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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)
Therapeutic Discovery Corporation
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(Name of Issuer)
Class A Common Stock, Par Value $0.01
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(Title of Class of Securities)
883376105
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CUSIP Number
Peter D. Staple, Esq.
ALZA Corporation
950 Page Mill Road
Palo Alto, California 94303
(650) 494-5000
With a copy to:
Sarah A. O'Dowd, Esq.
Heller, Ehrman, White & McAuliffe
525 University Avenue
Palo Alto, California 94301
(650) 324-7000
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(Name, address and telephone number
of person authorized to receive
notices and communications)
August 25, 1997
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(Date of Event which requires
filing of this statement)
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If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(b)(3) or (4), check the following box: [_]
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CUSIP No. 883376105
1) Name of Reporting Persons:
S.S. or I.R.S Identification No. of above person
ALZA Corporation
I.R.S. Identification No. 77-0142070
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2) Check the Appropriate Box if a Member of a Group
(a) [_]
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(b) [_]
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3) SEC Use Only
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4) Source of Funds: 00
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5) [_] Check if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e)
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6) Citizenship or Place of Organization: Delaware
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7) Sole Voting Power
100 Shares of Class B Common Stock
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Number of Shares 8) Shared Voting Power
Beneficially 7,734,424 Shares of Class A Common Stock
Owned by Each -----------------------------------------------------------
Reporting Person
With 9) Sole Dispositive Power
100 Shares of Class B Common Stock
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10) Shared Dispositive Power
7,734,424 Shares of Class A Common Stock
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11) Aggregate Amount Beneficially Owned by Each Reporting Person: 7,734,424
Shares of Class A Common Stock and 100 Shares of Class B Common Stock
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12) [_] Check if the Aggregate Amount in Row (11)
Excludes Certain Shares
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13) Percent of Class Represented by amount in Row (11):
100.0% (See response to Item 3)
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14) Type of Reporting Person
CO
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Item 1. Security and Issuer.
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This statement constitutes Amendment No. 1 to the Statement on Schedule
13D, dated June 22, 1993, relating to shares of Class A Common Stock, $.01 par
value per share (the "Class A Common Stock") of Therapeutic Discovery
Corporation, a Delaware corporation ("TDC"). The principal executive office of
TDC is located at 1454 Page Mill Road, Palo Alto, CA 94303-0806. Unless
otherwise indicated, all capitalized terms not otherwise defined herein shall
have the same meanings as those set forth in the initial Schedule 13D.
The exact title of the class of security which is the subject of this
filing is Class A Common Stock, par value $0.01, of TDC. The number of shares of
Class A Common Stock outstanding as of August 25, 1997, the most recent
practicable date, is 7,734,424. As of that date, there were also options to
purchase 395,000 shares of Class A Common Stock immediately exercisable. The
approximate number of holders of record of such Class A Common Stock as of
August 25, 1997, the most recent practicable date, is 5,604.
The reporting person, ALZA Corporation, a Delaware corporation, ("ALZA") is
filing this Amendment No. 1 on Schedule 13D because, on August 25, 1997, it
exercised the Purchase Option to acquire all of the outstanding Class A Common
Stock pursuant to TDC's Restated Certificate of Incorporation, as filed with the
Secretary of State for the State of Delaware on April 1, 1993 (the "Restated
Certificate"), on the terms and subject to the conditions set forth in the
Restated Certificate.
Item 2. Identity and Background.
-----------------------
This filing is being made by ALZA. Its principal business is pharmaceutical
research and development and the commercialization of pharmaceutical products.
The address of its principal executive offices are 950 Page Mill Road, Palo
Alto, CA 94303-0802
(i) During the last five years, ALZA has not been convicted in a criminal
proceeding (excluding traffic violation or similar misdemeanors). During the
last five years, ALZA has not been a party to a civil proceeding of a judicial
or administrative body of competent jurisdiction and as a result of such
proceeding was or is subject to a judgment by decree or final order enjoining
further violations of, or prohibiting activities, subject to, federal or state
securities laws or finding any violation of such laws.
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(ii) The following information is given with respect to the executive
officers and directors of ALZA:
(a) Dr. Alejandro Zaffaroni, Director, Founder and Co-Chairman
Business Address:
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950 Page Mill Road
P.O. Box 10950
Palo Alto, CA 94303-0802
Principal Occupation: Director and Co-Chairman of ALZA; Director
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of Affymetrix, Inc.; Chairman of the Board and Chief Financial
Officer of Symyx Technologies
Criminal Convictions During Preceding Five Years: None
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Judgments, Decrees or Orders Under Federal or State Securities
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Laws During Preceding Five Years: None
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Citizenship: United States
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(b) Dr. Ernest Mario, Director, Co-Chairman and Chief Executive
Officer
Business Address:
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950 Page Mill Road
P. O. Box 10950
Palo Alto, CA 94303-0802
Principal Occupation: Chief Executive Officer of ALZA
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Criminal Convictions During Preceding Five Years: None
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Judgments, Decrees or Orders Under Federal or State Securities
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Laws During Preceding Five Years: None
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Citizenship: United States
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(c) William G. Davis, Director
Business Address:
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3532 Bay Road, South Drive
Indianapolis, Indiana 46240
Principal Occupation: Independent Business Consultant; President
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(Retired), Medical Instruments Systems Division, Eli Lilly and
Company, a pharmaceutical company
Criminal Convictions During Preceding Five Years: None
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Judgments, Decrees or Orders Under Federal or State Securities
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Laws During Preceding Five Years: None
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Citizenship: United States
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(d) Dr. William R. Brody, Director
Business Address:
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3400 North Charles Street
242 Garland Hall
Baltimore, Maryland 21218
Principal Occupation: President of The John Hopkins
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University, a healthcare and educational institution
Criminal Convictions During Preceding Five Years: None
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Judgments, Decrees or Orders Under Federal or State Securities
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Laws During Preceding Five Years: None
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Citizenship: United States
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(e) Robert J. Glaser, M.D., Director
Business Address:
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1 Elm Place
Atherton, California 94027
Principal Occupation: Director (retired) for Medical Science and
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Trustee, Lucille P. Markey Charitable Trust, a philanthropic
foundation supporting basic biomedical research
Criminal Convictions During Preceding Five Years: None
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Judgments, Decrees or Orders Under Federal or State Securities
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Laws During Preceding Five Years: None
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Citizenship: United States
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(f) Dean O. Morton, Director
Business Address:
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3200 Hillview Avenue
Palo Alto, California 94304
Principal Occupation: Executive Vice President and Chief
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Operating Officer (Retired), Hewlett-Packard Corporation, an
electronics company
Criminal Convictions During Preceding Five Years: None
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Judgments, Decrees or Orders Under Federal or State Securities
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Laws During Preceding Five Years: None
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Citizenship: United States
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(g) Denise M. O'Leary, Director
Business Address:
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c/o Vivra, Inc.
1850 Gateway Drive, Suite 5000
San Mateo, CA 94404
Principal Occupation: Special Limited Partner with Menlo
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Ventures, a venture capital investment company
Criminal Convictions During Preceding Five Years: None
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Judgments, Decrees or Orders Under Federal or State Securities
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Laws During Preceding Five Years: None
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Citizenship: United States
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(h) Isaac Stein, Director
Business Address:
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525 University Avenue, Suite 700
Palo Alto, California 94301-1908
Principal Occupation: President, Waverley Associates, Inc., a
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private investment company
Criminal Convictions During Preceding Five Years: None
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Judgments, Decrees or Orders Under Federal or State Securities
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Laws During Preceding Five Years: None
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Citizenship: United States
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(i) Julian N. Stern, Director
Business Address:
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525 University Avenue, Suite 1100
Palo Alto, California 94301-1908
Principal Occupation: Partner, Heller Ehrman White & McAuliffe,
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a law firm
Criminal Convictions During Preceding Five Years: None
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Judgments, Decrees or Orders Under Federal or State Securities
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Laws During Preceding Five Years: None
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Citizenship: United States
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(j) Bruce C. Cozadd, Senior Vice President and Chief Financial
Officer
Business Address:
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950 Page Mill Road
P. O. Box 10950
Palo Alto, CA 94303-0802
Principal Occupation: Senior Vice President and Chief Financial
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Officer of ALZA
Criminal Convictions During Preceding Five Years: None
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Judgments, Decrees or Orders Under Federal or State Securities
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Laws During Preceding Five Years: None
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Citizenship: United States
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(k) Dr. Felix Theeuwes, President, New Ventures and Chief Scientist
Business Address:
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950 Page Mill Road
P.O. Box 10950
Palo Alto, California 94303-0802
Principal Occupation: President, New Ventures and Chief
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Scientist of ALZA
Criminal Convictions During Preceding Five Years: None
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Judgments, Decrees or Orders Under Federal or State Securities
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Laws During Preceding Five Years: None
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Citizenship: Belgium
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(l) Dr. Samuel R. Saks, Senior Vice President, Medical Affairs
Business Address:
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950 Page Mill Road
P.O. Box 10950
Palo Alto, California 94303-0802
Principal Occupation: Senior Vice President, Medical Affairs
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of ALZA
Criminal Convictions During Preceding Five Years: None
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Judgments, Decrees or Orders Under Federal or State Securities
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Laws During Preceding Five Years: None
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Citizenship: United States
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(m) Dr. Gary V. Fulscher, Senior Vice President, Operations
Business Address:
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950 Page Mill Road
P.O. Box 10950
Palo Alto, California 94303-0802
Principal Occupation: Senior Vice President, Operations of ALZA
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Criminal Convictions During Preceding Five Years: None
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Judgments, Decrees or Orders Under Federal or State Securities
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Laws During Preceding Five Years: None
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Citizenship: United States
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(n) Peter D. Staple, Senior Vice President and General Counsel
Business Address:
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950 Page Mill Road
P.O. Box 10950
Palo Alto, California 94303-0802
Principal Occupation: Senior Vice President and General Counsel
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of ALZA
Criminal Convictions During Preceding Five Years: None
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Judgments, Decrees or Orders Under Federal or State Securities
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Laws During Preceding Five Years: None
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Citizenship: United States
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(o) Dr. James W. Young, Senior Vice President, Research and
Development
Business Address:
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950 Page Mill Road
P.O. Box 10950
Palo Alto, California 94303-0802
Principal Occupation: Senior Vice President, Research and
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Development of ALZA
Criminal Convictions During Preceding Five Years: None
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Judgments, Decrees or Orders Under Federal or State Securities
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Laws During Preceding Five Years: None
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Citizenship: United States
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(p) James Butler, Senior Vice President, Sales and Marketing
Business Address:
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950 Page Mill Road
P.O. Box 10950
Palo Alto, California 94303-0802
Principal Occupation: Senior Vice President, Sales and Marketing
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of ALZA
Criminal Convictions During Preceding Five Years: None
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Judgments, Decrees or Orders Under Federal or State Securities
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Laws During Preceding Five Years: None
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Citizenship: United States
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(q) Harold Fethe, Vice President, Human Resources
Business Address:
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950 Page Mill Road
P.O. Box 10950
Palo Alto, California 94303-0802
Principal Occupation: Vice President, Human Resources of ALZA
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Criminal Convictions During Preceding Five Years: None
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Judgments, Decrees or Orders Under Federal or State Securities
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Laws During Preceding Five Years: None
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Citizenship: United States
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Item 3. Source and Amount of Funds or Other Consideration.
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The total consideration for the purchase by ALZA of the Class A Common
Stock is $100 million. The source of these funds is ALZA's cash, cash
equivalents and marketable securities.
Item 4. Purpose of Transaction.
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The purpose of this transaction is to acquire the rights to all products
and product candidates developed or under development by ALZA and TDC pursuant
to the Development Agreement dated March 10, 1993 between ALZA and TDC. ALZA
believes that it is in the best interests of ALZA and ALZA's stockholders to
exercise the Purchase Option at this time. ALZA will be replacing TDC's
directors with employees of ALZA. The transaction reported herein will cause TDC
to become a wholly-owned subsidiary of ALZA. TDC will be de-listed from the
Nasdaq National Market and will have its public reporting obligations suspended.
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Item 5. Interest in Securities of the Issuer.
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(a) As of August 25, 1997, ALZA has exercised the Purchase Option to
acquire 7,734,424 shares of Class A Common Stock and owns 100 shares of Class B
Common Stock of TDC. As of August 25, 1997, no shares of Class A Common Stock of
TDC are beneficially owned by any other person named in Item 2 except as set out
on the following table:
<TABLE>
<CAPTION>
Sole Power to Shared Power to
Name Position Vote and Dispose Vote and Dispose
---- -------- ---------------- ----------------
<S> <C> <C> <C>
Cozadd, Bruce C. Senior Vice President and Chief
Financial Officer of ALZA 15
Fethe, Harold Vice President, Human
Resources of ALZA 3,304
Fulscher, Dr. Gary V. Senior Vice President,
Operations of ALZA 4,489 4,693
Stern, Julian N. Director and Secretary of ALZA 9,393
Theeuwes, Dr. Felix President, New Ventures and
Chief Scientist of ALZA 413 17,064
Zaffaroni, Dr. Alejandro Co-Chairman of the Board and
Founder of ALZA 95,594
</TABLE>
As of December 31, 1996 ALZA's 401(k) tax deferral investment plan owned 18,902
shares of Class A Common Stock for the accounts of certain ALZA employees. The
employees direct the investment of these accounts. Some of the shares reported
as shared power to vote and dispose in the table above are included in the
foregoing amount.
(b) As above.
(c) None.
(d) Not applicable.
(e) Not applicable.
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Item 6. Contracts, Arrangements, Understandings or Relationships With Respect
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to Securities of the Issuer.
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Article FIFTH of the Restated Certificate provides ALZA with the Purchase
Option. The Purchase Option provides that ALZA may purchase all, but not less
than all, of the issued and outstanding Class A Common Stock at any time prior
to the earlier of: (i) 60 days after the later of (a) the date of filing with
the Securities and Exchange Commission or (b) the due date of TDC's Form 10-K or
Form 10-Q containing a balance sheet showing that TDC has less than an aggregate
of $5 million in cash, cash equivalents, and short-term and long-term
investments, or (ii) December 31, 1999 (subject to certain extension rights not
applicable in the circumstances). ALZA may exercise the Purchase Option at any
time prior to such expiration date by mailing an exercise notice to TDC. This
exercise notice must identify certain information, including a closing date for
the purchase and the exercise price and form of consideration to be paid to TDC
stockholders. The closing date must be within 90 days of the exercise date but
may be extended by ALZA in certain circumstances outlined in the Restated
Certificate, such as the need for regulatory clearance. ALZA exercised the
Purchase Option by providing the foregoing exercise notice to TDC on August 25,
1997. The closing date has been set for September 29, 1997 (the "Closing Date").
From the date of exercise of the Purchase Option until the Closing Date,
TDC is prohibited by the terms of the Restated Certificate from engaging in any
extraordinary corporate activity without the prior written consent of ALZA.
Article FOURTH of the Restated Certificate provides that as soon as ALZA
exercises the Purchase Option, TDC's board shall cease to be classified, the
number of authorized TDC directors shall be increased in accordance with a
formula set forth in the Restated Certificate and the holders of TDC's Class B
Common Stock (currently ALZA) shall have the sole right to appoint the directors
thereafter.
Within 15 days after the mailing of the exercise notice to TDC, TDC must
provide ALZA with a status statement containing certain financial information.
This financial information includes all actual and contingent liabilities of
TDC. ALZA then may reduce the exercise price by the amount of such liabilities.
It is not anticipated that any reduction will occur in the current circumstances
of this transaction.
ALZA must designate a payment agent who will distribute the exercise
price to the TDC stockholders. ALZA must also deposit both the exercise price,
and irrevocable instructions to pay the exercise price to TDC stockholders of
record as of the close of business on the Closing Date, with the payment agent
on or prior to the Closing Date. ALZA has designated Boston EquiServe, L.P., as
payment agent (the "Payment Agent").
On the Closing Date, title to the Class A Common Stock will automatically
transfer to and vest in ALZA without further act of any person. The Payment
Agent will then disburse the exercise price to TDC stockholders upon tender of
stock certificates to
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the Payment Agent or, if the Class A Common Stock is held in a brokerage
account, that account will be credited with such amount.
Item 7. Exhibits.
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7.1 Restated Certificate of Incorporation of Therapeutic Discovery
Corporation as filed with the Delaware Secretary of State on April 1, 1993
(incorporated by reference from Exhibit 7.1 of Schedule 13D filed by ALZA
Corporation in paper format on June 22, 1993 and electronically on September 4,
1997)
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
September 4, 1997 ALZA CORPORATION
By: /s/ PETER D. STAPLE
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Peter D. Staple
Senior Vice President and
General Counsel
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