<PAGE>
As filed with the Securities and Exchange Commission on September 7, 1999
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
___________________________
ALZA CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
Delaware 77-0142070
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
PETER D. STAPLE
Senior Vice President and
General Counsel
950 Page Mill Road
P. O. Box 10950
Palo Alto, CA 94303-0802
(650) 494-5000
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
___________________________
Copies to:
SARAH A. O'DOWD
Heller Ehrman White & Mcauliffe
525 University Avenue
Palo Alto, California 94301
Telephone: (650) 324-7000
Facsimile: (650) 324-0638
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
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, 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 of 1933, as amended, 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 of 1933, as amended check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering:[_]______________________.________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box:[_]
CALCULATION OF REGISTRATION FEE
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<CAPTION>
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Amount to be Proposed Maximum Proposed Maximum Amount of
Title of Securities to be Registered Registered(1) Offering Price Per Share Aggregate Offering Price Registration Fee
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value 20,000 $65.00 $1,300,000 $361.40
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</TABLE>
(1) In accordance with Rule 416 under the Securities Act of 1933, Common Stock
offered hereby shall also be deemed to cover additional securities to be
offered or issued to prevent dilution resulting from stock splits, stock
dividends or similar transactions.
___________________________
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 that specifically states that this Registration
Statement shall thereafter become effective in accordance with section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said section 8(a), may determine.
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SUBJECT TO COMPLETION, DATED SEPTEMBER 7, 1999
PROSPECTUS
ALZA CORPORATION
20,000 Shares of Common Stock
_________________________
This prospectus relates to the possible issuance by ALZA Corporation, a
Delaware corporation ("ALZA" or the "Company"), from time to time of up to
20,000 shares of its common stock, par value $0.01 per share, to the holders of
currently outstanding warrants to purchase shares of ALZA common stock upon
exercise of those warrants in accordance with the Warrant Agreement dated as of
May 14, 1993 (the "Warrant Agreement") between ALZA and The First National Bank
of Boston, as warrant agent. The aggregate value of the common stock issuable
hereunder is $1,300,000. Each warrant entitles the holder to purchase one-
eighth of a share of ALZA common stock, in ten-share increments, at a price of
$65 per share, subject to adjustment as provided in the Warrant Agreement. The
warrants may be exercised at any time prior to the close of business on December
31, 1999.
ALZA has entered into an Agreement and Plan of Merger, dated June, 21, 1999
(the "Merger Agreement"), by and among ALZA, Abbott Laboratories and AC Merger
Sub Inc. pursuant to which ALZA would become a wholly-owned subsidiary of Abbott
and each outstanding share of ALZA common stock will be converted into 1.2
shares of Abbott common stock. Under the terms of the warrants and the merger,
if the merger is consummated, each outstanding and unexercised warrant will
automatically become exercisable to purchase 0.15 of an Abbott common share at
an exercise price of $54.17 per full Abbott common share.
ALZA common stock trades on the NYSE under the symbol "AZA". On
September 2, 1999, the last reported sale price of the common stock on the
NYSE was $51.00 per share. The exercise price of the warrants is $65.00 per
share. Prior to exercising warrants, you should compare the price at which
ALZA's common stock is trading to the exercise price of the warrants.
Beginning on page 2, we have listed several "RISK FACTORS" which you should
consider. You should read the entire prospectus carefully before you make your
investment decision.
The Securities and Exchange Commission and state regulatory authorities
have not approved or disapproved these securities, or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
_________________________
The Date of this Prospectus is ________________, 1999
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 by 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.
<PAGE>
RISK FACTORS
You should consider carefully the following risk factors, along with the
other information contained or incorporated by reference in this prospectus, in
deciding whether to invest in ALZA common stock. These factors, among others,
may cause actual results, events or performance to differ materially from those
expressed in any forward-looking statements we made in this prospectus.
The price at which ALZA common stock may be purchased on the New York Stock
Exchange may be lower than the exercise price of the warrants.
Prior to exercising warrants, warrantholders should compare the price at
which ALZA's common stock is trading in the market to the exercise price of the
warrants. ALZA common stock trades on the NYSE under the symbol "AZA". On
September 2, 1999, the last reported sale price of ALZA's common stock on the
NYSE was $51.00 per share. The exercise price of the warrants is $65 per
share.
The price of ALZA's stock may go down if the proposed merger with Abbott
Laboratories does not occur.
ALZA has entered into a Merger Agreement with Abbott Laboratories pursuant
to which ALZA would become a wholly-owned subsidiary of Abbott. If the proposed
merger of ALZA with Abbott is not consummated, the price of ALZA's common stock
may go down. The merger may not be consummated for various reasons such as
failure to obtain the approval of ALZA's stockholders and failure to obtain
required regulatory approvals. If the merger is completed, each outstanding
share of ALZA common stock will be converted into 1.2 shares of Abbott common
stock.
ALZA's expanded sales organization may not be successful.
ALZA significantly expanded its sales organization during 1998, and the
profitability of its operations will depend on its ability to use this expanded
sales force effectively. ALZA's expanded sales organization may not succeed in
increasing ALZA's revenues or profits.
Many of ALZA's products are new and may not be successful.
Many of the products sold by ALZA have been introduced only during the last
few years. Several are relatively new products that had no established market
when they were introduced. Others are used for the treatment of conditions that
doctors may under-diagnose or not completely understand. It may be difficult
for ALZA to achieve adequate market acceptance and sales levels for these new
products.
Product development efforts may not yield successful products.
ALZA's future business success will depend on its ability to successfully
develop and obtain regulatory approval to market new pharmaceutical products.
Development of a product requires substantial technical, financial and human
resources even if the product is not successfully completed. Due to
uncertainties that are part of the development process, many of the products
that ALZA tries to develop will not be completed. ALZA may not choose product
candidates that will be successful, it may not be able to execute development in
a timely manner and it may not be able to fully fund development programs
necessary to complete development. Delays or unanticipated increases in costs
of development at any stage of development, or failure of ALZA to obtain
regulatory approval or market acceptance for its products, could adversely
affect ALZA's operating results.
ALZA's drug delivery technologies may not be broadly applicable or may
require extensive further investment.
The ALZA drug delivery systems may not perform in the same manner when
different drugs are incorporated into them and therefore these drug delivery
systems may not prove to be as useful or valuable as originally thought.
Substantial funding and other resources may be required to continue the
development of drug delivery systems for use with additional drugs.
Special materials must often be manufactured for the first time for use in
drug delivery systems, or materials may be used in the systems in a manner
different from their customary commercial uses. Materials needed for ALZA's
drug delivery systems may be difficult to obtain on commercially reasonable
terms, particularly when relatively small quantities are required, or if the
materials traditionally have not been used in pharmaceutical products.
Precision and reproducibility of certain materials are critical to the
performance of ALZA drug delivery systems, so having reliable sources of
materials is important.
<PAGE>
Results of clinical trials and approval of products are uncertain and ALZA
may be delayed in or prohibited from selling its products.
ALZA may suffer significant setbacks in advanced clinical trials of our
products, even after obtaining promising results in earlier trials. In
addition, clinical studies may not demonstrate the safety and effectiveness of a
product and even successful completion of clinical trials may not result in
marketable products.
Before obtaining regulatory approvals for the sale of any of its products,
ALZA must demonstrate through preclinical studies and clinical trials that the
product is safe and effective in each intended use. The results from
preclinical and early clinical studies do not always accurately predict results
in later, large-scale testing.
ALZA relies on other companies to conduct certain clinical trials. Those
companies may have different interests or priorities than ALZA, and its design,
timing and conduct of clinical trials may not meet the objectives of ALZA. ALZA
also works with a number of pharmaceutical companies who control or share
control of clinical development.
The rate of patient enrollment sometimes delays completion of clinical
studies. There is substantial competition to enroll patients in clinical trials
for oncology products, and such competition has delayed clinical development of
ALZA products in the past. Delays in planned patient enrollment can result in
increased development costs and delays in regulatory approval.
ALZA's operations depend on compliance with complex governmental
regulations.
The products that ALZA develops and sells are subject to extensive
regulation by the United States Food & Drug Administration ("FDA") and
comparable agencies in other countries. These regulations govern a range of
activities including clinical testing, market clearance, manufacturing, quality
assurance, advertising and record-keeping. Failure to obtain, or delays in
obtaining, regulatory clearance to market new products or existing products for
new indications, as well as other regulatory actions and recalls, could
adversely affect ALZA's results of operations.
Applications for marketing clearance must be based on extensive clinical
and other testing. Requirements for approval may differ from country to
country, and can involve additional testing and additional costs.
Substantial delays can occur in obtaining required clearances from both the
FDA and foreign regulatory authorities after applications are filed. Regulatory
authorities may not approve a product for the uses that are proposed by ALZA,
thereby limiting our ability to market the product. Even after clearances are
obtained, further delays may occur before the products become commercially
available in countries requiring pricing approvals.
Pharmaceutical pricing and reimbursement pressures may reduce
profitability.
As pressures for cost containment increase in the United States health care
industry, the prices ALZA can charge for products may be less favorable than in
the past. If one or more of ALZA's products is not included on approved drug
lists or is not reimbursed adequately by government agencies or managed care
organizations, its future profitability may be adversely affected.
Government and other third-party payors have increased attempts to contain
health care costs by limiting the level of reimbursement for new drugs and
sometimes by refusing to provide coverage or reimbursement for uses of the
products for which the FDA has not granted marketing clearance. In addition, in
many international markets, governments control the prices of prescription
pharmaceuticals. In these markets, once marketing approval is received, pricing
negotiation can take another 6 to 12 months or longer.
ALZA may be forced to lower prices to compete with other products. Lower
prices, competitors' attempts to gain market share or introductory pricing
programs could adversely affect ALZA's business, financial condition and results
of operations.
ALZA depends on relationships with other companies for revenues and access
to technologies and failure to maintain these relationships would hurt ALZA.
A substantial portion of ALZA's net income currently results from
royalties, fees and transfer prices paid by other companies selling products
incorporating ALZA technologies. These revenues vary from quarter to quarter as
a result of changing levels of product sales by these client companies.
2
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Because the client companies make the decisions regarding commercializing these
products, ALZA does not directly control most of the variables that affect these
revenues. In addition, these revenues can be adversely affected by competition
and pressures for cost containment on client companies.
ALZA also relies on relationships with client and other companies for
access to proprietary technology which it needs for product development,
including proprietary rights to drugs that may be incorporated into ALZA drug
delivery systems. ALZA's business could be adversely affected if it were unable
to access these proprietary technologies and drugs.
Uncertainty of supply may affect ALZA's ability to produce and sell
products.
A number of ALZA products are made at only one facility. A shutdown in any
of these facilities due to technical, regulatory or other problems, resulting in
an interruption in supply of products, could have an adverse impact on ALZA's
financial results.
The manufacturing process for pharmaceutical products is highly regulated,
and regulators may shut down manufacturing facilities that they believe do not
comply with regulations. The FDA's current Good Manufacturing Practices are
extensive regulations governing manufacturing processes, stability testing,
record-keeping and quality standards. Similar, but not identical, regulations
are in effect in other countries.
An interruption in supply from a supplier of a key material could
significantly delay the manufacturing of one or more ALZA products. Because the
suppliers of key components and materials must be named in the New Drug
Application ("NDA") filed with the FDA for a product, substantial delays can
occur if the qualification of a new supplier is required.
Patents and other intellectual property protection may be difficult to
obtain or ineffective, allowing other companies to more easily produce products
similar to ALZA's.
Patent protection generally has been important in the pharmaceutical
industry. ALZA believes that its current patents, and patents that may be
obtained in the future, are important to current operations and will be
important in the future.
ALZA's existing patents may not cover future products, additional patents
may not be issued, and current patents or patents issued in the future may not
provide meaningful protection or prove to be of commercial benefit. If patent
protection is not available, ALZA may face greater competition or pricing
pressures than expected.
In the United States, patents are granted for specified periods of time.
Some of ALZA's earlier patents covering various aspects of certain oral and
transdermal dosage forms have expired, or will expire, over the next several
years. In 2003, certain ALZA patents are due to expire that relate to its
OROS(R) systems and the Procardia(R) XL (nifedipine) product (which uses the
OROS delivery system).
ALZA commercializes several products it has acquired or in-licensed from
other companies. The extent to which those products are protected by patent
rights varies significantly from product to product. Some products, such as
Ditropan(R) and Mycelex(R) Troche, have been sold for many years and are not
covered by patents. Other products may have patent protection only for certain
formulations or uses of the product. Additional patents relating to these
products may or may not be issued, or if issued, may not provide significant
proprietary protection for these products.
Other companies may successfully challenge our patents in the future. In
some cases, other companies have initiated reexamination by the United States
Patent and Trademark Office of patents issued to ALZA, and have opposed ALZA
patents in other jurisdictions. Others have also challenged the validity or
enforceability of ALZA patents in litigation. If any challenge is successful,
other companies may then be able to use the invention covered by the patent
without payment.
Other companies may try to obtain patents relating to technologies or
products similar to ALZA's. This competitive patent activity may result in
adversarial proceedings such as patent interferences and oppositions, which may
result in third parties obtaining patent positions superior to ALZA's. If other
companies are able to obtain patents that cover any of ALZA's technologies or
products, ALZA may be subject to liability for damages and our activities could
be blocked by legal action unless it can obtain licenses to those patents.
3
<PAGE>
In addition, ALZA utilizes significant unpatented proprietary technology
and relies on unpatented trade secrets and proprietary know-how to protect
certain aspects of our production and other technologies. Other companies may
develop similar technology to compete with ALZA.
ALZA faces intense competition from other companies whose products may gain
greater market acceptance than ALZA's.
Most or all of the products commercialized by ALZA will face competition
from different chemical or other agents intended for treatment of the same
diseases. In addition, ALZA's current and future products are likely to face
competition both from traditional forms of drug delivery and from advanced
delivery systems being developed by others. A large number of companies are
developing drug delivery technologies. Competitors could include any of the
pharmaceutical companies in the world, including companies for which ALZA has
developed products. Many of these pharmaceutical companies have greater
financial resources, technical staff and manufacturing and marketing
capabilities than ALZA does. To the extent that ALZA develops or markets
products incorporating drugs that are not covered by patents, or products that
are being developed by multiple companies, ALZA is likely to face competition
from other companies developing and marketing similar products.
Other pharmaceutical companies are aggressively seeking to obtain new
products by licensing products or technology from other companies. ALZA will be
competing to license or acquire products or technology with companies with far
greater financial and other resources.
Generic pharmaceutical manufacturers will increase competition for certain
products. Generic competitors generally are able to obtain regulatory approval
for drugs no longer covered by patents without investing in costly and time-
consuming clinical trials, and need only demonstrate that their product is
equivalent to the drug they wish to copy. Because of their substantially
reduced development costs, generic companies are often able to charge much lower
prices for their products than the originator of a new product. Several generic
companies have filed for approval to market generic versions of the ALZA-
developed Procardia XL product. The introduction of generic competition could
significantly reduce ALZA's royalties from this product. A number of ALZA
products incorporate chemical entities that are not covered by patents. These
products may be subject to competition from generic drugs.
Product liability claims may increase costs and decrease profits.
Testing, manufacturing, marketing and use of ALZA's pharmaceutical products
involve substantial risk of product liability claims. In the past, product
liability exposure has been modest and ALZA has been indemnified by client
companies who market products developed by ALZA. However, due to the expansion
of ALZA's marketing and sales activities and increased sales of products
marketed directly by ALZA, the exposure to product liability claims may increase
significantly. Although ALZA maintains product liability insurance, a single
product liability claim could exceed coverage limits, and multiple claims are
possible. If that happens, the insurance coverage ALZA has may not be adequate,
and in the future such insurance may not be renewed at an acceptable cost or at
all. Our business, financial condition and results of operations could be
materially and adversely affected by one or more successful product liability
claims.
4
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WHERE YOU CAN FIND MORE INFORMATION
ALZA files annual, quarterly, and current reports, proxy statements, and
other documents with the Securities and Exchange Commission. You may read and
copy any document ALZA has filed with the SEC at the SEC's public reference room
at Judiciary Plaza Building, 450 Fifth Street, NW, Room 1024, Washington, D.C.
20549. You should call 1-800-SEC-0330 for more information on the public
reference room. The SEC maintains an Internet site at http://www.sec.gov where
certain information regarding issuers (including ALZA) may be found.
This prospectus is part of a registration statement that we filed with the
SEC (Registration No. 333-______). The registration statement contains more
information than this prospectus regarding ALZA and its common stock, including
certain exhibits and schedules. You can get a copy of the registration statement
from the SEC at the address listed above or from its Internet site.
You should rely only on the information contained, or incorporated by
reference, in this prospectus or the registration statement. ALZA has not
authorized anyone to provide you with information different from that contained
in this prospectus. ALZA is offering shares of its common stock upon exercise of
the warrants only in jurisdictions where such offers and sales are permitted.
The information contained in this prospectus is accurate only as of the date of
this prospectus, regardless of the time of delivery of this prospectus or of any
sale of the shares.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate" into this prospectus information we file
with the SEC in other documents. This means that we can disclose important
information to you by referring to other documents that contain that
information. The information may include documents filed after the date of this
prospectus which update and supersede the information you read in this
prospectus. We incorporate by reference the documents listed below, except to
the extent information in those documents is different from the information
contained in this prospectus, and all future documents filed with the SEC under
Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 until
we terminate the offering of these shares.
SEC Filing Period/Filing Date
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Annual Report on Form 10-K/A Year ended December 31, 1998
Quarterly Reports on Form 10-Q Quarter ended March 31, 1999
Quarter ended June 30, 1999
Current Reports on Form 8-K Dated December 16, 1998
Dated March 16,1999
Dated May 12, 1999
Dated June 25, 1999
Description of Common Stock contained in July 10, 1996
Registration Statement on Form 8-A
You may request a copy of these documents, at no cost, by calling (650) 494-5000
or writing to:
Corporate and Investor Relations
ALZA Corporation
950 Page Mill Road
Palo Alto, CA94304
5
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FORWARD-LOOKING STATEMENTS
This Prospectus contains certain forward-looking statements that are
subject to certain risks and uncertainties. These statements include statements
regarding (i) the Company's proposed merger with Abbott Laboratories, (ii) the
Company's products and its ability to develop new products, (iii) regulatory
approval of the Company's products, (iv) the Company's intellectual property,
and (v) the Company's competition. Such statements are based on management's
current expectations and are subject to a number of factors and uncertainties
that could cause actual results to differ materially from those described in the
forward-looking statements. The Company cautions investors that there can be no
assurance that actual results or business conditions will not differ materially
from those projected or suggested in such forward-looking statements as a result
of various factors, including the following: risks associated with the
Company's proposed merger with Abbott Laboratories; expansion of operations,
international operations, and personnel; intense competition; variation in the
Company's operating results; technological change; the Company's ability to
develop and protect proprietary products and technologies and to enter into
collaborative commercial relationships; the Company's future capital
requirements; and uncertainties as to the extent of future government regulation
of the Company's business. As a result, the Company's future efforts and
results involve a high degree of risk.
THE COMPANY
ALZA is a research-based pharmaceutical company with leading drug delivery
technologies. ALZA applies its technologies to develop pharmaceutical products
with enhanced therapeutic value for its own portfolio and for many of the
world's leading pharmaceutical companies. ALZA's sales and marketing efforts are
currently focused on the urology and oncology fields of medicine. Until 1993,
ALZA's business consisted almost exclusively of product development activities
undertaken pursuant to development and commercialization agreements with large
pharmaceutical companies. Among the ALZA-developed products commercialized to
date by client companies under these arrangements are Procardia XL(R) /Adalat
C(R) (nifedipine) for the treatment of angina and hypertension, Transderm-Nitro
(nitroglycerin transdermal system) for the prevention and treatment of angina,
Duragesic(R) (fentanyl transdermal system) for treatment of certain patients
with chronic pain, NicoDerm(R) CQ (nicotine transdermal system) for use as an
aid in smoking cessation, and Glucotrol XL(R) (glipizide) for the treatment of
Type II diabetes.
Beginning in 1993, ALZA embarked on a new strategy to become a fully-
integrated commercial pharmaceutical company. Although ALZA has continued its
traditional product development arrangements with client companies, and
currently has products in development with a number of major pharmaceutical
companies, ALZA has expanded its commercialization capabilities and activities.
ALZA Pharmaceuticals, ALZA's sales and marketing division, now markets and
promotes 15 urology and oncology products. At December 31, 1998, ALZA
Pharmaceuticals had a specialty United States oncology sales organization of
approximately 75 sales professionals, and a sales organization of over 300
United States sales professionals, plus 12 in Canada, promoting its urology
products to urologists and other specialists, as well as primary care
physicians. In addition, ALZA's Ditropan XL(R) (oxybutynin chloride) product,
launched in the United States on February 1, 1999, is co-promoted to general
practitioners by approximately 350 sales professionals from UCB Pharma, Inc. and
approximately 300 sales professionals from Abbott Laboratories.
On March 16, 1999, ALZA completed its merger with SEQUUS Pharmaceuticals,
Inc., an integrated pharmaceutical company engaged in the development of
therapies for cancer and other diseases utilizing advanced drug delivery
technologies. This transaction was accounted for under the pooling-of-interests
method of accounting.
On June 21, 1999, ALZA entered into an Agreement and Plan of Merger by and
among ALZA, Abbott Laboratories and AC Merger Sub Inc., pursuant to which ALZA
would become a wholly-owned subsidiary of Abbott and each outstanding share of
ALZA common stock will be converted into 1.2 shares of Abbott common stock. If
the merger is consummated, each outstanding and unexercised warrant will
automatically become exercisable to purchase 0.15 of an Abbott common
share at an exercise price of $54.17 per full Abbott common share.
6
<PAGE>
PLAN OF DISTRIBUTION
The Company may from time to time issue the shares of common stock
registered by this Registration Statement to the holders of warrants upon the
exercise of warrants in accordance with the Warrant Agreement. The Company will
issue the common stock directly or through agents to the holders of the
warrants.
USE OF PROCEEDS
ALZA will receive approximately $1,300,000 if warrantholders exercise
warrants to purchase all 20,000 shares of common stock registered hereunder.
ALZA intends to use any such proceeds for general working capital.
LEGAL MATTERS
Peter D. Staple, Senior Vice President and General Counsel of ALZA, has
issued an opinion about the validity of the securities being offered. Mr.
Staple owns 2,592 shares of common stock and has options to purchase 170,000
shares of common stock, 95,000 of which are exercisable within 60 days of
August 31, 1999. In addition, Mr. Staple owns 16,300 shares of restricted
stock 14,000 of which vest on August 12, 2002 and 2,300 of which vest on May
6, 2003.
EXPERTS
Ernst & Young LLP have audited ALZA's consolidated financial statements and
schedule, included in ALZA's Current Report on Form 8-K filed with the
Securities and Exchange Commission on May 12, 1999, as set forth in their
report, which is incorporated by reference in this prospectus and elsewhere in
the registration statement. ALZA's consolidated financial statements and
schedule are incorporated by reference in reliance on Ernst & Young LLP's
report, given on their authority as experts in accounting and auditing.
7
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, payable by the registrant in connection
with the resale of the shares being registered. All amounts are estimated
except the SEC Registration Fee and the NYSE listing application fee.
SEC Registration Fee............................ $ 365
NYSE Listing Application Fee.................... $ 300
Accounting Fees and Expenses.................... $ 5,000
Legal Fees and Expenses......................... $ 5,000
Miscellaneous................................... $ 3,500
Total......................................... $14,165
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Item 15. Indemnification of Directors and Officers
Section 102 of the Delaware General Corporation Law allows a corporation to
eliminate the personal liability of directors of a corporation to the
corporation or to any of its stockholders for monetary damage for a breach of
his or her fiduciary duty as a director, except in the case where the director
breached his or her duty of loyalty, failed to act in good faith, engaged in
intentional misconduct or knowingly violated a law, authorized the payment of a
dividend or approved a stock repurchase in violation of Delaware corporate law
or obtained an improper personal benefit. ALZA's Certificate of Incorporation
contains a provision that eliminates directors' personal liability as set forth
above.
Section 145 of the Delaware General Corporation Law, as amended, provides
that a corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he or she is or was a director, officer, employee or
agent of the corporation or is or was serving at its request in such capacity in
another corporation or business association against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him or her in connection with such action, suit or
proceeding if he or she acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of the corporation and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe his or her conduct was unlawful.
In addition, Article 9 of ALZA's Certificate of Incorporation provides as
follows:
Limitation of Liability and Indemnification of Directors.
(a) Elimination of Certain Liability of Directors. No director of the
corporation shall be personally liable to the corporation or its stockholders
for monetary damages for breach of fiduciary duty as a director, except for
liability (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law or (iv) for any transaction
from which the director derived an improper personal benefit.
(b) Indemnification and Insurance.
(1) Right to Indemnification. Each person who was or is made a party
or is threatened to be made a party to or is involved in any action, suit
or proceeding, whether civil, criminal, administrative or investigative (a
"proceeding"), because he or she, or a person of whom he or she is the
legal representative, is or was a director or officer of the corporation or
is or was serving at the request of the corporation as a
II-1
<PAGE>
director, officer, employee or agent of another corporation or of a
partnership, joint venture, trust or other enterprise (including service
with respect to employee benefit plans), whether the basis of the
proceeding is alleged action in an official capacity as a director,
officer, employee or agent or in any other capacity while serving as a
director, officer, employee or agent, shall be indemnified and held
harmless by the corporation to the fullest extent authorized by the
Delaware General Corporation Law, as the same exists or may hereafter be
amended (but, in the case of any such amendment, only to the extent that
such amendment permits the corporation to provide broader indemnification
rights than that law permitted the corporation to provide before such
amendment), against all expense, liability and loss (including attorneys'
fees, judgments, penalties, fines, Employee Retirement Income Security Act
of 1974 excise taxes or penalties, and amounts paid or to be paid in
settlement) reasonably incurred or suffered by such person in connection
therewith; provided, however, that the corporation shall indemnify any such
person seeking indemnification in connection with a proceeding (or part
thereof) initiated by such person only if the proceeding (or part thereof)
was authorized by the Board of Directors of the corporation. Such
indemnification shall continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of his
or her heirs, executors and administrators. The right to indemnification
conferred by this Section shall be a contract right which may not be
retroactively amended and shall include the right to be paid by the
corporation the expenses incurred in defending any such proceeding in
advance of its final disposition; provided, however, that, if the Delaware
General Corporation Law requires, the payment of such expenses incurred by
a director or officer in his or her capacity as a director or officer (and
not in any other capacity in which service was or is rendered by such
person while a director or officer, including, without limitation, service
with respect to an employee benefit plan) in advance of the final
disposition of the proceeding shall be made only upon delivery to the
corporation of an undertaking, by or on behalf of such director or officer,
to repay all amounts so advanced if ultimately it shall be determined that
such director or officer is not entitled to be indemnified under this
Section or otherwise. The corporation may, by action of its Board of
Directors, provide indemnification to employees and agents of the
corporation with the same scope and effect as the indemnification of
directors and officers.
(2) Nonexclusivity of Rights. The right to indemnification and the
payment of expenses incurred in defending a proceeding in advance of its
final disposition conferred in this Section shall not be exclusive of any
other right which any person may have or hereafter acquire under any
statute, provision of this Certificate of Incorporation, bylaw, agreement,
vote of stockholders or disinterested directors, or otherwise.
(3) Insurance. The corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of
the corporation or another corporation, partnership, joint venture, trust
or other enterprise against any such expense, liability or loss, whether or
not the corporation would have the power to indemnify such person against
such expense, liability or loss under the Delaware General Corporation Law.
ALZA has purchased directors and officers liability insurance which would
indemnify the directors and officers of ALZA against damages arising out of
certain kinds of claims which might be made against them based on their
negligent acts or omissions while acting in their capacity as such.
Item 16.
<TABLE>
<S> <C>
5.1 Opinion of Peter D. Staple
10.1 Warrant Agreement (previously filed as an exhibit to ALZA's Form
8-A Registration Statement (Commission File No. 0-11234) dated
March 31, 1993, as amended)
23.1 Consent of Peter D. Staple (contained in opinion filed as
Exhibit 5.1)
23.2 Consent of Ernst & Young LLP, Independent Auditors
24.1 Power of Attorney (see page II-5)
</TABLE>
Item 17. Undertakings
A. 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:
(a) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
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<PAGE>
(b) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most recent post
effective amendment thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the registration statement;
(c) 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;
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference 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 deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
B. 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 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 offering herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
C. 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 Registrant's Restated Certificate of Incorporation
and Bylaws, and the Delaware General Corporation Law, the Registrant has been
informed 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 a
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person for liabilities arising under the Act 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 of whether such
indemnification by it is against policy as expressed in the Act and will be
governed by the final adjudication of such issue.
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<PAGE>
SIGNATURE
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 Registration
Statement on Form S-3 to be signed on its behalf by the undersigned, thereunto
duly authorized, in Palo Alto, California on September 7, 1999.
ALZA CORPORATION
By: /s/ BRUCE C. COZADD
-------------------------------------------------
Bruce C. Cozadd
Senior Vice President and Chief Financial Officer
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<PAGE>
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Dr.
Ernest Mario and Mr. Bruce C. Cozadd his or her true and lawful attorneys in
fact and agents, each acting alone, with full power of substitution and
resubstitution, for him or her and in his or her name, place and stead, in any
and all capacities, to sign any or all amendments (including post effective
amendments) to the Registration Statement, and to sign any registration
statement for the same offering covered by this Registration Statement that is
to be effective upon filing pursuant to Rule 462(b) under the Securities Act of
1933, as amended, and all post effective amendments thereto, and to file the
same, with all exhibits thereto, and all documents in connection therewith, with
the Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, each acting alone, or
his or her substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated as of September 7, 1999.
<TABLE>
<CAPTION>
Signature Title
- ----------------------------- ---------------------------------------------
<S> <C>
/s/ DR. ERNEST MARIO
_____________________________ Chairman of the Board, Chief Executive Officer and
Dr. Ernest Mario Director (Principal Executive Officer)
/s/ DR. WILLIAM BRODY
_____________________________ Director
Dr. William Brody
/s/ DR. ROBERT J. GLASER
_____________________________ Director
Dr. Robert J. Glaser
/s/ DR. I. CRAIG HENDERSON
_____________________________ Director
Dr. I. Craig Henderson
/s/ DEAN O. MORTON
_____________________________ Director
Dean O. Morton
/s/ DENISE O'LEARY
_____________________________ Director
Denise O'Leary
/s/ ISAAC STEIN
_____________________________ Director
Isaac Stein
/s/ JULIAN N. STERN
_____________________________ Director
Julian N. Stern
/s/ BRUCE C. COZADD Senior Vice President and Chief Financial
_____________________________ Officer (Principal Financial and Accounting Officer)
Bruce C. Cozadd
</TABLE>
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<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description Page
_______________________________________________________________________________
5.1 Opinion of Peter D. Staple
10.1 Warrant Agreement (previously filed as an exhibit to ALZA's Form
8-A Registration Statement (Commission File No. 0-11234) dated
March 31, 1993, as amended)
23.1 Consent of Peter D. Staple (contained in opinion filed as
Exhibit 5.1)
23.2 Consent of Ernst & Young LLP, Independent Auditors
24.1 Power of Attorney (see page II-5)
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<PAGE>
EXHIBIT 5.1
September 3, 1999
ALZA Corporation
950 Page Mill Road
P.O. Box 10950
Palo Alto, CA 94303-0802
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
I am delivering this opinion in my capacity as Senior Vice President and General
Counsel of ALZA Corporation, a Delaware corporation ("ALZA"), in connection with
the Registration Statement on Form S-3 (the "Registration Statement") which ALZA
proposes to file with the Securities and Exchange Commission on or about
September 3, 1999 for the purpose of registering under the Securities Act of
1933, as amended, an additional 20,000 shares of its Common Stock, par value
$.01 (the "Shares") issuable upon exercise of warrants to purchase shares of
ALZA Common Stock in accordance with the Warrant Agreement dated as of May 14,
1993 (the "Warrant Agreement") between ALZA and The First National Bank of
Boston, as warrant agent.
In connection with this opinion, I have assumed the authenticity of all records,
documents and instruments submitted to me as originals, the genuineness of all
signatures, the legal capacity of natural persons and the conformity to the
originals of all records, documents and instruments submitted to me as copies. I
have based my opinion upon my review of such records, documents and instruments
as I have deemed appropriate to render this opinion.
This opinion is limited to the General Corporation Law of the State of Delaware.
I disclaim any opinion as to any other statute, rule, regulation, ordinance,
order or other promulgation of any other jurisdiction or any regional or local
governmental body.
Based upon the foregoing and my examination of such questions of law as I have
deemed necessary or appropriate for the purpose of this opinion, and assuming
that (i) the Registration Statement becomes and remains effective during the
period when the Shares are offered and sold, (ii) appropriate certificates
evidencing the Shares will be executed and delivered upon the issuance of the
Shares, (iii) the full consideration stated in the warrants and the Warrant
Agreement is paid for each Share, and (iv) all applicable securities laws are
complied with, it is my opinion that, when issued by the
<PAGE>
Company, after payment therefor in the manner provided in the warrants and the
Warrant Agreement, the Shares covered by the Registration Statement will be
legally issued, fully paid and nonassessable.
I hereby consent to the filing of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
/s/ PETER D. STAPLE
- -----------------------------------------
Peter D. Staple
Senior Vice President and General Counsel
<PAGE>
EXHIBIT 23.2
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of ALZA Corporation
for the registration of 20,000 shares of its common stock and to the
incorporation by reference therein of our report dated January 29, 1999,
except for paragraph 2 of Note 1 and Note 12 as to which date is March 16,
1999, with respect to the consolidated financial statements and schedule of ALZA
Corporation included in its Current Report dated May 12, 1999 (Form 8-K), filed
with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
---------------------
Ernst & Young LLP
Palo Alto, California
September 2, 1999
