Registration No.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________
FORM S-2
REGISTRATION STATEMENT
Under The Securities Act of 1933
______________________
Aquila Biopharmaceuticals, Inc.
(Exact name of registrant as specified in its charter)
Delaware 04-3307818
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
175 Crossing Boulevard
Framingham, Massachusetts 01702
(508) 628-0100
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
______________________
ATTORNEY JANE V. HAWKES
BOWDITCH & DEWEY, LLP
311 Main Street
Worcester, Massachusetts 01608
(508) 791-3511
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
______________________
Approximate date of commencement of proposed sale to the
public: As soon as practicable after this Registration Statement becomes
effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box.
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933, other than securities offered only in connection with dividend
or interest reinvestment plans, check the following box.
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.
CALCULATION OF REGISTRATION FEE
Title of Shares Amount Proposed Proposed Amount Of
To Be Registered To Be Maximum Maximum Registration
Registered Aggregate Aggregate Fee(2)
Price Per Offering
Unit(1) Price(1)
Common Stock, par
value $0.01 per share 750,000 $2.00 $1,500,000 $417.00
(1) Estimated solely for the purpose of computing the amount of
the registration fee pursuant to Rule 457(c) under the Securities Act of
1933, on the basis of the average of the high and low sale prices reported
on the NASDAQ National Market Automated Quotation System on May
27, 1999.
(2) Paid on June 4, 1999.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a)
of the Securities Act of 1933 or until the Registration Statement shall
become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
SUBJECT TO COMPLETION DATED JUNE 4, 1999
PROSPECTUS
750,000 SHARES
AQUILA BIOPHARMACEUTICALS, INC.
COMMON STOCK
All shares of common stock offered hereby are being sold by
Aquila. The price of such shares will be determined by negotiations
between Aquila and the purchasers.
Aquila's common stock is traded on the NASDAQ National
Market System under the symbol "AQLA". On June 2, 1999, the last
reported sale price for the common stock on the NASDAQ National
Market was $2.00 per share.
INVESTMENT IN THE SHARES INVOLVES A HIGH
DEGREE OF RISK. SEE "RISK FACTORS" COMMENCING ON
PAGE 3.
NEITHER THE SECURITIES AND EXCHANGE
COMMISSION NOR ANY STATE SECURITIES COMMISSION
HAS APPROVED OR DISAPPROVED OF THESE SECURITIES
OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS JUNE ___, 1998.
The information in this Prospectus is not complete and may be
changed. We may not sell these securities until the registration statement
filed with the Securities and Exchange Commission is effective. This
Prospectus is not an offer to sell these securities and it is not soliciting an
offer to buy these securities in any state where the offer or sale is not
permitted.
WHERE YOU CAN FIND MORE INFORMATION
We are a reporting company and file annual, quarterly and current
reports, proxy materials and other information with the SEC. You may
read and copy these reports, proxy materials and other information at the
SEC's public reference rooms at 450 Fifth Street, N.W., Washington, DC
20549, New York, NY, and Chicago, IL. You can request copies of these
documents by writing to the SEC and paying a fee for the copying costs.
Please call the SEC at 1-800-SEC-0330 for more information about the
operation of the public reference rooms. Our SEC filings are also
available at the SEC's Web Site at "http:\\www.sec.gov".
INFORMATION INCORPORATED BY REFERENCE
The SEC allows us to "incorporate by reference" information that
we file with them, which means that we can disclose important
information to you by referring you to those other documents. The
information incorporated by reference is an important part of this
Prospectus, and information that we file later with the SEC will
automatically update and supercede this information. We incorporate by
reference the documents listed below and any future filings we will make
with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934:
- Annual Report on Form 10-K for the fiscal year ended
December 31, 1998;
- Quarterly Report on Form 10-Q for the fiscal quarter ended
March 31, 1999; and
- Description of the common stock contained in Aquila's
Registration Statement on Form 8(a) filed with the SEC
under the Securities Exchange Act of 1934.
We are delivering with this Prospectus a copy of the Annual
Report on Form 10-K for the fiscal year ended December 31, 1998
and the Quarterly Report on Form 10-Q for the fiscal quarter ended
March 31, 1999. You may request a copy of the other filings at no
cost, by writing or telephoning us at the following address:
Aquila Biopharmaceuticals, Inc.
175 Crossing Boulevard
Framingham, Massachusetts 01702
Attn: James L. Warren, CFO
(508) 628-0100
This Prospectus is part of a registration statement we have filed
with the SEC. You should rely only on the information incorporated by
reference or provided in this Prospectus. No one else is authorized to
provide you with different information. We are not making an offer of
these securities in any state where the offer is not permitted. You should
not assume that the information in this Prospectus is accurate as of any
date other than the date on the front of this document.
PROSPECTUS SUMMARY
The Company
We engage in discovery, development and commercialization of
products to prevent, treat or control infectious diseases, autoimmune
disorders and cancers. Our proprietary product development programs
include Quilvax-M(TM) for controlling bovine mastitis, Quilimmune-M(TM)
for preventing malaria and Quilimmune-P(TM) for preventing pneumococcal
infections. CD1-TB to prevent tuberculosis infections and CD1-CHL for
preventing chlamydia infections are in research. We have six corporate
partners who are involved in product development programs using our
Stimulon(TM) adjuvants. A seventh corporate partner markets our feline
leukemia virus vaccine.
The Offering
Common Stock Offered 750,000 shares offered by
Aquila
Common Stock Outstanding 6,996,738 shares
as of June 2, 1999
Use of Proceeds Proceeds will be used for research
and development activities, including
preclinical and clinical studies,
capital expenditures and other
general corporate purposes. See
"Use of Proceeds."
NASDAQ Symbol AQLA
FORWARD-LOOKING STATEMENTS
This Prospectus and the documents incorporated herein contain
forward-looking statements which involve a number of risks and
uncertainties. Actual results may differ materially from those anticipated
in the forward-looking statements. The following factors, among others,
could effect our actual results: general economic conditions; risks in
product and technology development; delays and difficulties in the
regulatory approval process; difficulties in obtaining raw materials and
supplies for the Company's products; failure of corporate partners to
commercialize successfully products using the Company's technology;
competition from other companies; the costs of acquiring additional
technology; failure to obtain the funding necessary for the Company's
planned activities; and other risks and uncertainties identified in this
Prospectus and the Company's SEC filings and the exhibits thereto,
including those set forth under "Risk Factors" below.
RISK FACTORS
Investment in the shares offered hereby involves a high degree of
risk. Please consider carefully the following risk factors, among others,
relating to the Company.
HISTORY OF OPERATING LOSSES
Because of the nature of the business of developing and
commercializing drug products, our operating expenses from 1995 through
1998 have exceeded our operating revenues for the same period by
significant amounts. We expect to incur additional operating losses over
the next several years, and we expect losses to increase as our research and
development and clinical trial efforts expand. We cannot guarantee that
we will successfully develop, receive regulatory approval for,
commercialize, manufacture, market and sell any additional products, or
achieve or sustain future profitability.
EARLY STAGE OF TECHNOLOGY, UNCERTAINTY OF
PRODUCT DEVELOPMENT AND SUCCESSFUL COMMERCIALIZATION
Many of our research and development programs are at an early
stage of development. To date, the USDA has only approved one of our
product candidates, Quilvax-FeLV(TM), our feline leukemia vaccine.
Neither the USDA (in the case of our animal product candidate) nor the
FDA (in the case of our human product candidates) has approved any of
our other product candidates. While our development efforts are at
different stages for different products, we cannot assure you that we will
successfully develop any additional products or that we will not abandon
some or all of our proposed research programs. We must conduct time-
consuming, extensive and costly clinical trials, in compliance with FDA
regulations to show the safety and effectiveness of each of our human
product candidates before the FDA can approve a product candidate for
sale. We must also conduct trials and comply with USDA regulations to
show the safety and effectiveness of our animal product candidate before it
is approved. Clinical trials are lengthy and expensive and have a high risk
of failure. In addition, to compete effectively, our products must be easy
to use, cost effective and economical to manufacture on a commercial
scale. We cannot assure you that we can achieve any of these objectives.
Any of our product candidates may fail the testing phase or may not attain
market acceptance. Also, third parties may develop superior products or
have proprietary rights that preclude us from marketing our products.
Some of our product candidates and those products being developed by
our collaborators and licensees have advanced to human clinical trials.
We have one animal product in clinical trials, one human product has
completed Phase I clinical trials and one human product is in Phase II
clinical trials.
Our product candidates are prone to the risks of failure inherent in
pharmaceutical product development, including the following:
- Our technical approach will not be successful;
- Any or all of our product candidates will not be safe and
effective;
- Product candidates will not otherwise meet applicable
regulatory standards or receive regulatory clearance;
- Our product candidates will not prove to be commercially
viable products;
- We will not be able to manufacture or produce
economically or on a large scale any or all of our product
candidates;
- We will not be able to successfully market our product
candidates;
- We will not be able to market such products because of the
proprietary rights of third-parties; and
- Our competitors will market superior or equivalent
products.
FUTURE FUNDING NEEDS; UNCERTAINTY OF ADDITIONAL FINANCING
While we have some revenue sources, we do not think these
sources will generate sufficient funds to continue our operations until
commercialization of our product candidates. In addition, changes in our
research and development plans or other events affecting our operations
may significantly increase our capital requirements over current
projections. We cannot be certain that expected revenues will materialize,
or that other financing will be available on acceptable terms.
We will need to raise additional capital in order to continue our
research and development programs, conduct preclinical and clinical
testing of our product candidates and conduct full scale manufacturing of
any products that we may develop. The timing and degree of any future
requirements will depend on numerous factors, including:
- the progress of our research and development programs;
- the progress of preclinical and clinical testing;
- the time and costs involved in obtaining regulatory
approvals;
- the cost of filing, prosecuting, defending and enforcing any
patent claims and other intellectual property rights;
- competing technological and market developments;
- changes in our existing research relationships;
- our ability to establish collaborative marketing
arrangements; and
- development of commercialization activities and
arrangements.
Based on current projections, we estimate that our existing capital
resources, research revenue and revenue from product sales will be
sufficient to meet our cash requirements for approximately fifteen months.
Whether we can continue to operate beyond such period will depend upon
our ability to generate substantial operating revenue from license fees and
other sources or procure additional funding. We cannot be sure that our
product candidates will prove successful or generate significant sales or
earnings in the future or that, if needed, we will be able to obtain future
funding on reasonable terms, if at all, or at the appropriate time for our
planned activities.
If adequate funds are not available, we may be required to delay,
reduce the scope of or eliminate one or more of our research or
development programs; to obtain funds through arrangements with
collaborative partners or others that may require us to relinquish rights to
certain of our technologies, product candidates or products that we would
otherwise seek to develop or commercialize ourselves; or to license the
rights to such products on terms that are less favorable to us than might
otherwise be available. If we raise additional funds by issuing equity
securities, this may result in further dilution to our existing stockholders.
In addition, any future investors could demand (and we may have to grant)
rights superior to those of our existing stockholders.
RISKS ASSOCIATED WITH COLLABORATIVE ARRANGEMENTS
Part of our strategy for the development, clinical testing and
commercialization of our products is to license certain companies to use
our technologies. The success of these third parties in performing their
responsibilities under the license agreements may affect the timing and
amount of license fee payments, royalties and revenues from product sales,
and we cannot assure you that such collaborations will be successful. We
may not be able to establish additional acceptable collaborative
arrangements or license agreements should we deem this necessary to
develop and commercialize our product candidates, nor can we assure you
that such future arrangements will be successful.
PATENTS AND PROPRIETARY RIGHTS
We cannot be sure that our current patents or patents that issue
from any of our pending applications will not be challenged, invalidated or
circumvented. Although we are not aware of any issued third party
patents which would interfere with development of any of our products,
we cannot be certain that we will not infringe on existing or future patents
owned by others or that third parties will not bring suit against us for
infringement of such patents. CSL International ACN ("CSL") and Seed
Capital Inc. filed an opposition with the European Patent Office ("EPO")
on the issuance of our QS-21 patent in Europe. At a hearing before the
EPO in October of 1998, we prevailed on all points raised in the
opposition. CSL may appeal the EPO's decision, and, though we do not
believe that CSL's claims have any merit or are likely to succeed, there can
be no assurance that we will prevail in any future actions taken to attack
the validity of our patents.
Patent litigation can be extremely costly and time consuming, but
may be necessary for us to enforce our patents or defend against claims by
third-parties.
We also rely extensively on trade secrets and other unpatented
proprietary technology. We attempt to protect our proprietary technology
in part by confidentiality agreements with our employees, consultants,
advisors and collaborators. We cannot assure you that the other parties
will not violate these agreements, that we will have adequate remedies, or
that our trade secrets will not otherwise become known or independently
developed by competitors.
COMPETITION AND TECHNOLOGICAL CHANGE
The biotechnology and pharmaceutical industries are subject to
rapid and significant technological change. Our competitors in the United
States and abroad are numerous. Our competitors include, among others,
major pharmaceutical companies, specialized biotechnology firms,
universities and other research institutions. Specifically, other adjuvants
which could compete with our Stimulon(TM) adjuvants are under
development by Ribi ImmunoChem Research, Inc., Corixa Corporation,
AVANT Immunotherapeutics, Inc. and Chiron Corporation. Our
competitors may succeed in developing technologies and products that are
more effective than any which we are developing or that would render our
technology and products obsolete and noncompetitive.
Many of our competitors have substantially greater financial and
technical resources than we do in:
- production and marketing;
- conducting clinical trials; and
- obtaining regulatory approvals.
If we begin significant commercial sales of our products, we will
also be competing with respect to manufacturing and marketing
capabilities, areas in which we have limited experience.
GOVERNMENT REGULATION; NO ASSURANCE OF REGULATORY APPROVAL
Our research and development activities and products are subject
to extensive and rigorous regulation by the federal government, principally
the FDA and USDA, and by state and local governments. We intend to
market our products in other countries, and foreign governments may also
impose stringent regulations. We must complete all appropriate regulatory
clearance processes before commercializing any of our product candidates,
which is lengthy and expensive. We cannot be sure that we will obtain
necessary regulatory approvals on a timely basis, if at all, for any of our
product candidates.
The current regulatory framework may change or additional
regulations may arise at any stage during our product development, which
may affect our ability to obtain approval as anticipated, delay the
submission or review of an application or require additional expenditures.
Even if regulatory approval of the drug is granted, the approval may limit
the drug to certain uses or "indications." Approved drugs, drug
manufacturers and manufacturing facilities are also subject to continual
review and periodic inspections by the FDA or foreign regulatory
agencies, even after the drug is on the market. As a manufacturer, we
must spend considerable time, money and effort, especially in the areas of
production and quality control, to comply with FDA or foreign
manufacturing regulations. Later discovery of previously unknown
problems with a product or facility may result in restrictions being placed
on that product or us, including forcing a withdrawal of the product from
the market. Our failure to comply with applicable regulatory requirements
could, among other things, result in fines, suspensions of regulatory
approvals, product recalls, operating restrictions and criminal prosecution.
We are also subject to numerous environmental, health and workplace
safety laws and regulations, including those related to laboratory
procedures, exposure to blood-born pathogens, and the handling of bio-
hazardous materials.
MANUFACTURING LIMITATIONS
We have limited capability to manufacture products for
commercial use. We may need to construct additional manufacturing
facilities or to have another company manufacture our products. We do
not guarantee that we could do either at a cost low enough to enable us to
obtain an appropriate profit margin.
If we decide to manufacture additional products ourselves, we will
be subject to regulatory requirements and will require substantial
additional capital. The FDA or other regulatory agency may seek to
subject these products to more extensive regulation.
LIMITED SALES AND MARKETING EXPERIENCE
We have very limited experience in sales, marketing and
distribution of products. We currently do not sell any products directly.
Instead, we sell our feline leukemia vaccine through our partner Virbac
which is responsible for all sales and marketing of that product. In order
to distribute our products we will most likely have to enter into
collaborations with third parties. We may be unable to find a suitable
marketing partner or to enter into a marketing arrangement which would
be economically advantageous to the Company.
DEPENDENCE ON RETENTION AND ATTRACTION OF KEY
EMPLOYEES
Our product development and marketing plans depend heavily on
retaining existing management and the ability to hire additional qualified
management and operating personnel. Recruiting and retaining qualified
scientific personnel to perform research and development work is critical
to our success. Loss of our key personnel would likely delay the
achievement of development objectives and will have a negative affect on
our business. We do not maintain any key person life insurance policies.
We face serious competition for qualified individuals from numerous
pharmaceutical and biotechnology companies, and other research
institutions.
PRODUCT LIABILITY AND AVAILABILITY OF INSURANCE
Drugs used in clinical trials and drugs sold on the market may
expose us to damages claims and adverse publicity resulting from the use
of such products. We have limited product liability coverage for clinical
research use of product candidates such as the Stimulon(TM) adjuvants and
Quilvax(TM) and Quilimmune(TM) products. We also maintain product
liability insurance for the commercial sale of our feline leukemia vaccine,
and we intend to obtain similar coverage for new products if and when
they are commercialized. We may not be able to afford to buy enough
liability insurance to protect us against all of the product liability losses
that could possibly occur, and we cannot guarantee that any such insurance
would provide us with sufficient protection against a product liability
claim.
HAZARDOUS MATERIALS; ENVIRONMENTAL MATTERS
Our research and development activities and manufacturing
processes involve the controlled use of hazardous, controlled and
radioactive materials. Although we believe that our safety procedures for
handling and disposing of such materials comply with the standards
required under local, state and federal regulations, there is still a risk of
accidental contamination or injury, or negligent disposal by third parties.
If there was such an accident, we could be held liable for any damages that
result. Those liabilities may exceed our resources. Although we believe
that we are in compliance with applicable and environmental laws and
regulations and currently do not expect to have to spend significant
amounts of money for environmental control facilities, we may be
required to do so to comply with environmental laws and regulations in
the future.
UNCERTAINTY RELATED TO PRICING OF HEALTH CARE
PRODUCTS AND REIMBURSEMENT
Our ability to successfully sell our products depends in part on the
extent to which reimbursement for the cost of such products and related
treatments will be available from government, health administration
authorities, private health coverage insurers, HMOs and other
organizations. Adequate third-party coverage may not be available to
allow us to obtain satisfactory price levels for third-party payor
reimbursements. Government and other third-party payors are
increasingly attempting to contain health care costs by limiting both
coverage and the level of reimbursement for new products. If adequate
coverage and reimbursement levels are not provided by government and
third-party payors for uses of our product, the market acceptance of these
products will be more difficult. We cannot guarantee that our corporate
partners' products, if any, will be considered cost-effective or that
adequate reimbursement will be available to enable us or our corporate
partners to make a profit.
VOLATILITY OF STOCK PRICE; LIMITED TRADING VOLUME
The market price of our common stock has been and is likely to
continue to be volatile. The market price can be influenced by factors
such as announcements by us or our competitors of technological
innovations, new commercial products, major financing agreements,
patent or proprietary right developments, public concern as to the safety of
biotechnology, and period to period fluctuations in financial results.
There is limited trading volume in our common stock and limited
liquidity. We cannot guarantee that greater trading volume or a more
active market for the common stock will develop.
POTENTIAL ANTI-TAKEOVER DEVICES
Certain provisions of our charter documents, our Shareholder
Rights Plan and Delaware General Corporation law may have the effect of
delaying, discouraging, inhibiting or preventing an attempt by a third party
to obtain control of Aquila by means of a tender offer, business
combination, proxy contest or otherwise. The terms of the members of
our board expire in different years, thus making it more difficult for a
party waging a proxy contest to obtain control of a majority of the board.
In addition, our Shareholder Rights Plan discourages any hostile takeover
by giving existing stockholders the right to buy shares in either the
Company or any acquirer at a price that could cause massive dilution.
USE OF PROCEEDS
Assuming a sale price of $2.00 and the sale of 750,000 shares, we
estimate that the net proceeds received from the sale of shares offered will
be approximately $1,471,583. The Company currently expects to use the
net proceeds for general corporate purposes that may include funding
repayment of debt or operations. Until applied to any use, the net
proceeds of this offering will be invested in high quality interest bearing
investments or deposit accounts.
PLAN OF DISTRIBUTION
We are offering up to 750,000 shares of our common stock directly
to a limited number of investors. The Company and the purchasers will
negotiate the price of the common stock being offered.
DESCRIPTION OF CAPITAL STOCK
Our authorized capital stock consists of 30,500,000 shares of
common stock, $0.01 par value per share, and 5,000,000 shares of
preferred stock, $0.01 par value per share. As of June 2, 1999, there were
6,996,738 shares of common stock outstanding held of record by 4,847
record holders. We have not issued any shares of preferred stock.
COMMON STOCK
Each common stockholder is entitled to one vote per share on all
matters to be voted upon by the stockholders. Subject to preferences that
may be applicable to any outstanding preferred stock, the common
stockholders are entitled to receive ratably any dividends that are declared
from time to time by the Board of Directors out of legally available funds.
In the event of liquidation, dissolution or winding up, the holders of our
common stock are entitled to share ratably in all assets remaining after
payment of liabilities, subject to prior rights of preferred stock, if any, then
outstanding. The common stock has no pre-emptive or conversion rights
or other subscription rights, other than those associated with the
Shareholder Rights Agreement described below. All outstanding shares of
common stock are fully paid and nonassessable.
CERTAIN PROVISIONS TO DISCOURAGE OR PREVENT COERCIVE TAKEOVERS
Certain provisions of our charter documents could make the
acquisition of Aquila and the removal of incumbent officers and directors
more difficult. These provisions are expected to discourage coercive
takeover practices and inadequate takeover bids and to encourage persons
seeking to acquire control of us to first negotiate with us. We believe that
the benefits of increased protection of our potential ability to negotiate
with the proponent of an unfriendly or unsolicited proposal to acquire or
restructure us outweigh the disadvantages of discouraging these proposals,
because, among other things, negotiation of these proposals could result in
an improvement of their terms.
Our bylaws provide for a classified board of directors divided into
three classes, with staggered three-year terms. As a result, only one class
of directors will be elected at each annual meeting of stockholders with the
other classes continuing for the remainder of their respective three-year
terms. The classification of the board of directors may make it more
difficult for existing stockholders to replace the board of directors as well
as for another party to obtain control of us by replacing the board of
directors. Since the board of directors has the power to retain and
discharge officers, the provisions could also make it more difficult for
existing stockholders or another party to effect a change in management.
We are subject to the provisions of Section 203 of the Delaware
law. In general, the statute prohibits a publicly held Delaware corporation
from engaging in a "business combination" with an "interested
stockholder" for a period of three years after the date that the person
became an interested stockholder. These transactions may be permitted if
the business combination or the transaction in which the person became an
interested stockholder occurs after the interested stockholder owns 85% of
the voting stock of the corporation or if the stockholders or directors
approve the transaction. Generally, a "business combination" includes a
merger, asset or stock sale, or other transaction resulting in a financial
benefit to the stockholder. Generally, an "interested stockholder is a
person who, together with affiliates and associates, owns (or within three
years prior, did own) 15% or more of the corporation's voting stock.
These provisions may have the effect of delaying, deferring or preventing
a change in control of us without further action by the stockholders.
Aquila has in place a shareholder rights plan which is designed to
distribute common stock purchase rights to holders of Aquila's common
stock if a person or group:
- acquires beneficial ownership of fifteen percent or more
of Aquila's outstanding stock; or
- acquires beneficial ownership of ten percent or more of
Aquila's outstanding stock and is deemed by our board
of directors to be a person or group whose ownership
could have material adverse consequences for Aquila,
our property or our stockholders; or
- commences a tender offer which would result in
ownership as described in the two situations above.
The plan expires June 2, 2008 and provides for the issuance of
common stock in Aquila or the acquiring company equal in value to twice
the exercise price for each right. The dilutive effect of this transaction is
intended to deter inadequate takeover bids.
EXPERTS
The consolidated financial statements of Aquila
Biopharmaceuticals, Inc. incorporated in this Prospectus by reference to the
Annual Report on Form 10-K for the year ended December 31, 1998 have
been incorporated herein in reliance on the report of
PricewaterhouseCoopers LLP given on the authority of said firm as
experts in accounting and auditing.
LEGAL MATTERS
The legality of the shares to be sold hereunder will be passed upon
by Bowditch & Dewey, LLP, Worcester, Massachusetts.
TABLE OF CONTENTS
Where You Can Find More Information 1
Information Incorporated By Reference 1
Prospectus Summary 2
Forward-Looking Statements 2
Risk Factors 3
Use of Proceeds 7
Plan of Distribution 7
Description of Capital Stock 7
Experts 9
Legal Matters 9
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth an itemized statement of all expenses
in connection with the issuance and distribution of the securities being
registered, to be borne by the registrant:
Registration fee $417
NASD filing fee $15,000
Legal Fees and expenses* $10,000
Accounting fees and expenses* $3,000
Total $28,417
_________
* Estimated
Item 15. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law provides
that the Company shall have the power to indemnify any director, officer,
employee or agent for expenses (including attorneys' fees) judgments,
fines and amounts paid in settlement actually and reasonably incurred by
him in connection with any suit, action or proceeding if such person acted
in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company, and, with respect to any
criminal proceeding, had no reasonable cause to believe his conduct was
unlawful. In the event an action against such a person is by or in the right
of the Company and such person shall have been adjudged to be liable to
the Company, such indemnification is permitted only to the extent that the
Delaware Court of Chancery or the court in which such action is brought
shall deem proper.
Article THIRD of the Company's By-laws provides for
indemnification of its directors, officers, employees or agents to the fullest
extent provided by laws.
Article SIXTH of the Company's Restated Certificate of
Incorporation provides that a director of the Company shall not be
personally liable to the Company or its stockholders for monetary
damages for breach of his or her fiduciary duty as a director to the extent
provided either (i) in the order of the United States Bankruptcy Court for
the District of Massachusetts confirming the Reorganization Plan of the
Company's predecessor, Cambridge Biotech Corporation, but in any
event, to no greater extent that is permitted by Section 102(b)(7) or any
successor similar provision in the Delaware General Corporation Law, or
(ii) by the Delaware General Corporation Law.
The Company maintains an executive liability indemnification
policy. Subject to the policy conditions, the insurance provides coverage
for an amount payable by the Company to its directors and officers
pursuant to the Company's By-laws.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or persons
controlling the registrant pursuant to the foregoing provisions, 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.
Item 16. Exhibits.
3.1 Amended and Restated Certificate of Incorporation,
effective July 25, 1996 (incorporated by reference to
Exhibit 2 to Form 8-K, dated July 18, 1996, File No. 0-
12081).
3.2 Certificate of Amendment of Amended and Restated
Certificate of Incorporation, effective March 24, 1997
(incorporated by reference to Exhibit 3.2 to Annual Report
on Form 10-K for fiscal year ended December 31, 1996,
File No. 0-12081).
3.3 By-laws (incorporated by reference to Exhibit 2 to Form 8-
K, dated July 18, 1996, File No. 0-12081).
4.1 Specimen Certificate representing common stock of the
Company (incorporated by reference to Exhibit 4.1 to From
8-K, dated October 21, 1996, File No. 0-12081).
5.1 Opinion of Bowditch & Dewey, LLP
*10.1 Contract Research and License Agreement with Virbac
Laboratories, S.A. dated July 6, 1983 (incorporated by
reference to Exhibit 10.31 to Annual Report on Form 10-K
for fiscal year ended December 31, 1983, File No. 0-
12081).
*10.1.1 Amendment to Agreement with Virbac
Laboratories, S.A. (incorporated by reference to Exhibit
10.10.1 to Annual Report on Form 10-K for fiscal year
ended December 31, 1988, File No. 0-12081).
10.2 Lease for Framingham Massachusetts facility with NDNE
9/90 Corporate Center LLC as landlord effective September
9, 1998 (incorporated by reference to Exhibit 10.1 to Form
S-3/A No. 1 filed May 6, 1998, File No. 0-12081).
*10.3 License, Development and Supply Agreement with
SmithKline Beecham, p.l.c., dated as of September 11,
1992, as amended by Agreement dated as of March 31,
1993 (incorporated by reference to Exhibit 10-17 to Annual
Report of Form 10-K for fiscal year ended December 31,
1992, File No. 0-12081).
tm10.4 Employment Agreement with Alison Taunton-Rigby, dated
April 6, 1995 (incorporated by reference to Exhibit 10.17 to
Annual Report on From 10-K for fiscal year ended
December 31, 1995, File No. 01-12081).
tm10.5 Employment Agreement with Gerald A. Beltz, dated
August 21, 1995 (incorporated by reference to Exhibit
10.18 to Annual Report on From 10-K for fiscal year ended
December 31, 1995, File No. 01-12081).
tm10.6 Employment Agreement with Deborah Blackburn Grabbe,
dated August 21, 1995 (incorporated by reference to
Exhibit 10.19 to Annual Report on Form 10-K for fiscal
year ended December 31, 1995, File No. 01-12081).
tm10.7 Employment Agreement with James L. Warren, dated
January 17, 1998 (incorporated by reference to Exhibit
10.15 to Annual Report on Form 10-K for the fiscal year
ended December 31, 1997, File No. 01-12081).
10.9 Master Acquisition Agreement by and among bioMerieux
Vitek, Inc., Aquila Biopharmaceuticals, Inc. and
Cambridge Biotech Corporation, dated as of April 4, 1996
(incorporated by reference to Exhibit 10.1 to quarterly
report on Form 10-Q for quarter ended June 30, 1996, File
No. 0-12081).
10.10 Asset Purchase Agreement between Meridian Diagnostics,
Inc. and Cambridge Biotech Corporation, dated as of June
24, 1996 (incorporated by reference to Exhibit 2.1 to
current report on Form 8-K, dated June 24, 1996, File No.
0-12081).
10.12 1996 Stock Award and Option Plan (incorporated by
reference to Exhibit 10.12 to Annual Report on Form 10-K
for the fiscal year ended December 31, 1996, File No. 01-
12081).
10.13 1996 Directors Stock Award and Option Plan (incorporated
by reference to Exhibit 10.13 to Annual Report on Form 10-K
for the fiscal year ended December 31, 1996, File No. 01-12081).
10.14 1996 Employee Stock Purchase Plan (incorporated by
reference to Exhibit 10.14 to Annual Report on Form 10-K
for the fiscal year ended December 31, 1996, File No. 01-
12081).
10.15 1996 Employee Retention Agreements (incorporated by
reference to Exhibit 10.2 to Quarterly Report on Form 10-Q
for fiscal quarter ended September 30, 1997).
23.1 Consent of Bowditch & Dewey, LLP (included in Exhibit
5.1)
23.2 Consent of Independent Accountants
24.1 Power of Attorney (included on signature page)
* Confidential treatment previously granted.
tm Management contract or compensatory plan.
Item 17. Undertakings.
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 and 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 and 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.
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 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.
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-2 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Framingham, The
Commonwealth of Massachusetts, on June 4, 1999.
AQUILA BIOPHARMACEUTICALS, INC.
By: /s/ Alison Taunton-Rigby
Alison Taunton-Rigby
President and Chief Executive Officer
By: /s/ James L. Warren
James L. Warren
Treasurer, Chief Financial Officer and
Chief Accounting Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated. The persons whose signatures appear
below do hereby make, constitute and appoint Alison Taunton-Rigby and
Jane V. Hawkes and each of them their true and lawful attorneys and
agents with full power and authority on their behalf to execute and file
with the Securities and Exchange Commission any amendment or
amendments, including post-effective amendments to this Registration
Statement and any and all instruments and documents which may be
necessary or desirable in connection with the registration of the shares of
common stock pursuant to this Registration Statement and they do ratify
and confirm all said agents and attorneys may do or cause to be done by
virtue hereof.
/s/ Jeffrey T. Beaver May 27, 1999
Jeffrey T. Beaver, Director
/s/ Robert J. Carpenter June 4, 1999
Robert J. Carpenter, Director
/s/ Keith J. Dorrington May 28, 1999
Keith J. Dorrington, Director
/s/ Elliott D. Hillback, Jr. June 4, 1999
Elliott D. Hillback, Jr., Director
/s/ Alison Taunton-Rigby June 4, 1999
Alison Taunton-Rigby, Director
Exhibit Index
3.1 Amended and Restated Certificate of Incorporation,
effective July 25, 1996 (incorporated by reference to
Exhibit 2 to Form 8-K, dated July 18, 1996, File No. 0-
12081).
3.2 Certificate of Amendment of Amended and Restated
Certificate of Incorporation, effective March 24, 1997 (
incorporated by reference to Exhibit 3.2 to Annual Report
on Form 10-K for fiscal year ended December 31, 1996,
File No. 0-12081).
3.3 By-laws (incorporated by reference to Exhibit 2 to Form 8-
K, dated July 18, 1996, File No. 0-12081).
4.1 Specimen Certificate representing common stock of the
Company (incorporated by reference to Exhibit 4.1 to From
8-K, dated October 21, 1996, File No. 0-12081).
5.2 Opinion of Bowditch & Dewey, LLP
*10.1 Contract Research and License Agreement with Virbac
Laboratories, S.A. dated July 6, 1983 (incorporated by
reference to Exhibit 10.31 to Annual Report on Form 10-K
for fiscal year ended December 31, 1983, File No. 0-
12081).
*10.1.1 Amendment to Agreement with Virbac
Laboratories, S.A. (incorporated by reference to Exhibit
10.10.1 to Annual Report on Form 10-K for fiscal year
ended December 31, 1988, File No. 0-12081).
10.2 Lease for Framingham Massachusetts facility with NDNE
9/90 Corporate Center LLC as landlord effective September
9, 1998 (incorporated by reference to Exhibit 10.1 to Form
S-3/A No. 1 filed May 6, 1998, File No. 0-12081).
*10.3 License, Development and Supply Agreement with
SmithKline Beecham, p.l.c., dated as of September 11,
1992, as amended by Agreement dated as of March 31,
1993 (incorporated by reference to Exhibit 10-17 to Annual
Report of Form 10-K for fiscal year ended December 31,
1992, File No. 0-12081).
tm10.4 Employment Agreement with Alison Taunton-Rigby, dated
April 6, 1995 (incorporated by reference to Exhibit 10.17 to
Annual Report on From 10-K for fiscal year ended
December 31, 1995, File No. 01-12081).
tm10.5 Employment Agreement with Gerald A. Beltz, dated
August 21, 1995 (incorporated by reference to Exhibit
10.18 to Annual Report on From 10-K for fiscal year ended
December 31, 1995, File No. 01-12081).
tm10.6 Employment Agreement with Deborah Blackburn Grabbe,
dated August 21, 1995 (incorporated by reference to
Exhibit 10.19 to Annual Report on Form 10-K for fiscal
year ended December 31, 1995, File No. 01-12081).
tm10.7 Employment Agreement with James L. Warren, dated
January 17, 1998 (incorporated by reference to Exhibit
10.15 to Annual Report on Form 10-K for the fiscal year
ended December 31, 1997, File No. 01-12081).
10.9 Master Acquisition Agreement by and among bioMerieux
Vitek, Inc., Aquila Biopharmaceuticals, Inc. and
Cambridge Biotech Corporation, dated as of April 4, 1996
(incorporated by reference to Exhibit 10.1 to quarterly
report on Form 10-Q for quarter ended June 30, 1996, File
No. 0-12081).
10.11 Asset Purchase Agreement between Meridian Diagnostics,
Inc. and Cambridge Biotech Corporation, dated as of June
24, 1996 (incorporated by reference to Exhibit 2.1 to
current report on Form 8-K, dated June 24, 1996, File No.
0-12081).
10.12 1996 Stock Award and Option Plan (incorporated by
reference to Exhibit 10.12 to Annual Report on Form 10-K
for the fiscal year ended December 31, 1996, File No. 01-
12081).
10.13 1996 Directors Stock Award and Option Plan (incorporated
by reference to Exhibit 10.13 to
Annual Report on Form 10-K for the fiscal year ended
December 31, 1996, File No. 01-12081).
10.14 1996 Employee Stock Purchase Plan (incorporated by
reference to Exhibit 10.14 to Annual Report on Form 10-K
for the fiscal year ended December 31, 1996, File No. 01-
12081).
10.15 1996 Employee Retention Agreements (incorporated by
reference to Exhibit 10.2 to Quarterly Report on Form 10-Q
for fiscal quarter ended September 30, 1997).
23.1 Consent of Bowditch & Dewey, LLP (included in Exhibit 5.1)
23.2 Consent of Independent Accountants.
* Confidential treatment previously granted.
tm Management contract or compensatory plan.
Exhibit 5.1
Aquila Biopharmaceuticals, Inc.
175 Crossing Boulevard
Framingham, Massachusetts 01702
Ladies and Gentlemen:
This opinion is delivered to you in connection with the registration
statement on Form S-2 (the "Registration Statement") filed on June 4, 1999 by
Aquila Biopharmaceuticals, Inc. (the "Company") under the Securities
Act of 1933, as amended, for registration under said Act of 750,000 shares
of the common stock, $.01 par value (the "Common Stock"), of the Company.
We are familiar with the Restated Certificate of Incorporation of the
Company, as amended, the corporate minute book and the by-laws of the Company,
as amended, and the Registration Statement. We have also made such further
investigation as we have deemed necessary for the purposes of this opinion.
Based upon and subject to the foregoing, we are of the opinion that the
shares of Common Stock of the Company covered by the Registration Statement
have been validly authorized for issuance and will be, upon issuance, legally
issued, fully paid and nonassessable.
We understand that this opinion is to be used in connection with the
Registration Statement. We consent to the filing of this opinion as an exhibit
to the Registration Statement and the reference to our firm in the prospectus
contained in the Registration Statement under the caption "Legal Matters."
Very truly yours,
/s/ Bowditch & Dewey
BOWDITCH & DEWEY, LLP
Exhibit 23.2
Consent of Independent Accountants
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-2 to register 750,000 shares of common stock of our
report dated February 11, 1999 relating to the consolidated financial
statements, which appears in Aquila Biopharmaceuticals, Inc.'s Annual Report
on Form 10-K for the year ended December 31, 1998. We also consent to the
reference to us under the heading "Experts" in such Registration Statement.
PricewaterhouseCoopers LLP
June 4, 1999
