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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 2, 1999
REGISTRATION NO. 333-86037
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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ALPHARMA INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 22-2095212
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
</TABLE>
ONE EXECUTIVE DRIVE
FORT LEE, NEW JERSEY 07024
TELEPHONE: (201) 947-7774
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL OFFICES)
ROBERT F. WROBEL
VICE PRESIDENT AND CHIEF LEGAL OFFICER
ALPHARMA INC.
ONE EXECUTIVE DRIVE
FORT LEE, NEW JERSEY 07024
TELEPHONE: (201) 947-7774
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPY TO:
GLEN E. HESS, P.C.
KIRKLAND & ELLIS
CITICORP CENTER
153 EAST 53RD STREET
NEW YORK, NEW YORK 10022
(212) 446-4800
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time 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, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [ ]
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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 THE 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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THE INFORMATION IN THIS PRELIMINARY PROSPECTUS IS NOT COMPLETE AND MAY BE
CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT
COVERING THEM HAS BEEN DECLARED EFFECTIVE BY THE SEC. THIS PRELIMINARY
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND WE ARE NOT SOLICITING
OFFERS TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED.
SUBJECT TO COMPLETION, DATED NOVEMBER 2, 1999
Prospectus
$250,000,000
[ALPHARMA LOGO]
DEBT SECURITIES
CLASS A COMMON STOCK
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We may use this prospectus to offer and sell securities from time to time.
The types of securities we may sell include:
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- - senior debt securities - Class A common stock
- - subordinated debt securities
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We will provide the specific terms of these securities in supplements to
this prospectus prepared in connection with each offering. These terms may
include:
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In the case of any securities: In the case of debt securities:
- - offering price - denomination or currency
- - size of offering - interest rate
- - underwriting discounts - maturity
- ranking
- whether they may be redeemed prior
to maturity
- whether they are convertible into
common stock
</TABLE>
The securities offered will contain other significant terms and conditions.
Please read this prospectus and the applicable prospectus supplement carefully
before you invest.
THIS INVESTMENT INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING ON PAGE 1.
Our Class A common stock is traded on the New York Stock Exchange under the
symbol "ALO."
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of the securities or passed upon the
adequacy or accuracy of the prospectus. Any representation to the contrary is a
criminal offense.
The date of this prospectus is , 1999.
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TABLE OF CONTENTS
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PAGE
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Forward-Looking Statements.................................. i
Incorporation by Reference.................................. i
Risk Factors................................................ 1
Use of Proceeds............................................. 6
Ratio of Earnings to Fixed Charges.......................... 6
Our Company................................................. 7
Where You Can Find More Information......................... 8
Description of Debt Securities.............................. 9
Description of Capital Stock................................ 15
Book-Entry.................................................. 16
Plan of Distribution........................................ 19
Legal Matters............................................... 20
Experts..................................................... 20
</TABLE>
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FORWARD-LOOKING STATEMENTS
This prospectus contains "forward-looking statements," or statements that
are based on current expectations, estimates, and projections rather than
historical facts. We offer these forward-looking statements in reliance on the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements may prove, in hindsight, to have been inaccurate
because of risks and uncertainties that are difficult to predict. Many of the
risks and uncertainties that we face are included under the caption "Risk
Factors."
We are not obligated to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
In light of these risks, uncertainties and assumptions, the forward-looking
events discussed in this prospectus might not occur.
INCORPORATION BY REFERENCE
We have filed the following documents with the Securities and Exchange
Commission. These documents are incorporated herein by reference as of their
respective dates of filing and shall be deemed to be a part of this prospectus:
1. Our Annual Report on Form 10-K for the year ended December 31, 1998.
2. Our Quarterly Reports on Form 10-Q for the quarters ended March 31,
1999, June 30, 1999 and September 30, 1999 and on Form 10-Q/A for the
quarter ended June 30, 1999.
3. Our Current Reports on Form 8-K dated February 23, 1999, June 17, 1999
and July 2, 1999 and on Form 8-K/A dated August 30, 1999.
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All documents and reports which we file pursuant to Section 13(a), 13(c),
14 or 15(d) of the Securities Exchange Act of 1934 after the date of this
prospectus are also incorporated by reference in this prospectus and will be
deemed a part of this prospectus from the date of filing of the document or
report.
Statements contained in documents incorporated or deemed to be incorporated
by reference after the date of this prospectus will modify statements in any
other subsequently filed documents to the extent the new information differs
from the old information. Any statements modified or superseded will no longer
constitute a part of this prospectus in their original form.
We will provide you without charge, upon request, with a copy of any or all
of the documents referred to above which have been or may be incorporated in the
prospectus by reference, other than exhibits to such documents unless the
exhibits themselves are specifically incorporated by reference. Requests for
such copies should be directed to Alpharma Inc., One Executive Drive, Fort Lee,
New Jersey 07024, Attention: Investor Relations Department (telephone number:
(201) 947-7774).
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RISK FACTORS
You should carefully consider the following risks as well as other
information contained in this prospectus before deciding to invest in any
offered securities.
OUR SUBSTANTIAL INDEBTEDNESS COULD LIMIT OUR ABILITY TO OBTAIN ADDITIONAL
FINANCING, LIMIT OUR OPERATING FLEXIBILITY AND MAKE US MORE VULNERABLE TO
ECONOMIC DOWNTURNS.
As of September 30, 1999, we had total outstanding long-term indebtedness
of approximately $648 million, or approximately 68% of our total capitalization.
In addition, we had approximately $72 million of availability under our
revolving credit facility and short-term European line, subject to the
satisfaction of the financial tests and maintenance of the financial ratios we
describe in this document and our other public filings. These tests and
covenants include an interest coverage ratio, total debt to EBITDA and equity to
total asset ratio. This level of indebtedness could:
- limit our ability to obtain additional financing
- limit our operating flexibility as a result of covenants contained in our
credit facility
- make us more vulnerable to economic downturns and
- limit our ability to pursue other business opportunities.
Also, we are vulnerable to fluctuations in interest rates since
approximately $315 million of our debt at September 30, 1999 was at variable
interest rates. We believe that we are more leveraged than many of our
competitors.
Our acquisition of the Isis Group resulted in an equity to total asset
ratio under our revolving credit facility of 24.5% as of June 30, 1999. The
ratio falling below 25% required an increase in the interest rate margin under
our revolving credit facility of .75% beginning August 18, 1999. We are required
to achieve a minimum ratio of at least 25% by December 18, 1999. A failure to
meet this minimum ratio by December 18, 1999 would constitute an event of
default under our revolving credit facility and would have a material adverse
effect on us. The equity to total asset ratio at September 30, 1999 was 25.5%.
We expect the margin increase to be rescinded on or about November 2, 1999.
POTENTIAL ACQUISITIONS MAY REDUCE OUR EARNINGS, BE DIFFICULT TO INTEGRATE INTO
OUR COMPANY AND REQUIRE ADDITIONAL FINANCING.
We search for and evaluate acquisitions which will provide new product and
market opportunities, leverage existing assets and add critical mass.
Acquisitions commonly involve risks and may have a material effect on our
results of operations. Any acquisitions we make may fail to accomplish our
strategic objectives, may not be successfully integrated with our operations and
may not perform as expected. In addition, based on current acquisition prices in
the pharmaceutical industry, acquisitions could initially be dilutive to our
earnings and add significant intangible assets and related goodwill amortization
charges. Our acquisition strategy will require additional debt or equity
financing, resulting in additional leverage and dilution of ownership,
respectively. We may not be able to finance acquisitions on terms satisfactory
to us.
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WE ARE SUBJECT TO GOVERNMENT REGULATIONS AND ACTIONS THAT INCREASE OUR COSTS AND
COULD PREVENT US FROM MARKETING OR SELLING SOME OF OUR PRODUCTS IN CERTAIN
COUNTRIES.
The research, development, manufacturing and marketing of our products are
subject to extensive government regulation. Government regulation includes
inspection of and controls over testing, manufacturing, safety, efficacy,
labeling, record keeping, sale and distribution of pharmaceutical products. The
U.S. and other governments regularly review manufacturing operations.
Noncompliance with applicable requirements can result in fines, recall or
seizure of products, suspension of production and debarment of individuals or
our company from obtaining new drug approvals. Government regulation
substantially increases the cost of manufacturing, developing and selling our
products.
We have filed applications to market our products with the United States
Food and Drug Administration and other regulatory agencies both in the U.S. and
internationally. The timing of receipt of approvals of these applications can
significantly affect future revenues and income. This is particularly
significant with respect to human pharmaceuticals at the end of third parties'
patent protection. There can be no assurance that we will obtain new product
approvals in a timely manner, if ever. Failure to obtain approvals, or to obtain
them when expected, could have a material adverse effect on our business. We
also have affiliations, license agreements and other arrangements with
companies, such as Ascent Pediatrics, Inc., which arrangements depend on
regulatory approvals sought by such companies.
The European Union and five non-EU countries have banned the use of
bacitracin zinc, a feed antibiotic growth promoter, in livestock feeds effective
July 1, 1999. Our initial effort to reverse this action by means of a court
injunction from the Court of First Instance of the European Court was denied. We
are making further attempts to reverse or limit this action, with particular
emphasis on political means. Although we may not succeed, we believe that strong
scientific evidence exists to refute the EU position. In addition, other
countries are considering a similar ban. If the loss of bacitracin zinc sales is
limited to the European Union and those countries that have already taken
similar action, we do not anticipate a material adverse effect. If either (a)
other countries more important to our sales of bacitracin-based products ban
these products or (b) the European Union (or countries or customers within the
EU) acts to prevent the importation of meat products from countries that allow
the use of bacitracin-based products, we could be materially affected.
Specifically the loss of the U.S. market for our bacitracin based products would
be materially adverse to us. We cannot predict whether the present bacitracin
zinc ban will be expanded.
OUR FOREIGN OPERATIONS ARE SUBJECT TO ADDITIONAL ECONOMIC AND POLITICAL RISKS.
Our foreign operations are subject to currency exchange fluctuations and
restrictions, political instability in some countries, and uncertainty as to the
enforceability of, and government control over, commercial rights.
Some of our foreign operations, particularly in Indonesia where we have a
manufacturing facility and Brazil where we have recently added significant
sales, are being affected by wide currency fluctuations and decreased economic
activity in these regions and, in case of Indonesia, by social and political
unrest. While our present exposure to economic factors in these regions is not
material, they are important areas for anticipated future growth.
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We sell products in many countries that are recognized to be susceptible to
significant foreign currency risk. These products are generally sold for U.S.
dollars, which eliminates the direct currency risk but increases credit risk if
the local currency devalues significantly and it becomes more difficult for
customers to purchase U.S. dollars required to pay us. Recent acquisitions in
Europe may increase the foreign currency risk.
OUR OPERATING RESULTS HAVE VARIED IN THE PAST AND MAY CONTINUE TO DO SO.
Our businesses may experience variations in revenues and net income as a
result of many factors, including acquisitions, delays in the introduction of
new products, success or failures of strategic alliances and joint ventures,
management actions and the general conditions of the pharmaceutical and animal
health industries.
MANY OF OUR COMPETITORS HAVE MORE RESOURCES THAN WE HAVE.
All of our businesses operate in highly competitive markets and many of our
competitors are substantially larger and have greater financial, technical and
marketing resources. As a result, we may be at a disadvantage in our ability to
develop and market new products to meet competitive demands.
WE HAVE BEEN AND WILL CONTINUE TO BE AFFECTED BY THE COMPETITIVE AND CHANGING
NATURE OF THE PHARMACEUTICAL INDUSTRY.
Our U.S. generic pharmaceutical business has historically been subject to
intense competition. As patents and other bases for market exclusivity expire,
prices typically decline as generic competitors enter the marketplace. Normally,
there is a further unit price decline as the number of generic competitors
increases. The timing of these price decreases is unpredictable and can result
in a significantly curtailed period of profitability for a generic product. In
addition, brand-name manufacturers frequently take actions to prevent or
discourage the use of generic equivalents through marketing and regulatory
activities and litigation.
Generic pharmaceutical market conditions in the U.S. were further
exacerbated in the second half of 1996 by a fundamental shift in industry
distribution, purchasing and stocking patterns resulting from increased
importance of sales to major wholesalers and a concurrent reduction in sales to
private label generic distributors. We believe that this trend continues to
date. Wholesaler programs generally require lower prices on products sold, lower
inventory levels kept at the wholesaler and fewer manufacturers selected to
provide products to the wholesaler's own marketing programs.
The factors which have adversely affected the U.S. generic pharmaceutical
industry may also affect some or all of the markets in which the international
pharmaceutical division operates. In addition, in Europe we are encountering
price pressure from imports of identical products from lower priced markets
under EU laws of free movement of goods. Parallel imports could lead to lower
volume growth. Our international pharmaceutical division is also affected by
general governmental initiatives to reduce drug prices. Both parallel imports
and governmental cost containment could cause lower prices in certain markets
including the Nordic countries where we have significant sales.
It is difficult for us to respond to competitive challenges because of the
significance of relatively few major customers, such as large wholesalers and
chain stores, a rapidly changing market and uncertainty of timing of new product
approvals.
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FUTURE INABILITY TO OBTAIN RAW MATERIALS OR PRODUCTS FROM CONTRACT MANUFACTURERS
COULD SERIOUSLY AFFECT OUR OPERATIONS.
We currently purchase many of our raw materials and other products from
single suppliers. Although we have not experienced difficulty to date, we may
experience supply interruptions in the future and may have to obtain substitute
materials or products. If we had to obtain substitute materials or products, we
would require additional regulatory approvals. Any significant interruption of
supply from our suppliers could have a material adverse effect on our
operations.
OUR BUSINESS IS AFFECTED BY THE POLICIES OF THIRD-PARTY PAYORS, SUCH AS INSURERS
AND MANAGED CARE ORGANIZATIONS.
Our commercial success with respect to generic products depends, in part,
on the availability of adequate reimbursement from third-party health care
payors, such as government and private health insurers and managed care
organizations. Third-party payors are increasingly challenging the pricing of
medical products and services and their reimbursement practices may prevent us
from maintaining our present product price levels. In addition, the market for
our products may be limited by third-party payors who establish lists of
approved products and do not provide reimbursement for products not listed.
SOME OF OUR PRODUCTS MAY BE SUBJECT TO PRODUCT LIABILITY CLAIMS.
Continuing studies are being conducted by the industry, government agencies
and others. These studies increasingly employ sophisticated methods and
techniques and can call into question the utilization, safety and efficacy of
previously marketed products. In some cases, these studies have resulted in the
removal of products from the market and have given rise to claims for damages
from previous users. Our business could be harmed by such actions.
OUR RELATIONSHIP WITH OUR CONTROLLING STOCKHOLDER COULD LEAD TO CONFLICTS OF
INTEREST.
A.L. Industrier AS, or Industrier, is the beneficial owner of 100% of the
outstanding shares of the Class B common stock. Industrier also owns $67.8
million of our 5 3/4% convertible subordinated notes due 2005 which are
convertible into Class B common stock. As a result of its stock ownership,
Industrier controls Alpharma and is presently entitled to elect two-thirds of
the members of our board of directors. Einar Sissener, Chairman of the Board and
Chairman of the Office of the Chief Executive of Alpharma, controls a majority
of Industrier's outstanding shares and is Chairman of Industrier. In addition,
Mr. Sissener beneficially owns 338,668 shares of Class A common stock. Gert
Munthe, President and Chief Executive Officer of Alpharma, is the son-in-law of
Mr. Sissener and a director of Industrier.
Alpharma and Industrier engage in various transactions from time to time,
and conflicts of interest are present with respect to the terms of such
transactions. All contractual arrangements between Alpharma and Industrier are
subject to review by, or ratification of, a committee of our board of directors
consisting of one or more directors who are unaffiliated with Industrier, as to
the fairness of the terms and conditions of such arrangements to Alpharma.
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THE MARKET PRICE OF OUR COMMON STOCK MAY BE HIGHLY VOLATILE BECAUSE OF INTERNAL
AND EXTERNAL FACTORS.
The stock market has from time to time experienced significant price and
volume fluctuations that may be unrelated to the operating performance of
particular companies. In addition, the market price of our Class A common stock,
like the stock prices of many publicly traded pharmaceutical companies, has been
and may continue to be highly volatile. The sale by our major shareholders or
members of our management of shares of common stock, management actions,
announcements of technological innovations or new commercial products by
Alpharma or its competitors, publicity regarding actual or potential medical
results relating to marketed products, regulatory developments in either the
U.S. or foreign countries, public concern as to the safety of pharmaceutical and
animal health products, factors present in foreign operations, the loss of
suppliers or contract manufacturers, third-party reimbursement pressures,
potential liability for current products and economic and other external
factors, as well as period-to-period fluctuations in financial results, among
other factors, may have a significant impact on the market price of the Class A
common stock.
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USE OF PROCEEDS
Unless the applicable prospectus supplement provides otherwise, we intend
to use the net proceeds from the sale of the offered securities to reduce our
indebtedness and for general corporate purposes, including capital expenditures
and acquisitions. We believe that any issuance of equity offered by this
prospectus will enhance our ability to finance future acquisitions, including
incurring additional debt. We may reborrow any amounts that we repay under our
credit facility. We are evaluating several possible acquisition candidates but,
other than as incorporated by reference or described in this prospectus, we
currently have no agreement or understanding regarding any material acquisition.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
Alpharma and its subsidiaries on a consolidated basis for each of the periods
indicated. We calculated the ratio of earnings to fixed charges by dividing
earnings by total fixed charges. Earnings consist of pretax income plus fixed
charges and amortization of capitalized interest less capitalized interest.
Fixed charges consist of interest expense on all indebtedness (including
amortization of deferred debt issuance costs) and a portion of rent expense
(33%) we estimated to be the interest component of those rentals.
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NINE MONTHS
YEAR ENDED DECEMBER 31, ENDED SEPTEMBER 30,
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1994 1995 1996 1997 1998 1999
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1.07x 2.24x --(1) 2.31x 2.29x 2.35x
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(1) Earnings in 1996 were not sufficient to cover fixed charges. The deficiency
of earnings was $16.4 million.
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OUR COMPANY
We are a multinational pharmaceutical company that develops, manufactures
and markets specialty human pharmaceutical and animal health products. We
manufacture and market approximately 620 pharmaceutical products for human use
and 40 animal health products. We conduct our business in more than 60 countries
and have approximately 3,200 employees at 40 sites in 22 countries. For the year
ended December 31, 1998, we generated revenue of over $600 million and operating
income of $65 million.
Our human pharmaceutical business is the largest manufacturer and marketer
of generic liquid and topical pharmaceuticals in the U.S. In addition, we have
leading and expanding positions internationally, especially in Europe, where we
have leading positions in branded generic in the Nordic countries and a
substantial generic pharmaceutical market presence in the UK, Netherlands,
Germany and France, through recent acquisitions. Further, through our fine
chemicals division, we are the world's leading producer of bacitracin,
bacitracin zinc and polymixin, which are important pharmaceutical grade
antibiotics. Our human pharmaceutical business generated approximately $420
million of revenue, or approximately 70% of our total revenues, for the year
ended December 31, 1998. On June 18, 1999 we acquired Isis Pharma and Isis
Puren, the German generic businesses of Schwarz Pharma AG. The acquisition
consisted of sales personnel, product registrations, patents and trademarks.
Isis had 1998 revenues in Germany of approximately $75 million and has about 200
employees, of which 140 are in the sales force. Schwarz Pharma has agreed to
continue to supply some of the more substantial Isis products for a period of
four years and all remaining products for one year. Approximately 80% of Isis'
sales consist of cardiovascular products. The most important product of Isis is
the cardiovascular drug Pentalong(TM).
Our animal health business is a leading provider of animal feed additives
for the poultry, cattle and swine industries, as well as vaccines for the
aquaculture industry. We are the market leader in the manufacture and sale of
bacitracin-based feed additives sold under the trade names BMD(R)and Albac. In
addition, we believe that we have a significant market share with several other
of our feed additives, including those sold under our Deccox and 3-Nitro(R)
brands. In aquatic animal health, we believe we are a leader in the development,
manufacture and marketing of vaccines for use in immunizing farmed fish against
disease. Our animal health business generated approximately $185 million of
revenue, or approximately 30% of our total revenues, for the year ended December
31, 1998.
We were originally organized as A.L. Laboratories, Inc., a wholly owned
subsidiary of Apothekernes Laboratorium A.S., a Norwegian healthcare company,
the predecessor company to A.L. Industrier AS. In 1994, we acquired the
complementary human pharmaceutical and animal health business of our parent
company and subsequently changed our name to Alpharma Inc. to operate worldwide
as one corporate entity.
Our principal executive offices are located at One Executive Drive, Fort
Lee, New Jersey 07024.
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other
information with the SEC. You may read and copy these reports, statements and
other information at the SEC's public reference rooms at:
- Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549;
- Seven World Trade Center, 13th Floor, New York, New York 10048; or
- Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661.
In addition, our Class A common stock and our convertible subordinated
notes due 2005 are traded on the New York Stock Exchange under the symbols "ALO"
and "ALO5 DOS" respectively and reports, proxy and information statements and
other information about us can also be inspected at the offices of the Exchange,
20 Broad Street, New York, New York 10005.
Please call the SEC at 1-800-SEC-0330 for further information on the
operation of the public reference rooms. You can also request copies of these
documents, for a copying fee, by writing to the SEC.
Our SEC filings can also be reviewed by accessing the SEC's Internet site
at http://www.sec.gov, which contains reports, proxy and information statements
and other information.
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DESCRIPTION OF DEBT SECURITIES
We will issue debt securities in one or more series under an indenture
between our company and First Union National Bank, as Trustee, the form of which
we have filed as an exhibit to the Registration Statement. The following
summaries of certain provisions of the indenture are not complete and are
qualified in their entirety by express reference to the indenture and the
securities resolutions or the indentures supplemental thereto (copies of which
have been or will be filed with the Commission). Capitalized terms used in this
section without definition have the meanings given to them in the indenture.
GENERAL
The indenture does not limit the amount of debt securities that can be
issued thereunder and provides that the debt securities may be issued from time
to time in one or more series pursuant to the terms of one or more securities
resolutions or supplemental indentures. As of the date of this prospectus, there
were no debt securities outstanding under the indenture. The debt securities
will be unsecured and will have the ranking set forth in the terms of any
supplements to this prospectus.
TERMS
We will determine the terms of the debt securities at the time or times of
sale. We will provide the specific terms of each series in supplements to this
prospectus. Reference is made to the prospectus supplement for the following
terms, if applicable, of the debt securities offered thereby:
- designation, aggregate principal amount, currency or composite currency
and denominations
- terms of any redemption at the option of Holders
- price and, if an index formula or other method is used, the method for
determining amounts of principal or interest
- maturity date and other dates, if any, on which principal will be payable
- interest rate (which may be fixed or variable), if any
- date or dates from which interest will accrue and on which interest will
be payable, and the record dates for the payment of interest
- place or places where principal and interest will be payable and on which
interest will be payable, and the record dates for the payment of
interest
- tax indemnity provisions
- terms of any mandatory or optional redemption by us including any sinking
fund
- terms of any conversion or exchange right
- if the debt securities provide that payments of principal or interest may
be made in a currency other than that in which debt securities are
denominated, the manner for determining the payments
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- portion of principal payable upon acceleration of a Discounted Debt
Security (as defined below)
- ranking
- whether and upon what terms debt securities may be defeased
- manner of paying principal and interest
- any events of default or the covenants in addition to or in lieu of those
set forth in the indenture
- provisions for electronic issuance of debt securities or for debt
securities in uncertificated form
- any additional provisions or other special terms not inconsistent with
the provisions of the indenture, including any terms that may be required
or advisable under United States or other applicable laws or regulations,
or advisable in connection with the marketing of the debt securities.
We may issue debt securities of any series as registered debt securities,
bearer debt securities or uncertificated debt securities, and in denominations
as specified in the terms of the series. (Section 2.01)
In connection with its original issuance, no bearer debt security will be
offered, sold or delivered to any location in the United States, and a bearer
debt security in definitive form may be delivered in connection with its
original issuance only upon presentation of a certificate in a form prescribed
by us to comply with United States laws and regulations. (Section 2.04)
Registration of transfer of registered debt securities may be requested
upon surrender thereof at any agency of ours maintained for that purpose and
upon fulfillment of all other requirements of the agent. (Sections 2.03 and
2.07)
Under the indenture we may issue debt securities as Discounted Debt
Securities to be offered and sold at a substantial discount from the principal
amount thereof. Special United States federal income tax and other
considerations applicable thereto will be described in the prospectus supplement
relating to the Discounted Debt Securities. "Discounted Debt Security" means a
debt security where the amount of principal due upon acceleration is less than
the stated principal amount. (Section 2.10)
CERTAIN COVENANTS
Unless otherwise specified in the applicable prospectus supplement, the
debt securities will not be secured by any properties or assets and will
represent unsecured debt of our company.
Any restrictive covenants which may apply to a particular series of debt
securities will be described in the prospectus supplement relating to that
series. The indenture does not limit our ability to enter into sale and
leaseback transactions.
Unless otherwise indicated in a prospectus supplement, these covenants, if
applicable, do not afford holders of the debt securities protection in the event
of a highly leveraged or other transaction involving us that may adversely
affect holders of the debt securities.
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<PAGE> 15
SUCCESSOR OBLIGOR
Unless otherwise specified in the securities resolution establishing a
series of debt securities, we shall not consolidate with or merge into, or
transfer all or substantially all of our assets to, any person in any
transaction in which we are not the survivor, unless:
(1) the person is organized under the laws of the United States or a
State thereof or is organized under the laws of a foreign jurisdiction and
consents to the jurisdiction of the courts of the United States or a State
thereof;
(2) the person assumes by supplemental indenture all of our
obligations under the indenture, the debt securities and any coupons; and
(3) immediately after the transaction no Default (as defined) exists.
The successor shall be substituted for us, and thereafter all of our
obligations under the indenture, the debt securities and any coupons shall
terminate. (Section 5.01)
EXCHANGE OF DEBT SECURITIES
Registered debt securities may be exchanged for an equal aggregate
principal amount of registered debt securities of the same series and date of
maturity in the authorized denominations as may be requested upon surrender of
the registered debt securities at an agency of ours maintained for that purpose
and upon fulfillment of all other requirements of the agent. (Section 2.07)
DEFAULT AND REMEDIES
Unless the securities resolution establishing the series otherwise provides
(in which event the prospectus supplement will so state), an "Event of Default"
with respect to a series of debt securities will occur if:
(1) we default in any payment of interest on any debt securities of
the series when the same becomes due and payable and the Default continues
for a period of 60 days;
(2) we default in the payment of the principal and premium, if any, of
any debt securities of the series when the same becomes due and payable at
maturity or upon redemption, acceleration or otherwise and the default
shall continue for five or more days;
(3) we default in the payment or satisfaction of any sinking fund
obligation with respect to any debt securities of a series as required by
the securities resolution establishing the series and the Default continues
for a period of 60 days;
(4) we default in the performance of any of its other agreements
applicable to the series and the Default continues for 90 days after the
notice specified below;
(5) pursuant to or within the meaning of any Bankruptcy Law:
(a) we commence a voluntary case,
(b) we consent to the entry of an order for relief against us in an
involuntary case,
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<PAGE> 16
(c) we consent to the appointment of a Custodian for us or for all
or substantially all of our property, or
(d) we make a general assignment for the benefit of our creditors;
(6) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(a) is for relief against us in an involuntary case,
(b) appoints a Custodian for us or for all or substantially all of
our property, or
(c) orders that we be liquidated, and the order or decree remains
unstayed and in effect for 60 days; or
(7) there occurs any other Event of Default provided for in the
series. (Section 6.01)
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar Federal
or State law for the relief of debtors. The term "Custodian" means any receiver,
trustee, assignee, liquidator or a similar official under any Bankruptcy Law.
(Section 6.01)
"Default" means any event which is, or after notice or passage of time
would be, an Event of Default. A Default under subparagraph (4) above is not an
Event of Default until the Trustee or the Holders of at least 33 1/3% in
principal amount of the series notify us of the Default and we do not cure the
Default within the time specified after receipt of the notice. (Section 6.01)
The Trustee may require indemnity satisfactory to it before it enforces the
indenture or the debt securities of the series. (Section 7.01) Subject to
certain limitations, Holders of a majority in principal amount of the debt
securities of the series may direct the Trustee in its exercise of any trust or
power with respect to the series. (Section 6.05) Except in the case of Default
in payment on a series, the Trustee may withhold from Securityholders of the
series notice of any continuing Default (except a Default in payment of
principal or interest) if it determines that withholding notice is in their
interest. (Section 7.04) We are required to furnish the Trustee annually a brief
certificate as to our compliance with all conditions and covenants under the
indenture. (Section 4.04)
The failure to redeem any debt securities subject to a Conditional
Redemption (as defined) is not an Event of Default if any event on which the
redemption is so conditioned does not occur and is not waived before the
scheduled redemption date. (Section 6.01)
The indenture does not have a cross-default provision. Thus, a default by
us on any other debt, including any other series of debt securities, would not
constitute an Event of Default.
AMENDMENTS AND WAIVERS
The indenture and the debt securities or any coupons of the series may be
amended, and any default may be waived as follows: Unless the securities
resolution otherwise provides (in which event the prospectus supplement will so
state), the debt securities and the indenture may be amended with the consent of
the Holders of a majority in principal amount of the debt securities of all
series affected voting as one class. (Section 9.02) Unless the securities
resolution otherwise provides (in which event the prospectus
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<PAGE> 17
supplement will so state), a Default on a particular series may be waived with
the consent of the Holders of a majority in principal amount of the debt
securities of the series. (Section 6.04)
However, without the consent of each Holder affected, no amendment or
waiver may:
(1) reduce the amount of debt securities whose Holders must consent to
an amendment or waiver;
(2) reduce the interest on or change the time for payment of interest
on any debt security;
(3) change the fixed maturity of any debt security;
(4) reduce the principal of any non-Discounted Debt Security or reduce
the amount of the principal of any Discounted Debt Security that would be
due on acceleration thereof;
(5) change the currency in which the principal or interest on a debt
security is payable;
(6) make any change that materially adversely affects the right to
convert any debt security; or
(7) waive any Default in payment of interest on or principal of a debt
security. (Sections 6.04 and 9.02)
Without the consent of any Holder, the indenture or the debt securities may
be amended:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to provide for assumption of Company obligations to Holders in the
event of a merger or consolidation requiring the assumption;
(3) to provide that specific provisions of the indenture shall not
apply to a series of debt securities not previously issued;
(4) to create a series and establish its terms;
(5) to provide for a separate trustee for one or more series; or
(6) to make any change that does not materially adversely affect the
rights of any Holder. (Section 9.01)
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Debt securities of a series may be defeased in accordance with their terms
and, unless the securities resolution establishing the terms of the series
otherwise provides, as set forth below. We at any time may terminate as to a
series all of our obligations (except for certain obligations, including
obligations with respect to the defeasance trust and obligations to register the
transfer or exchange of a debt security, to replace destroyed, lost or stolen
debt securities and coupons and to maintain paying agencies in respect of the
debt securities) with respect to the debt securities of the series and any
related coupons and the indenture ("legal defeasance"). We at any time may
terminate as to a series our obligations with respect to the debt securities and
coupons of the series under any
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<PAGE> 18
restrictive covenants which may be applicable to a particular series ("covenant
defeasance").
We may exercise our legal defeasance option notwithstanding our prior
exercise of our covenant defeasance option. If we exercise our legal defeasance
option, a series may not be accelerated because of an Event of Default. If we
exercise our covenant defeasance option, a series may not be accelerated by
reference to any restrictive covenants which may be applicable to that series.
(Section 8.01)
To exercise either defeasance option as to a series, we must:
(1) irrevocably deposit in trust (the "defeasance trust") with the
Trustee or another trustee money or U.S. Government Obligations, deliver a
certificate from a nationally recognized firm of independent accountants
expressing their opinion that the payments of principal and interest when
due on the deposited U.S. Government Obligations, without reinvestment,
plus any deposited money without investment will provide cash at the times
and in the amounts as will be sufficient to pay the principal and interest
when due on all debt securities of that series to maturity or redemption,
as the case may be, and
(2) comply with certain other conditions.
In particular, we must obtain an opinion of tax counsel that the defeasance
will not result in recognition of any gain or loss to holders for Federal income
tax purposes. "U.S. Government Obligations" means direct obligations of the
United States or an instrumentality of the United States, the payment of which
is unconditionally guaranteed by the United States, which, in either case, have
the full faith and credit of the United States of America pledged for payment
and which are not callable at the issuer's option, or certificates representing
an ownership interest in those obligations. (Section 8.02)
REGARDING THE TRUSTEE
First Union National Bank will act as Trustee for debt securities issued
under the indenture and, unless otherwise indicated in a prospectus supplement,
the Trustee will also act as Registrar and Paying Agent with respect to the debt
securities. (Section 2.03)
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<PAGE> 19
DESCRIPTION OF CAPITAL STOCK
Our authorized capital stock currently consists of: (i) 50,000,000 shares
of Class A common stock, of which 18,036,351 shares were outstanding as of June
30, 1999, (ii) 15,000,000 shares of Class B common stock, $.20 par value per
share, of which 9,500,000 shares were issued and outstanding as of June 30,
1999, and (iii) 500,000 shares of preferred stock, par value $1.00 per share,
none of which were issued and outstanding as of June 30, 1999. The following
description of our capital stock is a summary of provisions of our amended and
restated certificate of incorporation and is qualified in its entirety by the
provisions of that document which has been filed with the SEC. As of June 30,
1999, the Class A common stock was held of record by approximately 1,788
stockholders.
COMMON STOCK
The Class A common stock and the Class B common stock are identical in all
respects, including with respect to the right to receive dividends, except as
follows: (1) the holders of the Class A common stock are currently entitled as
class to elect 33 1/3% of the Board of Directors (rounded to the nearest whole
number, but not less than two members of the Board of Directors), and the
holders of the Class B common stock are entitled as a class to elect the
remaining directors; (2) on all other matters submitted to a vote of
stockholders, the holders of the Class A common stock are entitled to one vote
per share of Class A common stock held, and the holders of the Class B common
stock are entitled to four votes per share of Class B common stock held; (3) the
holders of the Class B common stock have the right at any time and from time to
time to convert each share of Class B common stock into one share of Class A
common stock; and (4) shares of Class A common stock may be declared and paid as
dividends on shares of both Class A common stock and Class B common stock;
shares of Class B common stock may be declared and paid as dividends on shares
of both Class A common stock and Class B common stock; shares of Class A common
stock may be declared and paid as dividends on shares of Class A common stock
and shares of Class B common stock may be declared and paid as dividends on
shares of Class B common stock; and in any such case the same number of shares
must be declared and paid as dividends in respect of each outstanding share of
Class A common stock and each outstanding share of Class B common stock. The
special voting rights of the holders of the Class A common stock as reflected in
clause (1) above terminate if the number of outstanding shares of Class A common
stock is less than 10% of the aggregate number of issued and outstanding shares
of Class A common stock and Class B common stock, and the special voting rights
of the holders of the Class B common stock as reflected in clauses (1) and (2)
above terminate if the number of issued and outstanding shares of Class B common
stock is less than 12 1/2% of such aggregate number, in each case as determined
on the record for the stockholder vote.
We may not subdivide or combine either class of common stock without at the
same time combining or subdividing shares of the other class of common stock in
the same proportion. Upon liquidation of Alpharma, holders of the Class A common
stock and the Class B common stock are entitled to share ratably in any assets
available for distribution to stockholders after payment of all our obligations,
and payments due in respect of any other of our senior securities, including any
shares of preferred stock. Holders of common stock do not have cumulative voting
rights or preemptive, subscription or, except as set forth above with respect to
the Class B common stock, conversion rights.
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<PAGE> 20
PREFERRED STOCK
We may issue the preferred stock in one or more series, with designations,
relative rights, powers, priorities, preferences and limitations thereof as the
Board of Directors, without any stockholder action, may determine, provided that
we may not limit the right of the holders of Class A common stock, voting as a
class, to elect no less than 25% of the Board of Directors by granting voting
rights to any series of preferred stock.
TRANSFER AGENT
BankBoston, N.A. is the transfer agent for the common stock.
BOOK-ENTRY
DTC will act as securities depository for the debt securities. The debt
securities will be issued only as fully registered securities registered in the
name of Cede & Co. (DTC's partnership nominee). One or more fully registered
global certificates will be issued for the debt securities representing the
aggregate principal amount of the debt securities and will be deposited with
DTC.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the 1934 Act, as
amended. DTC holds securities that its participants (the "Direct Participants")
deposit with DTC. DTC also facilitates the settlement among Direct Participants
of securities transactions, such as transfers and pledges, in deposited
securities through electronic computerized book-entry changes in Direct
Participants' accounts, thereby eliminating the need for physical movement of
securities certificates. Direct Participants include securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations. DTC is owned by a number of its Direct Participants and by the
New York Stock Exchange, Inc., the American Stock Exchange, Inc., and the
National Association of Securities Dealers, Inc. Access to the DTC system is
also available to others such as securities brokers and dealers, banks and trust
companies that clear through or maintain a custodial relationship with a Direct
Participant, either directly or indirectly (the "Indirect Participants," and
together with the Direct Participants, the "Participants"). The rules applicable
to DTC and its Participants are on file with the SEC.
Purchases of the debt securities within the DTC system must be made by or
through Direct Participants which will receive a credit for the debt securities
on DTC's records. The ownership interest of each actual purchaser of each debt
security (a "Beneficial Owner") will in turn be recorded on the Direct and
Indirect Participants' respective records. Beneficial Owners will not receive
written confirmation from DTC of their purchase, but Beneficial Owners are
expected to receive written confirmations providing details of the transaction,
as well as periodic statements of their holdings, from the Direct or Indirect
Participant through which the Beneficial Owner entered into the transaction.
Transfers of ownership interest in the debt securities will be effected by
entries made on the books of Participants acting on behalf of Beneficial Owners.
Beneficial Owners will not receive certificates representing their ownership
interest in debt securities except in the event that use of the book-entry
system for the debt securities is discontinued.
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<PAGE> 21
The deposit of the debt securities with DTC and their registration in the
name of Cede & Co. effect no change in beneficial ownership. DTC has no
knowledge of the actual Beneficial Owners of the debt securities; DTC's records
reflect only the identity of the Direct Participants to whose accounts the debt
securities are credited, which may or may not be the Beneficial Owners. The
Participants will remain responsible for keeping account of their holdings on
behalf of their customers.
Conveyance of notices and other direct communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. If less than all of the debt
securities of an issue are being redeemed, DTC's practice will determine by lot
the amount of the interest of each Direct Participant in the series to be
redeemed.
Neither DTC nor Cede & Co. will consent or vote with respect to the debt
securities. Under its usual procedures, DTC mails an omnibus proxy (an "Omnibus
Proxy") to the Participants as soon as possible after the record date. The
Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct
Participants to whose accounts the debt securities are credited on the record
date (identified in a listing attached to the Omnibus Proxy).
Principal, premium, if any, and interest on the debt securities will be
paid to DTC. DTC's practice is to credit Direct Participants' accounts on the
relevant payment date in accordance with their respective holdings shown on
DTC's records unless DTC has reason to believe that it will not receive payment
on the payment date. Payments by Participants to Beneficial Owners will be
governed by standing instructions and customary practices, as is the case with
securities held for the accounts of customers in bearer form or registered in
"street-name," and will be the responsibility of the Participant and not of DTC,
the underwriters, or us, subject to any statutory or regulatory requirements as
may be in effect from time to time. Payment of principal, premium, if any, and
interest to DTC is the responsibility of us or the Trustee. Disbursement of
these payments to Direct Participants is the responsibility of DTC, and
disbursement of these payments to the Beneficial Owners is the responsibility of
Direct and Indirect Participants.
DTC may discontinue providing its services as securities depository with
respect to the debt securities at any time by giving reasonable notice to us.
Under those circumstances and in the event that a successor securities
depository is not obtained, certificates for the debt securities are required to
be printed and delivered. In addition, we may decide to discontinue use of the
system of book-entry transfers through DTC (or any successor securities
depository). In that event, certificates for the debt securities will be printed
and delivered.
We will not have any responsibility or obligation to Participants or to the
persons for whom they act as nominees with respect to the accuracy of the
records of DTC, its nominees or any Direct or Indirect Participant with respect
to any ownership interest in the debt securities, or with respect to payments or
providing of notice to the Direct Participants, the Indirect Participants or the
Beneficial Owners.
So long as Cede & Co. is the registered owner of the debt securities, as
nominee of DTC, references herein to holders of the debt securities shall mean
Cede & Co. or DTC and shall not mean the Beneficial Owners of the debt
securities.
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DTC management is aware that some computer applications, systems, and the
like for processing data ("Systems") that are dependent upon calendar dates,
including dates before, on, and after January 1, 2000, may encounter "year 2000
problems." DTC has informed its Participants and other members of the financial
community (the "Industry") that it has developed and is implementing a program
so that its Systems, as the same relate to the timely payment of distributions
(including principal and income payments) to security holders, book-entry
deliveries, and settlement of trades within DTC, continue to function
appropriately. This program includes a technical assessment and remediation
plan, each of which is complete. Additionally, DTC's plan includes a testing
phase, which is expected to be completed within appropriate time frames.
However, DTC's ability to perform properly its services is also dependent
upon other parties, including but not limited to issuers and their agents, as
well as third party vendors from whom DTC licenses software and hardware, and
third party vendors on whom DTC relies for information or the provision of
services, including telecommunication and electrical utility service providers,
among others. DTC has informed the industry that it is contracting (and will
continue to contract) third party vendors from whom DTC acquires services to:
(i) impress upon them the importance of such services being year 2000 compliant;
and (ii) determine the extent of their efforts for year 2000 remediation (and,
as appropriate, testing) of their services. In addition, DTC is in the process
of developing such contingency plans as it deems appropriate.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from DTC.
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<PAGE> 23
PLAN OF DISTRIBUTION
The Company may sell securities through underwriters or dealers, directly
to one or more purchasers or through agents. The applicable prospectus
supplement will set forth the terms of the offering of any securities,
including:
- the names of any underwriters or agents
- the proceeds to the Company from the sale
- any other items constituting underwriters' compensation
- any discounts or concessions allowed or re-allowed or paid to dealers
- the purchase price of the securities
- any underwriting discounts
- any initial public offering price
- any securities exchanges on which the securities may be listed
If underwriters are used in the sale, securities will be acquired by the
underwriters for their own account and may be resold from time to time in one or
more transactions, including negotiated transactions, at a fixed public offering
price or at varying prices determined at the time of sale. Those securities may
be offered to the public either through underwriting syndicates represented by
managing underwriters or by underwriters without a syndicate. Unless otherwise
set forth in the applicable prospectus supplement, the obligations of the
underwriters to purchase those securities will be subject to certain conditions
precedent, and the underwriters will be obligated to purchase all of those
securities if any of them are purchased. Any initial public offering price and
any discounts or concessions allowed or reallowed or paid to dealers may be
changed from time to time. Only underwriters named in a prospectus supplement
are deemed to be underwriters in connection with the securities offered thereby.
We may sell securities directly or through agents designated by us from
time to time. Any agent involved in the offer or sale of securities will be
named, and any commissions payable by us to the agent will be set forth in the
applicable prospectus supplement. Unless otherwise indicated in the applicable
prospectus supplement, the agent will act on a best efforts basis for the period
of its appointment.
If so indicated in a prospectus supplement with respect to securities, we
will authorize agents, underwriters or dealers to solicit offers by certain
institutions to purchase securities from us at the public offering price set
forth in the prospectus supplement pursuant to delayed delivery contracts
providing for payment and delivery on the date or dates stated in the prospectus
supplement. Each contract will be for an amount not less than, and the aggregate
principal amount of the securities sold pursuant to the contracts shall be not
less nor more than, the respective amounts stated in the prospectus supplement.
Institutions with whom the contracts, when authorized, may be made include
commercial and savings banks, insurance companies, pension funds, investment
companies, educational and charitable institutions, and other institutions, but
will in all cases be subject to our approval. The contracts will not be subject
to any conditions except:
(1) the purchase by an institution of the securities covered by its
contract shall not at the time of delivery be prohibited under the laws of
any jurisdiction in the United States to which the institution is subject,
and
(2) if the securities are being sold to underwriters, we shall have
sold to the underwriters the total principal amount of the securities less
the principal amount thereof covered by the contracts.
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<PAGE> 24
The underwriters will not have any responsibility in respect of the
validity or performance of the contracts.
If dealers are utilized in the sale of any securities, we will sell those
securities to the dealers, as principal. Any dealer may then resell those
securities to the public at varying prices to be determined by the dealer at the
time of resale. The name of any dealer and the terms of the transaction will be
set forth in the prospectus supplement with respect to the securities being
offered thereby.
It has not been determined whether any series of securities will be listed
on a securities exchange. Underwriters will not be obligated to make a market in
any series of securities. We cannot predict the level of trading activity in, or
the liquidity of, any series of securities.
Any underwriters, dealers or agents participating in the distribution of
securities may be deemed to be underwriters, and any discounts or commissions
received by them on the sale or resale of securities may be deemed to be
underwriting discounts and commissions under the Securities Act of 1933. Agents
and underwriters may be entitled under agreements entered into with us to
indemnification by us against certain liabilities, including liabilities under
the Securities Act of 1933, or to contribution with respect to payments that the
agents or underwriters may be required to make in respect thereof. Agents and
underwriters may be customers of, engaged in transactions with, or perform
services for, us or our affiliates in the ordinary course of business.
LEGAL MATTERS
Kirkland & Ellis, New York, New York (a partnership that includes
professional corporations) will pass upon legal matters regarding the issuance
of the securities and the validity of the common stock being issuable upon
conversion of the securities. Mr. Glen E. Hess has been a director of Alpharma
since 1983. Mr. Hess's professional corporation is a partner of Kirkland &
Ellis, a law firm which since 1978 has performed significant legal services for
Alpharma.
EXPERTS
The financial statements of Alpharma Inc. incorporated in this prospectus
by reference to the Annual Report on Form 10-K for the year ended December 31,
1998 have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
The financial statements of ISIS Pharma GmbH and subsidiary, Zwickaw as of
and for the years ended December 31, 1997 and 1998 incorporated by reference to
the Current Report on Form 8-K/A dated August 30, 1999 have been so incorporated
in reliance on the report of Deloitte & Touche GmbH
Wirtschaftsprufungsgesellschaft, independent accountants, given on the authority
of said firm as experts in auditing and accounting.
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- --------------------------------------------------------------------------------
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$250,000,000
[ALPHARMA LOGO]
-------------------------
PROSPECTUS
-------------------------
, 1999
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 26
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses of the Registrant in connection
with the issuance and distribution of the securities being registered, other
than underwriting discounts and commissions. All such amounts are estimates,
other than the fees payable to the Securities and Exchange Commission.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee......... $ 69,500
Legal fees and expenses..................................... 150,000
Accounting fees and expenses................................ 50,000
Printing.................................................... 200,000
Trustee's fees and expenses................................. 8,500
Miscellaneous............................................... 22,000
Total.................................................. $ 500,000*
</TABLE>
- -------------------------
* All expenses, except the Securities and Exchange Commission registration fee,
are estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 102(b)(7) of the General Corporation Law of the State of Delaware
permits a Delaware corporation to limit the personal liability of its directors
in accordance with the provisions set forth therein. The Restated Certificate of
Incorporation of the Registrant provides that the personal liability of its
directors shall be limited to the fullest extent permitted by applicable law.
Section 145 of the General Corporation Law of the State of Delaware
contains provisions permitting corporations organized thereunder to indemnify
directors, officers, employees or agents against expenses, judgments and fines
reasonably incurred and against certain other liabilities in connection with any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that such
person was or is a director, officer, employee or agent of the corporation. The
Restated Certificate of Incorporation of the Registrant provide for
indemnification of its directors and officers to the fullest extent permitted by
applicable law.
II-1
<PAGE> 27
ITEM 16. EXHIBITS.
The following exhibits are filed pursuant to Item 601 of Regulation S-K:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
2.1 Sale and purchase agreement between Schwarz Pharma AG,
Alpharma GmbH & Co. KG and Alpharma Inc. dated June 18, 1999
was filed as Exhibit 2.1 of the Company's Form 8-K dated as
of July 2, 1999, and is incorporated by reference.
2.2 Agreement for the sale and purchase of the issued share
capital of Cox Investments Limited, dated April 30, 1998
between Hoechst AG, Alpharma (U.K.) Limited, and Alpharma
Inc. was filed as Exhibit 2.1 of the Company's Form 8-K,
dated as of May 7, 1998 and is incorporated by reference.
4.1A Form of Indenture.*
4.1B Form of Securities Resolution.*
4.2 Reference is made to Article Fourth of the Amended and
Restated Certificate of Incorporation of the Company which
is filed as Exhibit 3.1 to the Company's 1998 Annual Report
on Form 10-K and is incorporated by reference.
4.3 Indenture, dated as of March 30, 1998, by and among the
Company and First Union National Bank, as trustee, with
respect to the 5 3/4% Convertible Subordinated Notes due
2005 was filed as Exhibit 4.1 of the Company's Form 8-K
dated as of March 30, 1998 and is incorporated by reference.
4.4 Note Purchase Agreement dated March 5, 1998 and Amendment
No. I thereto dated March 25, 1998 by and between the
Company and A.L. Industrier A.S. was filed as Exhibit 1.2 of
the Company's Form 8-K dated as of March 30, 1998 and is
incorporated by reference.
4.5 $300,000,000 Credit Agreement among Alpharma U.S. Inc., as
Borrower, Union Bank of Norway, as agent and arranger, and
Den norske Bank AS, as co-arranger, dated January 20, 1999
was filed as Exhibit 10.2 to the Company's 1998 Annual
Report on Form 10-K and is incorporated by reference.
4.6 Parent Guaranty, made by the Company in favor of Union Bank
of Norway, as agent and arranger, and Den norske Bank AS, as
co-arranger, dated January 20, 1999, was filed as Exhibit
10.7 to the Company's 1998 Annual Report on Form 10-K and is
incorporated by reference.
4.7 Indenture dated as of June 2, 1999, by and between the
Registrant and First Union National Bank, as trustee, with
respect to the 3% Convertible Senior Subordinated Notes due
2006, was filed as Exhibit 4.1 to the Company's Form 8-K
dated as of June 16, 1999 and is incorporated by reference.
5.1 Opinion of Kirkland & Ellis regarding legality of securities
being registered.*
12.1 Statement re: computation of ratio of earnings to fixed
charges.*
23.1 Consent of PricewaterhouseCoopers, LLP.**
23.2 Consent of Kirkland & Ellis (included in Exhibit 5.1).*
23.3 Consent of Deloitte & Touche GmbH
Wirtschaftsprufungsgesellschaft.**
24.1 Powers of Attorney (included signature pages of Registration
Statement).*
25.1 Statement of eligibility of Trustee, on Form T-1.*
</TABLE>
- ---------------
* Previously filed.
** Filed herewith.
II-2
<PAGE> 28
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:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) 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. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.
(iii) 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 (a)(1)(i) and (a)(1)(ii) of this
section do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed with or furnished to the Commission 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 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 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(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 foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for
II-3
<PAGE> 29
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-4
<PAGE> 30
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe it meets all the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Fort Lee, New Jersey, as of November 2, 1999.
ALPHARMA INC.
By: /s/ ROBERT F. WROBEL
------------------------------------
Robert F. Wrobel
Vice President and Chief Legal
Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and as of the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
*EINAR W. SISSENER Chairman and Director November 2, 1999
- --------------------------------------------------- (Principal Executive
Einar W. Sissener Officer)
*GERT W. MUNTHE President and Chief Executive November 2, 1999
- --------------------------------------------------- Officer and Director
Gert W. Munthe
*JEFFREY E. SMITH Vice President, Finance and November 2, 1999
- --------------------------------------------------- Chief Financial Officer
Jeffrey E. Smith (Principal Financial
Officer and Principal
Accounting Officer)
*I. ROY COHEN Director November 2, 1999
- ---------------------------------------------------
I. Roy Cohen
*THOMAS GIBIAN Director November 2, 1999
- ---------------------------------------------------
Thomas Gibian
*GLEN E. HESS Director November 2, 1999
- ---------------------------------------------------
Glen E. Hess
*ERIK G. TANDBERG Director November 2, 1999
- ---------------------------------------------------
Erik G. Tandberg
</TABLE>
II-5
<PAGE> 31
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
*PETER G. TOMBROS Director November 2, 1999
- ---------------------------------------------------
Peter G. Tombros
*ERIK HORNNAESS Director November 2, 1999
- ---------------------------------------------------
Erik Hornnaess
*OYVIN A. BROYMER Director November 2, 1999
- ---------------------------------------------------
Oyvin A. Broymer
*Signed by attorney-in-fact:
</TABLE>
II-6
<PAGE> 32
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
2.1 Sale and purchase agreement between Schwarz Pharma AG,
Alpharma GmbH & Co. KG and Alpharma Inc. dated June 18, 1999
was filed as Exhibit 2.1 of the Company's Form 8-K dated as
of July 2, 1999, and is incorporated by reference.
2.2 Agreement for the sale and purchase of the issued share
capital of Cox Investments Limited, dated April 30, 1998
between Hoechst AG, Alpharma (U.K.) Limited, and Alpharma
Inc. was filed as Exhibit 2.1 of the Company's Form 8-K,
dated as of May 7, 1998 and is incorporated by reference.
4.1A Form of Indenture.*
4.1B Form of Securities Resolution.*
4.2 Reference is made to Article Fourth of the Amended and
Restated Certificate of Incorporation of the Company which
is filed as Exhibit 3.1 to the Company's 1998 Annual Report
on Form 10-K and is incorporated by reference.
4.3 Indenture, dated as of March 30, 1998, by and among the
Company and First Union National Bank, as trustee, with
respect to the 5 3/4% Convertible Subordinated Notes due
2005 was filed as Exhibit 4.1 of the Company's Form 8-K
dated as of March 30, 1998 and is incorporated by reference.
4.4 Note Purchase Agreement dated March 5, 1998 and Amendment
No. I thereto dated March 25, 1998 by and between the
Company and A.L. Industrier A.S. was filed as Exhibit 1.2 of
the Company's Form 8-K dated as of March 30, 1998 and is
incorporated by reference.
4.5 $300,000,000 Credit Agreement among Alpharma U.S. Inc., as
Borrower, Union Bank of Norway, as agent and arranger, and
Den norske Bank AS, as co-arranger, dated January 20, 1999
was filed as Exhibit 10.2 to the Company's 1998 Annual
Report on Form 10-K and is incorporated by reference.
4.6 Parent Guaranty, made by the Company in favor of Union Bank
of Norway, as agent and arranger, and Den norske Bank AS, as
co-arranger, dated January 20, 1999, was filed as Exhibit
10.7 to the Company's 1998 Annual Report on Form 10-K and is
incorporated by reference.
4.7 Indenture dated as of June 2, 1999, by and between the
Registrant and First Union National Bank, as trustee, with
respect to the 3% Convertible Senior Subordinated Notes due
2006, was filed as Exhibit 4.1 to the Company's Form 8-K
dated as of June 16, 1999 and is incorporated by reference.
5.1 Opinion of Kirkland & Ellis regarding legality of securities
being registered.*
12.1 Statement re: computation of ratio of earnings to fixed
charges.*
23.1 Consent of PricewaterhouseCoopers, LLP.**
23.2 Consent of Kirkland & Ellis (included in Exhibit 5.1).*
23.3 Consent of Deloitte & Touche GmbH
Wirtschaftsprufungsgesellschaft.**
24.1 Powers of Attorney (included signature pages of Registration
Statement).*
25.1 Statement of eligibility of Trustee, on Form T-1.*
</TABLE>
- ---------------
* Previously filed.
** Filed herewith.
<PAGE> 1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated February 24, 1999 relating to the
financial statements, which appears in Alpharma 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.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Florham Park, New Jersey
November 1, 1999
<PAGE> 1
Exhibit 23.3
[WEDIT DELOITTE & TOUCHE LETTERHEAD]
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Alpharma Inc. on Form S-3 of our report dated August 9, 1999 relating to the
financial statements of ISIS Pharma GmbH, Zwickau as of and for the years ended
December 31, 1997 and 1998 which appear in the Current Report on Form 8-K/A of
Alpharma Inc. dated August 30, 1999.
Dusseldorf
November 2, 1999
Deloitte & Touche GmbH
Wirtschaftsprufungsgesellschaft
/s/ Deloitte & Touche GmbH
Wirtschaftsprufungsgesellschaft
