PROSPECTUS
20,000,000 SHARES
IVAX CORPORATION
COMMON STOCK
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This Prospectus relates to 20,000,000 shares of common stock, par value
$.10 per share (the "Common Stock"), which may be offered and issued by IVAX
Corporation (the "Company") from time to time in connection with acquisitions of
businesses or properties. An aggregate of 4,418,920 of the 20,000,000 shares of
Common Stock covered by this Prospectus have already been issued in connection
with various acquisitions of businesses and properties.
The Company anticipates that such acquisitions occurring in the future
will consist principally of businesses (or the assets thereof) complementary to
and related to the Company's current businesses, but on occasion, an acquired
business may be dissimilar to the businesses of the Company. The consideration
for acquisitions will consist of shares of Common Stock, cash, notes or other
evidences of indebtedness, guarantees, assumption of liabilities, tangible or
intangible property, or a combination thereof, as determined from time to time
by negotiations between the Company and the owners or controlling persons of the
businesses or properties to be acquired. In addition, the Company may lease
property from and enter into management or consulting agreements and
non-competition agreements with the former owners and key executive personnel of
the businesses to be acquired.
The Company contemplates that the terms of an acquisition will be
determined by negotiations between the Company's representatives and the owners
or controlling persons of the businesses or properties to be acquired. Factors
taken into account in acquisitions include, among other relevant factors, the
quality and reputation of the business, the assets, liabilities, results of
operations and cash flows of the business, the quality of its management and
employees, its earnings potential, its products and products under development,
the geographic locations of the business and the market value of the Common
Stock of the Company when pertinent. The Company anticipates that shares of
Common Stock issued in any such acquisition will be valued at a price reasonably
related to the market value of the Common Stock, either at the time the terms of
the acquisition are tentatively agreed upon, or at or about the time of closing,
or during the period or periods prior to delivery of the shares.
The Company does not expect that underwriting discounts or commissions
will be paid, except that finders fees may be paid to persons from time to time
in connection with specific acquisitions. Any person receiving any such fees may
be deemed to be an underwriter within the meaning of the Securities Act of 1933.
The Common Stock is listed on the American Stock Exchange under the
symbol IVX. On January 16, 1996, the closing sale price of the Common Stock on
the American Stock Exchange was $26 3/4 per share.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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The date of this Prospectus is January 17, 1996
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NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION SHOULD NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL,
OR A SOLICITATION OF AN OFFER TO PURCHASE THE SECURITIES OFFERED BY THIS
PROSPECTUS IN ANY JURISDICTION IN WHICH, OR TO OR FROM ANY PERSON TO OR FROM
WHOM, IT IS UNLAWFUL TO MAKE SUCH AN OFFER, OR SOLICITATION OF AN OFFER. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY DISTRIBUTION OF THE SECURITIES OFFERED
PURSUANT TO THIS PROSPECTUS SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE INFORMATION SET FORTH HEREIN OR
IN THE AFFAIRS OF THE COMPANY SINCE THE DATE OF THIS PROSPECTUS OR THAT THE
INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
FOR A DISCUSSION OF CERTAIN FACTORS WHICH SHOULD BE CONSIDERED WHEN
EVALUATING THE TRANSACTIONS CONTEMPLATED BY THIS PROSPECTUS, SEE "INVESTMENT
CONSIDERATIONS."
TABLE OF CONTENTS
PAGE
Available Information...................................................... 3
Information Incorporated by Reference...................................... 3
The Company................................................................ 4
Investment Considerations.................................................. 4
Use of Proceeds............................................................ 8
Selected Consolidated Financial Data....................................... 9
Other Information.......................................................... 11
Restrictions on Resale..................................................... 11
Experts.................................................................... 11
Legal Matters.............................................................. 11
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files periodic reports, proxy and information statements
and other information, with the Securities and Exchange Commission (the "SEC")
pursuant to the Exchange Act, relating to its business, financial statements and
other matters. Such reports, proxy and information statements and other
information can be inspected and copied at the public reference facilities
maintained by the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549, and at
the SEC's regional offices at 7 World Trade Center, Suite 1300, New York, N.Y.
10048 and Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511. Copies of such material can also be obtained from
the Public Reference Section of the SEC, 450 Fifth Street, N.W., Washington,
D.C. 20549, at prescribed rates. In addition, certain reports, proxy materials
and other information concerning the Company can be inspected at the offices of
the American Stock Exchange, Inc. (the "AMEX"), 86 Trinity Place, New York, New
York 10006, the national securities exchange on which shares of Common Stock are
listed and traded.
INFORMATION INCORPORATED BY REFERENCE
The following documents previously filed with the SEC are hereby
incorporated by reference into this Prospectus:
(1) Annual Report on Form 10-K for the year ended December 31, 1994.
(2) Quarterly Report on Form 10-Q for the quarter ended March 31, 1995.
(3) Quarterly Report on Form 10-Q for the quarter ended June 30, 1995.
(4) Quarterly Report on Form 10-Q for the quarter ended September 30,
1995.
(5) Current Report on Form 8-K dated October 18, 1995.
(6) Current Report on Form 8-K dated November 15, 1995.
(7) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-B, dated July 28, 1993.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Exchange Act after the date of this Prospectus and prior to
termination of this Offering shall be deemed to be incorporated by reference
herein and made a part hereof from the date any such document is filed. Any
statements contained in a document incorporated by reference herein shall be
deemed to be modified or superseded for purposes hereof to the extent that a
statement contained herein (or in any other subsequently filed document which
also is incorporated by reference herein) modifies or supersedes such statement.
Any statement so modified or superseded shall not be deemed to constitute a part
hereof except as so modified or superseded.
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT
PRESENTED HEREIN OR DELIVERED HEREWITH. COPIES OF ANY SUCH DOCUMENTS, OTHER THAN
EXHIBITS TO SUCH DOCUMENTS, ARE AVAILABLE WITHOUT CHARGE TO ANY PERSON,
INCLUDING ANY BENEFICIAL OWNER, TO WHOM THIS PROSPECTUS IS DELIVERED UPON
WRITTEN OR ORAL REQUEST TO ARMANDO A. TABERNILLA, VICE PRESIDENT-LEGAL AFFAIRS,
IVAX CORPORATION, 8800 NORTHWEST 36TH STREET, MIAMI, FLORIDA 33178, TELEPHONE:
(305) 590-2200. IN ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST
SHOULD BE MADE FIVE BUSINESS DAYS BEFORE FINAL ACTION IS TO BE TAKEN WITH
RESPECT TO A PROPOSED ACQUISITION BY THE COMPANY INVOLVING THE ISSUANCE OF
SECURITIES COVERED BY THIS PROSPECTUS.
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THE COMPANY
The Company is a holding company with subsidiaries engaged in the
research, development, manufacture and marketing of personal care products,
pharmaceuticals, intravenous solutions and related products, medical diagnostic
products and specialty chemicals. The Company's principal executive offices are
located at 8800 Northwest 36th Street, Miami, Florida 33178, and its telephone
number is (305) 590-2200. For further information about the business and
operations of the Company, reference is made to the Company's reports
incorporated herein by reference. See "Information Incorporated by Reference."
INVESTMENT CONSIDERATIONS
In addition to the other information contained or incorporated by
reference herein, the following factors should be considered carefully in
evaluating the Company and its business prospects.
VERAPAMIL
Net revenues attributable to sales of extended release verapamil HCl
("verapamil") constituted in excess of 10% of the Company's 1994 consolidated
net revenues. Net revenues from verapamil manufactured by the Company totalled
$66 million during the first nine months of 1995 compared to $86.9 million for
the same period of 1994. The decrease in net revenues in the first nine months
of 1995 compared to the first nine months of 1994 was due primarily to a
reduction in the net selling price of verapamil caused by competition, offset in
part by increased volume caused by an increase in the substitution rate of
generic verapamil for brand name verapamil. The Company had been the sole United
States supplier of generic verapamil until March 1994, when Zenith Laboratories,
Inc. ("Zenith") began distribution of generic verapamil supplied by a company
marketing brand name verapamil. Notwithstanding the Company's acquisition of
Zenith, competition in the generic verapamil market has continued because
Zenith's former verapamil supplier commenced distribution of generic verapamil
through another generic pharmaceutical company. Moreover, other manufacturers
may obtain regulatory approvals or otherwise determine to market generic
verapamil during 1996 and thereafter. As additional competitors enter the
generic verapamil market, the resulting competition is likely to further reduce
the Company's verapamil net revenues and gross profit.
DEPENDENCY ON PRODUCT DEVELOPMENT
The Company's future success is largely dependent upon its ability to
develop, manufacture and market commercially viable new pharmaceutical products
and generic versions of off-patent pharmaceutical products.
Generally, in order to be marketed commercially, products must be developed and
tested, new products must be proven to be safe and effective in clinical trials,
generic products must be proven to be bioequivalent to the name brand
counterpart, and all products must receive requisite regulatory approval. Each
of these steps, as well as the process taken as a whole, involves significant
periods of time and expense. There can be no assurance that any products
presently under development, if and when fully developed and tested, will
perform in accordance with the Company's expectations, that necessary regulatory
approvals will be obtained in a timely manner, if at all, or that any of such
products can be successfully and profitably produced and marketed.
COMPETITION AND TECHNOLOGICAL CHANGE
The markets in which the Company does business are highly competitive
and subject to rapid technological change. Competitors include major
pharmaceutical companies, many of which have considerably greater financial,
technical, clinical, marketing and other resources and experience than the
Company. The markets in which the Company competes and intends to compete are
undergoing, and are expected to continue to undergo, rapid and significant
technological change, and the Company expects competition to intensify as
technological advances in such fields are made. There can be no assurance that
developments by others will not render the products or technologies of the
Company obsolete or uncompetitive.
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Revenues and gross profit derived from generic pharmaceutical products
tend to follow a pattern based on regulatory and competitive factors unique to
the generic pharmaceutical industry. As patents for brand name products and
related exclusivity periods mandated by regulatory authorities expire, the first
generic manufacturer to receive regulatory approval for generic equivalents of
such products is usually able to achieve relatively high revenues and gross
profit. As other generic manufacturers receive regulatory approvals on competing
products, prices and revenues typically decline. Accordingly, the level of
revenues and gross profit attributable to generic products developed and
manufactured by the Company is dependent, in part, on its ability to develop and
introduce new generic products, the timing of regulatory approval of such
products, and the number and timing of regulatory approvals of competing
products. In addition, competition in the United States generic pharmaceutical
market continues to intensify as the pharmaceutical industry adjusts to
increased pressures to contain health care costs. Brand name companies are
increasingly selling their products into the generic market directly by
acquiring or forming strategic alliances with generic pharmaceutical companies.
No regulatory approvals are required for a brand name manufacturer to sell
directly or through a third party to the generic market, nor do such
manufacturers face any other significant barriers to entry into such market.
McGaw, Inc. ("McGaw"), a significant subsidiary of the Company which
provides intravenous solutions and related equipment to hospitals and alternate
site health care providers, faces substantial competition in the markets in
which it operates. There are three major suppliers of intravenous solutions and
related sets in the hospital and alternate site health care markets: Baxter
International, Inc. ("Baxter"), Abbott Laboratories ("Abbott") and McGaw, with
McGaw's share of this market (based on revenues) accounting for less than 20%.
Baxter and Abbott are major diversified health care companies with significantly
greater market shares and financial, technological and marketing resources than
McGaw. Baxter and Abbott each offers a broad range of medical products in
addition to intravenous solutions, sets and related products, allowing them to
give different customer incentives, including higher volume discounts.
GOVERNMENTAL REGULATION
The Company's pharmaceutical and intravenous operations are subject to
extensive regulation by governmental authorities in the United States and other
countries, which regulate the testing, approval, manufacture, labeling,
marketing and sale of pharmaceutical products. The Company devotes significant
time, effort and expense addressing the extensive government regulations
applicable to its business, and in general, the trend is towards more stringent
regulation. The process of obtaining regulatory approval is rigorous, time
consuming and costly. There can be no assurance that the Company will obtain
necessary approvals on a timely basis, if at all. Delays in receiving regulatory
approvals would adversely affect the Company's ability to market products
commercially. Product approvals by the United States Food and Drug
Administration (the "FDA") and comparable foreign regulatory authorities may be
withdrawn if compliance with regulatory standards is not maintained or if
problems relating to the products are experienced after initial approval.
HEALTH CARE REFORM
Political, economic and regulatory influences are resulting in
fundamental changes in the health care industry in the United States. Numerous
legislative proposals have been introduced or proposed in Congress and in some
state legislatures that would effect major changes in the United States health
care system nationally and at the state level. Reforms under consideration
include fundamental changes to the health care delivery and payment system
designed to, among other things, increase access to, and decrease the cost of,
health care. The Company anticipates that Congress and state legislatures will
continue to review and assess alternative health care delivery systems and
payment methods and that public debate of these issues will likely continue in
the future. Due to uncertainties regarding the ultimate features of reform
initiatives and their enactment and implementation, the Company cannot predict
which, if any, reform proposals will be adopted, when they may be adopted or
what impact they may have on the Company. There can be no assurance that such
reforms, if enacted, will not have a material adverse effect on the Company.
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CONCENTRATION OF OWNERSHIP
The executive officers and directors of the Company and two additional
shareholders of the Company currently have or share voting control over
approximately 26% of the issued and outstanding Company Common Stock.
Accordingly, such persons may have the ability to significantly influence the
election of the members of the Company's Board of Directors and other corporate
decisions.
VOLATILITY OF STOCK PRICE
The market prices for securities of companies engaged in pharmaceutical
development, including the Company, have been volatile. Among other things, the
announcement of technological innovations or new commercial products by the
Company or its competitors, changes in governmental regulation, regulatory
approvals by the Company or its competitors, developments relating to patents or
proprietary rights by the Company or its competitors, publicity regarding actual
or potential medical results with respect to products under development by the
Company or its competitors, as well as period-to-period fluctuations in
financial results, may have a significant impact on the market price of the
Company Common Stock. For the 52-week period ended January 16, 1996, the closing
sale price per share of the Company Common Stock, as reported on the American
Stock Exchange, has ranged from a high of $32 1/4 to a low of $19 5/8.
ACQUISITIONS AND OTHER CORPORATE TRANSACTIONS
The Company currently intends to expand through internal growth, the
acquisition of other businesses and strategic business alliances with other
companies, including licensing arrangements and joint ventures. The Company
regularly reviews potential acquisitions and business alliances, some of which
may be material, and is currently having preliminary discussions with various
companies with respect to various acquisitions and business alliances which
could result in material changes in the Company's financial condition and
operating results.
Historically, the Company has generally acquired other businesses
through the issuance of common stock. As reflected in the selected historical
financial information of the Company, since January 1, 1992, the Company has
acquired nine businesses which may be deemed significant under applicable
regulations of the SEC, all of which have involved the issuance of shares of the
Company Common Stock either alone or in combination with cash payments. As
consideration for any future acquisition, the Company may pay cash, contribute
assets, incur indebtedness or issue debt or equity securities. The Company does
not intend to seek shareholder approval for any such acquisitions unless
required by law or the rules of the AMEX.
There are currently 250 million shares of the Company Common Stock
authorized for issuance, of which approximately 117.8 million shares were
outstanding at November 30, 1995, and approximately 16 million shares were
reserved for issuance pursuant to stock option plans and other employee benefit
plans, conversion of outstanding warrants and debentures, and conversion of the
Company's 6 1/2% Convertible Subordinated Notes due 2001. Accordingly,
approximately 116.2 million shares of the Company Common Stock are authorized
and available for issuance from time to time in the discretion of the Company's
Board of Directors, including issuances in connection with future acquisitions.
LITIGATION
In September 1994, parties purporting to be shareholders of the Company
filed a class action complaint against the Company, all but one of its directors
and certain of its officers in the United States District Court for the Southern
District of Florida which consolidates, amends and supplements a number of
similar complaints filed earlier in 1994. The consolidated lawsuit is styled
HARVEY M. JASPER RETIREMENT TRUST AND HARVEY M. JASPER INDIVIDUAL RETIREMENT
ACCOUNT ET AL. VS. IVAX CORPORATION AND PHILLIP FROST ET AL. Plaintiffs seek to
act as representatives of a class consisting of all purchasers of the Company
Common Stock between January 14 and May 2, 1994, including as a subclass parties
who exchanged their shares of McGaw common stock for the Company Common Stock in
connection with the Company's acquisition of McGaw in March 1994. In general,
the complaints allege violations of Sections 10(b), 14(a) and 20(a) of the
Exchange Act and the rules promulgated
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thereunder, and Sections 11, 12(2) and 15 of the Securities Act of 1933, as
amended (the "Securities Act"), as well as a claim for negligent
misrepresentation. The complaint alleges that the Company made untrue statements
of material fact and/or omitted to state material facts necessary to make
statements made not misleading in its public disclosure documents, in
communications to securities analysts and to the public, and in the Company's
registration statement and proxy statement-prospectus distributed in connection
with the acquisition of McGaw, relating primarily to net revenues and earnings,
verapamil sales, and effects of competition in the verapamil tablet market on
the Company's net revenues and earnings. In addition, the former chairman and
chief executive officer of McGaw individually filed a similar complaint, now
pending in the Southern District of Florida, against the Company and Dr. Frost,
alleging many of the same securities laws violations as the preceding complaint
and certain additional state law claims. The class action complaint seeks an
unspecified amount of compensatory and rescissionary damages, equitable and/or
injunctive relief, interest, litigation costs and attorneys' fees. The complaint
filed by the former McGaw chairman seeks up to $21 million in compensatory
damages (and up to $48 million in rescissionary damages upon tender of the
Company shares held by plaintiff), as well as punitive damages, litigation costs
and attorneys' fees. The former McGaw chairman's suit has been consolidated for
all purposes, including trial, with the class action suit described above. The
outside directors of the Company initially named as defendants in the class
action suit were dismissed without prejudice from the consolidated actions
pursuant to a stipulation filed in January 1995. In February 1995, the Company
and certain of its officers and directors filed a motion to dismiss the
consolidated amended complaint. In March 1995, the former McGaw chairman filed a
motion to opt out of the class action and to proceed under a separate complaint.
On August 15, 1995, a hearing was held with respect to each of these pending
motions and on August 31, 1995, the Magistrate rendered a Report and
Recommendation which recommended that the Company's motion to dismiss be denied,
that the class be certified, and that the former McGaw chairman be allowed to
proceed under a separate complaint. On October 2, 1995, the Company filed
objections to that portion of the Report and Recommendation that the Company's
motion to dismiss be denied.
On April 28, 1995, an action styled VENTANA PARTNERSHIP III, L.P. AND
VENTANA EQUITY EXPANSION PARTNERSHIP IV, L.P. VS. IVAX CORPORATION, PHILLIP
FROST, M.D., ISAAC KAYE AND ANDREW ZINZI was filed in the United States District
Court for the Southern District of California. The complaint alleges essentially
the same securities laws violations as well as a negligent misrepresentation
claim as alleged in the consolidated class action suit referred to above. The
complaint seeks in excess of $21 million in compensatory, consequential,
rescissionary and punitive damages, as well as litigation costs. On August 17,
1995, the Court entered an order transferring this action to the Southern
District of Florida. It is expected that this action will be consolidated with
the class action suit referred to above.
In July 1994, an action styled ABS MB INVESTMENT LIMITED PARTNERSHIP
AND ABS MB LTD. VS. IVAX CORPORATION was filed against the Company in the United
States District Court for the District of Maryland. Plaintiffs, shareholders of
McGaw at the time of its acquisition by the Company, alleged that the Company
violated Sections 11 and 12(2) of the Securities Act, as well as certain state
securities laws, and that it breached certain provisions of the merger agreement
and the Company's bylaws, by issuing to plaintiffs shares of the Company's
common stock subject to the restrictions imposed by Rule 145 promulgated under
the Securities Act and Accounting Series Release 135 ("ASR 135"). ASR 135
provides that an affiliate of any company in a business combination to be
treated as a pooling of interest may not sell or reduce its risk relative to
common shares received in the business combination until such time as financial
results covering at least 30 days of post-merger combined operations have been
published. The plaintiffs claim that, as a result of the restrictions imposed on
the certificates issued to them, they suffered damages from the loss of value of
their shares, and seek damages of $11 million, plus expenses and attorneys'
fees. In August 1994, plaintiffs filed a motion for partial summary judgment,
and in September 1994, the Company filed a motion to dismiss and a motion to
transfer venue to the Southern District of Florida. On June 26, 1995 the Court
entered an order denying plaintiffs' motion for summary judgment with respect to
the claims alleging that the Company breached certain provisions of the merger
agreement and the Company's bylaws and granted the Company's motion to dismiss
such counts. The Court denied the Company's motion to dismiss the counts
relating to alleged violation of Section 11 and 12(2) of the Securities Act and
alleged violations of certain state securities laws, as well as its motion to
transfer venue. On July 11, 1995, the plaintiffs filed a motion to reconsider
the dismissal of the claims alleging breach of the Company's bylaws, or, in the
alternative, to certify an appeal of the dismissal of such counts. On October
17,
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1995, the Court entered an order granting the plaintiffs' motion to amend
their complaint to assert new counts of action under the Uniform Commercial Code
and granting the plaintiffs' motion for reconsideration of the dismissal of the
claims alleging breach of the Company's bylaws and ordered that such counts be
reinstated.
In late April 1995, Zenith, a wholly-owned subsidiary of the Company,
received approvals from the Food and Drug Administration to manufacture and
market the antibiotic cefaclor in capsule and oral suspension formulations in
the United States. Cefaclor is the generic equivalent of Ceclor(R), a product of
Eli Lilly and Company ("Lilly"). On April 27, 1995, Lilly filed a lawsuit
against Zenith and others styled ELI LILLY AND COMPANY V. AMERICAN CYANAMID
COMPANY, BIOCRAFT LABORATORIES, INC., ZENITH LABORATORIES, INC. AND BIOCHIMICA
OPOS S.P.A. in the United States District Court for the Southern District of
Indiana, Indianapolis Division. In general, the lawsuit alleges that Zenith's
cefaclor raw material supplier, a third party unaffiliated with the Company,
manufactures cefaclor raw material in a manner which infringes two process
patents owned by Lilly, and that Zenith and the other named defendants have
knowingly and willfully infringed and induced the supplier to infringe the
patents by importing the raw material into the United States. The lawsuit seeks
to enjoin Zenith and the other defendants from infringing or inducing the
infringement of the patents and from making, using or selling any product
incorporating the raw material provided by such supplier, and seeks an
unspecified amount of monetary damages and the destruction of all cefaclor raw
material manufactured by the supplier and imported into the United States. On
April 17, 1995, Lilly filed a motion for preliminary injunction against the
United States based defendants, including Zenith, which seeks to enjoin them
from importing, using or selling cefaclor. On August 4, 1995, the Court entered
an order denying Lilly's motion for preliminary injunction on August 11, 1995,
Lilly filed a notice of appeal of such order. Ceclor(R) is a registered
trademark of Eli Lilly and Company.
The Company intends to defend each of the foregoing lawsuits
vigorously. Although the Company believes such lawsuits are without merit, any
of such lawsuits, if determined adversely to the Company, would likely have a
material adverse effect on the Company's financial position and results of
operations. Additional information concerning this and other lawsuits pending
against the Company and its subsidiaries is contained in the Company's reports
incorporated herein by reference. See "Information Incorporated by Reference."
USE OF PROCEEDS
This Prospectus relates to shares of Common Stock which may be offered
and issued by the Company from time to time in the acquisition of other
businesses or properties. Other than the businesses or properties acquired,
there will be no proceeds to the Company from these offerings.
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SELECTED CONSOLIDATED FINANCIAL DATA
The following is a summary of certain financial information of the
Company and its consolidated subsidiaries and is qualified in its entirety by,
and should be read in conjunction with, the detailed information and
consolidated financial statements, including notes thereto, included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1994 and
its Quarterly Report on Form 10-Q for the quarter ended September 30, 1995. The
unaudited consolidated interim period financial statements include, in the
opinion of management, all adjustments necessary to present fairly the data for
such periods. The results of operations for interim periods are not necessarily
indicative of results to be achieved for full fiscal years.
<TABLE>
<CAPTION>
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
NINE MONTHS
ENDED
SEPTEMBER 30, (1)(2) YEAR ENDED DECEMBER 31, (1) (2)
---------------------- ------------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
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<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF
OPERATIONS DATA:
Net revenues............................ $897,976 $838,713 $1,134,806 $1,062,945 $853,497 $600,766 $329,066
Income before
extraordinary items.................... 79,010 77,916 89,872 107,982 37,410 15,647 7,159
Net income.............................. 79,044 76,656 89,049 99,354 29,820 17,850 7,874
Earnings per common share:
Primary:
Earnings before extra-
ordinary items....................... .67 .67 .77 .94 .37 .17 .08
Net earnings.......................... .67 .66 .76 .87 .29 .19 .09
Fully Diluted:
Earnings before extra-
ordinary items....................... .66 .67 .77 .93 .37 .17 .08
Net earnings.......................... .66 .66 .76 .86 .29 .19 .09
Weighted average number of common
shares outstanding, primary ........... 118,842 116,273 116,339 114,722 99,642 91,714 83,348
Weighted average number of common
shares outstanding,
fully diluted ......................... 120,578 116,554 116,792 115,504 99,928 92,927 83,387
Cash dividends per common share (2)..... $ .04 $ .03 $ .06 $ .04 $ - $ - $ -
(continued)
</TABLE>
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<TABLE>
<CAPTION>
SELECTED CONSOLIDATED FINANCIAL DATA - (CONTINUED)
(UNAUDITED)
SEPTEMBER 30, (1)(2) DECEMBER 31, (1)
-------------------- -------------------------------------------------------
1995 1994 1993 1992 1991 1990
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CONSOLIDATED BALANCE
SHEET DATA:
Working capital......................... $ 418,094 $ 332,818 $ 295,413 $214,479 $199,910 $ 56,218
Total assets............................ 1,242,933 1,106,704 1,001,279 848,075 812,484 465,831
Total long-term debt, net of
current portion........................ 289,974 253,839 278,708 334,722 313,951 208,729
Shareholders' equity ................... 734,590 634,456 527,772 339,657 295,969 131,229
Book value per common
share (3) ............................. 6.25 5.56 4.65 3.05 2.71 1.31
</TABLE>
(1) Figures have been restated to reflect the acquisitions of the following
companies, each of which was accounted for under the pooling of interests
method of accounting: Zenith Laboratories, Inc. and McGaw, Inc. (since its
inception in October 1990) in 1994; Johnson Products Co., Inc. in 1993;
Willen Drug Company, DVM Pharmaceuticals, Inc., Waverley Pharmaceuticals
Limited, and H N Norton Co. in 1992; and Norton Healthcare Limited in 1990.
Figures include the results of the following businesses acquired by purchase
since the respective acquisition dates: 60% of the shares of Galena, a.s.,
on July 25, 1994; certain assets and the assumption of certain liabilities
of Elf Atochem North America, Inc. on June 7, 1993; Flori Roberts, Inc. on
July 28, 1992; and Goldline Laboratories, Inc. and Bioline Laboratories,
Inc. effective December 1, 1991.
(2) Does not reflect a $.04 per share dividend paid on December 1, 1995 to
holders of record of Common Stock on November 10, 1995 or a $.03 per share
dividend paid on December 1, 1994 to holders of record on November 15, 1994.
(3) Assumes conversion of Zenith's 10.00% Cumulative Convertible Preferred
Stock.
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<PAGE>
OTHER INFORMATION
Acquisitions involving the offer and issuance of shares of the Company
Common Stock may require approval by certain federal and state regulatory
bodies. The rights of dissenting stockholders of any acquired corporation and
the federal income tax consequences for persons involved in any acquisition
involving the issuance of shares of the Company Common Stock will be determined
on a case-by-case basis for each acquisition.
RESTRICTIONS ON RESALE
This Prospectus, which has been prepared in accordance with the SEC's
Form S-4, is not available for use in connection with reoffers or resales of
securities acquired pursuant to this Prospectus by persons who may be deemed
"affiliates" of the Company as such term is defined by the SEC. Such
"affiliates" may sell such shares only pursuant to a prospectus prepared in
accordance with a Commission form which is available for such purpose or
pursuant to an available exemption from the registration requirements of the
Securities Act.
EXPERTS
The consolidated financial statements and financial statement
schedules of the Company, incorporated by reference in this Prospectus and
elsewhere in the Registration Statement, as of December 31, 1994 and 1993, and
for each of the three years in the period ended December 31, 1994, have been
audited by Arthur Andersen LLP, independent public accountants, and its report
is included in reliance upon the authority of said firm as experts in giving
said report. The consolidated financial statements and financial statement
schedules of Zenith Laboratories, Inc. and subsidiaries as of December 31, 1993
and for the years ended December 31, 1993 and 1992, included in the consolidated
financial statements of the Company incorporated by reference in this Prospectus
and elsewhere in the Registration Statement, have been audited by Coopers &
Lybrand L.L.P., independent accountants, and its report is included in reliance
upon the authority of said firm as experts in accounting and auditing in giving
said report. The consolidated financial statements of McGaw, Inc. as of December
31, 1993 and for the years ended December 31, 1993 and 1992, included in the
consolidated financial statements of the Company incorporated by reference in
this Prospectus and elsewhere in the Registration Statement have been audited by
Ernst & Young LLP, independent auditors, as set forth in their report thereon.
Such consolidated financial statements are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
LEGAL MATTERS
The validity of the shares of the Company Common Stock being registered
under the Registration Statement of which this Prospectus is a part will be
passed upon for the Company by Stearns Weaver Miller Weissler Alhadeff &
Sitterson, P.A., 150 West Flagler Street, Suite 2200, Miami, Florida 33130-1557.
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