<PAGE>
RULE NO. 424(b)(5)
REGISTRATION NO. 333-23423
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED MAY 28, 1997
1,000,000 SHARES
EMISPHERE TECHNOLOGIES, INC.
LOGO
COMMON STOCK
(PAR VALUE $.01 PER SHARE)
----------------
The offering consists of 1,000,000 shares (the "Shares") of the common stock
(the "Common Stock") par value $.01 per share of Emisphere Technologies, Inc.
("Emisphere" or the "Company") being offered by the Company at a price of
$19.00 per share.
SEE "RISK FACTORS" BEGINNING ON PAGE 6 OF THE PROSPECTUS FOR CERTAIN
CONSIDERATIONS RELEVANT TO AN INVESTMENT IN THE COMMON STOCK.
The Company's Common Stock is quoted on the Nasdaq National Market under the
symbol "EMIS". On July 18, 1997, the last reported sale price of Emisphere's
Common Stock on the Nasdaq National Market was $21 1/2 per share.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------------
<TABLE>
<CAPTION>
INITIAL PUBLIC UNDERWRITING PROCEEDS TO
OFFERING PRICE DISCOUNT (1) COMPANY (2)
-------------- ------------ -----------
<S> <C> <C> <C>
Per Share............................... $19.00 $1.09 $17.91
Total(3)................................ $19,000,000 $1,090,000 $17,910,000
</TABLE>
- --------
(1) The Company has agreed to indemnify the Underwriter against certain
liabilities, including liabilities under the Securities Act of 1933. See
"Underwriting."
(2) Before deducting estimated expenses of $500,000 payable by the Company.
(3) The Company has granted Goldman, Sachs & Co. an option for 30 days to
purchase up to an additional 150,000 shares at the initial public offering
price per share, less the underwriting discount, solely to cover over-
allotments. If such option is exercised in full, the total initial public
offering price, underwriting discount and proceeds to Company will be
$21,850,000, $1,253,500, and $20,596,500, respectively. See
"Underwriting".
----------------
The shares offered hereby are offered by Goldman, Sachs & Co., as specified
herein, subject to receipt and acceptance by them and subject to their right
to reject any order in whole or in part. It is expected that certificates for
the shares will be ready for delivery in New York, New York, on or about July
24, 1997, against payment therefor in immediately available funds.
GOLDMAN, SACHS & CO.
----------------
The date of this Prospectus Supplement is July 21, 1997
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THE OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK,
INCLUDING OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING TRANSACTIONS IN SUCH
COMMON STOCK AND THE IMPOSITION OF A PENALTY BID, DURING AND AFTER THE
OFFERING. IN ADDITION, IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS ALSO
MAY ENGAGE IN PASSIVE MARKET MAKING TRANSACTIONS IN THE COMMON STOCK ON THE
NASDAQ NATIONAL MARKET, IN ACCORDANCE WITH RULE 103 UNDER THE SECURITIES
EXCHANGE ACT OF 1934. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE
"UNDERWRITING".
DOCUMENTS INCORPORATED BY REFERENCE
In addition to the documents referred to under "Documents Incorporated by
Reference" in the accompanying Prospectus, the following documents heretofore
filed by the Company with the Commission pursuant to the Securities Exchange
Act of 1934, as amended (the "Exchange Act") are incorporated by reference in
the Prospectus and this Prospectus Supplement:
(1) Quarterly Report on Form 10-Q for the quarter ended April 30, 1997; and
(2) Current Report on Form 8-K dated July 21, 1997.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements included in or incorporated by reference into the
Prospectus and this Prospectus Supplement constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995 (the "Reform Act"). Such forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of the Company to be materially different
from any future results, performance, or achievements expressed or implied by
such forward-looking statements. Such factors include, among others, the
following: uncertainties related to future test results and viability of the
Company's product candidates, which are in the early stages of development;
the need to obtain regulatory approval for the Company's product candidates;
the Company's dependence on partnerships with pharmaceutical companies to
develop, manufacture and commercialize products using the Company's drug
delivery technologies; the Company's dependence on the success of the 50/50
joint venture with Elan Corporation plc ("Elan") for the development and
commercialization of an oral heparin product ("the Elan Joint Venture") and
the strategic alliance with Eli Lilly and Company ("Lilly") for the
development and commercialization of certain of Lilly's therapeutic proteins
(the "Lilly Strategic Alliance"); the risk of technological obsolescence and
risks associated with the Company's highly competitive industry; the Company's
dependence on patents and proprietary rights; the Company's absence of
profitable operations and need for additional capital; the Company's
dependence on others to manufacture the Company's chemical compounds; the risk
of product liability and policy limits of product liability insurance;
potential liability for human clinical trials; the Company's dependence on key
personnel; the quality, judgment and strategic decisions of management and
other personnel; uncertain availability of third-party reimbursement for
commercial medical products; general business and economic conditions; and
other factors referenced or incorporated by reference in the Prospectus and
this Prospectus Supplement.
S-2
<PAGE>
USE OF PROCEEDS
SPECIAL NOTE: CERTAIN STATEMENTS UNDER THIS CAPTION "USE OF PROCEEDS",
CONSTITUTE "FORWARD-LOOKING STATEMENTS" UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND THE EXCHANGE ACT. SEE "RISK FACTORS" IN
THE PROSPECTUS AND "SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS" IN THIS
PROSPECTUS SUPPLEMENT.
The net proceeds (after deducting the underwriting discount and estimated
offering expenses) of $17.4 million from the sale of the Shares ($20.1 million
if the underwriters' over-allotment option is exercised in full) will be
applied by the Company to fund: (1) continuing research and development; (2)
the Company's share of the Elan Joint Venture's ongoing expenses for the
development of an oral formulation of heparin; (3) an increase in capacity to
support its expanded research and development and testing activities,
including buildout costs associated with a new headquarters and laboratory
facility; (4) an increase in manufacturing capacity; and (5) the remainder for
general corporate purposes.
CAPITALIZATION
The following table sets forth (i) the capitalization of the Company at
April 30, 1997 and (ii) the capitalization of the Company as adjusted to
reflect the sale by the Company of 1,000,000 shares of Common Stock offered
hereby at an offering price of $19.00 per share and the application of the net
proceeds therefrom, which are estimated to be $17.4 million (after deducting
the underwriting discount and estimated offering expenses).
<TABLE>
<CAPTION>
APRIL 30, 1997
--------------------
ACTUAL AS ADJUSTED
------- -----------
(IN THOUSANDS)
<S> <C> <C>
Stockholders' equity:
Preferred Stock, par value $.01 per share, 1,000,000
shares authorized; no shares issued and outstanding..... $ -- $ --
Common Stock, par value $.01 per share, 20,000,000 shares
authorized; 9,568,933 issued (9,525,433 outstanding),
actual; 10,568,933 issued (10,525,433 outstanding), as
adjusted (1)............................................ 95 105
Additional paid-in capital............................... 63,177 80,577
Accumulated deficit...................................... (48,245) (48,245)
Net unrealized loss on investments....................... (10) (10)
------- -------
15,017 32,427
Less 43,500 shares of Common Stock held in treasury, at
cost.................................................... (193) (193)
------- -------
Total stockholders' equity.............................. 14,824 32,234
------- -------
Total capitalization.................................... $14,824 $32,234
======= =======
</TABLE>
- --------
(1) Based on the number of shares outstanding on April 30, 1997, which does
not include (i) 3,944,372 shares then-issuable upon exercise of options,
at a weighted average exercise price of $10.33 per share granted to
officers, directors, employees and consultants of the Company and (ii)
250,000 shares issuable upon exercise of warrants at an exercise price of
$16.25 per share held by an affiliate of Elan. Since April 30, 1997,
10,040 shares have been issued upon exercise of options.
DILUTION
The Company's net tangible book value at April 30, 1997, was $14.8 million,
or $1.56 per share of Common Stock. Net tangible book value per share is
determined by dividing the net tangible book value of the Company (total
assets less total liabilities) by the number of shares of Common Stock
outstanding. Without taking into account any changes in net tangible book
value after April 30, 1997, other than to give effect to the sale by the
Company of the 1,000,000 shares of Common Stock offered hereby, after
deducting the estimated underwriting discount and offering expenses, the
Company's pro forma net tangible book value at April 30, 1997 would have been
$32.2 million, or $3.06 per share. This
S-3
<PAGE>
represents an immediate dilution in pro forma net tangible book value of $15.94
per share to new investors purchasing shares of Common Stock in this offering
and an immediate increase in pro forma net tangible book value of $1.50 per
share to existing stockholders. The following table illustrates the per share
dilution:
<TABLE>
<S> <C> <C>
Public offering price per share to be paid by a new investor... $19.00
Net tangible book value per share before offering.............. $1.56
Increase in net tangible book value per share attributable to
new investors................................................. 1.50
-----
Pro forma net tangible book value per share after offering(1).. 3.06
------
Dilution per share to new investors(2)(3)...................... $15.94
======
</TABLE>
- --------
(1) Determined by dividing the Company's pro forma net tangible book value
after the offering by the pro forma number of shares outstanding after the
offering.
(2) Determined by subtracting the pro forma net tangible book value per share
after the offering from the price per share paid by a new investor.
(3) If all options and warrants outstanding on April 30, 1997 to purchase an
aggregate of 4,194,372 shares of Common Stock at a weighted average
exercise price of $10.68 per share were exercised in full, without giving
effect to the underwriters' over-allotment option, the adjusted pro forma
net tangible book value per share would be $5.23, resulting in immediate
dilution to new investors of $13.77.
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement, the
Company has agreed to sell to Goldman, Sachs & Co. (the "Underwriters"), and
the Underwriters have agreed to purchase from the Company 1,000,000 shares
Common Stock.
Under the terms and conditions of the Underwriting Agreement, the
Underwriters are committed to take and pay for all the Shares, if any are
taken.
The Underwriters propose to offer the Shares in part directly to the public
at the initial public offering price set forth on the cover page of this
Prospectus Supplement and in part to certain securities dealers at such price
less a concession of $.60 per share. The Underwriters may allow, and such
dealers may reallow, a concession not in excess of $.10 per share to certain
brokers and dealers. After the Shares are released for sale to the public, the
offering price and other selling terms may from time to time be varied by the
Underwriters.
The Company has granted the Underwriters an option exercisable for the 30
days after the date of this Prospectus Supplement to purchase up to an
aggregate of 150,000 additional shares of Common Stock to cover over-
allotments, if any.
It is expected that Elan or one of its affiliates will purchase approximately
90,000 shares from the Underwriters.
The Underwriting Agreement provides that the Company will indemnify the
Underwriter against certain liabilities, including liabilities under the
Securities Act of 1933, as amended.
Certain of the officers and directors of the Company have agreed that they
will not sell, offer to sell, contract to sell, or otherwise dispose of any
shares of Common Stock, any right to acquire shares of Common Stock or any
shares of Common Stock issuable upon exercise of any right to acquire such
shares, or establish or increase any "put equivalent" position (as defined in
Rule 16a-1(h) under the Exchange Act) with respect to any shares of Common
Stock for a period of 90 days after the date of this Prospectus Supplement
without the prior written consent of the Underwriters. The Company has also
agreed not to sell, offer to sell, contract to sell or otherwise dispose of
(other than in connection
S-4
<PAGE>
with the exercise of outstanding warrants and stock options granted under
certain of the Company's existing employee benefit plans) any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock or any rights to acquire Common Stock (other than the grant of
options not exercisable within 90 days from the date of this Prospectus
Supplement under the Company's employee benefit plans) for a period of 90 days
after the date of this Prospectus Supplement without the prior written consent
of the Underwriters, subject to certain limited exceptions.
In connection with the offering, the Underwriters may purchase and sell the
Common Stock in the open market. These transactions may include over-allotment
and stabilizing transactions, "passive" market making (see below) and purchases
to cover short positions created by the Underwriters in connection with the
offering. Stabilizing transactions consist of certain bids or purchases for the
purpose of preventing or retarding a decline in the market price of the Common
Stock; and short positions created by the Underwriters involve the sale by the
Underwriters of a greater number of shares of Common Stock than they are
required to purchase from the Company in the offering. The Underwriters also
may impose a penalty bid, whereby selling concessions allowed to broker-dealers
in respect of the securities sold in the offering may be reclaimed by the
Underwriters if such shares of Common Stock are repurchased by the Underwriters
in stabilizing or covering transactions. These activities may stabilize,
maintain or otherwise affect the market price of the Common Stock, which may be
higher than the price that might otherwise prevail in the open market; and
these activities, if commenced, may be discontinued at any time. These
transactions may be effected on the Nasdaq National Market, in the over-the-
counter market or otherwise.
As permitted by Rule 103 under the Exchange Act, Underwriters or prospective
Underwriters that are market makers ("passive market makers") in the Common
Stock may make bids for or purchases of the Common Stock in the Nasdaq National
Market until such time, if any, when a stabilizing bid for such Common Stock
has been made. Rule 103 generally provides that (i) a passive market maker's
net daily purchases of shares of Common Stock may not exceed 30% of its average
daily trading volume in such Common Stock for the two full consecutive calendar
months (or any 60 consecutive days ending within the 10 days) immediately
preceding the filing date of the registration statement of which this
Prospectus forms a part, (ii) a passive market maker may not effect
transactions or display bids for the Common Stock at a price that exceeds the
highest independent bid for the Common Stock by persons who are not passive
market makers and (iii) bids made by passive market makers must be identified
as such.
S-5
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR PROSPECTUS SUPPLE-
MENT, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED. THE PROSPECTUS AND PROSPECTUS SUPPLE-
MENT DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
ANY SECURITIES OTHER THAN THE SECURITIES TO WHICH IT RELATES OR AN OFFER TO
SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUM-
STANCE IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY
OF THIS PROSPECTUS AND PROSPECTUS SUPPLEMENT NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFOR-
MATION CONTAINED HEREIN IS CORRECT AT ANY TIME SUBSEQUENT TO ITS DATE.
-----------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Documents Incorporated by Reference........................................ S-2
Special Note Regarding Forward-Looking Statements.......................... S-2
Use of Proceeds............................................................ S-3
Capitalization............................................................. S-3
Dilution................................................................... S-3
Underwriting............................................................... S-4
PROSPECTUS
Available Information...................................................... 2
Documents Incorporated by Reference........................................ 2
Special Note Regarding Forward-Looking Statements.......................... 3
The Company................................................................ 4
Risk Factors............................................................... 6
Use of Proceeds............................................................ 14
Business................................................................... 15
Management................................................................. 27
Plan of Distribution....................................................... 30
Legal Matters.............................................................. 30
Experts.................................................................... 31
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
1,000,000 SHARES
EMISPHERE TECHNOLOGIES, INC.
COMMON STOCK
(par value $.01 per share)
-----------
LOGO
-----------
GOLDMAN, SACHS & CO.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
