SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
ARONEX PHARMACEUTICALS, INC.
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(Name of Issuer)
Shares of Common Stock, par value $0.001 per share
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(Title of Class of Securities)
042666206
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(CUSIP NUMBER)
PARAGON ASSOCIATES AND PARAGON ASSOCIATES II JOINT VENTURE
500 Crescent Court
Suite 260
Dallas, Texas 75201
Tel. No.: (214) 871-3700
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
- with copies to -
Ford Lacy, P.C.
Akin, Gump, Strauss, Hauer & Feld, LLP
1700 Pacific Avenue, Suite 4100
Dallas, Texas 75201-4618
(214) 969-2800
October 8, 1997
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(Date of event which requires filing of this statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4) check the following
box [ ]
The information required in the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934, as amended ("Act"), or otherwise subject to the
liabilities of that section of the Act but shall be subject to all other
provisions of the Act.
CUSIP No. 042666206 13D
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Paragon Associates and
Paragon Associates II Joint Venture - 75-1956332
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF
A GROUP* (a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS
IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Texas
NUMBER OF 7 SOLE VOTING POWER 808,500
SHARES
BENEFICIALLY 8 SHARED VOTING POWER 0
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER 808,500
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE POWER 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
808,500
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW
(11) EXCLUDES CERTAIN SHARES* [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.26%
14 TYPE OF REPORTING PERSON*
OO
*SEE INSTRUCTIONS BEFORE FILLING OUT
SCHEDULE 13D
ITEM 1. SECURITY AND ISSUER
Securities acquired: Shares of common stock, par value $0.001
per share ("Common Stock")
Issuer: Aronex Pharmaceuticals, Inc.
3400 Research Forest Drive
The Woodlands, Texas 77381
Tel. No. (281) 367-1666
ITEM 2. IDENTITY AND BACKGROUND
This Schedule 13D is filed by a joint venture formed by (i)
Paragon Associates, a Texas limited partnership ("Paragon") and (ii)
Paragon Associates II, a Texas limited partnership ("Paragon II").
Bradbury Dyer III is the sole general partner of Paragon and Paragon II and
is the authorized agent to the joint venture, which is hereinafter referred
to as "Paragon JV."
The business address of Paragon, Paragon II, Paragon JV and Mr.
Dyer is 500 Crescent Court, Suite 260, Dallas, Texas 75201. The principal
business of Paragon JV is the joint management of the assets and activities
of Paragon and Paragon II. The principal business of Paragon and Paragon
II is investment in and trading of capital stocks, warrants, bonds, notes,
debentures and other securities. The present principal occupations or
employments of Mr. Dyer are management of his personal investments, general
partner of Paragon and Paragon II, and agent for Paragon JV. Mr. Dyer is a
citizen of the United States.
Neither Paragon, Paragon II, Paragon JV nor Mr. Dyer has, during
the past five years, been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors) or been a party to a civil
proceeding of a judicial or an administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state securities
laws or finding any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS
As of October 9, 1997, Paragon JV had invested $4,025,002 in
shares of Common Stock of Aronex Pharmaceuticals, Inc. (the "Issuer") as
described below in Item 5. The source of these funds was the working
capital of Paragon JV.
ITEM 4. PURPOSE OF THE TRANSACTION
Paragon JV acquired shares of the Issuer's Common Stock for
investment purposes and does not have any present plans or proposals that
relate to or would result in any change in the business, policies,
management, structure or capitalization of the Issuer, but Paragon JV
reserves the right to consider or make such plans and/or proposals in the
future. Paragon JV reserves the right to acquire, or dispose of,
additional securities of the Issuer, in the ordinary course of business, to
the extent deemed advisable in light of its general investment and trading
policies, market conditions or other factors. Paragon JV may contact the
Issuer and/or other shareholders regarding potential strategies to increase
shareholder value. Other than as described above, Paragon JV has no
present plans or proposals which would result in any of the following:
1) any extraordinary corporate transaction, such as a
merger, reorganization or liquidation, involving the Issuer or
any of its subsidiaries;
2) any sale or transfer of a material amount of assets of
the Issuer or any of its subsidiaries;
3) any change in the present board of directors or
managers of the Issuer;
4) any material change in the present capitalization or
dividend policy of the Issuer;
5) any other material change in the Issuer's business or
corporate structure;
6) any change in the Issuer's charter, by-laws or
instruments corresponding thereto or other actions which may
impede the acquisition of control of the Issuer by any person;
7) causing a class of securities of the Issuer to be
delisted from a national securities exchange or to cease to be
authorized to be quoted in an interdealer quotation system of a
registered national securities association;
8) causing a class of securities of the Issuer to become
eligible for termination of registration pursuant to Section
12(g)(4) of the Act; or
9) any action similar to any of those enumerated above.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) As of June 30, 1997, and according to the Issuer's most recent
Quarterly Report on Form 10-Q, there were issued and outstanding 14,687,000
shares of Common Stock. However, based on information provided to Paragon
JV by the Issuer, the Issuer issued 686,000 shares on September 11, 1997,
under a pre-existing contingent obligation, which brought total shares
issued and outstanding on that date to 15,373,000. As of the date hereof,
Paragon JV (in carrying out the purposes of Paragon and Paragon II) has
beneficial ownership of 808,500 such shares, representing approximately
5.26% of the Common Stock of the Issuer. Under the terms of the joint
venture agreement of Paragon JV, a copy of which is herewith filed as Annex
A and incorporated herein by reference, Paragon and Paragon II have
beneficial ownership of such shares in proportion to their respective
accounts in the joint venture. Mr. Dyer does not have direct beneficial
ownership of such shares; however, Mr. Dyer, as sole general partner of
Paragon and Paragon II, and as agent for Paragon JV, may be deemed, for
purposes of determining beneficial ownership pursuant to Rule 13d-3, to
have indirect beneficial ownership of such shares.
(b) Paragon JV has the sole power to vote or to direct the vote of
and the sole power to dispose or to direct the disposition of a total of
808,500 shares of Common Stock of the Issuer; however, Paragon and Paragon
II, as co-venturers in Paragon JV, each hold an undivided interest in such
shares based on their respective accounts in Paragon JV, and may be deemed,
for purposes of determining beneficial ownership pursuant to Rule 13d-3, to
have shared power with Paragon JV to vote or to direct the vote of and to
dispose or to direct the disposition of such shares. Mr. Dyer, as sole
general partner of Paragon and Paragon II and as managing agent for Paragon
JV, may be deemed, for purposes of determining beneficial ownership
pursuant to Rule 13d-3, to have shared power with Paragon JV to vote or to
direct the vote of and to dispose or to direct the disposition of such
shares.
(c) The transactions in the Issuer's securities by Paragon JV during
the last sixty days are listed as Annex B attached hereto and made apart
hereof.
(d) Not Applicable.
(e) Not Applicable.
ITEM 6. CONTRACTS, ARRANGEMENT, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER
Not Applicable.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Not Applicable.
ANNEX A
JOINT OPERATION AND
ACCOUNTING PROCEDURES AGREEMENT
AGREEMENT dated as of January 1, 1984 by and among Bradbury Dyer III
(hereinafter called "Dyer"), an individual residing in Dallas, Texas,
Paragon Associates (hereinafter called "Old Paragon"), a Texas limited
partnership of which Dyer is the general partner, and Paragon Associates II
(hereinafter called "Paragon II"), a Texas limited partnership of which
Dyer is the general partner. The address of Dyer, Old Paragon and Paragon
II is Suite 2340, One Dallas Centre, 350 North St. Paul, Dallas, Texas
75201.
Note: The Introductory Statement to this Agreement has been
deleted because it does not govern the terms of the joint
operation of the parties hereto and does contain certain
information which the reporting persons desire to hold in
confidence.
AGREEMENT
1. Old Paragon and Paragon II hereby form a joint venture for the
purpose of jointly carrying out the purposes set forth in the Limited
Partnership Agreements of Old Paragon and Paragon II and accounting for
their commingled assets and liabilities exclusive of the contingent
liabilities of the Metropolitan Claims which shall be retained by, and
remain solely the obligation of, Old Paragon. Each party hereto may
withdraw from the joint venture its share of the assets subject to its
share of the liabilities at any time.
2. Old Paragon confirms to Paragon II that Old Paragon intends
solely to retain and does retain any and all liability which it might have
with respect to the Metropolitan Claims and Old Paragon hereby indemnifies
the joint venture and Paragon II and each person or entity who is at any
time a limited partner of Paragon II against any loss or liability with
respect to, or resulting from, the Metropolitan Claims and any and all
costs and expenses, including attorney's fees, which any of them may incur
in connection with the defense thereof or the enforcement of this
provision. Dyer will not permit capital withdrawals from Old Paragon which
would impair its ability to satisfy any liability which it might have with
respect to the Metropolitan Claims or with respect to obligations under
this paragraph 2.
3. Dyer, as agent for the joint venture, hereby is authorized to
open any and all bank, brokerage or other accounts necessary or useful for
the joint operation of Old Paragon and Paragon II. Any bank, broker or
other person may conclusively rely on this agreement as evidence of Dyer's
authority to so act.
4. Old Paragon shall have a _______% interest in the joint venture
and Paragon II shall have a ________% interest in the joint venture. Such
interests are based upon Old Paragon's net worth (net of withdrawals) at
December 31, 1983 of $_______________ and Paragon II's net worth as of
January 1, 1984 of $______________. These sharing ratios will be adjusted
to reflect any contributions or withdrawals by either Old Paragon or
Paragon II. Each of Old Paragon and Paragon II hereby assumes through the
joint venture a pro rata interest in each contributed asset and liability
of the other, it is being understood and agreed that no liability with
respect to the Metropolitan Claims is being assumed through the joint
venture or otherwise. Further, Old Paragon and Paragon II each agree that
any gain or loss realized for federal income tax purposes which is
attributable to unrealized gain or loss existing on January 1, 1984 shall
be included in the gain or loss of the contributing party.
5. Old Paragon and Paragon II agree that each will separately
account for its interest in the joint venture and each will separately
prepare and file all appropriate tax returns.
6. Dyer, as agent for the joint venture, will make any and all tax
filings and elections for the joint venture as appropriate to reflect the
separate and distinct nature of the interests of Old Paragon and Paragon II
in the joint venture.
7. The authority of Dyer, as agent for the accounts of the joint
venture, shall be the same as his authority with respect to the separate
assets and liabilities of Old Paragon and Paragon II under the Limited
Partnership Agreement for Paragon Associates (as amended) and the Limited
Partnership Agreement for Paragon Associates II.
8. This Agreement shall be effective as of January 1, 1984. Any
activity in any account of Old Paragon or Paragon II since that date will
be deemed to be for the account of the joint venture.
9. Paragraph 2 of this Agreement may not be amended or terminated
without the prior written consent of each person or entity which becomes a
limited partner of Paragon II any time on or after January 1, 1984.
10. Nothing in this Agreement shall prevent Bradbury Dyer III from
causing the termination of the joint venture when there is no longer
pending or threatened against Bradbury Dyer III or Paragon Associates any
Metropolitan Claim.
EXECUTED at Dallas, Texas as of the day and year first above written.
PARAGON ASSOCIATES
By: /S/ BRADBURY DYER III
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Bradbury Dyer III
General Partner
PARAGON ASSOCIATES II
By: /S/ BRADBURY DYER III
-----------------------------
Bradbury Dyer III
General Partner
/S/ BRADBURY DYER III
----------------------------------
Bradbury Dyer III
ANNEX B
Transaction Buy/Sell Quantity Price per
Date (shares) Share ($)
------------ --------- --------- ---------
08/08/97 Buy 7,500 4.50
08/11/97 Buy 3,000 4.50
08/12/97 Buy 5,000 4.50
08/15/97 Buy 5,000 4.50
08/18/97 Buy 5,000 4.50
08/19/97 Buy 35,000 4.50
08/21/97 Buy 15,000 4.50
08/26/97 Buy 35,000 4.48
08/27/97 Buy 5,000 4.37
08/28/97 Buy 8,500 4.50
09/05/97 Buy 7,500 4.37
09/08/97 Buy 5,000 4.31
09/09/97 Buy 2,500 4.37
09/12/97 Buy 5,000 4.37
09/17/97 Buy 10,000 5.62
09/18/97 Buy 20,000 5.48
09/19/97 Buy 5,000 5.44
09/22/97 Buy 5,000 5.37
09/24/97 Buy 40,000 6.23
09/25/97 Buy 35,000 6.69
09/26/97 Buy 20,000 6.75
09/29/97 Buy 10,000 6.25
09/30/97 Buy 25,000 6.50
10/03/97 Buy 20,000 6.37
10/07/97 Buy 5,000 6.37
10/08/97 Buy 50,000 6.84
10/09/97 Buy 20,000 7.00
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409,000
=======
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
the undersigned certifies that the information set forth in this statement
is true, complete and correct.
Dated: October 14, 1997
Paragon Associates and Paragon Associates II
Joint Venture
By: /S/ BRADBURY DYER III
------------------------------------
Bradbury Dyer III, Authorized Agent
