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FILING PURSUANT TO RULE 424(b)(2)
REGISTRATION STATEMENT NO. 333-71911
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED JUNE 21, 1999)
359,100 SHARES
ISIS PHARMACEUTICALS, INC.
COMMON STOCK
------------------------
You should read this prospectus supplement and the accompanying prospectus
carefully before you invest. Both documents contain information you should
consider carefully before making your investment decision.
INVESTING IN OUR COMMON STOCK INVOLVES CERTAIN RISKS. SEE "RISK FACTORS"
BEGINNING ON PAGE 5.
PLAN OF DISTRIBUTION
We are offering 359,100 shares of our common stock to an institutional
investor pursuant to this prospectus supplement. The common stock will be
purchased at a negotiated purchase price of $9.7466. The $9.7466 purchase price
reflects the average of recent trading prices of the common stock on the Nasdaq
National Market. We will not pay any other compensation in conjunction with the
sale of our common stock.
USE OF PROCEEDS
We will use the proceeds of this offering as described in the prospectus.
See "Use of Proceeds" beginning on page 11.
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WHERE YOU CAN GET MORE INFORMATION
The SEC allows us to "incorporate by reference" information that we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus supplement and the accompanying prospectus.
We incorporate the documents listed below, in addition to those indicated on
page 10 of the prospectus:
- Annual Report on Form 10-K for the year ended December 31, 1998, as
amended on June 8, 1999 and June 14, 1999; and
- Current Report on Form 8-K dated as of April 20, 1999, as amended on June
8, 1999 and June 16, 1999.
MARKET FOR OUR COMMON STOCK
On July 16, 1999, the last reported sale price of our common stock on the
Nasdaq National Market was $10.3125 per share. Our common stock is listed on the
Nasdaq National Market under the symbol "ISIP." The common stock sold under this
prospectus supplement will be listed on the Nasdaq National Market after we
notify the Nasdaq National Market that the shares have been issued.
As of July 16, 1999, we have 28,345,220 shares of common stock outstanding.
GENERAL
You should rely only on the information provided or incorporated by
reference in this prospectus supplement and the prospectus. We have not
authorized anyone else to provide you with different information. You should not
assume that the information in this prospectus supplement is accurate as of any
date other than the date on the front of these documents.
NEITHER THE SECURITIES EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE SECURITIES OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus supplement is July 19, 1999.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
PROSPECTUS SUPPLEMENT
Plan of Distribution...................................... S-1
Use of Proceeds........................................... S-1
Where You Can Get More Information........................ S-2
Market for Our Common Stock............................... S-2
General................................................... S-2
PROSPECTUS
Prospectus Summary........................................ 3
The Company............................................... 3
The Offering.............................................. 4
Risk Factors.............................................. 5
Where You Can Get More Information........................ 10
Use of Proceeds........................................... 11
Dilution.................................................. 12
Plan of Distribution...................................... 12
Legal Matters............................................. 13
Experts................................................... 13
</TABLE>
S-3
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PROSPECTUS
4,000,000 Shares
ISIS PHARMACEUTICALS, INC.
Common Stock
-------------------------
This prospectus will allow us to issue common stock over time. This means:
- we will provide a prospectus supplement each time we issue common
stock;
- the prospectus supplement will inform you about the specific terms of
that offering and also may add, update or change information contained
in this document; and
- you should read this document and any prospectus supplement carefully
before you invest.
Isis' common stock is traded on the Nasdaq National Market under the symbol
"ISIP". On June 7, 1999, the last reported sale price for our common stock on
the Nasdaq National Market was $9.91 per share.
INVESTING IN OUR COMMON STOCK INVOLVES CERTAIN RISKS. SEE "RISK FACTORS"
BEGINNING ON PAGE 5.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE SECURITIES OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is June 21, 1999
<PAGE> 5
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.......................................... 3
The Company................................................. 3
The Offering................................................ 4
Risk Factors................................................ 5
Where You Can Get More Information.......................... 10
Use of Proceeds............................................. 11
Dilution.................................................... 12
Plan of Distribution........................................ 12
Legal Matters............................................... 13
Experts..................................................... 13
</TABLE>
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PROSPECTUS SUMMARY
The following summary is qualified in its entirety by reference to the more
detailed information and consolidated financial statements appearing elsewhere
or incorporated by reference in this prospectus.
THE COMPANY
Isis was incorporated in California in January 1989 and in April 1991
changed its state of incorporation to Delaware. Our executive offices are
located at 2292 Faraday Avenue, Carlsbad, California 92008, and our telephone
number is (760) 931-9200. Isis' world wide web address is http://www.isip.com.
Information contained in our world wide web site should not be considered to be
part of this prospectus.
In February 1999, Dr. Daniel Kisner, President, Chief Operating Officer and
a director of Isis, resigned all positions to assume the position of Chief
Executive Officer of Caliper Technologies, a privately held company. Dr. Debby
Jo Blank joined Isis as Executive Vice President overseeing corporate
development, business development, strategic planning and marketing, human
resources and operations, and investor relations. B. Lynne Parshall, Executive
Vice President and Chief Financial Officer assumed responsibility for Isis'
manufacturing and regulatory affairs activities in addition to her previous
responsibilities.
Isis Pharmaceuticals is a trademark of Isis. Vitravene(TM) is a trademark
of CIBA Vision Corporation. All other brand names or trademarks appearing in
this prospectus are the property of their respective holders.
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THE OFFERING
Common stock offered in this
prospectus...................... 4,000,000 shares
Common stock outstanding after
the offering.................... 32,245,139 shares(1)
Use of proceeds................. For research, drug discovery and development
activities, including preclinical and
clinical studies, production of compounds
for such studies and capital expenditures,
and other general corporate purposes. See
"Use of Proceeds."
Nasdaq National Market symbol... ISIP
- -------------------------
(1) Based on shares outstanding as of June 7, 1999. Does not include 7,923,718
shares of common stock issuable upon exercise of outstanding options or
1,015,000 shares of common stock issuable upon exercise of outstanding
warrants as of June 7, 1999.
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RISK FACTORS
Please consider the following risk factors carefully in addition to the
other information contained in this prospectus and in any other documents
incorporated by reference into this prospectus from our other SEC filings.
OUR BUSINESS WILL SUFFER IF WE FAIL TO OBTAIN REGULATORY APPROVAL FOR OUR
PRODUCTS.
We must conduct time-consuming, extensive and costly clinical trials, in
compliance with U.S. Food and Drug Administration regulations, to show the
safety and efficacy of each of our drug candidates, as well as its optimum
dosage, before the FDA can approve a drug candidate for sale. We cannot
guarantee that we will be able to obtain necessary regulatory approvals on a
timely basis, if at all, for any of our products under development. Delays in
receiving these approvals, failure by us or our partners to receive these
approvals at all or failure to comply with existing or future regulatory
requirements could have a material adverse effect on our business, financial
condition and results of operations.
While limited trials of our products have to date produced favorable
results, significant additional trials may be required, and we may not be able
to demonstrate that our drug candidates are safe or effective. We have only
introduced one commercial product, Vitravene. We cannot guarantee that any of
our other product candidates will obtain required government approvals or that
we can successfully commercialize any products. We expect to have ongoing
discussions with the FDA and foreign regulatory agencies with respect to all of
our drugs in clinical development.
OUR BUSINESS WILL SUFFER IF OUR PRODUCTS ARE NOT USED BY DOCTORS TO TREAT
PATIENTS.
We cannot guarantee that any of our products in development, if approved
for marketing, will be used by doctors to treat patients. We currently have one
product, Vitravene, a treatment for CMV retinitis in AIDS patients, which
addresses a small commercial market with significant competition. We delivered
our first commercial shipment of Vitravene to our partner CIBA Vision in 1998,
earning product revenue of $560,000.
The degree of market acceptance for any of our products depends upon a
number of factors, including:
- the receipt and scope of regulatory approvals,
- the establishment and demonstration in the medical and patient community
of the clinical efficacy and safety of our product candidates and their
potential advantages over competitive products, and
- reimbursement policies of government and third-party payors.
In addition, we cannot guarantee that physicians, patients, patient
advocates, payors or the medical community in general will accept and use any
products that we may develop.
OUR BUSINESS WILL SUFFER IF ANY OF OUR COLLABORATIVE PARTNERS FAIL TO DEVELOP,
FUND OR SELL ANY OF OUR PRODUCTS UNDER DEVELOPMENT.
If any collaborative partner fails to develop or sell any product in which
we have rights, our business may be negatively affected. While we believe that
our collaborative
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partners will have sufficient motivation to continue their funding, development
and commercialization activities, we cannot be sure that any of these
collaborations will be continued or result in commercialized products. The
failure of a corporate partner to continue funding any particular program could
delay or stop the development or commercialization of any products resulting
from such program.
Collaborative partners may be pursuing other technologies or developing
other drug candidates either on their own or in collaboration with others,
including our competitors, to develop treatments for the same diseases targeted
by our own collaborative programs.
We also may wish to rely on additional collaborative arrangements to
develop and commercialize our products in the future. However, we may not be
able to negotiate acceptable collaborative arrangements in the future, and, even
if successfully negotiated, the collaborative arrangements themselves may not be
successful.
OUR BUSINESS COULD SUFFER IF THE RESULTS OF FURTHER CLINICAL TESTING INDICATE
THAT ANY OF OUR PRODUCTS UNDER DEVELOPMENT ARE NOT SUITABLE FOR COMMERCIAL USE.
Drug discovery and development involves inherent risks, including the risk
that molecular targets prove unsuccessful and the risk that compounds that
demonstrate attractive activity in preclinical studies do not demonstrate
similar activity in human beings or have undesirable side effects. Most of our
resources are dedicated to applying molecular biology and medicinal chemistry to
the discovery and development of drug candidates based upon antisense
technology, a novel drug discovery tool in designing drugs that work at the
genetic level to block the production of disease-causing proteins.
WE HAVE INCURRED LOSSES AND OUR BUSINESS WILL SUFFER IF WE FAIL TO ACHIEVE
PROFITABILITY IN THE FUTURE.
Because of the nature of the business of drug discovery and development,
our expenses have exceeded our revenues since Isis was founded in January 1989.
As of December 31, 1998, our accumulated losses were approximately $197 million.
Most of the losses have resulted from costs incurred in connection with our
research and development programs and from general and administrative costs
associated with our growth and operations. These costs have exceeded our
revenues, most of which have come from collaborative arrangements, interest
income and research grants. Our current product revenues are derived solely from
sales of Vitravene. This product has limited sales potential relative to most
pharmaceutical products. We expect to incur additional operating losses over the
next several years and we expect losses to increase as our preclinical testing
and clinical trial efforts continue to expand. We cannot guarantee that we will
successfully develop, receive regulatory approval for, commercialize,
manufacture, market or sell any additional products, or achieve or sustain
future profitability.
OUR BUSINESS WILL SUFFER IF WE FAIL TO OBTAIN TIMELY FUNDING.
Based on our current operating plan, we believe that our available cash and
existing sources of revenue and credit, together with the proceeds of this
offering and interest earned thereon, will be adequate to satisfy our capital
needs until at least the end of 2000.
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We expect that we will need substantial additional funding in the future. Our
future capital requirements will depend on many factors, such as the following:
- continued scientific progress in our research, drug discovery and
development programs;
- the size of these programs and progress with preclinical and clinical
trials;
- the time and costs involved in obtaining regulatory approvals;
- the market acceptance of Vitravene;
- the costs involved in filing, prosecuting and enforcing patent claims;
- competing technological and market developments, including the
introduction of new therapies that address our markets; and
- changes in existing collaborative relationships and our ability to
establish and maintain additional collaborative arrangements.
If we are unable to raise the total amount of proceeds covered by this
prospectus, we will need to raise additional funds to finance our research and
development and other operating activities. If we find that we do not have
enough money, additional funds may be raised, including through public or
private financing. Additional financing may not be available, or, if available,
may not be on acceptable terms. If additional funds are raised by issuing equity
securities, the shares of existing stockholders will be subject to further
dilution and share prices may decline. If adequate funds are not available, we
may be required to cut back on one or more of our research, drug discovery or
development programs or obtain funds through arrangements with collaborative
partners or others. These arrangements may require us to give up rights to
certain of our technologies, product candidates or products.
OUR BUSINESS WILL SUFFER IF WE CANNOT MANUFACTURE OUR PRODUCTS OR HAVE A THIRD
PARTY MANUFACTURE OUR PRODUCTS AT LOW COSTS SO AS TO ENABLE US TO CHARGE
COMPETITIVE PRICES TO BUYERS.
To establish additional commercial manufacturing capability on a large
scale, we must improve our manufacturing processes and reduce our product costs.
The manufacture of sufficient quantities of new drugs is typically a
time-consuming and complex process. Pharmaceutical products based on chemically
modified oligonucleotides have never been manufactured on a large commercial
scale. There are a limited number of suppliers for certain capital equipment and
raw materials that we use to manufacture our drugs, and some of these suppliers
will need to increase their scale of production to meet our projected needs for
commercial manufacturing. We may not be able to manufacture at a cost or in
quantities necessary to make commercially successful products.
In 1998, we entered into an antisense oligonucleotide manufacturing
collaboration with Zeneca Life Science Molecules of Manchester, England pursuant
to which Zeneca LSM will supply a portion of our requirements of drugs for
clinical trials. As of the date of this prospectus, we have not received any
supply of drugs under this arrangement, and we cannot guarantee that Zeneca LSM
will prove to be an acceptable alternative supplier.
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OUR BUSINESS WILL SUFFER IF WE FAIL TO COMPETE EFFECTIVELY WITH OUR COMPETITORS.
Our competitors are engaged in all areas of drug discovery in the United
States and other countries, are numerous, and include, among others, major
pharmaceutical and chemical companies, specialized biopharmaceutical firms,
universities and other research institutions. Our competitors may succeed in
developing other new therapeutic drug candidates that are more effective than
any drug candidates that we have been developing. These competitive developments
could make our technology and products obsolete or non-competitive before we
have had enough time to recover our research, development or commercialization
expenses.
Many of our competitors have substantially greater financial, technical and
human resources than we do. In addition, many of these competitors have
significantly greater experience than we do in conducting preclinical testing
and human clinical trials of new pharmaceutical products and in obtaining FDA
and other regulatory approvals of products for use in health care. Accordingly,
our competitors may succeed in obtaining regulatory approval for products
earlier than we do. We will also compete with respect to manufacturing
efficiency and marketing capabilities, areas in which we have limited or no
experience.
OUR BUSINESS WILL SUFFER IF WE ARE UNABLE TO PROTECT OUR PATENTS OR OUR
PROPRIETARY RIGHTS.
Our success depends to a significant degree upon our ability to develop
proprietary products. However, we cannot assure you that patents will be granted
on any of our patent applications in the United States or in other countries. We
also cannot assure you that the scope of any of our issued patents will be
sufficiently broad to offer meaningful protection. In addition, our issued
patents or patents licensed to us could be successfully challenged, invalidated
or circumvented so that our patent rights would not create an effective
competitive barrier.
INTELLECTUAL PROPERTY LITIGATION COULD HARM OUR BUSINESS.
We have not experienced any patent or other intellectual property
litigation. However, we cannot guarantee that we will not have to defend our
intellectual property rights in the future. In the event of an intellectual
property dispute, we may be forced to litigate or otherwise defend our
intellectual property assets. Such disputes could involve litigation or
proceedings declared by the U.S. Patent and Trademark Office or the
International Trade Commission. Intellectual property litigation can be
extremely expensive, and such expense, as well as the consequences should we not
prevail, could seriously harm our business.
If a third party claimed an intellectual property right to technology we
use, we might be forced to discontinue an important product or product line,
alter our products and processes, pay license fees or cease certain activities.
Although we might under these circumstances attempt to obtain a license to such
intellectual property, we may not be able to do so on favorable terms, if at
all.
THE LOSS OF KEY PERSONNEL, OR THE INABILITY TO ATTRACT AND RETAIN HIGHLY SKILLED
PERSONNEL, COULD ADVERSELY AFFECT OUR BUSINESS.
We are dependent on the principal members of our management and scientific
staff. We do not have employment agreements with any of our management. The loss
of our
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management and key scientific employees might slow the achievement of important
research and development goals. Recently, Dr. Daniel Kisner, our President and
Chief Operating Officer and director resigned all positions to assume the
position of Chief Executive Officer of Caliper Technologies, a privately held
company. Dr. Kisner's resignation is not expected to have a material adverse
effect on our business. It is also critical to our success to recruit and retain
qualified scientific personnel to perform research and development work.
Although we believe we will be successful in attracting and keeping skilled and
experienced scientific personnel, we may not be able to do so on acceptable
terms, because of stiff competition for experienced scientists among many
pharmaceutical and health care companies, universities and non-profit research
institutions.
OUR STOCK PRICE MAY CONTINUE TO BE HIGHLY VOLATILE.
The market price of our common stock, like that of the securities of many
other biopharmaceutical companies, has been and is likely to continue to be
highly volatile. During the last twelve months, the market price of our common
stock has ranged from $7 to $16. The market price can be affected by many
factors, including, for example, fluctuation in our operating results,
announcements of technological innovations or new drug products being developed
by us or our competitors, governmental regulation, regulatory approval,
developments in patent or other proprietary rights, public concern regarding the
safety of our drugs and general market conditions.
PROVISIONS IN OUR CERTIFICATE OF INCORPORATION AND DELAWARE LAW MAY PREVENT
STOCKHOLDERS FROM RECEIVING A PREMIUM FOR THEIR SHARES.
Our certificate of incorporation provides for classified terms for the
members of the board of directors. Our certificate also includes a provision
that requires at least 66 2/3% of our voting stockholders to approve a merger or
certain other business transactions with, or proposed by, 15% or more of our
voting stockholders, except in cases where certain directors approve the
transaction or certain minimum price criteria and other procedural requirements
are met.
Our certificate of incorporation also requires that any action required or
permitted to be taken by our stockholders must be taken at a duly called annual
or special meeting of stockholders and may not be taken by written consent. In
addition, special meetings of our stockholders may be called only by the board
of directors, the chairman of the board or the president, or by any holder of
10% or more of our outstanding common stock. The classified board, stockholder
vote requirements and other charter provisions protect us in two ways. First,
these provisions may discourage certain types of transactions in which the
stockholders might otherwise receive a premium for their shares over then
current market prices, and may limit the ability of the stockholders to approve
transactions that they think may be in their best interests. Second, the board
of directors has the authority to fix the rights and preferences of and issue
shares of preferred stock, which may have the effect of delaying or preventing a
change in control of Isis without action by the stockholders.
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WHERE YOU CAN GET MORE INFORMATION
We are a reporting company and file annual, quarterly and current reports,
proxy statements and other information with the SEC. You may read and copy these
reports, proxy statements and other information at the SEC's public reference
rooms in Washington, D.C., New York, NY and Chicago, IL. You can request copies
of these documents by writing to the SEC and paying a fee for the copying cost.
Please call the SEC at 1-800-SEC-0330 for more information about the operation
of the public reference rooms. Our SEC filings are also available at the SEC's
Web site at "http://www.sec.gov". In addition, you can read and copy our SEC
filings at the office of the National Association of Securities Dealers, Inc. at
1735 K Street, Washington, D.C. 20006.
The SEC allows us to "incorporate by reference" information that we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We incorporate
by reference the documents listed below and any future filings we will make with
the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act
of 1934:
- Annual Report on Form 10-K for the year ended December 31, 1998, as
amended on June 8, 1999;
- Quarterly Report on Form 10-Q for the quarter ended March 31, 1999;
- Proxy Statement for the 1999 Annual Meeting of Stockholders;
- Current Report on Form 8-K dated as of April 20, 1999, as amended on June
8, 1999; and
- Isis' registration statement on Form 8-A filed on April 2, 1991, which
includes a description of our common stock.
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address or telephone number:
Isis Pharmaceuticals, Inc.
Attn: Vice President of Finance
2292 Faraday Avenue
Carlsbad, CA 92008
Telephone Number (760) 931-9200
This prospectus is part of a larger registration statement we filed with
the SEC. You should rely only on the information incorporated by reference or
provided in this prospectus. We have not authorized anyone else to provide you
with different information. We are not making an offer of these securities in
any state where the offer is not permitted. You should not assume that the
information in this prospectus is accurate as of any date other than the date on
the front of the document.
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USE OF PROCEEDS
We cannot guarantee that we will receive any proceeds in connection with
this offering.
Companies in the biopharmaceutical industry generally expend significant
capital resources in product research and development. We anticipate that we
will be required to raise substantial additional capital over a period of
several years in order to finance our research and development programs.
Additional capital may be raised through additional public or private
financings, as well as collaborative relationships, borrowings and other
available sources.
We intend to use the net proceeds of this offering, if any, for our
research, drug discovery and development programs and for other general
corporate purposes. Expenses to be funded with the offering proceeds include
costs of preclinical and clinical studies, the production of compounds for such
studies and capital expenditures. We have not identified precisely the amounts
we plan to spend on each research, drug discovery and development program or the
timing of such expenditures. Isis, however, currently plans that the proceeds,
if any, will be used for product development, including clinical trials,
preclinical studies, manufacturing scale-up and facilities and equipment
acquisition. The remaining proceeds, if any, will be used to expand selected
research activities and for general and administrative purposes. The amounts
actually expended for each purpose may vary significantly depending upon
numerous factors, including the amount and timing of the proceeds from this
offering, progress of our research, drug discovery and development programs, the
results of preclinical and clinical studies, the timing of regulatory approvals,
technological advances, determinations as to commercial potential of our
compounds and the status of competitive products. In addition, expenditures will
also depend upon the establishment of collaborative research arrangements with
other companies, the availability of other financing and other factors.
Other methods of financing our operations, including the acquisition of
tenant improvements and capital equipment, such as mortgage or lease financing,
may be used by us if available on attractive terms. In the past, Isis has made a
practice of using lease financing for equipment purchases and intends to
continue to do so in the future to the extent the terms of such financing remain
commercially attractive. To the extent such financing is used, proceeds of this
offering will be reallocated to working capital.
Based upon our current operating plan, we believe that our available cash
and existing sources of revenue and credit, together with the proceeds of this
offering and interest earned thereon, will be adequate to satisfy our capital
needs until at least the end of 2000.
Proceeds of this offering, if any, may also be used to acquire companies or
products that complement the business of Isis. We are not planning or
negotiating any such transactions as of the date of this prospectus.
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DILUTION
The net tangible deficit of Isis at March 31, 1999 was $26,402,000 or
approximately $0.97 per share of common stock. Net tangible deficit per share
represents the amount of our tangible assets less total liabilities, divided by
27,329,000 shares of common stock.
Net tangible book value dilution per share represents the difference
between the amount per share paid by purchasers of shares of common stock in the
offering made hereby and the pro forma net tangible book value per share of
common stock immediately after completion of the offering. After giving effect
to the sale of 4,000,000 shares of common stock in this offering at an assumed
offering price of $10.05 per share and the application of the estimated net
proceeds therefrom (after deducting estimated offering expenses) the pro forma
net tangible book value of Isis as of March 31, 1999 would have been $13,698,000
or $0.44 per share, an immediate increase in net tangible book value of $1.41
per share to existing stockholders and an immediate dilution in net tangible
book value of $9.61 per share to purchasers of common stock in the offering, as
illustrated in the following table:
<TABLE>
<S> <C> <C>
Assumed public offering price per share..................... $10.05
Net tangible book value per share at March 31, 1999......... $(.97)
Increase per share attributable to new investors............ $1.41
-----
Pro forma net tangible book value per share after
offering.................................................. $ .44
------
Net tangible book value dilution per share to new
investors................................................. $ 9.61
------
</TABLE>
To the extent that outstanding options and warrants are exercised, there
will be further dilution to new investors.
PLAN OF DISTRIBUTION
We may offer the common stock:
- directly to purchasers;
- to or through underwriters;
- through dealers, agents or institutional investors; or
- through a combination of such methods.
Regardless of the method used to sell the common stock, we will provide a
prospectus supplement that will disclose:
- the identity of any underwriters, dealers, agents or investors who
purchase the common stock;
- the material terms of the distribution, including the number of shares
sold and the consideration paid;
- the amount of any compensation, discounts or commissions to be received
by the underwriters, dealers or agents;
- the terms of any identification provisions, including indemnification
from liabilities under the federal securities laws; and
- the nature of any transaction by an underwriter, dealer or agent during
the offering that is intended to stabilize or maintain the market price
of the common stock.
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LEGAL MATTERS
The validity of the issuance of the common stock offered in this prospectus
will be passed upon for Isis by Grantland E. Bryce, Vice President and General
Counsel of Isis. Mr. Bryce does not beneficially own any shares of common stock
as of the date of this prospectus.
EXPERTS
The financial statements of Isis Pharmaceuticals, Inc., appearing in Isis
Pharmaceuticals, Inc.'s Annual Report on Form 10-K for the year ended December
31, 1998, have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report. We incorporate by reference their report as a part of
this prospectus. Such financial statements are incorporated into this prospectus
in reliance upon the reports of Ernst & Young LLP given upon the authority of
Ernst & Young LLP as experts in accounting and auditing.
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