<PAGE>
As filed with the Securities and Exchange Commission on June 11, 1999
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Registration No. 333-_________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ICOS CORPORATION
(Exact name of Registrant as specified in its charter)
<TABLE>
Delaware 91-1463450
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<S> <C>
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification Number)
</TABLE>
22021 20th Avenue S.E.
Bothell, Washington 98021
(425) 485-1900
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
George B. Rathmann
Chairman, Chief Executive Officer and President
ICOS Corporation
22021 20th Avenue S.E.
Bothell, Washington 98021
(425) 485-1900
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
Stephen M. Graham
Andrew B. Moore
Perkins Coie LLP
1201 Third Avenue, 48th Floor
Seattle, Washington 98101-3099
(206) 583-8888
Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of this Registration Statement as determined by
the selling stockholders.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box.[X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering.[ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act of 1933, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.[ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.[ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Maximum Proposed Maximum
Title of Each Class of Amount to Be Offering Price Aggregate Offering Amount of
Securities to Be Registered Registered per Share(1) Price Registration Fee
<S> <C> <C> <C> <C>
Common Stock, par value $.01 per share.... 7,550,600 shares $44.16 $333,434,496 $92,696.00
===================================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933, based on the
average of the high and low sales prices of the common stock on June 8,
1999.
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with section 8(a) of
the Securities Act of 1933 or until this registration statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said section 8(a), may determine.
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The information in this prospectus is not complete and may be changed. The
selling holders may not sell these securities until the registration statement
filed with the Securities and Exchange Commission is effective. This prospectus
is not an offer to sell these securities and it is not soliciting an offer to
buy these securities in any state where the offer or sale is not permitted.
PROSPECTUS
(Subject to completion, dated June 11, 1999)
7,550,600 Shares
[LOGO]
ICOS CORPORATION
Common Stock
_______________
The selling stockholders listed in this prospectus may offer for sale up to
7,550,600 shares of common stock that may be issued to the selling stockholders
upon the exercise of warrants. The selling stockholders may sell the common
stock to or through broker-dealers who may receive compensation in the form of
discounts, concessions or commissions.
ICOS will not receive any proceeds from this offering other than the price
paid upon the exercise of the warrants. ICOS will pay all expenses incurred in
registering and listing these shares, including legal and accounting fees.
The common stock trades on the Nasdaq National Market under the symbol
"ICOS." On June 9, 1999, the last reported sales price of the common stock on
Nasdaq was $43.8125 per share.
Investing in the common stock involves a high degree of risk. See "Risk
Factors" beginning on page 6.
_______________
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined whether
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.
_______________
The date of this prospectus is ________ __, 1999.
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TABLE OF CONTENTS
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FORWARD-LOOKING INFORMATION...................... 4
HOW TO OBTAIN MORE INFORMATION................... 4
THE COMPANY...................................... 5
RISK FACTORS..................................... 6
SELLING STOCKHOLDERS............................. 12
USE OF PROCEEDS.................................. 13
PLAN OF DISTRIBUTION............................. 13
EXPERTS.......................................... 14
LEGAL MATTERS.................................... 14
________________
</TABLE>
We have not authorized any person to give you any information or to make
any representations other than those contained in this prospectus. You should
not rely on any information or representations other than this prospectus. This
prospectus is not an offer to sell or a solicitation of an offer to buy any
securities other than the common stock. It is not an offer to sell or a
solicitation of an offer to buy securities if the offer or solicitation would be
unlawful. The affairs of ICOS may have changed since the date of this
prospectus. You should not assume that the information in this prospectus is
correct at any time subsequent to its date.
<PAGE>
FORWARD-LOOKING INFORMATION
This prospectus includes "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. This Act provides a "safe
harbor" for forward-looking statements to encourage companies to provide
prospective information about themselves so long as they identify these
statements as forward-looking and provide meaningful cautionary statements
identifying important factors that could cause actual results to differ from the
projected results. All statements other than statements of historical fact we
make in this prospectus or in any document incorporated by reference are
forward-looking. In particular, the statements we make regarding industry
prospects and our future results of operations or financial position are
forward-looking statements. Forward-looking statements reflect our current
expectations and are inherently uncertain. Our actual results may differ
significantly from our expectations. The section entitled "Risk Factors"
describes some, but not all, of the factors that could cause these differences.
HOW TO OBTAIN MORE INFORMATION
We file reports, proxy statements and other information with the Securities
and Exchange Commission. You may read any document we file at the SEC's public
reference rooms at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call
the SEC toll free at 1-800-SEC-0330 for information about its public reference
rooms. You may also read our filings at the SEC's Web site at
http://www.sec.gov.
To register these shares, we have filed with the SEC a registration
statement on Form S-3 under the Securities Act of 1933. This prospectus does
not contain all the information in the registration statement. We have omitted
certain parts of the registration statement, as permitted by the rules and
regulations of the SEC. You may inspect and copy the registration statement,
including exhibits, at the SEC's public reference facilities or Web site. Our
statements in this prospectus about the contents of any contract or other
document are not necessarily complete. You should refer to the copy of each
contract or other document we have filed as an exhibit to the registration
statement for complete information.
The SEC allows us to "incorporate by reference" into this prospectus the
information we file with it. This means that we can disclose important
information to you by referring you to those documents. This information we
incorporate by reference is considered a part of this prospectus, and later
information we file with the SEC will automatically update and supersede this
information. We incorporate by reference the documents listed below and any
future filings we make with the SEC under Sections 13(a), 13(c), 14 and 15(d) of
the Securities Exchange Act of 1934 until this offering is completed:
. Our Annual Report on Form 10-K for the year ended December 31, 1998;
. Our Quarterly Report on Form 10-Q for the quarterly period ended March
31, 1999;
. Our Proxy Statement, dated March 31, 1999, for our 1999 Annual Meeting
of Stockholders; and
. The description of our common stock contained in the registration
statement on Form 8-A filed with the SEC on April 18, 1991, under
Section 12(g) of the Exchange Act.
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You may obtain copies of these documents free of charge by contacting the
investor relations department at our principal offices, which are located at
22021 20th Avenue S.E., Bothell, Washington 98021, (425) 485-1900.
THE COMPANY
ICOS was formed in 1989 to develop and commercialize proprietary
pharmaceuticals for the treatment of inflammatory diseases and other serious
medical conditions by understanding the underlying mechanisms and identifying
the molecular entities involved.
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RISK FACTORS
In addition to the other information contained in this prospectus, you
should carefully read and consider the following risk factors before purchasing
our common stock. If any of the following risks actually occur, our business,
financial condition or results of operations could be materially adversely
affected. In such case, the trading price of our common stock could decline,
and you may lose all or part of your investment.
The risks and uncertainties described below are not the only ones facing
our company. Additional risks and uncertainties not presently known to us or
that we currently deem immaterial may also impair our business operations. We
undertake no obligation to publicly release the result of any revisions to these
forward-looking statements that may be made to reflect events or circumstances
after the date hereof or to reflect the occurrence of unanticipated events.
We have not generated revenues from the sale of products, and we may not be able
to generate enough product revenues in the future to achieve profitability.
We have not yet completed the development of any products and we do not
expect to have any products commercially available for several years.
Consequently, we have not generated revenues from the sale of products since we
started operations. We anticipate that our operating expenses will increase
significantly in 1999 and subsequent years as we attempt to complete development
of our potential products and introduce our potential products into the market.
Therefore, even if we do successfully develop products that can be marketed, we
will need to generate significant revenues from those products to achieve and
maintain profitability. If we do become profitable, we cannot be certain that
we can sustain or increase profitability on a quarterly or annual basis.
Our clinical trials may fail to demonstrate the safety and efficacy of our
products, which could prevent or significantly delay the regulatory approval of
our products.
Before obtaining regulatory approvals for the sale of any of our potential
products, we must subject those products to extensive preclinical and clinical
testing to demonstrate their safety and effectiveness for humans. We may not
complete our clinical trials of potential products under development and the
results of the trials may fail to demonstrate the safety or effectiveness of
such products to the extent necessary to obtain regulatory approvals. This could
delay or prevent regulatory approval of our potential products.
At any time during the course of our clinical trials or commercial use of
our products, factors such as delays in patient enrollment in our clinical
trials, the discovery of unacceptable toxicities or side effects, or the
development of disease resistance or other physiological factors could cause us
to interrupt, limit, delay or abort the development or sale of our potential
products.
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If we are unable to obtain the additional funding we need to develop and market
our potential products, we may be required to delay, scale back or eliminate
expenditures for some of our programs or contract with third parties to develop
and market our potential products or technologies.
The development of our potential products will require the commitment of
substantial financial resources to conduct the time-consuming research,
preclinical development and clinical trials necessary to bring our products to
market. We may seek additional funding through public or private financings,
including equity financings, and through other arrangements, including
collaborative arrangements. However, financing may be unavailable when we need
it or may be unavailable on acceptable terms. If adequate funds are unavailable,
we may be required to delay, scale back or eliminate expenditures for some of
our programs or contract with third parties to develop and market our potential
products or technologies.
If we fail to negotiate and maintain collaborative arrangements with third
parties, our development and marketing activities may be delayed or reduced.
We have entered into, and we expect to enter into in the future,
collaborative arrangements with experienced third parties who perform, or may in
the future perform, development, regulatory compliance, manufacturing and
marketing activities relating to some of our potential products. If we fail to
secure and maintain successful collaborative arrangements, our development and
marketing activities may be delayed or reduced. Currently, we have collaborative
arrangements with Suntory Limited, Eli Lilly and Company, and other companies
and research laboratories. We may enter into similar arrangements with other
collaborators in the future, but we may be unable to negotiate additional
collaborative arrangements or extensions of our existing arrangements on
acceptable terms. If we do, any extended or additional arrangements may not be
successful.
Our ability to obtain successful collaborative participation will depend on
a number of factors, including our and our collaborators achieving research
objectives and any existing or potential collaborators' financial, competitive,
marketing and strategic considerations, such as the relative advantages of
alternative products being marketed or developed by others.
We could experience price pressure or reduced demand for our products as a
result of inadequate third-party reimbursement of the patient costs of our
products and the trend toward managed healthcare and government insurance
programs.
Our ability to sell products successfully in the future depends in part on
the extent to which various third parties are willing to reimburse the patient
costs of our products and related treatments. These third parties include
government authorities, private health insurers and other organizations, such as
health maintenance organizations. Third-party payors are increasingly
challenging the prices charged for medical products and services. Accordingly,
if less costly drugs are available, third-party payors may not authorize or may
limit reimbursement for our products, even if our products are safer or more
effective than the alternatives. In addition, the trend toward managed
healthcare and government insurance programs could result in lower prices and
reduced demand for our products. Cost containment measures instituted by
healthcare providers, including, for example, practice protocols and guidelines
for use of products, and general healthcare reform may also affect our ability
to sell products in sufficient quantities, or at adequate prices, to become
profitable. We cannot predict the effect of future legislation or regulation
concerning the healthcare industry and third-party coverage and reimbursement on
our business.
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We may be unable to establish the manufacturing and sales and marketing
capabilities necessary to become profitable.
Currently, we do not have facilities for the manufacture of small molecule
products, such as IC351, and we may not have sufficient manufacturing capacity
to manufacture all of our biological products in quantities necessary for
commercial sale. In addition, our manufacturing capacity may be inadequate to
complete all clinical trials contemplated by us over time. We expect to develop
our manufacturing capacity by expanding our current facilities, building new
facilities or contracting with other parties for manufacturing services. We may
not, however, be able to acquire all the manufacturing resources necessary to
become profitable.
We also do not have direct sales or marketing capabilities. If we decide to
market our potential products through a direct sales force, we would need to
either hire a sales force with expertise in pharmaceutical sales or contract
with a third party to provide a sales force to meet our needs. We may be unable
to develop a direct sales force or establish other distribution channels
necessary for us to generate enough sales to become profitable.
We may be unable to protect our intellectual property rights adequately.
Our success and ability to compete depend on our licensed and internally
developed technology. Despite our efforts to protect our proprietary rights,
unauthorized parties may copy, develop independently or otherwise obtain and use
our products or technology. We protect our proprietary technology through a
combination of patent, copyright, trade secret and trademark law. We also enter
into confidentiality or license agreements with our employees, consultants and
corporate partners.
We cannot be sure that our pending patent applications will result in
issued patents. In addition, our issued patents or pending applications may be
challenged or circumvented by our competitors. Policing unauthorized use of our
intellectual property will be difficult, and we cannot be certain that we will
be able to prevent misappropriation of our technology, particularly in countries
where the laws may not protect our proprietary rights as fully as in the United
States.
Intellectual property claims and litigation could subject us to significant
liability for damages and invalidation of our proprietary rights.
In the future, we may have to resort to litigation to protect our
intellectual property rights, to protect our trade secrets or to determine the
validity and scope of the proprietary rights of others. Any litigation,
regardless of its success, would probably be costly and require significant time
and attention of our key management and technical personnel. Litigation could
also force us to stop or delay selling, manufacturing or using products that
incorporate the challenged intellectual property, pay damages or enter into
licensing or royalty agreements which may be unavailable on acceptable terms.
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We may be unable to compete successfully in the highly competitive market for
pharmaceutical and biotechnological products.
The market in which we compete is well established and intensely
competitive. We may be unable to compete successfully against our current and
future competitors. Our failure to compete successfully may result in pricing
reductions, reduced gross margins and failure to achieve market acceptance.
Many entities are engaged in developing pharmaceutical and biotechnological
products for human therapeutic applications, including the applications targeted
by us. Our competitors include pharmaceutical companies, chemical companies,
specialized biotechnology companies, and research and academic institutions.
Many of these organizations have substantially more capital, research and
development, regulatory, manufacturing, marketing, human and other resources and
experience than we do. As a result, they may be able to adapt more quickly to
new technologies, devote greater resources to the promotion or sale of their
products, initiate or withstand substantial price competition, or take advantage
of acquisition or other opportunities more readily.
Rapid changes in technology and industry standards could render our potential
products unmarketable or obsolete.
We are engaged in a field characterized by extensive research efforts and
rapid technological development. New drug discoveries and developments in our
field and other drug discovery technologies are accelerating. Our competitors
may develop technologies and products that are more effective than any we
develop or that render our technology and potential products obsolete or
noncompetitive. In addition, our potential products could become obsolete or
unmarketable if new industry standards emerge. To be successful, we will need to
continually enhance our products and to design, develop and market new products
that keep pace with new technological and industry developments.
Our stock price has been and is likely to continue to be volatile, which could
cause the market price of our common stock to decline, and you may be unable to
sell your shares at or above your purchase price.
The market prices for our common stock and for securities of biotechnology
and pharmaceutical companies generally have been volatile in the past and are
likely to continue to be volatile in the future. If you decide to purchase our
shares, you may not be able to resell them at or above the price you paid due to
a number of factors, including actual or anticipated variations in quarterly
operating results, results and progress of preclinical studies and clinical
trials, changes in earnings estimates by analysts, announcements of
technological innovations or new products by our competitors, changes in the
structure of the healthcare financing and payment systems, general conditions in
the biotechnology and pharmaceutical industry, and significant sales of our
common stock by one or more of our principal stockholders.
Government regulatory authorities may not approve our potential products.
The U.S. Food and Drug Administration and comparable agencies in foreign
countries impose substantial requirements on biotechnology and pharmaceutical
companies during development of potential products. These requirements include
lengthy and detailed laboratory and clinical testing procedures, sampling
activities and other costly and time-consuming procedures surrounding the
development and testing of proposed products. Governmental regulation also
affects the manufacture and marketing of pharmaceutical products. If we do not
receive the necessary governmental approvals to market our products, we will be
unable to sell our products and our business may fail.
Any future FDA or other governmental approval of our
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potential products may entail limitations on the indicated uses for which these
products may be marketed. The effect of governmental regulation may be to delay
marketing new products for a considerable period of time, to impose costly
requirements on our activities or to provide a competitive advantage to our
competitors. In addition, compliance with the regulations of these agencies may
delay or prevent us from introducing new or improved products or require us to
stop marketing our products. If we fail to comply with the laws and regulations
pertaining to our business, we may be subject to sanctions, including the
temporary or permanent suspension of operations, product recalls and marketing
restrictions.
We may be required to defend lawsuits or pay damages in connection with the
alleged or actual harm caused by our products.
Product liability is a risk in the testing and marketing of biotechnology
and pharmaceutical products. We face an inherent business risk of exposure to
product liability claims in the event that the use of our technology or products
is alleged to have resulted in harm to others. This risk exists in human
clinical trials as well as in commercial distribution. The biotechnology and
pharmaceutical industry in general has been subject to significant medical
malpractice litigation. We may incur significant liability in the event of such
litigation. Although we maintain product liability insurance, we cannot be sure
that this coverage is adequate or that it will continue to be available on
acceptable terms.
We may be exposed to substantial environmental liability arising from our
activities involving the use of hazardous materials.
Our research and development activities involve the controlled use of
hazardous materials, chemicals, viruses and radioactive compounds. In the event
of an accident involving these materials, we could be held liable for any
damages that result, and that liability could exceed our resources. We are
subject to federal, state and local laws and regulations governing the use,
manufacture, storage, handling and disposal of hazardous materials and certain
waste products. Although we believe that our operations comply with the
standards prescribed by these laws, the risk of accidental contamination or
injury from these materials cannot be completely eliminated.
We depend on highly qualified management and technical personnel who may not
remain with us.
We are highly dependent on the efforts and abilities of our current key
technical and managerial personnel. Our success will depend in part on retaining
the services of our existing management and key personnel and attracting and
retaining new highly qualified personnel. Failure to retain our existing key
management and technical personnel or to attract additional highly qualified
personnel could, among other things, inhibit our ability to negotiate additional
collaborative arrangements, delay preclinical or clinical testing of our
products, obstruct our ongoing discovery research, or delay the regulatory
approval process.
In our field, competition for qualified management and technical personnel
is intense. This competition is particularly acute at this time due to the low
unemployment rate experienced nationally. In addition, many of the companies
with which we compete for experienced personnel have greater
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financial and other resources than we do. As a result of these factors, we may
be unsuccessful in recruiting and retaining sufficient qualified personnel.
Future sales of our common stock may depress our stock price.
Sales in the public market of substantial amounts of our common stock,
including the offer or sale of these shares, could depress prevailing market
prices of our common stock. As of May 28, 1999, we had 43,501,172 shares of our
common stock outstanding. In addition to the up to 7,550,600 shares of common
stock that the selling stockholders may offer or sell in connection with this
offering, as of May 28, 1999, we had granted options or warrants to purchase
11,584,100 shares of our common stock. These options or warrants generally have
an exercise price that is substantially below the prevailing market price of our
common stock as of May 28, 1999. The exercise of those options or warrants, and
the prompt resale of the common stock received, may result in downward pressure
on the price of our common stock. The existence of the currently outstanding
warrants and options to purchase our common stock may negatively affect our
ability to complete future equity financings at acceptable prices and on
acceptable terms.
If we or our key outside vendors encounter Year 2000 computer problems,
development of our products may be delayed.
Many currently installed computer systems are not capable of distinguishing
21st century dates from 20th century dates. As a result, beginning on January 1,
2000, computer systems and software used by many companies and organizations in
a wide variety of industries may produce erroneous results, or fail, unless
they are modified or upgraded to process date information correctly. Year 2000
problems with our computer systems or the systems of our key outside vendors
might cause delays in our development activities or in our clinical trials and
ultimately delay the launch of our potential products.
Currently, we are in the process of analyzing our software and computer
systems and the Year 2000 status of our key outside vendors. We believe that we
have already addressed many of our expected internal Year 2000 issues through
normal upgrades and new purchases of software and computer equipment. However,
it is possible that after analyzing our systems for Year 2000 issues, making
necessary upgrades and replacements to our systems and testing our systems, we
may still encounter Year 2000 problems. Furthermore, it is possible that some
of our key outside vendors will fail to correct in a timely fashion, if at all,
their own Year 2000 problems.
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SELLING STOCKHOLDERS
In June 1999, we issued Series B Limited Partner Warrants to purchase an
aggregate of up to 7,550,600 shares of our common stock at an exercise price per
share equal to the greater of
. twenty-five percent over the average closing price of our common stock
on Nasdaq for the 30 trading days immediately preceding the fifth
trading day before June 30, 1999; and
. the closing price of our common stock on Nasdaq on June 30, 1999.
Each of the warrant holders holds an interest in ICOS Clinical Partners,
L.P., a limited partnership formed to support the development of certain
products, which is party to a product development agreement with us. The
warrants may be exercised in whole or in part at any time after July 30, 1999
and before July 1, 2004. Under the terms of the warrants, we are obligated to
use our commercially reasonable efforts to maintain an effective registration
statement for the entire exercise period to facilitate public resales of shares
received on exercise of the warrants. After exercise of their warrants, the
selling stockholders may offer or sell the shares received upon exercise of the
warrants from time to time in the manner contemplated under "Plan of
Distribution." The selling stockholders may also, where permitted, resell the
shares in private transactions pursuant to Rule 144 under the Securities Act of
1933, as amended.
The following table provides certain information as of May 28, 1999
regarding each selling stockholder and the maximum number of shares each may
offer, assuming they choose to exercise their warrants and elect to sell the
shares they receive under this prospectus.
<TABLE>
<CAPTION>
Shares of
Common Stock
Beneficially Owned
After Offering(2)
------------------------------
Shares of
Common Stock
Beneficially Maximum Number Percentage of
Owned Prior to of Shares That Common Stock
Name Offering(1) Be Sold May Amount Outstanding
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<S> <C> <C> <C> <C>
George B. Rathmann(3) ................ 2,534,478 328,000 2,206,478 5.0%
Thomas P. St. John(4) ................ 217,078 2,000 215,078 *
Frank T. Cary(5) ..................... 179,087 8,000 171,087 *
James L. Ferguson(5) ................. 162,837 8,000 154,837 *
William H. Gates, III(6) ............. 5,374,983 328,000 5,046,983 11.5%
Robert W. Pangia(5) .................. 147,837 8,000 139,837 *
All other Selling Stockholders as a
group (1,401 persons) (7) ........... 6,868,600
</TABLE>
_______________
* Less than 1%.
(1) Beneficial ownership is determined in accordance with the rules of the SEC
and generally includes voting or investment power with respect to
securities. The shares of common stock subject to options or warrants
currently exercisable or exercisable within 60 days of May 28, 1999 are
deemed outstanding and to be beneficially owned by the selling stockholder
holding such options or warrants for the purpose of computing the percentage
ownership of such selling stockholder, but are not treated as outstanding
for the purpose of computing the percentage ownership of any other selling
stockholder.
(2) Computed in accordance with Rule 13d-3(d)(1)(i) promulgated under the
Exchange Act and based on 43,501,172 shares of our common stock outstanding
as of May 28, 1999, treating as outstanding the number of shares issuable
upon the assumed
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exercise in full by the named selling stockholder of such selling
stockholder's warrant and assuming the sale of all the shares received upon
such exercise, but not assuming the exercise of the warrants of any other
selling stockholder.
(3) Includes 682,323 shares issuable upon exercise of stock options or warrants
that are exercisable within 60 days of May 28, 1999 and 165,000 shares held
by the Rathmann Family Revocable Trust. Mr. Rathmann is Chairman, Chief
Executive Officer and President of ICOS.
(4) Includes 174,578 shares issuable upon exercise of stock options or warrants
that are exercisable within 60 days of May 28, 1999. Mr. St. John is Vice
President, Therapeutic Development of ICOS.
(5) Includes 147,837 shares issuable upon exercise of stock options or warrants
that are exercisable within 60 days of May 28, 1999. Messrs. Cary, Ferguson
and Pangia are members of the board of directors of ICOS.
(6) Includes 349,364 shares issuable upon exercise of stock options or warrants
that are exercisable within 60 days of May 28, 1999. Mr. Gates is a member
of the board of directors of ICOS.
(7) Represents unaffiliated selling stockholders that, to our knowledge, do not
beneficially own 1% or more of our common stock.
USE OF PROCEEDS
We will receive the proceeds of any exercise of the warrants. If all the
warrants are exercised, we will receive aggregate gross proceeds of
$___________, but there can be no assurance that any or all of the warrants will
be exercised. After payment of our expenses related to this offering, which are
estimated to be approximately $138,196, any remaining net proceeds received by
us will be used for general corporate purposes.
We will not receive any proceeds from the sale of the shares by the selling
stockholders and we will pay all expenses incurred in registering and listing
the shares, including legal and accounting fees.
PLAN OF DISTRIBUTION
Our common stock is traded on Nasdaq. The shares may be sold from time to
time by the selling stockholders in transactions in the over-the-counter market,
through Nasdaq or on one or more other securities markets and exchanges, in
privately negotiated transactions, or through the writing of options on the
shares. They may sell the shares at fixed prices that may be changed, at market
prices prevailing at the time of sale, at prices relating to such prevailing
market prices or at negotiated prices. The selling stockholders may effect such
transactions by selling these shares to or through broker-dealers, including
through block trades in which brokers or dealers may attempt to sell these
shares as agents but may position and resell the block as principals to
facilitate the transaction.
Any broker-dealers participating in the distribution of these shares may
receive compensation in the form of discounts, concessions or commissions from
the selling stockholders and/or the purchasers of the shares for whom such
broker-dealers may act as agents or to whom they may sell as principals, or
both. In connection with any sales of these shares by any selling stockholder,
such selling stockholder and any broker-dealers who participate in such sale may
be deemed to be "underwriters" as defined in the Securities Act. Any
commissions paid or any discounts or concessions allowed to any such broker-
dealers, and any profits received on the resale of such shares of common stock
purchased by them, may be deemed to be underwriting discounts and commissions
under the Securities Act.
The rules of the SEC generally prohibit underwriters, brokers, dealers and
certain other persons engaged or participating in the distribution of these
shares, including the selling stockholders, from making a market in such shares
during the "cooling off" period preceding the commencement of such distribution,
which may limit the timing of purchases and sales of our common stock by the
selling stockholders.
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<PAGE>
In order to comply with the securities laws of certain states, if
applicable, these shares will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states these
shares may not be sold unless they have been registered or qualified for sale in
the applicable state or an exemption from the registration or qualification
requirement is available and complied with.
Pursuant to the terms of the warrants, we have agreed to bear all expenses
incurred in registering and listing these shares.
There can be no assurance that any selling stockholder will exercise its
warrant in whole or in part or sell any or all of the shares offered hereunder.
It is anticipated that this offering will remain in effect until June 30, 2004
or until all of these shares have been sold, whichever is earlier.
EXPERTS
The consolidated financial statements of ICOS Corporation and subsidiary as
of December 31, 1998 and 1997 and for each of the years in the three-year period
ended December 31, 1998 have been incorporated by reference herein and in the
registration statement in reliance on the report of KPMG LLP, independent
certified public accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.
LEGAL MATTERS
The validity of the common stock offered hereby has been passed upon for
ICOS by Perkins Coie LLP, Seattle, Washington.
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<PAGE>
7,550,600 Shares
ICOS CORPORATION
Common Stock
PROSPECTUS
________ __, 1999
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the costs and expenses payable by the
registrant in connection with the sale of the securities being registered. All
amounts are estimates except the SEC registration fee and the Nasdaq National
Market additional listing fee.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee.......................... $ 92,696
Nasdaq National Market additional listing fee................................ 17,500
Printing and engraving expenses.............................................. 10,000
Legal fees and expenses...................................................... 10,000
Accounting fees and expenses................................................. 5,000
Miscellaneous fees and expenses.............................................. 3,003
--------
Total..................................................................... $138,196
========
</TABLE>
Item 15. Indemnification of Directors and Officers
Section 145(a) of the Delaware General Corporation Law provides that a
Delaware corporation may indemnify any person who was or is made or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that such person is or was a director, officer, employee or agent of the
corporation or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation or enterprise,
against expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding if such person acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
cause to believe his or her conduct was unlawful.
Section 145(b) of the DGCL provides that a Delaware corporation may
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses actually
and reasonably incurred by such person in connection with the defense or
settlement of such action or suit if such person acted under similar standards,
except that no indemnification may be made in respect of any claim, issue or
matter as to which such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the Court of Chancery or the
court in which such action or suit was brought shall determine that despite the
adjudication of liability, such person is fairly and reasonably entitled to be
indemnified for such expenses which the Court of Chancery or such other court
shall deem proper.
Section 145 of the DGCL further provides that to the extent a director or
officer of a Delaware corporation has been successful in the defense of any
action, suit or proceeding referred to in subsections 145(a) and (b) or in the
defense of any claim, issue or matter therein, such person shall be indemnified
against expenses actually and reasonably incurred by such person in connection
therewith; that indemnification provided for by Section 145 shall not be deemed
exclusive of any other rights to which the indemnified party may be entitled;
and that the corporation may purchase and maintain insurance on
II-1
<PAGE>
behalf of a director or officer of the corporation against any liability
asserted against such person or incurred by him or her in any such capacity or
arising out of his or her status as such whether or not the corporation would
have the power to indemnify such person against such liabilities under Section
145.
Section 10 of ICOS' Amended and Restated Bylaws requires indemnification of
officers and directors to the fullest extent permitted under Delaware law.
Subject to any restrictions imposed by Delaware law, the bylaws provide an
unconditional right to indemnification for all expense, liability and loss
(including attorneys' fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid in settlement) actually and reasonably incurred or suffered by
any person entitled to indemnification in connection with any actual or
threatened action, suit or proceeding, whether civil, criminal, administrative
or investigative, by reason of the fact that such person is or was serving as a
director or officer of ICOS or that, being or having been a director or officer
or an employee of ICOS, such person is or was serving at the request of ICOS as
a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, including an employee benefit plan.
However, board approval is required with respect to indemnification for any
proceeding initiated by a person entitled to indemnification. The bylaws also
provide that ICOS may, by action of its board of directors, provide
indemnification to its employees and agents with the same scope and effect as
the foregoing indemnification of directors and officers.
Section 102(b)(7) of the DGCL permits a corporation to provide in its
certificate of incorporation that a director of the corporation shall not be
personally liable to the corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director, except for liability for (i) any
breach of the director's duty of loyalty to the corporation or its stockholders,
(ii) acts or omissions not in good faith or that involve intentional misconduct
or a knowing violation of law, (iii) payments of unlawful dividends or unlawful
stock repurchases or redemptions, or (iv) any transaction from which the
director derived an improper personal benefit.
Article 10 of ICOS' Restated Certificate of Incorporation provides that, to
the fullest extent that the DGCL, as it now exists or may hereafter be amended,
permits the limitation or elimination of the liability of directors, a director
of ICOS shall not be liable to ICOS or its stockholders for monetary damages for
breach of fiduciary duty as a director. Any amendment to or repeal of such
Article 10 shall not adversely affect any right or protection of a director of
ICOS for or with respect to any acts or omissions of such director occurring
prior to such amendment or repeal.
ICOS' officers and directors are covered by insurance (with certain
exceptions and limitations) that indemnifies them against losses for which ICOS
grants them indemnification and for which they become legally obligated to pay
on account of claims made against them for "wrongful acts" committed before or
during the policy period. Additionally, ICOS' outside directors are covered by
a similar insurance policy.
Item 16. Exhibits
5.1 Opinion of Perkins Coie LLP, counsel to ICOS
23.1 Consent of KPMG LLP, independent certified public accountants
23.2 Consent of Perkins Coie LLP (contained in Exhibit 5.1)
24.1 Power of attorney (contained on Page II-4)
II-2
<PAGE>
Item 17. Undertakings
A. The undersigned registrant hereby undertakes;
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement to include any
material information with respect to the plan of distribution not previously
disclosed in this registration statement or any material change to such
information in this registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
B. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
D. The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Bothell, State of Washington, on the 11th day of
June, 1999.
ICOS CORPORATION
By: /s/ Howard S. Mendelsohn
_____________________________
Howard S. Mendelsohn
Chief Accounting Officer
POWER OF ATTORNEY
Each person whose individual signature appears below hereby authorizes
George B. Rathmann, Howard S. Mendelsohn, or either of them, as attorneys-in-
fact with full power of substitution, to execute in the name and on the behalf
of each person, individually and in each capacity stated below, and to file, any
and all amendments to this Registration Statement, including any and all post-
effective amendments, and any related Rule 462(b) Registration Statement.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed by the following persons in the
capacities indicated on June 11, 1999.
Signature Title
- -------------------------- -----------------------------------------------
/s/ George B. Rathmann Chairman, Chief Executive Officer and President
__________________________ (Principal Executive Officer)
George B. Rathmann
/s/ Gary L. Wilcox Director and Executive Vice President, Operations
__________________________
Gary L. Wilcox
/s/ Howard S. Mendelsohn Chief Accounting Officer
__________________________ (Principal Financial and Accounting Officer)
Howard S. Mendelsohn
/s/ Frank T. Cary Director
__________________________
Frank T. Cary
/s/ James L. Ferguson Director
__________________________
James L. Ferguson
/s/ William H. Gates III Director
__________________________
William H. Gates III
II-4
<PAGE>
/s/ Janice M. LeCoq Director
__________________________
Janice M. LeCocq
/s/ David V. Milligan Director
__________________________
David V. Milligan
Director
__________________________
Robert W. Pangia
/s/ Alexander B. Trowbridge Director
__________________________
Alexander B. Trowbridge
/s/ Walter B. Wriston Director
__________________________
Walter B. Wriston
II-5
<PAGE>
EXHIBIT INDEX
Exhibit
Number
---------
5.1 Opinion of Perkins Coie LLP, counsel to ICOS
23.1 Consent of KPMG LLP, independent certified public accountants
23.2 Consent of Perkins Coie LLP (contained in Exhibit 5.1)
24.1 Power of attorney (contained on Page II-4)
<PAGE>
EXHIBIT 5.1
[Perkins Coie LLP letterhead]
June 11, 1999
ICOS Corporation
22021 20th Avenue S.E.
Bothell, WA 98021
Gentlemen and Ladies:
We have acted as counsel to you in connection with the registration under
the Securities Act of 1933, as amended, by ICOS Corporation (the "Company") of
up to 7,550,600 shares of Common Stock, $.01 par value (the "Shares"). The
Shares are to be offered and sold by securityholders of the Company, following
receipt of such Shares pursuant to the exercise of warrants to purchase shares
of the Company's Common Stock (the "Warrants"). In this regard, we have
participated in the preparation of a Registration Statement on Form S-3 relating
to the Shares (the "Registration Statement") which you are filing with the
Securities and Exchange Commission. We have examined the Registration Statement
and such documents and records of the Company and other documents as we have
deemed necessary for the purpose of this opinion.
Based upon the foregoing, we are of the opinion that, when issued and
delivered in accordance with the terms of the Warrants for the consideration
expressed therein, the Shares will be duly authorized and validly issued and
fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and any amendment thereto, including any and all post-
effective amendments, and to the reference to our firm in the Prospectus of the
Registration Statement under the heading "Legal Matters." In giving such
consent, we do not thereby admit that we are in the category of persons whose
consent is required under Section 7 of the Securities Act.
Very truly yours,
/s/ Perkins Coie LLP
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
ICOS Corporation:
We consent to the use of our report incorporated herein by reference and to
the reference to our firm under the heading "Experts" in the prospectus.
/s/ KPMG LLP
Seattle, Washington
June 9, 1999
