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As filed with the Securities and Exchange Commission on April 13, 2000
Registration No. 333-__________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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ALKERMES, INC.
(Exact name of registrant as specified in its charter)
Pennsylvania 23-2472830
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
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64 Sidney Street
Cambridge, Massachusetts 02139
(617) 494-0171
(Address, including zip code, and telephone
number, including area code,
of registrant's principal executive offices)
Richard F. Pops, Chief Executive Officer
Alkermes, Inc.
64 Sidney Street, Cambridge, Massachusetts 02139
(617) 494-0171
(Name, address, including zip code, and telephone
number, including area code,
of agent for service)
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Copies to:
Jennifer L. Miller, Esq.
Ballard Spahr Andrews & Ingersoll, LLP
1735 Market Street, 51st Floor
Philadelphia, Pennsylvania 19103
(215) 665-8500
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Approximate date of commencement of proposed sale to the public:
From time to time after this Registration Statement becomes effective.
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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, 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, 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: [ ]
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CALCULATION OF REGISTRATION FEE
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Proposed maximum
Title of each class of Proposed maximum aggregate Amount of
securities to be Amount to be offering price per offering price (1) registration fee
registered registered unit
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<S> <C> <C> <C> <C>
Common Stock,
par value $.01 per share 352,504 shares $66.00 $23,265,264 $6,142
====================================================================================================================
</TABLE>
(1) Estimated solely for the purposes of calculating the registration fee
pursuant to Rule 457(c) of the Securities Act of 1933.
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 the Registration Statement shall become
effective on such date as the SEC, acting pursuant to said Section 8(a), may
determine.
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PROSPECTUS
ALKERMES, INC.
352,504 SHARES OF COMMON STOCK
The selling shareholder may offer and sell 352,504 shares of our common
stock with this prospectus. We will not receive any of the proceeds from sales
of these shares by the selling shareholder.
Our common stock is traded on the Nasdaq National Market under the symbol
"ALKS." On April 12, 2000, the last sale price of our common stock, as reported
on the Nasdaq National Market, was $64.25 per share.
The selling shareholder may sell its shares from time to time on the Nasdaq
National Market or otherwise. It may sell the shares at prevailing market prices
or at prices negotiated with purchasers. The selling shareholder will be
responsible for any commissions or discounts due to brokers or dealers. The
amount of those commissions or discounts cannot be known now because they will
be negotiated at the time of the sales. Alkermes and the selling shareholder
will share all other offering expenses equally.
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 8.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
The date of this Prospectus is April 13, 2000
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You should rely only on the information contained in this prospectus. We
have not authorized anyone to provide you with information that is different
from that contained in this prospectus. The selling shareholder is offering to
sell, and seeking offers to buy, the shares of common stock only in
jurisdictions where offers and sales are permitted. The information contained in
this prospectus is accurate only as of the date of this prospectus, regardless
of the time of delivery of this prospectus or any sale of the common stock. In
this prospectus, references to "we," "us" and "our" refer to Alkermes, Inc. and
its subsidiaries.
TABLE OF CONTENTS
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WHERE YOU CAN FIND MORE INFORMATION...............................................................................2
INCORPORATION OF INFORMATION WE FILE WITH THE SEC.................................................................3
SUMMARY...........................................................................................................4
RISK FACTORS......................................................................................................8
USE OF PROCEEDS..................................................................................................21
SELLING SHAREHOLDER..............................................................................................21
PLAN OF DISTRIBUTION.............................................................................................22
LEGAL MATTERS....................................................................................................23
EXPERTS..........................................................................................................23
</TABLE>
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ALKERMES(R), PROLEASE(R), MEDISORB(R), CEREPORT(R) AND THE ALKERMES LOGO
ARE REGISTERED TRADEMARKS OF ALKERMES, INC. AIR(TM), ALBULAST(TM),
ESTROLAST(TM), RECEPTOR-MEDIATED PERMEABILIZERS(TM), RMP(TM) AND RINGCAP(TM) ARE
TRADEMARKS OF ALKERMES, INC.
NUTROPIN DEPOT(TM) IS A TRADEMARK OF GENENTECH, INC. RISPERDAL(R) IS A
REGISTERED TRADEMARK OF JOHNSON & JOHNSON.
WHERE YOU CAN FIND MORE INFORMATION
Alkermes is subject to the information and reporting requirements of the
Securities Exchange Act of 1934, under which we file periodic reports, proxy and
information statements and other information with the SEC. Copies of our
reports, proxy and information statements and other information may be examined
without charge at the Public Reference Section of the SEC, 450 Fifth Street,
N.W., Room 1024, Washington, D.C. 20549, and the SEC's Regional Offices located
at 500 West Madison Street, Suite 1400, Chicago, IL 60661, and 7 World Trade
Center, 13th Floor, New York, NY 10048 or on the Internet at http://www.sec.gov.
Copies of all or a portion of such materials can be obtained from the Public
Reference Section of the SEC upon payment of prescribed fees. Please call the
SEC at 1-800-SEC-0330 for further information about the Public Reference Room.
These reports, proxy and information statements and other information may also
be inspected at the offices of The Nasdaq Stock Market, 1735 K Street, N.W.,
Washington, D.C. 20006.
This prospectus is a part of a registration statement on Form S-3 that we
filed with the SEC with respect to the common stock offered by this prospectus.
This prospectus does not contain all the information that is in the registration
statement. We omitted certain parts of the registration statement as allowed by
the SEC. We refer you to the registration statement and its exhibits for further
information about us and the common stock offered by the selling shareholders.
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INCORPORATION OF INFORMATION WE FILE WITH THE SEC
We have "incorporated by reference" into this prospectus the information we
file with the SEC. This means that we can disclose important business, financial
and other information in this prospectus by referring you to the documents
containing this information. All information incorporated by reference is part
of this prospectus, unless and until that information is updated and superseded
by the information contained in this prospectus or any information incorporated
later. Any information that we subsequently file with the SEC that is
incorporated by reference will automatically update and supersede any previous
information that is part of this prospectus.
We incorporate by reference our documents listed below and any future
filings we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 until this offering is completed:
- Annual Report on Form 10-K for the fiscal year ended March 31,
1999;
- Quarterly Reports on Form 10-Q for the fiscal quarters ended June
30, 1999, September 30, 1999 and December 31, 1999;
- Current Reports on Form 8-K filed on April 8, 1999, April 21,
1999, February 14, 2000 and March 31, 2000, and Current Reports
on Form 8-K/A dated February 1, 1999, as filed on April 19, 1999
and May 13, 1999 (the supplemental consolidated financial
statements set forth in Item 7 were subsequently superseded by
the financial statements and supplementary data set forth in
Item 8 of the Registrant's Annual Report on Form 10-K for the
fiscal year ended March 31, 1999); and
- Item 1 of Registration Statement on Form 8-A dated June 28, 1991,
as amended by Form 8-A/A dated January 17, 1997.
Alkermes will provide without charge to each person to whom a copy of this
prospectus is delivered, including any beneficial owner, upon the written or
oral request of such person, a copy of any or all of the documents incorporated
by reference (other than exhibits to such documents, unless such exhibits are
specifically incorporated by reference into the information that this prospectus
incorporates). Requests should be directed to:
Alkermes, Inc.
64 Sidney Street
Cambridge, MA 02139-4136
Attention: James M. Frates, Vice President, Chief Financial Officer
and Treasurer
Telephone: (617) 494-0171
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SUMMARY
This summary may not contain all of the information that you should
consider before investing in our securities. You should read the entire
prospectus carefully.
THE COMPANY
We are applying sophisticated drug delivery technologies and product
development and manufacturing capabilities to the development of an expanding
portfolio of pharmaceutical products. We develop product candidates in
collaboration with pharmaceutical and biotechnology company partners and for our
own account. We currently have numerous product candidates in development with
multiple collaborative partners including Genentech, Inc. ("Genentech"), Johnson
& Johnson, Janssen Pharmaceutica International ("Janssen"), Ares-Serono
International S.A. ("Ares-Serono"), Glaxo Wellcome ("Glaxo") and Eli Lilly and
Company Limited ("Eli Lilly").
Our most advanced product development programs are Nutropin Depot and
Risperdal Depot. Nutropin Depot is an injectable sustained release formulation
of Genentech's recombinant human growth hormone ("rhGH") based on our ProLease
drug delivery technology. Following the completion of clinical trials and the
scale-up, construction and validation of our Cambridge, Massachusetts
manufacturing facility, Genentech submitted a New Drug Application to the FDA in
June 1999. Nutropin Depot was granted priority review status and, on December
23, 1999, was approved for marketing in the United States for the treatment of
growth hormone deficiency in children. In addition, we began a Phase I clinical
trial of Nutropin Depot in adult patients with growth hormone deficiency in
January 2000. Risperdal Depot is an injectable sustained release formulation of
Janssen's anti-psychotic drug, Risperdal, based on our Medisorb drug delivery
technology. Following completion of Phase I and multi-center Phase II clinical
trials and the scale-up and expansion of our Wilmington, Ohio manufacturing
facility, Phase III clinical trials of Risperdal Depot began in the second
calendar quarter of 1999. In addition to our work with collaborators, we have
also used our Medisorb technology to develop products for our own account. For
example, we intend to proceed into Phase I clinical trials with an injectable
sustained release Medisorb formulation of Naltrexone, an opiate antagonist, for
the treatment of alcoholism.
Our product development programs are based on improving the medical or
commercial potential of pharmaceutical compounds through advanced drug delivery
systems. We have focused on applying the tools and science of biotechnology to
the development of drug delivery systems characterized by their value,
uniqueness and proprietary nature.
We believe that we have established a leadership position in the
development and manufacturing of pharmaceutical products based on injectable
sustained release drug delivery technologies. We have two such technologies:
ProLease, developed specifically for application to fragile protein and peptide
based drugs, and Medisorb, designed primarily for application to small molecule
drugs and stable peptides. We have scaled-up manufacturing processes for these
two technologies and designed and constructed commercial scale good
manufacturing practices ("GMP") production facilities incorporating
state-of-the-art sterile manufacturing processes.
We have also established a significant presence in the field of pulmonary
drug delivery. Our pulmonary drug delivery system, known as AIR, offers a
unique, proprietary delivery system for optimized drug delivery to the lungs.
The AIR system is useful for small molecules, proteins or peptides and allows
for both local delivery to the lungs and systemic delivery via the lungs. The
technology has a number of advantages including the use of a small, convenient,
inexpensive delivery device, the ability to deliver high doses efficiently and
the potential for sustained drug release in the lungs. We have scaled-up key
aspects of our AIR particle manufacturing to support large scale clinical trials
and have entered into an agreement with a leading manufacturer of inhaler
devices.
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On February 3, 2000, we announced a collaboration with Glaxo upon Glaxo's
exercise of its option to obtain a license to our AIR technology for use in the
development of multiple product candidates in up to four specified respiratory
disease categories. Glaxo's decision to obtain a license followed the completion
of a 12-month feasibility study between the two companies. On February 8, 2000,
we announced that we entered into an agreement with Eli Lilly to develop an
inhaled formulation of human growth hormone based on our AIR pulmonary drug
delivery system. This agreement follows the completion of a nine-month
feasibility program conducted by the two companies. We are also developing for
our own account AlbuLast, a sustained release pulmonary formulation of albuterol
sulfate, for the treatment of asthma. Phase I clinical trials have been
conducted and a Phase I/II clinical trial in asthmatic patients is currently
underway.
On February 16, 2000, we announced the private placement of $200 million
aggregate principal amount of our 3 3/4% convertible subordinated notes due
2007. The initial purchasers of the notes have an option to purchase up to an
additional $50 million in principal amount of notes. The notes are convertible
into our common stock at a conversion price of $135.50 per share, subject to
adjustment in certain circumstances. The private placement, which was made
through initial purchasers to qualified institutional buyers under Rule 144A
under the Securities Act of 1933, closed on February 18, 2000. The net proceeds
of the offering will be used for research, development and clinical trial
activities, potential acquisitions of additional technologies and compounds,
manufacturing facilities and equipment, as well as for working capital and
general corporate purposes.
On February 28, 2000, we announced that our Board of Directors has
authorized a two-for-one split of our common stock and an increase in the
authorized shares of common stock from 80,000,000 to 160,000,000 shares. The
proposal to effect the stock split and the increase in the authorized shares of
common stock is contingent upon receipt of shareholder approval. The proposal
will be submitted to shareholders for approval at a special meeting to be held
on April 28, 2000, in Cambridge, Massachusetts. If the proposal is approved, the
stock split and the increase in the authorized shares of common stock will
become effective with the filing of an amendment to our charter, which is
expected to occur on April 28, 2000. If approved, each share of common stock
owned by holders of common stock on such date will become two shares of common
stock. Distribution of the additional shares is expected to occur on or about
May 12, 2000.
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THE OFFERING
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<S> <C>
Common stock offered by
the selling shareholder...................... All of the 352,504 shares offered by this prospectus may be sold by
the selling shareholder, who acquired these shares upon conversion
of our 1999 convertible exchangeable preferred stock.
Common stock outstanding
as of April 5, 2000.......................... 27,210,241 shares.
Use of proceeds.............................. We will not receive any of the proceeds from the sale of the common
stock under this prospectus.
Trading...................................... Our common stock is traded on the Nasdaq National Market under the
symbol "ALKS."
</TABLE>
In addition to the 27,210,241 shares of common stock outstanding as of
April 5, 2000, on the same date, we had:
- outstanding options and awards for 3,859,670 shares of common stock
at a weighted average exercise price of $20.8848 per share;
- outstanding shares of $3.25 convertible exchangeable preferred stock
that are currently convertible into 3,880,126 shares of common stock; and
- outstanding 3 3/4% convertible subordinated notes due 2007 that are
currently convertible into 1,476,015 shares of common stock.
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FORWARD-LOOKING STATEMENTS
This prospectus and the documents that are and will be incorporated into
this prospectus contain forward-looking statements that involve risks and
uncertainties. These statements may constitute forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. These
statements relate to our future plans, objectives, expectations and intentions
and may be identified by the use of words like "believes," "expects," "may,"
"will," "should," "seeks," "pro forma" or "anticipates" and similar expressions.
Although we believe that our expectations are based on reasonable
assumptions within the bounds of our knowledge of our business and operations,
our business is subject to significant risks and we cannot assure you that
actual results of our development activities and our results of operations will
not differ materially from our expectations. Factors which could cause actual
results to differ from expectations include, among others: (i) our first
product, Nutropin Depot, may not produce significant revenues and, in commercial
use, may have unintended side effects, adverse reactions or incidents of misuse;
(ii) we and our collaborators may not be permitted by regulatory authorities to
undertake clinical trials for RingCap or DST or to undertake additional clinical
trials for ProLease, Cereport, Medisorb or AIR product candidates or clinical
trials could be delayed; (iii) our product candidates could be ineffective or
unsafe during clinical trials; (iv) even if clinical trials are completed and
the data is submitted to the FDA as an NDA for marketing approval and to other
health authorities as a marketing authorization application, the NDA or
marketing authorization application could fail to be accepted or could fail to
receive approval on a timely basis, if at all; (v) we could incur difficulties
or set-backs in obtaining the substantial additional funding required to
continue research and development programs and clinical trials; (vi) disputes
with collaborators, termination of collaborations or failure to negotiate
acceptable new collaborative arrangements for ProLease, Medisorb, AIR, RingCap
or DST technologies, or for Cereport, could occur; (vii) our collaborators could
elect to terminate or delay development programs; (viii) even if our product
candidates appear promising at an early stage of development, product candidates
could fail to receive necessary regulatory approvals, be difficult to
manufacture on a large scale, be uneconomical, fail to achieve market
acceptance, be precluded from commercialization by proprietary rights of third
parties or experience substantial competition in the marketplace; (ix) we may be
unable to manufacture Nutropin Depot or future products on a commercial scale;
(x) technological change in the biotechnology or pharmaceutical industries could
render our product candidates obsolete or noncompetitive; (xi) difficulties or
set-backs in obtaining or enforcing our patents and difficulties with the patent
rights of others could occur; (xii) disputes with Alkermes Clinical Partners,
L.P. over rights to Cereport and related technology could occur; and (xiii)
other factors discussed under "Risk Factors" beginning on page 8, and elsewhere
in this prospectus and documents incorporated by reference, could occur.
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RISK FACTORS
An investment in our common stock involves a high degree of risk. You
should consider carefully the following risk factors in addition to the
remainder of this prospectus before making an investment decision.
OUR DELIVERY TECHNOLOGIES MAY NOT PRODUCE SAFE, EFFICACIOUS OR COMMERCIALLY
VIABLE PRODUCTS
All of our product candidates, except Nutropin Depot, need significant
additional research and development and each of them requires FDA approval
before it can be marketed. Nutropin Depot has received FDA approval but it has
not yet been commercially launched. To be profitable, we must develop,
manufacture and market our products, either alone or by collaborating with
others. It can take several years for a product to be approved and we may not be
successful in bringing other product candidates to the market. A new drug may
appear promising at an early stage of development or after clinical trials and
never reach the market, or it may reach the market and not sell, for a variety
of reasons. The drug may:
- be shown to be ineffective or to cause harmful side effects
during preclinical testing or clinical trials;
- fail to receive regulatory approval on a timely basis or at all;
- be hard to manufacture on a large scale;
- be uneconomical;
- not be prescribed by doctors or accepted by patients;
- fail to receive a sufficient level of reimbursement from
government or third-party payors; or
- infringe on proprietary rights of another party.
If our technology fails to generate product candidates that lead to the
successful development and commercialization of products, or if our partners
decide not to pursue one of our product candidates, our business and financial
condition will be materially adversely affected.
NUTROPIN DEPOT MAY NOT PRODUCE SIGNIFICANT REVENUES
Our first product, Nutropin Depot, was approved by the FDA on December 23,
1999 and has not yet been launched commercially. Our partner Genentech is
responsible for marketing the product, which will face significant competition
from the currently approved products that treat growth hormone deficiency. In
addition, Genentech has a number of daily injection formulations on the market,
which may affect its efforts related to Nutropin Depot. The revenues we receive
from the sale of Nutropin Depot may not be significant and depend on numerous
factors outside of our control, including Genentech's decisions on pricing and
discounting, Genentech's reliance on third-party marketing partners outside the
United States, the ability to obtain reimbursement from third-party payors, the
market size for the product and the reaction of companies that market
competitive products, as well as general market conditions. If Nutropin Depot
does not produce significant revenues our business and financial condition could
be materially adversely affected.
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AS NUTROPIN DEPOT IS USED COMMERCIALLY, UNINTENDED SIDE EFFECTS, ADVERSE
REACTIONS OR INCIDENTS OF MISUSE MAY APPEAR
Until recently, the use of Nutropin Depot has been limited to clinical
trial patients under controlled conditions and under the care of physicians. We
cannot predict whether the widespread commercial use of Nutropin Depot will
produce undesirable or unintended side effects that have not been evident in our
clinical trials to date. Additionally, incidents of product misuse may occur.
These events, among others, could result in additional regulatory controls.
CLINICAL TRIALS FOR OUR PRODUCT CANDIDATES ARE EXPENSIVE AND THEIR OUTCOME IS
UNCERTAIN
Conducting clinical trials is a lengthy, time-consuming and expensive
process. Before obtaining regulatory approvals for the commercial sale of any
products, we or our partners must demonstrate through preclinical testing and
clinical trials that our product candidates are safe and effective for use in
humans. We have incurred and will continue to incur substantial expense for, and
devote a significant amount of time to, preclinical testing and clinical trials.
Historically, the results from preclinical testing and early clinical
trials have often not predicted results of later clinical trials. A number of
new drugs have shown promising results in clinical trials, but subsequently
failed to establish sufficient safety and efficacy data to obtain necessary
regulatory approvals. Data obtained from preclinical and clinical activities are
susceptible to varying interpretations, which may delay, limit or prevent
regulatory approval. In addition, regulatory delays or rejections may be
encountered as a result of many factors, including changes in regulatory policy
during the period of product development.
Clinical trials conducted by us, by our collaborators or by third parties
on our behalf may not demonstrate sufficient safety and efficacy to obtain the
requisite regulatory approvals for our product candidates. Regulatory
authorities may not permit us to undertake any additional clinical trials for
our product candidates.
Clinical trials of each of our product candidates involve a drug delivery
technology and a drug, either as a single formulation or, as in the case of
Cereport, as two products administered in conjunction with each other. This
makes testing more complex because the outcome of the trials depends on the
performance of our technology in combination with a drug.
We have other product candidates in preclinical development. We have not
submitted investigational new drug applications or begun clinical trials for
these product candidates. Our preclinical and clinical development efforts may
not be successfully completed. We may not file further investigational new drug
applications. We or our collaborators may not begin clinical trials as planned.
Completion of clinical trials may take several years or more. The length of
time can vary substantially with the type, complexity, novelty and intended use
of the product candidate. Our commencement and rate of completion of clinical
trials may be delayed by many factors, including:
- our inability to recruit patients at the expected rate;
- the failure of clinical trials to demonstrate a product
candidate's efficacy;
- our inability to follow patients adequately after treatment;
- our inability to predict unforeseen safety issues;
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- our inability to manufacture sufficient quantities of materials
used for clinical trials; and
- the potential for unforeseen governmental or regulatory delays.
If a product candidate fails to demonstrate safety and efficacy in clinical
trials, this failure may delay development of other product candidates and
hinder our ability to conduct related preclinical testing and clinical trials.
As a result of these failures, we may also be unable to find additional
collaborators or to obtain additional financing. Our business and financial
condition may be materially adversely affected by any delays in, or termination
of, our clinical trials.
THE FDA MAY NOT APPROVE OUR PRODUCT CANDIDATES
Approval from the FDA is required to manufacture and market pharmaceutical
products in the United States. Other countries have similar requirements. The
process that pharmaceutical products must undergo to get this approval is
extensive and includes preclinical testing and clinical trials to demonstrate
safety and efficacy and a review of the manufacturing process to ensure
compliance with good manufacturing practices ("GMP"). This process can last many
years and be very costly and still be unsuccessful. FDA approval can be delayed,
limited or not granted at all for many reasons, including:
- a product candidate may not be safe or effective;
- data from preclinical testing and clinical trials can be
interpreted by FDA officials in different ways than we interpret
it;
- the FDA might not approve our manufacturing processes or
facilities;
- the FDA may change its approval policies or adopt new
regulations; and
- a product candidate may not be approved for all the indications
we request.
The process of getting approvals in foreign countries is subject to delay and
failure for similar reasons. Any delay in, or failure to receive, approval will
have a material adverse effect on our business and financial condition.
Most of our product candidates are drug delivery systems combined with a
drug in a single formulation to treat a specific condition. In most cases, the
FDA has already approved the drug used in these product candidates for treating
the condition targeted by the product candidate. Cereport is a separate
formulation from the drug it is intended to be used with but must be tested with
that drug. We are conducting clinical trials on Cereport with carboplatin, which
is a chemotherapeutic agent, in patients with certain types of brain tumors. If
the FDA approves Cereport based on these trials, the approval will be for
Cereport's use in conjunction with carboplatin for the treatment of those types
of brain tumors. Unlike the drugs used with many of our product candidates, the
FDA has not approved carboplatin for treating the types of tumors that we are
targeting, and this could result in the FDA requiring additional clinical
trials. However, the FDA has approved carboplatin for the treatment of other
types of cancerous tumors. Any delay in the approval process for any of our
product candidates will result in increased costs that could materially and
adversely affect our business and financial condition.
Regulatory approval of a product candidate is limited to specific
therapeutic uses for which the product has demonstrated safety and efficacy in
clinical testing. Approval of a product candidate could also be contingent on
post-marketing studies. In addition, any marketed drug and its manufacturer
continue to be subject to strict regulation after approval. Any unforeseen
problems with an approved drug
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or any violation of regulations could result in restrictions on the drug,
including its withdrawal from the market.
WE ANTICIPATE WE WILL INCUR CONTINUED LOSSES FOR THE FORESEEABLE FUTURE
We have had net operating losses since being founded in 1987. At December
31, 1999, our accumulated deficit was $227.7 million. These losses principally
consist of the costs of research and development, the costs of acquiring rights
to research and development performed by others and general and administrative
expenses. The majority of revenues that we have received have come from
collaboration and development agreements, research grants and interest income.
We expect to incur substantial additional expenses over the next several years
as our research and development activities, including clinical trials,
accelerate and as we begin to manufacture Nutropin Depot or other future
products for commercial sale. Because we do not expect to generate significant
revenues from the sale of products, if any, for several years, we anticipate
that additional expenses will result in losses.
Our future profitability depends, in part, on:
- obtaining regulatory approval for additional product candidates;
- entering into agreements to develop and commercialize products;
- developing the capacity to manufacture and market products or
entering into agreements with others to do so;
- market acceptance of our products;
- the ability to obtain additional research and development funding
from collaborative partners; and
- the ability to achieve certain product development milestones.
We may not achieve any or all of these goals and, thus, cannot provide
assurances that we will ever achieve significant revenues or profits. Even if we
do receive regulatory approval for additional products, we may not achieve
significant commercial success.
Our manufacturing facilities in Cambridge, Massachusetts and Wilmington,
Ohio require specialized personnel and are expensive to operate and maintain.
Any delay in the market launch of Nutropin Depot or the approval of future
product candidates to be manufactured in these facilities will require us to
continue to operate these expensive facilities and retain the specialized
personnel, which may increase our expected losses.
WE NEED TO SPEND SUBSTANTIAL FUNDS TO BECOME PROFITABLE
We believe that our liquid assets, anticipated funding from our
collaborators and interest income will satisfy our capital and operating
requirements for at least the next 18 months, but we cannot guarantee that this
will be the case. We will need to spend substantial amounts of money before we
can be profitable, if ever. The amount we will spend, and when we will spend it,
will depend, in part, on:
- how our research and development programs, including clinical
trials, progress;
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- how much time and expense will be required to receive FDA
approval for our product candidates;
- the cost of building, operating and maintaining manufacturing
facilities;
- how many product candidates we pursue;
- how much time and money we need to prosecute and enforce patent
rights;
- how competing technological and market developments affect our
product candidates;
- the cost of possible acquisitions of drug delivery technologies,
compounds or companies;
- the cost of obtaining licenses to use technology owned by others;
and
- whether and how we choose to exercise our option to purchase the
limited partnership interests in Clinical Partners.
If we require additional funds to complete any of our programs, we may seek
funds through arrangements with collaborators, by issuing securities or through
debt financing. If we can only raise additional funds on terms that are not
favorable to us, we may have to cut back significantly on one or more of our
programs, give up some of our rights to our technologies or product candidates
or agree to reduced royalty rates from collaborators.
WE RELY HEAVILY ON COLLABORATORS
Our arrangements with collaborators and licensors are critical to our
success in bringing our product candidates to the market. In some cases, we
depend on these parties to conduct preclinical testing and clinical trials and
to provide funding for our development programs. Some of our collaborators can
terminate their agreements with us for no reason and on limited notice. We
cannot guarantee that any of these relationships will continue. Failure to make
or maintain these arrangements or a delay in a collaborator's performance may
materially adversely affect our business and financial condition.
We cannot control our collaborators' performance or the resources they
devote to our programs. If a collaborator fails to perform, the research,
development or commercialization program on which it is working will be delayed.
If this happens, we may have to use funds, personnel, laboratories and other
resources that we have not budgeted, and we may not be able to continue the
program. The failure of a collaborator to perform or a loss of a collaborator
may materially adversely affect our business and financial condition.
Disputes may arise between us and a collaborator and may involve the issue
of which of us owns the technology that is developed during a collaboration.
Such a dispute could delay the program on which the collaborator or we are
working. It could also result in expensive arbitration or litigation, which may
not be resolved in our favor.
A collaborator may choose to use its own or other technology to develop a
way to deliver its drug and withdraw its support of our product candidate.
Our collaborators could merge with or be acquired by another company or
experience financial or other setbacks unrelated to our collaboration that
could, nevertheless, adversely affect us.
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None of our drug delivery systems can be commercialized as stand-alone
products but must be combined with a drug. To develop any new product candidate
using one of these drug delivery systems, we must obtain the drug from another
party. We cannot assure you that we will be able to obtain any such drugs on
reasonable terms.
In January 2000, Glaxo exercised its option to obtain a license to our AIR
technology for use in the development of multiple products in up to four
respiratory disease categories. The companies are negotiating the definitive
license agreement, but we cannot assure you that we and Glaxo will sign a
definitive agreement.
OUR MANUFACTURING EXPERIENCE IS LIMITED AND WE HAVE NO EXPERIENCE MANUFACTURING
COMMERCIAL PRODUCTS
We currently manufacture each of our product candidates, except for
Cereport. The manufacture of drugs for clinical trials and for commercial sale
is subject to regulation by the FDA under current GMP regulations and by other
regulators under other laws and regulations. We have manufactured product
candidates for use in clinical trials but we do not have experience
manufacturing commercial products. We cannot assure you that we can successfully
manufacture Nutropin Depot or other future products in sufficient quantities for
commercial sale, or in a timely or economical manner.
In October 1998, we completed construction of a new commercial
manufacturing plant for Nutropin Depot and future ProLease product candidates.
In June 1998, we completed an expansion of our existing Medisorb manufacturing
facility. The only manufacturing facility that the FDA has inspected and
approved is for the manufacture of Nutropin Depot. We cannot guarantee that the
FDA will approve any of our other facilities or, once they are approved, that we
will remain in compliance with current GMP.
We rely on an unrelated party to manufacture Cereport for use in clinical
trials. We expect to rely on the same party to manufacture Cereport for
commercial sale if Cereport receives FDA approval. If we are unable to do so, or
the manufacturer fails to perform as required, we may be unable to secure an
alternative manufacturer on reasonable terms or in a timely manner.
If more of our product candidates progress to late stage development, we
will incur significant expenses in the expansion or construction of
manufacturing facilities and increases in personnel in order to manufacture
product candidates. The development of commercial scale manufacturing processes
is complex and expensive. We cannot assure you that we will be able to develop
this manufacturing capability in a timely way or at all.
If we fail to develop manufacturing capacity and experience, fail to
continue to contract for manufacturing on acceptable terms, or fail to
manufacture our product candidates economically at a commercial scale, our
development programs will be materially adversely affected. This may result in
delays in receiving FDA approval for one or more of our product candidates or
delays in the commercial production of a product that has already been approved.
Any such delays could materially adversely affect our business and financial
condition.
WE MAY NOT BE SUCCESSFUL IN THE DEVELOPMENT OF PRODUCTS FOR OUR OWN ACCOUNT
In addition to our development work with collaborators, we are developing
proprietary product candidates for our own account and applying our drug
delivery technologies to off patent drugs. Because of the lack of external
funding for such development programs there is a risk that we may not be able to
continue to fund all such programs to completion or to provide the support
necessary to perform the
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clinical trials, obtain regulatory approvals or market any approved products on
a worldwide basis. We expect the development of products for our own account to
consume more resources than our programs with collaborators.
WE ARE SUBJECT TO EXTENSIVE GOVERNMENT REGULATIONS AND WE MAY NOT BE ABLE TO
OBTAIN REGULATORY APPROVALS
Our product candidates are subject to extensive and rigorous domestic
government regulation. The FDA regulates, among other things, the development,
testing, manufacture, safety, efficacy, record-keeping, labeling, storage,
approval, advertising, promotion, sale and distribution of biopharmaceutical
products. If our products are marketed abroad, they will also be subject to
extensive regulation by foreign governments. Certain material changes to an
approved product, such as manufacturing changes or additional labeling claims,
are subject to further FDA review and approval. Any required approvals, once
obtained, may be withdrawn. Further, if we fail to comply with FDA and other
regulatory requirements at any stage during the regulatory process, we may be
subject to sanctions, including:
- delays, warning letters and fines;
- product recalls or seizures and injunctions on sales;
- refusal of the FDA to review pending market approval applications
or supplements to approval applications;
- total or partial suspension of production;
- withdrawals of previously approved marketing applications; and
- civil penalties and criminal prosecutions.
We are also subject to federal, state and local government regulation in
the conduct of our business, including regulations on employee safety and our
handling and disposal of hazardous and radioactive materials. Any new regulation
or change to an existing regulation could require us to implement costly capital
or operating improvements for which we have not budgeted. We cannot assure you
that these regulations will remain the same or that we will maintain compliance
with these regulations.
We and our contract manufacturer of Cereport also are required to comply
with the FDA current GMP regulations. Current GMP regulations include
requirements relating to quality control, quality assurance and maintenance of
records and documentation. Manufacturing facilities are subject to inspection by
the FDA and must be approved before we can use them in commercial manufacturing
of our products. We or our contract manufacturer may be unable to comply with
the applicable current GMP requirements and other FDA regulatory requirements.
If we or our contract manufacturer fail to comply, our business and financial
condition will be materially adversely affected.
WE HAVE ONLY LIMITED RIGHTS TO CEREPORT
We transferred to Alkermes Clinical Partners, L.P. ("Clinical Partners")
substantially all of our rights to certain technology that includes Cereport and
then entered into an agreement with Clinical Partners under which we perform
research and development of Cereport. Clinical Partners issued securities and
used the proceeds from the sale of those securities to fund our research and
development of Cereport. Funding provided by Clinical Partners was insufficient
to complete clinical trials and apply for
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FDA approval. Since June 1996, we have used our own funds to develop Cereport.
So long as we continue this funding, we have an option to purchase the limited
partnership interests in Clinical Partners for cash or our common stock. If this
purchase option terminates, we will have no rights to Cereport or the related
technology in the United States or Canada.
If we exercise the purchase option, we must make a substantial cash payment
or issue a large number of shares of common stock. The exercise of the option
may require us to record significant charges to earnings for the purchase of
in-process research and development. If we acquire rights to the Cereport
technology under the option, we will still be obligated to pay royalties to the
limited partners.
COMPETITION IN THE BIOTECHNOLOGY INDUSTRY
We can provide no assurance that we will be able to compete successfully
against the competitive forces discussed below in developing, marketing or
selling our products.
We face intense competition
We face intense competition from academic institutions, government
agencies, research institutions and biotechnology and pharmaceutical companies,
including other drug delivery companies. Some of these competitors are also our
collaborators. These competitors are working to develop and market other drug
delivery systems, vaccines and other methods of preventing or reducing disease,
and new small-molecule and other classes of drugs that can be used without a
drug delivery system.
There are other companies developing sustained release drug delivery
systems, pulmonary delivery systems and oral delivery systems. In addition, we
know of new chemical entities that are being developed that, if successful,
could compete against our product candidates. These chemical entities are being
designed to work differently than our product candidates and may turn out to be
safer or to work better than our product candidates. Among the many experimental
therapies being tested in the United States and Europe, there may be some that
we do not now know of that may compete with our drug delivery systems or product
candidates. Our collaborators could choose a competing drug delivery system to
use with their drugs instead of one of our drug delivery systems.
Many of our competitors have much greater capital resources, manufacturing
and marketing experience, research and development resources and production
facilities than we do. Many of them also have much more experience than we do in
preclinical testing and clinical trials of new drugs and in obtaining FDA and
foreign approvals. In addition, they may succeed in obtaining patents that would
make it difficult or impossible for us to compete with their products.
Rapid technological change could render our drug delivery systems obsolete or
noncompetitive
Major technological changes can happen quickly in the biotechnology and
pharmaceutical industries; and the development by competitors of technologically
improved or different products may make our product candidates obsolete or
noncompetitive.
The competitive nature of our industry could adversely affect market acceptance
of our products
Our product candidates may not gain market acceptance among physicians,
patients, healthcare payors and the medical community. The degree of market
acceptance of any product candidates that we develop will depend on a number of
factors, including:
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- demonstration of their clinical efficacy and safety;
- their cost-effectiveness;
- their potential advantage over alternative treatment methods;
- the marketing and distribution support they receive; and
- reimbursement policies of government and third-party payors.
Our product candidates, if successfully developed, will compete with a
number of drugs and therapies currently manufactured and marketed by major
pharmaceutical and other biotechnology companies. Our products may also compete
with new products currently under development by others or with products which
may cost less than our products. Physicians, patients, third-party payors and
the medical community may not accept or utilize our products. If our products do
not achieve significant market acceptance, our business and financial condition
will be materially adversely affected.
PATENT PROTECTION FOR OUR PRODUCTS IS IMPORTANT AND UNCERTAIN
The following factors are important to our success:
- receiving patent protection for our product candidates and those
of our collaborators;
- maintaining our trade secrets;
- not infringing on the proprietary rights of others; and
- preventing others from infringing on our proprietary rights.
We will be able to protect our proprietary rights from unauthorized use by
third parties only to the extent that our proprietary rights are covered by
valid and enforceable patents or are effectively maintained as trade secrets.
We know of several U.S. patents issued to other parties that relate to our
product candidates. One of those parties has asked us to compare our Medisorb
technology to that party's patented technology. The manufacture, use, offer for
sale, sale or importing of these product candidates might infringe on the claims
of these patents. A party might file an infringement action against us. Our cost
of defending such an action is likely to be high and we might not receive a
favorable ruling.
We also know of patent applications filed by other parties in the United
States and various foreign countries that may relate to some of our product
candidates if issued in their present form. If patents are issued to any of
these applicants, we may not be able to manufacture, use, offer for sale, or
sell some of our product candidates without first getting a license from the
patent holder. The patent holder may not grant us a license on reasonable terms
or it may refuse to grant us a license at all. This could delay or prevent us
from developing, manufacturing or selling those of our product candidates that
would require the license.
We try to protect our proprietary position by filing United States and
foreign patent applications related to our proprietary technology, inventions
and improvements that are important to the development of our business. Because
the patent position of biopharmaceutical companies involves complex legal and
factual questions, enforceability of patents cannot be predicted with certainty.
Patents, if issued, may be
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challenged, invalidated or circumvented. Thus, any patents that we own or
license from others may not provide any protection against competitors. Our
pending patent applications, those we may file in the future, or those we may
license from third parties, may not result in patents being issued. And, if
issued, they may not provide us with proprietary protection or competitive
advantages against competitors with similar technology. Furthermore, others may
independently develop similar technologies or duplicate any technology that we
have developed. The laws of certain foreign countries do not protect our
intellectual property rights to the same extent as do the laws of the United
States.
We also rely on trade secrets, know-how and technology, which are not
protected by patents, to maintain our competitive position. We try to protect
this information by entering into confidentiality agreements with parties that
have access to it, such as our corporate partners, collaborators, employees and
consultants. Any of these parties may breach the agreements and disclose our
confidential information or our competitors might learn of the information in
some other way. If any trade secret, know-how or other technology not protected
by a patent were to be disclosed to or independently developed by a competitor,
our business and financial condition could be materially adversely affected.
EFFORTS TO KEEP DOWN THE COST OF HEALTHCARE MAY THREATEN OUR PROFITABILITY
Third-party payors, which include governments and private health insurers,
are increasingly challenging the prices charged for medical products and
services. In their attempts to reduce healthcare costs, they have also been
limiting their coverage and reimbursement levels for new drugs. In some cases,
they are refusing to cover the costs of drugs that are not new but are being
used for newly approved purposes. Patients who use a product that we may develop
might not be reimbursed for its cost. If third-party payors do not provide
adequate coverage and reimbursement for our products, if and when they reach the
market, doctors may not prescribe them or patients may not use them.
The federal government and various state governments have considered
proposals to regulate the prices of prescription drugs, as is done in certain
foreign countries. We expect that there will be more proposals like these. If
any of these proposals are enacted, we may receive a lower price for our
products, if and when they reach the market, than we currently estimate. Lack of
adequate reimbursement or the enactment of price controls would have a material
adverse effect on our business and financial condition.
WE HAVE NO MARKETING OR SALES EXPERIENCE
We currently have no experience in marketing or selling pharmaceutical
products. To achieve commercial success for any product that may be approved by
the FDA, particularly products developed for our own account, we must either
develop a marketing and sales force or contract with another party (including
collaborators) to perform these services for us. In either case, we will be
competing with companies that have experienced and well-funded marketing and
sales operations. We may not be successful in developing a marketing and sales
force or in contracting with a third party on acceptable terms to sell our
products.
WE ARE EXPOSED TO PRODUCT LIABILITY CLAIMS
We may be exposed to liability claims arising from the use of our product
candidates in clinical trials and the commercial sale of any products. These
claims may be brought by consumers, our collaborators or parties selling the
products. We currently carry liability insurance for claims arising from the use
of our product candidates during clinical trials and the commercial sale of our
products in the amount of up to $10 million per occurrence and $10 million in
the aggregate. However, we cannot provide any assurance that this coverage will
be sufficient to satisfy any liabilities that may arise. As our development
activities progress and we begin commercial sales, this coverage may be
inadequate; and we
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may be unable to get adequate coverage at an acceptable cost or we may be unable
to get adequate coverage at all. This could prevent or limit our
commercialization of our product candidates. Even if we are able to continue to
carry insurance that we believe is adequate, our financial condition may be
materially adversely affected by a product liability claim.
WE MAY NOT BE ABLE TO RETAIN OUR KEY EXECUTIVES AND RESEARCH AND DEVELOPMENT
PERSONNEL
Our success depends on the services of key employees in executive and
research and development positions. The loss of the services of one or more of
these employees could have a material adverse effect on our business.
WE MAY ENCOUNTER DIFFICULTIES INTEGRATING FUTURE ACQUISITIONS
As part of our business strategy we may acquire novel technologies or
compounds through acquisitions. Although no current acquisition is planned, we
cannot assure you that any such future acquisition will be successfully
integrated with our current businesses, will achieve revenues or will be
profitable. We may have difficulty assimilating the operations, technology and
personnel of any acquired businesses.
If we make significant acquisitions for stock consideration, the common
stockholders may be significantly diluted. If we make significant acquisitions
for cash consideration, we may be required to use a substantial portion of our
available cash.
WE DO NOT ANTICIPATE PAYING DIVIDENDS ON OUR COMMON STOCK
We have not paid cash dividends on our common stock and do not expect to do
so in the foreseeable future. As of April 5, 2000, we had outstanding 2,298,925
shares of convertible preferred stock. We must pay cash dividends to the holders
of the convertible preferred stock, and any dividends that we do not pay will
accrue and remain owing to the holders of the convertible preferred stock but
will not bear interest. We must pay the accumulated, unpaid dividends on the
convertible preferred stock before we can declare or pay cash dividends on the
common stock.
WE MAY ISSUE MORE COMMON STOCK
As discussed above under "We need to spend substantial funds to become
profitable," we may issue additional equity securities to raise funds, thus
reducing the ownership share of the current holders of our common stock, which
may adversely affect the market price of the common stock. In addition, we must
issue common stock to certain security holders and other parties under the
circumstances described below. Any of these parties could sell all or a large
number of its shares, which could adversely affect the market price of our
common stock. Even if none of these sales happen, the perception by investors
that sales might occur could adversely affect the market price of our common
stock.
Convertible preferred stock
We may exchange our $3.25 convertible exchangeable preferred stock (the
"$3.25 preferred stock") in whole for debentures, but have no current plans to
do so. Any holder of shares of our $3.25 preferred stock, or the debentures for
which they may have been exchanged, may convert its shares or debentures into
shares of common stock. We have already registered for resale shares of our
common stock issuable upon conversion under the Securities Act of 1933. Each
share of our $3.25 preferred stock is currently convertible into 1.6878 shares
of common stock for a total of 3,880,126 shares of common stock. We are
currently considering various alternatives designed to effect an early
conversion of our
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$3.25 preferred stock into common stock. We have not reached any conclusions on
whether we will proceed with any of these alternatives.
Convertible note held by Schering
In October 1998, we issued a promissory note in the principal amount of
approximately $6.0 million to Schering Corporation. We have the option to pay in
cash or convert the amount due on this note into our common stock. If we convert
the amount due into common stock, we may need to register the common stock under
the Securities Act of 1933. This note is due in October 2001.
Stock options and awards
At April 5, 2000, we were obligated to issue 3,859,670 shares of common
stock upon the exercise of stock options and vesting of stock awards. We have
already registered these shares under the Securities Act of 1933.
OUR COMMON STOCK PRICE IS HIGHLY VOLATILE
The realization of any of the risks described in these "Risk Factors" or
other unforeseen risks could have a dramatic and adverse effect on the market
price of our common stock. Additionally, market prices for securities of
biotechnology and pharmaceutical companies, including ours, have historically
been very volatile. The market for these securities has from time to time
experienced significant price and volume fluctuations for reasons that were
unrelated to the operating performance of any one company. In particular and in
addition to circumstances described elsewhere under "Risk Factors," the
following factors can adversely affect the market price of our common stock:
- announcements of technological innovations or new therapeutic
products by us or others;
- public concern as to the safety of drugs developed by us or
others;
- general market conditions;
- success of research and development programs;
- changes in government regulations or patent decisions; and
- developments of our corporate partners.
ANTI-TAKEOVER PROVISIONS MAY NOT BENEFIT SHAREHOLDERS
We are a Pennsylvania corporation. Anti-takeover provisions of Pennsylvania
law could make it more difficult for a person or group to acquire control of us,
even if the change in control would be beneficial to shareholders. Our articles
of incorporation and bylaws also contain certain provisions that could have a
similar effect. The articles provide that our board of directors may issue,
without shareholder approval, preferred stock having such voting rights,
preferences and special rights as the board of directors may determine. The
issuance of such preferred stock could make it more difficult for a third party
to acquire us.
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WE SUBSTANTIALLY INCREASED OUR INDEBTEDNESS
As a result of our sale of 3 3/4% convertible subordinated notes due 2007
in February 2000, we incurred $200.0 million of additional indebtedness,
increasing our ratio of debt to equity (expressed as a percentage) from
approximately 20.7% to approximately 143.5% as of December 31, 1999, on a pro
forma basis giving effect to the sale of the notes. If the initial purchasers of
the notes exercise their option to purchase an additional $50 million principal
amount of the notes, our ratio of debt to equity (expressed as a percentage)
will increase to approximately 174.2% as of December 31, 1999, on a pro forma
basis giving effect to the sale of all of the notes. Our other indebtedness is
principally comprised of bank financing. We may incur substantial additional
indebtedness in the future. The level of our indebtedness, among other things,
could
- make it difficult for us to obtain any necessary financing in the
future for working capital, capital expenditures, debt service
requirements or other purposes;
- limit our flexibility in planning for, or reacting to changes in,
our business; and
- make us more vulnerable in the event of a downturn in our
business.
We cannot assure you that we will be able to meet our debt service obligations.
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USE OF PROCEEDS
We will not receive any of the proceeds from the sale of the common stock
offered in this prospectus.
SELLING SHAREHOLDER
We originally issued to the selling shareholder, in a transaction exempt
from the registration requirements of the Securities Act, 3,500 shares of our
1999 convertible exchangeable preferred stock, which the selling shareholder
then converted into 352,504 shares of our common stock. The selling shareholder
may from time to time offer and sell pursuant to this prospectus any or all of
its shares of our common stock.
Based upon information furnished to us by the selling shareholder, the
selling shareholder is Genentech, Inc., who beneficially owns 352,504 shares of
our common stock, all of which may be offered by the selling shareholder under
this prospectus. Because the selling shareholder may offer all or a portion of
the common stock under this prospectus, we cannot estimate the number of shares
that the selling shareholder will hold upon termination of any sale.
The selling shareholder does not hold or have, and has not held or had
within the past three years, any position or office with us or any of our
predecessors or affiliates. However, the selling shareholder has been
collaborating with us in the development of products using the ProLease system,
including Nutropin Depot, pursuant to license agreements under which Genentech
has paid development funding.
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PLAN OF DISTRIBUTION
The selling shareholder may from time to time, in one or more transactions,
sell all or a portion of the common stock on the Nasdaq National Market at the
then current market price or at negotiated prices. The offering price of the
shares from time to time will be determined by the selling shareholder and may
be higher or lower than the market price of our common stock on the Nasdaq
National Market. The shares may be sold directly or through broker-dealers
acting as principal or agent. The methods by which the shares may be sold
include:
- a block trade in which the broker-dealer so engaged will attempt to
sell the shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction;
- purchases by a broker-dealer as principal and resale by such
broker-dealer for its account pursuant to this prospectus;
- ordinary brokerage transactions and transactions in which the broker
solicits purchasers; and
- privately negotiated transactions.
In effecting sales, brokers or dealers engaged by the selling shareholder
may arrange for other brokers or dealers to participate. These brokers or
dealers may receive commissions or discounts from the selling shareholder, as
applicable, in amounts to be negotiated immediately prior to the sale. The
selling shareholder and any broker-dealers participating in the distribution of
the shares may be deemed to be "underwriters" within the meaning of the
Securities Act, and any profit on the sale of the shares by the selling
shareholder and any commissions received by any broker-dealers may be deemed to
be underwriting commissions under the Securities Act. In addition, any shares
covered by this prospectus that qualify for sale pursuant to Rule 144 might be
sold under Rule 144 rather than pursuant to this prospectus.
Additionally, in connection with the sale of the shares, the selling
shareholder may enter into hedging transactions with broker-dealers and the
broker-dealers may engage in short sales of the securities in the course of
hedging the positions they assume with the selling shareholder. The selling
shareholder may also enter into option or other transactions with broker-dealers
that involve the delivery of the shares to the broker-dealers, who may then
resell or otherwise transfer the shares. The selling shareholder may also loan
or pledge the shares to a broker-dealer and the broker-dealer may sell the
shares so loaned or upon a default may sell or otherwise transfer the pledged
shares.
When the selling shareholder elects to make a particular offer of shares,
we will distribute a prospectus supplement, if required, that will identify any
underwriters, dealers or agents and any discounts, commissions and other terms
constituting compensation from the selling shareholder, as applicable, and any
other required information.
In order to comply with the securities laws of certain states, if
applicable, the shares may be sold only through registered or licensed brokers
or dealers. In addition, in certain states, the shares may not be sold unless
they have been registered or qualified for sale in such state or an exemption
from such registration or qualification requirement is available and is complied
with.
We also have agreed to indemnify the selling shareholder in certain
circumstances, against certain liabilities arising under the Securities Act. The
selling shareholder has agreed to indemnify us and our
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directors and officers who sign the registration statement against certain
liabilities, including liabilities arising under the Securities Act.
Alkermes and the selling shareholder have agreed to share all costs and
expenses relating to the registration of the shares equally. Any commissions,
discounts or other fees payable to broker-dealers in connection with any sale of
the shares will be borne by the selling shareholder.
All references to the selling shareholder in this section of the prospectus
shall also be deemed to include any transferees, assignees and pledgees of the
selling shareholder.
LEGAL MATTERS
The validity of the common stock offered hereby will be passed upon for
Alkermes by Ballard Spahr Andrews & Ingersoll, LLP, Philadelphia, Pennsylvania.
Morris Cheston, Jr., Secretary of Alkermes and of Advanced Inhalation Research,
Inc., Alkermes Controlled Therapeutics, Inc., Alkermes Controlled Therapeutics
Inc. II and Alkermes Development Corporation II, all of which are wholly owned
subsidiaries of Alkermes, and Martha J. Hays, Secretary of Alkermes Investments,
Inc., a wholly owned subsidiary of Alkermes, are partners in the law firm of
Ballard Spahr Andrews & Ingersoll, LLP.
EXPERTS
The consolidated financial statements of Alkermes, Inc. and subsidiaries as
of March 31, 1999 and 1998 and for each of the three years in the period ended
March 31, 1999, incorporated in this prospectus by reference from our Annual
Report on Form 10-K for the year ended March 31, 1999, and the financial
statements of Advanced Inhalation Research, Inc. as of March 31, 1998 and for
the period from May 7, 1997 (date of incorporation) through March 31, 1998,
incorporated in this prospectus by reference from Amendment Nos. 1 and 2 to the
Current Report on Form 8-K/A dated February 1, 1999, have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their reports, which
are incorporated herein by reference, and have been so incorporated in reliance
upon the reports of such firm given their authority as experts in accounting and
auditing.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the amounts of expenses attributed to the
issuance of the securities offered pursuant to this Registration Statement which
shall be shared by Alkermes, Inc. and the selling shareholder equally. All of
the expenses listed below, except the SEC registration fee and the Nasdaq
Listing Fee, represent estimates only.
<TABLE>
<CAPTION>
<S> <C>
SEC registration fee........................................................... $ 6,142
Nasdaq listing fee............................................................. 3,525
Printing and engraving expenses................................................ 10,000
Accounting fees and expenses................................................... 10,000
Legal fees and expenses........................................................ 20,000
Miscellaneous fees and expenses................................................ 5,333
-------
Total................................................................. $55,000
</TABLE>
Item 15. Indemnification of Directors and Officers.
The Pennsylvania Business Corporation Law of 1988 authorizes Alkermes to
grant indemnities to directors and officers in terms sufficiently broad to
permit indemnification of such persons under certain circumstances for
liabilities (including reimbursement for expenses incurred) arising under the
Securities Act of 1933. In addition, Alkermes has also obtained Directors' and
Officers' Liability Insurance in the amount of $10,000,000 which insures its
officers and directors against certain liabilities such persons may incur in
their capacities as officers or directors of Alkermes.
Article 5 of Alkermes' Amended and Restated By-Laws provides as follows:
INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHER PERSONS
5.1 INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHER PERSONS. The
Corporation shall indemnify any director, officer, employee or agent of the
Corporation or any of its subsidiaries who was or is an "authorized
representative" of the Corporation (which shall mean, for the purpose of this
Article, a director or officer of the Corporation, or a person serving at the
request of the Corporation as a director, officer, partner, fiduciary or trustee
of another corporation, partnership, joint venture, trust, employee benefit plan
or other enterprise) and who was or is a "party" (which shall include for
purposes of this Article the giving of testimony or similar involvement) or is
threatened to be made a party to any "proceeding" (which shall mean for purposes
of this Article any threatened, pending or completed action, suit, appeal or
other proceeding of any nature, whether civil, criminal, administrative or
investigative, whether formal or informal, and whether brought by or in the
right of the Corporation, its shareholders or otherwise) by reason of the fact
that such person was or is an authorized representative of the Corporation to
the fullest extent permitted by law, including without limitation
indemnification against expenses (which shall include for purposes of this
Article attorneys' fees and disbursements), damages, punitive damages,
judgments, penalties, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such proceeding unless the
act or failure to act giving rise to the claim is finally determined by a court
to have constituted willful misconduct or recklessness. If an authorized
representative is not entitled to indemnification in respect of a portion of
<PAGE> 27
any liabilities to which such person may be subject, the Corporation shall
nonetheless indemnify such person to the maximum extent for the remaining
portion of the liabilities.
5.2 ADVANCEMENT OF EXPENSES. The Corporation shall pay the expenses
(including attorneys' fees and disbursements) actually and reasonably incurred
in defending a proceeding on behalf of any person entitled to indemnification
under Section 5.1 in advance of the final disposition of such proceeding upon
receipt of an undertaking by or on behalf of such person to repay such amount if
it shall ultimately be determined that such person is not entitled to be
indemnified by the Corporation as authorized in this Article and may pay such
expenses in advance on behalf of any employee or agent on receipt of a similar
undertaking. The financial ability of such authorized representative to make
such repayment shall not be prerequisite to the making of an advance.
5.3 EMPLOYEE BENEFIT PLANS. For purposes of this Article, the Corporation
shall be deemed to have requested an officer, director, employee or agent to
serve as fiduciary with respect to an employee benefit plan where the
performance by such person of duties to the Corporation also imposes duties on,
or otherwise involves services by, such person as a fiduciary with respect to
the plan; excise taxes assessed on an authorized representative with respect to
any transaction with an employee benefit plan shall be deemed "fines"; and
action taken or omitted by such person with respect to an employee benefit plan
in the performance of duties for a purpose reasonably believed to be in the
interest of the participants and beneficiaries of the plan shall be deemed to be
for a purpose which is not opposed to the best interests of the Corporation.
5.4 SECURITY FOR INDEMNIFICATION OBLIGATIONS. To further effect, satisfy or
secure the indemnification obligations provided herein or otherwise, the
Corporation may maintain insurance, obtain a letter of credit, act as
self-insurer, create a reserve, trust, escrow, cash collateral or other fund or
account, enter into indemnification agreements, pledge or grant a security
interest in any assets or properties of the Corporation, or use any other
mechanism or arrangement whatsoever in such amounts, at such costs, and upon
such other terms and conditions as the Board of Directors shall deem
appropriate.
5.5 RELIANCE UPON PROVISIONS. Each person who shall act as an authorized
representative of the Corporation shall be deemed to be doing so in reliance
upon the rights of indemnification provided by this Article.
5.6 AMENDMENT OR REPEAL. All rights of indemnification under this Article
shall be deemed a contract between the Corporation and the person entitled to
indemnification under this Article pursuant to which the Corporation and each
such person intend to be legally bound. Any repeal, amendment or modification
hereof shall be prospective only and shall not limit, but may expand, any rights
or obligations in respect of any proceeding whether commenced prior to or after
such change to the extent such proceeding pertains to actions or failures to act
occurring prior to such change.
5.7 SCOPE OF ARTICLE. The indemnification, as authorized by this Article,
shall not be deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under any statute,
agreement, vote of shareholders or disinterested directors or otherwise, both as
to action in an official capacity and as to action in any other capacity while
holding such office. The indemnification and advancement of expenses provided
by, or granted pursuant to, this Article shall continue as to a person who has
ceased to be an officer, director, employee or agent in respect of matters
arising prior to such time, and shall inure to the benefit of the heirs,
executors and administrators of such person.
II-2
<PAGE> 28
Item 16. Exhibits.
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- -----------
<S> <C>
3.1(a) Second Amended and Restated Articles of Incorporation of Alkermes, Inc. effective
July 23, 1991. (Incorporated by reference to Exhibit 4.1(a) to the Registrant's Report on
Form 10-Q for the quarter ended June 30, 1991).
3.1(b) Amendment to Second Amended and Restated Articles of Incorporation, as filed with the
Pennsylvania Secretary of State on November 1, 1991. (Incorporated by reference to
Exhibit 4.1(c) to the Registrant's Report on Form 10-Q for the quarter ended
September 30, 1991).
3.1(c) Amendment to the Second Amended and Restated Articles of Incorporation, as amended,
as filed with the Pennsylvania Secretary of State on February 12, 1993. (Incorporated by
reference to Exhibit 4.1(d) to the Registrant's Report on Form 10-Q for the quarter ended
December 31, 1992).
3.1(d)(I) Amendment to the Second Amended and Restated Articles of Incorporation, as filed with
the Pennsylvania Secretary of State on February 26, 1998 (designating 3,000,000 shares
of Capital Stock as Preferred Stock). (Incorporated by reference to Exhibit 3.1(e)(I) to
the Registrant's Report on Form 10-Q for the quarter ended September 30, 1999).
3.1(d)(II) Amendment to Second Amended and Restated Articles of Incorporation, as filed with the
Pennsylvania Secretary of State on February 26, 1998 ($3.25 Convertible Preferred Stock
Terms). (Incorporated by reference to Exhibit 4.6 to the Registrant's Registration
Statement on Form S-3, as amended (File No. 333-50157)).
3.1(f) Amendment to the Second Amended and Restated Articles of Incorporation, as filed with the
Pennsylvania Secretary of State on April 12, 1999 (1999 Preferred Stock Terms). (Incorporated
by reference to Exhibit 3.1(f) to the Company's Report on Form 10-K for the year ended March
31, 1999).
3.1(g) Amendment to the Second Amended and Restated Articles of Incorporation, as filed with the
Pennsylvania Secretary of State on April 12, 1999 (Non-Voting Common Stock Terms).
(Incorporated by reference to Exhibit 3.1(g) to the Company's Report on Form 10-K for the year
ended March 31, 1999).
3.1(h) Amendment to the Second Amended and Restated Articles of Incorporation, as filed with the
Pennsylvania Secretary of State on September 20, 1999 (increasing authorized Common Stock to
80,000,000 shares). (Incorporated by reference to Exhibit 3.1(h) to the Company's Report on
Form 10-Q for the quarter ended September 30, 1999).
3.2 Amended and Restated By-Laws of Alkermes, Inc., effective as of June 2, 1999. (Incorporated by
reference to Exhibit 3.2 to the Company's Report on Form 10-K for the year ended March 31,
1999).
4.1 Specimen of Common Stock Certificate of Alkermes, Inc. (Incorporated by reference to Exhibit 4
to the Registrant's Registration Statement on Form S-1 as amended (File No. 33-40250)).
4.2 Specimen of $3.25 Convertible Preferred Stock Certificate of Alkermes, Inc. (Incorporated by
reference to Exhibit 4.1 to the Registrant's Registration Statement on Form S-3, as amended
(File No. 333-50157)).
4.3 Specimen of 1999 Preferred Stock Certificate of Alkermes, Inc. (Incorporated by
reference to Exhibit 4.3 to the Company's Report on Form 10-K for the fiscal year ended
March 31, 1999).
5* Opinion of Ballard Spahr Andrews & Ingersoll, LLP.
23.1* Consent of Deloitte & Touche LLP.
23.2* Consent of Ballard Spahr Andrews & Ingersoll, LLP (contained in Exhibit 5).
24* Power of Attorney (included on signature page).
</TABLE>
- ------------------------
*filed herewith
II-3
<PAGE> 29
Item 17. Undertakings.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Securities Act") 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 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.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which any offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
PROVIDED, HOWEVER, that paragraphs (1)(i) and (1)(ii) do not apply if the
registration statement is on Form S-3 or Form S-8 and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act, 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.
II-4
<PAGE> 30
(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.
(4) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, 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 therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-5
<PAGE> 31
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 Cambridge, Commonwealth of Massachusetts, on April
13, 2000.
ALKERMES, INC.
By: /s/ Richard F. Pops
-------------------
Richard F. Pops
Chief Executive Officer
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Richard F. Pops, Robert A. Breyer and
James M. Frates and each or any one of them, his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this registration statement and any registration statement relating to any
offering made pursuant to this registration statement that is to be effective
upon filing pursuant to Rule 462(b) under the Securities Act, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to
perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as he might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents, or any of them, or his or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Michael A. Wall Director and Chairman of the Board April 13, 2000
- --------------------------------------------
Michael A. Wall
/s/ Richard F. Pops Director and Chief Executive Officer April 13, 2000
- -------------------------------------------- (Principal Executive Officer)
Richard F. Pops
/s/ Robert A. Breyer Director, President and Chief April 13, 2000
- -------------------------------------------- Operating Officer
Robert A. Breyer
/s/ James M. Frates Vice President, Chief Financial April 13, 2000
- -------------------------------------------- Officer and Treasurer (Principal
James M. Frates Financial Officer and Principal
Accounting Officer)
/s/ Alexander Rich Director April 13, 2000
- --------------------------------------------
Alexander Rich
</TABLE>
<PAGE> 32
<TABLE>
<CAPTION>
<S> <C> <C>
/s/ Paul Schimmel Director April 13, 2000
- --------------------------------------------
Paul Schimmel
/s/ Floyd Bloom Director April 13, 2000
- --------------------------------------------
Floyd Bloom
/s/ John K. Clarke Director April 13, 2000
- --------------------------------------------
John K. Clarke
</TABLE>
<PAGE> 33
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
3.1(a) Second Amended and Restated Articles of Incorporation of Alkermes, Inc. effective
July 23, 1991. (Incorporated by reference to Exhibit 4.1(a) to the Registrant's Report on
Form 10-Q for the quarter ended June 30, 1991).
3.1(b) Amendment to Second Amended and Restated Articles of Incorporation, as filed with the
Pennsylvania Secretary of State on November 1, 1991. (Incorporated by reference to
Exhibit 4.1(c) to the Registrant's Report on Form 10-Q for the quarter ended
September 30, 1991).
3.1(c) Amendment to the Second Amended and Restated Articles of Incorporation, as amended,
as filed with the Pennsylvania Secretary of State on February 12, 1993. (Incorporated by
reference to Exhibit 4.1(d) to the Registrant's Report on Form 10-Q for the quarter ended
December 31, 1992).
3.1(d)(I) Amendment to the Second Amended and Restated Articles of Incorporation, as filed with
the Pennsylvania Secretary of State on February 26, 1998 (designating 3,000,000 shares
of Capital Stock as Preferred Stock). (Incorporated by reference to Exhibit 3.1(e)(I) to
the Registrant's Report on Form 10-Q for the quarter ended September 30, 1999).
3.1(d)(II) Amendment to Second Amended and Restated Articles of Incorporation, as filed with the
Pennsylvania Secretary of State on February 26, 1998 ($3.25 Convertible Preferred Stock
Terms). (Incorporated by reference to Exhibit 4.6 to the Registrant's Registration
Statement on Form S-3, as amended (File No. 333-50157)).
3.1(f) Amendment to the Second Amended and Restated Articles of Incorporation, as filed with the
Pennsylvania Secretary of State on April 12, 1999 (1999 Preferred Stock Terms). (Incorporated
by reference to Exhibit 3.1(f) to the Company's Report on Form 10-K for the year ended March
31, 1999).
3.1(g) Amendment to the Second Amended and Restated Articles of Incorporation, as filed with the
Pennsylvania Secretary of State on April 12, 1999 (Non-Voting Common Stock Terms).
(Incorporated by reference to Exhibit 3.1(g) to the Company's Report on Form 10-K for the year
ended March 31, 1999).
3.1(h) Amendment to the Second Amended and Restated Articles of Incorporation, as filed with the
Pennsylvania Secretary of State on September 20, 1999 (increasing authorized Common Stock to
80,000,000 shares). (Incorporated by reference to Exhibit 3.1(h) to the Company's Report on
Form 10-Q for the quarter ended September 30, 1999).
3.2 Amended and Restated By-Laws of Alkermes, Inc., effective as of June 2, 1999. (Incorporated by
reference to Exhibit 3.2 to the Company's Report on Form 10-K for the year ended March 31,
1999).
4.1 Specimen of Common Stock Certificate of Alkermes, Inc. (Incorporated by reference to Exhibit 4
to the Registrant's Registration Statement on Form S-1 as amended (File No. 33-40250)).
4.2 Specimen of $3.25 Convertible Preferred Stock Certificate of Alkermes, Inc. (Incorporated by
reference to Exhibit 4.1 to the Registrant's Registration Statement on Form S-3, as amended
(File No. 333-50157)).
4.3 Specimen of 1999 Preferred Stock Certificate of Alkermes, Inc. (Incorporated by
reference to Exhibit 4.3 to the Company's Report on Form 10-K for the fiscal year ended
March 31, 1999).
5* Opinion of Ballard Spahr Andrews & Ingersoll, LLP.
23.1* Consent of Deloitte & Touche LLP.
23.2* Consent of Ballard Spahr Andrews & Ingersoll, LLP (contained in Exhibit 5).
24* Power of Attorney (included on signature page).
</TABLE>
- --------------------
*filed herewith
<PAGE> 1
EXHIBIT 5
[Letterhead of Ballard Spahr Andrews & Ingersoll, LLP]
April 13, 2000
Alkermes, Inc.
64 Sidney Street
Cambridge, Massachusetts 02139
Re: Registration Statement on Form S-3 for Alkermes, Inc.
Ladies and Gentlemen:
We have acted as counsel to Alkermes, Inc., a Pennsylvania corporation (the
"Company"), and are rendering this opinion in connection with the filing of a
Registration Statement on Form S-3 (the "Registration Statement") by the Company
with the Securities and Exchange Commission under the Securities Act of 1933, as
amended, relating to the registration by the Company of 352,504 shares of the
Company's common stock, par value $.01 per share (the "Common Stock"), to be
sold by the holder thereof as described in the Registration Statement (the
"Selling Shareholder").
We have examined originals or copies, certified or otherwise identified to
our satisfaction, of the Registration Statement and all exhibits thereto and
such corporate records and other agreements, documents and instruments, and such
certificates or comparable documents of public officials and officers and
representatives of the Company and have made such inquiries of such officers and
representatives and have considered such matters of law as we have deemed
appropriate as the basis for the opinion hereinafter set forth, including the
Company's Amended and Restated By-Laws, certain resolutions adopted by the Board
of Directors of the Company relating to the issuance of the Common Stock and
statements by certain officers of the Company.
Based upon the foregoing and subject to the limitations set forth herein,
we are of the opinion that the shares of Common Stock to be sold by the Selling
Shareholder are duly authorized, legally issued, fully paid and non-assessable.
We express no opinion as to the law of any jurisdiction other than the law
of the Commonwealth of Pennsylvania.
We consent to the filing of this opinion as Exhibit 5 to the Registration
Statement and to the reference to this firm in the section of the Registration
Statement entitled "Legal Matters."
Very truly yours,
/s/ Ballard Spahr Andrews & Ingersoll, LLP
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Alkermes, Inc. on Form S-3 of our report dated May 21, 1999, appearing in the
Annual Report on Form 10-K of Alkermes, Inc. for the year ended March 31, 1999
and our report dated April 13, 1999, on the financial statements of Advanced
Inhalation Research, Inc. as of March 31, 1998 and for the period from May 7,
1997 (date of incorporation) through March 31, 1998, appearing in Amendment Nos.
1 and 2 to the Current Report on Form 8-K/A dated February 1, 1999 of Alkermes,
Inc. The supplemental consolidated financial statements set forth in Item 7 in
Amendment No. 2 to the Current Report on Form 8-K/A dated February 1, 1999 of
Alkermes, Inc. were subsequently superseded by the consolidated financial
statements set forth in Item 8 in the Annual Report on Form 10-K of Alkermes,
Inc. for the year ended March 31, 1999. We also consent to the reference to us
under the heading "Experts" in the Prospectus, which is part of this
Registration Statement.
/s/ Deloitte & Touche LLP
Boston, Massachusetts
April 10, 2000
