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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 13, 1999
REGISTRATION NO. 333-
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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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AMYLIN PHARMACEUTICALS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 33-0266089
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
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9373 TOWNE CENTRE DRIVE
SAN DIEGO, CALIFORNIA 92121
(858) 552-2200
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
JOSEPH C. COOK, JR.
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
AMYLIN PHARMACEUTICALS, INC.
9373 TOWNE CENTRE DRIVE
SAN DIEGO, CALIFORNIA 92121
(858) 552-2200
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
THOMAS A. COLL, ESQ.
COOLEY GODWARD LLP
4365 EXECUTIVE DRIVE, SUITE 1100
SAN DIEGO, CA 92121
(858) 550-6000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement.
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. [ ]
CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED PER SHARE(1) PRICE(1) REGISTRATION FEE
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Common Stock, $.001 par value...... 12,594,009 $3.59375 $45,259,719.85 $12,582.21
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(1) Estimated in accordance with Rule 457(c) of the Securities Act of 1933
solely for the purpose of computing the amount of the registration fee based
on the average of the high and low prices of the Registrant's Common Stock
as reported on the Nasdaq SmallCap Market on September 7, 1999.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY
DETERMINE.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED SEPTEMBER 13, 1999
PROSPECTUS
12,594,009 SHARES
AMYLIN PHARMACEUTICALS, INC.
COMMON STOCK
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The Security Holders identified in this prospectus are selling 12,594,009
shares of our common stock. These shares may be offered from time to time by the
Security Holders through public or private transactions, on or off the Nasdaq
SmallCap Market, at prevailing market prices or at privately negotiated prices.
The Security Holders will receive all of the proceeds from the sale of the
shares and will pay all underwriting discounts and selling commissions, if any,
applicable to the sale of the shares. We will pay the expenses of registration
of the sale of the shares.
Our common stock is currently traded on the Nasdaq SmallCap Market under
the symbol "AMLN." On September 10, 1999, the last reported sales price of a
share of Amylin Pharmaceuticals, Inc. common stock on the Nasdaq SmallCap Market
was $4.75 per share.
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INVESTMENT IN THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 6 OF THIS PROSPECTUS.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is September , 1999.
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THIS PROSPECTUS IS PART OF A REGISTRATION STATEMENT WE FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION (THE "SEC"). YOU SHOULD RELY ONLY ON THE
INFORMATION INCORPORATED BY REFERENCE OR PROVIDED IN THIS PROSPECTUS. WE HAVE
NOT AUTHORIZED ANYONE ELSE TO PROVIDE YOU WITH DIFFERENT INFORMATION. WE ARE NOT
MAKING AN OFFER OF THESE SECURITIES IN ANY STATE WHERE THE OFFER IS NOT
PERMITTED. YOU SHOULD NOT ASSUME THAT THE INFORMATION IN THIS PROSPECTUS IS
ACCURATE AS OF ANY DATE OTHER THAN THE DATE OF THIS PROSPECTUS, REGARDLESS OF
THE TIME OF DELIVERY OF THIS PROSPECTUS OR ANY SALE OF COMMON STOCK.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy the documents we file at the
SEC's public reference room in Washington, D.C., New York, New York and Chicago,
Illinois. You can request copies of these documents by writing to the SEC and
paying a fee for the copying cost. Please call the SEC at 1-800-SEC-0330 for
further information on the public reference rooms. Our SEC filings are also
available to the public at no cost from the SEC's website at http://www.sec.gov.
The SEC allows us to "incorporate by reference" information that we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and information that we file later
with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below, except as superseded or
modified herein, and any future filings we will make with the SEC under Sections
13(a), 13(c), 14 or 15(d) of the Securities and Exchange Act of 1934 (the
"Exchange Act"):
1. Annual Report on Form 10-K for the fiscal year ended December 31, 1998;
2. Quarterly Reports on Form 10-Q for the quarters ended March 31, 1999 and
June 30, 1999; and
3. Notice of Annual Meeting and Proxy Statement for Annual Meeting of
Stockholders held on May 24, 1999.
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address:
Investor Relations
Amylin Pharmaceuticals, Inc.
9373 Towne Centre Drive
San Diego, California 92121
Telephone: (858) 552-2200
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DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus, including the documents that we incorporate by reference,
contains forward-looking statements within the meaning of Section 27A of the
Securities Act and Section 21E of the Exchange Act. Any statements about our
expectations, beliefs, plans, objectives, assumptions or future events or
performance are not historical facts and may be forward-looking. These
statements are often, but not always, made through the use of words or phrases
such as "anticipate," "estimate," "plans," "projects," "continuing," "ongoing,"
"expects," "management believes," "the Company believes," "the Company intends,"
"we believe," "we intend" and similar words or phrases. Accordingly, these
statements involve estimates, assumptions and uncertainties which could cause
actual results to differ materially from those expressed in them. Any
forward-looking statements are qualified in their entirety by reference to the
factors discussed throughout this prospectus. Among the key factors that could
cause actual results to differ materially from the forward-looking statements:
- scientific and technological uncertainties regarding our product
candidates;
- risks that the results of our one-year Phase 3 study of SYMLIN in type 1
diabetes, which are expected in the fourth quarter of this year, may be
inconclusive or negative;
- risks and uncertainties regarding the adequacy of our clinical trial
processes and whether the results of those clinical trials will be
adequate to support regulatory filings and/or approvals;
- our ability to raise additional needed capital or consummate strategic or
corporate partner transactions on favorable terms or at all;
- risks associated with timing of filing for regulatory approval of SYMLIN,
and if such approval is received, time to market thereafter; and
- dependence on third party service providers and manufacturers of our
products.
Because the risk factors referred to above, as well as the risk factors
beginning on page 6 of this prospectus, could cause actual results or outcomes
to differ materially from those expressed in any forward-looking statements made
by us or on behalf of the Company, you should not place undue reliance on any
such forward-looking statements. Further, any forward-looking statement speaks
only as of the date on which it is made, and we undertake no obligation to
update any forward-looking statement or statements to reflect events or
circumstances after the date on which such statement is made or to reflect the
occurrence of unanticipated events. New factors emerge from time to time, and it
is not possible for us to predict which will arise. In addition, we cannot
assess the impact of each factor on our business or the extent to which any
factor, or combination of factors, may cause actual results to differ materially
from those contained in any forward-looking statements.
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OUR BUSINESS
You should read the following summary together with the more detailed
information regarding our company and the common stock being sold in this
offering and our financial statements and notes to those statements appearing
elsewhere in this prospectus or incorporated here by reference. References in
this prospectus to "Amylin," "Amylin Pharmaceuticals," "our company," "we,"
"our," and "us" refer to Amylin Pharmaceuticals, Inc.
We are a development pharmaceutical company focused on metabolic disorders
and specializing in preclinical characterization of lead molecules and
demonstration of proof of principle in humans. We have pioneered research of the
hormone amylin and we are developing SYMLIN(TM) (pramlintide acetate), our
patented synthetic analog of human amylin, for the treatment of diabetes in
people using insulin. We are also evaluating AC2993 (synthetic exendin-4), our
second diabetes drug candidate, as a potential treatment for type 2 diabetes and
related metabolic disorders.
RECENT CLINICAL TRIAL RESULTS FOR SYMLIN
In August 1999, we announced that SYMLIN produced a statistically
significant lowering of the primary glucose control endpoint in a one-year Phase
3 study in people with type 2 diabetes who use insulin. Additionally, study
participants who received SYMLIN experienced a statistically significant
reduction in body weight.
In the intent-to-treat statistical analysis, patients receiving SYMLIN in
addition to their usual diabetes therapy achieved a statistically significant
improvement in glycated hemoglobin (HbA1c) at 6 months, compared to those in the
control group, who received their usual diabetes therapy alone. Those receiving
a dosage of 120 micrograms of SYMLIN twice daily achieved a reduction of 0.7% in
the primary endpoint of HbA1c at 6 months, compared to a reduction of 0.3% in
the control group (p=0.003). For patients who received a dosage of 120
micrograms of SYMLIN twice daily who completed one year of treatment, the
reduction in HbA1c was 0.7%, compared with a reduction of 0.1% for the control
group (p=0.001). The lower dosage group, SYMLIN 90 micrograms twice daily, did
not reach statistical significance for the primary endpoint (p=0.057). Overall,
the observations in the SYMLIN 120 and 90 microgram twice daily dosage groups
are consistent with our previously reported Phase 3 clinical study results.
STUDY DESIGN
People with type 2 diabetes whose usual diabetes treatment regimens
comprised insulin with or without oral hypoglycemic agents were enrolled in over
75 research centers in the United States. At least 90% of individuals enrolled
in the study were using multiple injections of insulin each day. Participants
continued their usual diabetes treatment regimens and were randomized to receive
120 micrograms of SYMLIN twice daily, 90 micrograms of SYMLIN twice daily, or
placebo. HbA1c, an accepted clinical standard, was measured to assess glucose
control during the one-year study. The primary endpoint was change in HbA1c from
baseline to 6 months for the SYMLIN groups compared with the control group. A
predefined secondary endpoint was HbA1c change from baseline in study
participants who were identified as glycemic "responders" by having achieved at
least a 0.5% HbA1c reduction four weeks after the initiation of study drug.
ADDITIONAL STUDY RESULTS
In addition to the results described above, we observed the following from
our most recent one-year Phase 3 study in people with type 2 diabetes:
- Participants receiving 120 micrograms of SYMLIN twice daily lost 3.1
pounds at the end of one year, while those in the control group gained
1.5 pounds (p=0.001).
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- In the group of patients who received 120 micrograms of SYMLIN twice
daily, we identified 44% of participants as glycemic "responders." As
observed in our previous Phase 3 studies, this "responder" rate was
approximately twice that of the control group. Glycemic "responders" in
the group of patients who received 120 micrograms of SYMLIN twice daily
had an average reduction in HbA1c of at least 1.0% from Week 13 through
the end of the one-year study.
- We did not identify any safety issues of concern during the study, and
the data indicated that all dosages were well tolerated. There was no
difference in the annual event rate for severe hypoglycemia between the
SYMLIN and control groups.
ONGOING PHASE 3 CLINICAL TRIALS
We are also continuing our ongoing one-year Phase 3 study in type 1
diabetes. The completion of that study is on schedule and we plan to report
results in the fourth quarter of 1999.
AC2993 CLINICAL TRIAL PROGRAM
Exendin-4 is a naturally occurring peptide initially derived from the
salivary secretions of the Gila monster. We have successfully completed a Phase
1 safety and tolerability trial and a clinical study of AC2993 (synthetic
exendin-4) in people with type 2 diabetes. A Phase 2, multiple-dose study in
people with type 2 diabetes is currently in progress and we plan to report
results in the fourth quarter of 1999. We have demonstrated that AC2993 is
biologically active in animal models when administered via noninjectable routes.
We are currently engaged in partnership discussions for SYMLIN and AC2993.
RECENT APPOINTMENTS TO OUR BOARD OF DIRECTORS.
In July and August 1999, we elected Vaughn D. Bryson and Jay S. Skyler,
M.D., respectively, to our Board of Directors. Mr. Bryson was a thirty-two year
employee of Eli Lilly and Company and served as its President and Chief
Executive Officer from 1991 to 1993. He also served as Eli Lilly's Executive
Vice President from 1986 until 1991, and served as a member of Lilly's Board of
Directors from 1984 until his retirement in 1993.
Dr. Skyler is a Professor of Medicine, Pediatrics, and Psychology and
Co-Director of the Behavioral Medicine Research Center at the University of
Miami in Florida. He is also Director of the Operations Coordinating Center for
the National Institute of Diabetes & Digestive & Kidney Diseases Diabetes
Prevention Trial in Type 1 Diabetes. Dr. Skyler has also served as President of
the American Diabetes Association, and is current Vice President of the
International Diabetes Federation.
We were incorporated in Delaware in September 1987. Our executive offices
are currently located at 9373 Towne Centre Drive, San Diego, California 92121,
and our telephone number is (858) 552-2200.
SYMLIN is our trademark. All other brand names or trademarks appearing in
this prospectus are the property of their respective holders.
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RISK FACTORS
Except for the historical information contained or incorporated by
reference herein, this prospectus (and the information incorporated herein by
reference) contains forward-looking statements that involve risks and
uncertainties. Our actual results could differ materially from those discussed
here or incorporated by reference. Factors that could cause or contribute to
such differences include, but are not limited to, those discussed in the
following section, as well as those discussed elsewhere in this prospectus and
in any other documents incorporated herein by reference.
Investment in Amylin shares involves a high degree of risk. You should
consider the following discussion of risks as well as other information in this
prospectus before purchasing any Amylin shares. Each of these risk factors could
adversely affect our business, operating results and financial condition, as
well as adversely affect the value of an investment in our common stock.
OUR ONGOING PHASE 3 CLINICAL STUDY OF SYMLIN MAY NOT CONFIRM OR IMPROVE UPON OUR
PRIOR CLINICAL TRIAL RESULTS
We have completed and reported results from five pivotal Phase 3 clinical
trials on SYMLIN. We are currently conducting one additional Phase 3 study of
SYMLIN to determine whether treatment with SYMLIN can improve metabolic control
in patients with type 1 diabetes who use insulin. We expect to report the
results from this ongoing clinical trial in the fourth quarter of 1999. We
cannot predict whether the results of this ongoing Phase 3 clinical trial for
SYMLIN will confirm or improve upon the results of our Phase 3 clinical trials
completed to date or that the data will support regulatory approval of SYMLIN
for the treatment of patients with type 1 diabetes or any other indication. If
the results of our ongoing Phase 3 clinical trial do not confirm or improve upon
the results of our Phase 3 clinical trials for SYMLIN completed to date, it may
delay or prevent our filing of applications for regulatory approval of SYMLIN
with regulatory authorities in North America and Europe, currently scheduled for
mid-2000.
WE WILL REQUIRE FUTURE CAPITAL AND ARE UNCERTAIN OF THE AVAILABILITY OR TERMS OF
ADDITIONAL FUNDING, WHICH MAY LEAD TO BANKRUPTCY IF FUNDING BECOMES UNAVAILABLE
OR DILUTION OR OTHER ADVERSE EFFECTS TO THE VALUE OF YOUR SHARES OR RIGHTS AS A
SHAREHOLDER EVEN IF FUNDING IS AVAILABLE
Our collaborative relationship with Johnson & Johnson was terminated in
August 1998. Accordingly, we must continue to find alternate sources of capital
in order to complete the development and commercialization of SYMLIN. In 1999,
we have generated additional working capital through the private offering of $15
million of preferred stock and the sale of assets of our Cabrillo Laboratories
division. Our future capital requirements will depend on many factors,
including:
- the results of our ongoing Phase 3 clinical study for SYMLIN in type 1
diabetes (expected in the fourth quarter of 1999);
- our ability to establish one or more development and/or commercialization
collaborations for our SYMLIN and AC2993 programs;
- progress with our other ongoing and new preclinical studies and clinical
studies;
- the time and costs involved in obtaining regulatory approvals;
- scientific progress in our other research and development programs and
the magnitude of these programs;
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- the costs involved in preparing, filing, prosecuting, maintaining, and
enforcing patents or defending ourselves against competing technological
and market developments;
- changes in collaborative relationships;
- the costs of manufacturing scale-up; and
- the potential need to repay outstanding indebtedness.
We anticipate that our existing cash, including interest income from cash
investments, will be adequate to satisfy our capital requirements into the first
quarter of 2000. If results of our ongoing clinical study for SYMLIN are
available when we expect and if those results improve upon the results of our
initial Phase 3 clinical studies, we believe that we should be able to raise
additional funds through other corporate partnerships, equity offerings, debt
offerings and/or investor partnerships. However, we cannot assure you that:
- additional financial resources will be raised in the necessary time frame
or on terms favorable to us, if at all;
- any such additional financing will be adequate; or
- we will not be required to use such additional financing to repay
existing indebtedness.
In the event we are unable to obtain additional financing on acceptable
terms, we will not have the financial resources to continue research and
development of SYMLIN, AC2993 or any of our other product candidates and we
would curtail or cease our operations.
OUR ABILITY TO ENTER INTO COLLABORATIVE ARRANGEMENTS OR OTHER THIRD PARTY
RELATIONSHIPS IS CRITICAL TO OUR SUCCESSFUL DEVELOPMENT, SALES AND LICENSING OF
PRODUCTS AND POTENTIAL PROFITABILITY
After Johnson & Johnson's termination of our earlier collaboration, we
assumed full responsibility for certain product development, marketing and
manufacturing functions for SYMLIN that were previously managed by Johnson &
Johnson. In order for us to perform those functions, we require the cooperation
of third-party service providers and manufacturers. While we believe that
business relations between us and such third-party suppliers have been good, we
cannot predict whether third-party service providers and manufacturers will
continue to cooperate with us in the performance of such services or functions.
Any difficulties or interruptions of service with such third parties could
disrupt the completion of our clinical trials, the manufacture of our products
and delay our filing for regulatory approval of SYMLIN.
We believe that we will likely need to find another corporate partner who
can provide primary responsibility for commercialization of SYMLIN. We cannot
assure you that we will be able to find such a corporate partner, or that such a
corporate partner will establish adequate sales and distribution capabilities or
be successful in gaining market acceptance for products, if any. Additionally,
we cannot assure you that we will be able to find a corporate partner for AC2993
or that such a corporate partner will establish adequate sales and distribution
capabilities or be successful in gaining market acceptance for products, if any.
RESULTS FROM OUR CLINICAL TRIALS MAY NOT BE SUFFICIENT TO OBTAIN REGULATORY
CLEARANCE TO MARKET SYMLIN OR AC2993 IN THE UNITED STATES OR ABROAD ON A TIMELY
BASIS, OR AT ALL
Clinical testing is a long, expensive and uncertain process. We cannot
assure you that the data collected from our clinical trials will be sufficient
to support approval of SYMLIN or AC2993 by the United States Food and Drug
Administration, the FDA, or any foreign regulatory authorities. Moreover,
preclinical and clinical data can be interpreted in different ways, which could
delay, limit
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or prevent regulatory approval. Consequently, even if Amylin believes that
preclinical and clinical data are sufficient to support regulatory approval for
SYMLIN or AC2993, we cannot assure you that the FDA or any foreign regulatory
authorities will ultimately approve those products for commercial sale in any
jurisdiction. If SYMLIN does not meet applicable regulatory requirements for
approval, we may not have the financial resources to continue research and
development of SYMLIN or any of our other product candidates and we may not be
able to generate revenues from the commercial sale of any of our products.
WE HAVE A HISTORY OF OPERATING LOSSES, ANTICIPATE FUTURE LOSSES, MAY NOT
GENERATE REVENUES FROM PRODUCT SALES AND MAY NEVER BECOME PROFITABLE
We have experienced significant operating losses since our inception in
1987. As of June 30, 1999, we had an accumulated deficit of approximately $274
million. We expect to incur significant additional operating losses over the
next several years. We have derived substantially all of our revenues to date
from development funding, fees and milestone payments under collaborative
agreements and from interest income. To date, we have not received any revenues
from product sales. To achieve profitable operations, we, alone or with others,
must successfully develop, manufacture, obtain required regulatory approvals and
market our products. We cannot assure you that we will ever become profitable or
that we will remain profitable if and when we become profitable.
IF WE FAIL TO COMPLY WITH EXTENSIVE REGULATIONS ENFORCED BY DOMESTIC AND FOREIGN
REGULATORY AUTHORITIES, THE COMMERCIALIZATION OF OUR PRODUCT CANDIDATES COULD BE
PREVENTED OR DELAYED
Our product candidates are subject to extensive government regulations
related to development, clinical trials, manufacturing and commercialization.
The process of obtaining FDA and other regulatory approvals is costly, time
consuming, uncertain and subject to unanticipated delays.
The FDA may refuse to approve an application if it believes that applicable
regulatory criteria are not satisfied. The FDA may also require additional
testing for safety and efficacy. Moreover, if regulatory approval of a product
is granted, the approval may be limited to specific indications or limited with
respect to its distribution. Foreign regulatory authorities may apply similar
limitations or may refuse to grant any approval.
We cannot assure you that the FDA will approve the SYMLIN clinical trials
or manufacturing processes or that manufacturing facilities operated by the
third party manufacturers with whom Amylin has contracted for the manufacture of
SYMLIN will pass an FDA preapproval inspection for SYMLIN. Any failure to obtain
or delay in obtaining such approvals would have a material adverse effect on our
business, financial condition and results of operation.
Even if United States regulatory approval for SYMLIN is obtained, the
approval will be subject to continual review, and newly discovered or developed
safety issues may result in revocation of the marketing approval. Moreover, if
and when such approval is obtained, the marketing of SYMLIN will be subject to
extensive regulatory requirements administered by the FDA and other regulatory
bodies, including adverse event reporting requirements and the FDA's general
prohibition against promoting products for unapproved or "off-label" uses. The
SYMLIN manufacturing facilities are also subject to continual review and
periodic inspection and approval of manufacturing modifications. Domestic
manufacturing facilities are subject to biennial inspections by the FDA and must
comply with the FDA's Good Manufacturing Practices regulations. In complying
with these regulations, manufacturers must spend funds, time and effort in the
areas of production, record keeping, personnel and quality control to ensure
full technical compliance. The FDA stringently applies regulatory standards for
manufacturing. Failure to comply with any of these postapproval requirements
can, among other things, result in warning letters, product seizures, recalls,
fines, injunctions, suspensions or revocations of marketing licenses, operating
restrictions and criminal prosecutions. Any such
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enforcement action or any unanticipated changes in existing regulatory
requirements or the adoption of new requirements could adversely affect our
ability to market products and generate revenues and thus adversely affect our
ability to continue as a going concern.
Amylin and the manufacturers of SYMLIN also are subject to numerous
federal, state and local laws relating to such matters as safe working
conditions, manufacturing practices, environmental protection, fire hazard
control and hazardous substance disposal. We cannot assure you that we will
avoid incurring significant costs to comply with such laws and regulations in
the future.
OUR CLINICAL STUDIES FOR SYMLIN AND AC2993 ARE SUBJECT TO DELAYS
Although we believe the data from our clinical studies for SYMLIN and
AC2993 obtained to date warrant continuing with development of these product
candidates, we cannot predict whether we will encounter problems with any of our
ongoing clinical studies that will cause us or regulatory authorities to delay
or suspend those clinical studies or delay the analysis of data therefrom. If
the results of our ongoing clinical studies for SYMLIN and AC2993 are not
available when we expect:
- the submission of our applications for regulatory approval of SYMLIN with
regulatory authorities in North America and Europe, currently scheduled
for mid-2000, could be delayed;
- we may not have the financial resources to continue research and
development of any of our product candidates; and
- our ability to enter into collaborative arrangements relating to any
product subject to such delay would be adversely affected.
Our ongoing and future clinical studies could be delayed for a variety of
reasons, including:
- delays in enrolling volunteers;
- lower than anticipated retention rate of volunteers in a trial; or
- serious adverse events relating to the product candidate.
SUBSTANTIAL FUTURE SALES OF OUR COMMON STOCK IN THE PUBLIC MARKET COULD CAUSE
OUR STOCK PRICE TO FALL
Sales of a large number of shares of our common stock in the public market
after this offering or the perception that such sales could occur could cause
the market price of our common stock to drop. As of September 2, 1999, we had
approximately 49.96 million shares of common stock outstanding. Sales of common
stock by existing stockholders in the public market, or the availability of such
shares for sale, could adversely affect the market price of our common stock.
Likewise, additional equity financings or other share issuances by us, including
shares issued in connection with strategic alliances, could adversely affect the
market price of our common stock.
WE HAVE ONLY TWO DRUG CANDIDATES CURRENTLY IN CLINICAL DEVELOPMENT AND OUR OTHER
DRUG DEVELOPMENT PROGRAMS ARE AT AN EARLY STAGE
All of our products are in research or development, and we have not
generated any revenues from product sales. To date, we have dedicated our
resources primarily to the research and development of potential pharmaceutical
products to treat metabolic disorders. The physiology of fuel metabolism is
highly complex, and the causes of metabolic disorders, such as diabetes, are not
fully known. Although we believe that preclinical, Phase 2 and completed Phase 3
clinical data support our theories regarding the regulation of metabolism, we
cannot assure you that our theories are correct or that any of our product
candidates will be effective in the treatment of metabolic disorders.
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Our research and development programs other than SYMLIN and AC2993 are at
an early stage. Any additional product candidates will require significant
research, development, preclinical and clinical testing, regulatory approval and
commitments of resources prior to commercialization. We cannot predict whether
our research will lead to the discovery of any additional product candidates or
whether SYMLIN, AC2993 or any such potential products will be successfully
developed, prove to be safe and efficacious in clinical studies, meet applicable
regulatory standards, be produced in commercial quantities at acceptable costs
or be marketed successfully.
OUR PRODUCTS MUST OBTAIN REGULATORY APPROVAL IN OTHER COUNTRIES WHICH MAY DELAY
OR PROHIBIT SALES
We must obtain regulatory approvals in countries other than the United
States before marketing products in those countries. The requirements governing
the conduct of clinical studies, product licensing, pricing and reimbursement
vary widely from country to country. Some countries require approval of the sale
price of a drug before it can be marketed. In many countries, the pricing review
period begins after product licensing approval is granted. As a result, we or
our licensees may obtain regulatory approval for a product in a particular
country, but then be subject to price regulation that prevents the sale of the
product at satisfactory prices.
CERTAIN PROVISIONS IN AMYLIN'S CORPORATE CHARTER AND BYLAWS MAY DISCOURAGE
TAKE-OVER ATTEMPTS AND THUS DEPRESS THE MARKET PRICE OF OUR STOCK
Provisions in Amylin's certificate of incorporation, as amended, may have
the effect of delaying or preventing a change of control or changes in its
management. These provisions include:
- the right of the board of directors to elect a director to fill a vacancy
created by the expansion of the board of directors;
- the ability of the board of directors to issue, without stockholder
approval, up to 7,375,000 shares of preferred stock with terms set by the
board of directors; and
- the requirement that at least 10% of the outstanding shares are needed to
call a special meeting of stockholders.
Each of these provisions could discourage potential take-over attempts and
could adversely affect the market price of our common stock.
WE EXPERIENCE A SUBSTANTIAL DEGREE OF UNCERTAINTY RELATING TO PATENTS THAT, IF
DETERMINED TO BE UNENFORCEABLE, COULD RESULT IN THE LOSS OF THE PATENT OR CLAIMS
AGAINST US
Our success will depend in part on our ability to (1) obtain patent
protection for our products and technologies both in the United States and other
countries and (2) operate without infringing the proprietary rights of third
parties. Legal standards relating to the validity of patents covering
pharmaceutical and biotechnological inventions and the scope of claims made
under these patents are still developing. As a result, our ability to obtain and
enforce patents that protect our products is uncertain and involves complex
legal and factual questions.
We cannot guarantee that any patents will issue from any pending or future
patent applications owned by or licensed to us. Existing or future patents may
be challenged, infringed upon, invalidated, found to be unenforceable or
circumvented by others. We cannot assure you that any of our rights under any
issued patents will provide sufficient protection against competitive products
or otherwise cover commercially valuable products or processes. Because patent
applications in the United States are maintained in secrecy until patents issue
and publication of discoveries in the scientific or patent literature often lag
behind actual discoveries, we also cannot be completely sure that the inventors
of subject matter covered by our patents and patent applications were the first
to invent or the first to
10
<PAGE> 12
file patent applications for such inventions. In the event that a third party
has also filed a patent for any of its inventions, we may have to participate in
interference proceedings declared by the US Patent and Trademark Office to
determine priority of invention, which could result in substantial cost to us,
even if the eventual outcome is favorable to us. We cannot assure you that our
patents, if issued, would be held valid by a court of competent jurisdiction.
Furthermore, we may not have identified all United States and foreign patents
that pose a risk of infringement.
WE MAY INCUR SUBSTANTIAL COSTS AND DELAYS AS A RESULT OF PROCEEDINGS AND
LITIGATION REGARDING PATENTS AND OTHER PROPRIETARY RIGHTS
Proceedings involving our patents or patent applications could result in
adverse decisions about:
- the patentability of our inventions and products; and/or
- the enforceability, validity or scope of protection offered by our
patents.
The manufacture, use or sale of our products may infringe on the patent
rights of others. If we are unable to avoid infringement of the patent rights of
others, we may be required to seek a license, defend an infringement action or
challenge the validity of the patents in court. Patent litigation is costly and
time consuming. We may not have sufficient resources to bring these actions to a
successful conclusion. In addition, if we do not obtain a license, develop or
obtain non-infringing technology, and fail successfully to defend an
infringement action or to have infringing patents declared invalid, we may:
- incur substantial money damages;
- encounter significant delays in bringing products to market; and/or
- be precluded from participating in the manufacture, use or sale of
products or methods of treatment requiring licenses.
CONFIDENTIALITY AGREEMENTS WITH EMPLOYEES AND OTHERS MAY NOT ADEQUATELY PREVENT
DISCLOSURE OF TRADE SECRETS AND OTHER UNPATENTED PROPRIETARY INFORMATION, WHICH,
IF DISCLOSED, COULD MATERIALLY ADVERSELY AFFECT OUR OPERATIONS OR FINANCIAL
CONDITION
In order to protect our proprietary technology and processes, we also rely
in part on confidentiality agreements with our corporate partners, employees,
consultants, outside scientific collaborators and sponsored researchers and
other advisors. These agreements may not effectively prevent disclosure of
confidential information and may not provide an adequate remedy in the event of
unauthorized disclosure of confidential information. In addition, others may
independently discover trade secrets and proprietary information. Costly and
time-consuming litigation could be necessary to enforce and determine the scope
of our proprietary rights, and failure to obtain or maintain trade secret
protection could have a material adverse effect on our business, results of
operations and financial condition.
COMPETITION IN THE BIOTECHNOLOGY AND PHARMACEUTICAL INDUSTRIES MAY RESULT IN
COMPETING PRODUCTS, SUPERIOR MARKETING OF OTHER PRODUCTS AND LOWER REVENUES OR
PROFITS FOR US
We believe that competition may be intense for all of our product
candidates. Our competitors include multinational pharmaceutical and chemical
companies, specialized biotechnology firms and universities and other research
institutions. A number of our competitors are pursuing the development of novel
pharmaceuticals which target the same diseases that we are targeting, and we
expect that the number of companies seeking to develop products and therapies
for the treatment of diabetes and other metabolic disorders will increase. Many
of our competitors have substantially greater financial, technical and human
resources than we do. In addition, many of these competitors
11
<PAGE> 13
have significantly greater experience than we do in undertaking preclinical
testing and human clinical studies of new pharmaceutical products and in
obtaining regulatory approvals of human therapeutic products. Accordingly, our
competitors may succeed in obtaining FDA approval for products more rapidly than
we do. Furthermore, if we are permitted to commence commercial sales of
products, we may also be competing with respect to manufacturing efficiency and
marketing capabilities, areas in which we have limited or no experience.
Our target patient population for SYMLIN is people with diabetes whose
therapy includes multiple insulin injections daily. AC2993 is currently being
studied for the treatment of type 2 diabetes. Other products are currently in
development or exist in the market that may compete directly with the products
that we are seeking to develop and market. Various products are available to
treat type 2 diabetes, including:
<TABLE>
<S> <C>
- sulfonylureas - repaglinide
- metformin - insulin
- acarbose - thiozolidinediones
</TABLE>
In addition, several companies are developing various approaches to improve
treatments for type 1 and type 2 diabetes. We cannot predict whether our
products, even if successfully tested and developed, will have sufficient
advantages over existing products to cause health care professionals to adopt
them over such other products or that our products will offer an economically
feasible alternative to such existing products.
WE MAY NOT BE ABLE TO KEEP UP WITH THE RAPID TECHNOLOGICAL CHANGE IN THE
BIOTECHNOLOGY AND PHARMACEUTICAL INDUSTRIES, WHICH COULD MAKE OUR PRODUCTS
OBSOLETE
Biotechnology and related pharmaceutical technologies have undergone and
continue to be subject to rapid and significant change. We expect that the
technologies associated with biotechnology research and development will
continue to develop rapidly. Our future will depend in large part on our ability
to maintain a competitive position with respect to these technologies. Any
compounds, products or processes that we develop may become obsolete before we
recover expenses incurred in developing those products.
WE DO NOT MANUFACTURE OUR OWN PRODUCTS AND MAY NOT BE ABLE TO OBTAIN ADEQUATE
SUPPLIES, WHICH COULD CAUSE DELAYS OR REDUCE PROFIT MARGINS
The manufacturing of sufficient quantities of new drugs is a time consuming
and complex process. We currently have no facilities for the manufacture of
clinical study or commercial supplies of SYMLIN or AC2993. We currently rely on
third parties to manufacture SYMLIN and AC2993 for preclinical testing and
clinical studies. We expect to work with contract suppliers who have the
capabilities for the commercial manufacture of SYMLIN. All manufacturing
facilities must comply with applicable regulations of the FDA. We cannot assure
you that we, alone or together with a new corporate partner, will be able to
make the transition to commercial production. We have established a quality
control and quality assurance program, including a set of standard operating
procedures and specifications, designed to ensure that our products are
manufactured in accordance with cGMP and other applicable domestic and foreign
regulatory standards. However, we are dependent upon contract manufacturers to
comply reliably with such procedures and regulations. We cannot assure you that
these manufacturers will meet our requirements for quality, quantity or
timeliness. Therefore, we may not be able to obtain supplies of products on
acceptable terms or in sufficient quantities, if at all. Our dependence on third
parties for the manufacture of products may also reduce our profit margins and
ability to develop and deliver products with sufficient speed.
12
<PAGE> 14
If any of our existing manufacturers cease to manufacture SYMLIN, we may
need to locate and engage another manufacturer. The cost and time to establish
manufacturing facilities to produce SYMLIN would be substantial. As a result,
using a new manufacturer could delay bringing SYMLIN to market or disrupt our
ability to supply SYMLIN. Any such delay or disruption could require us to raise
additional funds.
WE DEPEND ON KEY PERSONNEL AND COMPETITION FOR QUALIFIED PERSONNEL IS INTENSE,
WHICH COULD RESULT IN DELAYS OR ADDITIONAL COSTS
We are highly dependent on Joseph C. Cook, Jr., our Chief Executive
Officer, and Orville G. Kolterman, M.D., our Senior Vice President of Clinical
Affairs, and the other principal members of our scientific and management staff,
the loss of whose services might impede the achievement of our research and
development objectives. Recruiting and retaining qualified scientific personnel
to perform research and development work in the future will also be critical to
our success. Although we believe we will be successful in attracting and
retaining skilled and experienced scientific personnel, we cannot assure you
that we will be able to attract and retain such personnel on acceptable terms
given the competition between numerous pharmaceutical and biotechnology
companies, universities and other research institutions for experienced
scientists and management personnel. We do not maintain "key person" insurance
on any of our employees. In addition, we rely on consultants and advisors,
including scientific and clinical advisors, to assist us in formulating research
and development strategy. Certain of our consultants and advisors are employed
by employers other than us and have commitments to or consulting or advisory
contracts with other entities that may limit their availability to us.
WE HAVE NO EXPERIENCE IN SALES, MARKETING AND DISTRIBUTION AND RELY ON THIRD
PARTIES, WHICH MAY RESULT IN LOWER SALES, HIGHER COSTS OR LOWER PROFIT MARGINS
We have limited experience in market development and no experience in
sales, marketing or distribution. To market any of our products directly, we
must obtain access to marketing and sales forces with technical expertise and
with supporting distribution capability. As a consequence, we believe that we
will likely need to find a corporate partner who can provide primary
responsibility for commercialization of SYMLIN and/or AC2993. We cannot assure
you that we will be able to find such corporate partners, or that such corporate
partners will establish adequate sales and distribution capabilities or be
successful in gaining market acceptance for products.
OUR SUCCESS MAY DEPEND ON THIRD-PARTY REIMBURSEMENT OF PATIENTS' COSTS FOR OUR
PRODUCTS
Our ability to commercialize our products successfully will depend in part
on the extent to which reimbursement for the cost of such products and related
treatments will be available from government health administration authorities,
private health insurers and other organizations. The levels of revenues and
profitability of pharmaceutical companies may be affected by the continuing
efforts of governmental and third-party payors to contain or reduce the costs of
health care through various means. For example, in certain foreign markets
pricing or profitability of prescription pharmaceuticals is subject to
government control. In the United States, there have been, and we expect that
there will continue to be, a number of federal and state proposals to implement
similar government control. In addition, both in the United States and
elsewhere, sales of prescription pharmaceuticals are dependent in part on the
availability of reimbursement from third-party payors, such as government and
private insurance plans. Third-party payors are increasingly challenging the
prices charged for medical products and services. If we succeed in bringing
SYMLIN and/or AC2993 to the market, we cannot assure you that either product
will be considered cost effective and that reimbursement will be available or
will be sufficient to allow us to sell SYMLIN and/or AC2993 on a competitive
basis. This could have a material adverse effect on our business.
13
<PAGE> 15
OUR BUSINESS HAS A SUBSTANTIAL RISK OF PRODUCT LIABILITY CLAIMS, AND INSURANCE
MAY BE EXPENSIVE OR UNAVAILABLE
Our business exposes us to potential product liability risks that are
inherent in the testing, manufacturing and marketing of human therapeutic
products. Product liability claims could result in a recall of products or a
change in the indications for which they may be used. Although we currently have
product liability insurance, we cannot assure you that insurance will provide
adequate coverage against potential liabilities. Furthermore, product liability
insurance is becoming increasingly expensive. As a result, we may not be able to
maintain current amounts of insurance coverage, obtain additional insurance or
obtain insurance at a reasonable cost or in sufficient amounts to protect
against losses that could have a material adverse effect on us.
OUR ACTIVITIES INVOLVE THE USE OF HAZARDOUS MATERIALS, WHICH SUBJECT US TO
REGULATION, RELATED COSTS AND DELAYS AND POTENTIAL LIABILITIES
Our research and development involves the controlled use of hazardous
materials, chemicals and various radioactive compounds. Although we believe that
our safety procedures for handling and disposing of such materials comply with
the standards prescribed by state and federal regulations, the risk of
accidental contamination or injury from these materials cannot be eliminated. If
an accident occurs, we could be held liable for resulting damages, which could
be substantial. We are also subject to numerous environmental, health and
workplace safety laws and regulations, including those governing laboratory
procedures, exposure to blood-borne pathogens and the handling of biohazardous
materials. Additional federal, state and local laws and regulations affecting
our operations may be adopted in the future. We may incur substantial costs to
comply with and substantial fines or penalties if we violate any of these laws
or regulations.
OUR COMMON STOCK HAS A HISTORY OF VOLATILITY, WHICH MAY AFFECT THE PRICE OF THE
COMMON STOCK
The market prices for securities of biopharmaceutical and biotechnology
companies, including our common stock, have historically been highly volatile,
and the market from time to time has experienced significant price and volume
fluctuations that are unrelated to the operating performance of such companies.
Given the uncertainty of our future funding and the pending announcement of
results of our ongoing Phase 3 clinical study of SYMLIN in type 1 diabetes
(expected during the fourth quarter of 1999), and our Phase 2 clinical study of
AC2993 in type 2 diabetes (expected in the fourth quarter of 1999), we expect
that we may continue to experience volatility of our stock price during the
remainder of 1999. In addition, the following factors may have a significant
effect on the market price of our common stock:
- announcements of additional clinical study results;
- developments in our relationships with current or future collaborative
partners;
- fluctuation in our operating results;
- public concern as to the safety of drugs developed by us;
- technological innovations or new commercial therapeutic products by us or
our competitors;
- developments in patent or other proprietary rights;
- governmental policy or regulation; and
- general market conditions.
Broad market and industry factors may materially adversely affect the
market price of our common stock, regardless of our actual operating
performance. In the past, following periods of volatility in the market price of
a company's securities, securities class-action litigation has often been
instituted against such companies. Such litigation, if instituted, could result
in substantial costs and a
14
<PAGE> 16
diversion of management's attention and resources, which would materially
adversely affect our business, financial condition and results of operations.
Our common stock is listed for trading on the Nasdaq SmallCap Market, which
requires certain minimum market prices for equity securities listed on that
market. If our stock price does not meet the minimum requirements for listing on
Nasdaq SmallCap, our securities may be delisted from Nasdaq SmallCap or we may
be required to effect a reverse stock split in order to maintain our listing. We
cannot assure you that we will be able to maintain the listing of our common
stock on Nasdaq SmallCap or any other exchange.
YEAR 2000 ISSUES MAY RESULT IN UNANTICIPATED COSTS OR ADVERSE EFFECTS ON
AMYLIN'S OPERATIONS
As is true for most companies, the Year 2000 problem creates a risk for
Amylin. If systems do not correctly recognize date information when the year
changes to 2000, there could be an adverse impact on our operations.
We have reviewed all our internal information technology equipment to
assess Year 2000 risks to our internal operations. We are in the process of
remediating the issues we identified and we expect to have all of our internal
information technology Year 2000 compliant by the end of the third quarter of
1999.
We also have contacted our important business partners in order to assess
their progress in addressing Year 2000 issues. Information provided by them has
been used to assess their commitment to Year 2000 readiness. Based on the
information provided, we believe that our business partners are taking adequate
steps to ensure that their business operations will not be seriously disrupted
by Year 2000 issues. Additionally, our primary computer systems do not interface
directly with those of third parties, thus providing Amylin with further
confidence that its internal operations will not be disrupted even if third
parties fail to adequately complete their Year 2000 programs. However, in the
event that our third party business partners delay their own remediation efforts
or a third party cannot supply us with products or services, our results of
operations could be adversely affected. Similarly, if significant new
non-compliance issues are identified, our business financial condition or
results of operations could be materially adversely affected. For example, our
research and development efforts could be interrupted, resulting in delays in
the progress of our products, including SYMLIN.
Our most significant potential exposure to Year 2000 problems is related to
our dependence on commercial utilities. If our water and power supply were
interrupted, our research and development activities as well as our general
business operations would be seriously affected until services could be restored
or until suitable alternate sources could be secured. Amylin has not yet
developed and evaluated contingency plans that could potentially mitigate this
type of disruption. We are currently evaluating options and determining if any
of these are prudent and affordable.
Year 2000 costs to date have been primarily related to internal personnel
costs. Total external costs to remediate Year 2000 problems are estimated at
less than $100,000. At this time, we have no reason to believe that Year 2000
issues will have a material impact on our business or financial condition.
15
<PAGE> 17
SECURITY HOLDERS
We are registering for resale certain shares of Amylin common stock held by
the Security Holders. The following table sets forth (i) the name of the
Security Holders, (ii) the number and percent of shares of Amylin common stock
that the Security Holders beneficially owned prior to the offering for resale of
any of the shares of Amylin common stock being registered hereby, (iii) the
number of shares of Amylin common stock that may be offered for resale for the
account of the Security Holders pursuant to this prospectus (the "Resale
Shares"), and (iv) the number and percent of shares of Amylin common stock to be
held by the Security Holders after the offering of the Resale Shares (assuming
all of the Resale Shares are sold by the Security Holders). The term "Security
Holder" includes the security holders listed below.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED NUMBER OWNED
PRIOR TO OFFERING OF SHARES AFTER OFFERING(2)
---------------------- BEING ----------------------
SELLING SECURITY HOLDERS(1) NUMBER PERCENT(3) OFFERED NUMBER PERCENT(3)
--------------------------- --------- ---------- --------- --------- ----------
<S> <C> <C> <C> <C> <C>
Allen Andersson(4).................... 6,920,459 13.9% 5,205,559 1,714,900 3.4%
Susan Riecken (5)..................... 6,920,459 13.9% 5,205,559 1,714,900 3.4%
Funds Managed by Domain Associates,
LLC(6).............................. 5,708,716 11.4% 5,037,605 671,111 1.3%
Charles A. Dunn Jr. and Sharon G.
Dunn, Co-Trustees UTD 5/5/81........ 209,866 * 209,866 0 *
Vaughn D. Bryson(7)................... 52,013 * 42,013 10,000 *
Donald H. Rumsfeld(8)................. 95,027 * 84,027 11,000 *
Rumsfeld Family Trust................. 83,926 * 83,926 0 *
VMN Associates........................ 83,926 * 83,926 0 *
Kingsbury Capital Partners, L.P.
III................................. 1,259,401 2.5% 1,259,401 0 *
The Greene Family Trust(9)............ 2,083,352 4.2% 335,806 1,747,546 3.5%
Joseph C. Cook, Jr.(10)............... 1,868,490 3.7% 251,880 1,616,610 3.2%
</TABLE>
- -------------------------
* less than 1%
(1) This table is based upon information supplied to us by the Security
Holders, Schedules 13G, Forms 3 and 4, and other public documents filed
with the SEC.
(2) Assumes the sale of all of the Resale Shares.
(3) Applicable percentage of ownership is based on an aggregate of 49,958,838
shares of Amylin common stock issued and outstanding on September 2, 1999,
adjusted as required by rules promulgated by the SEC and including an
aggregate of 12,594,009 shares of common stock issued upon conversion of
the previously outstanding Series A Preferred Stock.
(4) This amount includes 2,602,729 shares held by Susan Riecken, Mr.
Andersson's spouse.
(5) This amount includes 4,317,730 shares held by Allen Andersson, Ms.
Riecken's spouse.
(6) Includes 4,919,726 shares held by Domain Partners IV, L.P., 117,879 shares
held by DP IV Associates, L.P., 653,847 shares held by Domain Partners II,
L.P., and 17,264 shares which Mr. James C. Blair has the right to acquire
within 60 days after the date of this table pursuant to outstanding
options. Mr. Blair is a member of the Board of Directors of Amylin and also
is a general partner of One Palmer Square Associates II, L.P., and a
managing member of One Palmer Square Associates IV, LLC. One Palmer Square
Associates II, L.P. is the general partner of Domain Partners II, L.P. One
Palmer Square Associates IV, LLC is the general partner of Domain Partners
IV, L.P. and DP IV Associates, L.P.
16
<PAGE> 18
(7) Includes 10,000 shares held by the Vaughn D. Bryson Irrevocable Trust, U-A
1/14/99. Mr. Bryson is a director of Amylin.
(8) Includes 10,000 shares which Mr. Rumsfeld has the right to acquire within
60 days after the date of this table pursuant to outstanding options.
(9) This amount includes 45,769 shares held by The Greene Children's Trust, of
which Howard E. Greene, Jr. is trustee, and 7,264 shares which Mr. Greene
has the right to acquire within 60 days after the date of this table
pursuant to outstanding options. Mr. Greene is the trustee of The Greene
Family Trust and is also a member of Amylin's Board of Directors.
(10) Includes 100,752 shares held of record by Farview Management Co., L.P. and
151,128 shares held of record by Judith E. and Joseph C. Cook, Jr. Also
includes 40,000 and 827,024 shares which Farview Management Co., L.P. and
Mr. Cook, respectively, have the right to acquire within 60 days after the
date of this table pursuant to outstanding options. Mr. Cook has served as
the Chief Executive Officer and Chairman of the Board of Amylin since March
1998, and as a director since November 1994, and is also a partner of
Farview Management, Co., L.P.
17
<PAGE> 19
PLAN OF DISTRIBUTION
The Resale Shares may be sold from time to time by the Security Holders in
one or more transactions at fixed prices, at market prices at the time of sale,
at varying prices determined at the time of sale or at negotiated prices. The
Security Holders may offer their Resale Shares in one or more of the following
transactions:
- On any national securities exchange or quotation service on which the
Amylin common stock may be listed or quoted at the time of sale,
including the Nasdaq SmallCap Market;
- In the over-the-counter market;
- In private transactions;
- Through options;
- By pledge to secure debts or other obligations; or
- A combination of any of the above transactions.
The Security Holders may effect such transactions by selling to or through
one or more broker-dealers, and such broker-dealers may receive compensation in
the form of underwriting discounts, concessions or commissions from the Security
Holders. The Security Holders and any broker-dealers that participate in the
distribution may, under certain circumstances, be deemed to be "underwriters"
within the meaning of the Securities Act, and any commissions received by such
broker-dealers and any profits realized on any resale of the Resale Shares by
them might be deemed to be underwriting discounts and commissions under the
Securities Act.
Under applicable rules and regulations under the Exchange Act, any person
engaged in the distribution of the Resale Shares may not simultaneously engage
in market making activities with respect to Amylin's common stock for a period
of two business days prior to the commencement of such distribution. In addition
and without limiting the foregoing, the Security Holders and any other person
participating in a distribution will be subject to applicable provisions of the
Securities Exchange Act and the rules and regulations thereunder, including
without limitation, Regulation M under the Exchange Act, which may limit the
timing of purchases and sales of shares of Amylin Pharmaceuticals, Inc. common
stock by the Selling Security Holders or any such other person.
We will make copies of this prospectus available to the Security Holders
and have informed the Security Holders of the need for delivery of a copy of
this prospectus to each purchaser of the Resale Shares prior to or at the time
of any sale of the Resale Shares.
The Security Holders will pay all underwriting discounts, commissions,
transfer taxes and other expenses associated with the sale of the Resale Shares
by them. We will pay all costs and expenses associated with the registration of
the Resale Shares. We estimate that our expenses in connection with this
offering will be approximately $102,583.
18
<PAGE> 20
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of any of the Resale
Shares by the Security Holders. All proceeds from the sale of the Resale Shares
will be for the accounts of the Security Holders.
LEGAL MATTERS
The validity of the issuance of the common stock offered hereby will be
passed upon for Amylin by Cooley Godward LLP, San Diego, California.
EXPERTS
The consolidated financial statements of Amylin Pharmaceuticals, Inc. at
December 31, 1998 and 1997, and for each of the three years in the period ended
December 31, 1998, appearing in this Prospectus and Registration Statement have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon appearing elsewhere herein, and are included in reliance upon
such report given on the authority of such firm as experts in accounting and
auditing.
19
<PAGE> 21
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Ernst & Young LLP, Independent Auditors........... F-2
Consolidated Balance Sheets as of December 31, 1998 and
1997...................................................... F-3
Consolidated Statements of Operations for the years ended
December 31, 1998, 1997 and 1996.......................... F-4
Consolidated Statement of Stockholders' Equity (Net Capital
Deficiency) for the years ended December 31, 1998, 1997
and 1996.................................................. F-5
Consolidated Statements of Cash Flows for the years ended
December 31, 1998, 1997 and 1996.......................... F-6
Notes to Consolidated Financial Statements.................. F-7
</TABLE>
F-1
<PAGE> 22
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
The Board of Directors and Stockholders
Amylin Pharmaceuticals, Inc.
We have audited the accompanying consolidated balance sheets of Amylin
Pharmaceuticals, Inc. as of December 31, 1998 and 1997, and the related
consolidated statements of operations, stockholders' equity (net capital
deficiency), and cash flows for each of the three years in the period ended
December 31, 1998. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
Since the date of completion of our audit of the accompanying financial
statements and initial issuance of our report thereon dated March 12, 1999,
except for Note 7, as to which the date is March 23, 1999, as discussed in Note
1, the Company's estimated available cash and short-term investments are
expected to last only into the first quarter of 2000. Note 1 includes
management's discussion of this issue.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Amylin
Pharmaceuticals, Inc. at December 31, 1998 and 1997, and the consolidated
results of its operations and its cash flows for each of the three years in the
period ended December 31, 1998, in conformity with generally accepted accounting
principles.
ERNST & YOUNG LLP
San Diego, California
March 12, 1999,
except for Note 7 as to which the date is
March 23, 1999
and the last paragraph of Note 1, as to which the date is
September 9, 1999
F-2
<PAGE> 23
AMYLIN PHARMACEUTICALS, INC.
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------------
1998 1997
------------- -------------
<S> <C> <C>
Current assets:
Cash and cash equivalents................................ $ 8,787,000 $ 46,903,000
Short-term investments................................... 2,002,000 5,845,000
Receivable from related party............................ -- 966,000
Other current assets..................................... 514,000 1,298,000
------------- -------------
Total current assets....................................... 11,303,000 55,012,000
Property and equipment, at cost:
Equipment................................................ 15,197,000 14,707,000
Leasehold improvements................................... 3,955,000 4,763,000
------------- -------------
19,152,000 19,470,000
Less accumulated depreciation and amortization........... (13,556,000) (10,860,000)
------------- -------------
5,596,000 8,610,000
Patents, net............................................... 1,779,000 1,664,000
Other assets at cost....................................... 145,000 52,000
------------- -------------
$ 18,823,000 $ 65,338,000
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY (NET CAPITAL DEFICIENCY)
Current liabilities:
Accounts payable......................................... $ 2,187,000 $ 5,278,000
Accrued liabilities, including other deferred revenue.... 2,130,000 10,606,000
Deferred collaborative revenue from related party........ -- 6,357,000
Current portion of notes payable to unrelated parties.... 1,794,000 1,240,000
Current portion of obligations under capital leases...... -- 228,000
------------- -------------
Total current liabilities.................................. 6,111,000 23,709,000
Notes payable............................................ 4,164,000 3,047,000
Note payable to related party.............................. 39,925,000 33,933,000
Other long-term obligations................................ 85,000 --
Commitments and contingencies
Stockholders' equity (net capital deficiency):
Preferred stock, $.001 par value, 7,500,000 shares
authorized, none issued and outstanding............... -- --
Common stock, $.001 par value, 100,000,000 shares
authorized, 36,726,000 and 32,394,000 issued and
outstanding at December 31, 1998 and 1997,
respectively.......................................... 37,000 33,000
Additional paid-in capital............................... 229,757,000 215,245,000
Accumulated deficit...................................... (260,830,000) (209,732,000)
Deferred compensation.................................... (428,000) (893,000)
Accumulated other comprehensive income................... 2,000 (4,000)
------------- -------------
Total stockholders' equity (net capital deficiency)........ (31,462,000) 4,649,000
------------- -------------
$ 18,823,000 $ 65,338,000
============= =============
</TABLE>
See accompanying notes.
F-3
<PAGE> 24
AMYLIN PHARMACEUTICALS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------
1998 1997 1996
------------ ------------ ------------
<S> <C> <C> <C>
Revenues under collaborative agreements with
related party............................. $ 16,236,000 $ 42,609,000 $ 35,803,000
Expenses:
Research and development.................. 53,597,000 82,281,000 64,998,000
General and administrative................ 10,191,000 15,592,000 10,420,000
------------ ------------ ------------
63,788,000 97,873,000 75,418,000
------------ ------------ ------------
Loss from operations........................ (47,552,000) (55,264,000) (39,615,000)
Interest and other income................... 1,424,000 2,613,000 2,274,000
Interest and other expense.................. (4,970,000) (1,976,000) (446,000)
------------ ------------ ------------
Net loss.................................... $(51,098,000) $(54,627,000) $(37,787,000)
============ ============ ============
Basic and diluted net loss per share........ $ (1.49) $ (1.70) $ (1.31)
============ ============ ============
Shares used in computing net loss per
share -- basic and diluted................ 34,325,326 32,155,761 28,744,822
============ ============ ============
</TABLE>
See accompanying notes.
F-4
<PAGE> 25
AMYLIN PHARMACEUTICALS, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(NET CAPITAL DEFICIENCY)
FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
ACCUMULATED
COMMON STOCK ADDITIONAL OTHER TOTAL
-------------------- PAID-IN ACCUMULATED DEFERRED COMPREHENSIVE STOCKHOLDERS'
SHARES AMOUNT CAPITAL DEFICIT COMPENSATION INCOME EQUITY
---------- ------- ------------ ------------- ------------ ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31,
1995....................... 28,018,000 $28,000 $166,994,000 $(117,318,000) $ -- $ 50,000 49,754,000
Comprehensive income
(loss):
Net loss................. -- -- -- (37,787,000) -- -- (37,787,000)
Unrealized loss on
available-for-sale
securities............. -- -- -- -- -- (66,000) (66,000)
------------
Comprehensive loss....... -- -- -- -- -- -- (37,853,000)
Issuance of common stock
in public offering..... 2,012,000 2,000 18,767,000 -- -- -- 18,769,000
Issuance of common stock
in private placement... 1,500,000 1,000 14,999,000 -- -- -- 15,000,000
Issuance of common stock
upon exercise of
options................ 447,000 1,000 1,967,000 -- -- -- 1,968,000
Deferred compensation
related to stock
options................ -- -- 2,073,000 -- (2,073,000) -- --
Amortization of deferred
compensation........... -- -- -- -- 896,000 -- 896,000
---------- ------- ------------ ------------- ----------- -------- ------------
Balance at December 31,
1996....................... 31,977,000 32,000 204,800,000 (155,105,000) (1,177,000) (16,000) 48,534,000
Comprehensive income
(loss):
Net loss................. -- -- -- (54,627,000) -- -- (54,627,000)
Unrealized gain on
available-for-sale
securities............. -- -- -- -- -- 12,000 12,000
------------
Comprehensive loss....... -- -- -- -- -- -- (54,615,000)
Issuance of common stock
upon exercise of
options................ 417,000 1,000 2,100,000 -- -- -- 2,101,000
Deferred compensation
related to stock
options................ -- -- 261,000 -- (261,000) -- --
Amortization of deferred
compensation........... -- -- -- -- 545,000 -- 545,000
Discount on Note Payable
related to grant of
common stock
warrants............... -- -- 8,084,000 -- -- -- 8,084,000
---------- ------- ------------ ------------- ----------- -------- ------------
Balance at December 31,
1997....................... 32,394,000 33,000 215,245,000 (209,732,000) (893,000) (4,000) 4,649,000
Comprehensive income
(loss):
Net loss................. -- -- -- (51,098,000) -- -- (51,098,000)
Unrealized loss on
available-for-sale
securities............. -- -- -- -- -- 6,000 6,000
------------
Comprehensive loss....... -- -- -- -- -- -- (51,092,000)
Issuance of common stock
upon exercise of
options................ 130,000 130 549,000 -- -- -- 549,000
Issuance of common stock
for employer 401(k)
match.................. 81,000 81 458,000 -- -- -- 458,000
Issuance of common stock
in private placement... 4,000,000 4,000 12,730,000 -- -- -- 12,734,000
Issuance of common stock
under Employee Stock
Purchase Plan.......... 121,000 121 438,000 -- -- -- 438,000
Deferred compensation
related to stock
options................ -- -- 337,000 -- (337,000) -- --
Amortization of deferred
compensation........... -- -- -- -- 802,000 -- 802,000
---------- ------- ------------ ------------- ----------- -------- ------------
Balance at December 31,
1998....................... 36,726,000 $37,000 $229,757,000 $(260,830,000) $ (428,000) $ 2,000 $(31,462,000)
========== ======= ============ ============= =========== ======== ============
</TABLE>
See accompanying notes.
F-5
<PAGE> 26
AMYLIN PHARMACEUTICALS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------------------
1998 1997 1996
------------ ------------ ------------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net loss........................................ $(51,098,000) $(54,627,000) $(37,787,000)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization................. 2,696,000 2,865,000 2,345,000
Deferred revenue from related party........... (6,357,000) (1,597,000) 3,336,000
Deferred rent and other expense............... -- (17,000) (25,000)
Amortization of deferred compensation......... 802,000 545,000 896,000
Amortization of warrants issued with debt..... 1,198,000 299,000 --
Changes in operating assets and liabilities:
Receivable from related party................. 966,000 1,123,000 (1,866,000)
Other current assets.......................... 784,000 (156,000) 130,000
Accounts payable.............................. (3,091,000) 449,000 3,352,000
Accrued liabilities........................... (8,711,000) 5,995,000 1,750,000
------------ ------------ ------------
Net cash flows used in operating activities..... (62,811,000) (45,121,000) (27,869,000)
INVESTING ACTIVITIES:
Purchases of short-term investments............. (2,158,000) (15,541,000) (38,972,000)
Maturities of short-term investments............ 2,000,000 19,005,000 29,642,000
Sales of short-term investments................. 3,995,000 10,172,000 26,607,000
Sale (purchase) of equipment and leasehold
improvements.................................. 318,000 (4,641,000) (3,278,000)
Increase in deposits, patents and other
assets........................................ 122,000 (371,000) (313,000)
------------ ------------ ------------
Net cash flows provided by investing
activities.................................... 4,277,000 8,624,000 13,686,000
FINANCING ACTIVITIES:
Issuance of notes payable....................... 7,707,000 40,467,000 5,379,000
Principal payments on capital leases and
equipment notes payable....................... (1,468,000) (1,822,000) (988,000)
Issuance of common stock, net................... 14,179,000 2,101,000 35,737,000
------------ ------------ ------------
Net cash flows provided by financing
activities.................................... 20,418,000 40,746,000 40,128,000
------------ ------------ ------------
Decrease in cash and cash equivalents........... (38,116,000) 4,249,000 25,945,000
Cash and cash equivalents at beginning of
period........................................ 46,903,000 42,654,000 16,709,000
------------ ------------ ------------
Cash and cash equivalents at end of period...... $ 8,787,000 $ 46,903,000 $ 42,654,000
============ ============ ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Interest paid................................... $ 129,000 $ 411,000 $ 281,000
============ ============ ============
</TABLE>
See accompanying notes.
F-6
<PAGE> 27
AMYLIN PHARMACEUTICALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION AND BUSINESS ACTIVITY
Amylin Pharmaceuticals, Inc. ("Amylin" or the "Company") was incorporated
in Delaware on September 29, 1987. The Company is an early development
pharmaceutical company focused on metabolic disorders, and specializing in
preclinical characterization of lead molecules and demonstration of proof of
principle in humans. The Company is conducting a series of Phase 3 clinical
trials of its leading drug candidate, pramlintide, in people with type 1 or
insulin-using type 2 diabetes. The Company is also conducting clinical trials of
AC2993 (synthetic exendin-4), a second diabetes drug candidate.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company
and its wholly owned subsidiary, Amylin Europe Limited. All significant
intercompany transactions and balances have been eliminated in consolidation.
RESEARCH REVENUES UNDER COLLABORATIVE AGREEMENTS AND RESEARCH AND DEVELOPMENT
EXPENSES
Research revenues under collaborative agreements are recorded when earned
as research activities are performed. Payments in excess of amounts earned are
deferred. Research and development costs are expensed as incurred.
CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS
Cash, cash equivalents and short-term investments consist principally of
U.S. government securities and other highly liquid debt instruments. The Company
considers instruments with remaining maturities of less than 90 days when
purchased to be cash equivalents.
CONCENTRATION OF CREDIT RISK
The Company invests its excess cash in U.S. government securities and debt
instruments of financial institutions and corporations with strong credit
ratings. The Company has established guidelines relative to diversification and
maturities that maintain safety and liquidity. These guidelines are periodically
reviewed.
INVESTMENTS
The Company has classified its debt securities as available-for-sale, and
accordingly, carries its short term investments at fair value, and unrealized
holding gains or losses on these securities are carried as a separate component
of stockholders' equity. The amortized cost of debt securities in this category
is adjusted for amortization of premiums and accretion of discounts to maturity.
Such amortization is included in interest income. Realized gains and losses and
declines in value judged to be other-than-temporary (of which there have been
none to date) on available-for-sale securities are included in interest income.
The cost of securities sold is based on the specific identification method.
DEPRECIATION AND AMORTIZATION
Depreciation of equipment is computed using the straight-line method over
two to five years. Leasehold improvements are amortized over the shorter of the
estimated useful lives of the assets or
F-7
<PAGE> 28
AMYLIN PHARMACEUTICALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
the remaining term of the lease. Amortization of equipment under capital leases
is reported with depreciation of property and equipment. Patents consist of
patent filing costs which are amortized over the estimated economic life of the
patents when issued.
NET LOSS PER SHARE
In 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard ("SFAS") No. 128, Earnings per Share. SFAS 128
replaced the calculation of primary and fully diluted earnings per share with
basic and diluted earnings per share. Unlike primary earnings per share, basic
earnings per share excludes any dilutive effects of options, warrants and
convertible securities. Diluted earnings per share is very similar to the
previously reported fully diluted earnings per share. The adoption of SFAS 128
had no effect on the Company's financial statements.
OPTIONS
The Company has elected to follow Accounting Principles Board Opinion No.
25 Accounting for Stock Issued to Employees and related Interpretations ("APB
25") in accounting for its employee stock options. Under APB 25, when the
exercise price of the Company's employee stock options is not less than the
market price of the underlying stock on the date of grant, no compensation
expense is recognized.
COMPREHENSIVE INCOME
Effective January 1, 1998, the Company adopted SFAS No. 130, Reporting
Comprehensive Income, which requires that all components of comprehensive
income, including net income, be reported in the financial statements in the
period in which they are recognized. Comprehensive income is defined as the
change in equity during a period from transactions and other events and
circumstances from non-owner sources. Net income and other comprehensive income,
including unrealized gains and losses on investments, shall be reported, net of
their related tax effect, to arrive at comprehensive income. Prior year
financial statements have been reclassified to conform to the requirements of
SFAS No. 130.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
LIQUIDITY
The Company's future capital requirements will depend on many factors,
including the results of its one-year US Phase 3 clinical trial for SYMLIN
(expected in the fourth quarter of 1999), the ability of the Company to
establish one or more development and/or commercialization collaborations for
its SYMLIN program, the time and costs involved in obtaining regulatory
approvals, scientific progress in its non-SYMLIN research and development
programs, the cost involved in preparing, filing, prosecuting, maintaining,
enforcing or defending itself against patents, competing technological and
market developments, and the costs of manufacturing scale-up. The Company
anticipates that its
F-8
<PAGE> 29
AMYLIN PHARMACEUTICALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
existing cash including interest income from cash investments will be adequate
to satisfy the Company's capital requirements into the first quarter of 2000. If
the results of the Company's ongoing US Phase 3 clinical trial for SYMLIN in
Type 1 diabetes are available when expected and if those results are favorable,
the Company believes that it should be able to raise additional funds through
other corporate partnerships, equity offerings, debt offerings and/or investor
partnerships. However, there can be no assurance that additional financial
resources will be raised in the necessary time frame or on terms favorable to
the Company if at all. In the event the Company is unable to obtain additional
financing on acceptable terms, the Company will not have the financial resources
to continue research and development of SYMLIN or any of the Company's other
product candidates.
2. INVESTMENTS
The following is a summary of investments as of December 31, 1998 and 1997,
including $7,628,000 and $37,211,000 classified as cash equivalents in the
accompanying balance sheets as of December 31, 1998 and 1997, respectively. All
respective investments mature in less than one year.
<TABLE>
<CAPTION>
AVAILABLE-FOR-SALE SECURITIES
-------------------------------------------------
GROSS GROSS
UNREALIZED UNREALIZED ESTIMATED
COST GAINS LOSSES FAIR VALUE
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
DECEMBER 31, 1998
U.S. Treasury securities and obligations of
U.S. government agencies.................... $5,051,000 $1,000 $-- $5,052,000
Other debt securities......................... 4,577,000 1,000 -- 4,578,000
---------- ------ --- ----------
Total............................... $9,628,000 $2,000 $-- $9,630,000
========== ====== === ==========
</TABLE>
<TABLE>
<CAPTION>
AVAILABLE-FOR-SALE SECURITIES
---------------------------------------------------
GROSS GROSS
UNREALIZED UNREALIZED ESTIMATED
COST GAINS LOSSES FAIR VALUE
----------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
DECEMBER 31, 1997
U.S. Treasury securities and obligations of
U.S. government agencies.................. $21,832,000 $-- $(3,000) $21,829,000
Other debt securities....................... 21,228,000 -- (1,000) 21,227,000
----------- --- ------- -----------
Total............................. $43,060,000 $-- $(4,000) $43,056,000
=========== === ======= ===========
</TABLE>
The gross realized gains on sales of available-for-sale securities totaled
$1,400 and $1,000 and the gross realized losses totaled $500 and $3,000 for the
years ended December 31, 1998 and 1997, respectively.
3. COMMITMENTS
LEASES
The Company leases its facilities and certain machinery and equipment under
operating and capital leases. The minimum annual rent on the Company's
facilities is subject to increases based on stated rental adjustment terms of
certain leases, taxes, insurance and operating costs. Certain
F-9
<PAGE> 30
AMYLIN PHARMACEUTICALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
equipment leases require the Company to provide the lessor with a guaranteed
residual at the end of the lease term at which time title to the equipment
passes to the Company.
Minimum future annual obligations for operating leases for years ending
after December 31, 1998 are as follows:
<TABLE>
<S> <C>
1999........................................ $ 926,000
2000........................................ 827,000
2001........................................ 860,000
2002........................................ 894,000
Thereafter.................................. 1,571,000
----------
Total minimum lease payments...... $5,078,000
==========
</TABLE>
Rent expense for 1998, 1997, and 1996 was $2,402,000, $2,697,000 and
$2,315,000, respectively.
DEBT
As of December 31, 1998, the Company had an outstanding loan of $15,000 for
financing of equipment and tenant improvements. The loan is payable over
forty-eight months which commenced on February 1, 1995. Payments include
principal and monthly interest of prime plus 1.75% (9.5% at December 31, 1998)
of the outstanding principal balance. The loan agreement contains provisions for
the complete repayment of any outstanding principal balance should the Company's
cash balances fall below certain minimum levels.
In 1996, the Company entered into a master line of credit agreement (as
amended) to provide up to $5,000,000 of net financing for standard equipment. As
of December 31, 1998, the Company had an outstanding loan balance of $3,243,896.
Borrowings under each loan schedule are payable over forty-eight months to
include principal and monthly interest based on the average of three and five-
year U.S. Treasury maturities (approximately 10.63% at December 31, 1998).
Principal payments due in 1999 through 2002 are $1,239,820, $1,272,351,
$705,520, and $26,205, respectively. The credit agreement provides the lender
with a security interest in all equipment financed under the line.
In November 1997, the Company entered into a commitment agreement to enter
into a financing agreement which will provide up to $2,700,000 of financing for
equipment purchases. As of December 31, 1998, the Company had an outstanding
loan balance of $2,700,000. Borrowings under this agreement are payable over a
sixty-month period with principal payments commencing on January 1, 1999.
Monthly interest payments are calculated based on prime plus 0.5% (approximately
8.25% at December 31, 1998) of the outstanding principal balance and commenced
with the outstanding balance in 1998. Principal payments due in 1999 through
2003 are $540,000 annually. The credit agreement provides the lender with a
security interest in all equipment financed under the agreement and requires
payment of a security deposit of 50% of the outstanding balance should the
Company's cash balances fall below $10,000,000.
4. STOCKHOLDERS' EQUITY
STOCK PURCHASE PLAN
In November 1991, the Company adopted the Employee Stock Purchase Plan (the
"Purchase Plan"), under which 500,000 shares of common stock may be issued to
eligible employees, including officers. The price of common stock under the
Purchase Plan is equal to the lessor of 85% of the
F-10
<PAGE> 31
AMYLIN PHARMACEUTICALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
market price on the effective date of an employee's participation in the plan or
85% of the fair market value of the common stock at the purchase date. At
December 31, 1998, 422,956 shares of common stock had been issued under the
plan.
STOCK OPTIONS
Under the Company's 1991 Stock Option Plan (the "Plan"), 7,800,000 shares
of common stock are reserved for issuance upon exercise of options granted to
employees and consultants of the Company. The Plan provides for the grant of
incentive and nonstatutory stock options. The exercise price of incentive stock
options must equal at least the fair market value on the date of grant, and the
exercise price of nonstatutory stock options may be no less than 85% of the fair
market value on the date of grant. Additionally, the Company is authorized to
issue supplemental stock options for up to 70,000 options outside of the Plan.
The maximum term of all options granted is ten years.
Under the Company's Non-Employee Directors' Stock Option Plan (the
"Directors' Plan") 350,000 shares of common stock are reserved for issuance upon
exercise of nonqualified stock options granted to Non-Employee Directors of the
Company.
The following table summarizes option activity:
<TABLE>
<CAPTION>
SHARES WEIGHTED
UNDER AVERAGE
OPTION EXERCISE PRICE
---------- --------------
<S> <C> <C>
Outstanding at December 31, 1995.............. 4,308,233 $ 5.74
Granted..................................... 1,927,796 $10.58
Exercised................................... (404,671) $ 4.46
Cancelled................................... (331,576) $ 9.43
---------- ------
Outstanding at December 31, 1996.............. 5,499,782 $ 7.31
Granted..................................... 566,914 $11.94
Exercised................................... (376,826) $ 4.71
Cancelled................................... (327,231) $ 8.48
---------- ------
Outstanding at December 31, 1997.............. 5,362,639 $ 7.91
Granted..................................... 3,364,337 $ 2.54
Exercised................................... (169,069) $ 4.32
Cancelled................................... (2,590,778) $ 8.67
---------- ------
Outstanding at December 31, 1998.............. 5,967,129 $ 4.65
========== ======
</TABLE>
At December 31, 1998, 1,214,555 shares remained available for grant or
sale.
F-11
<PAGE> 32
AMYLIN PHARMACEUTICALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Following is a further breakdown of the options outstanding as of December
31, 1998:
<TABLE>
<CAPTION>
WEIGHTED WEIGHTED
AVERAGE AVERAGE WEIGHTED
RANGE NUMBER REMAINING EXERCISE NUMBER AVERAGE EXERCISE
OF EXERCISE PRICES OUTSTANDING CONTRACTUAL LIFE PRICE EXERCISABLE PRICE
------------------ ----------- ---------------- ---------------- ----------- ----------------
<S> <C> <C> <C> <C> <C>
$0.313 1,230,000 9.81 $ 0.31300 -- $ 0.00000
$0.438 - $4.375 1,138,441 7.76 2.62945 438,166 2.31577
$4.500 1,254,223 5.05 4.50000 1,254,038 4.50000
$4.750 - $7.125 1,288,041 7.19 5.81223 896,949 6.02831
$7.250 - $14.375 1,056,424 6.52 10.65456 966,715 10.51093
--------- ---- --------- --------- ---------
$0.313 - $14.375 5,967,129 7.27 $ 4.65292 3,555,868 $ 6.25052
========= ==== ========= ========= =========
</TABLE>
Adjusted pro forma information regarding net loss and loss per share is
required by SFAS No. 123, and has been determined as if the Company had
accounted for its employee stock options and stock purchase plan under the fair
value method of SFAS No. 123. The fair value for these options was estimated at
the date of grant using the "Black-Scholes" method for option pricing with the
following weighted average assumptions for 1998, 1997 and 1996, respectively:
risk-free interest of 5.50%, 5.71% and 6.39%; dividend yield of 0%; volatility
factors of the expected market price of the Company's common stock of 73.5%,
65.4% and 64.7%; and a weighted-average expected life of the option of five
years.
For purposes of adjusted pro forma disclosures, the estimated fair value of
the option is amortized to expense over the option's vesting period.
The Company's adjusted pro forma information is as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------
1998 1997 1996
------------ ------------ ------------
<S> <C> <C> <C>
Adjusted pro forma net loss................. $(52,713,000) $(59,850,000) $(41,969,000)
Adjusted pro forma basic and diluted net
loss per share............................ $ (1.54) $ (1.86) $ (1.46)
</TABLE>
The weighted-average fair value of options granted during 1998, 1997, and
1996 was $1.66, $7.14 and $6.67, respectively.
STOCK WARRANTS
In May 1997, in conjunction with an amendment to a License Agreement, the
Company issued warrants to the licensor to purchase 20,000 shares of the
Company's common stock with a fixed exercise price of $11.375 per share and a
10-year exercise period.
On September 30, 1997, in conjunction with the draw down under the
Development Loan Facility with Johnson & Johnson, the Company issued a warrant
to Johnson & Johnson to purchase 1,530,950 shares of the Company's common stock
at an exercise price of $12.00 per share which expires on September 29, 2007
(see "Collaborative Agreements").
F-12
<PAGE> 33
AMYLIN PHARMACEUTICALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
SHARES RESERVED FOR FUTURE ISSUANCE
The following shares of common stock are reserved for future issuance at
December 31, 1998:
<TABLE>
<S> <C>
1991 Stock Option Plan.............................. 6,803,198
Employee Stock Purchase Plan........................ 91,211
Directors Plan...................................... 328,576
Phantom Stock Plan.................................. 141,195
Warrants............................................ 1,530,950
----------
8,895,130
==========
</TABLE>
5. COLLABORATIVE AGREEMENTS
JOHNSON & JOHNSON
In June 1995, the Company entered into a worldwide Collaboration Agreement
(the "Collaboration Agreement") with LifeScan, Inc. for the development and
commercialization of pramlintide, a diabetes drug candidate currently in Phase 3
clinical trials. In conjunction with the Collaboration Agreement, the Company
also entered into a Stock Purchase Agreement with Johnson & Johnson Development
Corporation ("JJDC") and a Loan Agreement with Johnson & Johnson. LifeScan, Inc.
and JJDC, each of which are wholly-owned subsidiaries of Johnson & Johnson, are
referred to herein as Johnson & Johnson.
Johnson & Johnson paid the Company a license fee, which was recognized as
revenue upon the signing of the Collaboration Agreement in 1995. Approximately
$16.2 million, $33.6 million, and $27.4 million of development payments were
made to the Company and recognized as revenues during 1998, 1997, and 1996,
respectively. Also included in receivables from related party was $1.0 million
of pre-marketing expenses due to the Company from Johnson & Johnson as of
December 31, 1997. Additionally, the Company's December 31, 1997 balance sheet
includes approximately $6.4 million in short-term deferred revenues reflecting
amounts advanced from Johnson & Johnson representing an equalization payment for
its share of projected development expenses for the first quarter of 1997.
Payments from Johnson & Johnson to Amylin Pharmaceuticals for development
expenses were recognized as revenue in the period in which they were earned.
In accordance with the terms of the Stock Purchase Agreement, Johnson &
Johnson purchased 3,455,407 shares of the Company's common stock through
December 31, 1998.
In September 1997, the Company received proceeds of approximately $30.6
million from the loan facility (the "Development Loan Facility"). The proceeds
were applied against the Company's one-half share of development expenses for
pramlintide. The loan carries an interest rate of 9.0%. In conjunction with the
borrowing, the Company issued warrants to Johnson & Johnson to purchase
1,530,950 shares of the Company's common stock over a 10-year exercise period.
The estimated fair value of the warrants has been accounted for as a discount
from the face value of the note. The loan is repayable beginning 12 months after
approval of a new drug application for pramlintide with 50% of the Company's
pramlintide profits, if any, subject to certain exceptions set forth in the
Development Loan facility. The loan is secured by the Company's issued patents
and patent applications relating to Amylin. Additionally, as of December 31,
1998, the Company owed Johnson & Johnson approximately $12.3 million for its
share of pre-launch marketing expenses.
F-13
<PAGE> 34
AMYLIN PHARMACEUTICALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
In February 1998, Johnson & Johnson provided the Company with six-months
notice of its intention to terminate their collaboration. Johnson & Johnson's
financial and other obligations under the Collaboration Agreement continued
during the termination notice period and ended in August 1998. Based upon
Johnson & Johnson's decision, Amylin restructured its operations which included
reducing its workforce by approximately 25%. The impact of this restructuring
slowed down other (non-pramlintide) research programs.
In September 1998, the Company entered into a repurchase agreement (the
"Pramlintide Repurchase Agreement") with Ortho-Biotech, Inc., an affiliate of
Johnson & Johnson ("J&J"), which provided that J&J will order and purchase
certain amounts of pramlintide from third party vendors and will place in
inventory such amounts of pramlintide for possible future purchase by Amylin.
J&J will purchase the pramlintide from certain vendors based upon agreed upon
prices per gram. The repurchase price of the compound shall be the same price
paid by J&J to the supplier. Amylin must repurchase the pramlintide in full on
the first to occur of the following: (i) Amylin executes any agreement with a
major company relating to the development, commercialization and/or sale of
pramlintide; (ii) Amylin requests in writing that J&J process the material or
requests that J&J transfer the material to a third party for processing; (iii)
Amylin receives regulatory approval for the sale of pramlintide; or (iv) Amylin
is acquired by a third party. If none of the above listed events occur, Amylin
will not have an obligation to purchase the pramlintide inventory from J&J. As
of December 31, 1998, J&J had purchased pramlintide inventory for Amylin
totaling approximately $1.1 million.
6. INCOME TAXES
Significant components of the Company's deferred tax assets as of December
31, 1998 and 1997 are shown below. A valuation allowance of $109,822,000, of
which $42,232,000 is related to 1998 changes, has been recognized as of December
31, 1998 to offset the deferred tax assets as realization of such assets is
uncertain.
<TABLE>
<CAPTION>
1998 1997
------------- ------------
<S> <C> <C>
Deferred tax assets:
Capitalized research expenses............. $ 8,672,000 $ 9,653,000
Net operating loss carryforwards.......... 87,943,000 68,892,000
Research and development credits.......... 12,464,000 9,615,000
Other..................................... 743,000 3,790,000
------------- ------------
Total deferred tax assets................. 109,822,000 91,950,000
Valuation allowance for deferred tax
assets.................................. (109,822,000) (91,950,000)
------------- ------------
Net deferred tax assets................... $ -- $ --
============= ============
</TABLE>
Approximately $382,000 of the valuation allowance for deferred tax assets
relates to stock option deductions which when recognized will be allocated
directly to additional paid-in capital.
At December 31, 1998, the Company has federal, California and foreign tax
net operating loss carryforwards of approximately $241,881,000, $21,932,000 and
$6,528,000, respectively. The difference between the tax loss carryforwards for
federal and California purposes is attributable to the capitalization of
research and development expenses for California tax purposes and the fifty
percent limitation on California loss carryforwards. The federal tax loss
carryforwards will begin expiring in 2002 unless previously utilized. The
California tax loss carryforwards will continue to expire in 1999
F-14
<PAGE> 35
AMYLIN PHARMACEUTICALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
($998,000 expired in 1998). The Company also has federal and California research
and development tax credit carryforwards of $10,149,000 and $3,561,000,
respectively, which will begin expiring in 2003 unless previously utilized.
Pursuant to Internal Revenue Code Sections 382 and 383, the use of the
Company's net operating loss and credit carryforwards may be limited if a
cumulative change in ownership of more than 50% occurs within a three-year
period. However, the Company does not believe that such a limitation would have
a material impact upon the future utilization of these carryforwards.
7. SUBSEQUENT EVENT
In March 1999, the Company raised $15 million through a private placement
of Series A Convertible Preferred Stock (the "Series A Preferred Stock") to a
group of investors ("the Investors"). Subject to adjustment in certain events,
the Series A Preferred Stock is convertible into common stock of the Company at
$1.20 per share (the "Conversion Price"). The Conversion Price will be adjusted
using a weighted-average formula for issuances of other securities at a price
per share lower than the then current Conversion Price, provided that, at no
time shall the Conversion Price fall below $0.96 per share. The Series A
Preferred Stock accrues dividends at a rate of 5% of the purchase price per
share per annum. Beginning at the first anniversary of the closing, dividends
are payable semi-annually in cash or common stock valued at a ten day trailing
average closing price.
F-15
<PAGE> 36
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth all expenses payable by the Registrant in
connection with the sale of the common stock being registered. All the amounts
shown are estimates except for the registration fee.
<TABLE>
<S> <C>
SEC Registration Fee........................................ $ 12,583
Legal fees and expenses..................................... $ 75,000
Transfer Agent's Fees....................................... $ 5,000
Accounting fees and expenses................................ $ 10,000
--------
Total..................................................... $102,583
========
</TABLE>
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Under Section 145 of the Delaware General Corporation Law, the Registrant
has broad powers to indemnify its directors and officers against liabilities
they may incur in such capacities, including liabilities under the Securities
Act of 1933, as amended (the "Securities Act").
The Registrants Certificate of Incorporation and By-laws include provisions
to (i) eliminate the personal liability of its directors for monetary damages
resulting from breaches of their fiduciary duty to the extent permitted by
Section 102(b)(7) of the General Corporation Law of Delaware (the "Delaware
Law") and (ii) require the Registrant to indemnify its Directors and officers to
the fullest extent permitted by Section 145 of the Delaware Law, including
circumstances in which indemnification is otherwise discretionary. Pursuant to
Section 145 of the Delaware Law, a corporation generally has the power to
indemnify its present and former directors, officers, employees and agents
against expenses incurred by them in connection with any suit to which they are
or are threatened to be made, a party by reason of their serving in such
positions so long as they acted in good faith and in a manner they reasonably
believed to be in or not opposed to, the best interests of the corporation and
with respect to any criminal action, they had no reasonable cause to believe
their conduct was unlawful. The Registrant believes that these provisions are
necessary to attract and retain qualified persons as directors and officers.
These provisions do not eliminate the directors' duty of care, and, in
appropriate circumstances, equitable remedies such as injunctive or other forms
of non-monetary relief will remain available under Delaware Law. In addition,
each director will continue to be subject to liability for breach of the
director's duty of loyalty to the Registrant, for acts or omissions not in good
faith or involving intentional misconduct, for knowing violations of law, for
acts or omissions that the director believes to be contrary to the best
interests of the Registrant or its stockholders, for any transaction from which
the director derived an improper personal benefit, for acts or omissions
involving a reckless disregard for the director's duty to the Registrant or its
stockholders when the director was aware or should have been aware of a risk of
serious injury to the Registrant or its stockholders, for acts or omissions that
constitute an unexcused pattern of inattention that amounts to an abdication of
the director's duty to the Registrant or its stockholders, for improper
transactions between the director and the Registrant and for improper
distributions to stockholders and loans to directors and officers. The provision
also does not affect a director's responsibilities under any other law, such as
the federal securities law or state or federal environmental laws.
The Registrant has entered into indemnity agreements with each of its
directors and executive officers that require the Registrant to indemnify such
persons against expenses, judgments, fines, settlements and other amounts
incurred (including expenses of a derivative action) in connection with any
proceeding, whether actual or threatened, to which any such person may be made a
party by
II-1
<PAGE> 37
reason of the fact that such person is or was a director or an executive officer
of the Registrant or any of its affiliated enterprises, such person acted in
good faith and in a manner such person reasonably believed to be in or not
opposed to the best interests of the Registrant and, with respect to any
criminal proceeding, had no reasonable cause to believe his conduct was
unlawful. The indemnification agreements also set forth certain procedures that
will apply in the event of a claim for indemnification thereunder.
At present, there is no pending litigation or proceeding involving a
director or officer of the Registrant as to which indemnification is being
sought nor is the Registrant aware of any threatened litigation that may result
in claims for indemnification by any officer or director.
The Registrant has an insurance policy covering the officers and directors
of the Registrant with respect to certain liabilities, including liabilities
arising under the Securities Act or otherwise.
ITEM 16. EXHIBITS
(a) Exhibits.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------- -----------------------
<C> <S>
*3.1 Registrant's Amended and Restated Certificate of
Incorporation.
*3.2 Registrant's Amended and Restated Bylaws.
**3.3 Registrant's Certificate of Amendment of Amended and
Restated Certificate of Incorporation.
***3.4 Certificate of Designation of the 5% Series A Convertible
Preferred Stock of the Registrant.
4.1 Reference is made to Exhibits 3.1-3.4.
***4.2 Form of Stock Purchase Agreement dated March 22, 1999
between the Registrant and purchasers of the Registrant's 5%
Series A Convertible Preferred Stock.
5.1 Opinion of Cooley Godward LLP.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.3 Consent of Cooley Godward LLP. Reference is made to Exhibit
5.1.
24.1 Power of Attorney. Reference is made to page II-4.
</TABLE>
- -------------------------
* Filed as an exhibit to Registrant's Registration Statement on Form S-1 (No.
333-44195) or amendments thereto and incorporated herein by reference.
** Filed as an exhibit to Registrant's Registration Statement on Form S-3 (No.
333-58831) or amendments thereto, and incorporated herein by reference.
*** Filed as an exhibit to Registrant's Annual Report on form 10-K for the
fiscal year ended December 31, 1998.
ITEM 17. UNDERTAKINGS.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the provisions described in Item 15 or otherwise, the
Registrant has been advised that in the opinion of the SEC, such indemnification
is against public policy as expressed in the 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
II-2
<PAGE> 38
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the 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 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 of 1933;
(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;
(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 clauses (i) and (ii) do not apply if the
information required to be included in a post-effective amendment by these
clauses 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 that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof;
(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; and
(4) that, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant's annual report
pursuant to section 13(a) or section 15(d) of the Securities Exchange Act
of 1934 (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-3
<PAGE> 39
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 of 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 San Diego, State of California, on the 13th day of
September 1999.
AMYLIN PHARMACEUTICALS, INC.
By: /s/ JOSEPH C. COOK
------------------------------------
Joseph C. Cook, Jr.
Chairman of the Board and Chief
Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Joseph C. Cook, Jr. as his true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for the undersigned and in his name, place and stead, in any and
all capacities, to sign any or all amendments (including post-effective
amendments) to the Registration Statement and to file the same, with all
exhibits thereto, and all documents in connection therewith, with the Securities
and Exchange Commission, granting unto said attorney-in-fact and agent, full
power and authority to do and 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 attorney-in-fact and agent, or his 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 below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ JOSEPH C. COOK Chairman of the Board and September 13, 1999
- ----------------------------------------------------- Chief Executive Officer
Joseph C. Cook, Jr.
/s/ JAMES C. BLAIR Director September 13, 1999
- -----------------------------------------------------
James C. Blair
Director September 13, 1999
- -----------------------------------------------------
Vaughn D. Bryson
/s/ JAMES C. GAITHER Director September 13, 1999
- -----------------------------------------------------
James C. Gaither
/s/ GINGER L. GRAHAM Director September 13, 1999
- -----------------------------------------------------
Ginger L. Graham
/s/ HOWARD E. GREENE, JR. Director September 13, 1999
- -----------------------------------------------------
Howard E. Greene, Jr.
/s/ VAUGHN M. KAILIAN Director September 13, 1999
- -----------------------------------------------------
Vaughn M. Kailian
Director September 13, 1999
- -----------------------------------------------------
Jay S. Skyler, M.D.
/s/ MARTIN R. BROWN Vice President of September 13, 1999
- ----------------------------------------------------- Operations (Principal
Accounting Officer)
</TABLE>
II-4
<PAGE> 40
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ------- -----------------------
<C> <S>
*3.1 Registrant's Amended and Restated Certificate of
Incorporation.
*3.2 Registrant's Amended and Restated Bylaws.
**3.3 Registrant's Certificate of Amendment of Amended and
Restated Certificate of Incorporation.
***3.4 Certificate of Designation of the 5% Series A Convertible
Preferred Stock of the Registrant.
4.1 Reference is made to Exhibits 3.1-3.4.
***4.2 Form of Stock Purchase Agreement dated March 23, 1999
between the Registrant and purchasers of the Registrant's 5%
Series A Convertible Preferred Stock.
5.1 Opinion of Cooley Godward LLP.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.3 Consent of Cooley Godward LLP. Reference is made to Exhibit
5.1.
24.1 Power of Attorney. Reference is made to page II-4.
</TABLE>
- -------------------------
* Filed as an exhibit to Registrant's Registration Statement on Form S-1 (No.
333-44195) or amendments thereto, and incorporated herein by reference.
** Filed as an exhibit to Registrant's Registration Statement on Form S-3 (No.
333-58831) or amendments thereto, and incorporated herein by reference.
*** Filed as an exhibit to Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1998.
<PAGE> 1
EXHIBIT 5.1
[COOLEY GODWARD LLP LETTERHEAD]
September 13, 1999
Amylin Pharmaceuticals, Inc.
9373 Towne Centre Drive
San Diego, CA 92121
Ladies and Gentlemen:
You have requested our opinion with respect to certain matters in connection
with the filing by Amylin Pharmaceuticals, Inc., a Delaware corporation (the
"Company"), of a Registration Statement on Form S-3 (the "Registration
Statement") including a related prospectus filed with the Registration Statement
(the "Prospectus"), covering the registration of up to 12,594,009 shares of the
Common Stock, $.001 par value, of the Company (the "Shares") on behalf of
certain selling stockholders.
In connection with this opinion, we have examined the Registration Statement and
related Prospectus, the Company's Amended and Restated Certificate of
Incorporation and Bylaws, as amended, and such other records, documents,
certificates, memoranda and other instruments as we deem necessary as a basis
for this opinion. We have assumed the genuineness and authenticity of all
documents submitted to us as originals, the conformity to originals of all
documents submitted to us as copies thereof and the due execution and delivery
of all documents where due execution and delivery are a prerequisite to the
effectiveness thereof.
On the basis of the foregoing, and in reliance thereon, we are of the opinion
that the Shares are validly issued, fully paid and nonassessable.
We consent to the reference to our firm under the caption "Legal Matters" in the
Prospectus included in the Registration Statement and to the filing of this
opinion as an exhibit to the Registration Statement.
Very truly yours,
Cooley Godward LLP
/s/ Thomas A. Coll
- ------------------
Thomas A. Coll
<PAGE> 1
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" and to the
use of our report dated March 23, 1999 (except for Note 7, as to which the date
is March 23, 1999, and the last paragraph of Note 1, as to which the date is
September 9, 1999), in the Registration Statement (Form S-3) and related
prospectus of Amylin Pharmaceuticals, Inc. dated September 13, 1999.
ERNST & YOUNG LLP
San Diego, California
September 9, 1999
