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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 4, 2000
REGISTRATION NO. 333-87033
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 2
TO
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(2)
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Common Stock, $.001 par value........... 16,304,009 $11.13 $86,552,020 $23,484
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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 ($3.59375 per
share), with respect to 12,594,009 shares, and February 2, 2000 ($11.13 per
share), with respect to 3,710,000 shares.
(2) The Registrant previously paid $12,582.21 for the registration fee
applicable to 12,594,009 shares registered hereunder.
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 FEBRUARY 4, 2000
PROSPECTUS
16,304,009 SHARES
AMYLIN PHARMACEUTICALS, INC.
COMMON STOCK
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We are registering our common stock for resale by the security holders
identified in this prospectus. We will not receive any proceeds from the
security holders' sale of their shares of our common stock.
For a description of the method of distribution of the resale shares, see
page 18 of this prospectus.
Our common stock is currently traded on the Nasdaq SmallCap Market under
the symbol "AMLN." On February 3, 2000, the last reported sales price for our
common stock was $11.813 per share.
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INVESTMENT IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 5 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 February , 2000.
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THIS PROSPECTUS IS PART OF A REGISTRATION STATEMENT WE FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. YOU SHOULD RELY ONLY ON THE INFORMATION
CONTAINED IN OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS. 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 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 PROVIDED ON THE FRONT PAGE OF THIS PROSPECTUS,
REGARDLESS OF THE TIME OF DELIVERY OF THIS PROSPECTUS OR ANY SALE OF COMMON
STOCK.
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OUR BUSINESS
You should read the following summary together with the more detailed
information regarding our company, our common stock and our financial statements
and notes to those statements appearing elsewhere in this prospectus or
incorporated here by reference.
We are a development pharmaceutical company focused on metabolic disorders
and specializing in characterization of potential drug candidates in laboratory
tests and demonstration of biological activity 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
type 1 diabetes and insulin-using type 2 diabetes. 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. Amylin is
currently engaged in partnership discussions for SYMLIN and AC2993.
Type 1, or juvenile onset, diabetes typically involves rapid deterioration
of cells in the pancreas that produce the hormones insulin and amylin.
Approximately 2 million people in North America and Western Europe have type 1
diabetes. These people have limited treatment options and require daily insulin
injections and careful attention to diet and exercise. Type 1 diabetes is not
usually helped by oral medications.
Type 2, or adult onset, diabetes is a progressive disorder. Approximately
19 million people in North America and Western Europe have been diagnosed with
type 2 diabetes. People with type 2 diabetes initially are able to manage their
diabetes with diet, exercise, and/or oral diabetes medications. Over time many
people need injections of insulin each day to enable their bodies to metabolize
and store food. We estimate that approximately 3.3 million people with type 2
diabetes in North America and Western Europe have progressed to a stage of this
disease that requires them to use multiple insulin injections each day.
SYMLIN CLINICAL TRIAL PROGRAM
We designed the SYMLIN Phase 3 program to evaluate the safety and efficacy
of SYMLIN administered for 6 months, 1 year, or longer. This program comprised
six double-blind, placebo-controlled studies (three in type 1 diabetes and three
in type 2 diabetes), and two longer term open-label, safety studies. We
conducted each of the double-blind studies to explore the effects of SYMLIN
administration (in addition to insulin) on metabolic control in people with
diabetes. We have reported results from all six double-blind Phase 3 studies. We
have also reported results from numerous Phase 1 and Phase 2 studies of SYMLIN.
To date, over 3,500 people have received SYMLIN in our clinical trials. Based on
the results of our clinical trials for SYMLIN, we plan to submit applications
for regulatory approval of SYMLIN in mid-2000.
Prior to August 1999, we had reported the results of four Phase 3 clinical
studies for SYMLIN. The results of these four studies provided important insight
into the biological actions of SYMLIN and encouraged us to complete the
remaining two planned Phase 3 clinical studies for SYMLIN. However, standing
alone, they were not sufficient to support applications for regulatory approval
for marketing of SYMLIN.
In August 1999 and November 1999, we announced positive results from the
final two planned Phase 3 clinical studies for SYMLIN. One study examined the
effects of SYMLIN in patients with type 1 diabetes and the other examined the
effects of SYMLIN in patients with type 2 diabetes who use insulin. In both
studies, SYMLIN, when used along with insulin for six months, reduced the
average concentration of glucose in the bloodstream of patients compared to
those who received insulin alone. This is an essential FDA requirement. Average
blood glucose concentrations were also reduced after 12 months of treatment with
SYMLIN. In both studies, a predefined subset of patients
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received even greater reductions in their average blood glucose levels. In
addition, in both studies, patients receiving SYMLIN showed improved body weight
control compared to those who received insulin alone.
AC2993 CLINICAL TRIAL PROGRAM
Our second diabetes drug candidate, AC2993 (synthetic exendin-4), is in
Phase 2 evaluation for the treatment of people with type 2 diabetes. We have
reported results of a Phase 1 and Phase 2 studies for AC2993. To date, over 100
people have received AC2993 in our clinical trials. We have also demonstrated
that AC2993 is biologically active in animal models when administered via
noninjectable routes.
RECENT APPOINTMENTS TO OUR BOARD OF DIRECTORS
In July, August and September 1999, we elected Vaughn D. Bryson, Jay S.
Skyler, M.D. and Donald H. Rumsfeld, 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.
Mr. Rumsfeld is currently Chairman of the Board of Directors of Gilead
Sciences, Inc. He also serves as a member of the boards of directors of Asea
Brown Boveri Ltd., Tribune Company and RAND Corporation. He is currently
Chairman of the Salomon Smith Barney International Advisory Board and a member
of the Forstmann Little & Co. Advisory Board. From 1991 to 1996, Mr. Rumsfeld
served as a member of the board of directors of Amylin Pharmaceuticals. Mr.
Rumsfeld was Chairman and Chief Executive Officer of General Instrument
Corporation from October 1990 to August 1993 and served as a senior advisor to
William Blair & Co., an investment banking firm, from 1985 to 1990. He was Chief
Executive Officer of G.D. Searle & Co. from 1977 to 1985. Mr. Rumsfeld formerly
served as U.S. Secretary of Defense, White House Chief of Staff, U.S. Ambassador
to NATO, and U.S. congressman. He has also served as the President's special
envoy to the Middle East. He is a recipient of the Presidential Medal of
Freedom, the United States' highest civilian award.
CORPORATE INFORMATION
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, this prospectus (and the information incorporated 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 differences in our
actual results include those discussed in the following section, as well as
those discussed elsewhere in this prospectus and in any other documents
incorporated by reference into this prospectus.
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.
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.
Our drug 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 for approval of a drug candidate if it believes that
applicable regulatory criteria are not satisfied. The FDA may also require
additional testing for safety and efficacy. Moreover, if the FDA grants
regulatory approval of a product, 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.
The data collected from our clinical trials may not be sufficient to
support approval of SYMLIN or AC2993 by the FDA or any foreign regulatory
authorities. With respect to SYMLIN, the results of the first four Phase 3
clinical studies were not sufficient, standing alone, to support an application
with the FDA for marketing approval. In some of these first four studies, the
statistical requirements agreed in advance with the FDA were not met. However,
the results of the final two planned Phase 3 clinical studies for SYMLIN that
were reported in August and November 1999 were positive. We believe that the
results of our entire SYMLIN clinical trial program, including the two most
recently completed Phase 3 clinical studies of SYMLIN, should support regulatory
approval of SYMLIN. However, it is possible that the FDA or other regulatory
authorities may deem our SYMLIN clinical trial results insufficient to meet
regulatory requirements for marketing approval. Moreover, preclinical and
clinical data can be interpreted in different ways, which could delay, limit or
prevent regulatory approval. Manufacturing facilities operated by the third
party manufacturers with whom we contract to manufacture SYMLIN may not pass an
FDA preapproval inspection for SYMLIN. Any failure to obtain or delay these
approvals could prohibit or delay us from marketing SYMLIN. Consequently, even
if we believe that preclinical and clinical data are sufficient to support
regulatory approval for SYMLIN, the FDA and foreign regulatory authorities may
not ultimately approve SYMLIN 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.
DELAYS IN THE CONDUCT OR COMPLETION OF OUR CLINICAL TRIALS OR THE ANALYSIS OF
THE DATA FROM OUR CLINICAL TRIALS MAY RESULT IN DELAYS IN OUR PLANNED FILINGS
FOR REGULATORY APPROVALS, OR ADVERSELY AFFECT OUR ABILITY TO ENTER INTO NEW
COLLABORATIVE ARRANGEMENTS.
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
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will encounter problems with any of our completed or ongoing clinical studies
that will cause us or regulatory authorities to delay or suspend our ongoing
clinical studies or delay the analysis of data from our completed or ongoing
clinical studies. If the results of our ongoing and planned clinical studies for
AC2993 are not available when we expect or if we encounter any delay in the
analysis of our clinical studies for SYMLIN or AC2993:
- we may delay the submission of our applications for regulatory approval
of SYMLIN with regulatory authorities in North America and Europe,
currently scheduled for mid-2000;
- we may not have the financial resources to continue research and
development of any of our product candidates; and
- we may not be able to enter into collaborative arrangements relating to
any product subject to delay in regulatory filing.
Any of the following reasons could delay the completion of our ongoing and
future clinical studies:
- delays in enrolling volunteers;
- lower than anticipated retention rate of volunteers in a trial; or
- serious adverse events relating to the product candidate.
EVEN IF WE OBTAIN INITIAL REGULATORY APPROVAL FOR OUR PRODUCTS, IF WE FAIL TO
COMPLY WITH EXTENSIVE CONTINUING REGULATIONS ENFORCED BY DOMESTIC AND FOREIGN
REGULATORY AUTHORITIES, IT COULD HARM OUR ABILITY TO GENERATE REVENUES AND THE
MARKET PRICE OF OUR STOCK COULD FALL.
Even if we are able to obtain United States regulatory approval for SYMLIN,
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 we obtain marketing approval for SYMLIN, the marketing of
the product 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 of these enforcement actions 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
and cause our stock price to fall.
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. In the future, we may incur
significant costs to comply with those laws and regulations.
EXISTING PRICING REGULATIONS AND REIMBURSEMENT LIMITATIONS MAY REDUCE OUR
POTENTIAL PROFITS FROM THE SALE OF OUR PRODUCTS.
The requirements governing 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
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marketed. In many countries, the pricing review period begins after product
licensing approval is granted. As a result, we or our partners may obtain
regulatory approval for a product in a particular country, but then be subject
to price regulations that reduce our profits from the sale of the product. Also,
in some foreign markets pricing of prescription pharmaceuticals is subject to
continuing government control even after initial marketing approval.
Our ability to commercialize our products successfully also will depend in
part on the extent to which reimbursement for the cost of our products and
related treatments will be available from government health administration
authorities, private health insurers and other organizations. 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.
WE WILL REQUIRE FUTURE CAPITAL AND ARE UNCERTAIN OF THE AVAILABILITY OR TERMS OF
ADDITIONAL FUNDING. IF FUNDING BECOMES UNAVAILABLE, IS INADEQUATE, OR IS NOT
AVAILABLE ON ACCEPTABLE TERMS, IT MAY ADVERSELY AFFECT THE VALUE OF YOUR SHARES.
We must continue to find sources of capital in order to complete the
development and commercialization of SYMLIN and AC2993. Our future capital
requirements will depend on many factors, including:
- our ability to obtain additional financing;
- the time and costs involved in obtaining regulatory approvals;
- the costs of manufacturing SYMLIN and AC2993;
- our ability to establish one or more development and/or commercialization
collaborations for our SYMLIN and AC2993 programs;
- progress with our preclinical studies and clinical studies;
- scientific progress in our other research programs and the magnitude of
these programs;
- the costs involved in preparing, filing, prosecuting, maintaining, and
enforcing patents or defending ourselves against competing technological
and market developments; 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
fourth quarter of 2000. We believe that we should be able to raise additional
funds through corporate partnerships, equity offerings, debt offerings and/or
investor partnerships in order to fund our business following the fourth quarter
of 2000. However, you should be aware that:
- we may not obtain additional financial resources in the necessary time
frame or on terms favorable to us, if at all;
- any available additional financing may not be adequate; and
- we may be required to use future financing to repay existing indebtedness
to our current or future creditors, including Johnson & Johnson.
As of September 30, 1999, the total principal and interest due to Johnson &
Johnson was approximately $49.5 million, which is secured by our issued patents
and patent applications relating to amylin. In the event we are unable to obtain
additional financing on acceptable terms, we would not have the financial
resources to continue research and development of SYMLIN, AC2993 or any of
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our other product candidates and we would curtail or cease our operations, which
would adversely affect the value of your shares.
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 September 30, 1999, we had an accumulated deficit of approximately
$281 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 may not ever become profitable. If we become profitable,
we may not remain profitable.
WE HAVE NO EXPERIENCE IN SALES, MARKETING AND DISTRIBUTION AND OUR ABILITY TO
ENTER INTO COLLABORATIVE ARRANGEMENTS OR OTHER THIRD PARTY RELATIONSHIPS IS
IMPORTANT TO OUR SUCCESSFUL DEVELOPMENT AND COMMERCIALIZATION OF PRODUCTS AND
POTENTIAL PROFITABILITY.
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 or enter into
marketing and distribution arrangements for SYMLIN and/or AC2993. We may not be
able to find a corporate partner for SYMLIN or AC2993 or enter into marketing
and distribution arrangements for these drug candidates. Moreover, any new
corporate partner, marketer or distributor for SYMLIN or AC2993 may not
establish adequate sales and distribution capabilities or gain market acceptance
for products, if any.
OUR COMMERCIALIZATION PLANS FOR SYMLIN AND AC2993 ARE DEPENDENT ON THE
PERFORMANCE OF, AND OUR RELATIONSHIPS WITH, THIRD PARTIES THAT PROVIDE US WITH
PRODUCT DEVELOPMENT, CLINICAL AND REGULATORY SUPPLIES AND SERVICES.
We depend to a significant degree on third parties to perform the majority
of product development, clinical and regulatory functions for our product
candidates. In particular, we rely to a significant degree on third parties for
the preparation and submission of our planned regulatory filings for SYMLIN.
While we believe that business relations between us and our third-party
suppliers and service providers have been good, we cannot predict whether
third-party suppliers and service providers will continue to cooperate with us
in the performance of our most important services or functions. Any difficulties
or interruptions of service with our third-party product development, clinical
and regulatory suppliers and service providers could disrupt the development of
our product candidates, the completion of our clinical trials, the manufacture
of our products and delay our filing for regulatory approval of SYMLIN.
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. We work with three contract
suppliers who have the capabilities for the commercial manufacture of SYMLIN.
All manufacturing facilities must comply with applicable regulations of the FDA.
We, alone or together with a new corporate partner, may not be able to make the
transition to commercial
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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 the FDA's current
Good Manufacturing Practices and other applicable domestic and foreign
regulatory standards. However, we are dependent upon contract manufacturers to
comply reliably with those procedures and regulations. While we believe that our
business relations between us and our contract manufacturers are good, we cannot
predict whether these manufacturers will meet our requirements for quality,
quantity or timeliness for the manufacture of SYMLIN or AC2993. 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.
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, disrupt our
ability to supply SYMLIN or reduce our profit margins. Any delay or disruption
in the manufacturing of SYMLIN could require us to raise additional funds.
OUR OTHER RESEARCH AND DEVELOPMENT PROGRAMS MAY NOT RESULT IN ADDITIONAL DRUG
CANDIDATES.
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 before commercialization. We cannot predict whether our
research will lead to the discovery of any additional product candidates.
IF OUR PATENTS ARE DETERMINED TO BE UNENFORCEABLE OR IF WE ARE UNABLE TO OBTAIN
NEW PATENTS BASED ON CURRENT PATENT APPLICATIONS OR FOR FUTURE INVENTIONS, WE
MAY NOT BE ABLE TO PREVENT OTHERS FROM USING OUR INTELLECTUAL PROPERTY.
We own or hold exclusive rights to 28 issued United States patents and
approximately 30 pending United States patent applications. Of these issued
patents and patent applications, we have a total of 11 issued U.S. patents and
nine pending applications that we believe are relevant to the development and
commercialization of SYMLIN and one issued US patent and seven pending
applications that we believe are relevant to the development and
commercialization of AC2993. We also own or hold exclusive rights to various
foreign patent applications that correspond to issued United States patents or
pending United States patent applications.
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. Third parties may challenge or
infringe upon existing or future patents. In the event that a third party
challenges a patent, a court may invalidate the patent or determine that the
patent is not enforceable. Alternatively, a third party may successfully
circumvent our patents. Our rights under any issued patents may not provide us
with 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 cannot be sure that the inventors of subject matter covered by
our patents and patent applications were the first to invent or the first to
9
<PAGE> 11
file patent applications for these 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. Furthermore, we may not have
identified all United States and foreign patents that pose a risk of
infringement.
LITIGATION REGARDING PATENTS AND OTHER PROPRIETARY RIGHTS MAY BE EXPENSIVE AND
CAUSE DELAYS IN BRINGING PRODUCTS TO MARKET.
Proceedings involving our patents or patent applications could result in adverse
decisions about:
- the patentability of our inventions and products relating to SYMLIN and
AC2993; and/or
- the enforceability, validity or scope of protection offered by our
patents relating to SYMLIN and AC2993.
The manufacture, use or sale of SYMLIN or AC2993 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 SYMLIN or AC2993 to market;
and/or
- be precluded from participating in the manufacture, use or sale of SYMLIN
or AC2993 or methods of treatment requiring licenses.
CONFIDENTIALITY AGREEMENTS WITH EMPLOYEES AND OTHERS MAY NOT ADEQUATELY PREVENT
DISCLOSURE OF TRADE SECRETS AND OTHER PROPRIETARY INFORMATION.
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 adversely affect our competitive business position.
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 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
10
<PAGE> 12
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 - alpha-glucosidase inhibitors
- insulin - 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 other products or that our products will offer an economically
feasible alternative to 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.
OUR FUTURE SUCCESS DEPENDS ON OUR ABILITY TO RETAIN OUR CHIEF EXECUTIVE OFFICER
AND OUR SENIOR VICE PRESIDENT OF CLINICAL AFFAIRS AND TO ATTRACT, RETAIN AND
MOTIVATE QUALIFIED PERSONNEL.
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 may not be able to
attract and retain these 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. Our consultants
and advisors may be employed by employers other than us and may have commitments
to or consulting or advisory contracts with other entities that may limit their
availability to us.
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
11
<PAGE> 13
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 those 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.
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; and
- 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.
Each of these provisions could discourage potential take-over attempts and
could adversely affect the market price of our common stock.
SUBSTANTIAL FUTURE SALES OF OUR COMMON STOCK BY EXISTING STOCKHOLDERS OR BY US
COULD CAUSE OUR STOCK PRICE TO FALL.
Sales by existing stockholders of a large number of shares of our common
stock in the public market after this offering or the perception that additional
sales could occur could cause the market price of our common stock to drop. As
of December 20, 1999, we had approximately 53.9 million shares of common stock
outstanding. 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.
SIGNIFICANT VOLATILITY IN THE MARKET PRICE FOR OUR COMMON STOCK COULD EXPOSE US
TO LITIGATION RISK.
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 these
biopharmaceutical and biotechnology companies. Given the uncertainty of our
future funding and our planned filing for regulatory approval of SYMLIN, we
expect that we may continue to
12
<PAGE> 14
experience volatility of our stock price throughout 2000. 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;
- fluctuations 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 those companies. This type of litigation, if instituted,
could result in substantial costs and a diversion of management's attention and
resources, which would materially adversely affect our business, financial
condition and results of operations.
YEAR 2000 ISSUES MAY RESULT IN UNANTICIPATED COSTS OR ADVERSE EFFECTS ON OUR
OPERATIONS.
As is true for most companies, the Year 2000 problem creates a risk for us.
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 our program for identifying and solving Year 2000 related
issues. This program involved the review and assessment of our internal
information technology and appropriate corrective action where necessary.
We also have contacted our important business partners in order to assess
their progress in addressing Year 2000 issues. We used information provided by
them to assess their commitment to Year 2000 readiness. Based on the information
provided and our interactions with those third parties during 2000, 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 us with further confidence that our internal
operations will not be disrupted even if third parties experience Year 2000
problems. However, in the event that our third party business partners cannot
supply us with products or services due to Year 2000 issues, our results of
operations could be adversely affected. Similarly, if significant new
non-compliance issues are identified, our business 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. We have limited back-up
diesel power generation capability. In the event of a power outage, we could
operate for approximately 24 hours before needing to refuel. We have received
reasonable assurances from local diesel suppliers that additional fuel will be
available if needed and therefore Amylin has decided not to stockpile diesel
fuel. We have an adequate water supply to operate for 30 days, if necessary.
Year 2000 costs to date have been primarily related to internal personnel
costs and external consulting costs. Total external costs to remediate Year 2000
problems are estimated at less than
13
<PAGE> 15
$100,000. We have experienced no significant Year 2000 problems to date, and at
this time, we have no reason to believe that Year 2000 issues will have a
material impact on our business or financial condition.
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 rooms 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.
We incorporate by reference the documents listed below, except as
superseded or modified by this registration statement, 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:
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,
June 30, 1999 and September 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
14
<PAGE> 16
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
like "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 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 regulatory 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 5 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 of
those 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 to reflect events or circumstances after
the date on which the 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 factors 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.
15
<PAGE> 17
SECURITY HOLDERS
We are registering for resale certain shares of Amylin common stock held by
the security holders identified below. The following table sets forth:
- the name of the security holders,
- 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 by this registration
statement,
- 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, and
- 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).
This table is prepared based on information supplied to us by the listed
security holders, schedules 13G and Forms 3 and 4, and other public documents
filed with the SEC, and assumes the sale of all of the resale shares. The
applicable percentages of ownership are based on an aggregate of 53,913,246
shares of Amylin common stock issued and outstanding on December 20, 1999,
adjusted as required by rules promulgated by the SEC.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED NUMBER OWNED
PRIOR TO OFFERING OF SHARES AFTER OFFERING
---------------------- BEING ----------------------
SECURITY HOLDERS NUMBER PERCENT(3) OFFERED NUMBER PERCENT(3)
---------------- --------- ---------- --------- --------- ----------
<S> <C> <C> <C> <C> <C>
Allen Andersson(1).................... 9,320,459 17.3% 7,605,559 1,714,900 3.2%
Susan Riecken(2)...................... 9,320,459 17.3% 7,605,559 1,714,900 3.2%
Funds Managed by Domain Associates,
LLC(3).............................. 5,910,207 11.0% 5,237,605 672,602 1.3%
Charles A. Dunn Jr. and Sharon G.
Dunn, Co-Trustees UTD 5/5/81........ 209,866 * 209,866 0 *
Vaughn D. Bryson(4)................... 52,013 * 42,013 10,000 *
Donald H. Rumsfeld(5)................. 111,277 * 104,027 7,250 *
Rumsfeld Family Trust(6).............. 108,926 * 108,926 5,000 *
VMN Associates(6)..................... 108,926 * 108,926 5,000 *
Funds Managed by Kingsbury Associates,
L.P.(7)............................. 1,459,401 2.7% 1,459,401 0 *
The Greene Family Trust(8)............ 2,164,843 4.0% 415,806 1,749,037 3.2%
Joseph C. Cook, Jr.(9)................ 1,514,925 2.8% 311,880 1,203,045 2.2%
Ginger L. Graham(10).................. 88,755 * 40,000 48,755 *
Funds Managed by Deerfield
Partners(11)........................ 1,600,000 3.0% 600,000 1,000,000 1.9%
Jeffrey R. Swarz(12).................. 21,750 * 5,000 16,750 *
Terry C. Vance(13).................... 36,750 * 15,000 21,750 *
Ronald M. Nordmann.................... 20,000 * 20,000 0 *
Peter M. Hecht........................ 20,000 * 20,000 0 *
1149336 Ontario, Inc.(14)............. 15,000 * 10,000 5,000 *
</TABLE>
- -------------------------
* less than 1%
(1) This amount includes 2,602,729 shares held by Susan Riecken, Mr.
Andersson's spouse.
16
<PAGE> 18
(2) This amount includes 6,717,730 shares held by Allen Andersson, Ms.
Riecken's spouse.
(3) Includes 5,115,046 shares held by Domain Partners IV, L.P., 122,559 shares
held by DP IV Associates, L.P., 653,847 shares held by Domain Partners II,
L.P., and 18,755 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.
(4) Includes 10,000 shares held by the Vaughn D. Bryson Irrevocable Trust, U-A
1/14/99. Mr. Bryson is a director of Amylin. Mr. Bryson is a member of
Amylin's Board of Directors.
(5) Includes 6,250 shares which Mr. Rumsfeld has the right to acquire within 60
days after the date of this table pursuant to outstanding options. Mr.
Rumsfeld is a member of Amylin's Board of Directors.
(6) Includes 5,000 shares beneficially owned by the trustee of both the
Rumsfeld Family Trust and VMN Associates through various investment
partnerships. The trustee disclaims beneficial ownership of those shares
except to the extent of his pecuniary interest in the investment
partnerships.
(7) Includes 1,369,401 shares held of record by Kingsbury Capital Partners,
L.P. III, 70,000 shares held of record by Kingsbury Capital Partners, L.P.
II and 10,000 shares held of record by the Timothy J. and Cynthia K.
Wollaeger Trust. Mr. Timothy J. Wollaeger is a general partner of Kingsbury
Associates, L.P., the general partner of Kingsbury Capital Partners, L.P.
III and Kingsbury Capital Partners, L.P. II. Mr. Wollaeger is also a
trustee of the Timothy J. and Cynthia K. Wollaeger Trust.
(8) This amount includes 75,769 shares held by The Greene Children's Trust, of
which Howard E. Greene, Jr. is trustee, and 8,755 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.
(9) Includes 130,752 shares held of record by Farview Management Co., L.P. and
181,128 shares held of record by Judith E. and Joseph C. Cook, Jr. Also
includes 40,000 and 749,246 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.
(10) Includes 48,755 shares which Ms. Graham has the right to acquire within 60
days after the date of this table pursuant to outstanding options. Ms.
Graham is a member of Amylin's Board of Directors.
(11) Includes 1,184,000 shares held of record by Deerfield Partners, L.P. and
416,000 shares held of record by Deerfield International Limited.
(12) Includes 16,750 shares which Mr. Swarz has the right to acquire within 60
days after the date of this table pursuant to outstanding options.
(13) Includes 16,750 shares which Mr. Vance has the right to acquire within 60
days after the date of this table pursuant to outstanding options.
(14) Includes 5,000 shares which an executive officer of 1149336 Ontario, Inc.
has the right to acquire within 60 days after the date of this table
pursuant to outstanding options. All of the 10,000 shares being offered for
resale are issuable upon the exercise of an outstanding warrant to purchase
10,000 shares of common stock.
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,
- market prices at the time of sale,
- varying prices determined at the time of sale, or
- 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 these transactions by selling to or through
one or more broker-dealers, and broker-dealers involved in these transactions
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 those 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 the 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
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 common stock by the security holders or
any 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 $113,485.
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
Cooley Godward LLP, San Diego, California will pass upon the validity of
the issuance of the common stock offered by this prospectus.
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 appearing elsewhere here in, and are included in reliance upon that
report given on the authority of Ernst & Young LLP 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 fourth 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 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 fourth quarter of 2000.
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 EVENTS
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.
On September 2, 1999, all of the outstanding shares of the Company's Series
A Preferred Stock automatically converted into an aggregate of 12,594,009 shares
of common stock.
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........................................ $ 23,485
Legal fees and expenses..................................... $ 75,000
Transfer Agent's Fees....................................... $ 5,000
Accounting fees and expenses................................ $ 10,000
--------
Total..................................................... $113,485
========
</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.(1)
3.2 Registrant's Amended and Restated Bylaws.(1)
3.3 Registrant's Certificate of Amendment of Amended and
Restated Certificate of Incorporation.(2)
3.4 Certificate of Designation of the 5% Series A Convertible
Preferred Stock of the Registrant.(3)
3.5 Amendment to Registrant's Amended and Restated Bylaws.(4)
4.1 Reference is made to Exhibits 3.1-3.5.
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.(3)
4.3 Form of Stock Purchase Agreement dated October 6, 1999
between the Registrant and purchasers of the Registrant's
Common Stock.
4.4 Warrant Agreement dated December 8, 1999 issued by the
Registrant to 1149336 Ontario, Inc.
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.
</TABLE>
- -------------------------
(1) Filed as an exhibit to Registrant's Registration Statement on Form S-1 (No.
333-44195) or amendments thereto and incorporated herein by reference.
(2) Filed as an exhibit to Registrant's Registration Statement on Form S-3 (No.
333-58831) or amendments thereto, and incorporated herein by reference.
(3) Filed as an exhibit to Registrant's Annual Report on form 10-K for the
fiscal year ended December 31, 1998.
(4) Filed as an exhibit to Registrant's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1999.
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,
II-2
<PAGE> 38
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 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 4th day of
February 2000.
AMYLIN PHARMACEUTICALS, INC.
By: /s/ JOSEPH C. COOK
------------------------------------
Joseph C. Cook, Jr.
Chairman of the Board and Chief
Executive Officer
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 February 4, 2000
- ----------------------------------------------------- Chief Executive Officer
Joseph C. Cook, Jr.
/s/ JAMES C. BLAIR* Director February 4, 2000
- -----------------------------------------------------
James C. Blair
Director February 4, 2000
- -----------------------------------------------------
Vaughn D. Bryson
/s/ JAMES C. GAITHER* Director February 4, 2000
- -----------------------------------------------------
James C. Gaither
/s/ GINGER L. GRAHAM* Director February 4, 2000
- -----------------------------------------------------
Ginger L. Graham
/s/ HOWARD E. GREENE, JR.* Director February 4, 2000
- -----------------------------------------------------
Howard E. Greene, Jr.
/s/ VAUGHN M. KAILIAN* Director February 4, 2000
- -----------------------------------------------------
Vaughn M. Kailian
Director February 4, 2000
- -----------------------------------------------------
Donald H. Rumsfeld
Director February 4, 2000
- -----------------------------------------------------
Jay S. Skyler, M.D.
/s/ MARTIN R. BROWN* Vice President of Operations February 4, 2000
- ----------------------------------------------------- (Principal Accounting
Martin R. Brown Officer)
*By: /s/ JOSEPH C. COOK, JR.
- -----------------------------------------------------
Joseph C. Cook, Jr.
Attorney-in-Fact
</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.(1)
3.2 Registrant's Amended and Restated Bylaws.(1)
3.3 Registrant's Certificate of Amendment of Amended and
Restated Certificate of Incorporation.(2)
3.4 Certificate of Designation of the 5% Series A Convertible
Preferred Stock of the Registrant.(3)
3.5 Amendment to Registrant's Amended and Restated Bylaws.(4)
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.(3)
4.3 Form of Stock Purchase Agreement dated October 6, 1999
between the Registrant and purchasers of the Registrant's
Common Stock.
4.4 Warrant Agreement dated December 8, 1999 issued by the
Registrant to 1149336 Ontario, Inc.
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.
</TABLE>
- -------------------------
(1) Filed as an exhibit to Registrant's Registration Statement on Form S-1 (No.
333-44195) or amendments thereto, and incorporated herein by reference.
(2) Filed as an exhibit to Registrant's Registration Statement on Form S-3 (No.
333-58831) or amendments thereto, and incorporated herein by reference.
(3) Filed as an exhibit to Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1998.
(4) Filed as an exhibit to Registrant's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1999.
<PAGE> 1
EXHIBIT 4.3
AMYLIN PHARMACEUTICALS, INC.
COMMON STOCK PURCHASE AGREEMENT
OCTOBER 6, 1999
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
1. AUTHORIZATION OF SALE OF THE SHARES.......................................1
2. AGREEMENT TO SELL AND PURCHASE THE SHARES.................................1
2.1 Sale of the Shares...............................................1
2.2 Separate Agreements..............................................1
2.3 Acceptance of Proposed Purchase of Shares........................1
3. DELIVERY OF THE SHARES AT THE CLOSING.....................................1
4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY..................2
4.1 Organization and Qualification...................................2
4.2 Due Execution, Delivery and Performance of the Agreements........2
4.3 Issuance, Sale and Delivery of the Shares........................2
4.4 Public Information; Financial Statements.........................3
4.5 No Material Change...............................................4
4.6 Eligibility for Form S-3.........................................4
4.7 Litigation.......................................................4
4.8 Governmental Consents............................................4
4.9 Use of Proceeds..................................................4
5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASER................4
5.1 Investment Representations.......................................4
5.2 Requisite Power and Authority....................................5
5.3 Rule 144.........................................................5
5.4 Covenants........................................................5
6. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS....................6
7. REGISTRATION OF THE COMMON STOCK; COMPLIANCE WITH THE SECURITIES ACT......6
7.1 Registration Procedures and Expenses.............................6
7.2 Notification of Changes..........................................7
7.3 Indemnification..................................................7
7.4 Termination of Conditions and Obligations........................9
7.5 Legends.........................................................10
8. BROKER'S FEE.............................................................10
9. NOTICES..................................................................10
10. CHANGES..................................................................11
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
<S> <C> <C>
11. HEADINGS.................................................................11
12. SEVERABILITY.............................................................11
13. GOVERNING LAW............................................................11
14. COUNTERPARTS.............................................................11
15. SUCCESSORS AND ASSIGNS...................................................11
16. FURTHER ACTIONS..........................................................11
17. ENTIRE AGREEMENT.........................................................11
18. PAYMENT OF FEES AND EXPENSES.............................................12
19. CONFIDENTIAL DISCLOSURE AGREEMENT........................................12
</TABLE>
<PAGE> 4
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is made as of October
6, 1999 between AMYLIN PHARMACEUTICALS, INC., a Delaware corporation with its
principal place of business at 9373 Towne Centre Drive, Suite 250, San Diego,
California 92121 (the "Company"), and the purchaser whose name and address are
set forth on the signature page hereof (the "Purchaser").
IN CONSIDERATION of the mutual covenants contained in this Agreement,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Company and the Purchaser agree as follows:
1. AUTHORIZATION OF SALE OF THE SHARES. Subject to the terms and
conditions of this Agreement, the Company has authorized the sale of up to four
million (4,000,000) shares of Common Stock of the Company (the "Shares") at a
price of five dollars ($5.00) per Share.
2. AGREEMENT TO SELL AND PURCHASE THE SHARES.
2.1 SALE OF THE SHARES. At the Closing (as defined in Section 3), the
Company will sell to the Purchaser, and the Purchaser will buy from the Company,
upon the terms and conditions hereinafter set forth, the number of Shares set
forth next to Purchaser's name on the signature page hereof. The Shares shall
have the rights, preferences, privileges and restrictions set forth in the
Company's Amended and Restated Certificate of Incorporation, as amended to date
(the "Certificate").
2.2 SEPARATE AGREEMENTS. The Company proposes to enter the same form of
purchase agreement with certain other investors (the "Other Purchasers") and
expects to complete sales of Shares to them. The Purchaser and the Other
Purchasers are hereinafter sometimes collectively referred to as the
"Purchasers," and this Agreement and the agreements executed by the Other
Purchasers are hereinafter sometimes collectively referred to as the
"Agreements."
2.3 ACCEPTANCE OF PROPOSED PURCHASE OF SHARES. The Company shall have
no obligation hereunder with respect to the Purchaser until the Company shall
execute and deliver to the Purchaser an executed copy of this Agreement. If this
Agreement is not executed and delivered by the Company, this Agreement shall be
of no further force or effect.
3. DELIVERY OF THE SHARES AT THE CLOSING. Subject to Section 2.3 herein,
the completion of the purchase and sale of the Shares to be issued pursuant to
this Agreement (the "Closing") shall occur (i) upon receipt by the Company of
(A) a copy of this Agreement which has been executed on Purchaser's behalf, (B)
a completed Stock Certificate Questionnaire, the form of which is attached
hereto as EXHIBIT A, and (C) the aggregate purchase price for the Shares, or
(ii) following the occurrence of the actions set forth in clause (i) above on
such other date as may be agreed to by the Company and the Purchaser. At the
Closing, the Company shall deliver to the Purchaser or the Purchaser's custodian
bank, in accordance with the Purchaser's delivery instructions, (A) a copy of
this Agreement which has been executed on behalf of the Company, and (B) one or
more stock certificates registered in the name of the Purchaser, or in such
nominee name(s) as designated by the Purchaser, representing the number of
Shares
1.
<PAGE> 5
referred to in Section 2 above. The name(s) in which the stock certificates are
to be issued shall be set forth in the Stock Certificate Questionnaire attached
hereto as EXHIBIT A, as completed by Purchaser. The Company's obligation to
complete the purchase and sale of the Shares and deliver such stock
certificate(s) to the Purchaser at the Closing shall be subject to the following
conditions, any one or more of which may be waived in writing by the Company:
(a) subject to delivery of the Share certificates to the Purchaser or
Purchaser's custodian bank, receipt by the Company of immediately available
funds, by check or wire transfer, in the full amount of the purchase price for
the Shares being purchased hereunder; (b) the accuracy of the representations
and warranties made by the Purchaser herein as of the Closing; and (c) the
fulfillment of those undertakings of the Purchaser to be fulfilled prior to the
Closing. The Purchaser's obligation to accept delivery of such stock
certificate(s) and to pay for the Shares evidenced thereby shall be subject to
the following conditions: (a) the accuracy of the representations and warranties
made by the Company herein as of the Closing; (b) the purchase by Purchasers
other than the Purchaser hereunder, of a minimum of 800,000 Shares; and (c) the
fulfillment of those undertakings of the Company to be fulfilled prior to the
Closing.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY. The Company
hereby represents and warrants to, and covenants with, the Purchaser as of the
date of this Agreement as follows:
4.1 ORGANIZATION AND QUALIFICATION. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite corporate power and authority to conduct its
business as currently conducted and is duly qualified as a foreign corporation
and in good standing in all jurisdictions in which the character of the property
owned or leased or the nature of the business transacted by it makes
qualification necessary (except where the failure to be so qualified would not
have a material adverse effect on the business, properties, financial condition
or results or operations of the Company).
4.2 DUE EXECUTION, DELIVERY AND PERFORMANCE OF THE AGREEMENTS. The
Company's execution, delivery and performance of this Agreement (a) has been
duly authorized by all requisite corporate action by the Company, and (b) will
not violate the Certificate or Bylaws of the Company, each as amended to date,
or violate or result in a breach of or constitute a default under any provision
of any material indenture, mortgage, agreement, contract or other material
instrument to which the Company or any subsidiary is a party or by which the
Company or any subsidiary or any of their respective properties or assets is
bound as of the date hereof. Upon execution and delivery, and assuming the valid
execution hereof by the Purchaser, this Agreement will constitute a valid and
binding obligation of the Company, enforceable in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' and contracting
parties' rights generally and except as enforceability may be subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law) and except as the indemnification agreements
of the Company in Section 7.3 hereof may be legally unenforceable.
4.3 ISSUANCE, SALE AND DELIVERY OF THE SHARES. The authorized capital
stock of the Company consists of one hundred million (100,000,000) shares of
Common Stock, par value one-tenth of one cent ($.001) per share, forty-nine
million nine hundred eighty thousand eight
2.
<PAGE> 6
hundred thirty-eight (49,980,838) shares of which are issued and outstanding as
of September 29, 1999, four million six hundred fifty-five thousand two hundred
forty-six (4,655,246) shares of which are subject to outstanding options as of
September 29, 1999, two million two hundred thirteen thousand five hundred
ninety (2,213,590) shares of which are reserved for future issuance to
employees, directors and consultants pursuant to the Company's stock plans,
including the Company's 1991 Stock Option Plan, the Company's Non-Employee
Directors' Stock Option Plan, the Company's Employee Stock Purchase Plan and the
Company's Directors' Deferred Compensation Plan as of September 29, 1999, and
one million five hundred fifty thousand nine hundred fifty (1,550,950) shares of
which are subject to outstanding warrants, and seven million five hundred
thousand (7,500,000) shares of Preferred Stock, par value one-tenth of one cent
($.001) per share, none of which, prior to the Closing, are issued and
outstanding. All issued and outstanding shares of the Company's Common Stock
have been duly authorized and validly issued, and are fully paid and
nonassessable. When issued, delivered to Purchaser or Purchaser's custodian bank
and paid for by Purchaser in accordance with the terms and conditions of this
Agreement, the Shares to be sold hereunder will be validly issued, fully paid
and nonassessable and will be delivered by the Company free and clear of all
liens, pledges, claims, encumbrances, security interests or other restrictions,
except for restrictions on transfer imposed to ensure compliance with the
Securities Act of 1933, as amended (the "Securities Act").
4.4 PUBLIC INFORMATION; FINANCIAL STATEMENTS. The Company represents
that it has furnished or will furnish, if requested by the Purchaser prior to
the Closing, to Purchaser copies of the Company's: (i) Annual Report on Form
10-K for the year ended December 31, 1998; (ii) Quarterly Reports on Form 10-Q
for the quarters ended March 31, 1999 and June 30, 1999; (iii) Notice of Annual
Meeting and Proxy Statement for the Company's 1999 Annual Meeting of
Stockholders, dated April 15, 1999; (iv) Registration Statement on Form S-3
(Registration No. 333-87033); and (v) press releases since June 30, 1999. All of
the foregoing public documents are collectively referred to herein as the
"Public Documents." The Company has filed in a timely manner all documents that
the Company was required to file with the Securities and Exchange Commission
(the "Commission") under Sections 13, 14(a) and 15(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), during the twelve (12) months
preceding the date of this Agreement. As of their respective filing dates (or,
if amended, when amended), all documents filed by the Company with the
Commission (the "SEC Documents") complied in all material respects with the
requirements of the Exchange Act. As of their respective dates, none of the SEC
Documents contained any untrue statement of material fact or omitted to state a
material fact required (under the federal securities laws in connection with the
sale of the Shares) to be stated therein or necessary to make the statements
made therein, in light of the circumstances under which they were made, not
misleading. The financial statements of the Company included in the SEC
Documents (the "Financial Statements") comply as to form in all material
respects with applicable accounting requirements and with the published rules
and regulations of the SEC with respect thereto. The Financial Statements have
been prepared in accordance with generally accepted accounting principles
consistently applied and fairly present the financial position of the Company at
the dates thereof and the results of its operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to normal,
recurring adjustments).
3.
<PAGE> 7
4.5 NO MATERIAL CHANGE. As of the date hereof, there has been no
material adverse change and no material adverse development in the business,
properties, operations, financial condition, results of operations or prospects
of the Company since June 30, 1999.
4.6 ELIGIBILITY FOR FORM S-3. The Company represents and warrants as of
the date hereof that it meets the requirements for the use of Form S-3 for
registration of the sale by the Purchaser of the Shares, and for the period
during which the Company is required pursuant to Section 7.1(c) herein to keep
the Registration Statement (as defined below) effective, the Company shall file
all reports required to be filed by the Company with the Commission in a timely
manner and take all other necessary action so as to maintain such eligibility
for the use of Form S-3.
4.7 LITIGATION. Except as set forth in the Company's SEC Documents,
there is no pending or, to the Company's knowledge, threatened, action, suit or
other proceeding to which the Company is a party or to which its property or
assets are subject.
4.8 GOVERNMENTAL CONSENTS. No consent, approval, order or authorization
of, or registration, qualification, designation, declaration or filing with, any
federal, state, or local governmental authority on the part of the Company is
required in connection with the consummation of the transactions contemplated by
this Agreement except for (a) compliance with the securities and blue sky laws
in the states and other jurisdictions in which Shares are offered and/or sold,
which compliance will be effected by the Company in accordance with such laws,
and (b) the filing of a registration statement and all amendments thereto with
the Commission as contemplated by Section 7.1 of this Agreement.
4.9 USE OF PROCEEDS. The Company intends to use the proceeds from the
sale of the Shares for working capital purposes.
5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASER.
The Purchaser represents and warrants to, and covenants with, the
Company as follows:
5.1 INVESTMENT REPRESENTATIONS. The Purchaser represents and warrants
to, and covenants with, the Company that: (i) the Purchaser, taking into account
the personnel and resources it can practically bring to bear on the purchase of
the Shares contemplated hereby, is knowledgeable, sophisticated and experienced
in making, and is qualified to make, decisions with respect to investments in
shares presenting an investment decision like that involved in the purchase of
the Shares, including investments in securities issued by the Company, and has
requested, received, reviewed and considered all information it deems relevant
in making an informed decision to purchase the Shares, including all of the
Company's Public Documents; (ii) the Purchaser is acquiring the number of Shares
referred to in Section 2 above for its own account for investment only and with
no present intention of distributing any of such Shares or any arrangement or
understanding with any other persons regarding the distribution of such Shares;
(iii) the Purchaser has completed or caused to be completed the Stock
Certificate Questionnaire attached hereto as EXHIBIT A and the information
provided therein by Purchaser is true and correct to the best knowledge of the
Purchaser as of the date hereof; (iv) the Purchaser has, in connection with its
decision to purchase the number of Shares set forth in Section 2 above, relied
solely upon the information delivered to the Purchaser as described in clause
(i)
4.
<PAGE> 8
above and the representations and warranties of the Company contained herein;
and (v) the Purchaser is an "accredited investor" within the meaning of Rule 501
of Regulation D promulgated under the Securities Act.
5.2 REQUISITE POWER AND AUTHORITY. The Purchaser further represents and
warrants to, and covenants with, the Company that (i) the Purchaser has full
right, power, authority and capacity to enter into this Agreement and to
consummate the transactions contemplated hereby and has taken all necessary
action to authorize the execution, delivery and performance of this Agreement,
and (ii) upon the execution and delivery of this Agreement, this Agreement shall
constitute a valid and binding obligation of the Purchaser enforceable in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' and contracting parties' rights generally and except as
enforceability may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law)
and except as the indemnification agreements of the Purchaser in Section 7.3
hereof may be legally unenforceable.
5.3 RULE 144. Purchaser acknowledges and agrees that the Shares
acquired by Purchaser hereunder must be held indefinitely unless they are
subsequently registered under the Securities Act or an exemption from such
registration is available. Purchaser has been advised or is aware of the
provisions of Rule 144 promulgated under the Securities Act, which permits
limited resale of securities in a private placement subject to the satisfaction
of certain conditions, including, among other things: the availability of
certain current public information about the Company, the resale occurring not
less than one year after a party has purchased and paid for the security to be
sold, the sale being made through an unsolicited "broker's transaction" or in
transactions directly with a market maker (as said term is defined under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) and the number
of shares being sold during any three-month period not exceeding specified
limitations.
5.4 COVENANTS. The Purchaser hereby covenants with the Company as
follows: (i) prior to the effective date of the Registration Statement
referenced in Section 7.1(a) below (the "Effective Date"), the Purchaser shall
not transfer any Shares except in compliance with the Securities Act and the
rules and regulations promulgated thereunder, and any transferee of Shares prior
to the Effective Date shall agree in advance in a writing acceptable to the
Company to be subject to all of the provisions of this Agreement with respect to
the Shares; and (ii) commencing as of the Effective Date, the Purchaser shall
not make any sale of the Shares, if any, without effectively causing the
prospectus delivery requirement under the Securities Act to be satisfied, and
the Purchaser acknowledges and agrees that on and after the Effective Date, such
Shares are not transferable on the books of the Company unless the certificate
submitted to the transfer agent evidencing the Shares is accompanied by a
separate purchaser's certificate: (1) in the form of EXHIBIT B hereto, (2)
executed by the Purchaser or by an officer of, or other authorized person
designated by, the Purchaser, and (3) to the effect that (A) the Shares have
been sold in accordance with the Registration Statement and (B) the requirement
of delivering a current prospectus has been satisfied. The Purchaser
acknowledges that there may occasionally be times when the Company must suspend
the use of the prospectus forming a part of the Registration Statement until
such time as an amendment to the Registration Statement has been filed by the
Company and declared effective by the Securities and Exchange Commission (the
5.
<PAGE> 9
"Commission"), or until such time as the Company has filed an appropriate report
with the Commission pursuant to the Securities Exchange Act of 1934, as amended.
The Purchaser hereby covenants that it will not sell any Shares pursuant to said
prospectus during the period commencing at the time at which the Company gives
the Purchaser notice of the suspension of the use of said prospectus and ending
at the time the Company gives the Purchaser notice that the Purchaser may
thereafter effect sales pursuant to said prospectus. The Purchaser further
covenants to promptly notify the Company of the sale of any of its Shares.
6. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. Notwithstanding any
investigation made by any party to this Agreement, all covenants, agreements,
representations and warranties made by the Company and the Purchaser herein and
in the certificates for the Shares delivered pursuant hereto shall survive the
execution of this Agreement, the delivery to the Purchaser of the Shares being
purchased and the payment therefor.
7. REGISTRATION OF THE COMMON STOCK; COMPLIANCE WITH THE SECURITIES ACT.
7.1 REGISTRATION PROCEDURES AND EXPENSES. The Company shall:
(a) within 120 days following the closing, prepare and file with
the Commission a registration statement on Form S-3 (the "Registration
Statement") in order to register with the Commission the sale of all the Shares
(collectively, the "Registrable Securities") by the Purchasers from time to time
through underwriters, agents or otherwise, in negotiated or market transactions
or through the automated quotation system of Nasdaq or the facilities of any
national securities exchange on which the Company's Common Stock is then traded
or in privately negotiated transactions or pursuant to such other method or
methods of distribution as Purchaser may require. It shall be a condition
precedent to the obligations of the Company to take any action pursuant to this
Section 7.1 that the Purchaser shall furnish to the Company such information
regarding itself, the Registrable Securities to be sold by Purchaser, and the
intended method of disposition of such securities as shall be required to effect
the registration of the Registrable Securities. Notwithstanding the foregoing,
the Company shall not be required to file or effect a registration pursuant to
this Section 7.1 if and for so long as any condition specified in Section 7.1(c)
shall exist and the Company shall have notified the Purchaser's thereof in
accordance with such section;
(b) use reasonable efforts, subject to the receipt of necessary
information from the Purchasers, to cause the Registration Statement to become
effective as soon as commercially practicable following the filing thereof with
the Commission;
(c) prepare and file with the Commission such amendments and
supplements to the Registration Statement and the prospectus used in connection
therewith and take such other actions as may be necessary to keep the
Registration Statement continually effective and not misleading until the
earliest of (A) the first anniversary date of the Closing, or (B) such date as
all of the Shares held by all of the Purchasers have been resold.
Notwithstanding the foregoing, each Purchaser acknowledges that there may
occasionally be times when the Company, in the good faith judgment of its Chief
Executive Officer or its Board of Directors, determines it must suspend such
Purchaser's ability to sell Shares pursuant to the Registration Statement until
such time as an amendment to the Registration Statement has been filed by the
6.
<PAGE> 10
Company and declared effective by the Commission, or until such time as the
Company has filed an appropriate report with the Commission pursuant to the
Securities Exchange Act of 1934, as amended (a "Suspension"). The Purchaser
agrees that, upon receipt of any notice from the Company of a Suspension, the
Purchaser will not sell any Shares pursuant to the Registration Statement until
the Purchaser is advised in writing by the Company that the use of the
applicable prospectus may be resumed;
(d) furnish to the Purchaser with respect to the Registrable
Securities registered under the Registration Statement such number of copies of
prospectuses and preliminary prospectuses in conformity with the requirements of
the Securities Act, in order to facilitate the public sale or other disposition
of all or any of the Registrable Securities by the Purchaser; provided, however,
that the obligation of the Company to deliver copies of prospectuses or
preliminary prospectuses to the Purchaser shall be subject to the receipt by the
Company of reasonable assurances from the Purchaser that the Purchaser will
comply with the applicable provisions of the Securities Act and of such other
securities or blue sky laws as may be applicable in connection with any use of
such prospectuses or preliminary prospectuses;
(e) file documents required of the Company for normal blue sky
clearance in states specified in writing by the Purchaser; provided, however,
that the Company shall not be required to qualify to do business or consent to
service of process in any jurisdiction in which it is not now so qualified or
has not so consented; and
(f) bear all expenses incurred by the Company in connection with
the procedures in paragraphs (a) through (e) of this Section 7.1 and the
registration of the Registrable Securities pursuant to the Registration
Statement.
7.2 NOTIFICATION OF CHANGES. The Purchaser agrees that it will promptly
notify the Company of any changes in the material information set forth in the
Registration Statement regarding the Purchaser or its plan of distribution with
respect to the Registrable Securities, as applicable.
7.3 INDEMNIFICATION.
(a) the term "Selling Stockholder" shall mean the Purchaser and, if
the Purchaser is an institution, the Purchaser's directors or trustees, officers
and employees and each person who controls the Purchaser within the meaning of
the Securities Act;
(b) the term "Registration Statement" shall include any final
prospectus, exhibit, supplement or amendment included in or relating to the
Registration Statement referred to in Section 7.1; and
(c) the term "untrue statement" shall include any untrue statement
or alleged untrue statement, or any omission or alleged omission, to state in
the Registration Statement a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
The Company agrees to indemnify and hold harmless each Selling
Stockholder from and against any losses, claims, damages or liabilities to which
such Selling Stockholder may become
7.
<PAGE> 11
subject (under the Securities Act or otherwise) insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) arise out
of, or are based upon, any untrue statement contained in the Registration
Statement on the Effective Date thereof, or arise out of any failure by the
Company to fulfill any undertaking herein or included in the Registration
Statement, and the Company will reimburse such Selling Stockholder for any
reasonable legal or other expenses reasonably incurred in investigating,
defending or preparing to defend any such action, proceeding or claim; provided,
however, that the Company shall not be liable in any such case to the extent
that such loss, claim, damage or liability arises out of, or is based upon, an
untrue statement made in such Registration Statement in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such Selling Stockholder specifically for use in preparation of the Registration
Statement, or the failure of such Selling Stockholder to comply with the
covenants and agreements contained in Section 5 or 7.2 hereof respecting sale of
the Registrable Securities or any statement or omission in any prospectus that
is corrected in any subsequent prospectus that was delivered to the Purchaser
prior to the pertinent sale or sales by the Purchaser.
The Purchaser agrees to indemnify and hold harmless the Company (and
each person, if any, who controls the Company within the meaning of Section 15
of the Securities Act, each officer of the Company who signs the Registration
Statement and each director of the Company) from and against any losses, claims,
damages or liabilities to which the Company (or any such officer, director or
controlling person) may become subject (under the Securities Act or otherwise),
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon, any failure to
comply with the covenants and agreements contained in Section 5 or 7.2 hereof
respecting sale of the Registrable Securities, or any untrue statement contained
in the Registration Statement on the Effective Date if such untrue statement was
made in reliance upon and in conformity with written information furnished by or
on behalf of the Purchaser specifically for use in preparation of the
Registration Statement, and the Purchaser will reimburse the Company (or such
officer, director or controlling person, as the case may be), for any legal or
other expenses reasonably incurred in investigating, defending or preparing to
defend any such action, proceeding or claim. In no event shall the liability of
the Purchaser hereunder be greater in amount than the dollar amount of the gross
proceeds received by the Purchaser upon the sale of Registrable Securities
giving rise to such indemnification obligation.
Promptly after receipt by any indemnified person of a notice of a claim
or the beginning of any action in respect of which indemnity is to be sought
against an indemnifying person pursuant to this Section 7.3, such indemnified
person shall notify the indemnifying person in writing of such claim or of the
commencement of such action, and, subject to the provisions hereinafter stated,
in case any such action shall be brought against an indemnified person and such
indemnifying person shall have been notified thereof, such indemnifying person
shall be entitled to participate therein, and, to the extent it shall wish, to
assume the defense thereof, with counsel reasonably satisfactory to such
indemnified person. After notice from the indemnifying person to such
indemnified person of its election to assume the defense thereof, such
indemnifying person shall not be liable to such indemnified person for any legal
expenses subsequently incurred by such indemnified person in connection with the
defense thereof; provided, however, that if there exists or shall exist a
conflict of interest that would make it inappropriate, in the opinion of counsel
to the indemnified person, for the same counsel to
8.
<PAGE> 12
represent both the indemnified person and such indemnifying person or any
affiliate or associate thereof, the indemnified person shall be entitled to
retain its own counsel at the expense of such indemnifying person; provided,
however, that no indemnifying person shall be responsible for the fees and
expenses of more than one separate counsel for all indemnified parties.
If the indemnification provided for in this Section 7.3 is held by a
court of competent jurisdiction to be unavailable to an indemnified party with
respect to any losses, claims, damages or liabilities referred to herein, the
indemnifying party, in lieu of indemnifying such indemnified party thereunder,
shall to the extent permitted by applicable law contribute to the amount paid or
payable by such indemnified party as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand and of the indemnified party on the other
in connection with the act or omission that resulted in such loss, claim, damage
or liability, as well as any other relevant equitable considerations. The
relative fault of the indemnifying party and of the indemnified party shall be
determined by a court of law by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission to state a
material fact relates to information supplied by the indemnifying party or by
the indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission;
provided, however, that (i) no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any seller of Shares who was not guilty of such fraudulent
misrepresentation, and (ii) contribution (together with any indemnification or
other obligations under this Agreement) by any seller of Shares shall be limited
in amount to the net amount of proceeds received by such seller from the sale of
such Shares.
The obligations of the Company and Purchaser under this Section 7.3
shall survive completion of any offering of Registrable Securities in a
Registration Statement and the termination of this Agreement. No indemnifying
party, in the defense of any such claim or litigation, shall, except with the
consent of each indemnified party, consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a release from
all liability in respect to such claim or litigation.
7.4 TERMINATION OF CONDITIONS AND OBLIGATIONS. Notwithstanding anything
stated herein to the contrary, the conditions precedent imposed by Section 5 or
this Section 7 upon the transferability of the Shares shall cease and terminate
as to any particular number of the Shares, when such Shares shall have been
effectively registered under the Securities Act and sold or otherwise disposed
of in accordance with the intended method of disposition set forth in the
Registration Statement covering such or at such time as an opinion of counsel
satisfactory to the Company shall have been rendered to the effect that such
conditions are not necessary in order to comply with the Securities Act.
The rights of the Purchaser hereunder, including the right to have the
Company register the Shares pursuant to this Agreement, shall be automatically
assigned by each Purchaser to any transferee of all or any portion of the
Shares, if: (a) the Purchaser agrees in writing with the transferee or assignee
to assign such rights, and a copy of such agreement is furnished to the Company
within a reasonable time after such assignment, (b) the Company is, within a
9.
<PAGE> 13
reasonable time after such transfer or assignment, furnished with written notice
of (i) the name and address of such transferee or assignee, and (ii) the
securities with respect to which such registration rights are being transferred
or assigned, (c) following such transfer or assignment, the further disposition
of such securities by the transferee or assignee is restricted under the
Securities Act or applicable state securities laws, (d) at or before the time
the Company receives the written notice contemplated by clause (ii) of this
sentence, the transferee or assignee agrees in writing for the benefit of the
Company to be bound by all of the provisions contained herein, and (e) such
transfer shall have been made in accordance with the applicable requirements of
this Agreement, including without limitation the provisions of Section 5.4
herein.
7.5 LEGENDS. Each certificate representing Shares shall (unless
otherwise permitted by the provisions of the Agreement) be stamped or otherwise
imprinted with a legend substantially similar to the following (in addition to
any legend required under applicable state securities laws or as provided
elsewhere in this Agreement):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER THE ACT OR, IN THE OPINION OF COUNSEL OR BASED ON
OTHER WRITTEN EVIDENCE IN THE FORM AND SUBSTANCE SATISFACTORY TO THE
ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR
HYPOTHECATION IS IN COMPLIANCE THEREWITH.
8. BROKER'S FEE. Each of the parties hereto hereby represents that on the
basis of any actions and agreements by it, there are no brokers or finders
entitled to compensation in connection with the sale of Shares to the Purchaser.
9. NOTICES. All notices, requests, consents and other communications
hereunder shall be in writing, shall be sent by facsimile or mailed by first
class registered or certified airmail, or nationally recognized overnight
express courier postage prepaid, and shall be deemed given when so sent by
facsimile or mailed and shall be delivered as follows:
(a) if to the Company, to:
Amylin Pharmaceuticals, Inc.
9373 Towne Centre Drive, Suite 250
San Diego, CA 92121
Attention: Chief Executive Officer
10.
<PAGE> 14
with a copy so mailed to:
Cooley Godward LLP
4365 Executive Drive, Suite 1100
San Diego, California 92121
Attention: Thomas A. Coll, Esq.
or to such other person at such other place as the Company shall designate to
the Purchaser in writing; and
(b) if to the Purchaser, at its address as set forth on the
signature page of this Agreement, or at such other address or addresses as may
have been furnished to the Company in writing.
10. CHANGES. Neither this Agreement nor any provision hereof may be
changed, waived, discharged, terminated, modified or amended except pursuant to
an instrument in writing signed by the Company and the Purchaser.
11. HEADINGS. The headings of the various sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed to be
part of this Agreement.
12. SEVERABILITY. In case any provision contained in this Agreement should
be invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way
be affected or impaired thereby.
13. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California as applied to contracts
entered into and performed entirely in California by California residents,
without regard to conflicts of law principles.
14. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument.
15. SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided herein,
this Agreement and the provisions hereof shall inure to the benefit of, and be
binding upon, the successors, assigns, heirs, executors and administrators of
each of the parties hereto.
16. FURTHER ACTIONS. Each party shall do and perform, or cause to be done
and performed, all such further acts and things, and shall execute and deliver
all such other agreements, certificates, instruments and documents, as the other
party may reasonably request in transactions of this nature in order to carry
out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.
17. ENTIRE AGREEMENT. This Agreement and other documents delivered pursuant
hereto, including the exhibits, constitute the full and entire understanding and
agreement between the parties with regard to the subjects hereof and thereof.
11.
<PAGE> 15
18. PAYMENT OF FEES AND EXPENSES. Except as expressly set forth herein,
each of the Company and the Purchaser shall bear its own expenses and legal fees
incurred on its behalf with respect to this Agreement and the transactions
contemplated hereby.
19. CONFIDENTIAL DISCLOSURE AGREEMENT. Notwithstanding any provision of
this Agreement to the contrary, any confidential disclosure agreement previously
executed by the Company and the Purchaser in connection with the transactions
contemplated by this Agreement shall remain in full force and effect in
accordance with its terms following the execution of this Agreement and the
consummation of the transactions contemplated hereby.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
12.
<PAGE> 16
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
AMYLIN PHARMACEUTICALS, INC.
By:
--------------------------------
Nancy K. Dahl, Esq.
Vice President and
General Counsel
PURCHASER
By: Number of Shares:
---------------------------- --------------------------
Name:
--------------------------
Title:
-------------------------
Notices to be sent to:
- -------------------------------
- -------------------------------
- -------------------------------
LIST OF ATTACHMENTS:
EXHIBIT A - STOCK CERTIFICATE QUESTIONNAIRE
EXHIBIT B - PURCHASER'S CERTIFICATE
13.
<PAGE> 17
EXHIBIT A
AMYLIN PHARMACEUTICALS, INC.
STOCK CERTIFICATE QUESTIONNAIRE
Pursuant to Section 3 of the Stock Purchase Agreement, please provide
us with the following information:
1. The exact name that your Shares are to be registered ____________________
in (this is the name that will appear on your stock
certificate(s)). You may use a nominee name
if appropriate:
2. The relationship between the Purchaser of the Shares ____________________
and the Registered Holder listed in response to
item 1 above:
3. The mailing address of the Registered Holder listed ____________________
in response to item 1 above:
4. The Social Security Number or Tax Identification ____________________
Number of the Registered Holder listed in the
response to item 1 above:
<PAGE> 18
EXHIBIT B
Attention:
PURCHASER'S CERTIFICATE OF SUBSEQUENT SALE
The undersigned, an officer of, or other person duly authorized by
________________________________ hereby certificates that he/she [said
institution] is the Purchaser of the shares evidenced by the attached
certificate, and as such, sold such shares on ____________________________ in
accordance with registration statement number
__________________________________________________ and the requirement of
delivering a current prospectus and current annual and quarterly reports (Forms
10-K and 10-Q) by the Company has been complied with in connection with such
sale.
Print or Type:
Name of Purchaser (Individual or Institution):_________________________________
Name of Individual representing Purchaser
(if an Institution) _________________________________
Title of Individual representing Purchaser
(if an Institution) _________________________________
Signature by:
Individual Purchaser or Individual
Representing Purchaser: _________________________________
<PAGE> 19
SCHEDULE OF PURCHASERS
<TABLE>
<CAPTION>
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PURCHASER SHARES PURCHASED
---------------------------------------------------------------------------
<S> <C>
Allen Anderson 2,400,000
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Domain Partners IV, L.P. 195,320
---------------------------------------------------------------------------
DP IV Associates, L.P. 4,680
---------------------------------------------------------------------------
Donald H. Rumsfeld 20,000
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Rumsfeld Family Trust 20,000
---------------------------------------------------------------------------
VMN Associates 20,000
---------------------------------------------------------------------------
Kingsbury Capital Partners, L.P. II 70,000
---------------------------------------------------------------------------
Kingsbury Capital Partners, L.P. III 110,000
---------------------------------------------------------------------------
Timothy J. and Cynthia K. Wollaeger Trust 20,000
---------------------------------------------------------------------------
The Greene Children's Trust 30,000
---------------------------------------------------------------------------
The Greene Family Trust 50,000
---------------------------------------------------------------------------
Judith E. and Joseph C. Cook, Jr. 30,000
---------------------------------------------------------------------------
Farview Management Co., L.P. 30,000
---------------------------------------------------------------------------
Deerfield Partners L.P. 492,000
---------------------------------------------------------------------------
Deerfield International Limited 108,000
---------------------------------------------------------------------------
Jeffrey R. Swarz 5,000
---------------------------------------------------------------------------
Terry C. Vance and Anne C. Vance as Joint Tenants in 15,000
Common with Rights of Survivorship
---------------------------------------------------------------------------
Ronald M. Nordmann 20,000
---------------------------------------------------------------------------
Peter Moses Hecht 20,000
---------------------------------------------------------------------------
Ginger L. Graham 40,000
---------------------------------------------------------------------------
TOTAL SHARES PURCHASED 3,700,000
---------------------------------------------------------------------------
</TABLE>
<PAGE> 1
EXHIBIT 4.4
WARRANT
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS. THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT
BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THESE SECURITIES UNDER THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES LAWS, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
REGISTRATION IS NOT REQUIRED AND THAT AN APPLICABLE EXEMPTION IS AVAILABLE.
WARRANT TO PURCHASE
10,000 SHARES OF COMMON STOCK OF
AMYLIN PHARMACEUTICALS, INC.
(Void after December 7, 2002)
This certifies that 1149336 Ontario Inc., a corporation formed under
the laws of the province of Ontario, Canada, or its permitted assigns (the
"Holder"), for value received, is entitled to purchase from AMYLIN
PHARMACEUTICALS, INC., a Delaware corporation (the "Company"), having a place of
business at 9373 Towne Centre Drive, San Diego, California 92121, Ten Thousand
(10,000) fully paid and nonassessable shares of the Company's Common Stock
("Stock") for cash at a price of $3.313 per share (the "Stock Purchase Price")
at any time or from time to time on or after December 8, 1999 and up to and
including 5:00 p.m. (Pacific time) on December 7, 2002, such day being referred
to herein as the "Expiration Date", upon surrender to the Company at its
principal office (or at such other location as the Company may advise the Holder
in writing) of this Warrant properly endorsed with the Form of Subscription
attached hereto as Addendum A duly filled in and signed and upon payment in cash
or by check of the aggregate Stock Purchase Price for the number of shares for
which this Warrant is being exercised determined in accordance with the
provisions hereof. The Stock Purchase Price and the number of shares purchasable
hereunder are subject to adjustment as provided in Section 3 of this Warrant.
This Warrant is subject to the following terms and conditions:
1. EXERCISE; ISSUANCE OF CERTIFICATES; PAYMENT FOR SHARES.
1.1 GENERAL. This Warrant is exercisable at the option of the
holder of record hereof at any time or from time to time on or after January
___, 2000 and up to and including the Expiration Date for all or any part of the
shares of Stock (but not for a fraction of a share) which may be purchased
hereunder. The Company agrees that the shares of Stock purchased under this
Warrant shall be and are deemed to be issued to the Holder hereof as the record
owner of such shares as of the close of business on the date on which this
Warrant shall have been surrendered, properly endorsed, the completed, executed
Form of Subscription delivered and payment made for such shares. Certificates
for the shares of Stock so purchased, together with any other securities or
property to which the Holder hereof is entitled upon such exercise, shall be
<PAGE> 2
delivered to the Holder hereof by the Company at the Company's expense within a
reasonable time after the rights represented by this Warrant have been so
exercised. In case of a purchase of less than all the shares which may be
purchased under this Warrant, the Company shall cancel this Warrant and execute
and deliver a new Warrant or Warrants of like tenor for the balance of the
shares purchasable under the Warrant surrendered upon such purchase to the
Holder hereof within a reasonable time. Each stock certificate so delivered
shall be in such denominations of Stock as may be requested by the Holder hereof
and shall be registered in the name of such Holder.
Notwithstanding anything to the contrary contained in this Section 1,
the Holder shall either (i) exercise this Warrant in full by paying to the
Company, by cash or check, an amount equal to the aggregate Stock Purchase Price
of the shares being purchased, or (ii) convert this Warrant into shares equal to
the value (as determined below) of this Warrant by surrender of this Warrant a
the principal office of the Company together with the Form of Subscription in
which event the Company shall issue to the Holder a number of shares of Common
Stock computed using the following formula:
X = Y (A-B)
-----------
A
Where: X = the number of shares of Common Stock to be issued to the
Holder. Y = the number of shares of Common Stock under this
Warrant. A = the fair market value of one share of Common
Stock (at the date of such surrender). B = the Stock Purchase
Price (as adjusted to the date of such surrender).
As used herein, current fair market value of Common Stock shall mean
with respect to each share of Common Stock the closing price of the Company's
Common Stock as quoted on the Nasdaq Stock Market, or, if on any day the Common
Stock is not so listed, the average of the highest bid and the lowest asked
price on such day in the domestic over-the-counter market as reported by the
National Quotation Bureau, Incorporated, or any similar successor organization,
in each case averaged over a period of 15 trading days consisting of the day as
of which the current fair market value of Common Stock is being determined and
the 14 consecutive trading days prior to such day. If at any time the Common
Stock is not listed on any securities exchange or quoted in the over-the-counter
market, the current fair market value of Common Stock shall be used for the
calculation of A above, and shall be determined in good faith by the Board of
Directors of the Company.
2. SHARES TO BE FULLY PAID; RESERVATION OF SHARES. The Company
covenants and agrees that all shares of Stock which may be issued upon the
exercise of the rights represented by this Warrant will, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable and free from all
preemptive rights of any shareholder and free of all taxes, liens and charges
with respect to the issue thereof. The Company further covenants and agrees that
during the period within which the rights represented by this Warrant may be
exercised, the Company will at all times have authorized and reserved, for the
purpose of issue or transfer upon exercise of the subscription rights evidenced
by this War-rant, a sufficient number of shares of authorized but unissued
Stock, or other securities and property, when and as required to provide for the
exercise
<PAGE> 3
of the rights represented by this Warrant. The Company will take all such action
as may be necessary to assure that such shares of Stock may be issued as
provided herein without violation of any applicable law or regulation, or of any
requirements of any domestic securities exchange upon which the Stock may be
listed; provided, however, that the Company shall not be required to effect a
registration under Federal or State securities laws with respect to such
exercise. The Company will not take any action which would result in any
adjustment of the Stock Purchase Price (as defined in Section 3 hereof) if the
total number of shares of Stock issuable after such action upon exercise of all
outstanding warrants, together with all shares of Stock then issuable upon
exercise of all options and upon the conversion of all convertible securities
then outstanding, would exceed the total number of shares of Stock then
authorized by the Company's Certificate of Incorporation.
3. ADJUSTMENT OF STOCK PURCHASE PRICE AND NUMBER OF SHARES. The Stock
Purchase Price and the number of shares purchasable upon the exercise of this
Warrant shall be subject to adjustment from time to time upon the occurrence of
certain events described in this Section 3. Upon each adjustment of the Stock
Purchase Price, the Holder of this Warrant shall thereafter be entitled to
purchase, at the Stock Purchase Price resulting from such adjustment, the number
of shares obtained by multiplying the Stock Purchase Price in effect immediately
prior to such adjustment by the number of shares purchasable pursuant hereto
immediately prior to such adjustment, and dividing the product thereof by the
Stock Purchase Price resulting from such adjustment.
3.1 SUBDIVISION OR COMBINATION OF STOCK. In case the Company shall
at any time subdivide its outstanding shares of Stock into a greater number of
shares, the Stock Purchase Price in effect immediately prior to such subdivision
shall be proportionately reduced, and conversely, in case the outstanding shares
of Stock of the Company shall be combined into a smaller number of shares, the
Stock Purchase Price in effect immediately prior to such combination shall be
proportionately increased.
3.2 DIVIDENDS IN STOCK, OTHER STOCK, PROPERTY, RECLASSIFICATION. If
at any time or from time to time all holders of shares of the Company's Common
Stock (or any shares of stock or other securities at the time receivable upon
the exercise of this Warrant) shall have received or become entitled to receive,
without payment therefor,
(A) Stock or any shares of stock or other securities which are
at any time directly or indirectly convertible into or exchangeable for Stock,
or any rights or options to subscribe for, purchase or otherwise acquire any of
the foregoing by way of dividend or other distribution, or
(B) Stock or additional stock or other securities or property
(including cash) by way of spin-off, split-up, reclassification, combination of
shares or similar corporate rearrangement, (other than shares of Stock issued as
a stock split, adjustments in respect of which shall be covered by the terms of
Section 3.1 above), then and in each such case, the Holder hereof shall, upon
the exercise of this Warrant, be entitled to receive, in addition to the number
of shares of Stock receivable thereupon, and without payment of any additional
consideration therefor, the amount of stock and other securities and property
which such Holder would hold on the date of such exercise had he been the holder
of record of such Stock as of the
<PAGE> 4
date on which holders of Stock received or became entitled to receive such
shares or all other additional stock and other securities and property.
3.3 REORGANIZATION, RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE.
If any capital reorganization of the capital stock of the Company, or any
consolidation or merger of the Company with another corporation, or the sale of
all or substantially all of its assets to another corporation shall be effected
in such a way that holders of Stock shall be entitled to receive stock,
securities, or other assets or property, then, as a condition of such
reorganization, reclassification, consolidation, merger or sale, lawful and
adequate provisions shall be made whereby the Holder hereof shall thereafter
have the right to purchase and receive (in lieu of the shares of the Stock of
the Company immediately theretofore purchasable and receivable upon the exercise
of the rights represented hereby) such shares of stock, securities or other
assets or property as may be issued or payable with respect to or in exchange
for a number of outstanding shares of such Stock equal to the number of shares
of such stock immediately theretofore purchasable and receivable upon the
exercise of the rights represented hereby. In any reorganization described
above, appropriate provision shall be made with respect to the rights and
interests of the Holder of this Warrant to the end that the provisions hereof
(including, without limitation, provisions for adjustments of the Stock Purchase
Price and of the number of shares purchasable and receivable upon the exercise
of this Warrant) shall thereafter be applicable, as nearly as may be, in
relation to any shares of stock, securities or assets thereafter deliverable
upon the exercise hereof.
3.4 NOTICE OF ADJUSTMENT. Upon any adjustment of the Stock Purchase
Price or any increase or decrease in the number of shares purchasable upon the
exercise of this Warrant, the Company shall give written notice thereof, by
first class mail, postage prepaid, addressed to the registered Holder of this
Warrant at the address of such Holder as shown on the books of the Company. The
notice shall be signed by the Company's chief financial officer and shall state
the Stock Purchase Price resulting from such adjustment and the increase or
decrease, if any, in the number of shares purchasable at such price upon the
exercise of this Warrant, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based.
3.5 OTHER NOTICES. If at any time:
(1) the Company shall declare any cash dividend upon its Common
Stock;
(2) the Company shall declare any dividend upon its Common Stock
payable in stock or make any special dividend or other distribution to the
holders of its Common Stock;
(3) the Company shall offer for subscription pro rata to the
holders of its Common Stock any additional shares of stock of any class or other
rights;
(4) there shall be any capital reorganization or
reclassification of the capital stock of the Company; or consolidation or merger
of the Company with, or sale of all or substantially all of its assets to,
another corporation; or
<PAGE> 5
(5) there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Company;
(6) then, in any one or more of said cases, the Company shall
give, by first class mail, postage prepaid, addressed to the Holder of this
Warrant at the address of such Holder as shown on the books of the Company, (a)
at least 20 days' prior written notice of the date on which the books of the
Company shall close or a record shall be taken for such dividend, distribution
or subscription rights or for determining rights to vote in respect of any such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding-up, and (b) in the case of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation,
winding-up or public offering, at least 20 days' prior written notice of the
date when the same shall take place; provided, however, that the Holder shall
make a best efforts attempt to respond to such notice as early as possible after
the receipt thereof. Any notice given in accordance with the foregoing clause
(a) shall also specify, in the case of any such dividend, distribution or
subscription rights, the date on which the holders of Common Stock shall be
entitled thereto. Any notice given in accordance with the foregoing clause (b)
shall also specify the date on which the holders of Stock shall be entitled to
exchange their Stock for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation, winding-up, con-version or public offering, as the case may be.
4. ISSUE TAX. The issuance of certificates for shares of Stock upon the
exercise of the Warrant shall be made without charge to the Holder of the
Warrant for any issue tax (other than any applicable income taxes) in respect
thereof; provided, however, that the Company shall not be required to pay any
tax which may be payable in respect of any transfer involved in the issuance and
delivery of any certificate in a name other than that of the then Holder of the
Warrant being exercised.
5. CLOSING OF BOOKS. The Company will at no time close its transfer
books against the transfer of any warrant or of any shares of Stock issued or
issuable upon the exercise of any warrant in any manner which interferes with
the timely exercise of this Warrant.
6. NO VOTING OR DIVIDEND RIGHTS; LIMITATION OF LIABILITY. Nothing
contained in this Warrant shall be construed as conferring upon the Holder
hereof the right to vote or to consent or to receive notice as a shareholder of
the Company or any other matters or any rights whatsoever as a shareholder of
the Company. No dividends or interest shall be payable or accrued in respect of
this Warrant or the interest represented hereby or the shares purchasable
hereunder until, and only to the extent that, this Warrant shall have been
exercised. No provisions hereof, in the absence of affirmative action by the
Holder to purchase shares of Stock, and no mere enumeration herein of the rights
or privileges of the Holder hereof, shall give rise to any liability of such
Holder for the Stock Purchase Price or as a shareholder of the Company, whether
such liability is asserted by the Company or by its creditors.
7. WARRANTS TRANSFERABLE. Subject to compliance with applicable federal
and state securities laws, this Warrant and all rights hereunder are
transferable, in whole, without charge to the Holder hereof (except for transfer
taxes), upon surrender of this Warrant properly endorsed. Each taker and holder
of this Warrant, by taking or holding the same, consents and agrees that
<PAGE> 6
this Warrant, when endorsed in blank, shall be deemed negotiable, and that the
Holder hereof, when this Warrant shall have been so endorsed, may be treated by
the Company, at the Company's option, and all other persons dealing with this
Warrant as the absolute owner hereof for any purpose and as the person entitled
to exercise the rights represented by this Warrant, or to the transfer hereof on
the books of the Company any notice to the contrary notwithstanding; but until
such transfer on such books, the Company may treat the registered owner hereof
as the owner for all purposes.
8. MODIFICATION AND WAIVER. This Warrant and any provision hereof may
be changed, waived, discharged or terminated only by an instrument in writing
signed by the Company and the Holder.
9. NOTICES. Any notice, request or other document required or permitted
to be given or delivered to the Holder hereof or the Company shall be delivered
or shall be sent by certified mail, postage prepaid, to each such holder at its
address as shown on the books of the Company or to the Company at the address
indicated therefor in the first paragraph of this Warrant or such other address
as either may from time to time provide to the other.
10. BINDING EFFECT ON SUCCESSORS. This Warrant shall be binding upon
any corporation succeeding the Company by merger, consolidation or acquisition
of all or substantially all of the Company's assets. All of the obligations of
the Company relating to the Stock issuable upon the exercise of this Warrant
shall survive the exercise and termination of this Warrant. All of the covenants
and agreements of the Company shall inure to the benefit of the successors and
assigns of the Holder hereof.
11. DESCRIPTIVE HEADINGS AND GOVERNING LAW. The description headings of
the several sections and paragraphs of this Warrant are inserted for convenience
only and do not constitute a part of this Warrant. This Warrant shall be
construed and enforced in accordance with, and the rights of the parties shall
be governed by, the laws of the State of Delaware without regard to conflict of
laws principles.
12. LOST WARRANTS. The Company represents and warrants to the Holder
hereof that upon receipt of evidence reasonably satisfactory to the Company of
the loss, theft, destruction, or mutilation of this Warrant and, in the case of
any such loss, theft or destruction, upon receipt of an indemnity reasonably
satisfactory to the Company, or in the case of any such mutilation upon
surrender and cancellation of such Warrant, the Company, at its expense, will
make and deliver a new Warrant, of like tenor, in lieu of the lost, stolen,
destroyed or mutilated Warrant.
13. FRACTIONAL SHARES. No fractional shares shall be issued upon
exercise of this Warrant. The Company shall, in lieu of issuing any fractional
share, pay the holder entitled to such fraction a sum in cash equal to such
fraction multiplied by the then effective Stock Purchase Price.
<PAGE> 7
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its officers, thereunto duly authorized this 8th day of December,
1999.
AMYLIN PHARMACEUTICALS, INC.,
a Delaware corporation.
By:
--------------------------------------
Joseph C. Cook, Jr.
Chief Executive Officer and
Chairman of the Board of Directors
<PAGE> 8
EXHIBIT A
SUBSCRIPTION FORM
Date: _________________, 19___
AMYLIN PHARMACEUTICALS, INC.
9373 Towne Centre Drive
San Diego, California 92121
Attn: Chief Executive Officer
Ladies and Gentlemen:
The undersigned hereby elects to exercise the warrant issued to it by AMYLIN
PHARMACEUTICALS, INC. (the "Company") and dated ________________, 2000 (the
"Warrant") and to purchase thereunder __________________________________ shares
of the Common Stock of the Company (the "Shares") at a purchase price of
________________ ($______) per Share or an aggregate purchase price of
__________________ ________________ Dollars ($__________) (the "Purchase
Price").
Pursuant to the terms of the Warrant the undersigned has delivered the
Purchase Price herewith in full in cash or by certified check or wire transfer.
The undersigned also makes the representations set forth on Exhibit B attached
to the Warrant.
Very truly yours,
1149336 ONTARIO, INC.
By:
--------------------------
Title:
-----------------------
A-1.
<PAGE> 9
EXHIBIT B
TO WARRANT CERTIFICATE
THIS AGREEMENT MUST BE COMPLETED, SIGNED AND RETURNED TO AMYLIN PHARMACEUTICALS,
INC. ALONG WITH THE SUBSCRIPTION FORM BEFORE THE STOCK ISSUABLE UPON EXERCISE OF
THE WARRANT CERTIFICATE DATED DECEMBER 8, 1999 WILL BE ISSUED.
_____________________, 20__
AMYLIN PHARMACEUTICALS, INC.
9373 Towne Centre Drive
San Diego, California 92121
Attn: Chief Executive Officer
The undersigned, 1149336 Ontario, Inc., a corporation formed under the laws of
the province of Ontario, Canada ("Purchaser"), intends to acquire up to
______________ shares of the Common Stock (the "Stock") of AMYLIN
PHARMACEUTICALS, INC. (the "Company") from the Company pursuant to the exercise
of a certain Warrant to purchase Stock held by Purchaser. The Stock will be
issued to Purchaser in a transaction not involving a public offering and
pursuant to an exemption from registration under the Securities Act of 1933, as
amended (the "1933 Act") and applicable state securities laws. In connection
with such purchase and in order to comply with the exemptions from registration
relied upon by the Company, Purchaser represents, warrants and agrees as
follows:
Purchaser is acquiring the Stock for its own account, to hold for
investment, and Purchaser shall not make any sale, transfer or other disposition
of the Stock in violation of the 1933 Act or the General Rules and Regulations
promulgated thereunder by the Securities and Exchange Commission (the "SEC") or
in violation of any applicable state securities law.
Purchaser has been advised that the Stock has not been registered under
the 1933 Act or state securities laws on the ground that this transaction is
exempt from registration, and that reliance by the Company on such exemptions is
predicated in part on Purchaser's representations set forth in this letter.
Purchaser has been informed that under the 1933 Act, the Stock must be
held indefinitely unless it is subsequently registered under the 1933 Act or
unless an exemption from such registration (such as Rule 144) is available with
respect to any proposed transfer or disposition by Purchaser of the Stock.
Purchaser further agrees that the Company may refuse to permit Purchaser to
sell, transfer or dispose of the Stock (except as permitted under Rule 144)
unless there is in effect a registration statement under the 1933 Act and any
applicable state securities
B-1.
<PAGE> 10
Warrant Agreement
1149336 ONTARIO, INC.
laws covering such transfer, or unless Purchaser furnishes an opinion of counsel
reasonably satisfactory to counsel for the Company, to the effect that such
registration is not required.
Purchaser also understands and agrees that there will be placed on the
certificate(s) for the Stock, or any substitutions therefor, a legend stating in
substance:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Securities Act"), or any state securities laws. These shares have been
acquired for investment and may not be sold or otherwise transferred in
the absence of an effective registration statement for these shares
under the Securities Act and applicable state securities laws, or an
opinion of counsel satisfactory to the Company that registration is not
required and that an applicable exemption is available."
Purchaser has carefully read this letter and has discussed its
requirements and other applicable limitations upon Purchaser's resale of the
Stock with Purchaser's counsel.
Very truly yours,
Name of Purchaser:
1149336 ONTARIO, INC.
By:
------------------------------
Title:
---------------------------
B-2.
<PAGE> 1
EXHIBIT 5.1
[COOLEY GODWARD LLP LETTERHEAD]
February 4, 2000
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, as amended, (the
"Registration Statement") including a related prospectus filed with the
Registration Statement (the "Prospectus"), covering the registration of up to
16,294,009 shares of the Common Stock, $.001 par value, of the Company on behalf
of certain selling stockholders (the "Shares") and 10,000 shares of the Common
Stock, $.001 par value, of the Company (the "Warrant Shares") which are issuable
pursuant to that certain Warrant dated December 8, 1999 between the Company and
1149336 Ontario Inc. (the "Warrant") on behalf of 1149336 Ontario Inc.
In connection with this opinion, we have examined the Registration Statement and
related Prospectus, the Warrant, 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 to be sold by the selling stockholders are validly issued, fully
paid and nonassessable and that the Warrant Shares, when issued and paid for
upon exercise of the Warrant, in accordance with its terms, will be 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 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), in Amendment No. 2 to the Registration Statement (Form S-3
No. 333-87033) and related prospectus of Amylin Pharmaceuticals, Inc. for the
registration of 16,304,009 shares of its common stock.
San Diego, California
February 3, 2000
