<PAGE>
As filed with the Securities and Exchange Commission on December 18, 1997
Registration No. 333-37955
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
________________
DURA PHARMACEUTICALS, INC.
(Exact name of Registrant as specified in its charter)
Delaware 5122 95-3645543
(State or other jurisdiction (Primary Standard (I.R.S. Employer
of incorporation Industrial Classification Identification No.)
or organization) Code Number)
7475 LUSK BOULEVARD, SAN DIEGO, CALIFORNIA 92121
(619) 457-2553
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
Cam L. Garner
CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
DURA PHARMACEUTICALS, INC.
7475 Lusk Boulevard, San Diego, California 92121
(619) 457-2553
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
________________
Copies to:
Faye H. Russell, Esq.
BROBECK, PHLEGER & HARRISON LLP
550 West "C" Street, Suite 1300
San Diego, California 92101
(619) 234-1966
________________
Approximate date of commencement of proposed sale to the public:
As soon as practicable after this Registration Statement becomes effective.
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
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Title of Securities Proposed Maximum Amount of
to be Registered Aggregate Offering Price(1) Registration Fee(1)
- -------------------------------------------------------------------------------
Common Stock, par value
$0.001 per share $45,700,000 $13,849
Common Stock, par value
$0.001 per share,
issuable upon exercise
of outstanding Series S
Warrants $96,039,871 $28,332
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Total Registration Fee ...........................................$42,181(2)
(1) Estimated solely for the purpose of computing the amount of the
registration fee in accordance with Rule 457(c) and Rule 457(o) under the
Securities Act of 1933.
(2) $13,849 of the above total registration fee was paid as of October 15,
1997, the date of the original filing.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THE REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION ACTING PURSUANT TO SAID SECTION 8(a)
MAY DETERMINE.
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PROSPECTUS
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3,136,603 Shares
DURA PHARMACEUTICALS, INC.
Common Stock
par value $0.001 per share
________________
This Prospectus relates to the public offering, which is not being
underwritten, of 3,136,603 shares (the "Shares") of the Common Stock, par
value $0.001 per share (the "Common Stock"), of Dura Pharmaceuticals, Inc.
("Dura" or the "Company") which may be offered by certain stockholders of the
Company (the "Selling Stockholders"). Of these 3,136,606 shares, 896,606
shares were issued by Dura (the "Option Shares") in connection with the
exercise by Dura of its exclusive option (the "Purchase Option") to purchase
all outstanding shares of the Callable Common Stock, par value $0.001 per
share (the "Callable Common Stock"), of Spiros Development Corporation, a
separately-owned Delaware corporation ("Spiros Corp."). An additional
2,239,997 shares (the "Warrant Shares") are issuable by Dura upon the
exercise of outstanding Series S Warrants of the Company ("Series S
Warrants"), originally issued by Dura in connection with a private placement
on December 29, 1995. The Series S Warrants were issued pursuant to an
exemption from the registration requirements of the Securities Act of 1933,
as amended (the "Securities Act") provided by Section 4(2) thereof. The
Warrant Shares are being registered by the Company pursuant to registration
rights obligations with the respective Selling Stockholders. The Warrant
Shares may be offered by current holders of the Series S Warrants who
subsequently exercise their warrant to purchase Warrant Shares. See "Selling
Stockholders."
The sale of the Shares may be effected by the Selling Stockholders from time
to time in transactions on the Nasdaq National Market ("Nasdaq"), in the over-
the-counter market, in negotiated transactions or a combination of such methods
of sale, at fixed prices which may be changed, at market prices prevailing at
the time of sale, at prices related to prevailing market prices or at
negotiated prices. The Selling Stockholders may effect such transactions by
selling the Shares to or through broker-dealers, and such broker-dealers may
receive compensation in the form of discounts, concessions or commissions from
the Selling Stockholders and/or the purchasers of the Shares for whom such
broker-dealers may act as agents or to whom they may sell as principals or both
(which compensation as to a particular broker-dealer might be in excess of
customary commissions). See "Plan of Distribution."
None of the proceeds from the sale of the Shares by the Selling Stockholders
will be received by the Company. The Company has agreed, among other things,
to bear certain expenses (other than underwriting discounts and commissions and
brokerage commissions and fees) in connection with the registration and sale of
the Shares being offered by the Selling Stockholders. See "Selling
Stockholders."
Dura Common Stock is traded on Nasdaq under the symbol "DURA." On
December 17, 1997, the last sale price of Dura Common Stock as reported on
Nasdaq was $43.63 per share.
The Selling Stockholders and any broker-dealers, agents or underwriters that
participate with the Selling Stockholders in the distribution of Shares may be
deemed to be "underwriters" within the meaning of Section 2(11) of the
Securities Act of 1933, as amended (the "Securities Act"), and any commissions
received by them and any profit on the resale of the Shares purchased by them
may be deemed to be underwriting commissions or discounts under the Securities
Act. See "Plan of Distribution."
________________
THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" ON PAGES 4 TO 9 FOR A DISCUSSION
OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS
OF THE COMMON STOCK OFFERED HEREBY.
________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
_______________
The date of this Prospectus is December 18, 1997.
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS IN CONNECTION
WITH THE OFFERING MADE HEREBY, AND IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY, ANY SELLING STOCKHOLDER OR BY ANY OTHER PERSON. NEITHER THE DELIVERY
OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT INFORMATION HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE HEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL OR A SOLICITATION OF AN OFFER TO BUY THE SHARES TO ANY PERSON OR BY ANYONE
IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION MAY NOT LAWFULLY BE
MADE.
AVAILABLE INFORMATION
The Company is subject to the informational reporting requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files annual and quarterly reports, proxy statements and
other information with the Securities and Exchange Commission (the
"Commission"). Such reports, proxy statements and other information can be
inspected and copied at the Commission's Public Reference Section, Room 1024,
450 Fifth Street, N.W., Washington, D.C. 20549; at the Commission's regional
offices at 7 World Trade Center, 13th Floor, New York, New York 10048; and at
Citicorp Center, 500 West Madison Street, Room 1400, Chicago, Illinois
60661-2511. Copies of such materials can also be obtained at prescribed
rates at the Public Reference Section of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549. The Commission also maintains a World Wide Web
site on the Internet at http://www.sec.gov that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the Commission. The Common Stock of the Company is
traded on Nasdaq, and information concerning the Company can be inspected at
the offices of Nasdaq Operations, 1745 K Street, N.W., Washington, D.C.
20006.
INFORMATION INCORPORATED BY REFERENCE
The following documents filed by the Company with the Commission are
hereby incorporated by reference in this Prospectus: (1) the Annual Report of
the Company on Form 10-K, as amended, for the fiscal year ended December 31,
1996; (2) the Quarterly Reports of the Company on Form 10-Q for the quarters
ended March 31, 1997, June 30, 1997 and September 30, 1997; (3) the Proxy
Statement of the Company dated April 16, 1997 in connection with the Annual
Meeting of Stockholders held on May 28, 1997; (4) the Current Reports of the
Company on Form 8-K filed on May 22, 1997, October 10, 1997, as amended,
October 24, 1997 and December 1, 1997; and (5) the description of the
Company's Common Stock contained in its Registration Statement on Form 8-A
filed on July 22, 1997.
All reports and other documents subsequently filed by the Company pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of
this Prospectus and prior to the termination of this offering shall be deemed
to be incorporated by reference herein and to be a part hereof from the date of
filing of such reports and documents. Any statement incorporated herein shall
be deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon written or oral request of such person, a copy of
any or all of the foregoing documents incorporated herein by reference (other
than exhibits to such documents, unless such exhibits are specifically
incorporated by reference into any such document). Requests for such documents
should be submitted in writing to Mitchell R. Woodbury, Senior Vice President
and General Counsel, at Dura Pharmaceuticals, Inc., 7475 Lusk Boulevard, San
Diego, California 92121 or by telephone at (619) 457-2553.
TRADEMARKS
ENTEX-R-, NASAREL-R- and NASALIDE-R- are registered trademarks of the
Company. The Company claims a common law trademark right to Spiros-TM-.
Ceclor-R-CD and Keftab-R- are registered trademarks of Eli Lilly and Company.
Spinhaler-R- is a registered trademark of Fisons Limited. Turbuhaler-R- is
a registered trademark of Astra Pharmaceuticals. Rotohaler-TM- is a
trademark of Glaxo Wellcome, Inc.
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<PAGE>
THE COMPANY
GENERAL
Dura is a specialty respiratory pharmaceutical and pulmonary drug
delivery company. Dura is engaged in developing and marketing prescription
pharmaceutical products for the treatment of asthma, hay fever, chronic
obstructive pulmonary disease ("COPD"), the common cold and related
respiratory ailments, and is developing a pulmonary drug delivery system.
Dura has strategically focused on the U.S. respiratory market because of its
size and growth opportunities. The estimated size of the target market for
antihistamines, asthma/rhinitis therapies, cough/cold preparations and
anti-infectives in 1996 was approximately $9.5 billion. The size and
fragmented nature of the market and the identifiable base of physician
prescribers allow Dura to achieve significant market penetration with a
specialized sales force. Dura currently markets 31 prescription products. It
also has a separate mail service pharmacy, Health Script Pharmacy Services,
Inc. ("Health Script"), which dispenses respiratory pharmaceuticals.
Dura employs a dual marketing strategy utilizing its focused field sales
force of over 300 people and dedicated managed care sales and marketing and
national account groups that cover managed care organizations and retail
pharmacy chains. Dura's field sales force targets a physician base that
includes approximately 80,000 U.S. allergists, ear, nose, and throat
specialists, pulmonologists and a selected subset of pediatricians and
generalist physicians, who Dura believes collectively write a significant
portion of respiratory pharmaceutical prescriptions. Dura believes that its
field sales force calls on approximately one-half of the target physician base.
Its managed care sales and marketing group concentrates on sales to large
regional and national managed care organizations. Dura expects to continue
expanding both the field sales force and the managed care sales and marketing
group as warranted by market opportunities.
This marketing strategy has allowed Dura to leverage its distribution
capabilities by acquiring the rights to market additional prescription
pharmaceutical products through acquisition, in-license or co-promotion
arrangements. Since 1992, Dura has acquired 19 products targeted at the U.S.
respiratory market. In September 1996, Dura acquired from Eli Lilly and
Company ("Lilly") exclusive U.S. marketing rights to the antibiotics
Keftab-R- and Ceclor-R-CD. Dura began marketing Keftab in September 1996,
and launched Ceclor CD in October 1996.
In May 1997, Dura acquired from Syntex (USA) Inc. and other members
of the Roche Group (collectively, "Syntex") the exclusive U.S. rights to the
intranasal steroid products Nasarel-R- and Nasalide-R-. The U.S. market for
intranasal steroids for the treatment of perennial and allergic rhinitis was
approximately $700 million in 1996, and has averaged 24% growth over the last
two years. Dura believes that this acquisition complements its strategy
because the products fit within its respiratory focus while adding a new
respiratory category, nasal steroids, to its product portfolio. In addition,
Dura believes that it will be able to further leverage its field sales force
by offering these new products to high-prescribing physicians during sales
calls. A portion of the revenues from these products is being utilized to
fund the expansion of Dura's existing field sales force.
Another key component of Dura's strategy is to develop the Spiros-TM-
pulmonary drug delivery system ("Spiros"). Spiros is being designed to
aerosolize pharmaceuticals in dry powder formulations for delivery to the lungs
while providing certain advantages over other currently-used methods of
pulmonary drug delivery. The Company has a three-level development program for
Spiros which entails (i) developing, on behalf of Spiros Development
Corporation II, Inc. ("Spiros Corp. II"), certain drug compounds for use in
Spiros, including in the near-term albuterol, beclomethasone and ipratropium,
three of the pharmaceutical agents most frequently prescribed to treat
respiratory conditions, (ii) licensing Spiros primarily to pharmaceutical
companies, including Mitsubishi Chemical Corporation, Fujisawa
Pharmaceuticals Co., Ltd. and Trega Biosciences, Inc., generally for use with
certain of their proprietary respiratory products, and (iii) developing Spiros,
generally in collaboration with third parties, for the systemic delivery of
compounds, including certain proteins and peptides, through the lungs for
respiratory and non-respiratory indications as an alternative to current
invasive delivery techniques.
In March 1997, Dura completed patient dosing in long-term and short-term
pivotal clinical trials. In November 1997, Dura announced, on behalf of
Spiros Corp. II, that it had submitted a New Drug Application ("NDA") with the
U.S. Food and Drug Administration ("FDA") for albuterol in the Spiros cassette
system. The NDA includes the results of clinical trials that were designed
to demonstrate comparability of the Spiros delivery system to a leading
branded albuterol metered dose inhaler product. Three pivotal studies
in addition to a number of dose finding and performance verification studies
were conducted for the submission. Dura has also filed an Investigational New
Drug ("IND") Application for U.S. studies on beclomethasone in the Spiros
cassette system. In the first quarter of 1997, clinical trials of
beclomethasone in the U.S. commenced under this IND Application. In addition,
Dura has performed powder formulation work with the peptide drug salmon
calcitonin which, in a clinical trial, demonstrated the ability to develop
macromolecule aerosol powder formulation and achieved systemic delivery using
the Spiros technology.
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<PAGE>
RECENT DEVELOPMENTS
In the third quarter of 1997, Dura issued $287.5 million principal
amount of 3-1/2% Convertible Subordinated Notes due 2002 (the "Notes").
Proceeds from the offering of the Notes are expected to be used for general
corporate purposes, including (i) to acquire, in-license, co-promote, develop
and commercialize pharmaceuticals targeted at Dura's physician base or in
areas related or otherwise complementary to Dura's existing business; (ii) to
fund product develop programs, including Spiros products; and (iii) for
working capital and facilities expansion. To date, no proceeds from the Notes
have been used. The Notes are convertible, at the option of the holder, into
shares of the Company's Common Stock at any time prior to maturity or
redemption at a conversion price of $50.635 per share, subject to adjustment
under certain conditions. Interest is payable semi-annually on January 15 and
July 15 of each year, commencing on January 15, 1998.
On October 10, 1997, Dura and Spiros Corp. II filed a registration
statement on Forms S-1/S-3 (No. 333-37673/37673-01) with the Commission. Such
registration statement, as amended, covers a proposed public offering of
5,500,000 units (the "Units"), each Unit consisting of one share of the
Callable Common Stock of Spiros Corp. II, par value $0.001 per share, and one
warrant to purchase one-fourth of one share of Dura Common Stock.
On October 21, 1997, Dura announced that it had signed a definitive
merger agreement with Scandipharm, Inc. ("Scandipharm"). On December 1, 1997,
Dura announced it had terminated the merger agreement with Scandipharm. Dura
has been advised by counsel for Scandipharm that Scandipharm does not believe
Dura has the right to terminate the merger agreement and that Scandipharm
reserves all rights under such agreement. The merger agreement does not
provide for any specific remedies or liquidated damages. Dura believes that
any claims brought by Scandipharm arising from the merger agreement would be
without merit; however, no assurance can be given that any damages awarded
based upon such claims would not materially and adversely affect Dura's
business or financial condition. Scandipharm is an Alabama-based distributor
of pharmaceutical products for the treatment of cystic fibrosis, a fatal
genetic disease affecting approximately 30,000 children and young adults.
Dura was incorporated under the laws of California in 1981 and
reincorporated in Delaware in 1997. The Company's principal executive
offices are located at 7475 Lusk Boulevard, San Diego, California 92121. Its
telephone number is (619) 457-2553.
RISK FACTORS
AN INVESTMENT IN THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF
RISK. IN ADDITION TO THE OTHER INFORMATION CONTAINED IN THIS PROSPECTUS OR
INCORPORATED HEREIN BY REFERENCE, PROSPECTIVE INVESTORS SHOULD CAREFULLY
CONSIDER THE FOLLOWING RISK FACTORS BEFORE PURCHASING THE COMMON STOCK OFFERED
HEREBY.
REDUCTION IN GROSS MARGINS
There is no proprietary protection for most of the products sold by the
Company and substitutes for such products are sold by other pharmaceutical
companies. The Company expects average selling prices for many of its products
to decline over time due to competitive and reimbursement pressures. While the
Company will seek to mitigate the effect of this decline in average selling
prices, there can be no assurance that the Company will be successful in these
efforts.
THIRD-PARTY REIMBURSEMENT; PRICING PRESSURES
The Company's commercial success will depend in part on the availability
of adequate reimbursement from third-party health care payers, such as
government and private health insurers and managed care organizations. Third-
party payers are increasingly challenging the pricing of medical products and
services. There can be no assurance that reimbursement will be available to
enable the Company to achieve market acceptance of its products or to maintain
price levels sufficient to realize an appropriate return on the Company's
investment in product acquisition, in-licensing and development. The market
for the Company's products may be limited by actions of third-party payers.
For example, many managed health care organizations are now controlling the
pharmaceuticals that are on their formulary lists. The resulting competition
among pharmaceutical companies to place their products on these formulary lists
has created a trend of downward pricing pressure in the industry. In addition,
many managed care organizations are pursuing various ways to reduce
pharmaceutical costs and are considering formulary contracts primarily with
those pharmaceutical companies that can offer a full line of products for a
given therapy sector or disease state. There can be no assurance that the
Company's products will be included on the formulary lists of managed care
organizations or that downward pricing pressure in the industry generally will
not negatively impact the Company's operations.
DEPENDENCE ON ACQUISITION OF RIGHTS TO PHARMACEUTICAL PRODUCTS
The Company's strategy for growth is dependent, in part, upon acquiring,
in-licensing and co-promoting pharmaceuticals targeted primarily at allergists,
ENTs, pulmonologists and a selected subset of pediatricians and generalist
physicians. Other companies, including those with substantially greater
resources, are competing with the Company for the rights to such products.
There can be no assurance that the Company will be able to acquire, in-license
or co-promote additional pharmaceuticals on acceptable terms, if at all. The
failure of the Company to acquire, in-license, co-promote, develop or market
commercially successful pharmaceuticals would have a material adverse effect on
the Company. Furthermore, there can be no assurance that the Company, once it
has obtained
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<PAGE>
rights to a pharmaceutical product and committed to payment terms,
will be able to generate sales sufficient to create a profit or otherwise avoid
a loss.
DEVELOPMENT RISKS ASSOCIATED WITH SPIROS
Spiros will require significant additional clinical studies and product
development. There can be no assurance that development of Spiros will be
completed successfully, that Spiros will not encounter problems in clinical
trials that will cause the delay or suspension of such trials, that current
or future testing will show Spiros to be safe or efficacious or that Spiros
will receive regulatory approval. In addition, regulatory approvals will
have to be obtained for each drug to be delivered through the use of Spiros
prior to commercialization. Moreover, even if Spiros does receive regulatory
approval, there can be no assurance that Spiros will be commercially
successful, have all of the patent and other protections necessary to prevent
competitors from producing similar products and not infringe on patent or
other proprietary rights of third parties. The failure of Spiros to receive
timely regulatory approval and achieve commercial success would have a
material adverse effect on the Company.
RISKS ASSOCIATED WITH RECENT ACQUISITIONS
In September 1996, the Company acquired from Lilly the exclusive U.S.
rights to market and distribute Keftab and Ceclor CD and entered into a
manufacturing agreement with Lilly which terminates in certain circumstances.
In May 1997, the Company acquired from Syntex the exclusive U.S. rights to the
intranasal steroid products Nasarel and Nasalide. Any interruption in the
supply of these products due to regulatory or other causes could result in the
inability of the Company to meet demand and could have a material adverse
impact on the Company.
The Company has limited experience in marketing antibiotic products,
such as Keftab and Ceclor CD, and steroid products, such as Nasarel and
Nasalide. Ceclor CD was not previously marketed to physicians prior to its
October 1996 launch by the Company, and no assurance can be given that the
Company will be able to continue to successfully compete with currently
available products. Failure to successfully market and sell Keftab, Ceclor
CD, Nasarel or Nasalide would have a material adverse effect on the Company's
business, financial condition and results of operations.
The Company has transferred a substantial portion of its recently
acquired product rights to foreign subsidiaries. Risks inherent in having
assets in foreign subsidiaries include those relating to political and
economic instability and the burden of complying with a wide variety of
complex foreign laws and treaties.
CUSTOMER CONCENTRATION; CONSOLIDATION OF DISTRIBUTION NETWORK
The distribution network for pharmaceutical products has in recent years
been subject to increasing consolidation. As a result, a few large wholesale
distributors control a significant share of the market and the number of
independent drug stores and small chains has decreased. Further
consolidation among, or any financial difficulties of, distributors or
retailers could result in the combination or elimination of warehouses
thereby stimulating product returns to the Company. Further consolidation or
financial difficulties could also cause customers to reduce their inventory
levels, or otherwise reduce purchases of the Company's products which could
result in a material adverse effect on the Company's business, financial
condition or results of operations.
The Company's principal customers are wholesale drug distributors and
major drug store chains. For the first nine months of 1997, three wholesale
customers individually accounted for 11% (McKesson Corporation), 11%
(Cardinal Health, Inc.) and 10% (AmeriSource Corporation) of sales. For
1996, three wholesale customers individually accounted for 17% (McKesson
Corporation), 14% (Bergen Brunswig Corporation) and 13% (Cardinal Health,
Inc.) of sales. Two wholesale customers individually accounted for 16% and
11% of 1995 sales, and three wholesale customers individually accounted for
21%, 14% and 12% of 1994 sales. The loss of any of these customers could
have a material adverse effect upon the Company's business, financial
condition or results of operations.
SEASONALITY AND FLUCTUATING QUARTERLY RESULTS
Historically, as a result of the winter cold and flu season, industry-wide
demand for respiratory products has been stronger in the first and fourth
quarters than in the second and third quarters of the year. In addition,
variations in the timing and severity of the winter cold and flu season have
influenced the Company's results of operations in the past. While the growth
and productivity of the Company's sales force and the introduction by the
Company of new products have historically mitigated the impact of seasonality
on the Company's results of operations, recent
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<PAGE>
product acquisitions by the Company, especially Keftab and Ceclor CD, which
are used to treat respiratory infections, are likely to increase the impact
of seasonality on the Company's results of operations. No assurances can be
given that the Company's results of operations will not be materially
adversely affected by the seasonality of product sales.
COMPETITION
Many companies, including large pharmaceutical firms with financial and
marketing resources and development capabilities substantially greater than
those of the Company, are engaged in developing, marketing and selling
products that compete with those offered or planned to be offered by the
Company. The selling prices of such products typically decline as
competition increases. Further, other products now in use or under
development by others may be more effective than the Company's current or
future products. The industry is characterized by rapid technological
change, and competitors may develop their products more rapidly than the
Company. Competitors may also be able to complete the regulatory process
sooner, and therefore, may begin to market their products in advance of the
Company's products. The Company believes that competition among both
prescription pharmaceuticals and pulmonary drug delivery systems aimed at the
respiratory infection, allergy, cough and cold, and asthma and COPD markets
will be based on, among other things, product efficacy, safety, reliability,
availability and price.
There are at least 25 other companies in the U.S. that are currently
engaged in developing, marketing and selling respiratory pharmaceuticals.
Additionally, there are at least 10 companies currently involved in the
development, marketing or sales of dry powder pulmonary drug delivery
systems. There are two types of dry powder inhalers ("DPIs") currently in
commercial use worldwide. In the U.S., only individual dose DPIs currently
are marketed, including the Rotohaler-TM- (developed and marketed by Glaxo
Wellcome, Inc.) and the Spinhaler-R- (developed and marketed by Fisons
Limited). The Turbuhaler-R- (developed and marketed by Astra
Pharmaceuticals), a multiple dose DPI, is the leading DPI in worldwide sales.
In June 1997, the FDA approved the first Turbuhaler product, the Pulmicort
Turbuhaler, for marketing in the United States.
DEPENDENCE ON THIRD PARTIES
The Company's strategy for development and commercialization of certain of
its products is dependent upon entering into various arrangements with
corporate partners, licensors and others and upon the subsequent success of
these partners, licensors and others in performing their obligations. There
can be no assurance that the Company will be able to negotiate acceptable
arrangements in the future or that such arrangements or its existing
arrangements will be successful. In addition, partners, licensors and others
may pursue alternative technologies or develop alternative compounds or drug
delivery systems either on their own or in collaboration with others, including
the Company's competitors. The Company has limited experience manufacturing
products for commercial purposes and currently does not have the capability to
manufacture its pharmaceutical products and therefore is dependent on contract
manufacturers for the production of such products for development and
commercial purposes. The manufacture of the Company's products is subject to
current Good Manufacturing Practice ("cGMP") regulations prescribed by the FDA.
The Company relies on a single manufacturer for each of its products. In the
event that the Company is unable to obtain or retain third-party manufacturing,
it may not be able to commercialize its products as planned. There can be no
assurance that the Company will be able to continue to obtain adequate supplies
of such products in a timely fashion at acceptable quality and prices. Also,
there can be no assurance that the Company will be able to enter into
agreements for the manufacture of future products with manufacturers whose
facilities and procedures comply with cGMP and other regulatory requirements.
The Company's current dependence upon others for the manufacture of its
products may adversely affect future profit margins, if any, on the sale of
those products and the Company's ability to develop and deliver products on a
timely and competitive basis.
LIMITED MANUFACTURING EXPERIENCE AND RELIANCE ON THIRD PARTIES
The Company's principal manufacturing facility is intended to be used to
formulate, mill, blend and manufacture drugs to be used with Spiros, pending
regulatory approval. The Company's manufacturing facility must be registered
with and licensed by various regulatory authorities and
-6-
<PAGE>
must comply with cGMP requirements prescribed by the FDA and the State of
California. The Company is currently expanding its facilities to provide
additional manufacturing capabilities. The Company will need to
significantly scale up its current manufacturing operations and comply with
cGMPs and other regulations prescribed by various regulatory agencies in the
United States and other countries to achieve the prescribed quality and
required levels of production of such products and to obtain marketing
approval. Any failure or significant delay in the validation of or obtaining
a satisfactory regulatory inspection of the new facility or failure to
successfully scale up could have a material adverse effect on the Company's
ability to manufacture products in connection with Spiros. Dura intends to
utilize third parties to produce components of and assemble the Spiros
aerosol generator. Such third parties have only produced limited quantities
of components and assembled generators and will be required to significantly
scale up their activities. There can be no assurance that such third parties
will be successful in completing these activities in a timely manner or can
meet cGMP requirements. Any failure or delay in the scale up of aerosol
generator manufacturing would have a material adverse effect on the ability
of the Company to manufacture Spiros products.
MANAGING GROWTH OF BUSINESS
The Company has experienced significant growth as total revenues
increased 58% in fiscal 1995, 102% in fiscal 1996, and 102% for the first
nine months of 1997, as compared to prior periods, primarily as a result of
the acquisition or in-licensing of additional respiratory pharmaceutical
products. During fiscal 1997, the Company executed an agreement relating to
the acquisition of the rights to the Nasarel and Nasalide products. During
fiscal 1996, the Company executed agreements relating to the acquisition of
the rights to the Entex, Ceclor CD and Keftab products. During fiscal 1995,
the Company executed three agreements relating to the acquisition,
in-licensing and co-promotion of products and acquired Health Script. Due to
the Company's emphasis on acquiring and in-licensing respiratory
pharmaceutical products, the Company anticipates that the integration of the
recently acquired businesses and products, as well as any future
acquisitions, will require significant management attention and expansion of
its sales force. The Company's ability to achieve and maintain profitability
is based on management's ability to manage its changing business effectively.
UNCERTAINTY OF PROFITABILITY; NEED FOR ADDITIONAL FUNDS
The Company has experienced significant operating losses in the past,
and, at September 30, 1997, the Company's accumulated deficit was
$49.6 million. Although the Company achieved profitability on an annual basis
in 1996 and in the first nine months of 1997, there can be no assurance that
revenue growth or profitability will continue on an annual or quarterly basis
in the future. In addition, any exercise of the Purchase Option and the
currently proposed $75.0 million contribution to Spiros Corp. II will result
in significant, non-recurring charges to earnings in the period such
transactions are completed. The acquisition and in-licensing of products, the
expansion of the Company's sales force in response to acquisition and
in-licensing of products, the maintenance of the Company's existing sales
force, the upgrade and expansion of its facilities, continued pricing
pressure and the exercise of the Purchase Option, as well as funds that the
Company, at its option, may provide for Spiros development or to acquire
Spiros technology, both internally and through Spiros Corp. II, will require
the commitment of substantial capital resources and may also result in
significant losses. Depending upon, among other things, the acquisition and
in-licensing opportunities available, the Company may need to raise
additional funds for these purposes. The Company may seek such additional
funding through public and private financing, including equity or debt
financing. Adequate funds for these purposes, whether through financial
markets or from other sources, may not be available when needed or on terms
acceptable to the Company. Insufficient funds may require the Company to
delay, scale back or suspend some or all of its product acquisition and
in-licensing programs, the upgrade and expansion of its facilities and
further development of Spiros. The Company anticipates that its existing
capital resources, together with cash expected to be generated from
operations and available bank borrowings, should be sufficient to finance its
current operations and working capital requirements through at least 12
months following the date of this prospectus.
GOVERNMENT REGULATION; NO ASSURANCE OF FDA APPROVAL
Development, testing, manufacturing and marketing of pharmaceutical
products, including drug delivery systems, are subject to extensive
regulation by numerous governmental authorities in the U.S. and other
countries. The process of obtaining FDA approval of pharmaceutical products
and drug delivery systems is costly and time-consuming. Any new
pharmaceutical product must undergo rigorous preclinical and clinical testing
and an extensive regulatory approval process mandated by the FDA. Such
regulatory review includes the determination of manufacturing capability and
product performance. Marketing of drug delivery systems also requires FDA
approval, which can be costly and time consuming to obtain. The Company will
need to obtain a separate regulatory approval for each Spiros drug delivery
system. The Company expects to submit an abbreviated NDA called a 505(b)(2)
application for the use of albuterol and other drugs with the Spiros system.
No assurances can be given that all of the Company's drugs identified for
development with Spiros will be suitable for, or approved under, abbreviated
application procedures. Certain abbreviated application procedures have been
the subject of petitions filed by brand name manufacturers which seek changes
in the FDA's approval process for such abbreviated applications. These
requested changes include, among other things, disallowance of the use by an
applicant of an abbreviated application with data considered proprietary by
the original manufacturer that was submitted to the FDA as part of an
original NDA. The Company is unable to predict at this time whether the FDA
will make any changes to its abbreviated application procedures as a result
of such petitions or the effect that such changes or challenges may have on
the Company. There can be no assurance that the pharmaceutical products
currently in development, or those products acquired or in-licensed by the
Company, will be approved by the FDA. In addition,
-7-
<PAGE>
there can be no assurance that all necessary approvals will be granted for
future products or that FDA review or actions will not involve delays caused
by the FDA's request for additional information or testing that could
adversely affect the time to market and sale of the products. For both
currently marketed and future products, failure to comply with applicable
regulatory requirements can, among other things, result in the suspension of
regulatory approval, as well as possible civil and criminal sanctions.
The Company, on behalf of Spiros Corp. II, filed an NDA for an
albuterol based product (the "Albuterol Product"), in November 1997. The FDA
may determine to reject the Company's NDA at any time within 60 days of
submission based on a determination that the NDA is incomplete or that
additional information is required prior to consideration of the NDA. Prior
to the FDA's approval of an Albuterol Product the Company will be required to
complete an ongoing open label study with respect to the Albuterol Product.
Since completion of the pivotal trials, the Company has made, and is
proposing to make, a number of additional modifications to the Spiros system,
some of which address problems encountered with the mechanical features of
the Spiros delivery system during the pivotal trials. These changes are
intended to improve the reliability, performance, manufacturability, and
customer acceptance of the mechanical features of the Spiros delivery system.
The Company expects that it will be required to complete testing and
validation pursuant to cGMP requirements of the Spiros system as modified for
commercial distribution, which could be costly and time-consuming. There can
be no assurance that the FDA will not require the Company to undertake
further laboratory testing, field testing and/or clinical studies in order to
ensure the safety and effectiveness of the Albuterol Product intended to be
commercialized by the Company and to ensure that it can be reliably
manufactured. If a proposed change is deemed to be a major modification by
the FDA, the Company could be required to repeat one or more of the clinical
studies. Moreover, because of the time necessary to validate the changes to
the Spiros system, there can be no assurance that the Company will be
prepared for any FDA preapproval inspection of the Company's manufacturing
facilities in a timely manner. If the Company is required to undertake
additional laboratory testing and/or clinical studies or to postpone the
preapproval inspection, or if the Company fails to complete the open label
study in a timely manner, the Company could receive a non-approval letter
and, in any event, there could be a substantial delay in completion of the
approval process. FDA approval to market the Albuterol Product could take
several months to several years, or approval may ultimately be denied.
The FDA is required to conduct biennial inspections of drug
manufacturing establishments. Since the NDA submission for the Albuterol
Product is the Company's first for a Spiros product, the FDA will inspect the
Company's manufacturing facility as part of the review process. The Company
may also be subject to inspection by the State of California. There can be no
assurance that the Company will be able to satisfy such inspections in a
timely manner, if at all.
In addition, changes in regulations could have a material adverse effect
on the Company. The FDA is continuing an evaluation of the effectiveness of
all drug products containing ingredients marketed prior to 1962 (the year of
enactment of the "Drug Amendments of 1962" to the Federal Food, Drug and
Cosmetic Act) as part of its Drug Efficacy Study Implementation ("DESI")
program and will determine which drugs are considered "new drugs" requiring
approval through a NDA for marketing. A Policy Guide (CPG 440.100) issued
by the FDA indicates that the FDA will implement procedures to determine
whether the new drug provisions are applicable to existing products. This
Policy Guide requires that products covered by paragraph B not be similar or
related to any drug included in the DESI program, or have a different
formulation or conditions for use than products marketed before November 13,
1984. If a final determination is made that a particular drug requires an
approved NDA, such approval will be required for marketing to continue. If
such a determination is made, the FDA might impose various requirements; for
example, it might require that the current product be the subject of an
approved NDA, that the product be reformulated and an NDA approval be
obtained, that the product must be sold on an over-the-counter basis rather
than as a prescription drug or that the product must be removed from the
market. The Company believes that nine of its prescription pharmaceutical
products may be covered by paragraph B of the Policy Guide and is aware that
one of its products may be considered to be similar or related to a DESI
drug. Also, it is not aware of evidence to substantiate that three of its
products have the same formulation or conditions for use as products marketed
before November 13, 1984. There can be no assurance as to which regulatory
course the FDA will follow, if any, with respect to many of the Company's
pharmaceutical products or whether the Company will be able to obtain any
approvals that the FDA may deem necessary. If any negative actions are taken
by the FDA, such actions could have a material adverse effect on the
Company's business. Health Script is subject to regulation by state
regulatory authorities, principally state boards of pharmacy. In addition,
Health Script is subject to regulation by other state and federal agencies
with respect to reimbursement for prescription drug benefits provided to
individuals covered primarily by publicly-funded programs.
PATENTS AND PROPRIETARY RIGHTS; UNPREDICTABILITY OF PATENT PROTECTION
The Company's success will depend in part on its ability to obtain patents
on current or future products or formulations, defend its patents, maintain
trade secrets and operate without infringing upon the proprietary rights of
others, both in the U.S. and abroad. However, only six of the pharmaceuticals
currently marketed by the Company are covered by patents. The Company also has
licenses or license rights to certain other U.S. and foreign patent and patent
applications. There can be no assurance that patents, U.S. or foreign, will be
obtained, or that, if issued or licensed to the Company, they will be
enforceable or will provide substantial protection from competition or be of
commercial benefit to the Company or that the Company will possess the
financial resources necessary to enforce or defend any of its patent rights.
Federal court decisions establishing legal standards for determining the
validity and scope of patents in the field are in transition. There can be no
assurance that the historical legal standards surrounding questions of validity
and scope will continue to be applied or that current defenses as to issued
patents in the field will offer protection in the future. The commercial
success of the Company will also depend upon avoiding the infringement of
patents issued to competitors and upon maintaining the technology licenses upon
which certain of the Company's current products are, or any future products
under development might be, based. Litigation, which could result in
substantial cost to the Company, may be necessary to enforce the Company's
patent and license rights or to determine the scope and validity of proprietary
rights of third parties. If any of the Company's products are found to
infringe upon patents or other rights owned by third parties, the Company could
be required to obtain a license to continue to manufacture or market such
products. There can be no assurance that licenses to such patent rights would
be made available to the Company on commercially reasonable terms, if at all.
If the Company does not obtain such licenses, it could encounter delays in
marketing affected products while it attempts to design around such patents or
it could find that the development, manufacture or sale of products requiring
such licenses is not possible. The Company currently has certain licenses from
third parties and in the future may require additional licenses from other
parties to develop, manufacture and market commercially viable products
effectively. There can be no assurance that such licenses will be obtainable
on commercially reasonable terms, if at all, or that the patents underlying
such licenses will be valid and enforceable.
-8-
<PAGE>
PRODUCT LIABILITY AND RECALL
The Company faces an inherent business risk of exposure to product
liability claims in the event that the testing, manufacturing, marketing or
use of its technologies or products is alleged to have resulted in adverse
effects. Such risks will exist even with respect to those products that
receive regulatory approval for commercial sale. While the Company has taken,
and will continue to take, what it believes are appropriate precautions,
there can be no assurance that it will avoid significant product liability
exposure. The Company currently has limited product liability insurance;
however, there can be no assurance that the Company will be able to maintain
such insurance, that such insurance can be maintained on acceptable terms or
that the level or breadth of any insurance coverage will be sufficient to
fully cover potential claims. There can be no assurance that adequate
insurance coverage will be available in the future at acceptable costs, if at
all, or that a product liability claim or recall would not materially and
adversely affect the business or financial condition of the Company.
TERMINATION OF MERGER AGREEMENT WITH SCANDIPHARM, INC.
On December 1, 1997, Dura announced it had terminated its merger
agreement with Scandipharm. Dura has been advised by counsel for Scandipharm
that Scandipharm does not believe Dura has the right to terminate such merger
agreement and that Scandipharm reserves all rights under such agreement. The
merger agreement does not provide for any specific remedies or liquidated
damages. Dura believes that any claims brought by Scandipharm arising from the
merger agreement would be without merit; however, no assurance can be given
that any damages awarded based upon such claims would not materially and
adversely affect Dura's business or financial condition.
ATTRACTION AND RETENTION OF KEY PERSONNEL
The Company is highly dependent on the principal members of its
scientific and management staff, the loss of whose services might impede the
achievement of development objectives. No Dura employee, other than
Mr. Garner and Mr. Kabakoff, is currently employed under an employment
contract. Each of Mr. Garner and Mr. Kabakoff is employed under a letter
agreement which is automatically extended for successive one-year periods.
Pursuant to their respective letter agreements, each of Mr. Garner and
Mr. Kabakoff is entitled to six months of base salary if their employment is
terminated without cause (nine months in the event their employment is
terminated in connection with a change in control of Dura). Recruiting and
retaining management and operational personnel and qualified scientific
personnel to perform research and development work will also be critical to
the Company's success. Although the Company believes that it is adequately
staffed in key positions and that it will be successful in attracting and
retaining skilled and experienced management, operational and scientific
personnel, there can be no assurance that the Company will be able to attract
and retain such personnel on acceptable terms given the competition among
numerous pharmaceutical companies, universities and research institutions for
such personnel. The loss of the services of key scientific, technical and
management personnel could have a material adverse effect on the Company,
especially in light of the Company's recent significant growth.
ABILITY TO SERVICE INDEBTEDNESS
In the third quarter of 1997, the Company issued $287.5 million
principal amount of 3-1/2% Convertible Subordinated Notes due 2002. There
can be no assurance that the Company will have the necessary funds available
to pay the interest on the principal of the above Notes or that such Notes
will be able to be refinanced. Any inability to service the obligation in
respect to such Notes could have a material adverse effect on the Company and
the market value of the Common Stock.
CHANGE IN CONTROL
Certain provisions of the Company's charter documents and terms relating
to the acceleration of the exercisability of certain warrants and options
relating to the purchase of such securities by the Company in the event of a
change in control may have the effect of delaying, deferring or preventing a
change in control of the Company, thereby possibly depriving stockholders of
receiving a premium for their shares of the Common Stock. In addition, upon
certain circumstances resulting in a change in control under the terms of
the Notes ("Change of Control"), the Company will be required to offer to
purchase for cash all of the outstanding Notes at a purchase price of 100% of
the principal amount thereof, plus accrued but unpaid interest through a
date that is 30 business days after the Company's notice of the occurrence of
such Change of Control. This Change in Control purchase feature of the Notes
may in certain circumstances have an anti-takeover effect. If a Change in
Control were to occur, there can be no assurance that the Company would have
sufficient funds to repurchase all Notes tendered by the holders thereof and
to repay other indebtedness that may become due as a result of any Change in
Control.
VOLATILITY OF COMPANY STOCK PRICE
The market prices for securities of emerging companies, including the
Company, have historically been highly volatile. Future announcements
concerning the Company or its competitors may have a significant impact on
the market price of the Common Stock. Such announcements might include
financial results, the results of testing, technological innovations, new
commercial products, changes to government regulations, government decisions
on commercialization of products, developments concerning proprietary rights,
litigation or public concern as to safety of the Company's products.
ABSENCE OF DIVIDENDS
The Company has never paid any cash dividends on its Common Stock. In
accordance with a bank loan agreement, the Company is prohibited from paying
cash dividends without prior bank approval. The Company currently anticipates
that it will retain all available funds for use in its business and does not
expect to pay any cash dividends in the foreseeable future.
-9-
<PAGE>
FORWARD-LOOKING STATEMENTS
Prospective investors are cautioned that the statements in this
Prospectus that are not descriptions of historical facts may be
forward-looking statements that are subject to risks and uncertainties.
Actual results in the future could differ materially from those currently
anticipated due to a number of factors, including those identified under
"Risk Factors" and elsewhere in this Prospectus or documents incorporated by
reference herein.
SELLING STOCKHOLDERS
The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock as of November 6, 1997
including where indicated, the shares issuable upon exercise of the Series S
Warrants by each Selling Stockholder plus the Option Shares acquired by each
of the Selling Stockholders as a result of Dura's exercise of the Purchase
Option. Except as otherwise indicated in this Prospectus, none of the
Selling Stockholders has had a material relationship with the Company within
the past three years other than as a result of the ownership of the Shares or
other securities of the Company. The numbers set forth in the column "Number
of Shares Being Offered" below constitute all of the Shares that each Selling
Stockholder may distribute in the offering; however, there are currently no
agreements, arrangements or understandings with respect to the sale of any of
the Shares and the table below assumes the sale of all Shares held by each
Selling Stockholder. The Shares are being registered to permit public
secondary trading of the Shares, and the Selling Stockholders may offer the
Shares for resale from time to time. See "Plan of Distribution."
The Option Shares being offered by the Selling Stockholders are those
acquired from the Company as a result of the Company's exercise of its
Purchase Option to acquire all of the Callable Common Stock of Spiros Corp.
The Company gave notice of its intent to exercise the Purchase Option on
November 6, 1997, subject to certain conditions. The Callable Common Stock
was originally issued to the Selling Stockholders in a private placement
transaction pursuant to a Purchase Agreement dated as of December 29, 1995
(the "Agreement"). The Company, in conjunction with Spiros Corp., sold
933,334 Units at a purchase price of $30 per Unit. Each Unit consists of one
share of Callable Common Stock and one Series S Warrant. The Series S
Warrants are exercisable for 2.4 shares of Dura Common Stock at an exercise
price of $19.47 per share.
Pursuant to the terms of its Purchase Option, the Company had the
ability to elect to issue the Option Shares in payment of the Purchase Option
exercise price. The aggregate number of Option Shares delivered to each
Selling Stockholder in payment of the Purchase Option exercise price was
determined by multiplying the total number of shares of Callable Common Stock
held by such Selling Stockholder by a fraction, the numerator of which is
$46.88 and the denominator of which is $48.80, the average daily closing
price of the Company's Common Stock as reported on Nasdaq for the 20 trading
days immediately preceding the date of Dura's notice to the Selling
Stockholders of its intent to exercise the Purchase Option. Domain Partners
III, L.P., is distributing the 92,853 shares it will receive upon exercise of
the Purchase Option directly to its limited partners, and the limited
partners are included herein as Selling Stockholders.
Pursuant to the Agreement, the Company agreed that in the event it
elected to issue the Option Shares in payment of the Purchase Option exercise
price, it would file with the Commission a Registration Statement on Form
S-3, of which this Prospectus forms a part, with respect to the resale of the
Option Shares. The Warrant Shares being offered by the Selling Stockholders
will be received by such Selling Stockholders upon exercise of the Series S
Warrants. Pursuant to that certain Investors' Rights Agreement dated December
29, 1995, the Company has agreed, among other things, to bear certain
expenses in connection with the registration and sale of the Warrant Shares
being offered by the Selling Stockholders. The Company also agreed to file
with the Commission a Registration Statement on Form S-3, of which this
Prospectus forms a part, with respect to the resale of the Warrant Shares.
The Shares may be resold by the Selling Stockholders from time to time at
prevailing prices on Nasdaq, in the over-the-counter market, in
privately-negotiated transactions or a combination of such methods. The
Company has also agreed to prepare and file such amendments and supplements
to the Registration Statement as may be necessary to keep the Registration
Statement effective until all Option Shares offered hereby have been sold
pursuant hereto or, with respect to the Warrant Shares, until such Warrant
Shares are no longer, by reason of Rule 144 under the Securities Act or any
other rule of similar effect, required to be registered for the sale thereof
by the Selling Stockholders.
-10-
<PAGE>
<TABLE>
<CAPTION>
Shares Beneficially Number of Shares Beneficially
Owned Prior Shares Being Owned
Names and Addresses to Offering (1)(2) Offered After Offering (1)(2)
- ------------------- ----------------------- ------------ -------------------------
Number Percent Number Percent
------ ------- ------ -------
<S> <C> <C> <C> <C> <C>
Abydos & Co. (3) 336,065 *% 336,065 0 0
c/o G.T. Capital Management
50 California Street, 27th Floor
San Francisco, CA 94111
American Bible Society 929 *% 929 0 0
1865 Broadway
New York, NY 10023
The Charles Schwab Trust Company, 56,011 *% 56,011 0 0
Trustee for the Dura Pharmaceuticals, Inc.
Deferred Compensation Plan (4)
1 Montgomery Street, 7th Floor
San Francisco, California 94104
Colgate University 2,228 *% 2,228 0 0
c/o Chase Manhattan Bank
770 Broadway, 10th Floor
New York, NY 10003-9598
Crossroads Constitution Limited Partnership 3,714 *% 3,714 0 0
c/o Bigler Investment Management
190 Farmington Avenue
Farmington, CT 06032
DP III Associates, L.P. (5) 11,237 *% 11,237 0 0
c/o Domain Associates
One Palmer Square
Princeton, New Jersey 08542
Domain Partners III, LLP (6) 231,974 *% 231,974 0 0
c/o Domain Associates
One Palmer Square
Princeton, New Jersey 08542
Elan International Services Limited (7) 2,334,241 5.0% 1,120,217 1,214,024 2.6%
102 St. James Court
Flatts, Smiths, FL04
Bermuda
Employees Retirement Plan of 1,486 *% 1,486 0 0
Duke University
c/o Duke Management Company
2200 West Main Street, Suite 1000
Durham, NC 27705
Endowment Venture Partners II, L.P. 7,428 *% 7,428 0 0
c/o Mellon Securities Trust Co.
120 Broadway, 13th Floor
Suite 1350
New York, NY 10271
547 Partners 371 *% 371 0 0
71 Rowayton Avenue
Five Mile Landing
Rowayton, CT 06853
The Ford Foundation 7,428 *% 7,428 0 0
c/o The Northern Trust
50 South LaSalle Street
Chicago, IL 60675
The Global Health Sciences Fund (8) 224,044 *% 224,044 0 0
c/o Invesco Trust Company
7800 East Union Avenue, Suite 800
Denver, Colorado 80237
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Shares Beneficially Number of Shares Beneficially
Owned Prior Shares Being Owned
Names and Addresses to Offering (1)(2) Offered After Offering (1)(2)
- ------------------- ----------------------- ------------ -------------------------
Number Percent Number Percent
------ ------- ------ -------
<S> <C> <C> <C> <C> <C>
Gothic Corporation
c/o Duke Management Company 4,457 *% 4,457 0 0
2200 West Main Street, Suite 1000
Durham, NC 27705
H&Q Healthcare Investors (9) 204,028 *% 154,028 50,000 *%
c/o Hambrecht & Quist Capital Management, Inc.
50 Rowes Wharf
Boston, MA 02110-3328
H&Q Life Sciences Investors (10) 126,024 *% 126,024 0 0
c/o Hambrecht & Quist Capital Management, Inc.
50 Rowes Wharf
Boston, Massachusetts 02110-3328
Hancock Venture Partners IV-Partnership Fund L.P. 5,200 *% 5,200 0 0
c/o HarbourVest Partners, LLC
One Financial Center
44th Floor
Boston, MA 02111
Iowa Public Employees Retirement System 3,714 *% 3,714 0 0
c/o Mellon Securities Trust Co.
120 Broadway, 13th Floor
New York, NY 10271
Knotty & Co. 7,428 *% 7,428 0 0
c/o State Street Bank and Trust Co.
225 Franklin Street
Incoming Securities
Concourse Level
Boston, MA 0,2101
Leeway & Co. 11,143 *% 11,143 0 0
c/o State Street Bank & Trust Co.
Master Trust Division-W6C
One Enterprise Drive
North Quincy, MA 02171
Mellon Bank, N.A. as Trustee for 7,428 *% 7,428 0 0
First Plaza Group Trust
Securities Teller Window
120 Broadway, 13th Floor
New York, NY 10271
Mellon Bank, N.A., as Trustee for 3,714 *% 3,714 0 0
NYNEX Master Pension Trust as Directed
by Bell Atlantic Asset Management Group
c/o Mellon Securities Trust Co.
120 Broadway, 33rd Floor
New York, NY 10271
Nassau Capital Funds, L.P. 5,943 *% 5,943 0 0
22 Chambers Street
Princeton, NJ 08542
New Enterprise Associates VI, Limited Partnership (11) 224,044 *% 224,044 0 0
1119 St. Paul Street
Baltimore, Maryland 21202
Old Court Limited (12) 708,042 1.6% 336,065 371,977 *%
P.O. Box 58
St. Peter Port
Guernsey, Channel Islands
</TABLE>
-12-
<PAGE>
<TABLE>
<CAPTION>
Shares Beneficially Number of Shares Beneficially
Owned Prior Shares Being Owned
Names and Addresses to Offering (1)(2) Offered After Offering (1)(2)
- ------------------- ----------------------- ------------ -------------------------
Number Percent Number Percent
------ ------- ------ -------
<S> <C> <C> <C> <C> <C>
One Palmer Square Associates III, L.P. 929 *% 929 0 0
c/o Domain Associates
One Palmer Square
Princeton, NJ 08542
Rush & Co. (13) 58,868 *% 45,368 13,500 *%
P.O. Box 61
Wall Street Station
New York, NY 10005
S-E-Bankens Lakemedelsfonden, Stockholm (14) 122,663 *% 122,663 0 0
Regeringsgatan 45
ST R2
S 106 40 Stockholm, Sweden
Sofinov Societe Financiere 3,714 *% 3,714 0 0
D'Innovation Inc.
1981 McGill College Avenue
Montreal (Quebec)
H3A 3C7 CANADA
Stanford University 3,714 *% 3,714 0 0
c/o Stanford Management Co.
2770 Sand Hill Road
Menlo Park, CA 94025
University of Notre Dame 4,457 *% 4,457 0 0
c/o Mellon Securities Trust Co.
120 Broadway, 13th Floor
New York, NY 10271
University of Southern California 2,971 *% 2,971 0 0
c/o BNY Western Trust
700 South Flower Street, 2nd Floor
Los Angeles, CA 90017
Utah State Retirement Fund 3,714 *% 3,714 0 0
c/o Abbott Capital Management, LLC
1330 Avenue of the Americas, Suite 2800
New York, NY 10019-5422
Funds managed by
Weiss Peck & Greer, LLC (15) 357,310 *% 56,010 301,300 *%
One New York Plaza, 30th Floor
New York, New York 10004-1950
The Young Men's Christian 743 *% 743 0 0
Association Retirement Fund
c/o Northern Trust Chicago
801 South Canal Street
Chicago, IL 60607
</TABLE>
* Less than 1%.
(1) Unless otherwise indicated, the persons named in the table have sole
voting and sole investment power with respect to all shares beneficially
owned. Unless otherwise indicated, share ownership in each case
includes shares issuable upon exercise of certain of the options and
warrants as described in the footnotes below.
(2) Percentage of ownership is calculated pursuant to SEC Rule 13d-3(d)(1),
where applicable; however, all of the 896,606 Option Shares acquired by the
Selling Stockholders as a result of the Purchase Option exercise and
offered hereby have been included and are deemed outstanding as of the
date hereof in calculating all ownership percentages.
(3) Includes 240,000 shares issuable upon exercise of the Series S Warrants.
(4) Includes 40,000 shares issuable upon exercise of the Series S Warrants.
(5) Includes 8,025 shares issuable upon exercise of the Series S Warrants.
(6) Includes 231,974 shares issuable upon exercise of the Series S Warrants.
(7) Shares beneficially owned as of November 17, 1997 and include 799,999
shares issuable upon exercise of Series S Warrants.
(8) Includes 160,000 shares issuable upon exercise of the Series S Warrants.
(9) Includes 109,999 shares issuable upon exercise of the Series S Warrants.
(10) Includes 90,000 shares issuable upon exercise of the Series S Warrants.
(11) Includes 160,000 shares issuable upon exercise of the Series S Warrants.
(12) Includes 240,000 shares issuable upon exercise of the Series S Warrants.
(13) Includes 32,400 shares issuable upon exercise of the Series S Warrants.
(14) Includes 87,600 shares issuable upon exercise of the Series S Warrants.
(15) Shares beneficially owned are reported as of November 25, 1997, and
include (a) 108,800 shares held by Weiss, Peck & Greer, a Delaware
limited liability company ("WPG"), (b) 12,500 shares, 56,000 shares
issuable upon exercise of a Series W Warrant, and 16,000 shares issuable
upon the exercise of a Series S Warrant held by WPG Institutional Life
Sciences Fund L.P., and (c) 40,000 shares, 84,000 shares issuable upon
exercise of a Series W Warrant, and 24,000 shares issuable upon the
exercise of a Series S Warrant held by WPG Life Sciences Fund L.P. WPG
Life Sciences Fund L.P. and WPG Institutional Life Sciences Fund L.P.
are limited partnerships, the general partner of which is WPG. WPG
disclaims beneficial ownership of the above-described shares.
ISSUANCE OF SHARES
The Option Shares were issued in connection with the exercise by Dura of
its Purchase Option. The Company will not receive any proceeds from the
issuance of the Option Shares. The Warrant Shares are issuable upon exercise
of the Series S Warrants. To date, no Series S Warrants have been exercised.
The aggregate proceeds that the Company could receive upon exercise of the
Series S Warrants is $43,612,741. The Company intends to use any such
proceeds for general corporate purposes, including working capital.
PLAN OF DISTRIBUTION
The Shares offered hereunder may be sold from time to time by the Selling
Stockholders, or by pledgees, donees, transferees or other successors in
interest. The Company will receive no proceeds from the sale of any of the
Shares. Such sales may be made on Nasdaq or in the over-the-counter market or
otherwise, at prices and on terms then prevailing or related to the then-
current market price, or in negotiated transactions. The Shares may be sold to
or through one or more broker-dealers, acting as agent or principal, in
underwritten offerings, block trades, agency placements, exchange
distributions, brokerage transactions or otherwise, or in any combination of
transactions.
At the time a particular offer of Shares is made, to the extent required,
a supplemental Prospectus will be distributed which will set forth the number
of shares being offered and the terms of the offering including the name
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<PAGE>
or names of any underwriters, dealers or agents, the purchase price paid by
any underwriter for the Shares purchased from the Selling Stockholders, any
discounts, commissions and other items constituting compensation from the
Selling Stockholders and any discounts, concessions or commissions allowed or
reallowed or paid to dealers.
In connection with any transaction involving the Shares, broker-dealers or
others may receive from the Selling Stockholders, and may in turn pay to other
broker-dealers or others, compensation in the form of commissions, discounts or
concessions in amounts to be negotiated at the time (which compensation may be
in excess of customary commissions). Broker-dealers and any other persons
participating in a distribution of the Shares may be deemed to be
"underwriters" within the meaning of the Act in connection with such
distribution, and any such commissions, discounts or concessions may be deemed
to be underwriting discounts or commissions under the Act.
Any or all of the sales or other transactions involving the Shares
described above, whether effected by the Selling Stockholders, any broker-
dealer or others, may be made pursuant to this prospectus. In addition, any
Shares that qualify for sale pursuant to Rule 144 under the Act may be sold
under rule 144 rather than pursuant to this prospectus.
In order to comply with the securities laws of certain states, if
applicable, the Shares will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states, the
Shares may not be sold unless they have been registered or qualified for sale
in the applicable state or an exemption from the registration or qualification
requirement is available and complied with.
Under applicable rules and regulations under the Exchange Act, any person
engaged in the distribution of the Shares may not simultaneously engage in
market making activities with respect to the Common Stock of the Company for a
period of two business days prior to the commencement of such distribution. In
addition and without limiting the foregoing, each Selling Stockholder will be
subject to applicable provisions of the Exchange Act and the rules and
regulations thereunder, including, without limitation, Rules 10b-6 and 10b-7,
which provisions may limit the timing of purchases and sales of shares of the
Company's Common Stock by the Selling Stockholders.
All costs associated with this offering will be paid by the Company.
The Company and the Selling Stockholders may agree to indemnify certain
persons, including broker-dealers or others, against certain liabilities in
connection with any offering of the Shares, including liabilities under the
Securities Act.
LEGAL MATTERS
The validity of the Shares offered hereby will be passed upon for the
Company by Brobeck, Phleger & Harrison LLP, San Diego, California.
EXPERTS
The financial statements of the Company incorporated in this Prospectus
by reference from the Company's Annual Report on Form 10-K for the year ended
December 31, 1996 have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report, which is incorporated herein by
reference, and have been so incorporated in reliance upon the report of such
firm given upon their authority as experts in accounting and auditing.
The financial statements of Spiros Development Corporation as of
December 31, 1995 and 1996 and for the periods then ended incorporated in
this Prospectus by reference from the Company's Current Report on Form 8-K
filed on October 10, 1997, as amended, have been audited by Deloitte & Touche
LLP, independent auditors, as stated in their report, which is incorporated
herein by reference, and have been so incorporated in reliance upon the
report of such firm given upon their authority as experts in accounting and
auditing.
-14-
<PAGE>
DURA PHARMACEUTICALS, INC.
TABLE OF CONTENTS
PAGE
AVAILABLE INFORMATION 2
INFORMATION INCORPORATED BY REFERENCE 2
THE COMPANY 3
RISK FACTORS 4
SELLING STOCKHOLDERS 10
ISSUANCE OF SHARES 13
PLAN OF DISTRIBUTION 13
LEGAL MATTERS 14
EXPERTS 14
-15-
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth all expenses, other than underwriting
discounts and commissions, payable by Dura in connection with the registration,
issuance and distribution of the securities being registered hereby. All the
amounts shown are estimates, except for the registration fee.
Registration fee $42,181
Legal fees and expenses 12,000
Accounting fees and expenses 7,000
Printing and engraving expenses 1,500
Miscellaneous expenses 2,651
-------
Total $65,332
-------
-------
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
(a) Section 145 of the Delaware General Corporation Law permits
indemnification of Dura's officers and directors under certain conditions and
subject to certain limitations. Section 145 of the Delaware General Corporation
Law also provides that a corporation, like Dura, has the power to purchase and
maintain insurance on behalf of its officers and directors against any
liability asserted against such person and incurred by him or her in such
capacity, or arising out of his or her status as such, whether or not the
corporation would have the power to indemnify him or her against such liability
under the provisions of Section 145 of the Delaware General Corporation Law.
(b) Dura's Bylaws (Article VII, Section (1)) provides that Dura shall
indemnify its directors and executive officers to the fullest extent not
prohibited by Delaware General Corporation Law. The rights to indemnity
thereunder continue as to a person who has ceased to be a director, officer,
employee or agent and inure to the benefit of the heirs, executors and
administrators of the person. In addition, expenses incurred by a director or
executive officer in defending any civil, criminal, administrative or
investigative action, suit or proceeding by reason of the fact that he or she
is or was a director or officer of Dura (or was serving at Dura's request as a
director or officer of another corporation) shall be paid by Dura in advance of
the final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such amount if
it shall ultimately be determined that he or she is not entitled to be
indemnified by Dura as authorized by the relevant section of the Delaware
General Corporation Law.
(c) As permitted by Section 102(b)(7) of the Delaware General
Corporation Law, Article V, Section (A) of Dura's Certificate of Incorporation
provides that a director of Dura shall not be personally liable for monetary
damages for breach of his or her fiduciary duty as a director, except for
liability (i) for any breach of the director's duty of loyalty to Dura or its
stockholders, (ii) for acts or omissions not in good faith or acts or omissions
that involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law or (iv) for any transaction
from which the director derived any improper personal benefit.
(d) Dura has entered into indemnification agreements with each of its
directors and executive officers, effective upon its reincorporation in July
1997.
(e) There is directors and officers liability insurance now in effect
which insures Dura's directors and officers.
II-1
<PAGE>
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
Exhibits.
EXHIBIT
NUMBER
5.1 Opinion of Brobeck, Phleger & Harrison with respect to the Common
Stock being registered.
23.1 Consent of Brobeck, Phleger & Harrison (contained in their opinion
filed as Exhibit 5.1).
23.2 Independent Auditors' Consent, Deloitte & Touche LLP.
*24.1 Power of Attorney.
**99.1 Purchase Agreement, dated December 29, 1995, among the Company,
Spiros Corp. and the purchasers of the Callable Common Stock of
Spiros Corp.
____________________________
* Previously Filed.
** Previously filed, and incorporated herein by reference, in the Company's
Current Report on Form 8-K filed January 9, 1996, as amended.
ITEM 17. UNDERTAKINGS.
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.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
(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.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial BONA FIDE offering
thereof.
The undersigned Registrant hereby undertakes to deliver or cause to be
delivered with the Prospectus, to each person to whom the Prospectus is sent
or given, the latest annual report, to security holders that is incorporated
by reference in the Prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X is not set forth in the Prospectus, to deliver,
or cause to be delivered to each person to whom the Prospectus is sent or
given, the latest quarterly report that is specifically incorporated by
reference in the Prospectus to provide such interim financial information.
II-2
<PAGE>
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer, or
controlling person of the Registrant in the successful defense of any action,
suit, or proceeding) is asserted by such director, officer, or controlling
person in connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question of whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial BONA FIDE offering thereof.
II-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, DURA
PHARMACEUTICALS, INC. 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, COUNTY OF SAN DIEGO, STATE
OF CALIFORNIA, ON THE 18th DAY OF DECEMBER, 1997.
DURA PHARMACEUTICALS, INC.
By: /s/ CAM L. GARNER
-----------------
CAM L. GARNER
CHAIRMAN, PRESIDENT 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
--------- ----- ----
<S> <C> <C>
/s/ CAM L. GARNER Chairman, President and Chief Executive December 18, 1997
- ----------------- Officer (Principal Executive Officer)
CAM L. GARNER
/s/ JAMES W. NEWMAN Senior Vice President, Finance and December 18, 1997
- ------------------- Administration, and Chief Financial Officer
JAMES W. NEWMAN (Principal Financial and Accounting Officer)
/s/ DAVID S. KABAKOFF Executive Vice President and Director December 18, 1997
- ---------------------
DAVID S. KABAKOFF
* Senior Vice President, Sales and Marketing, December 18, 1997
- ------------------- and Director
WALTER F. SPATH
* Director December 18, 1997
- ------------------
JAMES C. BLAIR
* Director December 18, 1997
- ---------------------
HERBERT J. CONRAD
* Director December 18, 1997
- -----------------------
JOSEPH C. COOK, JR.
* Director December 18, 1997
- -----------------
DAVID F. HALE
* Director December 18, 1997
- ----------------------
GORDON V. RAMSEIER
* Director December 18, 1997
- --------------------
CHARLES G. SMITH
*/s/ Cam L. Garner
- --------------------
By: Cam L. Garner, Attorney-in-Fact
</TABLE>
II-4
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
EXHIBITS
TO
REGISTRATION STATEMENT ON FORM S-3
UNDER
THE SECURITIES ACT OF 1933
DURA PHARMACEUTICALS, INC.
II-5
<PAGE>
EXHIBIT INDEX
Exhibit
Number Exhibit
- ------- -------
5.1 Opinion of Brobeck, Phleger & Harrison with respect to the
Common Stock being registered.
23.1 Consent of Brobeck, Phleger & Harrison (included in Exhibit 5.1).
23.2 Independent Auditors' Consent, Deloitte & Touche LLP.
*24.1 Power of Attorney.
**99.1 Purchase Agreement dated as of December 29, 1995, among the
Company, Spiros Corp. and the purchasers of the Callable Common
Stock of Spiros Corp.
____________________________
* Previously Filed.
** Previously filed, and incorporated herein by reference, in the Company's
Current Report on Form 8-K filed January 9, 1996, as amended.
II-6
<PAGE>
EXHIBIT 5.1
[BROBECK, PHLEGER & HARRISON LLP LETTERHEAD]
December 12, 1997
Dura Pharmaceuticals, Inc.
7475 Lusk Boulevard
San Diego, CA 92121
Re: 3,136,603 Shares of Common Stock of Dura Pharmaceuticals, Inc.
Ladies and Gentlemen:
We have acted as counsel to Dura Pharmaceuticals, Inc., a California
corporation (the "Company"), in connection with the registration of up to
3,136,603 shares of the Company's Common Stock (the "Shares"), pursuant to the
Company's Registration Statement on Form S-3 (the "Registration Statement").
This opinion is being furnished in accordance with the requirements
of Item 16 of Form S-3 and Item 601(b)(5)(i) of Regulation S-K under the
Securities Act of 1933, as amended.
In connection with this opinion, we have examined the Registration
Statement and related Prospectus, the Company's Amended and Restated
Certificate of Incorporation, as amended through the date hereof, the
Company's bylaws, as amended through the date hereof, and the originals, or
copies certified to our satisfaction, of such records, documents,
certificates, memoranda and other instruments as in our judgment are
necessary or appropriate to enable us to render the opinion expressed below
(the "Documents"). We are relying (without any independent investigation
thereof) upon the truth and accuracy of the statements, covenants,
representations and warranties set forth in such Documents.
On the basis of the foregoing, and in reliance thereon, we are of
the opinion that the Shares have been duly authorized, and if, as and when
issued as described in the Registration Statement and Prospectus (as amended
and supplemented through the date of issuance) will be validly issued, fully
paid and nonassessable.
We consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and to the reference to this firm under the caption
"Legal Matters" in the Prospectus which is part of the Registration
Statement. In giving this consent, we do not thereby admit that we are
within the category of persons whose consent is required under Section 7 of
the Act or the rules and regulations of the Securities and Exchange
Commission promulgated thereunder.
<PAGE>
Dura Pharmaceuticals, Inc. December 12,1997
Page 2
This opinion is expressed as of the date hereof and we disclaim any
undertaking to advise you of any subsequent changes in applicable law or in the
facts stated or assumed herein which may alter, affect or modify the opinion
expressed herein. Our opinion is expressly limited to the matters set forth
above and we render no opinion, whether by implication or otherwise, as to any
other matters relating to the Company or the Shares.
Very truly yours,
BROBECK, PHLEGER & HARRISON LLP
<PAGE>
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement No. 333-37955 of Dura Pharmaceuticals, Inc. on Amendment No. 1 to
Form S-3 of our report dated January 20, 1997, relating to the consolidated
financial statements of Dura Pharmaceuticals, Inc., incorporated by reference
in the Annual Report on Form 10-K of Dura Pharmaceuticals, Inc. for the year
ended December 31, 1996. We also consent to the incorporation by reference in
this Registration Statement of our report dated March 21, 1997 (November 6,
1997 as to Note 7), relating to the financial statements of Spiros
Development Corporation (a development stage enterprise) appearing in the
Current Report of Dura Pharmaceuticals, Inc. on Form 8-K filed on October 10,
1997, as amended.
We also consent to the references to us under the
heading "Experts" in the Prospectus, which is a part of this Registration
Statement.
DELOITTE & TOUCHE LLP
San Diego, California
December 18, 1997
