<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 19, 1999
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
CORVAS INTERNATIONAL, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 2834 33-0238812
(State or other jurisdiction (Primary Standard (I.R.S. Employer
of incorporation or Industrial Classification Identification Number)
organization) Code Number)
3030 SCIENCE PARK ROAD
SAN DIEGO, CA 92121
(858) 455-9800
(Address, including zip code and telephone number, including area code,
of Registrant's principal executive offices)
---------------
Randall E. Woods
President and Chief Executive Officer
CORVAS INTERNATIONAL, INC.
3030 SCIENCE PARK ROAD
SAN DIEGO, CA 92121
(858) 455-9800
(Name, address, including zip code and telephone number, including area code,
of agent for service)
---------------
COPIES TO:
Barbara L. Borden, Esq.
Denise L. Woolard, Esq.
COOLEY GODWARD LLP
4365 EXECUTIVE DRIVE, SUITE 1100
SAN DIEGO, CA 92121
---------------
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. [ ]
<TABLE>
----------------
CALCULATION OF REGISTRATION FEE
===========================================================================================================================
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
MAXIMUM AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED BE REGISTERED PER SHARE PRICE(1) FEE
- ----------------------------------------------- --------------- --------------- ------------------- -----------------------
<S> <C> <C> <C> <C>
Common Stock, $.001 par value per share 2,259,707 $2.84 $6,417,568 $1,784.08
- ----------------------------------------------- --------------- --------------- ------------------- -----------------------
(1) Estimated in accordance with Rule 457(c) solely for the purpose of calculating 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 National Market
on November 11, 1999.
===========================================================================================================================
</TABLE>
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 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.
================================================================================
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION - DATED NOVEMBER _, 1999
PROSPECTUS
2,259,707 SHARES
CORVAS INTERNATIONAL, INC.
COMMON STOCK
The selling stockholders are offering and selling up to 2,259,707
shares of Corvas common stock under this prospectus. We will not receive any of
the proceeds from the sale of the shares by the selling stockholders.
The selling stockholders may offer their Corvas common stock through
public or private transactions, on or off the Nasdaq National Market, at
prevailing market prices, or at privately negotiated prices.
Our common stock is listed on the Nasdaq National Market under the
ticker symbol "CVAS." On November 17, 1999, the closing price of one share of
Corvas common stock on the Nasdaq National Market was $3.00.
----------------
THE SHARES OF OUR COMMON STOCK OFFERED OR SOLD UNDER THIS PROSPECTUS
INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 4.
----------------
THE CORVAS SHARES OFFERED OR SOLD UNDER THIS PROSPECTUS HAVE NOT BEEN
APPROVED BY THE SEC OR ANY STATE SECURITIES COMMISSION, NOR HAVE THESE
ORGANIZATIONS DETERMINED THAT THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
PROSPECTUS DATED NOVEMBER _, 1999.
1.
<PAGE>
THIS PROSPECTUS IS PART OF A REGISTRATION STATEMENT THAT WE FILED WITH
THE SEC. THE REGISTRATION STATEMENT INCLUDES EXHIBITS AND ADDITIONAL INFORMATION
NOT INCLUDED IN THIS PROSPECTUS.
WE HAVE NOT AUTHORIZED ANY PERSON TO GIVE YOU ANY SUPPLEMENTAL
INFORMATION OR MAKE ANY REPRESENTATIONS FOR US. YOU SHOULD ONLY RELY ON
INFORMATION ABOUT CORVAS THAT IS CONTAINED IN THIS PROSPECTUS OR IN ONE OF OUR
PUBLIC REPORTS FILED WITH THE SEC AND INCORPORATED INTO THIS PROSPECTUS.
INFORMATION CONTAINED IN THIS PROSPECTUS OR IN CORVAS' PUBLIC REPORTS MAY BECOME
OUTDATED. YOU SHOULD NOT ASSUME THAT THE INFORMATION IN THIS PROSPECTUS IS
ACCURATE OR COMPLETE AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT OF THIS
PROSPECTUS OR OTHER DATE TO WHICH SPECIFIC INFORMATION CONTAINED HEREIN IS
QUALIFIED. WE ARE NOT MAKING AN OFFER OF SECURITIES IN ANY STATE WHERE THE OFFER
IS PROHIBITED.
THE COMPANY
At Corvas, we are designing and developing a new generation of
therapeutic agents for cardiovascular, cancer and other major diseases. Our drug
candidates target the following diseases.
o Major cardiovascular diseases such as heart attack, unstable
angina, deep vein thrombosis ("DVT"), pulmonary embolism and
stroke.
o Acute inflammation associated with reperfusion injury in
ischemic stroke.
o Cancer, as our drug candidates may inhibit the formation of
new blood vessels (angiogenesis) and the movement of tumor
cells in certain solid tumors (metastasis).
o Replication of the hepatitis C virus.
Many of our drug candidates are still in the research and development
stage. Corvas, alone or in conjunction with our corporate partner Pfizer Inc.
("Pfizer"), is conducting the following human clinical trials.
o International multi-center Phase II trial of our proprietary
injectable anticoagulant, rNAPc2, for the prevention of DVT,
the formation of blood clots in the veins of the legs,
following orthopedic surgery.
o Phase IIa trial of rNIF as a possible stroke therapy,
currently being conducted by Pfizer.
o An additional Phase IIa trial of rNAPc2 in coronary care
patients undergoing elective coronary balloon angioplasty.
Another of our proprietary drug candidates, rNAP5, is ready to begin
Phase I clinical testing for acute cardiovascular indications, pending
establishment of a partnership arrangement or corporate collaboration for this
program. In addition to our alliance with Pfizer for rNIF, we also have two
strategic alliances with Schering Corporation ("Schering-Plough"). The first
collaboration is for the development of synthetic oral anticoagulants for the
prevention and treatment of chronic cardiovascular diseases involving
thrombosis, such as DVT, unstable angina, atrial fibrillation and myocardial
infarction (heart attack). We are also collaborating with Schering-Plough on a
program directed at the development of oral inhibitors of a key protease
associated with hepatitis C virus replication, intended as a treatment for this
chronic viral disease.
2.
<PAGE>
We have expanded our internal research efforts to include two new key
targets for the treatment of certain solid tumor cancers. This research is
focused on the development of drugs that may inhibit the formation of new blood
vessels (angiogenesis) and the metastatic migration of tumor cells in certain
solid tumors. Another of our new research programs, being funded in part through
a $599,000 grant, is directed towards discovering inhibitors of a key malaria
protease, falcipain.
Our principal executive offices are located at 3030 Science Park Road,
San Diego, California 92121, and our telephone number is (858) 455-9800. We were
incorporated in 1987.
CORVAS(R) is a registered trademark and the Corvas logo is a trademark
of the Company.
3.
<PAGE>
RISK FACTORS
INVESTMENT IN CORVAS 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 CORVAS SHARES. THIS PROSPECTUS CONTAINS
FORWARD-LOOKING STATEMENTS. THESE STATEMENTS RELATE TO FUTURE EVENTS OR OUR
FUTURE CLINICAL OR PRODUCT DEVELOPMENT OR FINANCIAL PERFORMANCE. IN SOME CASES,
YOU CAN IDENTIFY FORWARD-LOOKING STATEMENTS BY TERMINOLOGY SUCH AS "MAY,"
"WILL," "SHOULD," "EXPECTS," "PLANS," "ANTICIPATES," "BELIEVES," "ESTIMATES,"
"PREDICTS," "POTENTIAL," OR "CONTINUE." OUR ACTUAL OPERATING RESULTS AND
FINANCIAL PERFORMANCE MAY PROVE TO BE VERY DIFFERENT FROM WHAT WE MIGHT HAVE
PREDICTED AS OF THE DATE OF THIS PROSPECTUS. THE RISKS DESCRIBED BELOW ADDRESS
SOME OF THE FACTORS THAT MAY AFFECT OUR FUTURE OPERATING RESULTS AND FINANCIAL
PERFORMANCE.
WE STILL ARE AT AN EARLY STAGE OF DEVELOPMENT AND WE DO NOT HAVE ANY COMMERCIAL
DRUGS OR OTHER PRODUCTS GENERATING REVENUES
We are at an early stage of development as a biotechnology and
pharmaceutical company, and we do not yet have any commercial products. Our
primary sources of revenue are research funding, license fees and milestone
payments from our corporate collaborations. Our existing drug candidates will
require significant additional development, clinical trials, regulatory
approvals and additional investment before they can be marketed for sale. We do
not expect to be able to market any of our existing drug candidates for a number
of years, if at all. We cannot assure you that any of our product development
efforts will lead to commercial drugs, either because the drug candidates fail
to be effective in targeting the desired indication in clinical trials or
because we have inadequate financial or other resources to pursue the program
through the clinical trial process.
WE HAVE A HISTORY OF OPERATING LOSSES THAT WE EXPECT TO CONTINUE FOR THE
FORESEEABLE FUTURE
We have experienced significant operating losses since our inception in
1987. At September 30, 1999, we had an accumulated deficit of approximately
$87,960,000. We expect to continue to incur substantial additional operating
losses over the next several years as we pursue our clinical trial and research
and development efforts. To become profitable, we, either alone or with others,
must successfully develop, manufacture and market our current drug candidates
and continue to identify, develop, manufacture and market additional future
drugs, all of which will require regulatory approval.
WE WILL CONTINUE TO NEED ADDITIONAL FINANCING, WHICH WE MAY NOT BE ABLE TO
OBTAIN ON ACCEPTABLE TERMS
Our operations since inception have consumed substantial amounts of
cash and we anticipate that we will continue to spend substantial additional
amounts on research and development, including amounts spent on our clinical
trials and for manufacturing clinical supplies of our drug candidates. We are
seeking to leverage our core technologies into new drug programs to diversify
our pipeline. These new programs may require additional cash investments that
are not funded through collaborations. Thus, we expect negative cash flows from
operations to continue in the foreseeable future and we also expect we will
continue to seek opportunities to raise capital.
4.
<PAGE>
We are actively seeking opportunities to fund our programs through
collaborative arrangements and to raise capital through private or public
financings. In August 1999, we raised $9,750,000 through the private sale of a
5.5% convertible senior subordinated note and the issuance of common stock. In
October 1999, we raised an additional $5,250,000 through the private sale of a
5.5% convertible senior subordinated note and the issuance of common stock. We
will continue to seek opportunities to raise additional capital when available
on favorable terms. Because of the risks involved in investing in early-stage
biotechnology companies and the limited number of financing sources making new
investments in the biotechnology industry in general, we may have difficulties
raising additional capital in a timely manner and on acceptable terms. If we are
unable to raise additional capital, we may have to significantly delay, scale
back or discontinue one or more of our drug discovery programs, clinical trials
or other aspects of our operations. We also could be forced to seek
collaborative partners for programs at an earlier stage than would be desirable
in order to maximize the rights retained by Corvas to future product candidates.
WE RELY ON OUR COLLABORATIVE PARTNERS TO FUND PROGRAMS AND CONDUCT CLINICAL
TRIALS
We have relied and expect to continue to rely on certain established
pharmaceutical companies to fund a portion of our research and development
expenses. We have collaborative agreements with Pfizer for the development of
rNIF, an anti-inflammatory drug that we developed, and with Schering-Plough for
the discovery and commercialization of orally active inhibitors of (i)
thrombosis (Factor Xa and thrombin) for the prevention and treatment of chronic
cardiovascular disorders and (ii) a key protease associated with hepatitis C
virus replication. As a result, we depend on Pfizer and Schering-Plough for
funding these collaborations and for the clinical testing (including regulatory
compliance) of any drug candidates developed through these collaborations. We
also will depend on them to launch and commercially market any drugs approved by
the FDA or foreign regulatory agencies.
We cannot control the amount and timing of resources dedicated by our
collaborators to the advancement of our drug programs. In addition, we face the
following risks.
o That our collaborator's interests will no longer coincide with
our interests such that our drug programs will not be
advanced.
o That our collaborators will terminate a program, delay a
clinical trial, underfund a clinical trial program, stop a
clinical trial and abandon a drug candidate, repeat or conduct
new clinical trials or require a new formulation of a drug
candidate for clinical testing.
o That our collaborators will develop, independently or with
third parties, products that could compete with our future
products.
5.
<PAGE>
WE ARE ATTEMPTING TO ENTER INTO A COLLABORATIVE AGREEMENT FOR OUR rNAPc2 DRUG
CANDIDATE
We are in the process of seeking an appropriate corporate partner for
our proprietary drug candidate, rNAPc2, in order to obtain additional funding
for the continued development of this drug candidate. The process of partnering
drug programs is lengthy and subject to risk and uncertainty. We may not be able
to obtain a partner on acceptable terms or within a reasonable period of time.
WE MUST OBTAIN REGULATORY APPROVAL TO MARKET OUR PRODUCTS IN THE U.S. AND
FOREIGN JURISDICTIONS
We must obtain regulatory approval before we can market or sell our
future drug products. In the U.S., we must obtain FDA approval for each drug
that we intend to commercialize. The FDA approval process is typically lengthy
and expensive, and approval is never guaranteed. Drug products that are
distributed abroad are also subject to foreign government regulation. Since our
drug products are in the early development stage, none of our drug products has
received regulatory approval to be commercially marketed and sold. If we fail to
obtain regulatory approval, we will be unable to market and sell our future
products.
TO OBTAIN REGULATORY APPROVAL TO MARKET OUR PRODUCTS, PRECLINICAL STUDIES AND
COSTLY AND LENGTHY CLINICAL TRIALS ARE REQUIRED, AND THE RESULTS OF THE STUDIES
AND TRIALS ARE HIGHLY UNCERTAIN
As part of the FDA approval process, we must conduct, at our own
expense or our partners' expense, preclinical studies on animals and clinical
trials on humans for each drug candidate. The number of preclinical studies and
clinical trials that the FDA will require varies depending on the drug product,
the disease or condition that the drug is being developed to address, and
regulations applicable to the particular drug. We may need to perform multiple
preclinical studies using various doses and formulations before we can begin
clinical trials, which could result in delays in our ability to market any of
our drug products. Furthermore, even if we obtain favorable results in
preclinical studies on animals, the results in humans may be different.
After we have conducted preclinical studies in animals, we must
demonstrate that our drug products are safe and effective for use on the target
human patients in order to receive regulatory approval for commercial sale.
Results that are adverse or inconclusive will stop us from filing for regulatory
approval of our products. There are many factors that can cause our clinical
trials to be delayed or terminated. These factors include the risk of slow
patient enrollment, lack of sufficient supplies of the drug candidate, adverse
medical events or side effects in treated patients, longer treatment time
required to demonstrate the safe and effective use of the drug and lack of
effectiveness of the drug candidate being used.
In addition, our Phase IIa trial for rNIF is being conducted by Pfizer
and we rely on our contractual rights to access data that is collected by
Pfizer. We depend on Pfizer for the data and cannot assure you that Pfizer will
continue the clinical trial or that the FDA will approve rNIF.
6.
<PAGE>
OUR DRUG CANDIDATES MAY COMPETE WITH OTHER DRUGS THAT MAY DIMINISH THE
COMMERCIAL SUCCESS OF ANY DRUGS WE COMMERCIALIZE
The biotechnology market is highly competitive. Almost all of the
larger biotechnology companies have developed, or are attempting to develop,
drugs that will be competitive with drugs that we may develop. We expect that
the competition from other biotechnology companies, pharmaceutical companies,
and research and academic institutions will increase. These competitors have
substantially greater financial, technical, research and other resources than we
do. It is possible that our competitors will develop and market drugs that are
more efficient and commercially attractive than our future drugs or that will
render our drugs obsolete. We also cannot assure you that we will have the
financial resources, technical expertise or marketing, distribution or support
capabilities to compete successfully.
FAILURE TO RETAIN OUR PRESIDENT AND CHIEF EXECUTIVE OFFICER AND OUR EXECUTIVE
VICE PRESIDENT, RESEARCH AND DEVELOPMENT COULD ADVERSELY EFFECT OUR ABILITY TO
OBTAIN FINANCING, CONDUCT CLINICAL TRIALS OR DEVELOP DRUGS
We depend on our President and Chief Executive Officer, Randall E.
Woods, and our Executive Vice President, Research and Development, George P.
Vlasuk, Ph.D. The loss of either of these individuals may prevent us from
achieving our business objectives. Each of these employees has an employment
agreement with us, but the agreements provide for "at-will" employment with no
specified term.
WE HAVE LIMITED MANUFACTURING EXPERIENCE AND WE RELY ON THIRD PARTIES TO
MANUFACTURE OUR CLINICAL SUPPLIES
In order to be successful, our drugs must be manufactured in sufficient
quantities, in compliance with regulatory requirements, and at an acceptable
cost. We have limited experience in pilot scale manufacturing. For larger-scale
production, as is required for clinical testing, we rely on third parties to
manufacture our drug candidates. If we cannot contract for large-scale
manufacturing capabilities on acceptable terms, our ability to conduct clinical
trials may be adversely affected, and this may result in the delay or preclusion
of submission of drugs for regulatory approval, which in turn could adversely
affect our business, financial condition, prospects and results of operations.
IF WE ARE UNABLE TO PROTECT OUR PROPRIETARY TECHNOLOGY, WE MAY NOT BE ABLE TO
COMPETE AS EFFECTIVELY
Our success depends in part on our ability to obtain patent protection
for our products, both in the U.S. and other countries. The scope and extent of
patent protection for our drug candidates is uncertain. We rely on patent and
other intellectual property protection to prevent our competitors from
manufacturing and marketing our drug candidates. We cannot be certain that our
patents will be enforceable or that they will afford us protection against our
competitors, especially since there is a lengthy lead time between when a patent
application is filed and when it is actually published. We also cannot assure
you that we will not infringe on intellectual property rights of others. If a
patent holder believes that our drug candidate infringes on their patent, the
patent holder may sue us even if we have received patent protection for our
technology. If another party claims we are infringing on their technology, we
would face a number of issues, including the following.
7.
<PAGE>
o Defending a lawsuit, which is very expensive and time
consuming.
o Paying a large sum for damages if we are found to be
infringing.
o Being prohibited from selling or licensing our drugs or drug
candidates until we obtain a license from the patent holder,
who may refuse to grant us a license or will only agree to do
so on unfavorable terms. Even if we are granted a license, we
may have to pay substantial royalties or grant cross-licenses
to our patents.
o Redesigning our drug so it does not infringe on the patent
holder's technology if we are unable to obtain a license. This
may not be possible and even if it is possible, it would
require substantial additional capital and would delay
commercialization.
We also rely on trade secrets and proprietary know-how to develop and
maintain our competitive position. While we believe we use reasonable protection
to protect our trade secrets, we cannot assure you that our current or former
employees, consultants or scientific advisors, or current or prospective
collaborative partners will not unintentionally or willfully disclose our
information to competitors. Furthermore, enforcing a claim alleging the
infringement of our trade secrets would be expensive and difficult to prove,
making the outcome uncertain. There is also the possibility that our competitors
may independently develop equivalent knowledge, methods and know-how.
Since we collaborate with third parties with respect to certain of our
technology, there is also the risk that disputes may arise as to the rights to
technology or drugs developed in collaboration with other parties.
IF WE BECOME SUBJECT TO PRODUCT LIABILITY CLAIMS, IT MAY RESULT IN DAMAGES THAT
EXCEED OUR INSURANCE
Since we conduct clinical trials on humans, we face the risk that the
use of our drug candidates will result in adverse effects. Such risks will exist
even for any drugs that are approved for commercial sale. We have obtained
liability insurance of $10,000,000 for our products in clinical trials, which we
believe is sufficient considering our business. However, we cannot predict all
of the possible harms or side effects that may result and, therefore, we cannot
assure you that the amount of coverage we currently hold will be adequate to
protect us. We also cannot assure you that we will have sufficient resources to
pay for any liability resulting from a claim beyond the limit of our insurance
coverage.
WE DO NOT HAVE ANY SALES, MARKETING OR DISTRIBUTION EXPERIENCE
Since we do not have any marketed products, we have limited experience
in sales, marketing and distribution. To directly market and distribute any
products we may develop, we must build a substantial marketing and sales force
with appropriate technical expertise and supporting distribution capabilities.
Alternatively, we may obtain the assistance of a pharmaceutical company or other
entity with a large distribution system and a large direct sales force. We
cannot assure you that we will be able to establish sales, marketing and
distribution capabilities of our own or enter into separate arrangements with
third parties in a timely manner or on acceptable terms.
8.
<PAGE>
THE GOVERNMENT MAY HAVE RIGHTS TO CERTAIN OF OUR TECHNOLOGY
In September 1999, we were awarded a Phase I Small Business Innovation
Research grant from the National Institute for Allergy and Infectious Disease to
support our research related to the treatment of malaria. As a result of the
grant, the government will obtain rights in the technology, including
inventions, developed with their funding. In addition, the government may
require us to grant to a third party an exclusive license to any of the
inventions resulting from the grant if the government determines that we have
not taken adequate steps to commercialize inventions or for public health or
safety needs.
OUR STOCK HAS BEEN AND MAY CONTINUE TO BE EXTREMELY VOLATILE
The market price of our common stock has been, and is likely to
continue to be, extremely volatile, in part because our daily sales volume is
relatively low. Our stock price could be subject to wide fluctuations in
response to a variety of factors, including the following.
o Announcements of technological innovations or new services by
us or our competitors.
o Changes in the market valuations of biotechnology companies.
o Changes in financial estimates by securities analysts.
o Actions by governmental regulatory agencies.
o Announcements by us or our competitors of acquisitions,
strategic relationships, joint ventures or capital
commitments.
o Additions or departures of key personnel.
o Sales of our common stock in the open market.
o Other events or factors that may be beyond our control.
9.
<PAGE>
USE OF PROCEEDS
Corvas will not receive any proceeds from sales of Corvas shares by the
selling stockholders. The selling stockholders will receive the proceeds from
sales of these shares.
RECENT DEVELOPMENTS
PRIVATE FINANCING
In August 1999, Corvas issued and sold in a private financing 1,300,000
shares of common stock for $2.50 per share and a 5.5% convertible senior
subordinated note due in August 2006 in the aggregate principal amount of
$6,500,000. Upon maturity, this note will have an accreted value of
approximately $9,503,000. In October 1999, we issued and sold in a private
financing 700,000 shares of common stock for $2.50 per share and an additional
5.5% convertible senior subordinated note due in August 2006 in the aggregate
principal amount of $3,500,000. Upon maturity, this note will have an accreted
value of approximately $5,069,000. These convertible notes accrue interest at
5.5% per annum, compounded semi-annually, with interest payable upon redemption
or conversion. We have agreed to pay any applicable withholding taxes that may
be payable in connection with the accretion, which are estimated to be 30% of
the annual accretion. At the option of the holder, these notes are convertible
into shares of Corvas common stock at $3.25 per share, subject to adjustment for
certain changes in capital or reorganizations and subject to adjustment if
Corvas sells additional securities for less than $2.50 per share before August
18, 2000. At our option, we may pay the accretion in cash or in Corvas common
stock priced at the then-current market price. We may call the notes for
redemption anytime after August 18, 2002.
10.
<PAGE>
SELLING STOCKHOLDERS
We are registering the 2,259,707 shares on behalf of the selling
stockholders pursuant to registration rights agreements we entered into with the
selling stockholders in connection with convertible debt and equity financings
closed concurrently on October 20, 1999.
Our registration of these Corvas shares does not necessarily mean that
the selling stockholders will sell any or all of these shares, or that Artisan
Equity Limited will elect to convert any of their second convertible note into
common stock, or that it will elect to convert this convertible note for the
number of shares listed in the following table.
<TABLE>
<CAPTION>
Percent of
Number of Percent of Number Number of Shares
Shares Shares of Shares Beneficially
Beneficially Beneficially Shares Beneficially Owned After
Owned Prior to Owned Prior to Being Owned After Offering(1)(2)
Name of Selling Stockholders Offering(1) Offering(1)(2) Offered Offering(1)(3) (3)
---------------------------- -------------- --------------- --------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Artisan Equity Limited(4) 4,483,707 20.4% 1,559,707 2,924,000 14.3%
Westcoast and Company(5) 1,608,000 9.2% 100,000 1,508,000 8.6%
Sofinov Societe Financiere
D'Innovation Inc. 1,400,000 8.0% 400,000 1,000,000 5.7%
Finsbury Technology Trust 200,000 1.1% 200,000 0 *
--------- --------- ---------
TOTAL 7,691,707 2,259,707 5,432,000
========= ========= =========
--------------------------------------------------------------------------------------------------------------------
</TABLE>
* Less than 1%
(1) Unless otherwise indicated below, the persons named in the table have
sole voting and investment power with respect to all shares
beneficially owned by them, subject to community property laws where
applicable.
(2) Applicable percentage of ownership is based on 17,488,391 shares of
common stock outstanding on November 17, 1999, adjusted as required by
rules promulgated by the Securities and Exchange Commission.
(3) Assumes the sale of all shares offered hereby.
(4) Assumes that both convertible notes accrete until the stated maturity
of August 17, 2006, and all principal and accretion are converted into
common stock immediately prior to maturity at $3.25 per share.
(5) Westcoast and Company is an affiliate of Wanger Asset Management, L.P.
Of the 1,608,000 shares of common stock indicated as beneficially
owned, Wanger Asset Management holds 1,508,000.
11.
<PAGE>
PLAN OF DISTRIBUTION
The selling stockholders may offer their Corvas shares at various times
in one or more of the following transactions:
o on the Nasdaq National Market;
o in the over-the-counter market;
o in negotiated transactions other than the Nasdaq National Market or the
over-the-counter market;
o in connection with short sales of the Corvas shares;
o by pledge to secure debts and other obligations;
o in connection with the writing of call options, in hedge transactions
and in settlement of other transactions in standardized or
over-the-counter options; or
o in a combination of any of the above transactions.
The selling stockholders may sell their shares at market prices at the
time of sale, at prices related to such prevailing market prices, at negotiated
prices or at fixed prices. The selling stockholders may use broker-dealers to
sell their shares. If this happens, broker-dealers will either receive discounts
or commissions from the selling stockholders, or they will receive commissions
from purchasers for whom they acted as agents.
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. 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
from the SEC's website at http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to other documents. The information incorporated by reference is
considered to be part of this prospectus, and information that we file later
with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings we
will make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934, as amended:
1. Annual Report on Form 10-K for the fiscal year ended December
31, 1998;
2. Quarterly Report on Form 10-Q for the quarter ended March 31,
1999;
3. Quarterly Report on Form 10-Q for the quarter ended June 30,
1999; and
4. Quarterly Report on Form 10-Q for the quarter ended September
30, 1999.
12.
<PAGE>
You may request a free copy of these filings by writing to us at the
following address:
CORVAS INTERNATIONAL, INC.
ATTN: INVESTOR RELATIONS
3030 SCIENCE PARK ROAD
SAN DIEGO, CA 92121
LEGAL MATTERS
For purposes of this offering, Cooley Godward LLP, San Diego,
California, is giving its opinion on the validity of the shares.
EXPERTS
The financial statements of Corvas International, Inc. as of December
31, 1998 and 1997, and for each of the years in the three-year period ended
December 31, 1998, have been incorporated by reference herein and in the
Registration Statement in reliance upon the report of KPMG LLP, independent
certified public accountants, incorporated by reference herein and upon
authority of said firm as experts in accounting and auditing.
13.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth all expenses payable by Corvas in
connection with the sale of the securities being registered. All the amounts
shown are estimates except for the SEC registration fee and the Nasdaq National
Market listing fee.
SEC Registration fee.............................. $ 1,784.08
Nasdaq National Market listing fee................ 14,000.00
Legal fees and expenses........................... 11,000.00
Accounting fees and expenses...................... 7,000.00
Miscellaneous..................................... 1,215.92
----------
Total.................................... $ 35,000.00
==========
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS
Section 145 of the General Corporation Law of the State of Delaware
(the "Delaware Law") empowers a Delaware corporation to indemnify any persons
who are, or are threatened to be made, parties to any threatened, pending or
completed legal action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of such
corporation), by reason of the fact that such person was an officer or director
of such corporation, or is or was serving at the request of such corporation as
a director, officer, employee or agent of another corporation or enterprise. The
indemnity may include expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement of such action, suit or proceeding, provided that
such officer or director acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the corporation's best interest,
and, for criminal proceedings, had no reasonable cause to believe his or her
conduct was illegal. A Delaware corporation may indemnify officers and directors
against expenses (including attorney's fees) in connection with the defense or
settlement of an action by or in the right of the corporation under the same
conditions, except that no indemnification is permitted without judicial
approval if the officer or director is adjudged to be liable to the corporation.
Where an officer or director is successful on the merits or otherwise in the
defense of any action referred to above, the corporation must indemnify him or
her against the expenses which such officer or director actually and reasonably
incurred.
II-1
<PAGE>
The Registrant's Bylaws contain a provision to limit the personal
liability of the directors of the Registrant for violations of their fiduciary
duty, except to the extent such limitation of liability is prohibited by the
Delaware Law. This provision eliminates each director's liability to the
Registrant or its stockholders for monetary damages except (i) for any breach of
the director's duty of loyalty to the Registrant or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the Delaware Law providing
for liability of directors for unlawful payment of dividends or unlawful stock
purchases or redemptions, or (iv) for any transaction from which a director
derived an improper personal benefit. The Registrant's Bylaws provide that the
Registrant shall indemnify directors and officers to the fullest extent
permitted by law. The effect of these provisions is to eliminate the personal
liability of directors for monetary damages for actions involving a breach of
their fiduciary duty of care, including any such actions involving gross
negligence.
In addition, Registrant has entered into indemnity agreements with its
executive officers and directors whereby Registrant obligates itself to
indemnify such officers and directors from any amounts which the officer or
director becomes obligated to pay because of any claim made against him or her
arising out of any act or omission committed while he or she is acting in his or
her capacity as a director and/or officer of Registrant.
Registrant maintains directors and officers liability insurance
coverage that insures its officers and directors against certain losses that may
arise out of their positions with the Registrant and insures the Registrant for
liabilities it may incur to indemnify its officers and directors.
ITEM 16. EXHIBITS
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------
5.1 Opinion of Cooley Godward LLP.
23.1 Consent of KPMG LLP.
23.2 Consent of Cooley Godward LLP. Reference is made to
Exhibit 5.1.
24.1 Power of Attorney. Reference is made to page II-4.
ITEM 17. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors and executive officers of the Registrant
pursuant to provisions described in Item 15 or otherwise, the Registrant has
been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director or executive officer of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director or
executive officer in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
II-2
<PAGE>
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement to include any
material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement.
(2) That, for purposes of determining any liability under the
Securities Act, each filing of the Registrant's annual report pursuant to
Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to Section 15(d) of the
Exchange Act) 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.
(3) 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 Exchange Act; and where interim financial information required to be
presented by Article 3 of Regulation S-X are 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.
(4) That, for the purposes of determining liability under the
Securities Act, each 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.
(5) 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.
(6) That, for purposes of determining any liability under the
Securities Act, 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.
(7) For the purpose of determining any liability under the Securities
Act, 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, as amended,
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 November 19,
1999.
CORVAS INTERNATIONAL, INC.
By: /s/ Randall E. Woods
---------------------------------------
Randall E. Woods
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW TO ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Randall E. Woods and Carolyn M. Felzer,
and each of them, as his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming that all said attorneys-in-fact and agents, or any of
them or their or his substitute or substitutes, may lawfully do or cause to be
done by virtue thereof.
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/ Randall E. Woods President, Chief Executive Officer and November 19, 1999
- --------------------------- Director (PRINCIPAL EXECUTIVE OFFICER)
Randall E. Woods
/s/ Carolyn M. Felzer Senior Director of Finance (PRINCIPAL November 19, 1999
- --------------------------- FINANCIAL AND ACCOUNTING OFFICER)
Carolyn M. Felzer
November 19, 1999
/s/ M. Blake Ingle, Ph.D. Chairman of the Board of Directors
- ---------------------------
M. Blake Ingle, Ph.D.
/s/ George P. Vlasuk, Ph.D. Executive Vice President, Research and November 19, 1999
- --------------------------- Development and Director
George P. Vlasuk, Ph.D.
/s/ Michael Sorell, M.D. Director November 19, 1999
- ---------------------------
Michael Sorrell, M.D.
/s/ Nicole Vitullo Director November 19, 1999
- ---------------------------
Nicole Vitullo
</TABLE>
II-4
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------ -----------------------
5.1 Opinion of Cooley Godward LLP.
23.1 Consent of KPMG LLP.
23.2 Consent of Cooley Godward LLP. Reference is made to
Exhibit 5.1.
24.1 Power of Attorney. Reference is made to page II-4.
EXHIBIT 5.1
[COOLEY GODWARD LLP LETTERHEAD]
November 19, 1999
Corvas International, Inc.
3030 Science Park Road
San Diego, CA 92121
Ladies and Gentlemen:
You have requested our opinion with respect to certain matters in connection
with the filing by Corvas International, Inc. (the "Company") of a Registration
Statement on Form S-3 (the "Registration Statement") including a related
prospectus, with the Securities and Exchange Commission covering the offering of
2,259,707 shares of the Company's Common Stock, $.001 par value (the
"Securities") on behalf of certain selling stockholders, including 700,000
shares of Common Stock (the "Shares") and up to 1,559,707 shares of Common Stock
(the "Convertible Note Shares") issuable upon the conversion of convertible
notes held by certain selling securityholders (the "Convertible Notes").
In connection with this opinion, we have examined and relied upon the
Registration Statement and related Prospectus, the Convertible Notes, the
Company's Restated Certificate of Incorporation and Bylaws, as amended, and such
other documents, records, 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 (i) the Shares are validly issued, fully paid and nonassessable and (ii)
the Convertible Note Shares, when issued upon conversion of the Convertible
Notes, 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/ Barbara L. Borden
- ---------------------
Barbara L. Borden
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
THE BOARD OF DIRECTORS
CORVAS INTERNATIONAL, INC.:
We consent to the use of our report incorporated herein by reference
and to the reference to our firm under the heading "Experts" in the registration
statement on Form S-3 of Corvas International, Inc.
KPMG LLP
San Diego, California
November 18, 1999
