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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 30, 1996
REGISTRATION NO. 333-8075
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
TARGET THERAPEUTICS, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 95-3962471
(State of Incorporation) (I.R.S. Employer Identification No.)
47201 LAKEVIEW BLVD.
FREMONT, CA 94538
(Address of principal executive offices)
GARY R. BANG
PRESIDENT AND CHIEF EXECUTIVE OFFICER
TARGET THERAPEUTICS, INC.
47201 LAKEVIEW BLVD.
FREMONT, CA 94538
(510) 440-7700
(Name, address and telephone number of agent for service)
COPIES TO:
MICHAEL W. HALL
Venture Law Group
A Professional Corporation
2800 Sand Hill Road
Menlo Park, California 94025
(415) 854-4488
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As
soon as practicable after the effective date of this Registration Statement.
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, 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 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 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. / /
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
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+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
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
TARGET THERAPEUTICS, INC.
143,775 SHARES
COMMON STOCK
THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF
RISK. SEE "RISK FACTORS."
All references herein to "Target" or the "Company" mean Target
Therapeutics, Inc. unless otherwise indicated by the context.
The 143,775 shares of Target Common Stock, $0.0025 par value,
covered by this Prospectus (the "Shares") are offered for the account of certain
stockholders of Target (the "Selling Stockholders"). The Shares were issued to
the Selling Stockholders in connection with the acquisition of Interventional
Therapeutics Corporation, a California corporation, by the Company on May 23,
1996 (the "Acquisition"). For additional information concerning the Acquisition,
see "Issuance of Common Stock to Selling Stockholders." The Selling Stockholders
may sell the Shares from time to time on the over-the-counter market in regular
brokerage transactions, in transactions directly with market makers or in
certain privately negotiated transactions. See "Plan of Distribution." Each
Selling Stockholder has advised the Company that no sale or distribution other
than as disclosed herein will be effected until after this Prospectus shall have
been appropriately amended or supplemented, if required, to set forth the terms
thereof. The Company will not receive any proceeds from the sale of the Shares
by the Selling Stockholders.
All expenses of registration of the Shares, estimated to be
approximately $25,000 shall be borne by the Company. Normal commission expenses
and brokerage fees and any applicable transfer taxes are payable individually by
the Selling Stockholders.
Each of the Selling Stockholders may be deemed to be an
"Underwriter," as such term is defined in the Securities Act of 1933, as amended
(the "Securities Act").
On July 29, 1996, the last sale price of the Company's Common
Stock on The Nasdaq National Market was $32.50 per share.
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.
<TABLE>
<CAPTION>
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UNDERWRITING PROCEEDS TO
PRICE TO DISCOUNTS AND SELLING STOCKHOLDERS
PUBLIC COMMISSIONS SHAREHOLDERS
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share.................... See Text Above See Text Above See Text Above
Total........................
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</TABLE>
The date of this Prospectus is July 30, 1996
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act") and in
accordance therewith files proxy statements, reports and other information with
the Securities and Exchange Commission (the "Commission"). This filed material
can be inspected and copied at regional offices of the Commission located at 230
South Dearborn Street, Chicago, Illinois and 75 Park Place, New York, New York;
and at the Public Reference Office of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. Copies of such material can be obtained from the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549 at prescribed rates.
INFORMATION INCORPORATED BY REFERENCE
The following documents filed by the Company with the
Commission are incorporated by reference in this Prospectus:
1. The Company's Annual Report on Form 10-K for the year ended
March 31, 1996.
2. The Company's definitive Proxy Statement dated July 24,
1996, filed in connection with the September 4, 1996 Annual Meeting of
Stockholders of Target.
3. The Company's Current Report on Form 8-K filed with the
Commission on June 7, 1996.
4. The Company's Current Report on Form 8-K/A filed with the
Commission on July 25, 1996.
5. The Company's Current Report on Form 8-K filed with the
Commission on July 26, 1996.
6. The Company's Registration Statement on Form 8-A dated
January 15, 1992.
7. The Company's Registration Statement on Form 8-A dated
September 21, 1994 (relating to certain preferred stock purchase rights).
All documents 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 the offering of the Common Stock offered hereby
shall be deemed to be incorporated by reference in this Prospectus. Any
statement contained in a document incorporated by reference herein shall be
deemed to be modified or superseded for purposes hereof to the extent that a
statement contained herein (or in any other subsequently filed document which
also is incorporated by reference herein) modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed to constitute a
part hereof, except as so modified or superseded.
The Company will furnish without charge to each person,
including any beneficial owner, to whom this Prospectus is delivered, on the
written or oral request of such person, a copy of any or all of the documents
incorporated by reference, other than exhibits to such documents. Requests
should be directed to Robert E. McNamara, Target Therapeutics, Inc., 47201
Lakeview Boulevard, Fremont, California 94538, telephone: (510) 440-7700.
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THE COMPANY
Target Therapeutics, Inc. ("Target" or the "Company")
develops, manufactures and markets disposable and implantable medical devices
used in minimally invasive procedures to treat vascular diseases of the brain
associated with stroke and other disease sites accessible through small vessels
of the circulatory system. Interventional physicians can navigate Target's
variable stiffness micro-catheters and guidewires through tortuous blood vessels
not accessible using conventional catheters. The Company's products are used to
treat diseased, ruptured or blocked blood vessels in the brain responsible for
stroke, the third leading cause of death in the United States. One of these
products, the Guglielmi Detachable Coil system, is used to treat and prevent the
rupture of cerebral aneurysms. In September 1995, Target obtained clearance from
the United States Food and Drug Administration ("FDA") to market the GDC system
in the United States. The Company's products are also used in regions of the
body other than the brain. Target's products are used prior to or in lieu of
surgery and can significantly reduce procedural trauma, complexity, risk to the
patient, cost and recovery time. In May 1996, the Company completed the
acquisition of Interventional Therapeutics Corporation ("ITC"), a manufacturer
of specialized disposable catheters and embolization devices. The Company
currently markets its products through a direct sales force in North America and
internationally through a network of 44 specialty distributors, its German
subsidary, Target Therapeutics International (Deutschland) GmbH, its joint
venture in France, Target Guerbet Bio, and its joint venture in Japan, Target
CMI, Inc.
The Company's stock is currently traded on The Nasdaq Stock
Market under the symbol "TGET." The Company's corporate offices are located in
Fremont, California. The mailing address and telephone number are: 47201
Lakeview Boulevard, Fremont, California 94538, telephone: (510) 440-7700.
RISK FACTORS
Prospective purchasers of the Common Stock offered hereby
should carefully consider the following Risk Factors in addition to the other
information appearing in or incorporated by reference into this Prospectus.
Volatility of Stock Price and Quarterly Fluctuations in
Operating Results. The Company's stock price has been and may continue to be
subject to significant volatility, particularly on a quarterly basis. Any
shortfall in revenues or earnings from levels expected by securities analysts
could have an immediate and significant adverse effect on the trading price of
the Company's Common Stock in any given period. Furthermore, The Company
participates in a highly dynamic industry, which often results in significant
volatility of the Company's Common Stock price. The trading price of the
Company's Common Stock also may vary on the basis of numerous other factors,
including the timing and amount of expenses associated with expanding the
Company's operations both domestically and internationally, the Company's
ability to successfully meet new product development plans, success in achieving
regulatory clearance for new products in a timely manner, the acceptance of new
product introductions both in the United States and internationally, the mix
between pilot production of new products and full-scale manufacturing of
existing products, the mix between domestic and export sales, the availability
of complementary products and the effects this may have, particularly on
domestic sales, possible changes in ordering patterns of its customers due to
changes in the business environment or to potential variations in foreign
exchange rates, the Company's ability to continue to attract qualified engineers
to further the development of future products,
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potential future partnering arrangements, changes in the domestic and foreign
health care policies (including third-party reimbursement issues), increased
competitive forces, developments in the Company's ongoing intellectual property
litigation, and the general litigious nature of the medical device industry. The
Company also believes that seasonal patterns, including a reduction in the
number of procedures performed by physicians using the Company's products during
summer and holiday periods, may affect its quarterly revenue stream. In
addition, the Company cannot predict ordering rates by distributors, some of
which place infrequent stocking orders while others order at regular intervals.
Although the Company has experienced revenue growth since its inception and has
been profitable on a quarterly basis since the quarter ended December 31, 1990,
no assurance can be given that revenue growth or profitability on a quarterly or
annual basis will be sustained. The Company's results of operations have varied
significantly from quarter to quarter, and revenue growth rates have been
inconsistent. As a result of these and other factors, the Company expects to
continue to experience significant fluctuations in the trading price of its
Common Stock and in its quarterly operating results.
Reliance on Future Products and New Applications. The Company
has an ongoing and active research and development program pursuant to which it
is developing several new and enhanced versions of its catheters, guidewires and
micro-coils. The Company's future success will depend upon, among other factors,
its ability to develop or acquire from third parties, introduce and manufacture
new products or enhanced versions of existing products and to obtain regulatory
clearance on a timely basis for such products or for use of existing products
for new indications. The Company is also developing technology that enhances the
performance of its existing catheter and guidewire products. In addition, the
Company has several new versions of its micro-coils under development. There can
be no assurance that the Company will be able to develop or acquire new products
successfully, to manufacture new products in commercial volumes, to obtain
regulatory clearances on a timely basis to use such products in existing or new
clinical applications or to gain satisfactory market acceptance for such
products. Delays in commercial introduction or acceptance of new products could
have a material adverse effect on the Company's business, financial condition
and results of operations.
Governmental Regulation. The manufacture and marketing of the
Company's products are subject to extensive and rigorous federal and state
regulation in the United States and to various regulatory requirements in other
countries. The process of obtaining and maintaining required regulatory
clearances is lengthy, expensive and uncertain. The FDA requires that a new
medical device or a new indication for use of an existing medical device obtain
either a 510(k) premarket notification clearance or an approved Premarket
Approval application ("PMA") prior to being introduced into the market. The
process of obtaining a 510(k) clearance has recently taken at least six months
from the date of filing of the application and generally requires the submission
of supporting data, which can be extensive and extend the process for a
considerable length of time. In addition, the FDA may require review by an
advisory panel as a condition for 510(k) clearances, which can further lengthen
the process. The PMA process generally takes more than two years from initial
filing and requires the submission of extensive supporting data and clinical
information. No assurance can be given that any future products or applications
developed by the Company will not require clearance under the more lengthy and
expensive PMA process. If the Company is required to obtain clearance for any
products pursuant to the PMA procedure or if the 510(k) process with respect to
any products is extended for a considerable length of time, the commencement of
commercial marketing could be delayed substantially.
Sales of medical devices outside the United States are subject
to foreign regulatory requirements that vary widely from country to country. The
time required to obtain clearance required by foreign countries may be longer or
shorter than that required for FDA clearance, and requirements for licensing may
differ significantly from FDA requirements. Some countries have historically
permitted human studies
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earlier in the product development cycle than regulations in the United States.
Other countries, such as Japan, have standards similar to those of the FDA. This
disparity in the regulation of medical devices may result in more rapid product
clearance in certain countries than in the United States, while clearance in
countries such as Japan may require longer periods than in the United States. In
addition, the European Union has developed a new approach to the regulation of
medical products which may significantly change the situation in those
countries. The receipt or denial of FDA clearance for a particular product may
affect the receipt or denial of regulatory clearance for that product in certain
other countries.
There can be no assurance that the Company will obtain timely
regulatory clearance for its future products, or that existing clearances will
not be withdrawn. Moreover, regulatory clearances, if granted, may include
significant limitations on the indicated uses for which a product may be
marketed. Failure to comply with applicable regulatory requirements can, among
other consequences, result in fines, civil penalties, injunctions, suspensions
or losses of regulatory clearances, product recalls, seizure of products,
operating restrictions, refusal of the government to approve product license
applications or allow the Company to enter into supply contracts, and criminal
prosecution. In addition, governmental regulations may be established that could
prevent or delay regulatory clearance of the Company's products. Delays in
receipt of, or failure to receive, clearances, or the loss of previously
received clearances, could have a material adverse effect on the Company's
business, financial condition and results of operations.
Product Liability Litigation; Insurance. The Company faces the
risk of financial exposure to product liability claims alleging that the use of
the Company's products resulted in adverse effects. The Company's products are
often used in life-threatening situations and in the brain, where there is a
high risk of serious injury or death. Such risks will exist even with respect to
those products that have received, or in the future may receive, regulatory
clearance for commercial sale. The Company is currently a party to several legal
actions involving product liability claims. While the Company seeks to maintain
product liability insurance with coverage that the Company believes is
comparable to that maintained by companies similar in size and serving similar
markets, there can be no assurance that the Company will avoid significant
product liability claims and attendant adverse publicity. Furthermore, there can
be no assurance that the Company's product liability insurance will be adequate
or that such insurance coverage will remain available at acceptable costs. A
successful claim brought against the Company for which coverage is denied or in
excess of its insurance coverage could have a material adverse effect on the
Company's business, financial condition and results of operations. Additionally,
it is possible that adverse product liability actions could negatively affect
the Company's ability to obtain and maintain regulatory clearance for its
products.
Concentrated Customer Base and Adoption of Technology. The
Company believes that the number of interventional neuroradiologists and
neurosurgeons trained to use its vascular access and delivery products to treat
neurovascular disorders is relatively small, both in the United States and
abroad. The growth in the number of neuro-interventional physicians in the
United States is constrained by the lengthy training programs required to
educate these physicians. Future growth of the market for the Company's
neurovascular products will require continued expansion of the number of trained
interventional practitioners. To the extent that physicians do not adopt
micro-catheters for use in treating neurovascular disorders or sufficient
physicians are not trained in the use of the Company's products, both in the
United States and abroad, the market for the Company's products may remain
limited.
Competition. The medical device industry is characterized by
rapidly evolving technology and competition. The Company currently experiences
competition in the interventional neuroradiology market and expects such
competition to increase substantially. Several companies in the United States,
including large companies with resources significantly greater than those of the
Company, have introduced products
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that are being used in the interventional neuroradiology market. The Company is
also aware of other companies that may pursue commercialization of products
which may compete with the Company's products and may result in pricing and
margin pressures within this market. There can be no assurance that these
companies will not succeed in developing technologies and products that are more
effective than any which have been or are being developed by the Company or that
would render the Company's technologies or products obsolete or not competitive.
The cardiovascular and peripheral vascular interventional
markets are substantially more developed than the neuroradiology market and are
subject to intense competition. There are many large companies with
significantly greater financial, manufacturing, marketing, distribution and
technical resources, and experience than the Company focusing principally on
cardiovascular and peripheral applications for their catheter technologies. As a
result, the Company focuses its product development and marketing strategies on
market segments where the Company's small vessel access and delivery systems can
be used in applications not presently addressed by conventional catheter and
other interventional products. There can be no assurance, however, that
competitors will not successfully enter these markets with superior products. In
addition, the Company is aware of several other companies that have introduced
guidewires to the marketplace and attributes the slower growth rate of its
guidewire product line to increased competitive pressures. Such competition
could have a material adverse effect on the Company's business, financial
condition and results of operations.
Patents and Proprietary Technology. The medical device market
is characterized by substantial litigation regarding patent and other
intellectual property rights. The Company is aware of certain United States
patents with which certain of the Company's current or proposed products may be
in conflict. Two United States patents held by third parties may cover certain
of the Company's micro-catheter products. With respect to one of these patents,
based upon the Company's analysis with the assistance of its patent counsel, the
Company believes that such patent is invalid. With respect to the other of these
patents, although the Company has not obtained a formal opinion of counsel, the
Company believes that it has available defenses to a claim of infringement with
respect to such patent. However, the invalidity of any particular patent and the
availability of the Company's defenses must be determined by a court in the
event of litigation, and no assurance can be given that any dispute will be
resolved in a manner satisfactory to the Company. With respect to another patent
that may cover one element in the fabrication of a particular guidewire product
and one potential guidewire product, the Company has designed a guidewire
product that the Company believes avoids the risk of infringement. However, the
Company has continued and expects to continue to market the existing guidewire
product for the foreseeable future. The above-described patents are held by
large companies, each of which has substantial resources, and no assurance can
be given that such companies will not be successful in maintaining the validity
of their patents. If legal action is commenced against the Company to enforce
these patents and the plaintiff in such action prevails, the Company could be
prevented from practicing the subject matter claimed in such patents. In such
event or under other appropriate circumstances, the Company may attempt to
obtain licenses to such patents or redesign its products. The Company is also
aware that certain of its products under development may be covered by existing
patents, in which event the Company may be required to obtain licenses prior to
the introduction and commercial shipment of such products. There can be no
assurance that such licenses will be available or, if available, will be
available on terms acceptable to the Company, or that the Company will be
successful in any attempt to redesign its products or processes to avoid
infringement. Moreover, there can be no assurance that the Company has
identified all patents that may pose a risk of infringement by the Company's
current or proposed products. The Company's business, future operating results
and financial condition could be materially and adversely affected if its
products are found to infringe any of these patents. The Company has depended
and will continue to depend substantially on its technological expertise in the
development and manufacture of its current and future products. In addition, the
Company
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depends and will likely continue to depend on trade secret protection and on
various patents, such as its patent covering the variable stiffness shaft design
of its micro-catheters, to strengthen its proprietary position. There can be no
assurance that the Company will be successful in the future in obtaining patents
or that patents will not be challenged by third parties. There can be no
assurance that measures to protect trade secrets will be successful, or that
others will not independently develop similar products, duplicate any of the
Company's products, or design around any patents owned or licensed by the
Company. Litigation, which could result in substantial costs to and diversion of
effort by management of the Company, may be necessary to enforce patents issued
to the Company, to protect trade secrets or know-how owned by the Company or to
defend the Company against claimed infringement of the rights of others and to
determine the scope and validity of the patents or other proprietary rights of
other entities. The resolution of these claims generally involves complex legal
and factual questions and is highly uncertain. Adverse determinations in any
litigation could subject the Company to significant liabilities to third
parties, require the Company to seek licenses from third parties and prevent the
Company from manufacturing and selling its products, any of which could have a
material adverse effect on the Company's business, financial condition and
results of operations.
The patent which relates to the variable stiffness design of
the Company's Tracker micro-catheters (the "Tracker patent") has been the
subject of four reexamination proceedings in the United States Patent and
Trademark Office ("USPTO"). Following the completion of the first such
proceeding, the USPTO issued a reexamination certificate and confirmed the
patentability of the patent claims set forth in the certificate. Requests for
second, third and fourth reexaminations of the patent were initiated by one of
the Company's competitors, SciMed Life Systems, Inc. ("SciMed"), a subsidiary of
Boston Scientific Corporation, and after the USPTO's review of such petitions
the Company recently received notice from the USPTO that it had reaffirmed the
patentability of the claims of the Company patent. Notwithstanding this result,
no assurance can be given that SciMed will not mount a legal challenge to the
validity of the Company patent or that the Company would prevail in any such
action.
In addition, in November 1994 the Company filed a lawsuit in
the United States District Court (the "Court") against SciMed and Cordis
Endovascular Systems, Inc. ("Cordis"), a subsidiary of Johnson & Johnson,
seeking damages and preliminary and permanent injunctive relief against sales of
such companies' products believed to be infringing the Company patent. The
defendants responded, challenging the validity of the Company patent, denying
infringement, and raising other defenses. Furthermore, Cordis has filed a
countersuit against the Company claiming that certain of the Company's products
infringe Cordis's patents. In May 1996, the Court granted the Company's motion
for a preliminary injunction prohibiting Cordis and SciMed from infringing on
the Tracker Patent. However, the Court of Appeals has stayed the preliminary
injunction pending the outcome of Cordis and SciMed's appeal of the decision.
Notwithstanding the grant of the Company's motion for a preliminary
injunction, there can be no assurance that the Company will be ultimately
successful in this lawsuit.
The Company is also aware that at least one competitor in
Europe has sold micro-catheters that may infringe a patent that could issue on
the Company's patent application which is pending in the European Patent Office.
The Company is investigating its options for enforcement of its rights with
respect to such infringement. The patent which relates to the variable stiffness
design of the Company's Tracker micro-catheter is being opposed in Japan by an
undisclosed party.
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Importance of Foreign Sales. Export product sales outside of
the United States were 71% of product sales for the fiscal year ended March 31,
1996. The Company anticipates that export product sales to customers will
continue to generate a significant portion, if not a majority, of total product
sales. Fluctuations in the value of foreign currencies relative to the U.S.
dollar could adversely affect the Company's sales and results of operations from
time to time. The Company's international operations are also subject to certain
other risks common to foreign operations in general, including governmental
regulations and import and export restrictions. Changes in such governmental
regulations or import and export restrictions could adversely affect sales of
the Company's products and the Company's results of operations.
Third-Party Reimbursement. The Company's products are
purchased by hospitals, which, in the United States, then bill various
third-party payors including Medicare, Medicaid and private insurers for the
healthcare services provided to patients. Government agencies reimburse
hospitals for medical procedures at a fixed rate according to diagnosis-related
groups. Federal and state laws and regulations govern reimbursement by such
government agencies. Such laws and regulations also influence reimbursement of
medical fees by private insurance companies. Changes in current policies could
reduce or eliminate such reimbursements and thereby adversely affect future
sales of the Company's products. In addition, third-party payors may deny
reimbursement if they determine that the device used in the procedure is
unnecessary, inappropriate, not cost-effective, experimental or for a
non-approved indication. Third-party payors may deny reimbursement for
treatments using the Company's products, regardless of the FDA clearance status
of such products. Third-party payors are increasingly challenging the prices
charged for medical products and services. There can be no assurance that
reimbursement from third-party payors will be available, or if available, that
reimbursement will not be limited, thereby adversely affecting the Company's
ability to sell its products profitably. Although the Company has not
experienced any material problems to date, significant uncertainty exists as to
the reimbursement status of newly approved healthcare products, and there can be
no assurance that adequate third-party coverage will be available to patients.
In such event, sales of the Company's products could be adversely affected.
Dependence on Key Personnel. The Company is dependent upon a
limited number of key management and technical personnel. The Company's future
success will depend in part upon its ability to attract and retain highly
qualified personnel. The Company competes for such personnel with other
companies, academic institutions, government entities and other organizations.
There can be no assurance that the Company will be successful in hiring or
retaining qualified personnel. The loss of key personnel or the inability to
hire or retain qualified personnel could have a material adverse effect on the
Company's business, financial condition and results of operations.
Single Manufacturing Facility. The Company's principal
manufacturing capacity is located in a single facility. An earthquake, fire or
other similar calamity could result in significant disruptions and delays in the
Company's manufacturing and distribution process. The Company currently
maintains only limited amounts of certain finished product inventory, and the
Company's business, financial position and results of operations could be
materially adversely affected in such event.
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ISSUANCE OF COMMON STOCK TO SELLING STOCKHOLDERS
On May 23, 1996, Target acquired ITC pursuant to an Agreement
and Reorganization Agreement of Reorganization dated April 29, 1996 (the
"Reorganization Agreement") among Target, ITC and a wholly owned subsidiary of
Target ("Sub"). Pursuant to the Reorganization Agreement, Sub merged with and
into ITC and all outstanding shares of ITC capital stock and options to
purchase ITC capital stock were converted into shares of Target Common Stock
and options to purchase Target Common Stock, respectively. This Prospectus
covers approximately fifty percent (50%) of the shares of Target Common Stock
into which the shares of ITC capital stock formerly held by the Selling
Stockholders were converted under the Reorganization Agreement.
PLAN OF DISTRIBUTION
The Selling Stockholders may sell the Shares in whole or in
part, from time to time on the over-the-counter market at prices and on terms
prevailing at the time of any such sale. Any such sale may be made in broker's
transactions through broker-dealers acting as agents, in transactions directly
with market makers or in privately negotiated transactions where no broker or
other third party (other than the purchaser) is involved. The Selling
Stockholders will pay brokerage commissions or discounts, if any, with respect
to the sale of the Shares in amounts customary for the type of transaction
effected.
Each Selling Stockholder has advised the Company that during
such time as such Selling Stockholder may be engaged in the attempt to sell
Shares registered hereunder, such person will:
(i) not engage in any stabilization activity in connection
with any of the Company's securities;
(ii) cause to be furnished to each person to whom Shares
included herein may be offered, and to each broker-dealer, if any, through whom
Shares are offered, such copies of this Prospectus, as supplemented or amended,
as may be required by such person; and
(iii) not bid for or purchase any of the Company's securities
or any rights to acquire the Company's securities, or attempt to induce any
person to purchase any of the Company's securities or rights to acquire the
Company's securities other than as permitted under the Exchange Act.
The Selling Stockholders, and any other persons who
participate in the sale of the Shares, may be deemed to be "Underwriters" as
defined in the Securities Act. Any commissions paid or any discounts or
concessions allowed to any such persons, and any profits received on resale of
the Shares, may be deemed to be underwriting discounts and commissions under the
Securities Act.
The Company has agreed to maintain the effectiveness of this
Registration Statement until the earlier of the sale of all the Shares
registered pursuant to this Prospectus or the later of (i) August 31, 1996 or
(ii) thirty (30) days from the date of this Prospectus. No sales may be
made pursuant to this Prospectus after such date unless the Company amends or
supplements this Prospectus to indicate that it has agreed to extend such period
of effectiveness.
9
<PAGE> 11
SELLING STOCKHOLDERS
The following table sets forth certain information as of July 1, 1996
with respect to the Selling Stockholders:
<TABLE>
<CAPTION>
Shares Beneficially Shares of Shares Beneficially
Owned Prior Common Stock Offered Owned After
Name Of Selling Stockholder to the Offering (1) Hereby (1) the Offering (1)(2)
- --------------------------- ------------------- ---------- -------------------
Number Percent Number Percent
------ ------- ------ -------
<S> <C> <C> <C> <C> <C>
Richard C. Ball 872 * 437 435 *
Julie D. Bell (3) 69,815 * 32,223 37,592 *
John W. Beman 2,147 * 1,074 1,073 *
Marcelyn Berlo 2,630 * 1,316 1,314 *
Ray H. Dormandy, Jr.(4) 102,038 * 48,335 53,703 *
Joseph Eskridge (5) 2,147 * 537 1,610 *
Larry Haimovitch 643 * 322 321 *
Van T. Halbach (6) 6,013 * 2,157 3,856 *
Grant Hieshima 6,443 * 3,222 3,221 *
Randall T. Higashida 17,399 * 8,700 8,699 *
Joseph Norton 1,073 * 537 536 *
Reuben K. Jenkins 4,832 * 2,417 2,415 *
S. Allen Johnson 25,885 * 12,943 12,942 *
Charles Wayne Leonard (7) 15,090 * 5,398 9,692 *
Charles Garrett Leonard 1,557 * 779 778 *
Katherine Mack (8) 5,369 * 537 4,832 *
Peter Schillke 536 * 269 267 *
Charles Strother (9) 8,073 * 537 7,536 *
Luanne Terneer 827 * 414 413 *
John Van Bosch 858 * 430 428 *
J. Casey McGlynn as Trustee for Reid 2,684 * 1,343 1,341 *
Alexander Williams Trust, U/A/D,
8/17/89
Nycomed Research & Development 17,695 * 8,848 8,847 *
Peter K. Stein as Trustee for Brook C. 1,491 * 746 745 *
Stein Trust, U/A/D, 12/27/82
Peter K. Stein as Trustee for Rory T. 1,491 * 746 745 *
Stein Trust, U/A/D, 12/27/82
Peter K. Stein and Christian Stein as 1,491 * 746 745 *
Trustee for Stein Family Trust, U/A/D,
6/4/84
R. David Collin 1,789 * 895 894 *
Raymond Austin Williams, Jr. 1,790 * 896 894 *
Raymond Austin Williams 2,684 * 1,343 1,341 *
WS Investment 1,790 * 896 894 *
WTI Ventures 8,949 * 4,475 4,474 *
Silicon Valley Bank 513 * 257 256 *
</TABLE>
- ------------------------------
* Less than 1%
(1) Information with respect to beneficial ownership is based upon
information contained in filings made with the Securities and Exchange
Commission, as modified by the Company to reflect the issuance of
shares of
10
<PAGE> 12
Target Common Stock in the Acquisition and information
obtained from the Selling Stockholders. Excludes beneficial interests
in fractional shares.
(2) Assumes sale of all Shares offered hereby and no other purchases or
sales of Target Common Stock. See "Plan of Distribution."
(3) Includes 5,370 shares issuable upon exercise of options exercisable
within 60 days of July 1, 1996.
(4) Includes 5,370 shares issuable upon exercise of options exercisable
within 60 days of July 1, 1996.
(5) Includes 1,074 shares issuable upon exercise of options exercisable
within 60 days of July 1, 1996.
(6) Includes 1,700 shares issuable upon exercise of options exercisable
within 60 days of July 1, 1996.
(7) Includes 4,296 shares issuable upon exercise of options exercisable
within 60 days of July 1, 1996.
(8) Includes 4,296 shares issuable upon exercise of options exercisable
within 60 days of July 1, 1996.
(9) Includes 7,000 shares issuable upon exercise of options exercisable
within 60 days of July 1, 1996.
Dr. Charles M. Strother, a Selling Stockholder, is the Chairman of the
Board of Directors of the Company and Mr. Ray H. Dormandy, Jr., also a Selling
Stockholder, is an executive officer of the Company. Otherwise, no Selling
Stockholder has had any material relationship with the Company or any of its
predecessors or affiliates within the last three years, except that several of
the Selling Stockholders are employees of the Company.
11
<PAGE> 13
LEGAL MATTERS
Certain legal matters with respect to the legality of the issuance of
the Common Stock offered hereby will be passed upon for the Company by Venture
Law Group, A Professional Corporation, 2800 Sand Hill Road, Menlo Park,
California 94025. As of the date of this Prospectus, certain directors of
Venture Law Group beneficially owned an aggregate of 600 shares of the Company's
Common Stock.
EXPERTS
The consolidated financial statements and schedule of Target appearing
in Target's Annual Report (Form 10-K) for the year ended March 31, 1996, have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon included therein and incorporated herein by reference. The
consolidated financial statements of ITC Report on Form 8-K/A filed with the
Commission on July 25, 1996, have been audited by Frank, Rimerman & Co.,
independent auditors, as set forth in their report thereon included therein and
incorporated herein by reference. Such consolidated financial statements and
schedule are incorporated herein by reference in reliance upon such reports
given upon the authority of such firms as experts in accounting and auditing.
12
<PAGE> 14
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses payable by the
Registrant in connection with the sale and distribution of the Common Stock
being registered. Normal commission expenses and brokerage fees and any
applicable transfer taxes are payable individually by the Selling Stockholders.
All amounts are estimates except the registration fee.
<TABLE>
<CAPTION>
Amount
To be Paid
----------
<S> <C>
Registration Fee................................. 1,766.20
Legal Fees and Expenses.......................... 15,000.00
Accounting Fees and Expenses..................... 5,000.00
Miscellaneous.................................... 3,233.80
----------
Total.................................. $25,000.00
==========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145(a) of the Delaware General Corporation Law (the "DGCL")
provides in relevant part that "a corporation may indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation), by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had not reasonable cause to believe his conduct was unlawful."
With respect to derivative actions, Section 145(b) of the DGCL provides in
relevant part that "[a] corporation may indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor . . . [by reason of his service in one of the capacities
specified in the preceding sentence] against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interest of the
corporation and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
shall deem proper."
Section 102(b)(7) of the DGCL permits a corporation to provide in its
certificate of incorporation that a director of the corporation shall not be
personally liable to the corporation or its stockholders for
II-1
<PAGE> 15
monetary damages for breach of fiduciary duty as a director, except for
liability (i) for any breach of the director's duty of loyalty to the
corporation 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 General Corporation Law, or (iv) for any transaction
from which the director derived an improper personal benefit. Article VIII of
Registrant's Restated Certificate of Incorporation provides that no director of
Registrant shall be liable for monetary damages for any breach of fiduciary
duty, except to the extent that the DGCL prohibits the elimination or limitation
of liability of directors for breach of fiduciary duty. Article VIII also
provides that Registrant shall indemnify to the fullest extent permitted by law
any person made or threatened to be made a party to an action or proceeding,
whether criminal, civil, administrative or investigative, by reason of the fact
that he, his testator or intestate is or was a director, officer or employee of
Registrant or any predecessor of the corporation, or serves or served at any
other enterprise as a director, officer or employee at the request of Registrant
or any predecessor to the corporation.
The Bylaws of Registrant provide that the corporation shall indemnify
to the full extent authorized by law any person made or threatened to be made a
party to an action or a proceeding, whether criminal, civil, administrative or
investigative, by reason of the fact that he was or is a director, officer,
employee, or agent of the corporation or serves or served any other enterprise
as a director, officer, employee, or agent at the request of the corporation.
Registrant has entered into Indemnification Agreements with its officers and
directors. Registrant maintains an insurance policy covering its officers and
directors under which the insurer has agreed to pay, subject to certain
exclusions, the amount of any claim made against such officers or directors for
wrongful acts that such officers or directors may otherwise be required to pay
or for which Registrant is required to indemnify such officers or directors.
ITEM 16. EXHIBITS
Exhibit
Number Description of Exhibit
------ ----------------------
2.1(1) Agreement and Plan of Reorganization dated April 29,
1996 between the Registrant, Interventional Therapeutics
Corporation and TTI Acquisition Corporation (a
wholly-owned subsidiary of Registrant).
4.1(2) Preferred Shares Rights Agreement dated September 21,
1994 between Target Therapeutics, Inc. and The First
National Bank of Boston.
4.2(3) Amendment to Preferred Shares Rights Agreement dated May
7, 1996 between Target Therapeutics, Inc. and The First
National Bank of Boston.
4.3(3) Declaration of Registration Rights, Exhbit E to the
Agreement and Plan of Reorganization dated April 29,
1996 between the Registrant, Interventional Therapeutics
Corporation and TTI Acquisition Corporation.
5.1* Opinion of Venture Law Group
23.1 Consent of Ernst & Young LLP, Independent Auditors (see
page II-5)
23.2 Consent of Frank, Rimerman & Co., Independent Auditors
(see page II-6)
23.3* Consent of Counsel (included in Exhibit 5.1)
25.1* Power of Attorney
- ---------------
* Previously filed.
(1) Incorporated by reference to the identically numbered exhibit filed with
the Registrant's Form 8-K filed on June 7, 1996.
(2) Incorporated by reference to Exhibit Number 1 filed with the Registrant's
Form 8-A filed on September 22, 1994.
(3) Incorporated by reference to the identically numbered exhibit filed with
the Registrant's Form 10-K for the year ended March 31, 1996.
II-2
<PAGE> 16
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 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.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant's annual report pursuant
to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the provisions referred to in Item 15 above or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 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 against the Registrant by such director, officer
or controlling person in connection with the securities being registered
hereunder, 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 of 1933 and will be governed by the
final adjudication of such issue.
II-3
<PAGE> 17
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Target Therapeutics, Inc., a Delaware corporation, 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 Amendment to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Fremont, State of California, on July 30, 1996.
TARGET THERAPEUTICS, INC.
By /s/ Robert E. McNamara
---------------------------------
Robert E. McNamara, Vice President,
Finance and Administration, Chief
Financial Officer and Assistant
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed by the following persons
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Gary R. Bang* President, Chief Executive Officer and July 30, 1996
------------------------ Director (Principal Executive Officer)
(Gary R. Bang)
/s/ Robert E. McNamara Vice President, Finance and July 30, 1996
------------------------ Administration, Chief Financial Officer
(Robert E. McNamara) and Assistant Secretary (Principal
Financial and Accounting Officer)
/s/ Charles M. Strother* Chairman of the Board of Directors July 30, 1996
-------------------------
(Charles M. Strother)
/s/ William G. Davis* Director July 30, 1996
-------------------------
(William G. Davis)
/s/ Kathleen Murray* Director July 30, 1996
-------------------------
(Kathleen Murray, M.S.N.)
/s/ Howard D. Palefsky* Director July 30, 1996
-------------------------
(Howard D. Palefsky)
/s/ Richard D. Randall* Director July 30, 1996
-------------------------
(Richard D. Randall)
/s/ John C. Villforth* Director July 30, 1996
------------------------
(John C. Villforth)
*By: /s/ Robert E. McNamara
---------------------------
(Robert E. McNamara)
(Attorney-in-fact)
</TABLE>
II-4
<PAGE> 18
CONSENT OF ERNST & YOUNG, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
Amendment No. 1 to the Registration Statement (Form S-3 No. 333-8075) and
related Prospectus of Target Therapeutics, Inc. for the registration of 143,775
shares of its common stock and to the incorporation by reference therein of our
report dated April 26, 1996, with respect to the consolidated financial
statements and schedule of Target Therapeutics, Inc. included in its Annual
Report (Form 10-K) for the year ended March 31, 1996, filed with the Securities
and Exchange Commission.
Palo Alto, California /s/ ERNST & YOUNG LLP
July 29, 1996
II-5
<PAGE> 19
CONSENT OF FRANK, RIMERMAN & CO., INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
the Registration Statement (Form S-3 No. 333-8075) and related Prospectus of
Target Therapeutics, Inc. for the registration of 143,775 shares of its common
stock and to the incorporation by reference therein and in the Registration
Statements (Form S-8 Nos. 33-49456, 33-62978, 33-89148 and 333-04453)
pertaining to the 1988 Stock Option Plan, the 1991 Director Option Plan, the
1991 Employee Stock Purchase Plan of Target Therapeutics, Inc. and the 1990
Stock Option Plan of Interventional Therapeutics Corporation of our report
dated October 23, 1995 (except for the second paragraph of Note 1, the fifth
paragraph of Note 3 and the last two paragraphs of Note 7, as to which the date
is July 11, 1996), with respect to the consolidated financial statements of
Interventional Therapeutics Corporation included in the Current Report on Form
8-K/A of Target Therapeutics, Inc. filed with the Securities and Exchange
Commission on July 25, 1996.
Palo Alto, California /s/ FRANK, RIMERMAN & CO.
July 29, 1996
II-6
<PAGE> 20
TARGET THERAPEUTICS, INC.
INDEX TO EXHIBITS
EXHIBIT
NUMBER
23.1 Consent of Ernst & Young LLP, Independent Auditors (see page II-5)
23.2 Consent of Frank, Rimerman & Co., Independent Auditors (see page II-6)
II-7
