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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 29, 1997
REGISTRATION NO. 33-76414
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
POST-EFFECTIVE AMENDMENT NO. 1 TO
REGISTRATION STATEMENT ON FORM S-1 UNDER THE SECURITIES ACT OF 1933
ARIAD PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 8731 22-3106987
(State or other jurisdiction of incorporation or (Primary Standard Industrial (I.R.S. Employer
organization) Classification Code Number) Identification Number)
</TABLE>
26 LANDSDOWNE STREET
CAMBRIDGE, MASSACHUSETTS 02139-4234
(617) 494-0400
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
JAY R. LAMARCHE
SENIOR VICE PRESIDENT, FINANCE & CHIEF FINANCIAL OFFICER
ARIAD PHARMACEUTICALS, INC.
26 LANDSDOWNE STREET
CAMBRIDGE, MASSACHUSETTS 02139-4234
(617) 494-0400
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
With a copy to:
MARK S. BERGMAN
PAUL, WEISS, RIFKIND, WHARTON & GARRISON
1285 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019-6064
(212) 373-3000
Approximate date of commencement of proposed sale to the public: From time to
time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [x]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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 the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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2,125,225 SHARES
OF COMMON STOCK
ISSUABLE UPON EXERCISE OF WARRANTS
ARIAD PHARMACEUTICALS, INC.
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ARIAD Pharmaceuticals, Inc., a Delaware corporation (the "Company" or "ARIAD"),
is offering (the "Offering") up to 2,125,225 shares (the "Shares") of its Common
Stock, par value $0.001 per share ("Common Stock"), issuable upon the exercise
of outstanding warrants to purchase Common Stock ("Warrants"). The Common Stock
and the Warrants are listed on the Nasdaq National Market under the trading
symbols "ARIA" and "ARIAW", respectively.
Each Warrant entitles the holder thereof to purchase one share of Common Stock
at a purchase price of $8.40 per share, subject to certain adjustments (the
"Exercise Price"). The Exercise Price and the number of shares of Common Stock
issuable upon exercise of each Warrant are subject to adjustment upon the
occurrence of certain events, as described in and governed by the Warrant
Agreement, dated May 27, 1994, between the Company and State Street Bank and
Trust Company (the "Warrant Agreement"). Prior to the purchase of Common Stock
upon the exercise of a Warrant, the holder of a Warrant will have none of the
rights or privileges of a stockholder of the Company. The Shares of Common Stock
are offered hereunder in accordance with the Warrant Agreement on a continuous
basis until, with certain exceptions, 5:00 p.m., New York City time, on May 20,
1999, the expiration date of the Warrants.
--------------------------------------
THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 4.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
The sale of the Shares has not been registered or qualified by the Company under
the securities laws of any state as of the date of this Prospectus. Brokers or
dealers effecting transactions in the Shares should confirm the registration
thereof under the securities law of the states in which such transactions occur,
or the existence of any exemption from registration.
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The date of this Prospectus is January , 1997
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements under the captions "Risk Factors" and "Use of Proceeds" and
elsewhere in this Prospectus constitute "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or achievements of
the Company, or industry results, to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements. Such factors include, among other things, the
following: uncertainty of product development; regulatory and technological
uncertainty; future capital needs; history of losses; dependence on others;
patents and proprietary rights; absence of manufacturing, marketing and sales;
substantial competition and technological change; dependence on qualified
personnel; uncertain availability of health care reimbursement; volatility of
stock price; and other factors referenced in this Prospectus.
See "Risk Factors."
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Securities and
Exchange Commission (the "Commission") pursuant to the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), are incorporated by reference in this
Prospectus.
1. The Company's Annual Report on Form 10-K for the year ended December 31,
1995.
2. The Company's Quarterly Reports on Form 10-Q for the quarters ended March
31, 1996, June 30, 1996 and September 30, 1996.
3. The Company's Proxy Statement for its annual meeting of stockholders held
on June 18, 1996 (other than the portions thereof identified as not
deemed filed with the Commission);
4. The description of the Company's Common Stock which is contained in the
Company's Registration Statement on Form 10 filed with the Commission
on June 25, 1993, including all amendments and reports filed for the
purpose of updating such description.
All reports and documents filed by the Company with the Commission 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 made hereby shall be
deemed to be incorporated by reference in this Prospectus and to be a part
hereof from the date of filing of such documents. Any statement contained in
this Prospectus, any Prospectus supplement or in a document incorporated or
deemed to be incorporated by reference shall be deemed to be modified or
superseded to the extent that a statement contained in any Prospectus supplement
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein or therein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part hereof.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus has been delivered, upon the
written or oral request of such person, a copy of any or all of the documents
which are incorporated by reference in this Prospectus, other than exhibits to
such documents (unless such exhibits are specifically incorporated by reference
into such documents). Requests for such copies should be directed to Jay R.
LaMarche, Senior Vice President, Finance & Chief Financial Officer, at ARIAD
Pharmaceuticals, Inc., 26 Landsdowne Street, Cambridge, Massachusetts, 02139,
telephone (617) 494-0400.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Exchange
Act and, in accordance therewith, files reports, proxy statements and other
information with the Commission in Washington, D.C. Such reports, proxy
materials and other information concerning the company filed in accordance with
the Exchange Act and the Registration Statement of which this Prospectus forms a
part and exhibits and schedules thereto may be inspected, without charge, at the
public reference facility maintained at the Commission at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and on request, at the
Commission's regional offices at 7 World Trade Center, New York, New York 10048
and the Northwest Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material may also be obtained, at prescribed
rates, from the Public Reference Section of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549. The Commission also maintains a web site (address:
http://www.sec.gov) that contains reports, proxy and information statements and
other information regarding registrants, including the companies that file
electronically with the Commission.
A Registration Statement on Form S-3 (Registration No. 33-76414) (the
"Registration Statement") has been filed by the Company with the Commission,
with respect to the Shares offered hereby. This Prospectus does not contain all
the information set forth in the Registration Statement and the exhibits
thereto, certain parts of which have been omitted in accordance with the rules
and regulations of the Commission. Statements contained in this Prospectus as to
the contents of any contract or any other document referred to are not
necessarily complete, and in each instance reference is made to the copy of such
contract or other document filed or incorporated by reference as an exhibit to
the Registration Statement, each such statement being qualified in all respects
by such reference. For further information with respect to the Company and the
Shares, reference is hereby made to the Registration Statement and the exhibits
and schedules thereto. The Registration Statement and any amendments thereto,
including exhibits filed or incorporated by reference as a part thereof, are
available for inspection and copying at the Commission's offices as discussed
above.
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RISK FACTORS
An investment in the Common Stock offered hereby involves a high degree
of risk. Investors should carefully consider all of the information contained in
this Prospectus. Prospective investors should consider carefully the following
risk factors, in addition to the other information presented in this Prospectus,
before purchasing the Common Stock offered hereby.
EARLY STAGE OF THE COMPANY; ABSENCE OF PRODUCTS
From its incorporation in April 1991 through March 1992, the Company
was engaged principally in organizational activities, technology licensing and
obtaining financing. Between March 1992 and April 1995, the Company raised an
aggregate of approximately $68,950,000 in a series of private placements and its
initial public offering. Substantially all of the Company's resources have been
and for the foreseeable future will continue to be dedicated to the Company's
research programs and the development of potential products. There can be no
assurance that the Company's research will lead to the discovery of any products
nor can there be any assurance that the Company will be successful in acquiring
rights to new products or in developing products licensed or acquired from
others. The Company currently has several compounds in research and development,
none of which has entered human clinical trials. While the Company believes that
the results attained to date support further research and development of these
compounds, results attained in in vitro and in preclinical studies are not
necessarily indicative of results that will be obtained in human clinical
trials. The Company's drug candidates must progress through Phase II human
clinical trials or beyond before the Company will have evidence of in vivo
efficacy for such compounds.
If any potential products are identified or acquired, they are likely
to require significant additional research, development and preclinical testing
and will require extensive clinical investigation prior to submission of any
regulatory application for marketing authorization. In addition, any potential
products will require substantial additional investment prior to
commercialization. There can be no assurance that any such potential products
will be developed successfully, prove to be safe and efficacious in clinical
trials, meet applicable regulatory standards and meet the requirements for
regulatory approvals or be capable of being produced in commercial quantities at
acceptable costs, or, if introduced, will be successfully marketed or achieve
market acceptance.
REGULATORY AND TECHNOLOGICAL UNCERTAINTY
The Company is engaged in the biopharmaceutical field, which is
characterized by extensive research efforts and rapid technological change. New
developments in molecular cell biology, molecular pharmacology, recombinant DNA
technology and other pharmaceutical research processes are expected to continue
at a rapid pace in both industry and academia. There can be no assurance that
research and discoveries by others will not render some or all of the Company's
programs or products noncompetitive or obsolete.
The Company's business strategy is based, in part, upon the application
of emerging technologies to the development of biopharmaceutical products for
the treatment of human diseases. The Company's potential products are subject to
the risks of failure inherent in the development of therapeutic agents based on
new technologies. These risks include the possibilities that the Company's
approach to intracellular protein interactions and structure-based drug design
will not be successful; that any or all of the Company's potential therapeutic
agents will be found to be unsafe or ineffective, or otherwise fail to receive
necessary regulatory clearances; that the products, if safe and effective, will
be difficult to manufacture on a large scale or uneconomical to market; that
proprietary rights of third parties will preclude the Company from marketing
such products; or that third parties will market superior or equivalent
products. As a result, there can be no assurance that the Company's research
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and development activities will result in any commercially viable product.
The Company's approach to product development is based on the
application of structure-based drug design to intracellular protein interactions
and has not been used widely in drug development. There is, therefore,
substantial risk that this approach will not prove to be successful. Moreover,
the Company is applying this unproven approach to discover new treatments for a
variety of diseases that are also the subject of research and development
efforts by other companies. The Company's competitors may succeed in developing
technologies or products that are more effective than those of the Company.
Rapid technological change or developments by others may result in the Company's
technology or proposed products becoming obsolete or noncompetitive. See " --
Substantial Competition and Technological Change."
FUTURE CAPITAL NEEDS; UNCERTAINTY OF ADDITIONAL FUNDING; FIXED COMMITMENTS
The Company will require substantial additional funding in order to
continue its research and product development programs and preclinical testing
and clinical investigation of its potential products, for operating expenses,
for the pursuit of regulatory clearances and for establishing production and
sales and marketing capabilities.
The amounts and timing of the Company's expenditures and the Company's
capital requirements will depend on numerous factors, including the progress of
its research and development, the progress of preclinical testing and clinical
investigation, the time and costs involved in obtaining regulatory approvals,
the cost of filing, prosecuting, defending and enforcing any patent claims and
other intellectual property rights, competing technological and market
developments, changes in the Company's existing research relationships, the
ability of the Company to establish collaborative arrangements, the development
of commercialization activities and arrangements and the availability and cost
of additional equipment and instrumentation. Based on its currently planned
research and product development programs, the Company anticipates that its cash
reserves and other liquid assets plus other sources and interest income earned
thereon should be adequate to satisfy its capital and operational requirements
through mid - 1998. Thereafter, the Company will need to raise substantial
additional funding. The Company's cash requirements may vary materially from
those now planned because of results of research and development activities, the
results of clinical investigation, if any, relationships with possible strategic
partners, the acquisition of complementary products or related companies,
changes in the direction of the Company's research and development programs,
competitive and technological advances, the effectiveness of commercialization
activities and arrangements, policies of the U.S. Food and Drug Administration
(the "FDA") and non-U.S regulatory agencies and other factors.
The Company has substantial fixed commitments under various research
and licensing agreements, consulting and employment agreements, lease agreements
and long-term debt instruments. Such fixed commitments currently aggregate in
excess of $4.0 million per year and are likely to increase. The Company's loan
agreements and equipment leases contain certain restrictive covenants that
require the Company to maintain minimum levels of working capital, net worth and
liquid assets.
The Company intends to seek additional funding through public or
private financings or collaborative or other arrangements with corporate
partners or from other resources. There can be no assurance, however, that
additional funding will be available when needed from any of these sources or
will be available on terms acceptable to the Company. Insufficient funds may
require the Company to delay, scale back or eliminate one or more of its
research and development programs or to license third parties to commercialize
products or technologies that the Company would otherwise seek to develop itself
without relinquishing its rights thereto. To the extent the Company raises
additional capital by issuing securities, dilution to the holders of Common
Stock will result.
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HISTORY OF LOSSES; UNCERTAINTY OF FUTURE PROFITABILITY
The Company has incurred significant operating losses since its
inception in 1991, having accumulated a deficit of $53.5 million from its
operations through September 30, 1996. Losses have resulted principally from
costs incurred in research activities aimed at discovering and developing the
Company's pharmaceutical product candidates. The Company currently has no
product revenue, and there can be no assurance that it will be able to earn such
revenue or that its operations will become profitable, even if it is able to
commercialize any products.
The Company will be required to conduct significant research,
development, testing and regulatory compliance activities that, together with
projected general and administrative expenses, are expected to result in
substantial operating losses for at least the next several years. Revenues, if
any, that the Company may receive in the next few years will be limited to
payments under research or product development relationships that the Company
has or may hereafter establish, payments under license agreements that the
Company has or may hereafter enter into, research grants, and interest income.
There can be no assurance, however, that the Company will be able to establish
any such relationships or enter into any such license agreements. See "--
Dependence on Others; Collaborations." The Company's ability to achieve
profitability will depend upon its ability to complete successfully the
development of its potential products, to conduct clinical trials, to obtain
required regulatory approvals and to manufacture and market its products or to
enter into license agreements to undertake the foregoing on acceptable terms. In
the event that the Company does enter into any future license agreements, such
license agreements may adversely affect the Company's profit margins on its
potential products. The Company may never achieve significant revenue or
profitable operations.
DEPENDENCE ON OTHERS; COLLABORATIONS
The Company's strategy for research, development and commercialization
of its products is to rely, in part, upon various arrangements with corporate
and academic collaborators, licensors, licensees and others and will therefore
be dependent upon the success of these outside parties in performing their
duties. There can be no assurance that the Company will be able to negotiate
acceptable collaborative arrangements that the Company deems necessary to
develop or commercialize its products. There can be no assurance that such
arrangements or other collaborations will be completed or will be successful, or
that current or potential collaborators will not pursue treatments for other
diseases or seek alternative means of developing treatments for the diseases
targeted by collaborative programs with the Company. No assurance can be given
that the Company will realize any revenues pursuant to such arrangements. The
amount and timing of resources that the parties to such collaborative
arrangements devote to these activities will not necessarily be within the
control of the Company. There can be no assurance that such parties will perform
their obligations as expected or that any additional revenues will be derived
from such arrangements. If any of the Company's collaborators breaches or
terminates its agreement with the Company or otherwise fails to conduct its
collaborative activities in a timely manner, the development or
commercialization of the product candidate or research program under such
collaboration agreement may be delayed and the Company may be required to
undertake unforeseen additional responsibilities or to devote unforeseen
additional resources to such development or commercialization, or such
development or commercialization could be terminated. The termination or
cancellation of collaborative arrangements could also adversely affect the
Company's financial condition, intellectual property position and operations. In
addition, disagreements between collaborators and the Company could lead to
delays in the collaborative research, development or commercialization of
certain product candidates, or could require or result in legal process or
arbitration for resolution. These consequences could be time-consuming and
expensive and could have material adverse effects on the Company.
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LICENSES
The Company has licenses (or options to obtain licenses) to
technologies developed by various research institutes and universities. Pursuant
to the terms of those licenses, the Company is obligated to exercise diligence
in bringing potential products to market and to make certain milestone payments,
which in some instances may be substantial. The Company is also obligated to
make royalty payments on the sales, if any, on certain products based on the
licensed technology. In addition, in some instances, the Company is responsible
for the costs of filing and prosecuting patent applications. The licenses
generally expire upon the earlier of a fixed term of years after the date of the
license or the expiration of the applicable patents, if any. Each license is
terminable by either party, upon notice, if the other party defaults in the
performance of its material obligations.
UNCERTAINTY OF PROTECTION OF PATENTS AND PROPRIETARY RIGHTS
The Company's success depends on its ability to obtain patent
protection for its products or processes both in the United States and other
countries, to protect trade secrets, to operate without infringing upon the
proprietary rights of others and to prevent others from infringing on the
proprietary rights of the Company. Because of the substantial length of time and
expense associated with bringing new products through development and regulatory
approval to the marketplace, the pharmaceutical industry places considerable
importance on patent and trade secret protection for new technologies, products
and processes.
The Company intends to file applications in the United States and other
countries as appropriate for patents covering both its products and processes.
To date, the Company has filed 35 patent applications related to its technology
that are now pending in the United States, certain of which have been filed
internationally and one patent has been issued. In addition, the Company has
obtained exclusive licenses from third parties to certain technology covered
under two issued and 20 pending United States patent applications, and exclusive
options on one additional issued United States patent and one patent
application. The Company has also secured four nonexclusive technology licenses
with certain institutions in support of its research programs. There can be no
assurance that patents will issue from any of these applications or as to the
breadth of protection that any such patents may afford the Company.
The United States Patent and Trademark Office (the "USPTO") may request
clinical data demonstrating efficacy of potential therapeutic agents. The need
to provide such clinical data, if required, could delay or adversely affect the
Company's ability to obtain patent protection for any of its potential products.
A substantial number of patents have been applied for by, and issued to, other
pharmaceutical and biotechnology companies, and other companies may have filed
applications for patents, may have been issued patents or may obtain additional
patents and proprietary rights relating to products or processes competitive
with those of the Company.
Since patent applications in the United States are maintained in
secrecy until patents based thereon issue, and since publication of discoveries
in the scientific or patent literature often lags behind actual discoveries, the
Company cannot be certain that it or any licensor was the first creator of
inventions covered by pending patent applications or that it or such licensor
was the first to file patent applications for such inventions. Further, there
can be no assurance that the claims allowed under any issued patents will be
sufficiently broad to protect the Company's technology. In addition, there can
be no assurance that any patents issued to the Company will not be challenged,
invalidated or circumvented, or that the rights granted thereunder will provide
competitive advantages to the Company.
The commercial success of the Company will depend, in part, on the
Company neither infringing patents issued to others nor breaching any licenses
governing the production, sale or use of the Company's products. There can be no
assurance that the Company will be able to obtain a license to other technology
that it may require or that, if obtainable, such technology can be licensed at a
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reasonable cost. Failure by the Company to obtain a license to any technology
that it may require to commercialize its products may have a material adverse
impact on the Company.
Litigation, which could result in substantial cost to the Company, may
also be necessary to enforce any patents issued to the Company and/or to
determine the scope and validity of others' proprietary rights, in either case
in judicial or administrative proceedings. In addition, to determine the
priority of inventions, the Company may have to participate in interference
proceedings declared by the USPTO or in opposition, nullity or other proceedings
before foreign agencies with respect to any of its existing patent applications
or any future patents or applications, which could result in substantial cost to
the Company. Further, the Company may have to participate at substantial cost in
International Trade Commission proceedings to block importation of goods that
compete unfairly with products of the Company or be subject to International
Trade Commission proceedings brought by others.
A number of pharmaceutical and biotechnology companies and research and
academic institutions have developed technologies, filed patent applications or
received patents on various technologies that may be related to the Company's
business. Some of these technologies, applications or patents may conflict with
the Company's technologies or patent applications. Such conflict could limit the
scope of the patents, if any, that the Company may be able to obtain or result
in the denial of the Company's patent applications. In addition, if patents that
cover the Company's activities are issued to other companies, there can be no
assurance that the Company would be able to obtain licenses to the rights
contained under these patents at a reasonable cost or be able to develop or
obtain alternative technology. For example, the Company believes that the
successful development of its gene therapy program may depend, in part, on its
ability to obtain licenses to patents and proprietary rights of others. No
assurance can be given that any licenses required under any such patents or
proprietary rights would be made available on terms acceptable to the Company.
If the Company does not obtain such licenses, it could encounter delays in
product market introductions, or could find that the development, manufacture or
sale of products requiring such licenses could be foreclosed.
The Company relies, in part, on unpatented trade secrets and
proprietary know-how. However, trade secrets are difficult to protect. There can
be no assurance that others will not independently develop substantially
equivalent proprietary information and techniques or otherwise gain access to
the Company's trade secrets, that such trade secrets will not be disclosed or
that the Company can effectively protect its rights to unpatented trade secrets.
In an effort to protect its trade secrets, the Company has entered into
confidentiality agreements with its collaborators, employees and consultants.
These agreements provide that all confidential information developed or made
known to the individual during the course of the individual's relationship with
the Company is to be kept confidential and not disclosed to third parties except
in specific circumstances. In the case of employees, the agreements generally
provide that all inventions conceived by the employee are the exclusive property
of the Company. There can be no assurance that these agreements will not be
breached or that the Company would have adequate remedies for any breach.
The Company has licensed rights to certain unpatented technology from
research institutions to which it is obligated to pay royalties if it develops
products based upon the licensed technology. Although the Company holds a number
of exclusive options to certain technologies, these options are subject to
negotiation (upon exercise of the relevant options) of satisfactory terms. There
can be no assurance that terms satisfactory to the Company can be negotiated.
GOVERNMENT REGULATION AND PRODUCT APPROVAL
The FDA and comparable agencies in state and local jurisdictions and in
foreign countries impose substantial requirements on the testing, manufacturing
and marketing of pharmaceutical products through lengthy and detailed laboratory
testing and clinical investigation, sampling activities and other costly and
time-consuming procedures. Satisfaction of these requirements typically takes a
number of years and varies substantially based upon the type, complexity and
novelty of the pharmaceuticals products. To date, no compound being evaluated by
the Company has been submitted for FDA or other regulatory approval, and the
Company cannot predict when it might submit products, if any, for FDA or other
regulatory approval. The Company's policy is to conduct its research activities
in compliance with the guidelines of the National Institutes of Health for
research involving recombinant DNA molecules.
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The effect of government regulations may be to delay marketing of new
products of the Company for a considerable or indefinite period of time, to
impose costly procedures upon the Company's activities, to impose substantial
user fees and to furnish a competitive advantage to larger companies that
compete with the Company. If and when the Company submits compounds for FDA
approval, it is expected to take several years before such approval is obtained,
if at all. There can be no assurance that FDA or other regulatory approvals for
any products developed by the Company will be granted on a timely basis, if at
all. The FDA's policies may change, and additional government regulations may be
promulgated that could prevent or delay regulatory approval of the Company's
products. Any such delay in obtaining, or failure to obtain, such approvals
would adversely affect the marketing of the Company's products and its ability
to generate product revenue. Moreover, increased attention to the containment of
health care costs in the United States could result in new government
regulations that could have a material adverse effect on the Company's business.
The Company is unable to predict the likelihood of adverse regulation that might
arise from legislative or administrative action, either in the United States or
abroad.
NO MANUFACTURING, MARKETING, SALES, CLINICAL INVESTIGATION OR REGULATORY
COMPLIANCE ACTIVITIES
The Company has no history of manufacturing, marketing or product sales
and has not invested in manufacturing, marketing or product sales resources. In
view of the early stage of the Company and its research and development
programs, the Company has predominantly hired research scientists and a small
administrative staff. The Company expects to independently manufacture, package,
label and distribute its potential products or to establish arrangements with
third parties to perform some or all of these functions. If the Company is
unable to manufacture or contract for a sufficient supply of its potential
therapeutic agents on acceptable terms, the Company's preclinical testing and
clinical investigation activities may be delayed, resulting in the delay of
submission of products for regulatory approval, which may have a material
adverse effect on the Company. If the Company chooses to contract for
manufacturing services and encounters delays or difficulties in establishing
relationships with manufacturers to produce, package and distribute its finished
pharmaceutical products, if any, market introduction and subsequent sales of
such products would be adversely affected. Further, if it develops
pharmaceutical products that it determines to commercialize itself, the Company
will need to hire additional personnel skilled in the clinical investigation and
regulatory compliance process and in marketing and product sales. There can be
no assurance, however, that it will be able to acquire such resources or
personnel. Contract manufacturers that the Company may use must adhere to the
Good Manufacturing Practices ("GMP") regulations prescribed by the FDA. If the
Company were to manufacture its own products, it would be required to adhere to
GMP regulations. There can be no assurance that the Company will successfully
manufacture or market any product it may develop, either independently or
pursuant to joint venture, sublicensing or other manufacturing or marketing
arrangements, if any, with third parties. There can be no assurance that such
third-party arrangements can be successfully negotiated or that such
arrangements will be on commercially reasonable terms. To the extent that the
Company arranges with third parties to manufacture or market its products, if
any, the success of such products may depend on the efforts of such third
parties. The Company's potential dependence upon third parties for the
manufacture of its products may adversely affect the Company's profit margins
and its ability to develop and deliver such products on a timely and competitive
basis. Should the Company decide to manufacture its own products, the Company
will be subject to the risks and delays or difficulties inherent in the
manufacturing process and would require substantial additional capital.
SUBSTANTIAL COMPETITION AND TECHNOLOGICAL CHANGE
Many companies, both public and private, including well-known
pharmaceutical companies, chemical companies and specialized biotechnology
companies, are engaged in developing pharmaceutical and biotechnological
products for human therapeutic applications. Some of these companies are engaged
in research and product development based on structure-based drug design and
intracellular protein interactions.
9
<PAGE> 11
Many of these companies have substantially greater capital, research and
development and human resources and experience than the Company and represent
significant long-term competition for the Company. In addition, many of these
competitors have significantly greater experience than the Company in
undertaking preclinical testing and clinical investigation of new pharmaceutical
products and obtaining FDA and other regulatory approvals. Furthermore, if the
Company develops any product and is permitted to commence commercial sales
thereof, it will also be competing with companies that have greater resources
and experience in manufacturing, marketing and sales. The Company has no history
of performance in these areas. Other companies may succeed in developing
products that are more effective or less costly than any that may be developed
by the Company and may also prove to be more successful than the Company in
production and marketing. The pharmaceutical industry is characterized by
extensive research efforts and rapid technological change. New developments are
expected to continue, and there can be no assurance that discoveries by others
will not render the Company's programs or potential products noncompetitive.
Competition may increase further as a result of the potential advances in the
commercial applicability of genetic engineering, as well as other technologies,
and greater availability of capital for investment in these fields.
DEPENDENCE ON QUALIFIED PERSONNEL
Because of the specialized scientific nature of the Company's business,
the Company's success is highly dependent upon its ability to attract and retain
qualified scientific and technical personnel. The loss of Dr. Harvey J. Berger,
Chairman, President and Chief Executive Officer, Dr. Joan S. Brugge, Senior Vice
President, Exploratory Research and Scientific Director , Dr. Michael Gilman,
Senior Vice President, Drug Discovery and Scientific Director, ARIAD Gene
Therapeutics, Inc. or Dr. Manfred Weigele, Senior Vice President, Physical and
Chemical Sciences, would be detrimental to the Company. Although the Company has
entered into employment agreements with each of these individuals, there can be
no assurance that these employees will remain with the Company. The Company has
an employment agreement with Dr. Berger that extends to December 1999, an
employment agreement with Dr. Brugge that extends to December 1997, an
employment agreement with Dr. Weigele that extends to December 1997 and
employment agreements with other executive officers that also extend to December
1997. Although such employment agreements provide for the protection of the
Company's proprietary rights in its research and development, any of these
individuals may terminate their employment upon the termination of their
employment agreement. In addition, Dr. Berger's employment agreement allows Dr.
Berger to terminate his employment with the Company in certain circumstances.
The Company is currently recruiting additional qualified scientific and
technical personnel. There is intense competition for qualified personnel in the
areas of the Company's activities, and there can be no assurance that the
Company will be able to continue to attract and retain qualified personnel
necessary for the development of its business. The Company's planned activities
will require additional expertise in areas such as research, development,
preclinical testing, clinical investigation, regulatory affairs, manufacturing,
marketing and product sales. Such activities will require the addition of new
personnel, including management and the development of additional expertise by
existing personnel. Loss of the services of or failure to recruit additional key
scientific and technical personnel would be detrimental to the Company's
research and development programs and business.
The Company is also dependent upon consultants and advisors, including
its scientific advisors, to assist in formulating its research and development
strategy. All members of the Company's Board of Scientific and Medical Advisors
are employed on a full-time basis by entities other than the Company, primarily
by academic or research institutions, and may have commitments to or consulting
or advisory contracts with other entities that may limit their availability to
the Company. Accordingly, such advisors generally devote only a limited portion
of their time to the Company. Any inventions or processes discovered
independently by any such advisor may not become the property of the Company and
could remain the property of such person or of such person's employer.
10
<PAGE> 12
RISK OF PRODUCT LIABILITY
The Company's business exposes it to potential product liability risks
inherent in the testing, manufacturing and marketing of human therapeutic
products, and there can be no assurance that the Company will be able to avoid
significant product liability exposure. The Company does not currently have any
product liability insurance, and there can be no assurance that it will be able
to obtain or maintain such insurance on acceptable terms or that any insurance
obtained will provide adequate coverage against potential liabilities. An
inability to obtain sufficient insurance coverage at an acceptable cost or
otherwise to protect against potential product liability claims could prevent or
limit the commercialization of any products developed by the Company.
Furthermore, a product liability related claim or recall could have a material
adverse effect on the business or financial condition of the Company.
HAZARDOUS AND RADIOACTIVE MATERIALS; ENVIRONMENTAL MATTERS
The Company's research and development activities involve the
controlled use of hazardous and radioactive materials, such as toxins,
chemicals, viruses and various radioactive compounds. The Company is subject to
federal, state and local laws and regulations governing the use, manufacture,
storage, handling and disposal of such materials and certain waste products.
Although the Company believes that its safety procedures for handling and
disposing of such materials comply with the standards prescribed by state, local
and federal regulations, the risk of accidental contamination or injury from
these materials cannot be eliminated completely. In the event of such an
accident, the Company could be held liable for any damages that result and any
such liability could exceed the resources of the Company. Although the Company
believes that it is in compliance in all material respects with applicable
environmental laws and regulations and currently does not expect to make
material capital expenditures for environmental control facilities in the
near-term, there can be no assurance that the Company will not be required to
incur significant costs to comply with environmental laws and regulations in the
future, or any assurance that the operations, business or assets of the Company
will not be materially adversely affected by current or future environmental
laws or regulations.
UNCERTAINTY OF PHARMACEUTICAL PRICING AND RELATED MATTERS; UNCERTAIN
AVAILABILITY OF HEALTH CARE REIMBURSEMENT
The Company's business may be materially adversely affected by the
continuing efforts of government and third-party payors to contain or reduce the
costs of health care through various means. For example, in certain foreign
markets, pricing or profitability of prescription pharmaceuticals is subject to
government control. In the United States, there have been, and the Company
expects that there will continue to be, a number of federal and state proposals
to implement similar government control. In addition, there has been an
increasing emphasis on managed care in the United States which has and will
continue to put pressure on pharmaceutical pricing. Other comprehensive health
care reform proposals have been or are expected to be introduced by others in
Congress. Such proposals, if adopted, could decrease the price that the Company
receives for any products it may develop and sell in the future. Although the
Company cannot predict whether any such legislative initiatives or regulatory
reform proposals will be adopted, there can be no assurance that such
initiatives or proposals will not have an adverse effect upon the Company. In
addition, there have been a number of federal and state proposals to subject the
pricing of health care products and services to government control. It is
uncertain what legislative proposals will be adopted or what actions federal,
state or private payors for health care goods and services may take in response
to any health care reforms, and no assurance can be given that any such reforms
will not have an adverse effect on the Company. Further, to the extent that such
proposals or reforms have a material adverse effect on the business, financial
condition and profitability of other pharmaceutical companies that are
prospective collaborators for certain of the Company's potential products, the
Company's ability to commercialize its potential products may be adversely
affected.
11
<PAGE> 13
The Company's ability to commercialize pharmaceutical products may
depend in part on the extent to which reimbursement for the costs of such
products and related treatments will be available from government health
administration authorities, private health insurers and others. Significant
uncertainty exists as to the reimbursement status of newly approved health care
products, and third party payors are increasingly challenging the prices charged
for medical products and services. There can be no assurance that adequate
third-party insurance coverage will be available to patients to allow the
Company to establish and maintain price levels sufficient for realization of an
appropriate return on its investment in developing new therapies. Government and
other third party payors are increasingly attempting to contain health care
costs by limiting both coverage and the level of reimbursement for new
therapeutic products approved for marketing by the FDA and other regulatory
agencies and by refusing, in some cases, to provide any coverage for uses of
approved products for disease indications for which the agency has not granted
marketing approval. If adequate coverage and reimbursement levels are not
provided by government and third-party payors for uses of the Company's
therapeutic products, the market acceptance of these products would be adversely
affected.
CONTROL BY MANAGEMENT AND CERTAIN STOCKHOLDERS
As of September 30, 1996, directors and officers of the Company and
certain principal stockholders and their affiliates beneficially owned in the
aggregate shares representing approximately 30.5% of the outstanding shares of
Common Stock. Accordingly, they have the ability to influence significantly the
election of the Company's directors and otherwise control the Company. The
voting power of these holders may discourage or prevent any proposed takeover of
the Company pursuant to a tender offer unless the terms thereof are satisfactory
to such holders. Another obstacle to any proposed attempt to gain control of the
Company is the division of the Board of Directors into three classes, each of
which will serve for three years, with one class being elected each year. This
could inhibit dissenters or potential acquirors from gaining control of the
Board until there have been at least two annual meetings of stockholders.
WARRANTS AND STATE BLUE SKY REGISTRATION REQUIRED IN CONNECTION WITH EXERCISE OF
WARRANTS
The Company will be able to issue shares of its Common Stock upon
exercise of the Warrants only if such shares of Common Stock are qualified for
sale or exempt from qualification under applicable state securities laws of the
jurisdiction in which the various holders of Warrants reside. The Warrants
and/or Common Stock may be of less value and the market for the Warrants and/or
Common Stock may be limited if such shares of Common Stock are not qualified or
exempt from qualification in the jurisdictions in which the holders reside.
VOLATILITY OF STOCK PRICE
The market price of the Common Stock, like that of the securities of
many other biotechnology companies, is likely to be highly volatile. Factors
such as the results of preclinical studies and clinical trials by the Company or
its competitors, other evidence of the safety or efficacy of pharmaceutical
products of the Company or its competitors, announcements of technological
innovations or new therapeutic products by the Company or its competitors,
governmental regulation, healthcare legislation, developments in patent or other
proprietary rights of the Company or its competitors, including litigation,
fluctuations in the Company's operating results and market conditions for life
science stocks in general could have a significant impact on the future price of
the Common Stock and the relative volatility of such market price.
12
<PAGE> 14
THE COMPANY
The Company was incorporated under the laws of Delaware in April 1991,
and is engaged in the discovery and development of novel pharmaceuticals based
on intracellular signaling technology. The Company has established highly
integrated capabilities in functional genomics, molecular cell biology,
structure-based drug design, combinatorial chemistry and pharmacology. The
Company is developing small-molecule drugs that block signal transduction
pathways in cells responsible for osteoporosis, immune and inflammatory
diseases. In addition, the Company has developed a system to control signal
transduction pathways for the regulation of therapeutic protein production in
gene therapy. The Company's executive offices are located at 26 Landsdowne
Street, Cambridge, Massachusetts 02139-4234, and its telephone number is (617)
494-0400.
DESCRIPTION OF SECURITIES
The following summary description of the capital stock of the Company
does not purport to be complete and is qualified in its entirety by reference to
the Company's Amended Certificate of Incorporation.
COMMON STOCK
The holders of Common Stock are entitled to cast one vote for each
share held at all stockholders meetings for all purposes, including the election
of directors, and to share equally in such dividends as may be declared by the
Board of Directors out of funds legally available therefor. Upon liquidation or
dissolution, each outstanding share of Common Stock will be entitled to share
equally in the assets of the Company legally available for distribution to
stockholders after the payment of all debts and other liabilities of the
Company. All outstanding shares of Common Stock are fully paid and
nonassessable. The shares of Common Stock issuable upon exercise of the Warrants
will be, upon payment therefor, fully paid and nonassessable.
No holder of Common Stock has a preemptive or preferential right to
purchase or subscribe for any unissued or additional authorized stock or any
securities of the Company convertible into shares of Common Stock. There are no
conversion or redemption rights in the Common Stock.
The Common Stock does not have cumulative voting rights. Accordingly,
the holders of more than 50% of the Common Stock voting for the election of
directors can elect all of the directors of the Company if they so choose. The
By-laws of the Company require that a majority of the issued and outstanding
shares of Common Stock be represented in person or by proxy to constitute a
quorum and transact business at a stockholders meeting.
COMPANY WARRANTS
The Warrants were issued pursuant to the Warrant Agreement, between the
Company and State Street Bank and Trust Company, as warrant agent (the "Warrant
Agent") and are evidenced by warrant certificates in registered form. The
following discussion of the material terms and provisions of the Warrants is
qualified in its entirety by reference to the detailed provisions of the Warrant
Agreement, the form of which has been filed as an exhibit to the Registration
Statement of which this Prospectus forms a part.
Each Warrant entitles the holder to purchase at any time prior to May
20, 1999 one share of Common Stock at an exercise price equal to $8.40 per
share, subject to certain adjustments. The Exercise Price and the number of
shares of Common Stock underlying such Warrants are subject to adjustment for
stock splits, stock dividends and similar events. Neither the Exercise Price nor
the number of shares issuable upon exercise thereof will be adjusted if the
Company offers additional shares of Common Stock or warrants at a price below
the Exercise Price or the then prevailing market price of the Common Stock. The
Warrants may be exercised in whole or in part. Unless exercised, the Warrants
will automatically expire on May 20, 1999.
13
<PAGE> 15
In the event of any reclassification, capital reorganization or other
similar change of outstanding Common Stock, any consolidation or merger
involving the Company (other than a consolidation or merger which does not
result in any reclassification, capital reorganization or other similar change
in the outstanding Common Stock), or a sale, lease or conveyance to another
corporation of the property of the Company as, or substantially as, an entirety,
each Warrant will thereupon become exercisable only for the kind and number of
shares of stock or other securities, assets or cash to which a holder of the
number of shares of Common Stock issuable (at the time of such reclassification,
reorganization, consolidation, merger or sale) upon exercise of such Warrant
would have been entitled upon such reclassification, reorganization,
consolidation, merger or sale. In the case of a cash merger of the Company into
another corporation or any other cash transaction of the type mentioned above,
the effect of these provisions would be that the holder of a Warrant would
thereafter be limited to exercising such Warrant at the Exercise Price in effect
at such time for the amount of cash per share that a Warrant holder would have
received had such holder exercised such Warrant and received Common Stock
immediately prior to the effective date of such cash merger or transaction.
Depending upon the terms of such cash merger or transaction, the aggregate
amount of cash so received could be more or less than the Exercise Price.
Each holder of a Warrant may exercise such Warrant by surrendering the
certificate evidencing such Warrant, with the subscription form on the reverse
side of such certificate properly completed and executed, together with payment
of the Exercise Price, to the Warrant Agent at its office maintained for that
purpose. Such office will initially be the principal corporate office of the
Warrant Agent at State Street Bank and Trust Company, 225 Franklin Street,
Boston, MA 02110. The Exercise Price will be payable by certified check or money
order payable in United States dollars to the order of the Company. If less than
all of the Warrants evidenced by a Warrant certificate are exercised, a new
certificate will be issued for the remaining number of Warrants. Certificates
evidencing the Warrants may be exchanged for new certificates of different
denominations by presenting the Warrant certificates at the office of the
Warrant Agent.
No fractional shares of Common Stock will be issued upon the exercise
of the Warrants. In lieu of fractional shares of Common Stock, there will be
paid to the holder of the Warrants at the time of such exercise an amount in
cash equal to the same fraction of the current market value (as determined in
the Warrant Agreement) of a share of Common Stock.
The Company may redeem the Warrants at its option upon not less than 30
days' or more than 60 days' notice, at a price of $.05 per Warrant, provided the
closing bid price of Common Stock has been at least 160% of the Exercise Price
of the Warrants for 30 consecutive trading days ending within 15 days of the
date of the notice of redemption. All of the Warrants must be redeemed if any
are redeemed. In the event the Company exercises its right to redeem the
Warrants, such Warrants will be exercisable until the close of business on the
date fixed for redemption in such notice. If any Warrant called for redemption
is not exercised by such time, it will cease to be exercisable and the holder
thereof will be entitled only to the redemption price.
The Warrant Agreement contains provisions permitting the Company and
the Warrant Agent, without the consent of any Warrant holder, to supplement the
Warrant Agreement in order to cure any ambiguity, to correct any provision
contained therein which may be defective or inconsistent with any other
provisions therein, or to make other provisions which the Company and the
Warrant Agent may deem necessary or desirable and which do not adversely affect
the interests of the Warrant holders.
For the life of the Warrants, the Warrant holders have the opportunity
to benefit from a rise in the market price of the Common Stock without assuming
the risk of ownership of the shares of Common Stock issuable upon the exercise
of Warrants at a time when the Exercise Price is less than the market price for
the Common Stock. Further, the terms on which the Company could obtain
additional capital during the life of the Warrants may be adversely affected.
The Warrant holders may be expected to exercise their Warrants at a time when
the Company would, in all likelihood, be able to obtain needed capital by an
offering of Common Stock on terms more favorable than those provided for by the
Warrants.
14
<PAGE> 16
The holder of the Warrants will not have any of the rights or
privileges of stockholders of the Company, including voting rights and rights to
receive dividends, prior to exercise of the Warrants. The Company will reserve
out of its authorized but unissued shares a sufficient number of shares of
Common Stock for issuance on exercise of the Warrants. The Common Stock issuable
on exercise of the Warrants will be, when issued, duly authorized, validly
issued, fully paid and nonassessable.
For a holder to exercise the Warrants, there must be a current
registration statement in effect with the Commission and qualification with or
approval from various state securities agencies with respect to the shares or
other securities underlying the Warrants, or an opinion of counsel for the
Company that there is an exemption from registration or qualification. As long
as the Warrants remain outstanding and exercisable, the Company is required to
use its best efforts to maintain an effective registration statement with
respect to the shares issuable on exercise of the Warrants. There can be no
assurance, however, that such registration statement can be kept current. If a
registration statement covering such shares of Common Stock is not kept current
for any reason, or the shares underlying the Warrants are not registered in the
state in which a holder resides, the Warrants will not be exercisable and the
value thereof will be impaired.
USE OF PROCEEDS
The Company intends to use the proceeds from the sale of the Shares
upon exercise of the Warrants for its general corporate purposes, depending on
the Company's needs as determined from time to time by the Company's Board of
Directors.
PLAN OF DISTRIBUTION
The Shares offered hereby are issuable upon the exercise of the
Warrants and the payment of the Exercise Price. The Exercise Price and the
number of Shares issuable upon the exercise of each Warrant are subject to
adjustment, as provided in the Warrant Agreement, upon certain events.
In accordance with the provisions of the Warrant Agreement, upon the
surrender of a Warrant certificate with the subscription form, as set forth in
the Warrant Agreement, duly executed, along with payment of the Exercise Price
to the Warrant Agent or its successor at its principal office which is presently
at 225 Franklin Street, Boston, MA 02110, the Company will issue the applicable
number of shares of Common Stock, registered in such name or names as may be
directed by him or her, to the registered holder of such Warrant or Warrants.
DILUTION
The net tangible book value of the Common Stock of the Company as of
September 30, 1996 (based on the unaudited financial statements incorporated
herein by reference) was approximately $14.1 million or approximately $.74 per
share. "Net tangible book value" per share of Common Stock represents the total
tangible assets of the Company reduced by the total liabilities of the Company
and divided by the number of shares of Common Stock outstanding. Upon exercise
of all Warrants, after deducting estimated offering expenses and at the Exercise
Price of $8.40 per Share, the pro forma net tangible book value of the Common
Stock of the Company as of September 30, 1996 would have been approximately
$32.0 million or approximately $1.51 per share. The increase in net tangible
book value of $.77 per share would be due solely to the purchase of the Shares.
Purchasers will immediately incur a dilution of $6.89 per share from the $8.40
price of the Shares purchased upon exercise of the Warrants. "Dilution" is
determined by subtracting net tangible book value per share after the exercise
of all Warrants from the Exercise Price. There is no guarantee that all of the
Warrants will be exercised.
15
<PAGE> 17
LEGAL MATTERS
The legality of the Shares was passed upon for the Company by Paul,
Weiss, Rifkind, Wharton & Garrison. David T. Washburn, of counsel to Paul,
Weiss, Rifkind, Wharton & Garrison, is the Secretary of the Company. As of the
date hereof, certain partners of Paul, Weiss, Rifkind, Wharton & Garrison
beneficially own an aggregate of 64,392 shares of Common Stock.
EXPERTS
The consolidated financial statements incorporated in this prospectus by
reference from the Company's Annual Report on Form 10-K for the year ended
December 31, 1995 have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report, which is incorporated herein by reference,
and have been so incorporated in reliance upon the report of such firm given
upon their authority as experts in accounting and auditing.
16
<PAGE> 18
<TABLE>
<S> <C>
===================================================== =====================================================
No dealer, salesperson or any other person has been
authorized to give any information or to make any ARIAD Pharmaceuticals, Inc.
representations in connection with this offering
other than those contained in this Prospectus, and,
if given or made, such information or 2,125,225 Shares
representation must not be relied upon as having of Common Stock
been authorized. This Prospectus does not Issuable Upon Exercise of Warrants
constitute an offer to sell or a solicitation of
any offer to buy by anyone in any jurisdiction in
which such offer to sell or solicitation is not
authorized, or in which the person making such
offer or solicitation is not qualified to do so, or
to any person to whom it is unlawful to make such
offer or solicitation. Neither the delivery of
this Prospectus nor any sale made hereunder shall,
under any circumstances, create any implication
that there has been no change in the affairs of the
Company since the date as of which information is
furnished.
======================= ======================
PROSPECTUS
======================
TABLE OF CONTENTS Page
Incorporation of Certain Documents by
Reference ............................... 2
Available Information ................... 3
Risk Factors ............................ 4
The Company ............................. 13
Description of Securities ............... 13
Use of Proceeds ......................... 15
Plan of Distribution .................... 15
Dilution ................................ 15
Legal Matters ........................... 16
January , 1997
Experts ................................. 16
===================================================== =====================================================
</TABLE>
<PAGE> 19
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
The Registrant estimates that expenses in connection with the
offering described in this Registration Statement will be as follows. All of the
amounts are actual except that the legal fees and transfer agent and registrar
fees include estimates in connection with the offering of the Shares. All
amounts include amounts previously disclosed in the Form S-1, amended by this
Form S-3, and include expenses in connection with the offering described in the
Form S-1 of securities other than the Shares.
<CAPTION>
ITEM AMOUNT
---- ----------
<S> <C>
SEC registration fee $ 22,937
NASD fee 7,295
Nasdaq application fee 50,150
Legal fees and expenses 460,614
Accounting fees and expenses 116,500
Printing and engraving expenses 187,471
Blue Sky fees and expenses, including legal fees 25,000
Transfer agent and registrar fees and expenses 15,413
Underwriter's nonaccountable expenses allowance 293,000
Miscellaneous 30,620
----------
Total ........................................ $1,209,000
==========
</TABLE>
II-1
<PAGE> 20
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145(a) of the General Corporation Law of the State of Delaware
provides that a Delaware 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 or enterprise,
against expenses, 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 no cause to believe his conduct was unlawful.
Section 145(b) provides that a Delaware 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 the fact that such
person acted in any of the capacities set forth above, against expenses actually
and reasonably incurred by him in connection with the defense or settlement of
such action or suit if he acted under similar standards, except that no
indemnification may 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 in which such action or suit was brought shall
determine that despite the adjudication of liability, such person is fairly and
reasonably entitled to be indemnified for such expenses which the court shall
deem proper.
Section 145 further provides that to the extent a director or officer
of a corporation has been successful in the defense of any action, suit or
proceeding referred to in subsections (a) and (b) or in the defense of any
claim, issue or matter therein, he shall be indemnified against expenses
actually and reasonably incurred by him in connection therewith; that
indemnification provided for by Section 145 shall not be deemed exclusive of any
other rights to which the indemnified party may be entitled; and that the
corporation may purchase and maintain insurance on behalf of a director or
officer of the corporation against any liability asserted against him or
incurred by him in any such capacity or arising out of his status as such
whether or not the corporation would have the power to indemnify him against
such liabilities under such Section 145.
The Certificate of Incorporation, as amended, and By-laws of the
Company provide for indemnification of the Company's directors and officers to
the fullest extent permitted by law. The By-laws also permit the Board of
Directors to authorize the Company to purchase and maintain insurance against
any liability asserted against any director, officer, employee or agent of the
Company arising out of his capacity as such. Insofar as indemnification for
liabilities under the Securities Act may be permitted to directors, officers, or
controlling persons of the Company pursuant to the Company's Certificate of
Incorporation, as amended, its By-laws and the Delaware General Corporation Law,
the Company has been informed that in the opinion of the Commission such
indemnification is against public policy as expressed in such Act and is
therefore unenforceable.
As permitted by the Delaware General Corporation Law, the Company's
Certificate of Incorporation, as amended, provides that directors of the Company
shall not be personally liable to the Company or its stockholders for 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 Company 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, relating to prohibited dividends or
distributions or the repurchase or redemption of stock or (iv) for any
transaction from which the director derives an improper personal benefit. As a
result of this provision, the Company and its stockholders may be unable to
obtain monetary damages from a director for breach of his or her duty of care.
II-2
<PAGE> 21
ITEM 16. EXHIBITS
1.1 Form of Underwriting Agreement.(1)
4.1 Form of ARIAD Pharmaceuticals, Inc. Common Stock Purchase
Warrant(2)
4.2 Principal Stockholders' Agreement, dated as of January 5, 1992,
among ARIAD Pharmaceuticals, Inc., David Blech, David Blech as
Trustee of the Blech Family Trust, Mark S. Germain, Harvey J.
Berger, Harvey J. Berger and Wendy S. Berger as Trustees of the
Berger Family Trust, Avalon Ventures and Avalon Ventures IV.(2)
4.3 Form of Warrant Agreement (with Form of Warrant).(1)
4.4 Rights Agreement, dated as of December 15, 1994, between the
Company and State Street Bank and Trust Company, which includes
the Certificate of Designations in respect of the Series A
Preferred Stock, as Exhibit A, the Form of Right Certificate as
Exhibit B and the Summary of Rights to Purchase Series A
Preferred Stock as Exhibit C. Pursuant to the Rights Agreement,
Right Certificates will not be mailed until after the
Separation Date (as defined therein).(3)
4.5 Amendment, dated as of April 24, 1995, to Rights Agreement,
dated as of December 15, 1994, between ARIAD Pharmaceuticals,
Inc. and State Street Bank and Trust Company.(4)
4.6 Stock Purchase Agreement, dated as of April 24, 1995, between
ARIAD Pharmaceuticals, Inc. and Biotech Target S.A.(5)
5.1 Opinion of Paul, Weiss, Rifkind, Wharton & Garrison.(1)
23.1 Consent of Deloitte & Touche LLP(6)
23.2 Consent of Paul, Weiss, Rifkind, Wharton & Garrison (included
in their opinion filed as Exhibit 5.1)(1)
24.1 Power of Attorney (included on the signature page of the
Registration Statement)(1)
-----------------------------------------------------
(1) Previously filed
(2) Incorporated by reference to Registration Statement on Form 10 of the
Company filed with the Securities and Exchange Commission on June 25,
1993.
(3) Incorporated by reference to Form 8-K of the Company filed with the
Securities and Exchange Commission on December 21, 1994.
(4) Incorporated by reference to Form 8-K of the Company filed with the
Securities and Exchange Commission on May 15, 1995.
(5) Incorporated by reference to Form 10-K of the Company for the fiscal year
ended December 31, 1995 filed with the Securities and Exchange Commission
on March 15, 1996.
(6) Filed herewith
II-3
<PAGE> 22
ITEM 17. UNDERTAKINGS
(a) Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that
a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed
by the final adjudication of such issue.
(b) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement; provided, however, that paragraphs
(b)(1)(i) and (b)(1)(ii) do not apply if the registration
statement is on Form S-3 or Form S-8 and the information
required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by
the registrant pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act 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.
(c) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing
of the Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 that is incorporated by
reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
II-4
<PAGE> 23
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Amendment to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Boston and Commonwealth of
Massachusetts on the 29th of January, 1997.
ARIAD PHARMACEUTICALS, INC.
By: /s/ Jay R. LaMarche
----------------------------------
Jay R. LaMarche
Senior Vice President, Finance
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below by the following
persons and in the capacities indicated on the 29th of January, 1997.
Signature Title
--------- -----
* Chairman of the Board of Directors,
-------------------------------- President and Chief Executive Officer
Harvey J. Berger, M.D.
* Vice Chairman of the Board of Directors
--------------------------------
Edgar Haber, M.D.
/s/ Jay R. LaMarche Senior Vice President, Finance, Chief
-------------------------------- Financial Officer, Treasurer and
Jay R. LaMarche Director (Principal Financial and
Accounting Officer)
* Senior Vice President, Exploratory
-------------------------------- Research, Scientific Director and
Joan S. Brugge, Ph.D. Director
* Director
--------------------------------
Vaughn D. Bryson
* Director
--------------------------------
Philip Felig, M.D.
* Director
--------------------------------
Frank J. Hoenemeyer
* Director
--------------------------------
Peter T. Joseph
* Director
--------------------------------
Joel S. Marcus
* Director
--------------------------------
Sandford D. Smith
* Director
--------------------------------
Raymond S. Troubh
* By: /s/ Jay R. LaMarche
----------------------------
Jay R. LaMarche
Attorney-in-fact
II-5
<PAGE> 24
EXHIBIT INDEX
1.1 Form of Underwriting Agreement.(1)
4.1 Form of ARIAD Pharmaceuticals, Inc. Common Stock Purchase
Warrant(2)
4.2 Principal Stockholders' Agreement, dated as of January 5, 1992,
among ARIAD Pharmaceuticals, Inc., David Blech, David Blech as
Trustee of the Blech Family Trust, Mark S. Germain, Harvey J.
Berger, Harvey J. Berger and Wendy S. Berger as Trustees of the
Berger Family Trust, Avalon Ventures and Avalon Ventures IV.(2)
4.3 Form of Warrant Agreement (with Form of Warrant).(1)
4.4 Rights Agreement, dated as of December 15, 1994, between the
Company and State Street Bank and Trust Company, which includes
the Certificate of Designations in respect of the Series A
Preferred Stock, as Exhibit A, the Form of Right Certificate as
Exhibit B and the Summary of Rights to Purchase Series A
Preferred Stock as Exhibit C. Pursuant to the Rights Agreement,
Right Certificates will not be mailed until after the
Separation Date (as defined therein).(3)
4.5 Amendment, dated as of April 24, 1995, to Rights Agreement,
dated as of December 15, 1994, between ARIAD Pharmaceuticals,
Inc. and State Street Bank and Trust Company.(4)
4.6 Stock Purchase Agreement, dated as of April 24, 1995, between
ARIAD Pharmaceuticals, Inc. and Biotech Target S.A.(5)
5.1 Opinion of Paul, Weiss, Rifkind, Wharton & Garrison.(1)
23.1 Consent of Deloitte & Touche LLP(6)
23.2 Consent of Paul, Weiss, Rifkind, Wharton & Garrison (included
in their opinion filed as Exhibit 5.1)(1)
24.1 Power of Attorney (included on the signature page of the
Registration Statement)(1)
-----------------------------------------------------
(1) Previously filed
(2) Incorporated by reference to Registration Statement on Form 10 of the
Company filed with the Securities and Exchange Commission on June 25,
1993.
(3) Incorporated by reference to Form 8-K of the Company filed with the
Securities and Exchange Commission on December 21, 1994.
(4) Incorporated by reference to Form 8-K of the Company filed with the
Securities and Exchange Commission on May 15, 1995.
(5) Incorporated by reference to Form 10-K of the Company for the fiscal year
ended December 31, 1995 filed with the Securities and Exchange Commission
on March 15, 1996.
(6) Filed herewith
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT ON REPORT
The Board of Directors and Stockholders of
ARIAD Pharmaceuticals, Inc.:
We consent to the incorporation by reference in this Form S-3 Post-Effective
Amendment No. 1 to Registration Statement No. 33-76414 of ARIAD Pharmaceuticals,
Inc. on Form S-1 of our report dated January 19, 1996, appearing in the Annual
Report on Form 10-K of ARIAD Pharmaceuticals, Inc. for the year ended December
31, 1995, and to the reference to us under the heading "Experts" in the
Prospectus, which is part of such Registration Statement.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
January 28, 1997
