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As filed with the Securities and Exchange Commission on July 26, 2000
Registration No. 333-36612
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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TREGA BIOSCIENCES, INC.
(Exact name of registrant as specified in its charter)
Delaware 51-0336233
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
9880 Campus Point Drive
San Diego, California 92121
(858) 410-6500
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
MICHAEL G. GREY COPIES TO:
CHIEF EXECUTIVE OFFICER THOMAS E. SPARKS, JR.
TREGA BIOSCIENCES, INC. Pillsbury Madison & Sutro LLP
9880 Campus Point Drive 50 Fremont Street
San Diego, California 92121 San Francisco, California 94120
(858) 410-6500 (415) 983-1000
(Name, address, including zip code,
and telephone number, including
area code, of agent for service)
--------------------
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. / /
CALCULATION OF REGISTRATION FEE
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PROPOSED
MAXIMUM
PROPOSED MAXIMUM AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES TO BE AMOUNT TO BE OFFERING PRICE OFFERING REGISTRATION
REGISTERED REGISTERED PER SHARE(1) PRICE(1) FEE
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<S> <C> <C> <C> <C>
Common Stock, $.001 par value 3,886,668 Shares $3.86 $15,002,538 $3,961
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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) based upon the average of the high and low prices
of the Registrant's Common Stock on the Nasdaq National Market on May 5,
2000.
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 SECURITIES AND EXCHANGE
COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an
offer to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
--------------------------------------------------------------------------------
SUBJECT TO COMPLETION, DATED JULY 26, 2000
PROSPECTUS
3,886,668 SHARES
TREGA
BIOSCIENCES, INC.
COMMON STOCK
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The selling stockholders identified in this prospectus may sell up
to 3,886,668 shares of our common stock. We will not receive any of the
proceeds from the sale of shares by the selling stockholders.
Our common stock is traded on the Nasdaq National Market under the
symbol "TRGA."
----------------------
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. YOU
SHOULD CAREFULLY READ AND CONSIDER THE "RISK FACTORS" BEGINNING ON PAGE 3.
----------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------------------
The date of this prospectus is _________, 2000
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Table of Contents
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THE COMPANY..................................................................................................1
RISK FACTORS.................................................................................................3
PROCEEDS FROM THE OFFERING..................................................................................12
SELLING STOCKHOLDERS........................................................................................13
PLAN OF DISTRIBUTION........................................................................................14
LEGAL MATTERS...............................................................................................14
EXPERTS.....................................................................................................15
WHERE YOU CAN FIND MORE INFORMATION.........................................................................15
DOCUMENTS INCORPORATED BY REFERENCE.........................................................................15
</TABLE>
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THE COMPANY
We primarily develop and market products designed to assist
pharmaceutical and biotechnology companies in the identification of drug
candidates and to accelerate the traditional drug discovery process. These
products include our propriety IDiscovery-TM- technologies, comprised of our
Chem.Folio-Registered Trademark- chemical compounds and our IDEA-TM-
software. We also conduct an internal drug discovery program in the areas of
obesity, diabetes and syndrome X, a syndrome associated with obesity and
diabetes, involving the human body's resistance to insulin.
The Opportunity
Traditional drug discovery involves several sequential steps,
creating a time-consuming process with a high attrition rate. In order to
discover a drug, scientists first must identify targets in the human body.
Targets are biological molecules that cause medical conditions or diseases.
Most drugs work by binding to a target and changing the target's function or
activity. Thus, after selecting a target, scientists then must identify those
chemical compounds that change the target's function. These compounds are
known as "hits." Scientists often identify hits by first acquiring hundreds
of thousands of chemical compounds. This large quantity of compounds,
otherwise known as a compound library, may be generated by a technology
called combinatory chemistry. Combinatorial chemistry permits the rapid
creation of hundreds of thousands of chemical compounds through automated
techniques. Prior to the advent of combinatorial chemistry, chemists had to
create new compounds one at a time.
The generated compounds are then tested, or screened, against the
selected target. Such screening may identify hundreds of hits. Then, in a
series of labor intensive and time consuming steps, scientists determine how
the human body absorbs, distributes, metabolizes and excretes these hits and
whether they are toxic. The pharmaceutical industry refers to these
characteristics as ADMET (absorption, distribution, metabolism, excretion and
toxicity). Scientists then chemically modify the hits to identify those with
the appropriate activity and ADMET characteristics for potentially safe and
effective use in humans. This entire process of determination and
modification is called "lead optimization" and results in the identification
of drug candidates. Traditionally, lead optimization involves the use of
animal models, which is slow and inefficient and poorly predicts successful
human drug candidates. It takes approximately three to five years for
scientists to complete this initial phase of drug discovery. A drug candidate
then undergoes preclinical development and three phases of human clinical
development before receiving marketing approval from the U.S. Food and Drug
Administration. The entire process from target selection to FDA approval of a
drug typically ranges from 12-16 years, and the failure rate is high.
Our Solution
We believe that our IDiscovery-TM- technologies increase the
likelihood of clinical success by identifying those hits with essential
drug-like characteristics at the early stages of the drug discovery process.
Therefore, we believe our products and services will improve the probability
of success and result in a shorter drug discovery process.
CHEM.FOLIO-Registered Trademark- COMPOUNDS LIBRARIES AND SERVICES.
These include:
- off-the-shelf chemical compounds available for immediate
screening against a selected target, and rapid manufacture of
closely related compounds, or analogues, if requested by a
customer;
- chemical compounds made to a customer's specifications;
- information that will enable a customer to make additional
quantities of the chemical compounds; and
- information on the solubility, or the ability of the compound to
dissolve, and cytotoxity, the toxic effect of the compound on
cells, of the Chem. Folio-Registered Trademark- compounds.
We believe that the information provided to our customers will help
them determine whether the compounds would be appropriate drug
candidates at a much earlier stage of the drug development process than
under traditional methods of discovery. In addition to a direct sales
effort, we offer our compounds
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over the Internet through an electronic commerce company,
ChemNavigator.com, Inc. and through screening companies, including
EVOTEC BioSystems AG.
IDEA-TM- PREDICTIVE MODELS. IDEA-TM- predictive models are computer
simulation programs. We commercially launched one predictive model, the
IDEA-TM- absorption module, designed to predict the absorption
characteristics of chemical compounds in humans. We based the
development of this absorption module on human clinical data provided
by a consortium of major pharmaceutical companies. In addition, we plan
to develop other models to predict the other ADMET characteristics and
offer our predictive models over the Internet. We believe that our
IDEA-TM- predictive models will reduce the time and effort required in
the lead optimization process by reducing or eliminating the
traditional drug discovery process' reliance on animal testing.
Internal Drug Discovery
We discovered a group of chemical compounds that appear to influence
the production and activity of particular cytokines, or proteins that act as
messengers between cells, through interaction with melanocortin receptors, which
are protein molecules that bind to hormones produced by the pituitary gland
called melanocortins. We completed a Phase II clinical trial of one of these
compounds, HP-228, in the treatment of post-operative pain in hip and knee
replacements. In the past, we conducted a number of internal drug discovery
programs in this area with collaborators, including Ono Pharmaceuticals, Co.,
Ltd. On February 11, 2000, we announced that we will only conduct internal drug
discovery programs if collaborators are available to fully fund them. Currently,
we are carrying out a collaborative program, fully funded by Novartis Pharma AG,
in the area of diabetes, obesity and syndrome X. Additionally, we are seeking
collaborators for our HP-228 compound and our compounds for the treatment of
sexual dysfunction.
Trega became a Delaware corporation in 1991. We have executive offices
at 9880 Campus Point Drive, San Diego, California 92121 and our telephone number
is (858) 410-6500.
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RISK FACTORS
WE EXPECT TO CONTINUE TO INCUR LOSSES AND MAY NEVER ACHIEVE PROFITABILITY, WHICH
MAY HARM OUR FUTURE OPERATING PERFORMANCE AND CAUSE OUR STOCK PRICE TO DECLINE.
We have experienced significant operating losses since our inception in
1991. For the years ended December 31, 1999, 1998 and 1997, we had net losses of
approximately $8.7 million, $12.8 million and $9.4 million, respectively. As of
March 31, 2000, we had an accumulated deficit of approximately $81.4 million.
In 2000, we intend to continue to spend additional amounts on
developing, marketing and selling our IDiscovery-TM- products and services.
These amounts include investments in marketing our IDEA-TM- absorption
software module, developing additional IDEA-TM- predictive modules, expanding
our Chem.Folio-Registered Trademark- chemical compound inventory, acquiring
and licensing complementary technologies and expanding our use of the
Internet and intranet to market and disseminate our products and services.
If revenues do not correspondingly increase, our operating results
and financial condition could be negatively affected. Should we continue to
incur net losses in future periods, we may not be able to increase our
investment in the development of our products and services under our present
plans. Although we have set an objective to reach positive quarterly cash
flow by the end of 2000, we may never obtain sufficient revenues to achieve
profitability. If we do achieve profitability, we may not sustain or increase
profitability in the future. This in turn may cause our stock price to
decline.
OUR OPERATING RESULTS ARE UNPREDICTABLE, WHICH MAY CAUSE OUR STOCK PRICE TO
DECLINE AND RESULT IN LOSSES TO OUR INVESTORS.
Our operating results are unpredictable and may fluctuate
significantly from period to period, which may cause our stock price to
decline and result in losses to investors. Some of the factors that could
cause our operating results to fluctuate include:
- changes in the demand for our IDiscovery-TM- products and services;
- the introduction of competitive products or services;
- the nature, pricing and timing of other products and services
provided to our customers;
- acquisition, licensing and other costs related to the expansion of
our operations;
- changes in the research and development budgets of our customers
and collaborators; and
- payments of milestones, license fees or royalty payments under the
terms of our external alliances or future collaborations.
Moreover, the nature of our revenues underwent a significant shift
due to the change in our strategic focus. For example, in 1999, revenues from
our compound libraries accounted for approximately 56% of our total revenues
as compared to only 21% in 1998. In 1999, revenues from research conducted
under collaborative research agreements accounted for only 24% of our total
revenues versus 79% in 1998. As a result of these changes, we believe that
period-to-period comparisons of our financial results will not necessarily be
meaningful. You should not rely on these comparisons as an indication of our
future performance. If our operating results in any future period fall below
the expectations of securities analysts and investors, our stock price will
likely fall, possibly by a significant amount.
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OUR NEW BUSINESS STRATEGY OF FOCUSING ON OUR IDISCOVERY-TM- TECHNOLOGIES AND
UNPREDICTABLE FUTURE REVENUES MAKES EVALUATION OF OUR BUSINESS AND PROSPECTS
DIFFICULT.
Our new business strategy of focusing on IDiscovery-TM-
technologies, that we believe will allow our customers to identify drug
candidates more efficiently, is unproven. Because of this recent strategic
shift in focus, we cannot accurately predict our future revenues. We
currently have only one customer for our first predictive model, the IDEA-TM-
absorption module. We generated only limited revenues of approximately $7.5
million for the fiscal year ended 1999 from our Chem.Folio-Registered
Trademark- compound customers. In addition, we still depend in part on
revenues received from a collaborator, Novartis, for one of our internal drug
discovery programs. Our success will depend in large part upon:
- the performance of our IDiscovery-TM- technologies in accelerating the
drug discovery process;
- the acceptance of our IDiscovery-TM- technologies by our customers;
- our ability to enter into collaboration, licensing and other
agreements for IDiscovery-TM- technologies on favorable terms; and
- our ability to generate revenues with existing and potential
collaborators in our internal drug discovery programs.
Moreover, we have limited experience marketing our IDEA-TM-
absorption module, which we launched in December 1999. Additionally, the
sales cycle of the IDEA-TM- predictive models is unknown. Furthermore, the
plans for our future predictive modules, such as a metabolism module, are
unproven, and we cannot be sure that we will ever develop these products or
that any product that we develop will be commercially successful. As a result
of these factors, it is difficult to predict our future revenues and evaluate
our business prospects.
OUR IDISCOVERY-TM- TECHNOLOGIES AND PRODUCTS MAY NOT BE COMMERCIALLY VIABLE OR
SUCCESSFUL, WHICH COULD CAUSE US TO GENERATE INSUFFICIENT REVENUES TO BECOME
PROFITABLE.
Our ability to succeed depends upon the acceptance by potential
customers of our IDiscovery-TM- technologies, in place of more traditional
methods, as effective tools in the discovery of new drugs. Drug discovery
methods based upon our IDiscovery-TM- technologIEs may not lead to the
discovery or development of commercial pharmaceutical products. Moreover, we
have not yet completed or commenced most of our IDEA-TM- predictive model
development programs. These technology programs may not be developed,
employed or commercialized successfully, work efficiently or otherwise
enhance our ability to engage in the acceleration of the drug discovery
process. Some of the factors that will determine the demand for our
IDiscovery-TM- technologies include:
- the efficacy of our predictive models;
- the development of predictive models in addition to the
absorption module; and
- the novelty and diversity of our compound libraries.
In order for us to achieve our business objectives, we must convince
these companies that our predictive models and compound libraries will reduce
both the cost and length of the drug discovery process. If we cannot convince
companies in the pharmaceutical industry of the effectiveness of our
IDiscovery-TM- technologies, we may be unable to keep our existing customers
or attract additional customers on acceptable terms or develop a sustainable,
profitable business.
OUR INTERNAL DRUG DISCOVERY PROGRAMS MAY NEVER RESULT IN PRODUCTS, WHICH MEANS
WE MAY NOT RECEIVE MILESTONE OR ROYALTY PAYMENTS.
Our internal drug discovery programs, including our programs to
develop potential melanocortin-related drug candidates, are at early stages.
We only intend to proceed with such internal drug discovery programs if, and
to
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the extent, collaborators fund them. Moreover, our collaborators will
probably control the development of any drug candidates resulting from our
internal drug discovery programs. We do not expect drugs resulting in part
from our efforts to become commercially available for a number of years, if
ever, even if any such compounds are successfully developed and are proven to
be safe and effective. The failure to commercialize such compounds would
result in us not receiving any milestone or royalty payments.
IF WE FAIL TO SECURE NEW, OR LOSE OUR EXISTING COLLABORATORS, OR IF OUR
COLLABORATORS DO NOT APPLY ADEQUATE RESOURCES TO THEIR COLLABORATIONS WITH US,
OUR PRODUCT DEVELOPMENT ACTIVITIES AND OUR POTENTIAL FOR PROFITABILITY MAY
SUFFER.
Our strategy for the utilization and development of our
IDiscovery-TM-technologies and internal drug discovery programs requires us
to enter into contractual arrangements with corporate collaborators,
licensors, licensees and others. In fact, we intend to proceed with our
internal drug discovery programs only if collaborators are available to fully
fund such programs. There may only be a limited number of pharmaceutical or
biotechnology companies that would potentially collaborate with us. Thus, we
may not be successful in negotiating additional commercially and
scientifically sound collaborations.
Our success depends in part upon the performance by these
collaborators under these arrangements. We will have little or no control
over the resources that any collaborator may devote to its collaboration with
us. If any collaborator breaches or terminates its agreement with us to
develop an IDiscovery-TM- product or service, or fails to conduct its
collaborative activities in a timely manner, the commercialization of our
products could be delayed or prevented completely. In the case of our
internal drug discovery programs, the failure to conduct a collaborative
program in a timely manner would prevent us from receiving potential
milestones and royalties. Furthermore, our collaborators may resist sharing
revenue derived from the successful commercialization of a drug through
royalty payments, or others may have competing claims to all or a portion of
such revenue.
In addition, disputes may arise over ownership rights to
intellectual property, know-how or technologies developed with our
collaborators. Our arrangements with our collaborators involving our
Chem.Folio-TM- chemical compounds may require us to provide identical or
similar chemical compounds, or chemical compound technologies or information
to multiple parties. Disputes may arise between collaborators as to
proprietary rights to particular compounds in our libraries. If disputes
arise, our existing customers could stop using our chemical compounds; we
could lose existing and potential customers; we could have difficulty in
attracting future collaborators to assist with our product development
efforts; and we could incur litigation costs, which would affect our
financial position.
WE MAY NEED TO RAISE ADDITIONAL CAPITAL THAT MAY BE UNAVAILABLE, WHICH COULD
ADVERSELY AFFECT OUR OPERATIONS AND STOCK PRICE.
We may need to raise more money to continue the research and
development necessary to bring our products to market and to establish or
expand manufacturing and marketing capabilities. Additionally, we intend to
consider acquisitions and licensing of technologies that will add value to
our IDiscovery-TM- technologies. We may seek additional funds through public
and private stock offerings, arrangements with corporate partners, borrowings
under lease lines of credit or other sources. The amount of money needed will
depend on many factors, including among others:
- expenses in connection with the development of our
IDiscovery-TM- technologies or other products or services;
- expenses in connection with maintaining our intellectual
property, including preparing, filing, and
prosecuting patent claims and enforcing patents;
- our current and potential collaborative relationships; and
- the need to increase research and development spending to keep up
with competing technologies and market developments.
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Additional capital may not be available on terms acceptable to us,
or at all. In the event that we do not reach our goal of reaching positive
quarterly cash flow by the end of 2000, assuming a level of
Chem.Folio-Registered Trademark- compound library revenues for the next 12
months that is comparable to Chem.Folio-Registered Trademark- compound
library revenues in fiscal 1999, we anticipate that our existing capital
resources, funding from our Novartis collaboration, and our currently
available property and equipment financing and line of credit will fund our
current and planned operations through the next 12 months. If we cannot raise
more money we may have to reduce our capital expenditures, scale back our
development of new products, delay, reduce the scope of or eliminate our
acquisition activities, or curtail operations significantly. Any additional
equity financing may be dilutive to stockholders, and debt financing, if
available, may include restrictive covenants.
FAILURE TO COMPETE EFFECTIVELY IN OUR INTENSELY COMPETITIVE INDUSTRY WILL CAUSE
OUR REVENUES TO DECLINE.
We compete in markets that are intensely competitive, new and
rapidly changing. Many of our current and potential competitors have greater
financial, human and other resources than we do. If we cannot respond quickly
to changing customer requirements, secure intellectual property positions, or
adapt quickly and obtain access to new and emerging technologies, our
revenues may decline. Our competitors include:
- major pharmaceutical companies who manufacture compound libraries
or predictive software for their own use or who are developing drugs
focused on the melanocortins;
- specialized biotechnology/software firms, such as Simulations Plus,
Inc. and Camitro Corporation;
- combinatorial chemistry companies, such as Tripos, Inc., ArQule, Inc.
and Pharmacopeia, Inc.;
- academic institutions;
- governmental agencies; and
- other public and private research institutions.
Many pharmaceutical and biotechnology companies, which represent the
largest market for our products and services, develop, have developed or have
entered into collaborations with companies with internal predictive modeling
and/or combinatorial chemistry programs. We also compete for access to new
pharmacophores, which are three-dimensional representations of parts of
molecules responsible for drug activity. Any inability by us to develop new
pharmacophores would material effect our business development. Our
competitors may develop products that are more effective and/or less costly
than any of our current or future products. Many of these competitors have
substantially more resources and product development, production and
marketing capabilities than we do. In addition, many of our competitors have
significantly greater experience than we do in competing for the scarce
research and development budgets of pharmaceutical companies. Therefore, the
market for our IDiscovery-TM-technologies may not generate sufficient
revenues for us to become profitable.
In addition, products currently exist that will compete directly
with any drug candidates that we seek to develop, such as HP-228, or that our
collaborators may seek to develop. Any product candidate that our
collaborators or we develop must then compete for market acceptance and
market share. If our collaborators or we are successful in achieving
significant commercial sales of products, our collaborators and we also will
compete in manufacturing efficiency and marketing capability, an area in
which we have limited or no experience. Furthermore, our competitors may
obtain FDA approval for products sooner and be more successful in
manufacturing and marketing their products than our collaborators or us.
Significant factors in determining whether we will be able to compete
successfully include:
- the performance, pricing and ease of use of our IDiscovery-TM-
technologies;
- the novelty, diversity, purity and target specificity of our
compound libraries;
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- speed and costs of identifying and optimizing potential lead
compounds;
- the reputation and acceptance of our IDiscovery-TM- technologies;
- the quality and availability of customer service and customer
support; and
- the effectiveness of our sales and marketing efforts.
If our products are not competitive based on these or other factors,
our business, financial condition and results of operations will be
materially harmed.
IF WE DO NOT PROTECT OUR PROPRIETARY RIGHTS, THEN WE MAY NOT BE ABLE TO
CREATE A SUSTAINABLE BUSINESS.
Our success depends in part on obtaining, maintaining and enforcing
patents, maintaining our trade secrets, licensing patent rights owned by
others, and operating without infringing on third parties' proprietary
rights. We currently pursue patent protection for our predictive models, our
compound libraries and our efforts in the melanocortin area. We believe that
our patent applications claiming our IDEA-TM- absorption module are
especially important to our business because we believe that the module is
the first of its kind. We also hold licenses to a number of patents owned by
third parties, including a license to the Tea Bag technology. The Tea Bag
technology, which is a production technique used by us in our compound
business, expires in 2003. The expiration of this patent will enable our
competitors to use the Tea Bag technique, but the existence of the patent has
not prevented the development of competing techniques for the creation of
compound libraries. The expiration of the Tea Bag patent will be an
additional factor increasing competitiveness in the compound library field.
Patent positions in our industry are highly uncertain and involve
many complex legal and technical issues. The United States Patent and
Trademark Office, USPTO, and its foreign counterparts may not issue patents
from our pending patent applications. If issued, the patents may not give us
an advantage over competitors with similar technologies. If we do not receive
patents for our core technologies or inventions, the value of our patent
portfolio may diminish and our revenue may decline.
In addition to the intellectual property rights described above, we
also rely on unpatented technology, trade secrets and confidential information.
We may not be able to effectively protect such rights because third parties may
independently develop substantially equivalent information and techniques or
otherwise gain access to our technology or disclose such technology. We require
each of our employees and consultants to execute a confidentiality agreement at
the commencement of an employment or consulting relationship with us. However,
these agreements may not provide meaningful protection for our trade secrets or
other proprietary information in the event of unauthorized disclosure of this
confidential information.
THE SCOPE OF OUR ISSUED PATENTS MAY NOT PROVIDE US WITH ADEQUATE PROTECTION
OF OUR PRODUCTS AND SERVICES, WHICH COULD HARM OUR COMPETITIVE POSITION.
Any issued patents that cover our proprietary technologies may not
provide us with substantial protection or be commercially beneficial to us.
Issuance of a patent is not conclusive as to its validity, enforceability or
its scope. The USPTO or the courts may invalidate our patents. While we are
not engaged in any patent litigation currently, third parties may challenge
the validity, enforceability and the scope of a patent. Moreover, the cost of
litigation to uphold the validity of patents and to prevent infringement can
be substantial. In addition, any litigation could also divert our technical
and management personnel's time and attention from the operation of our
business. If the outcome of litigation is adverse to us, third parties may be
able to use our patented inventions without payment to us. During the course
of litigation, there may be public announcements of the results of legal
proceedings. Securities analysts or investors may perceive these
announcements to be negative, which could cause the market price of our stock
to drop. Any of these events may materially and adversely affect our business
and financial operations.
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THE USE OF OUR TECHNOLOGIES COULD POTENTIALLY CONFLICT WITH THE RIGHTS OF
OTHERS, WHICH COULD NEGATIVELY AFFECT OUR FINANCIAL POSITION.
There may be patent rights belonging to others that require us to
alter our products, pay licensing fees or cease activities using such
technologies. If our products conflict with patent rights of others, the
owners of those patent rights could bring legal actions against us claiming
damages and seeking to stop us from manufacturing and marketing the affected
products. If these legal actions are successful, in addition to any potential
liability for damages, we could be required to obtain a license in order to
continue to manufacture or market the affected products. We may not prevail
in any legal action or we may not be able to obtain any license required
under any patent on acceptable terms, or at all. Any of these events may
materially harm our business, financial condition and results of operations.
There are numerous third party patents in the fields of
combinatorial chemistry and our other drug discovery technologies. Thus, to
pursue the preferred development route of one or more of our products, we may
need to obtain a license to a patent, which would decrease the ultimate
profitability of the applicable product. If we cannot negotiate a license, we
may have to pursue a less desirable development route or terminate the
program altogether. Third parties may have claimed discoveries similar to
those covered by our patent applications. We do not expect to know for
several years the relative strength of our patent position as compared to
these other entities. In addition, other companies, including competitors of
ours, may obtain patents and proprietary rights relating to products or
processes used in, necessary to, competitive with or otherwise related to our
patents and products.
WE DEPEND ON KEY EMPLOYEES IN A COMPETITIVE MARKET FOR SKILLED PERSONNEL, AND
THE LOSS OF THEIR SERVICES WOULD AFFECT OUR ABILITY TO ACHIEVE OUR OBJECTIVES.
Our products and services are highly technical. Our key personnel
must have specialized training or advanced degrees in order to develop and
refine these products and services. There is a shortage of qualified
scientific, management and software development personnel who possess the
technical background necessary to adequately understand and improve our
products and services. We compete for these personnel with other
pharmaceutical and biotechnology companies, software firms, academic
institutions and government entities. If we are unable to attract and retain
scientific and management personnel with the appropriate credentials and
experience, our products and services could become noncompetitive and
obsolete. Our product development, operations and marketing efforts would be
delayed or curtailed if we lose the services of any of these people. Further
development of our products, including our IDEA-TM- predictive models and
Chem.Folio-Registered Trademark- compound libraries, requires us to hire
additional qualified scientific personnel to perform research and
development, as well as personnel with software development expertise. If we
are unable to continue to attract, train and retain these personnel, we may
be unable to expand our business.
SECURITY RISKS IN ELECTRONIC COMMERCE OR UNFAVORABLE INTERNET REGULATIONS MAY
DETER FUTURE USE OF OUR PRODUCTS AND SERVICES, WHICH COULD RESULT IN A LOSS
OF REVENUES.
Currently, customers may purchase Chem.Folio-Registered Trademark-
chemical compounds through an electronic commerce web site,
ChemNavigator.com. We plan to make our IDEA-TM- predictive software available
through our own web site. Our ability and the ability of ChemNavigator.com to
provide secure transmissions of confidential information over the Internet
may limit online uses and purchases of products. Advances in computer
capabilities and new discoveries in the field of cryptography may compromise
the security measures that Chem.Navigator.com and we will use to protect our
web sites and access to our databases. A breach of our security measures may
result in the misappropriation of our proprietary information or confidential
information about our customers. Also, a security breach could result in
interruptions in our operations. The security measures we adopt may not be
sufficient to prevent breaches, and we may be required to incur significant
costs to protect against security breaches or to alleviate problems caused by
breaches. Further, a breach of the security of our web site, the
ChemNavigator.com web site, or the web site of another company, may result in
our customers not using the Internet to access our products. For example, the
attacks earlier this year by computer hackers on major electronic commerce
web sites and other Internet service providers have heightened concerns
regarding the security and reliability of the Internet.
Because of the growth in electronic commerce, the United States
Congress has held hearings on whether to further regulate providers of
services and transactions in the electronic commerce market. The federal
government
8
<PAGE>
could enact laws, rules and regulations that would affect our business and
operations. Individual states could also enact laws regulating the use of the
Internet. If enacted, these federal and state laws, rules and regulations
could require us or ChemNavigator.com to change online business and
operations, which could limit the growth and development of our online
products.
BECAUSE OUR ACTIVITIES INVOLVE THE USE OF HAZARDOUS MATERIALS, WE MAY BE
SUBJECT TO COSTLY ENVIRONMENTAL LIABILITY THAT COULD EXCEED OUR RESOURCES AND
ADVERSELY AFFECT OUR FINANCIAL OPERATIONS.
Our research and development activities involve the controlled use
of hazardous materials, chemicals and various radioactive compounds. Federal,
state and local laws and regulations governing the use, manufacture, storage,
handling and disposal of these materials and specific waste products apply to
us. Although we believe that our safety procedures for handling and disposing
of these materials comply with legally prescribed standards, the risk of
accidental contamination or injury from these materials cannot be completely
eliminated. In the event of an accident, we could be held liable for damages,
and this liability could exceed our resources.
We believe that we comply in all material respects with applicable
environmental laws and regulations. However, we may have to incur significant
costs to comply with current or future environmental laws and regulations.
Any additional expenditures would harm our financial operations.
BECAUSE OUR REVENUES ARE DERIVED PRIMARILY FROM THE PHARMACEUTICAL AND
BIOTECHNOLOGY INDUSTRIES, OUR REVENUES MAY FLUCTUATE SUBSTANTIALLY DUE TO
REDUCTIONS AND DELAYS IN RESEARCH AND DEVELOPMENT EXPENDITURES.
We expect to derive revenues primarily from products and services
provided to the pharmaceutical and biotechnology industries. Accordingly, our
success will depend in large part upon the success of the companies within
those industries and their demand for our products and services. Our
operating results may fluctuate substantially due to reductions and delays in
research and development expenditures by companies in those industries. These
reductions and delays may result from factors such as:
- changes in economic conditions;
- consolidation in the pharmaceutical and biotechnology industries;
- changes in the regulatory environment affecting health care and
health care providers;
- pricing pressures;
- market-driven pressures on companies to consolidate and reduce
costs; and
- other factors affecting research and development spending.
We have no control over these factors.
OUR STOCK PRICE HAS BEEN AND WILL LIKELY CONTINUE TO BE VOLATILE, AND YOU MAY BE
UNABLE TO RESELL YOUR SHARES AT OR ABOVE THE PRICE YOU PAID.
Our stock price has been and is likely to continue to be highly
volatile. For example, our stock price has since the beginning of 2000 closed
as high as $13.375 on March 7, 2000 and as low as $1.938 on January 3, 2000.
Our stock price could fluctuate significantly due to a number of factors,
including:
- variations in our actual or anticipated operating results;
- sales of substantial amounts of our stock;
- announcements about us or about our competitors, including
technological innovation or new products or services;
9
<PAGE>
- litigation and other developments relating to our patents or
other proprietary rights or those of our competitors;
- conditions in the pharmaceutical and biotechnology industries;
- governmental regulation and legislation; and
- changes in securities analysts' estimates of our performance,
or our failure to meet analysts' expectations.
We have no control over most of these factors.
In addition, the stock markets in general, and the Nasdaq National
Market and the market for life sciences and technology companies in
particular, have experienced extreme price and volume fluctuations recently.
These fluctuations often have been unrelated or disproportionate to the
operating performance of these companies. These broad market and industry
factors may decrease the market price of our common stock, regardless of our
actual operating performance.
Historically, stockholders have brought securities class action
litigation against companies following periods of volatility in the market
prices of their securities. We may in the future be the target of similar
litigation. Securities litigation could result in substantial costs and a
diversion of management's attention and resources, which could affect our
profitability.
HEALTH CARE REFORM AND RESTRICTIONS ON REIMBURSEMENT MAY AFFECT THE ABILITY
OF PHARMACEUTICAL AND BIOTECHNOLOGY COMPANIES TO PURCHASE OR LICENSE OUR
PRODUCTS AND SERVICES, WHICH MAY AFFECT OUR PROFITABILITY.
The continuing efforts of government and third party payors to
contain or reduce the costs of health care may reduce the profitability of
pharmaceutical and biotechnology companies. For example, in some foreign
markets, the government controls pricing or profitability of prescription
pharmaceuticals. In the U.S., we expect the continuation of federal and state
proposals to implement similar governmental control. We cannot predict what
actions federal, state or private payors for health care goods and services
may take in response to any health care reform proposals or legislation. We
expect to derive almost all of our revenues in the foreseeable future from
the pharmaceutical and biotechnology industries. Accordingly, our success
depends upon the success of the companies within those industries and their
demand for our products and services. Any reduction in the profitability of
actual or prospective customers for our products and services could result in
reduced revenues for us.
THE STRICT REGULATORY APPROVAL PROCESS FOR PHARMACEUTICALS MAY PREVENT OUR
COLLABORATORS OR US FROM OBTAINING APPROVALS FOR THE COMMERCIALIZATION OF OUR
MELANOCORTIN-RELATED PRODUCTS, REDUCING ANY FUTURE ROYALTIES OR REVENUES.
The manufacturing and marketing of melanocortin-related
pharmaceutical products developed by our collaborators or us will be subject
to regulation in the United States and other countries. These regulations
could subject our collaborators or us to several problems such as:
- failure to obtain necessary regulatory approvals or clearances
for our melanocortin-related products on a timely basis, or at
all;
- delays in receipt of or failure to receive approvals or
clearances;
- the loss of previously received approvals or clearances; or
- limitations on intended uses imposed as a condition of
approvals.
In the United States, pharmaceuticals are subject to rigorous
regulation by the Food and Drug Administration, the FDA. Under the federal
Food, Drug and Cosmetic Act, the FDA regulates the testing,
10
<PAGE>
manufacture, safety, efficacy, labeling, storage, record keeping, approval,
advertising and promotion of pharmaceutical products. Our collaborators will
not be able to commence marketing or commercial sales of pharmaceutical
products until our collaborators receive clearance or approval from the FDA,
which can be a lengthy, expensive and uncertain process. Our collaborators
and we have not applied for FDA or other regulatory approvals with respect to
the sale of any of our pharmaceutical products under development, such as
HP-228. For marketing outside the United States, our collaborators and we
will also be subject to foreign regulatory requirements governing human
clinical trials and marketing approval for pharmaceutical products. The
requirements governing the conduct of clinical trials, product licensing,
pricing and reimbursement vary widely from country to country. We may
experience difficulties that could delay or prevent the successful
development, introduction and marketing of proposed products. Regulatory
clearance or approval or clearance of any proposed products may not be
granted by the FDA or foreign regulatory authorities on a timely basis, if at
all. If our collaborators or we do not receive FDA approval on a timely basis
or at all, we may not receive milestone or royalty payment, and our business
and financial position may be harmed.
IF WE FAIL TO DEVELOP OR MAINTAIN OUR RELATIONSHIPS WITH THIRD PARTY
MANUFACTURERS, OR IF THESE MANUFACTURERS FAIL TO PERFORM ADEQUATELY, WE MAY
BE UNABLE TO COMMERCIALIZE OUR PHARMACEUTICAL PRODUCTS AND OUR BUSINESS WILL
BE HARMED.
Our capacity to conduct clinical trials and commercialize our
melanocortin-related pharmaceutical products will depend in part on the
abilities of our collaborators or contract manufacturers to make products on
a large scale, at a competitive cost and under regulatory requirements. Our
collaborators or we must establish and maintain a commercial scale
formulation and manufacturing process for all of the potential pharmaceutical
products to complete clinical trials. We, our collaborators or third party
manufacturers may encounter difficulties with these processes at any time
that could result in delays in clinical trials, regulatory submissions or in
the commercialization of potential pharmaceutical products. Third party
manufacturers are subject to regulatory review and may fail to comply with
good manufacturing practices regulations. Our collaborators or we must
conduct new product testing and facility compliance inspections for any third
party manufacturer with whom we intend to contract. This testing and
inspection is costly and time-consuming. Any of these factors could prevent,
or cause delays in, obtaining regulatory approvals for, and manufacturing,
marketing or selling of, our products and could also result in significantly
higher operating expenses.
WE HAVE VARIOUS MECHANISMS IN PLACE THAT A STOCKHOLDER MAY NOT CONSIDER
FAVORABLE, WHICH MAY DISCOURAGE TAKEOVER ATTEMPTS AND WHICH MAY LOWER THE
PRICE THAT INVESTORS MIGHT BE WILLING TO PAY FOR OUR COMMON STOCK.
Our amended and restated certificate of incorporation and bylaws
contain provisions that may discourage, delay or prevent a change in our
control, even if the change in control would benefit stockholders. These
provisions include:
- authorizing the issuance of up to 5,000,000 shares of preferred
stock by our Board of Directors to increase the number of
outstanding shares and thwart a takeover attempt, without any
further approval of our stockholders;
- a classified Board of Directors with staggered, three-year terms,
which may lengthen the time to gain control of our Board of
Directors;
- prohibiting stockholder action by written consent, which requires
all actions to be taken at a meeting of stockholders;
- requiring super-majority voting to effect specified amendments to
our certificate of incorporation and bylaws;
- limiting who may call special meetings of stockholders; and
11
<PAGE>
- establishing advance notice requirements for nominations of
candidates for election to the board of Directors or for proposing
matters that can be acted upon by stockholders at stockholders
meetings.
In addition, provisions of Section 203 of Delaware General Corporate
Law govern us. These provisions may prohibit large stockholders, in
particular those owning 15% or more of our outstanding voting stock, from
merging or combining with us. These and other provision in our amended and
restated certificate of incorporation and bylaws and Delaware law could
reduce the price that investors might be willing to pay for shares of our
common stock in the future and result in the market price being lower than it
would be without these provisions.
WE MAY HAVE SUBSTANTIAL EXPOSURE TO PRODUCT LIABILITY CLAIMS AND MAY NOT HAVE
ADEQUATE INSURANCE TO COVER THOSE CLAIMS, WHICH WOULD ADVERSELY AFFECT OUR
FINANCIAL OPERATIONS.
We may be held liable if any product we develop, or any product made
by others using our technologies, causes injury. We carry only limited
product liability insurance coverage for our clinical trials. We intend to
obtain product liability insurance to cover our products approved for
marketing and sale. This insurance may be prohibitively expensive or may not
fully cover our potential liabilities. Our inability to obtain adequate
insurance coverage and at an acceptable cost could prevent or inhibit the
commercialization of our products. If a third party sues us for any injury
caused by products made by us or third parties using our technologies, our
liability could exceed our total assets, materially harming our financial
position.
FORWARD-LOOKING STATEMENTS
When used in this prospectus, the words "expects," "anticipates,"
"estimates," "plans," and similar expressions are intended to identify
forward-looking statements. These are statements that relate to future
periods and include statements under the captions "Risk Factors" and "The
Company" as to the adequacy of capital resources, growth in operations, the
ability to commercialize products developed under collaborations and
alliances, and the performance and utility of our products and services.
Forward-looking statements are subject to risks and uncertainties that could
cause actual results to differ materially from those projected. These risks
and uncertainties include, but are not limited to, risks relating to the
development of new IDEA-TM predictive models and expansion of our
Chem.Folio-Registered Trademark- compound libraries and their use by our
potential customers, and the risks set forth under "Risk Factors."
PROCEEDS FROM THE OFFERING
We will not receive any proceeds from the sale of the shares by the
selling stockholders. All proceeds from the sale of the shares will be for
the account of the selling stockholders, as described below. See "Selling
Stockholders" and "Plan of Distribution" below.
12
<PAGE>
SELLING STOCKHOLDERS
The following table discloses information as of July 25, 2000,
regarding each selling stockholder's beneficial ownership of our common stock
and the shares being offered by each selling stockholder. We have based the
information about beneficial ownership upon information obtained from the
selling stockholders.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED PRIOR
TO OFFERING
------------------------- NUMBER OF SHARES
SELLING STOCKHOLDERS NUMBER PERCENT BEING OFFERED
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
BayStar Capital, L.P. 300,000 1.07 300,000
BayStar International, LTD 200,000 * 200,000
Cypress VI Partners 33,333 * 33,333
EGM Medical Technology Fund LP 199,667 * 109,667
EGM Medical Technology Offshore Fund 135,600 * 72,000
First Security Van Kasper (1) 220,000 * 220,000
Jackson Square Partners, L.P. 181,667 * 181,667
Narragansett I, LP 30,934 * 30,934
Narragansett Offshore Ltd. 22,400 * 22,400
Paul M. Ginsburg 33,333 * 33,333
Pequot Scout Fund, L.P. 300,000 1.07 300,000
Special Situations Private Equity Fund, L.P. 300,000 1.07 300,000
The Timken Living Trust U/A/D 9/14/99 83,334 * 83,334
T. Rowe Price Associates, Inc.(2) 2,089,600 7.48 2,000,000(2)
</TABLE>
* Less than 1%
(1) Represents the number of shares of our common stock issuable upon the
exercise of a warrant granted to First Security Van Kasper for financial
services.
(2) Includes 1,333,334 shares held by T. Rowe Price New Horizons Fund, Inc.,
440,666 shares held by T. Rowe Price Health Sciences Fund, Inc. and 226,000
shares held by Green Line Mutual Funds - Green Line Health Sciences Fund.
On April 4 and April 11, 2000, we agreed to sell 3,666,668 shares of our
common stock and grant a warrant to First Security Van Kasper, the placement
agent, to purchase up to 220,000 additional shares of our common stock. In
connection with this financing, we agreed to file a registration statement
with the SEC covering the resale of the shares issued or issuable to each
selling stockholder. Our agreement requires us to cause this registration
statement to remain effective until the earlier of (a) April 12, 2002, (b)
the date on which each selling stockholder's shares could be sold in a single
three-month period under Rule 144 of the Securities Act of 1933 or (c) such
time as all the shares offered by this prospectus have been sold. We also
agreed to indemnify each selling stockholder against claims made against them
arising out of, among other things, statements made in this registration
statement.
13
<PAGE>
PLAN OF DISTRIBUTION
The shares covered by this prospectus may be offered and sold at
various times by the selling stockholders. The selling stockholders will act
independently of us in making decisions with respect to the timing, manner
and size of each sale. The shares may be sold by or for the account of the
selling stockholders in transactions on the Nasdaq National Market, the
over-the-counter market, or otherwise. These sales may be made at fixed
prices, at market prices prevailing at the time of sale, at prices related to
prevailing market prices, or at negotiated prices. The shares may be sold by
means of one or more of the following methods:
- a block trade in which the broker-dealer so engaged will attempt to
sell the shares as agent, but may position and resell a portion of
the block as principal to facilitate the transaction;
- purchases by a broker-dealer as principal and resale by that
broker-dealer for its account under this prospectus;
- ordinary brokerage transactions in which the broker solicits
purchasers;
- in connection with short sales, in which the shares are
redelivered to close out short positions;
- in connection with the loan or pledge of shares registered
hereunder to a broker-dealer, and the sale of the shares so loaned
or the sale of the shares so pledged upon a default;
- in connection with the writing of non-traded and exchange-traded
call options, in hedge transactions and in settlement of other
transactions in standardized or over-the-counter options;
- privately negotiated transactions; or
- in a combination of any of the above methods.
In effecting sales, broker-dealers engaged by the selling
stockholders may arrange for other broker-dealers to participate in resales.
Broker-dealers may receive compensation in the form of discounts, concessions
or commissions from the selling stockholders or from the purchasers of the
shares or from both. This compensation may exceed customary commissions.
The selling stockholders and any broker-dealers, agents or
underwriters that participate with the selling stockholders in the
distribution of the shares may be deemed to be "underwriters" within the
meaning of the Securities Act. Any commissions paid or any discounts or
concessions allowed to any of those persons, and any profits received on the
resale of the shares purchased by them, may be deemed to be underwriting
commissions or discounts under the Securities Act.
We have agreed to bear all expenses of registration of the shares
(other than fees and expenses, if any, of legal counsel or other advisors to
the selling stockholders). Any commissions, discounts, concessions or other
fees, if any, payable to broker-dealers in connection with any sale of the
shares will be borne by the selling stockholders selling those shares.
LEGAL MATTERS
Certain legal matters with respect to the validity of common stock
offered by this prospectus are being passed upon for us by Pillsbury Madison
& Sutro LLP, San Francisco, California.
14
<PAGE>
EXPERTS
Ernst & Young LLP, independent auditors, have audited our
consolidated financial statements included in our Annual Report on Form 10-K
for the year ended December 31, 1999, as set forth in their report, which is
incorporated by referenced in this prospectus and elsewhere in the
registration statement. Our consolidated financial statements are
incorporated by reference in reliance on Ernst & Young LLP's report, given on
their authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements, and
other information with the Securities and Exchange Commission. You may read
and copy any materials we file with the Commission at the Commission's public
reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call
the Commission at 1-800-SEC-0330 for more information on its public reference
rooms. The Commission also maintains an Internet Website at
http://www.sec.gov that contains reports, proxy and information statements,
and other information regarding issuers that file electronically with the
Commission.
We have filed with the Commission a registration statement (which
contains this prospectus) on Form S-3 under the Securities Act of 1933. The
registration statement relates to the common stock offered by the selling
stockholders. This prospectus does not contain all of the information set
forth in the registration statement and the exhibits and schedules to the
registration statement. Please refer to the registration statement and its
exhibits and schedules for further information with respect to us and our
common stock. Statements contained in this prospectus as to the contents of
any contract or other document are not necessarily complete and, in each
instance, we refer you to the copy of that contract or document filed as an
exhibit to the registration statement. You may read and obtain a copy of the
registration statement and its exhibits and schedules from the Commission, as
described in the preceding paragraph.
DOCUMENTS INCORPORATED BY REFERENCE
The Commission allows us to "incorporate by reference" the
information we file with them, which means that we can disclose important
information to you by referring you to those documents. The information
incorporated by reference is considered to be a part of this prospectus, and
later information that we file with the Commission will automatically update
and supersede this information. We incorporate by reference the documents
listed below and any future filings we make with the Commission under Section
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until this
offering is completed. The documents we incorporate by reference are:
- Our Annual Report on Form 10-K for the year ended December 31, 1999.
- Our Quarterly Report on Form 10-Q for the quarter ended March 31,
2000.
- The description of our common stock contained in our registration
statement on Form 8A filed under the Exchange Act March 13, 1996.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address and number:
Cynthia Reindal
Corporate Communications and Investor Relations
Trega Biosciences, Inc.
9880 Campus Point Drive
San Diego, California 92121
Telephone (858) 410-6500
15
<PAGE>
We have not authorized anyone to provide you with information or to
represent anything not contained in this prospectus. You must not rely on any
unauthorized information or representations. The selling stockholders are
offering to sell, and seeking offers to buy, only the shares of Trega common
stock covered by this prospectus, and only under circumstances and in
jurisdictions where it is lawful to do so. The information contained in this
prospectus is current only as of its date, regardless of the time of delivery
of this prospectus or of any sale of the shares.
16
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the various expenses payable by the
Registrant in connection with the sale and distribution of the securities
being registered hereby. Normal commission expenses and brokerage fees are
payable individually by the selling stockholders. All amounts are estimated
except the Commission registration fee and the Nasdaq National Market listing
fee.
<TABLE>
<CAPTION>
AMOUNT
<S> <C>
SEC registration fee............................................... $ 3,961.00
Nasdaq National Market listing fee................................. $ 17,500.00
Accounting fees and expenses....................................... $ 10,000.00
Legal fees and expenses............................................ $ 25,000.00
Miscellaneous fees and expenses.................................... $ 25,000.00
Total............................................ $ 81,461.00
============
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law provides for the
indemnification of officers, directors, and other corporate agents in terms
sufficiently broad to indemnify such persons under certain circumstances for
liabilities (including reimbursement for expenses incurred) arising under the
Securities Act. Our charter documents provide for indemnification of the
Registrant's directors, officers, employees and other agents to the extent and
under the circumstances permitted by the Delaware General Corporation Law. The
Registrant has also entered into agreements with its directors and officers that
will require the Registrant, among other things, to indemnify them against
certain liabilities that may arise by reason of their status or service as
directors or officers to the fullest extent not prohibited by law.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description of Document
------- -----------------------
<S> <C>
4.1* Subscription Agreement by and among Trega and certain
Investors, dated as of April 4, 2000.
4.2* Warrant, dated April 11, 2000, for common stock of
Trega issued to First Security Van Kasper.
5.1* Opinion of Pillsbury Madison & Sutro LLP.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.3* Consent of Pillsbury Madison & Sutro LLP (included
in its opinion filed as Exhibit 5.1 to this
Registration Statement).
24.1* Power of Attorney.
</TABLE>
--------------------------
* Filed previously
II-1
<PAGE>
ITEM 17. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the
Securities 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 Commission such
indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, 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 or the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to the Registration Statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act;
(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 (i) and (ii) do not apply if 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 Exchange Act that are incorporated by
reference in the Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment 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 that remain unsold at
the termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act, each filing of the Registrant's annual report pursuant
to Section 13(a) or Section 15(d) of the Exchange Act that is
incorporated by reference in the Registration Statement shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, 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
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of San Diego, State of California, on
July 26, 2000.
TREGA BIOSCIENCES, INC.
/s/ MICHAEL G. GREY
-------------------------------------
Michael G. Grey
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Name Title Date
<S> <C> <C>
/s/ HARVEY S. SADOW, PH.D.*
--------------------------------------
Harvey S. Sadow, Ph.D. Chairman of the Board of Directors July 26, 2000
/s/ MICHAEL G. GREY
--------------------------------------
Michael G. Grey Director, President and Chief Executive
Officer July 26, 2000
/s/ JAMES C. BLAIR PH.D.*
--------------------------------------
James C. Blair, Ph.D. Director July 26, 2000
/s/ BRUCE L.A. CARTER, PH.D.*
--------------------------------------
Bruce L.A. Carter, Ph.D. Director July 26, 2000
/s/ LAWRENCE D. MUSCHEK, PH.D.*
--------------------------------------
Lawrence D. Muschek, Ph.D. Director July 26, 2000
/s/ RONALD R. TUTTLE, PH.D.*
--------------------------------------
Ronald R. Tuttle, Ph.D. Director July 26, 2000
/s/ ROBERT S. WHITEHEAD*
--------------------------------------
Robert S. Whitehead Director July 26, 2000
/s/ MYRA N. WILLIAMS, PH.D.*
--------------------------------------
Myra N. Williams, Ph.D. Director July 26, 2000
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
Name Title Date
<S> <C> <C>
*/s/ MICHAEL G. GREY
--------------------------------------
Michael G. Grey
As Attorney-In-Fact July 26, 2000
</TABLE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT
<S> <C>
4.1* Subscription Agreement by and among Trega and certain Investors,
dated as of April 4, 2000.
4.2* Warrant, dated April 11, 2000, for common stock of Trega issued
to First Security Van Kasper.
5.1* Opinion of Pillsbury Madison & Sutro LLP.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.3* Consent of Pillsbury Madison & Sutro LLP (included in its
opinion filed as Exhibit 5.1 to the Registration Statement).
24.1* Power of Attorney.
</TABLE>
-------------------------------
* Filed previously
II-4
