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As filed with the Securities and Exchange Commission on March 17, 2000
Registration No. 333-96253
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
NPS PHARMACEUTICALS, INC.
(Exact name of Registrant as specified in its charter)
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<S> <C> <C>
Delaware 420 Chipeta Way 87-0439579
(State or other jurisdiction Salt Lake City, Utah 84108-1256 (IRS Employer of Identification No.)
incorporation or organization) (801) 583-4939
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(Address and telephone number
of principal executive offices)
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James U. Jensen, Vice President
Corporate Development and Legal Affairs
NPS Pharmaceuticals, Inc.
420 Chipeta Way
Salt Lake City, Utah 84108-1256
(801) 583-4939
(Name, address, and telephone number of agent for service of process)
Copies to:
Rodd M. Schreiber, Skadden, Arps, Slate, Meagher & Flom (Illinois)
333 West Wacker Drive, Chicago, Illinois 60606
(312) 407-0700
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Approximate date of commencement of proposed sale to the public:
As soon as practicable after the Registration Statement becomes effective.
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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, check the following box and
list the Securities Act registration statement number of earlier effective
registration statement for same offering. [ ]
If this Form is a post-effective amendment file 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 the 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 that specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the SEC, acting pursuant to said Section 8(a), may
determine.
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PROSPECTUS SUBJECT TO COMPLETION DATED MARCH 17, 2000
3,900,000 Shares
[NPS PHARMACEUTICALS LOGO HERE]
Common Stock
The stockholders named on page 17 are selling up to 3,900,000 shares of our
common stock.
Our common stock is traded on the Nasdaq Stock Market under the symbol NPSP. On
March 15, 2000 the last reported sale price of our common stock on Nasdaq was
$24.125 per share.
Before buying any shares you should read the discussion of material risks of
investing in our common stock under the heading "Risk Factors" beginning on
page 4.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
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The date of this Prospectus is ______, 2000
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 we are not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
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TABLE OF CONTENTS
Page
Risk Factors 4
Forward-Looking Statements 9
Use of Proceeds 9
Business 10
Selling Stockholders 17
Plan of Distribution 18
Legal Matters 19
Experts 20
Where You Can Find More Information 20
Information Not Required in Prospectus 22
Signatures 24
Exhibit Index 26
_________________________________________
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RISK FACTORS
You should carefully consider the following risk factors and warnings before
making an investment decision. Additional risks that we do not yet know of or
that we currently think are immaterial may also impair our business operations.
If any of the events or circumstances described in the following risks actually
occur, our business, financial condition, or results of operations could be
materially adversely affected. In such case, the trading price of our common
stock could decline, and you may lose all or part of your investment.
We have a history of operating losses and may never reach profitability. We
have not been profitable since our inception in 1986. As of December 31, 1999,
we had an accumulated deficit of approximately $78.9 million. We expect to
continue to incur losses for the next several years. We may never realize
significant revenues or be profitable. Factors that will influence our
profitability include:
* the success of our product candidates placed with Amgen, Kirin, SmithKline
Beecham, Janssen and Eli Lilly;
* the development and commercialization of additional products, especially our
most advanced non-partnered product candidates ALX1-11 and ALX-0600, which
relate to the treatment of osteoporosis and short bowel syndrome,
respectively;
* our ability to secure corporate partners to share the expense of development
of our non-partnered programs;
* the timing and difficulty of obtaining regulatory approvals; and
* competition.
If we fail to obtain additional financing to fund our operations, we will be
unable to complete our product development efforts. Most of our funding has come
from research and development fees and the sale of stock. We have not generated
any material revenues from product sales. We have expended and will continue to
expend significant sums to complete development of our products. Our current
resources are inadequate to finance all of the work planned and needed to
complete development of our current programs through to commercialization. We
have announced our intention to devote considerable cash resources to clinical
development. If we exceed our cost estimates, or incur costs earlier than
expected, we may be required to reduce costs, delay development or seek
additional financing through collaborative relationships or public and private
financings. Additional financing may not be available on favorable terms, or at
all. If we raise additional funds by selling equity securities, the share
ownership of our existing investors could be diluted or the new equity
purchasers may obtain terms that are better than those of our existing
investors. Lack of financing may delay, reduce or eliminate some of our programs
or force us to relinquish rights to technology, product candidates or
products.
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If we fail to maintain our existing collaborative relationships
or if our partners do not apply adequate resources to our collaborations, our
product development and profitability will be delayed. Our corporate partners
have full control over the development and commercialization activities in their
territories for their respective programs. Because we have granted exclusive
development, commercialization, and marketing rights to these partners, the
success of the programs are dependent upon their efforts. If our partners do not
satisfactorily perform under the agreements, or if our partners terminate these
agreements before lead product candidates are identified or any related product
candidates are developed, we might not have the financial resources necessary to
continue development of those programs. If we could not continue development of
these products, we might not become profitable. In addition much of the revenue
that we may receive under these partnerships depends upon our partners'
successful development and commercialization of the products. Our partners may
develop alternative technologies or products outside of their partnerships with
us, and the alternative technologies or products may be used to develop
treatments for the diseases targeted by our partnerships. As a result, we would
have to seek other sources of revenue which may not be available.
If we do not find corporate partners for new product candidates, our rate of
product development may be reduced. Our strategy for the development, testing,
manufacturing and commercialization of our products requires that we enter into
various collaborations with partners, licensors, licensees, and others in order
to conserve financial resources. We may not be able to negotiate further
collaborative arrangements on acceptable terms, if at all. If we are not able to
establish such arrangements, we would experience increased capital requirements
to undertake the activities at our own expense. In addition, we may encounter
significant delays in introducing our products into certain markets or find that
the development, manufacture or sale of our products in certain markets is
hindered by the absence of collaborative agreements. To the extent we enter into
co-promotion or other licensing arrangements, our revenues will depend upon the
efforts of third parties over which we have no control.
If we are not successful in acquiring rights to external technologies,
programs, and product candidates, we may not be able to maintain or expand our
product portfolio. In order to reduce our dependence on the success of the few
product candidates we now have, we are actively evaluating product acquisition
opportunities to establish and maintain an appropriate portfolio of product
candidates. We seek optimum diversity of materials, timetables, development
costs, applicability to current medical needs, and other select criteria. We may
be unsuccessful in our efforts to identify, acquire and exploit third-party
technologies or product opportunities. If we choose to and are successful in
entering into future agreements, we will experience increased capital
requirements to undertake research, development, and marketing of any licensed
technologies, programs, and development candidates. In addition, we may
encounter significant delays in commercializing any licensed product candidates
or we may find that the sale of these product candidates is subject to intense
competition.
If we do not successfully integrate the operations of NPS and Allelix,
commercialization of products may be delayed and financial resources may be
wasted. As a result of the acquisition of Allelix in December 1999, we must
integrate two companies that previously operated independently. Such integration
will require significant effort from each company including the coordination of
each company's efforts in research and development, business development,
intellectual property, finance, and administration. We may not be able
to integrate the respective operations of NPS and Allelix without encountering
difficulties or experiencing loss of personnel, and the benefits expected from
such integration may not be realized. The diversion of management's attention
combined with any difficulties encountered in the transition process, including
the interruption of, or a loss of momentum in, Allelix's or our activities and
problems associated with employee uncertainty and the potential loss of key
personnel, could delay development and commercialization of our products and
result in the inefficient use of limited corporate resources.
The acquisition of Allelix will result in integration costs and transaction
expenses that could reduce our profitability and cause the price of our stock to
decline. If the benefits of the acquisition do not exceed the costs associated
with it, including the dilution to our stockholders resulting from the issuance
of shares of NPS common stock in connection with the acquisition of Allelix, our
financial results, including earnings per share, could decline. We expect to
incur significant costs associated with integrating the operations of NPS and
Allelix. Such costs may include:
* elimination of duplicate operations;
* consolidation of certain administration, support, and research and
development activities; and
* increased expenditures for human trials of ALX1-11 and ALX-0600
Actual costs may substantially exceed preliminary estimates. In addition,
unanticipated expenses associated with integrating the two companies may arise.
We incurred a charges of $17.8 million in the fourth quarter of 1999 to
reflect our write-off of Allelix's in-process research and development efforts.
This write-off will not
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be accompanied by outward cash flow, but may be seen by investors as increasing
our the net loss. We may also incur additional charges in subsequent quarters to
reflect costs associated with the acquisition.
If we are not permitted to write-off a significant amount of the
purchase price of Allelix as attributable to in-process research and
development, estimates of future period results and actual future period results
could be burdened with additional costs, and the price of our common stock could
decline. If current accounting rules as interpreted by our auditors and the SEC
do not permit us to immediately write off a significant amount of the purchase
price for the Allelix acquisition as attributable to in-process research and
development, we would have to amortize a correspondingly higher amount of the
purchase price over several years. Such amortization would be reflected as an
expense item on our statement of operations, and cause us to report higher
losses, which may cause our stock price to decrease.
If we fail to satisfy FDA safety and efficacy requirements in our clinical
trials for any product, we will be unable to complete the development and
commercialization of that product. We must conduct extensive and costly human
clinical trials to demonstrate safety and efficacy for a pharmaceutical product
before the product can be approved by the FDA or other regulatory authorities.
If we are unable to demonstrate clinical efficacy for a product, we will not
receive the necessary FDA approval for that product, and we will never
commercialize that product. A product candidate that appears to be safe or
effective in early studies and testing may not ultimately prove to be safe or
effective when tested in a larger number of patients. All of our product
candidates could prove to be unsafe or ineffective. If one or more of our
product candidates fails to be safe or effective, we may never be profitable. We
may also encounter problems in a clinical trial that might significantly delay
or cause us to terminate the clinical trial program. Any side effects identified
in clinical trials could cause delays or prevent us from commercializing
additional products. This would make it more difficult for us to achieve
profitability. Additionally, those product candidates that are successful in the
clinic and obtain FDA approval may not be as effective as other products on the
market or otherwise be successful in the marketplace. For a more detailed
discussion of the development status of our products see the "Business" section
following this section in particularly, the discussions on hyperparathyrodism,
osteoporosis, gastrointestinal disorders and central nervous system.
We are subject to extensive government regulation which can be costly,
time consuming, and subject the introduction of our products to market us to
unanticipated delays. Our research and development activities and the
investigation, manufacture, distribution, and marketing of drug products are
subject to extensive regulation by governmental authorities in the United States
and other countries. Prior to marketing in the United States, a drug must
undergo rigorous testing and an extensive regulatory approval process
implemented by the FDA under federal law, including the Federal Food, Drug, and
Cosmetic Act. In order to receive approval, we must, among other things, satisfy
the FDA that the product is both safe and effective. Typically, this process
takes several years depending upon the type, complexity and novelty of the
product and the nature of the disease or other problem to be treated and
requires an expenditure of substantial resources. Drug testing is subject to
complex FDA rules and regulations, including the requirement to conduct human
testing on a large number of test subjects. We or the FDA may suspend human
trials at any time if either believes that subjects are being exposed to
unacceptable health risks.
Before receiving FDA approval to market a product, we may have to
demonstrate that the product represents an improved form of treatment when
compared to existing therapies. Data obtained from testing are susceptible to
varying interpretations that could delay, limit, or prevent regulatory approvals
of our products. In addition, we may encounter delays or rejections from
additional government regulation as a result of from future legislation,
administrative action, or changes in FDA policy during the period of product
development, human clinical trials, and FDA regulatory review. If we receive
regulatory approval of a product, the approval will be limited to those disease
states and conditions for which the product is useful, as demonstrated through
clinical studies. Furthermore, approval may subject us to ongoing requirements
for post-marketing studies. Even if we
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obtain regulatory approval, a marketed product, its manufacturer, and its
manufacturing facilities are subject to continual review and periodic
inspections. The discovery of previously unknown problems with a product,
manufacturer, or facility may result in restrictions on that product or
manufacturer, including costly recalls or withdrawal of the product from the
market. Compounds developed by us alone or in conjunction with others may not
prove to be safe or effective in human trials and may not meet all of the
applicable regulatory requirements needed for marketing approval.
Outside the United States, our ability to market a product is
contingent upon receiving marketing authorization from the appropriate foreign
regulatory authorities. The requirements governing the conduct of clinical
trials, marketing authorization, pricing and reimbursement vary widely from
country to country. This foreign regulatory approval process includes all of the
risks associated with FDA approval discussed above.
We face intense competition and technological change which will impact
the acceptance of our products in the marketplace and our ability to compete
against other companies in our industry. The pharmaceutical industry is
intensely competitive. Existing and future products, therapies, and
technological approaches will compete directly with our products. Competing
products may provide greater therapeutic benefits for a specific problem or may
offer comparable performance at a lower cost. If doctors and patients do not use
our products, our profitability may be delayed or prevented.
We compete with fully integrated pharmaceutical companies, smaller
companies that are collaborating with larger pharmaceutical companies, academic
institutions, government agencies and other public and private research
organizations. Many of these competitors have drug products already approved or
in development and operate large, well-funded research and development programs
in these fields. Our competitors may develop safer or more effective drugs and
achieve faster or broader regulatory approval. In addition, many of these
competitors have wider availability of supply, more effective marketing and
sales and superior intellectual property positions. Any products that we develop
may become obsolete before we recover any expenses incurred in connection with
the development of these products.
If we fail to protect our intellectual property or infringe the
intellectual property rights of others, we may not be able to compete
effectively. Our success will depend, in part, on our ability to obtain and
protect patents, maintain trade secrets and operate without infringing the
intellectual property rights of others. Our competitors may challenge,
invalidate, or circumvent our patents or patent applications. These patents may
also fail to provide us with meaningful competitive advantages.
Intellectual property rights are uncertain and involve complex legal
and factual questions, particularly with respect to biotechnology and
pharmaceutical patents. Generally, patent applications in the United States are
maintained in secrecy until patents issue, and publication of discoveries in the
scientific or patent literature often lag behind actual discoveries.
Accordingly, we cannot be certain that the inventors named in our patent
applications were the first to invent, or that we were the first to pursue
patent coverage for those inventions. We may unknowingly infringe the
intellectual property rights of others and may be liable for that infringement,
which could result in significant liability for us. We could be forced to either
seek a license to intellectual property rights of others or alter our products
or processes so that they no longer infringe the intellectual property of
others. A license could be very expensive to obtain, or may not be available at
all.
Similarly, changing our products or processes to avoid infringing the
rights of others may be costly or impractical. If we were to become involved in
a dispute regarding intellectual property, whether ours or that of another
company, we may have to participate in interference proceedings declared by the
U.S. Patent and Trademark Office to determine who had the claimed rights first.
We may also be forced to seek a judicial determination concerning the rights in
question. These types of proceedings may be costly and time consuming for us,
even if we eventually prevail. If we do not prevail, we might be forced to pay
significant damages, obtain a license or stop making a certain product.
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We also rely on trade secrets, know-how, and confidentiality provisions
in agreements with collaborative partners, employees, and consultants to protect
our intellectual property. However, other parties may not comply with the terms
of their agreements with us and we might not be able to adequately enforce our
rights against these people, or obtain adequate compensation in respect of the
damages caused by unauthorized disclosure.
Our reliance on third party manufacturers may limit our ability to
commercialize our products. We do not have any internal manufacturing capacity,
and we rely on third-party manufacturers for the manufacture of all of our
products used in clinical trials. If we are unable to contract for a sufficient
supply of our products on acceptable terms, or if we encounter delays and
difficulties in our relationships with manufacturers, our product testing
schedule would be delayed. A delay would set back our timetable for submission
of products for regulatory approval, the market introduction, and subsequent
sales which would postpone revenues and profitability. We will need to expand
our existing relationships or establish new relationships with additional third-
party manufacturers for products that we successfully develop in the future. We
may be unable to establish or maintain relationships with third-party
manufacturers on acceptable terms, and third-party manufacturers may be unable
to manufacture products in commercial quantities on a cost effective basis. Our
dependence upon third parties may reduce our profit margins and delay our
ability to develop and commercialize products on a timely and competitive basis.
Furthermore, third-party manufacturers may encounter manufacturing or quality
control problems in connection with the manufacture of our products and they may
be unable to maintain the necessary governmental licenses and approvals to
continue manufacturing our products.
Also, our corporate collaborators, licensees, or contract manufacturers
may be unable to manufacture any compounds we develop on a commercial scale, or
to manufacture products in quantities or at prices that will be commercially
viable or beneficial to us. Our partners are responsible for manufacturing any
products developed under their respective license agreements. If we or our
partners encounter difficulty in obtaining third-party manufacturing on
commercially acceptable terms, our ability to commercialize products may be
delayed or foreclosed.
If we are unable to establish sales, marketing, and distribution
capabilities, our ability to generate revenues will be impaired. We do not have
any sales, marketing, or distribution capabilities. We will have to develop a
sales force or rely on third parties to perform these functions for any products
we develop. In order to market any products directly, we would have to develop a
marketing and sales force with technical expertise and supporting distribution
capability. We might not be able to establish in-house sales and distribution
capabilities or relationships with third parties to accomplish those tasks,
which would limit our ability to generate revenues. Additionally, our licensees
currently have marketing and distribution rights with respect to products under
development for the treatment of hyperparathyroidism and osteoporosis; however,
such commercialization rights may revert to us under certain circumstances,
including termination of any agreements, in which case we would try to develop
additional marketing and distribution capacities for these products.
Because of the uncertainty of pharmaceutical pricing, reimbursement,
and healthcare reform measures, we may be unable to sell our products
profitably. The availability of reimbursement by governmental and other third-
party payors affects the market for any pharmaceutical product. These third-
party payors continually attempt to contain or reduce the costs of healthcare.
There have been a number of legislative and regulatory
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proposals to change the healthcare system, and further proposals are likely.
Under current guidelines, Medicare does not reimburse patients for self-
administered drugs. This policy may decrease the market for our products
designed to treat patients with age-related disorders, such as
hyperparathyroidism and osteoporosis. In addition, third-party payors are
increasingly challenging the price and cost-effectiveness of medical products
and services. Significant uncertainty exists with respect to the reimbursement
status of newly approved health care products. We might not be able to sell our
products profitably if reimbursement is unavailable or limited in scope.
If we fail to attract and retain key employees and consultants,
our introduction of products to market may be delayed. We are highly dependent
on the principal members of our scientific and management staff. If we lose any
of these persons, our ability to develop products and become profitable could
suffer. Nonetheless, we do not have long-term employment contracts. Our future
success will also depend in large part upon our continued ability to attract and
retain highly qualified scientific and management personnel. We face competition
for personnel from other companies, academic institutions, government entities,
and other organizations. Anticipated growth and expansion into areas and
activities requiring additional expertise, such as clinical trials, government
approvals, production and marketing, and general pharmaceutical company
management, will place increased demands on our personnel resources. These
demands may require us to add new management, research, development, and
administrative personnel, and our existing management personnel may have to
develop additional expertise. If we fail to acquire such services, or if our
existing management fails to develop such expertise, we may not be able to
obtain required approval for products or become profitable. We expect to meet
certain of these anticipated future needs through agreements with our partners
and potential additional corporate collaborations. Nevertheless, services
provided by them may not be sufficient to meet our personnel or management
needs.
If product liability claims are brought against us, we may incur
substantial liabilities which could reduce our financial resources. The testing
and commercial use of pharmaceutical products entails significant exposure to
product liability claims. If we succeed in developing products, the use of our
products in clinical trials and the sale of our products following regulatory
approval may expose us to product liability claims. These claims might be made
directly by consumers or others. We have obtained limited product liability
insurance coverage for our clinical trials on humans. This coverage may be
insufficient to protect us against product liability damages. We might not be
able to obtain or maintain product liability insurance in the future on
acceptable terms or in sufficient amounts to protect us against product
liability damages. We are entitled to indemnification under agreements with our
partners and licensees against damage claims, but claims arising from products
sold by a collaborative partner or licensee may also include claims directly
against us and may not be indemnifiable under the agreement.
Our operations involve hazardous materials and we must comply with
environmental laws and regulations, which can be expensive and restrict how we
do business. Our research and development activities involve the controlled use
of hazardous materials, radioactive compounds, and other potentially dangerous
chemicals and biological agents. Although we believe that our safety procedures
for these materials comply with governmental standards, we cannot eliminate the
risk of accidental contamination or injury from these materials. If an accident
or environmental discharge occurs, we could be held liable for any resulting
damages, which could exceed our financial resources. We disposed radioactive
waste at a site in Denver, Colorado, which is currently in remediation. Although
we were a small contributor to the site and there are a number of other
financially responsible contributors, we may be held liable for all or a portion
of the clean-up cost or any other costs or damages associated with this disposal
site.
Our stock price has been and may continue to be volatile and your
investment could suffer a decline in value. You should consider an investment in
our stock as risky and invest only if you can withstand a significant loss and
wide fluctuations in market value of your investment. We receive little
attention by securities analysts and frequently experience an imbalance between
supply and demand for our stock. The market price of our common stock has been
highly volatile and is likely to continue to be volatile. Factors affecting our
stock price include:
* fluctuations in our operating results;
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* announcements of technological innovations or new commercial
pharmaceutical products by us or our competitors;
* published reports by securities analysts;
* progress with clinical trials;
* governmental regulation;
* changes in reimbursement policies;
* developments in patent or other intellectual property rights;
* publicity, or the lack thereof, concerning the discovery and
development activities by our licensees;
* public concern as to the safety and efficacy of drugs developed by us
and our competitors; and
* general market conditions.
When we issue shares under employee stock incentive plans,
current stockholders and future earnings per share will be diluted. We maintain
stock incentive plans whereby employees, directors, and consultants can acquire
shares of our common stock through the exercise of stock options, grants, and
purchases. Shares issued under these plans may dilute the holdings of current
stockholders and reduce earnings per share in the future.
Antitakeover provisions in our articles, bylaws, shareholders rights
plan and under Delaware Law may discourage someone from acquiring us, and may
prevent a stockholder from receiving a favorable price for his or her shares.
Certain provisions of our certificate of incorporation and bylaws and Section
203 of the Delaware General Corporation Law could discourage potential
acquisition proposals and could delay or prevent a change in control of our
company. In addition, the Board of Directors, without further stockholder
approval, may issue preferred stock that could delay or prevent a change in
control of our company as well as reduce the voting power of the holders of
common stock, even to the extent of losing control to others. In addition, the
Board of Directors has adopted a shareholder rights plan, commonly known as a
"poison pill," that may delay or prevent a change in control. Such provisions
could diminish the opportunities for a stockholder to participate in tender
offers, including those at a price above the then-current market value of our
the common stock. These provisions may also inhibit fluctuations in the market
price of our common stock that could result from takeover attempts.
We have never paid cash dividends on our common stock. We intend to
retain any future earnings to finance the growth and development of our
business, and we do not plan to pay cash dividends in the foreseeable future. As
a result, stockholders should not expect to receive cash from holding our common
stock.
Unexpected Year 2000 related problems could still arise and, if
significant, could delay development of our products and reduce our available
financial resources. During 1999, we planned, inventoried, and evaluated our
systems, and remediated, replaced, and tested such remediation and replacements
as necessary. We used internal information systems technology personnel and
other personnel. As a result, we experienced no year 2000 related issues on
January 1, 2000. However, we recognize that there may be residual effects
related to year 2000 issues. We do not have any way to assess the costs related
to remediation of such residual issues. We may in the future identify a
significant internal or external year 2000 residual issue which, if not remedied
in a timely manner, could require us to spend significant resources.
FORWARD-LOOKING STATEMENTS
This prospectus includes forward-looking statements concerning our operations,
economic performance and financial condition, including, in particular, our
business strategy and means to implement the strategy, our goals, the markets we
intend to compete in and the likelihood of our success in developing and
expanding our business. These statements are based on a number of assumptions
and estimates which are inherently subject to significant risks and
uncertainties, many of which are beyond our control and reflect future business
conditions which are subject to change. A variety of factors, some of which are
described under "Risk Factors" in this prospectus, could cause actual results to
differ materially from those anticipated and reflected in our forward-looking
statements.
Consequently, all of the forward-looking statements made or incorporated by
reference in this prospectus are qualified by these cautionary statements, and
you are cautioned not to place undue reliance on these forward-looking
statements,
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which reflect management's analysis, judgment, belief or expectation
only as of the date of this prospectus. We undertake no obligation to publicly
revise these forward-looking statements to reflect events or circumstances that
arise after the date of this prospectus or to publicly release the results of
any revisions to the forward-looking statements that may be made to reflect
events or circumstances after the date of this prospectus. In addition to the
disclosure contained in this prospectus, you should carefully review any
disclosure of risks and uncertainties contained in other documents we file or
have filed from time to time with the Securities and Exchange Commission
according to the Securities Exchange Act of 1934.
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of the shares by the
selling stockholders.
BUSINESS
Overview
NPS Pharmaceuticals, Inc. is a biopharmaceutical company with headquarters
in Salt Lake City, Utah, and additional operations in Toronto (Mississauga),
Ontario, Canada. We conduct our operations in Canada under the name "NPS Allelix
Corp." We engage in drug discovery and development of small, orally active drug
products and recombinant peptides. We use a blend of partnered initiatives and
internal efforts to fund and pursue our discovery, development and market
efforts
On December 23, 1999 we acquired Allelix Biopharmaceuticals Inc., a
biopharmaceutical company based in Ontario, Canada. Under the arrangement,
Allelix shareholders who were U.S. residents received NPS common shares. Allelix
shareholders who were Canadian residents could elect to receive either NPS
common shares or shares of NPS Allelix Inc., the Canadian parent of NPS Allelix
Corp. and a subsidiary of NPS that are exchangeable one for one into NPS common
shares. The exchangeable shares are, as nearly as practicable, the functional
and economic equivalent of NPS common shares. NPS common shares trade on Nasdaq
under the symbol "NPSP", while shares of NPS Allelix Inc., which mirror the NPS
common shares, trade on The Toronto Stock Exchange under the symbol "NX".
At the conclusion of the acquisition the name of Allelix
Biopharmaceuticals was changed to NPS Allelix Corp. The discussion contained in
this section reflects the combined company and does not distinguish between what
was formerly NPS's business and what was formerly Allelix's business. References
to "us," "we" or "NPS" refer to the combined company.
We are engaged in the discovery and development of human pharmaceuticals
that are intended to address a variety of important diseases. Our most advanced
programs focus on the development of human pharmaceuticals for the treatment of
hyperparathyroidism and osteoporosis. We also have ongoing clinical development
efforts for drugs to treat gastrointestinal disorders and disorders of the
central nervous system, including neuroprotection in stroke and head trauma as
well as epilepsy and bipolar disorder. In addition, we are pursuing several
discovery programs that are extensions of our research on calcium receptors and
ion channels, and we periodically consider other product candidates in later
stages of development for potential in-license or collaboration opportunities.
We currently have three products in late-stage human trials: a
second generation calcimimetic for hyperparathyroidism ALX1-11, a form of
recombinant human parathyroid hormone for osteoporosis, and ALX-0600 for short
bowel syndrome and intestinal atrophy due to chemotherapy treatment.
We have partnered with Amgen Inc. and Kirin Brewery Company, Ltd. in our
calcimimetic program for hyperparathyroidism. Calcimimetics are small molecules
that stimulate calcium receptors on parathyroid cells to regulate the secretion
of parathyroid hormone. Amgen is currently conducting Phase II safety and
efficacy trials under the calcimimetic program. The hyperparathyroidism program
arose from our pioneering work on a cell surface receptor, termed the "calcium
receptor." This receptor senses levels of extracellular calcium and plays a key
role in regulating the amount of calcium in the body involved in numerous
physiological processes.
We are approaching osteoporosis on two fronts: development of injectable
recombinant parathyroid hormone and
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development of small molecule therapeutics. We are preparing to start Phase III
clinical trials with ALX1-11 in which we will evaluate safety and efficacy on a
large scale. We also have a collaboration with SmithKline Beecham centered on
discovery and development of small molecules active at the calcium receptor of
parathyroid tissue for the treatment of osteoporosis.
Our efforts to develop therapeutics to treat gastrointestinal disorders
are focused on the development of ALX-0600. This product is an analog of the
natural peptide hormone, glucagon-like peptide-2, which we believe has
significantly enhanced biological activity.
Our neuroprotection program is based on our work on small molecules with
novel activity on a cell receptor on brain cells referred to as N-methyl-D-
aspartate subtype of glutamate receptor-operated calcium channels. This
technology forms the basis for our neuroprotection program for ischemic stroke
and head trauma. The epilepsy/bipolar disorder program is based on our work on
small molecules that belong to the same chemical class as valproic acid but are
structurally distinct and have significantly different biological
properties.
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Clinical Development Programs and Partnered Preclincal Programs
The following chart summarizes the status of our clinical development programs
and partnered clinical programs:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Development Program Compound Classification Status (1) Commercial Rights
Hyperparathyroidism
Primary Calcimimetics Parathyroid hormone release Phase II Amgen, Kirin
inhibitors
Secondary Calcimimetics Parathyroid hormone release Phase II Amgen, Kirin
inhibitors
Osteoporosis
Increased bone ALX1-11 Recombinant human Phase III NPS
mineral density and parathyroid hormone
fracture reduction
Increased bone TBA Stimulator of endogenous Preclinical SmithKline, NPS
mineral density and parathyroid hormone release
fracture reduction
Gastrointestinal Disorders
Short bowel ALX-0600 Glucagon-like peptide 2 analog Phase II NPS
syndrome
Central Nervous System
Disorders
Stroke, head NPS 1506 methyl-D-aspartate Phase Ib NPS
trauma receptor antagonists
Epilepsy, Bipolar NPS 1776 Valproic acid (Depakote) Phase Ib NPS
Disorder substitute
Migraine ALX 0646 5HT - Selective agonist Phase I NPS
</TABLE>
__________________
(1) Preclinical means that a product is undergoing efficacy and safety
evaluation in laboratory testing and animal testing in preparation for
clinical trials. Phase I-III clinical trials denote safety and efficacy
tests in humans as follows:
* Phase I: Evaluation of safety and dosing.
* Phase Ib: Additional evaluation of safety and dosing.
* Phase II: Evaluation of safety and efficacy.
* Phase III: Larger scale evaluation of safety and efficacy.
Hyperparathyroidism Program
Overview. Hyperparathyroidism is typically characterized as being either
primary or secondary. Primary hyperparathyroidism is an age-related disorder
that results from excessive secretion of parathyroid hormone. Parathyroid
hormone acts in the kidney and on bone to elevate the levels of calcium in the
blood. Symptoms of primary hyperparathyroidism may include bone loss, muscle
weakness, depression, and cognitive dysfunction. There are currently no
pharmaceutical therapies for the treatment of primary hyperparathyroidism. In
severe cases, surgical removal of the affected parathyroid gland from the neck
region is the only effective treatment.
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Secondary hyperparathyroidism results from other disease states and
is most often associated with renal failure. Symptoms of secondary
hyperparathyroidism include excessive bone loss, bone pain, and chronic, severe
itching. Secondary hyperparathyroidism affects the vast majority of dialysis
patients. Studies have shown that secondary hyperparathyroidism develops early
in the course of renal failure, before patients start dialysis. Current
treatments for secondary hyperparathyroidism address the disease indirectly and
involve drug therapy with phosphate binders and/or Vitamin D. We believe that
these therapies have certain disadvantages. For example, phosphate binders are
not well tolerated by many people and calcitriol often leads to hypercalcemia
and hyperphosphatemia, which can exacerbate the underlying disease and in many
patients is ineffective. In severe cases, surgery may be required to remove all
or some of the parathyroid glands.
Calcimimetics
The results of preclinical and human clinical trials conducted by us,
Kirin, and Amgen have indicated that calcimimetic compounds could be effective
in treating both types of hyperparathyroidism. We have entered into agreements
with Amgen and Kirin relating to the development and commercialization of these
calcimimetic compounds for treating hyperparathyroidism.
Development Status. Amgen began Phase II dosing and safety trials in
primary and in secondary hyperparathyroidism in 1998 with a second generation
compound licensed from NPS. These trials are presently ongoing. In 1998, Amgen
completed a Phase I safety trial of this second generation compound. Early in
the calcimimetic program, we conducted a series of trials with Amgen with a
first generation calcimimetic. These trials included two Phase I safety and
tolerance studies, a multisite Phase I/II study in women with mild, primary
hyperparathyroidism and a pilot Phase I/II study in kidney dialysis patients
with secondary hyperparathyroidism. HPT. Kirin has conducted clinical trials for
the first generation calcimimetric in Japan, including a Phase I/II study in
dialysis patients with secondary hyperparathyroidism. We believe the second-
generation compound has a more favorable metabolic and kinetic profile than the
first generation calcimimetric in the hyperparathyroidism patient population.
Kirin is also developing a second generation compound. Our clinical trials may
not, however, proceed as indicated and no product of ours for the treatment of
hyperparathyroidism may prove safe and effective, meet applicable regulatory
standards, or be successfully marketed. Amgen and Kirin are obligated to pay us
royalties and milestone payments for the use and sale of calcimimetics.
Osteoporosis Program
Overview. Osteoporosis is characterized by a bone mineral density which
increases the risk of fractures. Experts believe osteoporosis affects more than
200 million people worldwide. In women, this condition typically occurs after
menopause and the complications from the resulting fractures can lead to
hospitalization and death. Approximately 20% of osteoporosis patients are male.
Demographic studies have shown that 50% of women over the age of 50 will
suffer an osteoporosis-related fracture during their lifetime. In North America,
1.5 million individuals sustain a fracture related to this disease each year,
including 300,000 hip fractures, resulting in a significant economic burden on
the health care system. The National Osteoporosis Foundation in the United
States estimates that a woman's risk of suffering a hip fracture is equal to her
combined risk of developing breast, uterine and ovarian cancer. The National
Institutes of Health estimate that, on a worldwide basis, more than 200 million
people suffer from reduced bone mass, which contributes to more than 4 million
fractures annually. Mortality in the first year following a hip fracture is 15%
to 20%. The successful treatment of osteoporosis would result in the reduction
of bone fractures, significantly improving quality of life and reducing health
care costs associated with treatment and chronic care.
Traditional treatments for osteoporosis include calcium supplements,
Vitamin D compounds, estrogen replacement therapy, calcitonin, diet and
exercise. In addition, a class of drugs known as bisphosphonates has been
developed which slows the resorption of bone and, over several years, can
increase bone mass by amounts ranging from 3% to 8%. Alendronate, marketed by
Merck and Co., Inc. under the brand name Fosamax, is the most recently approved
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<PAGE>
bisphosphonate and has demonstrated an increase in bone mineral density of 8%
over three years and a reduction in the incidence of bone fractures by 50%.
However, there is a widely recognized need among health care professionals for a
treatment that can prevent fractures by replacing lost bone more rapidly. We
believe that ALX1-11, may address this need. If approved for commercial sale,
ALX1-11 would be positioned as a therapy for postmenopausal osteoporosis in
patients who either have suffered a fracture due to osteoporosis or have been
diagnosed as having significantly decreased bone mass. Once bone mass is
restored, patients could be treated with anti-resorptive therapeutics.
ALX1-11
We are developing ALX1-11, a form of injectable recombinant human
parathyroid hormone, as a treatment for postmenopausal osteoporosis. Parathyroid
hormone plays an important role in the regulation of bone mineral metabolism in
the body. Recently published studies have shown that parathyroid hormone has a
marked stimulatory effect on new bone formation in animals when administered as
a single daily injection. Furthermore, several clinical investigators have
demonstrated in independent studies that a fragment of the parathyroid hormone
molecule enhances bone formation in humans. We believe that these results,
published over the past 20 years, suggest that parathyroid hormone is able to
reverse bone loss in people who suffer from osteoporosis. We also believe that
parathyroid hormone increases the number of bone-forming cells and may also
increase the activity of such cells. We confirmed the increase in bone density
observed in earlier studies in a Phase II safety and efficacy trial. ALX1-11 may
represent a significant treatment alternative for osteoporosis sufferers.
Development status. In 1994, we conducted a Phase I clinical trial in
The Netherlands that demonstrated the safety of ALX1-11 in humans. We initiated
the Phase II clinical trial for ALX1-11 in June 1995 in 18 centers throughout
Canada and the United States. The trial involved over 200 women suffering from
postmenopausal osteoporosis. The trial was a double blind, placebo-controlled,
dose-ranging safety and efficacy study and the course of treatment was 12
months. Patients self-administered one of three different dosages of ALX1-11 or
a placebo by injection under the skin in a manner similar to self-administered
daily insulin injections by diabetics. The goal of the clinical trial was to
compare the relative effectiveness of the three dose levels on spinal bone
mineral density. Blood samples were taken in the clinical trial to monitor the
effects of the drug on several biochemical markers of bone growth and bone
metabolism.
In June 1996, we entered into a collaboration agreement with Astra AB
for the development and commercialization of ALX1-11 for osteoporosis. We
completed the Phase II trial in February 1997. The results of the Phase II study
demonstrated an average increase in bone mineral density of nearly 7% in the
spine over the twelve month period of the study. The final report was submitted
to Astra AB in June 1997 and Astra AB conveyed to us its decision to conduct a
Phase III trial with ALX1-11 in September 1997. In September 1998, Astra
notified us that it would return all of the assets associated with the program
and all related intellectual property rights to us at no cost and paid a
cancellation penalty.
We intend to begin a Phase III safety and efficacy trial with ALX1-11 in
the U.S. and Canada in the first half of 2000. The Phase III study design will
be based on a double blind, placebo-controlled study for measuring increases in
bone mineral density and reductions in clinical fractures.
Since parathyroid hormone is a protein, it must be administered by
subcutaneous injection at the present time. Alternative routes of administration
such as inhalation, intranasal or transdermal may be feasible. A number of
companies are investigating alternative routes of administration for a variety
of peptides. In particular, insulin has been shown to be absorbed by the
inhalation route and calcitonin is commercially available in an intranasal form.
We believe that there is at least one company working on an inhalation form of
parathyroid hormone. We do not know the feasibility of administering parathyroid
hormone by one of these other routes and we will need to investigate.
SmithKline Beecham Collaboration
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In conjunction with SmithKline Beecham, we are also pursuing a treatment
of osteoporosis focusing on small molecule drugs called calcilytic compounds
that, in contrast to calcimimetic compounds, stimulate parathyroid hormone
secretion. This novel approach, which is intended to manipulate the body's own
parathyroid hormone reserves, could provide an effective anabolic therapy for
osteoporosis by stimulating new bone formation and replacing bone that has been
lost to the disease.
While chronically high levels of parathyroid hormone are known to cause
bone loss, parathyroid hormone levels fluctuate daily and we think this plays a
key role in regulating the balance between bone resorption and bone formation.
Recent studies by us in animals, and in humans by other organizations, have
shown that frequent, usually daily, injections of exogenous parathyroid hormone
are sufficient to cause a transient increase in circulating parathyroid hormone
levels, resulting in significant stimulation of new bone formation. Several
published animal studies have evaluated the structural integrity of this newly
formed bone and have found that the increases in bone mass achieved with
parathyroid hormone injections are accompanied by improvements in biomechanical
strength and in certain indices of bone structure thought to be related to
biomechanical strength.
In studies on animals, our scientists, together with SmithKline Beecham,
have demonstrated that intermittent increases in circulating levels of
parathyroid hormone can be obtained through the use of small molecules which act
in vitro as calcimimetics. Increased levels of parathyroid hormone achieved by
this mechanism are equivalent to levels of parathyroid hormone achieved by an
injection of parathyroid hormone sufficient to cause bone growth.
This approach to the treatment of osteoporosis fits nicely with the
approach we are also taking with ALX1-11. We believe that orally administered,
calcilytic drugs that act on the parathyroid cell calcium receptor to increase
parathyroid hormone release from the body's own parathyroid hormone
reserves could provide a cost-effective means of intermittently increasing
parathyroid hormone levels.
Preclinical Research Status. In January 1996, we received the first
milestone payment of $3.0 million from SmithKline Beecham for progress made in
our osteoporosis collaboration. Medicinal chemistry efforts are being applied to
various lead compounds with the goal of identifying product candidates. We have
produced a cell line that expresses the human parathyroid calcium receptor and
that serves as a tool for the high throughput screening of compounds to identify
new drug candidates. We continue to screen SmithKline Beecham and NPS compound
libraries to discover, identify, and characterize additional compounds with
calcilytic activity. We are also involved with SmithKline Beecham in medicinal
chemistry efforts to optimize compound leads obtained from such screening
activities. We are not certain that lead compounds will be identified, that
development activities will proceed, or that these candidates will prove safe
and/ or effective, meet applicable regulatory standards, or be successfully
marketed.
Gastrointestinal Disorders
Short Bowel Syndrome
Approximately 20,000 to 40,000 patients in North America have undergone
surgical resection removal of a portion of the small intestine because of
gastrointestinal problems that cause the intestine to malfunction. Patients with
this condition often do not have enough small intestine remaining after removal
to allow for the absorption of sufficient nutrients from the diet since the
epithelium of the small intestine is the primary site of nutrient absorption.
This results in a condition known as short bowel syndrome. There are currently
no effective therapies available for enhancing the growth and repair of the
small intestine epithelium. In extreme cases, the remaining intestine is no
longer able to perform its normal function of transporting vital nutrients into
the blood stream.
Patients with severely impaired intestinal function caused by short bowel
syndrome often must be fed intravenously by a technique called total
parenteral nutrition for a period of time and, in some cases,
permanently. Total parenteral nutrition costs can exceed $100,000 annually
per patient. Approximately 100,000 people in North
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<PAGE>
America are on long-term total parenteral nutrition.
ALX-0600
We are currently developing ALX-0600. This drug candidate is an analog
of a naturally occurring hormone having 33 amino acids and known as Glucagon-
Like Peptide-2. We are developing ALX-0600 for the treatment of short bowel
syndrome. A published study by one of our academic collaborators demonstrated
that the use of ALX-0600 in animals resulted in a marked stimulatory effect on
the rate of growth of epithelial cells lining the small intestine. In this
study, ALX-0600 induced an approximately 50% increase in weight of small
intestine epithelium within ten days of administration. We believe that ALX-0600
may have the ability to induce a similar effect in humans. Furthermore, the
growth-promoting properties of ALX-0600 appear to be highly tissue-specific,
predominantly affecting the small intestine, and thereby reducing the risk of
adverse side effects.
We are presently conducting a pilot Phase II safety and efficiency study
with ALX-0600 in patients with short bowel syndrome. In November 1999, we
entered into an agreement with the Canadian government through a program known
as Technology Partnerships Canada. Under the agreement, the Canadian government
will reimburse us up to $8.4 million (Cdn) for qualified costs related to
research and development of ALX-0600. As a result of the funding, we will pay a
royalty to the Canadian government on the sale or license of any product
developed from the funded research up to a maximum of $23.9 million (cdn).
We are also investigating the use of ALX-0600 for the replenishment of
epithelial cells of the small intestine which are damaged by chemotherapy
treatment for cancer. ALX-0600 may be suitable as an adjunct therapy to cancer
chemotherapy if it can ameliorate the toxic gastrointestinal side effects of
cancer chemotherapy, thereby improving patient compliance with the chemotherapy
regimen and possibly allowing for dose escalation of the chemotherapy agent. The
patients that would benefit from such an adjunctive therapy are those patients
receiving 5-fluorouracil, administered to approximately 1 million patients per
year, or CPT-11, administered to approximately 500,000 patients per year and
increasing. Approximately 16% and 50% of patients receiving these respective
therapies experience extreme gastrointestinal side effects sufficient to warrant
treatment with an agent such as ALX-0600, should its safety and efficacy be
proven in clinical trials.
We licensed the rights to ALX-0600 from an academic collaborator who is
entitled to participate in the proceeds of commercialization of the product
candidates, if successfully developed and approved. We completed a Phase I
clinical trial of ALX-0600 in healthy subjects in November 1998. We are
developing a recombinant production system that may be used to produce the
product.
Central Nervous System Disorders
Neuroprotection Program: NPS 1506
Overview. Stroke is the third leading cause of death in the United
States, with over 500,000 cases reported each year. In stroke, a blood vessel
becomes blocked, which leads to inadequate blood supply to the brain, a
condition sometimes referred to as ischemia. Many stroke victims survive and
approximately 100,000 to 150,000 per year are left severely and permanently
disabled by nerve damage resulting from stroke. Much of this damage occurs
within the first 24 to 48 hours after the stroke and is caused in part by the
excessive release of glutamate and the resultant influx of calcium into nerve
cells. Published research in animals has shown that much of this damage can be
prevented by blocking the influx of calcium into cells, particularly the influx
that results from activation of N-methyl-D-aspartate receptor-operated calcium
channels. Calcium influx resulting from the activation of these channels also
appears to cause the neuronal damage associated with head trauma. Approximately
two million traumatic brain injuries occur each year in the United States, with
25% of these injuries requiring hospitalization, and about 1% resulting in
death.
Certain medical procedures are associated with an increased risk of
stroke. For example, strokes occur in 3% to 7% of coronary artery bypass,
carotid endarterectomy, and heart valve replacement surgeries. Mild to severe
central nervous
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system dysfunction occurs in up to 80% of these procedures. Researchers think
this results from multiple micro strokes caused by the release of numerous tiny
blood clots into the bloodstream. Our research indicates that it might be
possible to lessen the severity of neuronal damage and cognitive impairment that
occurs as a result of these procedures by using a prophylactic treatment with
neuroprotective compounds.
N-methyl-D-aspartate receptor-operated calcium channels play critical
roles in normal excitatory neurotransmission and in events that lead to much of
the neurological damage associated with stroke and head trauma. Several
pharmaceutical companies have recognized the potential of these receptor-
operated calcium channels as molecular targets. These companies have begun
development of drugs to treat neurological disorders and have identified various
lead compounds. However, no such drug has successfully completed clinical trials
or been marketed. Work in this field is all the more challenging because these
receptor-operated calcium channels are also the site of action of phencyclidine,
often referred to as PCP or angel dust, and most clinically tested compounds
that target calcium channels exhibit undesirable phencyclidine-like side effects
inducing symptoms of psychosis. There are currently no safe or effective
neuroprotective therapeutics available that slow or stop the progression of
brain damage once a stroke or head trauma has occurred.
We have demonstrated significant neuroprotectant activity in certain
animal models of ischemic stroke and head trauma through systemic administration
of our class of lead compounds, particularly NPS 1506. In these animal studies,
we still observed significant neuroprotectant activity when administration of
the compound was delayed for two hours following the ischemic event. In
addition, our compounds have not exhibited phencyclidine-like side effects in a
variety of studies in animal models intended to identify those effects.
Development Status. In July 1997, we began a Phase I clinical trial for
NPS 1506 in healthy male volunteers. This trial was completed in early 1998.
Results of the trial indicated that the drug was safe and well tolerated. In
addition, we began a Phase Ib study in patients who have suffered a stroke
within a 48-hour period to assess safety and tolerability of the drug in stroke
patients. The clinical phase of this trial has been completed and we are
evaluating the data. We are currently searching for a corporate partner to
participate in the development of this program. Our ability to secure a
development partner for this program will affect our development plan and time
line for this program. There is risk that NPS 1506 and any other lead compounds
will not advance through clinical development, will not prove to be safe and/ or
effective, will not meet applicable regulatory standards, or will not be
successfully marketed.
Epilepsy and Bipolar Disorder: NPS 1776
Overview-Epilepsy. Many types of epileptic seizures have been medically
defined. They range from mild cases of nearly imperceptible behavior, such as
staring into space, to dramatic "grand mal" seizures where consciousness is lost
and the body convulses uncontrollably. In most cases of recurrent seizures,
drugs are the treatment of choice, although in some extreme instances,
neurosurgery may be an option. The most frequently used drug therapies include
carbamazepine, phenytoin, valproate, barbiturates, and benzodiazepines. Roughly
half of all epilepsy patients can control their seizures with available chemical
therapies. However, other patients achieve less than adequate control. An
estimated 15% of all patients are virtually resistant to drug treatment. Even
when some level of seizure control is achieved, it often comes with the
disadvantage of serious side effects.
Overview-Bipolar Disorder. Bipolar disorder is part of a class of
diseases referred to as affective illnesses or mood disorders. Affective
illnesses include all forms of depression, dysthmia or chronic, moderate
depression, manic disease, and bipolar disorder. The most responsive disease in
this class of illnesses is bipolar disorder. Until recently, bipolar disorder
was known as manic-depressive disorder. It is characterized by the occurrence of
both manic and depressive states, usually in alternation. Bipolar disorder, like
other mood disorders, is a lifetime illness with no known cure. As a result, the
number of bipolar patients continue to increase each year. In the United States,
approximately 17.5 million people have affective disorders. Of these,
approximately 2.2 million to 2.6 million people have been diagnosed as having
bipolar disorder.
Development Status. Our scientists have identified a lead compound for
the treatment of epilepsy. Our studies of this small, organic molecule,
designated NPS 1776, show that it is effective in a number of animal models of
epilepsy and
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that, importantly, there appears to be a wide margin between doses that control
seizures and doses that produce side effects. The compound also exhibited a high
margin of safety in animal models when compared to standard epilepsy treatments,
including valproate, as measured by a lack of motor impairment side effects
following drug administration. Recent research studies by others have indicated
that some drugs normally used in seizure control can offer hope for many bipolar
disorder patients. Valproic acid has received FDA approval for the treatment of
manic episodes in bipolar disorder. Based on data generated by us and relevant
literature, we believe that NPS 1776 may be useful for the treatment of
affective mood disorders such as bipolar disorder and for the treatment of
epilepsy. NPS 1776 is a branched chain, low molecular weight alifatic amide.
Thus, it has some structural similarities to valproic acid. However, we believe
that NPS 1776 has pharmacologically significant structural distinctions that
will provide a better safety profile in comparison to valproic acid, such as the
lack of (birth defect potential and (liver damage. Currently, we are conducting
specific studies to address these issues.
We completed a Phase I clinical trial in healthy male volunteers in
December 1998 in the United Kingdom. The purpose of the trial was to evaluate
the safety and pharmacokinetics of NPS 1776. Our preliminary analysis of the
data indicates that the drug was safe and well tolerated. We commenced a Phase
Ib study in the United Kingdom in December 1998 to confirm safety and
tolerability in volunteers receiving multiple doses of the drug. We are seeking
a partner to share in the development of NPS 1776. Future development of NPS
1776 may be dependent on our ability to find a development partner. There is a
risk that NPS 1776 will not advance through clinical development, will not prove
safe or effective, will not meet applicable regulatory standards, or will not be
successfully marketed.
Other Programs.
We also have other early stage programs. For example, in the field of
migraine we have completed a phase Ia trial in the United Kingdom on a compound
for which we are seeking a development partner. We are also working with Janssen
Pharmaceutica N.V. to identify prospective drug candidates for schizophrenia and
dementia. We continue to work with Eli Lilly to identify excitatory amino acid
receptors as therapeutic targets for various central nervous system disorders.
Finally, we have made advances in the elucidation of the neurophysiological
roles of metabotropic glutamate receptors. Our scientists have cloned a novel
metabotropic glutamate receptor located in the brain and thought to be linked to
several central nervous system disorders, and developed a screening technology
for identifying molecules active at this receptor and in fact have had success
in identifying such molecules.
SELLING STOCKHOLDERS
We are registering all 3,900,000 shares covered by this prospectus on
behalf of the selling stockholders named in the table below. We issued all of
the shares to the selling stockholders in a private placement transaction. We
have registered the shares to permit the selling stockholders and their
pledgees, donees, transferees or other successors-in-interest that receive their
shares from a selling stockholder as a gift, partnership distribution or other
non-sale related transfer after the date of this prospectus to resell the shares
when they deem appropriate.
The following table lists the name of each of the selling stockholders, the
number of shares owned by each of the selling stockholders, the number of shares
that may be offered under this prospectus, and the number of shares owned by
each of the selling stockholders as of February 3, 2000, the number of shares
that may be offered under this prospectus and the number of shares that will be
owned by each of the selling stockholders after this offering is completed.
Except as indicated in the table below, none of the selling stockholders has had
a material relationship with us within the past three years other than as a
result of the ownership of the shares or other securities of NPS. The number of
shares in the column "Number of Shares Being Offered" represents all of the
shares that each selling stockholder may offer under this prospectus. We do not
know how long the selling stockholders will hold the shares before selling them
and we currently have no agreements, arrangements or understandings with any of
the selling stockholders regarding the sale of any of the shares. The shares
offered under this prospectus may be offered from time to time by the selling
stockholders named below.
19
<PAGE>
<TABLE>
<CAPTION>
Shares Beneficially
Owned Prior to Offering
-----------------------
Number of Shares Shares Beneficially
Name of Selling Stockholder Number Percent Being Offered Owned After Offering
- -------------------------- ------ ------- ------------- --------------------
<S> <C> <C> <C> <C>
AIM Global Fund Inc. 84,000 * 84,000 --
AIM Global Health Sciences Fund 168,000 * 168,000 --
Aries Domestic Fund II, L.P. 2,569 * 2,569 --
Aries Domestic Fund, L.P. 15,241 * 15,241 --
Ashton Partners, L.L.C. 10,000 * 10,000 --
BayStar Capital, L.P. 150,000 * 150,000 --
BayStar International, Ltd. 50,000 * 50,000 --
Bershaw & Co., c/o Citibank Canada 20,000 * 20,000 --
Caduceus Capital II, L.P. 23,000 * 23,000 --
Casurina Limited Partnership 20,000 * 20,000 --
Clarion Partners, L.P. 14,400 * 14,400 --
Clarion Offshore Fund Ltd. 5,600 * 5,600 --
EGM Medical Technology Fund LP 14,000 * 14,000 --
EGM Medical Technology Offshore Fund 11,000 * 11,000 --
Goldfischer, Carl 10,000 * 10,000 --
Invesco Global Health Sciences Fund 263,000 1.1 263,000 --
Invesco Health Sciences Fund 596,700 2.5 596,700 --
Invesco Small Company Growth Fund 141,350 * 141,350 --
Invesco VIF - Health Sciences Fund 13,300 * 13,300 --
Invesco VIF - Small Company Growth Fund 850 * 850 --
IRT Small Company Growth Fund 3,600 * 3,600 --
Janus Investment Fund 850,000 3.6 850,000 --
Kelly, James C. 10,000 * 10,000 --
Maxim Invesco Small-Cap Growth Portfolio 29,200 * 29,200 --
MCP Global Corp., Ltd. 25,000 * 25,000 --
Meriken Nominees Ltd. 15,000 * 15,000 --
Merlin BioMed International 60,000 * 60,000 --
Merlin BioMed, L.P. 40,000 * 40,000 --
Moore Global Investments, Ltd. 160,000 * 160,000 --
MRM Life 10,000 * 10,000 --
Narragansett I, L.P. 36,500 * 36,500 --
Narragansett Offshore, Ltd. 13,500 * 13,500 --
Oakpoint Asset Management 10,000 * 10,000 --
Park Place International, Ltd. 50,000 * 50,000 --
Prism Partners I Offshore Fund 7,500 * 7,500 --
Prism Partners I, L.P. 52,500 * 52,500 --
Prism Partners II Offshore Fund 15,000 * 15,000 --
Putnam Health Sciences Trust 476,000 2.0 476,000 --
Putnam Variable Trust - Putnam VT
Health Sciences Fund 24,000 * 24,000 --
Putnam Investment Funds - Putnam
Capital Opportunities Fund 31,800 * 31,800 --
Putnam Capital Appreciation Fund 68,200 * 68,200 --
PW Eucalyptus Fund, LLC 70,500 * 70,500 --
PW Eucalyptus Fund, Ltd. 4,500 * 4,500 --
Remington Investment Strategies, L.P. 40,000 * 40,000 --
Salerno, Deborah 10,000 * 10,000 --
The Aries Master Fund 32,190 * 32,190 --
The Great-West Life Assurance Company 136,900 * 52,300 84,600
The Great-West Life Assurance Company 20,000 * 7,700 12,300
United Capital Management, Inc. 60,000 * 60,000 --
Winchester Global Trust Company Limited,
as Trustee for Caduceus Capital Trust 22,000 * 22,000 --
</TABLE>
*means less than 1%
20
<PAGE>
Shares Beneficially
Owned Prior to Offering
-----------------------
<TABLE>
<CAPTION>
Number of Shares Shares Beneficially
Names of Selling Stockholder Number Percent Being Offered Owned After Offering
- ---------------------------- ------ ------- ------------- --------------------
<S> <C> <C> <C> <C>
as Trustee for Caduceus Capital Trust
*means less than 1%
</TABLE>
PLAN OF DISTRIBUTION
The selling stockholders may sell the shares from time to time. The selling
stockholders will act independently of us in making deci sions regarding the
timing, manner and size of each sale. The sales may be made on one or more
exchanges or in the over-the-counter market or otherwise, at prices and at terms
then prevailing or at prices related to the then current market price, or in
negotiated t ransactions. The selling stockholders may effect these transactions
by selling the shares to or through broker-dealers. The shares may be sold by
one or more of the following:
* a block trade in which the broker-dealer will attempt to sell the shares as
agent but may position and resell a portion of the bloc k as principal to
facilitate the transaction,
* purchases by a broker-dealer as principal and resale by a broker-dealer for
its account under this prospectus,
* an exchange distribution in accordance with the rules of an exchange,
* ordinary brokerage transactions and transactions in which the broker
solicits purchasers, and
* in privately negotiated transactions.
To the extent required, this prospectus may be amended or supplemented from
time to time to describe a specific plan of distribution. If the plan of
distribution involves an arrangement with a broker-dealer for the sale of shares
through a block trade, special offe ring, exchange distribution or secondary
distribution or a purchase by a broker or dealer, the amendment or supplement
will disclose:
* the name of each selling stockholder and of the participating broker-
dealer(s),
* the number of shares involved,
* the price at which the shares were sold,
* the commissions paid or discounts or concessions allowed to the broker-
dealer(s), where applicable,
* that a broker-dealer(s) did not conduct any investigation to verify the
information set out or incorporated by reference in this prospectus, and
* other facts material to the transaction.
In addition, upon being notified by a selling stockholder that a donee or
pledgee intends to sell more than 500 shares, we will file a supplement to this
prospectus. In effecting sales, broker-dealers engaged by the selling
stockholders may arrange for other broker-dealers to participate in the resales.
The selling stockholders may enter into hedging transactions with broker-
dealers in connection with distributions of the shares or otherwise. In these
transactions, broker-dealers may engage in short sales of the shares in the
course of hedging the positions they assume with selling stockholders. The
selling stockholders also may sell shares short and redeliver the shares to
close out short positions. The selling stockholders may enter into option or
other transactions with broker-dealers which require the delivery to the broker-
dealer of the shares. The broker-dealer may then resell or otherwise transfer
the
21
<PAGE>
shares under this prospectus. The selling stockholders also may loan or pledge
the shares to a broker-dealer. The broker-dealer may sell the loaned shares, or
upon a default the broker-dealer may sell the pledged shares under this
prospectus.
Broker-dealers or agents may receive compensation in the form of commissions,
discounts or concessions from selling stockholders. Broker-dealers or agents
may also receive compensation from the purchasers of the shares for whom they
act as agents or to whom they sell as principals, or both. Compensation as to a
particular broker-dealer might be in excess of customary commissions and will be
in amounts to be negotiated in connection with the sale. Broker-dealers or
agents and any other participating broker-dealers or the sel ling stockholders
may be deemed to be "underwriters" within the meaning of Section 2(11) of the
Securities Act of 1933, when they sell the shares. Accordingly, any commission,
discount or concession received by them and any profit on the resale of the
shares purchased by them may be deemed to be underwriting discounts or
commissions under the Securities Ac t. Because selling stockholders may be
deemed to be "underwriters" within the meaning of Section 2(11) of the
Securities Act, the selling stockholders will be subject to the prospectus
delivery requirements of the Securities Act. In addition, any securities covere
d by this prospectus which qualify for sale under Rule 144 promulgated under the
Securities Act may be sold under Rule 144 rather tha n under this prospectus.
The selling stockholders have advised us that they have not entered into any
agreements, understandings or arrangements with any underwriters or broker-
dealers regarding the sale of their securities. There is no underwriter or
coordinating broker acting in connection with the proposed sale of shares by the
selling stockholders.
The shares will be sold only through registered or licensed brokers or dealers
if required under applicable state securities laws. In addition, in some states
the shares may not be sold unless they have been registered or qualified for
sale in the applicable state or an exemption from the registration or
qualification requirement is available and is complied with.
Each selling stockholder will be subject to applicable provisions of the
Exchange Act and the associated rules and regulations under the Exchange Act,
including Regulation M; these which provisions may limit the timing of purchases
and sales of shares of our common stock by the selling stockholders. We will
make copies of this prospectus available to the selling stockholders and have
informed them of the need to deliver copies of this prospectus to purchasers at
or prior to the time of any sale of the shares.
We will bear all costs, expenses and fees in connection with the registration
of the shares. The selling stockholders will bear all commissions and discounts,
if any, attributable to the sales of the shares. The selling stockholders may
agree to indemnify any broker-dealer or agent that participates in transactions
involving sales of the shares against specific liabilities, including
liabilities arising under the Securities Act. The selling stockholders have
agreed to indemnify specific persons, including broker-dealers and agents,
against specific liabilities in connection with the offering of the shares,
including liabilities arising under the Securities Act.
LEGAL MATTERS
James U. Jensen, Vice President, Corporate Development & Legal Affairs, will
pass on the validity of our common stock being registered.
EXPERTS
Our financial statements as of December 31, 1998 and 1997, and for each of the
years in the three-year period ended December 31, 1998 and for the period from
October 22, 1986 (inception) to December 31, 1998 have been incorporated by
reference in this prospectus and the related registration statement in reliance
upon the report of KPMG LLP, independent auditors, incorporated by reference
herein, and upon the authority of said firm 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 SEC. You can inspect and copy the registration statement on
Form S-3 of which this prospectus is a part (File No. 333-96253), as well as
reports, proxy statements and other information filed by us, at the public
reference facilities maintained by the SEC at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C., 20549, and at the following regional offices of the SEC: 7
World Trade
22
<PAGE>
Center, Suite 1300, New York, New York, 10048 and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois, 60661. You can obtain copies of
this material from the Public Reference Room of the SEC at 450 Fifth Street
N.W., Washington, D.C., 20549, at prescribed rates. You can call the SEC at 1-
800-732-0330 for information regarding the operation of its Public Reference
Room. The SEC also maintains a world wide web site at http://www.sec.gov that
contains reports, proxy and information statements, and other information
regarding registrants like our company that file electronically.
The SEC allows us to "incorporate by reference" other information that we file
with it, which means that we can disclose important in formation to you by
referring to those documents. The information incorporated by reference is an
important part of this prospectus, and information that we file later with the
SEC will automatically update and replace this information. We incorporate by
reference the documents listed below and any future filings made by us with the
SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934 until we have sold all of the securities that we have registered:
1. Our Annual Report on Form 10-K/A for the fiscal year ended December 31,
1998, including information in our Proxy Statement in connection with our 1998
Annual Meeting of Stockholders.
2. Our Quarterly Reports on Form 10-Q for the quarterly periods ended March
31, 1999, June 30, 1999, and September 30, 1999.
3. Our Current Reports on Form 8-K filed on October 1, 1999, November 12 1999,
November 18, 1999, and January 10, 2000.
4. Our Proxy Statement for the December 15, 1999 Special Stockholders
Meeting.
5. The description of our common stock contained in our Registration Statement
on Form 8-A filed May 23, 1994.
The reports and other documents that we file after the date of this prospectus
will update and supersede the information in this prospectus.
If you make a request for this information in writing or by telephone, we will
provide you without charge, a copy of any or all of th e information
incorporated by reference in the registration statement of which this prospectus
is a part. Requests for this informat ion should be submitted in writing to:
Corporate Secretary, NPS Pharmaceuticals, Inc., 420 Chipeta Way, Salt Lake City,
Utah, 84108, (801) 583-4939.
23
<PAGE>
You should rely only on the information contained in this prospectus. We have
not authorized anyone to provide you with information different from that
contained in this prospectus. The selling stockholders are offering to sell, and
seeking offers to buy shares of NPS Pharmaceuticals, Inc. common stock only in
jurisdictions where offers and sales are permitted. The information contained in
this prospectus is accurate only as of the date of this prospectus, regardless
of the time of delivery of this prospectus or of any sale of NPS common stock.
-----------------
TABLE OF CONTENTS
Page
Risk Factors.............................................................. 4
Forward-Looking Statements................................................ 9
Use of Proceeds........................................................... 9
Business.................................................................. 10
Selling Stockholders...................................................... 17
Plan of Distribution...................................................... 18
Legal Matters............................................................. 19
Experts................................................................... 20
Where You Can Find More Information....................................... 20
3,900,000 Shares
NPS PHARMACEUTICALS, INC.
COMMON STOCK
_______________________
PROSPECTUS
_____________, 2000
_______________________
24
<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 4. Other Expenses of Issuance and Distribution.
The following table sets forth the costs and expenses, other than underwriting
discounts payable by the registrant in connection with the sale of common stock
being registered. All amounts are estimates except the SEC registration fee and
the Nasdaq Stock Market additional listing fee.
Securities and Exchange Commission Registration Fee..............$10,773.75
Nasdaq National Market Listing Fee...............................$17,500.00
Accountant's Fees and Expenses...................................$20,000.00
Legal Fees and Expenses..........................................$ 5,000.00
Miscellaneous Expenses...........................................$ 2,000.00
Total.......................................$55,273.75
==========
Item 5. Indemnification of Directors and Officers.
Under Section 145 of the Delaware General Corporation Law, the Company has
broad powers to indemnify its directors and officers again st liabilities they
may incur in such capacities, including liabilities under the Securities Act.
The Company's Bylaws also provide t hat the Company will indemnify its directors
and executive officers and may indemnify its other officers, employees and other
agents to the fullest extent not prohibited by Delaware law.
The Company's Certificate of Incorporation provides for the elimination of
liability for monetary damages for breach of the directors ' fiduciary duty of
care to the Company and its stockholders. These provisions do not eliminate the
directors' duty of care and, in a ppropriate circumstances, equitable remedies
such as injunctive or other forms of non-monetary relief will remain available
under Del aware law. In addition, each director will continue to be subject to
liability for breach of the director's duty of loyalty to the Co mpany, for acts
or omissions not in good faith or involving intentional misconduct, for knowing
violations of law, for any transactio n from which the director derived an
improper personal benefit and for payment of dividends or approval of stock
repurchases or redem ptions that are unlawful under Delaware law. The provision
does not affect a director's responsibilities under any other laws, such a s the
federal securities laws or state or federal environmental laws.
The Company has entered into agreements with its directors and executive
officers that require the Company to indemnify such persons against expenses,
judgments, fines, settlements and other amounts actually and reasonably
incurred, including expenses of a derivative action in connection with any
proceeding, whether actual or threatened, to which any such person may be made a
party by reason of the fact that such person is or was a director or officer of
the Company or any of its affiliated enterprises, provided such person a cted in
good faith and in a manner such person reasonably believed to be in or not
opposed to the best interests of the Company and, with respect to any criminal
proceeding, had no reasonable cause to believe his or her conduct was unlawful.
The indemnification agre ements also set forth certain procedures that will
apply in the event of a claim for indemnification thereunder.
Item 6. Exhibits.
Exhibit No. Description
- ----------- -----------
5.1* Opinion of Counsel
10.36* Form of Stock Purchase Agreement dated February 4, 2000
between NPS Pharmaceuticals, Inc. and the Purchaser
23.1* Consent of independent certified public accountants.
23.2* Consent of counsel (included in Exhibit 5.1).
24.1* Power of Attorney (incorporated in the signature page of this
Form S-3).
- -----------
* Previously filed
25
<PAGE>
Item 7. Undertakings.
A. 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;
(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 s et 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 (1)(i) and (1)(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 Securities 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.
B. The undersigned Registrant hereby undertakes 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.
C. 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 SEC 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 proceedings 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 Securities Act and will be governed by
the final adjudication of such issue.
D. The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as
part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant
to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be
deemed to be part of this registration statement as of the time it
was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
26
<PAGE>
initial bona fide offering thereof.
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 No. 1 to the
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Salt Lake, County of Salt Lake, State of Utah,
on the 16th day of March, 2000.
NPS PHARMACEUTICALS, INC.
By: /s/ JAMES U. JENSEN
--------------------------------------------
James U. Jensen, Vice President Corporate
Development and Legal Affairs and Secretary
Pursuant to the requirements of the Securities Act, this Amendment No. 1 to the
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/S/ HUNTER JACKSON President, Chief Executive Officer and March 17, 2000
- ----------------------- Chairman of the Board
Hunter Jackson
/S/ ROBERT K. MERRELL Vice President, Finance, Chief Financial March 17, 2000
- ----------------------- Officer and Treasurer
Robert K. Merrell
/S/ JAMES U. JENSEN Vice President, Corporate Development and March 17, 2000
- ----------------------- Legal Affairs, Secretary and Director
James U. Jensen
* Director March 17, 2000
- -----------------------
Santo J. Costa
* Director March 17, 2000
- -----------------------
Dr. John R. Evans
* Director March 17, 2000
- -----------------------
James G. Groninger
27
<PAGE>
Signature Title Date
*
- ---------------------------- Director March 17, 2000
Joseph Klein, III
* Director March 17, 2000
- ----------------------------
Donald E. Kuhla
* Director March 17, 2000
- ----------------------------
Thomas N. Parks
* Director March 17, 2000
- ----------------------------
Edward Rygiel
* Director March 17, 2000
- ----------------------------
Dr. Calvin R. Stiller
* Director March 17, 2000
- ----------------------------
Peter G. Tombros
* BY: /s/ James U. Jensen
- ----------------------------
Attorney in Fact
28
