AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 9, 1998
REGISTRATION NO. 333-_____
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
ALEXION PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-3648318
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
25 SCIENCE PARK
NEW HAVEN, CT 06511
(203) 776-1790
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
---------------
LEONARD BELL, M.D.
ALEXION PHARMACEUTICALS, INC.
25 SCIENCE PARK
NEW HAVEN, CT 06511
(203) 776-1790
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
---------------
Copies of all communications, including all communications sent to
the agent for service, should be sent to:
MERRILL M. KRAINES, ESQ.
FULBRIGHT & JAWORSKI L.L.P.
666 FIFTH AVENUE
NEW YORK, NEW YORK 10103
---------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plan, 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, as amended, other than securities offered only in connection with dividend
or interest reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_| ___________________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_| _______________________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- -----------------------------------------------------------------------------------------------------------------------------------
Title of each class Amount to be Proposed maximum Proposed maximum Amount of
of securities registered price per unit aggregate offering price registration fee
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.0001 par
value per share 960,831 $13.6875(1) $13,151,375.00 $3,880.00
===================================================================================================================================
</TABLE>
(1) The price is estimated in accordance with Rule 457(c) under the Securities
Act of 1933, as amended, solely for the purpose of calculating the
registration fee and is $13.6875, the average of the high and low prices of
Alexion Pharmaceuticals, Inc. Common Shares as reported on The Nasdaq Stock
Market on March 4, 1998.
---------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO
REGISTRATION OF QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION -- DATED MARCH 9, 1998
ALEXION PHARMACEUTICALS, INC.
960,831 Shares
Common Stock
This Prospectus relates to the resale of shares of Common Stock, $.0001 par
value per share (the "Common Stock") of Alexion Pharmaceuticals, Inc. (the
"Company" or "Alexion") from time to time for the account of the Selling
Stockholders (the "Selling Stockholders"). Certain of the shares of Common Stock
registered hereby are issuable upon the exercise of warrants (the "Warrants")
owned by certain of the Selling Stockholders. The Company will not receive any
of the proceeds from the sale of the Common Stock by the Selling Stockholders.
The proceeds from the exercise of the Warrants, if any, will be received by the
Company. See "Use of Proceeds."
Of the 960,831 shares of Common Stock offered hereby, 670,000 were issued
by the Company in connection with a private placement in March 1998, 70,831
shares of Common Stock were issued as a dividend on the Company's Series B
Convertible Preferred Stock, $.0001 par value per share (the "Series B Preferred
Stock") and the remaining 220,000 shares of Common Stock are issuable upon the
exercise of the Warrants at an exercise price of $9.90. The Warrants were
originally issued to Josepthal Lyon & Ross Incorporated in connection with their
acting as underwriters of the Company's initial public offering and were later
distributed to certain employees of the underwriter.
The distribution of the Common Stock by the Selling Stockholders may be
effected from time to time in one or more transactions (which may involve block
transactions) in the over-the-counter market (including the Nasdaq National
Market) or any exchange on which the Common Stock may then be listed, in
negotiated transactions, through the writing of options on shares (whether such
options are listed on an options exchange or otherwise), or a combination of
such methods of sale, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices. The Selling
Stockholders may effect such transactions by selling shares to or through
broker-dealers, and such broker-dealers may receive compensation in the form of
underwriting discounts, concessions or commissions from the Selling Stockholders
and/or purchasers of shares for whom they may act as agent (which compensation
may be in excess of customary commissions). The Selling Stockholders may also
sell the shares of Common Stock pursuant to Rule 144 promulgated under the
Securities Act of 1933, as amended (the "Securities Act"), or may pledge shares
as collateral for margin accounts and such shares could be resold pursuant to
the terms of such accounts. The Selling Stockholders and any broker-dealers that
act in connection with the sale of Common Stock might be deemed to be
"underwriters" within the meaning of Section 2(11) of the Securities Act and any
commissions received by them and any profit on the resale of the shares might be
deemed to be underwriting discounts or commissions under the Securities Act. The
Selling Stockholders may agree to indemnify any agent, dealer or broker-dealer
that participates in transactions involving sales of the Common Stock against
certain liabilities, including liabilities arising under the Securities Act.
The Company's Common Stock trades on the Nasdaq National Market under the
symbol "ALXN." On March 6, 1998, the closing sale price of the Common Stock was
$15.00 per share.
All expenses of the registration of securities covered by this Prospectus
are to be borne by the Company, except that the Selling Stockholders will pay
underwriting discounts, selling commissions, and fees and the expenses, if any,
of counsel or other advisers to the Selling Stockholders.
---------------
<PAGE>
THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" LOCATED ON PAGE 4.
---------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
---------------
The date of this Prospectus is March __, 1998
-2-
<PAGE>
No person is authorized in connection with the offering made hereby to give
any information or to make any representation not contained or incorporated by
reference in this Prospectus, and any information or representation not
contained or incorporated herein must not be relied upon as having been
authorized by the Company or the Selling Stockholders. This Prospectus does not
constitute an offer to sell or a solicitation of an offer to buy by any person
in any jurisdiction in which it is unlawful for such person to make such offer
or solicitation. Neither the delivery of this Prospectus at any time nor any
sale made hereunder shall under any circumstance imply that the information
contained herein is correct as of any date subsequent to the date hereof.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports and other information with the Securities and Exchange
Commission (the "Commission"). Proxy statements, reports and other information
concerning the Company can be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549 and the regional offices of the Commission
located at Seven World Trade Center, 13th Floor, New York, New York 10048, and
500 West Madison Street, Chicago, Illinois 60661, and copies of such material
can be obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, and its public reference facilities in New
York, New York and Chicago, Illinois, at prescribed rates. Copies of such
information may also be inspected at the reading room of the library of the
National Association of Securities Dealers, Inc., 1735 K Street, Washington,
D.C. 20006. This Prospectus does not contain all of the information set forth in
the Registration Statement of which this Prospectus is a part and exhibits
thereto which the Company has filed with the Commission under the Securities Act
of 1933 as amended (the "Securities Act") and to which reference is hereby made.
The Commission maintains a World Wide Web site on the Internet at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding the Company and other registrants that file
electronically with the Commission.
This Prospectus constitutes a part of a Registration Statement on Form S-3
(herein, together with all amendments and exhibits, referred to as the
"Registration Statement") filed by the Company with the Commission under the
Securities Act. This Prospectus does not contain all of the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information with respect to the Company and the Common Stock, reference is
hereby made to the Registration Statement. Statements contained herein
concerning the provisions of any contract, agreement or other document are not
necessarily complete, and in each instance reference is made to the copy of such
contract, agreement or other document filed as an exhibit to the Registration
Statement or otherwise filed with the Commission. Each such statement is
qualified in its entirety by such reference. Copies of the Registration
Statement together with exhibits may be inspected at the offices of the
Commission as indicated above without charge and copies thereof may be obtained
therefrom upon payment of a prescribed fee.
PRIVATE SECURITIES LITIGATION REFORM ACT SAFE HARBOR STATEMENT
This Prospectus (including the documents incorporated by reference herein)
contains certain forward-looking statements (as such term is defined in the
Private Securities Litigation Reform Act of 1995) and information relating to
Alexion that are based on the beliefs of the management of Alexion, as well as
assumptions made by and information currently available to the management of
Alexion. When used in this Prospectus, the words "estimate," "project,"
"believe," "anticipate," "intend," "expect" and similar expressions are intended
to identify forward-looking statements. Such statements reflect the current
views of Alexion with respect to future events and are subject to risks and
uncertainties that could cause actual results to differ materially from those
contemplated in such forward-looking statements. For a discussion of such risks,
see "Risk Factors." Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof. Alexion does
not undertake any obligation to publicly release any revisions to these forward
looking statements to reflect events or circumstances after the date hereof or
to reflect the occurrence of unanticipated events.
---------------
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by Alexion Pharmaceuticals, Inc. are
incorporated herein by reference and made a part hereof:
1. The Company's Annual Report on Form 10-K for the fiscal year ended July
31, 1997, as amended by Form 10-K/A, dated November 14, 1997.
2. The Company's Quarterly Report on Form 10-Q for the quarterly period
ended October 31, 1997, dated December 9, 1997.
3. The Company's Current Report on Form 8-K, dated March 6, 1998.
In addition to the foregoing, all documents subsequently filed by the
Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, prior to the filing of a post-effective amendment
indicating that all of the securities offered hereunder have been sold or
deregistering all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be part hereof
from the date of filing of such documents. Any statement contained in a document
incorporated by reference in this Registration Statement shall be deemed to be
modified or superseded for purposes of this Registration Statement to the extent
that a statement contained herein or in any subsequently filed document that is
also incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Registration Statement.
This Prospectus incorporates documents by reference which are not presented
herein or delivered herewith. These documents are available upon request from:
Alexion Pharmaceuticals, Inc., 25 Science Park, New Haven, CT 06511, Attention:
David W. Keiser, Executive Vice President and Chief Operating Officer, (203)
776-1790. The Company undertakes to provide without charge to each person to
whom this Prospectus is delivered, upon written or oral request of such person,
a copy of any or all of the foregoing documents incorporated by reference
herein, other than exhibits to such documents, unless such exhibits are
specifically incorporated by reference into such documents.
-4-
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and financial data appearing elsewhere or incorporated by reference
in this Prospectus. Investors should carefully consider the information set
forth under the heading "Risk Factors."
This Prospectus contains forward-looking statements which involve risks and
uncertainties. The Company's actual results could differ materially from those
anticipated in these forward-looking statements as a result of certain factors,
including those set forth under "Risk Factors" and elsewhere in, or incorporated
by reference in, this Prospectus.
THE COMPANY
Alexion Pharmaceuticals, Inc. ("Alexion" or the "Company") is a
biopharmaceutical company engaged in research and the development of proprietary
immunoregulatory compounds for the treatment of autoimmune and cardiovascular
diseases. The Company is developing C5 complement inhibitors ("C5 Inhibitors")
and Apogens ("Apogens"), two classes of potential therapeutic compounds designed
to selectively target specific disease-causing segments of the immune system.
The Company believes that its C5 Inhibitors and Apogens, which are based upon
distinct immunoregulatory technologies, may have the advantage of achieving a
higher level of efficacy with the potential for reduced side effects when
compared to existing therapeutic approaches. In recent Phase I/II and Phase IIa
clinical trials involving 35 cardiopulmonary bypass patients, Alexion's lead C5
Inhibitor, 5G1.1-SC, has been demonstrated to significantly block complement
activation and provide a substantial anti-inflammatory effect. The Company also
filed two Investigational New Drug ("IND") applications for its second C5
Inhibitor, 5G1.1, in December 1997 so as to commence clinical studies in
rheumatoid arthritis and lupus patients. In early 1998, the Company filed an IND
application for its lead Apogen product candidate, MP4, for the treatment of
multiple sclerosis patients which is expected to enter clinical trials in the
first half of 1998. The Company will need to undertake and complete further
tests in order to confirm its belief regarding the safety and efficacy of its
product candidates, and there can be no assurance as to the results of any such
tests, or that such tests will commence on the expected date.
As an outgrowth of its core immunoregulatory technologies, the Company is
developing immunoprotected materials for transplantation and gene therapy. In
collaboration with United States Surgical Corporation ("US Surgical"), Alexion
is developing non-human cell and organ UniGraft products which are designed for
transplantation into humans. Further, in a collaboration with Genetic Therapy
Inc., a subsidiary of Novartis ("GTI/Novartis"), which was initiated in December
1996, Alexion is developing immunoprotected gene transfer systems which are
designed to enable the injectable delivery of therapeutic genes to patients'
cells. See "Recent Developments" below.
The Human Immune System. The role of the human immune system is to defend
the body from attack or invasion by infectious agents or pathogens. This is
accomplished through a complex system of proteins and cells, primarily
complement proteins, antibodies and various types of white blood cells, each
with a specialized function. Under normal circumstances, complement proteins,
together with antibodies and white blood cells, act beneficially to protect the
body by removing pathogenic microorganisms, cells containing antigens (foreign
proteins), and disease-causing immune complexes (combinations of antigens and
antibodies). However, any number of stimuli, including antibodies, pathogenic
microorganisms, injured tissue, normal tissue, proteases (inflammatory enzymes)
and artificial surfaces can locally activate complement proteins in a cascade of
enzymatic and biochemical reactions (the "complement cascade") to form
inflammatory byproducts leading, for example, in the case of rheumatoid
arthritis, to severe joint inflammation and, in the case of cardiovascular
disorders such as myocardial infarction (death of heart tissue), to additional
significant damage to the heart tissue. T-cells, a type of white blood cell,
play a critical role in the normal immune response by recognizing cells
containing antigens, initiating the immune response, attacking the
antigen-containing tissue and directing the production of antibodies directed at
the antigens, all of which lead to the elimination of the antigen-bearing
foreign organism. When a T-cell mistakenly attacks host tissue, the T-cell may
cause an inflammatory response resulting in tissue destruction and severe
autoimmune disease leading, for example, in the case of multiple sclerosis, to
severe and crippling destruction of nerve fibers in the brain.
<PAGE>
C5 Inhibitors. Alexion is developing specific and potent biopharmaceutical
C5 Inhibitors which are designed to intervene in the complement cascade at what
the Company believes to be the optimal point so that the disease-causing actions
of complement proteins generally are inhibited while the normal
disease-preventing functions of complement proteins generally remain intact. In
laboratory and animal models of human disease, Alexion has shown that C5
Inhibitors are effective in substantially preventing inflammation during
cardiopulmonary bypass ("CPB"), limiting myocardial infarction during coronary
ischemia and reperfusion, enhancing survival in lupus and preserving kidney
function in nephritis (kidney inflammation) and reducing the incidence and
severity of inflammation and joint damage in rheumatoid arthritis. The Company
is developing two C5 Inhibitors, a short acting humanized (compatible for human
use) single chain antibody (5G1.1-SC) designed for acute therapeutic settings
such as in CPB procedures and in treating myocardial infarctions, and a long
acting humanized monoclonal antibody (5G1.1) designed for treating chronic
disorders such as rheumatoid arthritis and lupus nephritis. In addition to
studies in normal volunteers, 5G1.1-SC has been recently studied in 35 patients
undergoing CPB in Phase I/II and Phase IIa clinical trials. In these studies,
5G1.1-SC administration reduced an increase of over 1000% in complement
activation observed in patients treated with placebo in a dose-dependent manner
such that there was no detectable increase in complement at the higher doses. In
the same studies, 5G1.1-SC reduced the peak white blood cell activation observed
in CPB patients treated with placebo by more than 60%. The Company filed two
INDs during December 1997 for the Company's long acting monoclonal antibody,
5G1.1, so as to commence clinical studies in rheumatoid arthritis and lupus.
Apogens. The Company's Apogen compounds are based upon discoveries at the
National Institutes of Health ("NIH") which are exclusively licensed to Alexion
and upon further discoveries by Alexion. These discoveries involve a mechanism
by which substantially all disease-causing T-cells are selectively eliminated in
vivo in animal models of disease. The highly specific recombinant Apogens under
development by the Company are designed to selectively eliminate disease-causing
T-cells in patients with certain autoimmune diseases including multiple
sclerosis and diabetes mellitus. The Company has demonstrated that its lead
proprietary Apogen, MP4 ("MP4"), is effective at preventing neurologic disease
and in ameliorating established disease in animal models of multiple sclerosis.
The Company filed an IND for MP4 for the treatment of multiple sclerosis
patients in early 1998.
UniGraft Program. The Company's UniGraft program, in collaboration with US
Surgical, is focused on developing non-human cell and organ products designed
for transplantation into humans without clinical rejection. Alexion has tested
genetically engineered pig hearts, livers and lungs in primates and has
demonstrated transplant organ function substantially longer than for
transplanted non-genetically engineered porcine organs. In September 1997,
Alexion and US Surgical Corporation amended the agreement such that US Surgical
made an additional $6.5 million payment to Alexion for equity, exclusive
licensing rights and certain manufacturing assets. Further, Alexion and US
Surgical agreed that preclinical milestone payments in the original agreement
are considered to have been satisfied.
Gene Transfer Systems. Alexion is developing, in collaboration with
GTI/Novartis, immunoprotected retroviral vector particles and producer cells
which are designed to resist rejection and therefore may be able to be used for
direct injectable delivery of therapeutic genes to patients' cells. Such
particles and producer cells are being engineered by Alexion for subsequent
preclinical evaluation by GTI.
The Company was founded in New Haven, Connecticut in January 1992 with
scientific founders largely drawn from the faculty of Yale University. The
Company's principal executive offices are at 25 Science Park, New Haven,
Connecticut 06511, and its telephone number is (203) 776-1790.
-2-
<PAGE>
THE OFFERING
Common Stock offered by the Selling
Stockholders.............................. 960,831 shares
NASDAQ symbol................................ ALXN
Risk factors................................. See "Risk Factors" for a
discussion of certain factors to
be considered by prospective
investors.
-3-
<PAGE>
RECENT DEVELOPMENTS
Private Placement of Common Stock
The Company has entered into a Stock Purchase Agreement, dated as of March
4, 1998 (the "Stock Purchase Agreement"), with Biotech Target S.A., an
institutional investor, pursuant to which the investor has committed to purchase
670,000 shares of the Common Stock of the Company at a price of $13.175 per
share, subject to the effectiveness of the Registration Statement of which this
Prospectus is a part. The offer and sale by the Company of the Common Stock to
the investor pursuant to the Stock Purchase Agreement was made pursuant to an
exemption from the registration requirements of the Securities Act provided by
Section 4(2) thereof. The Stock Purchase Agreement contains representations and
warranties as to the investor's status as an "accredited investor" as such term
is defined in Rule 501 promulgated under the Securities Act.
If the Registration Statement is declared effective on or prior to June 8,
1998, the investor will purchase the shares of Common Stock at a price per share
of $13.175, resulting in gross proceeds to the Company of $8,827,250. See
"Selling Stockholders."
-4-
<PAGE>
RISK FACTORS
An investment in the Common Stock offered hereby involves a high degree of
risk. Prospective investors should consider carefully the following risk
factors, as well as the other information set forth in this Prospectus, in
connection with an investment in the Common Stock offered hereby. This
Prospectus contains forward-looking statements that involve risks and
uncertainties. The Company's actual results could differ materially from the
results discussed in the forward-looking statements. Factors that could cause or
contribute to such differences include, but are not limited to, those discussed
in "Risk Factors," as well as those discussed elsewhere in this Prospectus.
Operating Losses; Uncertainty of Future Profitability. Alexion has
generated no revenues from product sales and is dependent upon its research and
development contracts, including the agreements with US Surgical and
GTI/Novartis, external financing, other research and development contracts and
research and development grants to the extent that they can be obtained and
interest income to pursue its intended business activities. The Company has
incurred losses since inception and has cumulative net losses of $33.0 million
through January 31, 1998. Losses have resulted principally from costs incurred
in research activities aimed at identifying and developing the Company's product
candidates and from general and administrative costs. The Company expects to
incur substantial additional operating losses over the next several years and
expects losses to increase as the Company's research and development efforts
expand and clinical trials continue and potentially expand. The Company's
ability to achieve profitability is dependent on its ability to obtain patent
protection and regulatory approval for its products, to obtain licenses from
third parties to use technology which it may need, to enter into agreements for
product development and commercialization with corporate partners and to develop
the capacity to manufacture and sell products. There can be no assurance that
the Company will successfully develop, commercialize, manufacture or market any
of its potential products, obtain required regulatory approvals, patents or
third party licenses to technology or ever achieve profitability.
Early Stage of Product Development; Risks of Clinical Trials. The Company's
research and development programs are at an early stage. There can be no
assurance that the Company's drug discovery efforts will result in the timely
commencement of clinical studies or the development of commercially successful
therapeutic drugs. Potential products which have been identified will require
significant additional development, preclinical and clinical testing, regulatory
approval, and additional investment prior to their commercialization, which may
never be achieved. Potential products may be found to be ineffective or cause
harmful side effects during preclinical testing or clinical trials, fail to
receive necessary regulatory approvals, be difficult to manufacture on a large
scale, fail to achieve market acceptance, be uneconomical or be precluded from
commercialization by proprietary rights of third parties. The results from
preclinical studies and early clinical trials may not be predictive of results
that will be obtained in large-scale clinical trials and do not necessarily
predict or prove safety or efficacy in humans.
In addition, the Company has commenced clinical development of three of its
product candidates. There can be no assurance that clinical trials of the
Company's product candidates will demonstrate sufficient safety and efficacy to
obtain the requisite regulatory approvals or will result in marketable products.
Clinical trials are often conducted with patients that are critically ill.
During the course of treatment, these patients can die or suffer other adverse
medical effects for reasons that may not be related to the pharmaceutical agent
being tested but which can nevertheless affect clinical trial results. A number
of companies in the pharmaceutical industry have suffered significant setbacks
in advanced clinical trials, even after promising results in earlier trials. Any
such setback could have a material adverse effect on the Company's business,
financial condition and results of operations. The completion of clinical trials
of the Company's product candidates may be delayed by many factors and there can
be no assurance that delays or terminations will not occur. One such factor is
the rate of enrollment of patients, which generally varies throughout the course
of a clinical trial and which depends on multiple factors, including but not
limited to the size of the patient population, the number of clinical trial
sites, the proximity of patients to clinical trial sites, the eligibility
criteria for the trial and the existence of competing clinical trials. The
Company cannot control the rate at which patients present themselves for
enrollment, and there can be no assurance that the rate of patient enrollment
will be consistent with the Company's expectations or be sufficient to enable
clinical trials of the Company's product candidates to
-5-
<PAGE>
be completed in a timely manner. Further, there can be no assurance that
materials for clinical trials will be produced in a timely manner, if at all.
Need for Additional Funds. The Company will require substantial additional
funds for its research and product development programs, for operating expenses,
for pursuing regulatory approval and for developing required production, sales
and marketing capabilities. With the exception of the Company's agreements with
US Surgical and GTI/Novartis and certain research grants, the Company does not
have any commitments or arrangements to obtain any such funds and there can be
no assurance that funds for these purposes, whether through additional sales of
securities or collaborative or other arrangements with corporate partners or
from other sources, will be available to the Company when needed or on terms
favorable to the Company. The unavailability of additional financing could
require the Company to delay, scale back or eliminate certain of its research
and product development programs or to license third parties to commercialize
products or technologies that the Company would otherwise undertake itself, any
of which would have a material adverse effect on the Company. The Company
believes that its existing available resources, together with anticipated future
funding from US Surgical and GTI/Novartis and certain research grants, and
interest income should be sufficient to fund its operating expenses and capital
requirements as currently planned for at least 18 months. However, the Company's
cash requirements may vary materially from those now planned because of results
of research and development, results of product testing, relationships with
strategic partners, changes in the focus and direction of the Company's research
and development programs, competitive and technological factors, developments in
the regulatory process and other factors, none of which can be predicted.
Rapid Technological Change. The Company is engaged in pharmaceutical fields
characterized by extensive research efforts, rapidly evolving technology and
intense competition from numerous organizations, including pharmaceutical
companies, biotechnology firms, academic institutions and others. New
developments are expected to continue at a rapid pace in both industry and
academia. There can be no assurance that research and discoveries by others will
not render any of the Company's programs or potential products obsolete or
uneconomical. In order to compete successfully, the Company will need to
complete development of and obtain regulatory approval of products that keep
pace with technological developments on a timely basis. Any failure by the
Company to anticipate or respond adequately to technological developments will
have a material adverse effect on the Company's business, financial condition
and results of operations.
Patent, License and Proprietary Rights Uncertainties. The Company's success
will depend in part on its ability to obtain United States and foreign patent
protection for its products, preserve its trade secrets and proprietary rights,
and operate without infringing on the proprietary rights of third parties or
having third parties circumvent the Company's rights. Because of the length of
time and expense associated with bringing new products through development and
regulatory approval to the marketplace, the health care industry has
traditionally placed considerable importance on obtaining patent and trade
secret protection for significant new technologies, products and processes.
There can be no assurance that any patents will issue from any of the patent
applications owned by or licensed to the Company. Further, even if patents were
to issue, there can be no assurance that they will provide the Company with
significant protection against competitive products or otherwise be commercially
valuable. In addition, patent law relating to certain of the Company's fields of
interest, particularly as to the scope of claims in issued patents, is still
developing and it is unclear how this uncertainty will affect the Company's
patent rights. Litigation, which could be costly and time consuming, may be
necessary to enforce patents issued to the Company and/or to determine the scope
and validity of others' proprietary rights, in either case in judicial or
administrative proceedings. The Company's competitive position is also dependent
upon unpatented trade secrets which generally are difficult to protect. There
can be no assurance that others will not independently develop substantially
equivalent proprietary information and techniques or otherwise gain access to
the Company's trade secrets, that the Company's trade secrets will not be
disclosed or that the Company can effectively protect its rights to unpatented
trade secrets. As the biotechnology industry expands and more patents are
issued, the risk increases that the Company's potential products may give rise
to claims that they infringe the patents of others. Any such infringement
litigation would be costly and time consuming to the Company.
The Company is aware of broad patents owned by third parties relating to
the manufacture, use, and sale of recombinant humanized antibodies, recombinant
humanized single chain antibodies and
-6-
<PAGE>
genetically engineered animals. The Company has received notice from one company
regarding the existence of a patent which the owners claim may be relevant to
the development and commercialization of certain of the Company's proposed
UniGraft organ transplantation products. The Company has identified and is
testing various approaches which it believes should not infringe this patent and
which should permit commercialization of its products. There can be no assurance
that the owner of this patent will not seek to enforce the patent against the
Company's so-modified commercial products or against the development activities
related to the non-modified products. To the extent it becomes necessary, there
can be no assurance that the Company will be able to obtain a license on
commercially reasonable terms. If the Company does not obtain necessary
licenses, it could encounter delays in product market introductions while it
attempts to design around such patent, or could find that the development,
manufacture or sale of products requiring such a license could be foreclosed.
Further, there can be no assurance that owners of patents that the Company does
not believe are relevant to the Company's product development and
commercialization will not seek to enforce their patents against the Company.
Such action could result in litigation which would be costly and time consuming.
There can be no assurance that the Company would be successful in such
litigations. The Company is currently unaware of any such threatened action.
Certain of the licenses by which the Company obtained its rights in and to
certain technologies require the Company to diligently commercialize or attempt
to commercialize such technologies. There can be no assurance that the Company
will meet such requirements, and failure to do so for a particular technology
could result in the Company losing its rights to that technology.
Currently, the Company has not sought to register its potential trademarks
and there can be no assurance that the Company will be able to obtain
registration for such trademarks.
No Assurance of FDA Approval; Government Regulation. The preclinical and
clinical testing, manufacturing, and marketing of the Company's products are
subject to extensive regulation by numerous government authorities in the United
States and other countries, including, but not limited to, the FDA. Among other
requirements, FDA approval of the Company's products, including a review of the
manufacturing processes and facilities used to produce such products, will be
required before such products may be marketed in the United States. Similarly,
marketing approval by a foreign governmental authority is typically required
before such products may be marketed in a particular foreign country. In order
to obtain FDA approval of a product, the Company must, among other things,
demonstrate to the satisfaction of the FDA that the product is safe and
effective for its intended uses and that the Company is capable of manufacturing
the product with procedures that conform to the FDA's then current good
manufacturing practice ("cGMP") regulations, which must be followed at all
times. The process of seeking FDA approvals can be costly, time consuming, and
subject to unanticipated and significant delays. There can be no assurance that
such approvals will be granted to the Company on a timely basis, or at all. Any
delay in obtaining or any failure to obtain such approvals would adversely
affect the Company's ability to introduce and market products and to generate
product revenue.
The Company's research and development processes involve the controlled use
of hazardous materials. The Company is subject to federal, state and local laws
and regulations governing the use, manufacture, storage, handling and disposing
of such materials and certain waste products. In the event of such an accident,
the Company could be held liable for any damages that result and any such
liability could exceed the resources of the Company. There can be no assurance
that the Company will not be required to incur significant costs to comply with
the environmental laws and regulations in the future, or that the business,
financial condition and results of operations of the Company will not be
materially adversely affected by current or future environmental laws or
regulations.
Substantial Competition. The pharmaceutical and biotechnology industries
are characterized by intense competition. Many companies, including major
pharmaceutical and chemical companies, as well as specialized biotechnology
companies, are engaged in activities similar to those of the Company. Certain of
these companies have substantially greater financial and other resources, larger
research and development staffs, and more extensive marketing and manufacturing
organizations than the Company. Many of these companies have significant
experience in preclinical testing, human clinical trials, product manufacturing,
marketing and distribution and other regulatory approval procedures. In
addition, colleges, universities, governmental agencies and other public and
private research organizations conduct
-7-
<PAGE>
research and may market commercial products on their own or through joint
ventures. These institutions are becoming more active in seeking patent
protection and licensing arrangements to collect royalties for use of technology
that they have developed. These institutions also compete with the Company in
recruiting and retaining highly qualified scientific personnel.
In particular, T-Cell Sciences, Inc. and Chiron Corporation have both
publicly announced intentions to develop complement inhibitors to treat diseases
related to trauma and inflammation indications and the Company is aware that
SmithKline Beecham Plc, Merck & Co., Inc. and CytoMed Inc. are attempting to
develop similar therapies. In addition, each of Bayer A.G. ("Bayer"), Immunex
Corporation, Pharmacia & Upjohn and Rhone-Poulenc Rorer, Inc. sells a product
which is used to reduce surgical bleeding during CPB. The Company is also aware
of announced and ongoing clinical trials of certain companies, including
Autoimmune, Inc., ImmuLogic Pharmaceutical Corporation, Neurocrine Biosciences,
Inc., and Anergen, Inc. employing T-cell specific tolerance technologies and
addressing patients with multiple sclerosis or diabetes mellitus. Baxter
Healthcare Corporation and Novartis, Inc., in collaboration with Biotransplant
Inc., have publicly announced intentions to commercially develop xenograft
organs and the Company is aware that Diacrin Inc. is also working in this field.
These companies may succeed in developing products that are more effective or
less costly than any that may be developed by Alexion and may also prove to be
more successful than Alexion in production and marketing. Competition may
increase further as a result of potential advances in the commercial
applicability of biotechnology and greater availability of capital for
investment in these fields.
Dependence on Qualified Personnel. The Company is highly dependent upon the
efforts of its senior management and scientific personnel including its
consultants, generally, and Dr. Leonard Bell, its President and Chief Executive
Officer, in particular. The Company and Dr. Bell are parties to an employment
agreement which expires on April 1, 2000. The loss of the services of one or
more of these individuals could have a material adverse effect on the Company's
ability to achieve its development objectives on a timely basis or at all. The
Company has a $2,000,000 key man life insurance policy on the life of Dr. Bell
of which the Company is the beneficiary. Because of the specialized scientific
nature of its business, Alexion is also highly dependent upon its ability to
continue to attract and retain qualified scientific and technical personnel.
There is intense competition for qualified personnel in the areas of the
Company's activities, and there can be no assurance that Alexion will be able to
continue to attract and retain the qualified personnel necessary for the
development of its business. Loss of the services of, or failure to recruit, key
scientific and technical personnel would be significantly detrimental to the
Company's product development programs.
All members of the Company's Board of Scientific Advisors and the Company's
other scientific consultants are employed on a full-time basis by academic or
research institutions. Accordingly, such advisors and consultants will be able
to devote only a small portion of their time to the Company. In addition, in
certain circumstances, inventions or processes discovered by them may not become
the property of the Company but may be the property of their full-time employers
or of other companies and institutions for which they now consult. There can be
no assurance that the interests and motivations of the Company's collaborators
are or will remain consistent with those of the Company. Furthermore, there can
be no assurance that the Company will be able to successfully negotiate license
rights to the results of collaborations or that such licenses will be on
commercially reasonable terms.
Dependence on Outside Parties and Collaborators. The Company's strategy for
the research, development, manufacture and commercialization of certain of its
products contemplates that it will enter into various arrangements with
corporate partners, licensors, licensees, outside researchers, consultants and
others and, therefore, the success of the Company is, and will be, dependent in
part upon the efforts of outside parties. There can be no assurance that the
Company will be able to negotiate acceptable collaborative arrangements to
develop or commercialize its products, that arrangements or other collaborations
entered into, if any, will be successful, or that current or potential
collaborators will not pursue treatments for other diseases or seek alternative
means of developing treatments for the diseases targeted by programs with the
Company. The Company has entered into research and development agreements with
US Surgical and GTI/Novartis to commercialize potential products to be developed
in the UniGraft program and for gene therapy. The amount and timing of resources
which US Surgical, GTI/Novartis or any other potential parties to collaboration
arrangements devote to these activities may not be within the control of the
Company. There can be no assurance that outside parties and
-8-
<PAGE>
collaborators will perform their obligations as expected or that any revenue
will be derived from outside arrangements. The Joint Development Agreement with
US Surgical may be terminated by US Surgical for any or no reason effective on
or after January 1, 1998, if notice is given by US Surgical at least six months
prior thereto. If any of the Company's collaborators breaches or terminates its
agreement with the Company or otherwise fails to conduct its collaborative
activities in a timely manner, the development or commercialization of the
product candidate or the research program which is the subject of the agreement
may be delayed and the Company may be required to undertake unforeseen
additional responsibilities or to devote additional resources to development or
commercialization or terminate the development or commercialization. This could
have a material adverse effect on the Company's prospects, financial condition,
intellectual property position and results of operations.
Limited Manufacturing, Marketing, Sales, Clinical Testing and Regulatory
Compliance Capability. The Company has not invested in the development of
commercial manufacturing, marketing, distribution or sales capabilities.
Moreover, the Company has insufficient capacity to manufacture more than one
product candidate at a time or to manufacture its product candidates for later
stage clinical development or commercialization. If the Company is unable to
develop or contract for additional manufacturing capabilities on acceptable
terms, the Company's ability to conduct human clinical testing will be
materially adversely affected, resulting in delays in the submission of products
for regulatory approval and in the initiation of new development programs, which
could have a material adverse effect on the Company's competitive position and
the Company's prospects for achieving profitability. In addition, as the
Company's product development efforts progress, the Company will need to hire
additional personnel skilled in clinical testing, regulatory compliance, and, if
the Company develops products with commercial potential, marketing and sales.
There can be no assurance that the Company will be able to acquire, or establish
third-party relationships to provide, any or all of these resources or be able
to obtain required personnel and resources to manufacture, or perform testing or
engage in marketing, distribution and sales on its own.
Uncertainty of Availability of Health Care Reimbursement. The Company's
ability to commercialize its products successfully may depend in part on the
extent to which reimbursement for the cost of such products and related
treatments will be available from government health administration authorities,
private health insurers and other organizations. Third-party payors are
attempting to control costs by limiting coverage of products and treatments and
the level of reimbursement for medical products and services. Significant
uncertainty exists as to the reimbursement status of newly approved health care
products, and if the Company succeeds in bringing one or more products to
market, there can be no assurance that these products will be considered
cost-effective, that reimbursement will be available, or, if available, that the
payor's reimbursement policies will not materially adversely affect the
Company's ability to sell its products on a profitable basis.
Product Liability; Potential Liability for Human Clinical Trials. The
Company's business exposes it to potential product liability risks which are
inherent in the testing, manufacturing, marketing and sale of human therapeutic
products and there can be no assurance that the Company will be able to avoid
significant product liability exposure. With respect to the Company's UniGraft
program, little is known about the potential long-term health risks of
transplanting non-human tissue into humans. In addition to product liability
risks associated with sales of products, the Company may be liable to the claims
of individuals who participate in human clinical trials of its products. While
the Company has obtained, and will seek, waivers of liability from all persons
who participated or may in the future participate in human clinical trials
conducted by or on behalf of the Company, there can be no assurance that waivers
will be effective to protect the Company from liability or the costs of product
liability litigation. The Company currently has product liability insurance to
cover certain liabilities relating to the conduct of human clinical trials.
However, there can be no assurance that it will be able to maintain such
insurance on acceptable terms or that the insurance will provide adequate
protection against potential liabilities. An inability to maintain sufficient
insurance coverage at an acceptable cost or otherwise to protect against
potential product liability claims could prevent or limit the commercialization
of products developed by the Company. Furthermore, a product liability related
claim or recall could have a material adverse effect on the business, financial
condition and results of operations of the Company.
Volatility of Share Price. The market prices for securities of
biopharmaceutical companies have been volatile. Factors such as announcements of
technological innovations or new commercial products
-9-
<PAGE>
by the Company or its competitors, government regulation, patent or proprietary
rights developments, public concern as to the safety or other implications of
biopharmaceutical products, results of preclinical or clinical trials, positive
or negative developments related to the Company's collaborators and market
conditions in general may have a significant impact on the market price of the
Company's Common Stock.
Dilutive Effect of Stock Issuances, Grants, Options and Warrants. As of
March 4, 1998, Alexion has granted options to purchase an aggregate of
approximately 1,599,586 shares of the Company's Common Stock under certain stock
option plans. Warrants to purchase an aggregate of approximately 220,000 of the
Company's Common Stock are also outstanding. Many of these options and warrants
have exercise prices below the current market price of the Company's Common
Stock. In addition, the Company may issue additional stock, warrants and/or
options to raise capital in the future. The Company regularly examines
opportunities to expand its technology base through means such as licenses,
joint ventures and acquisition of assets or ongoing businesses and may issue
securities in connection with such transactions. The Company may also issue
additional securities in connection with its stock option plans. During the
terms of such options and warrants, the holders thereof are given the
opportunity to profit from a rise in the market price of the Company's Common
Stock. The exercise of such options and warrants may have an adverse effect on
the market value of the Company's Common Stock. The existence of such options
and warrants may adversely affect the terms on which the Company can obtain
additional equity financing. To the extent the exercise prices of such options
and warrants are less than the net tangible book value of the Company's Common
Stock at the time such options and warrants are exercised, the Company's
stockholders will experience an immediate dilution in the net tangible book
value of their investment.
No Dividends. The Company has not paid dividends on its Common Stock since
its inception and does not expect to pay cash or stock dividends on its Common
Stock in the foreseeable future.
Possible Adverse Impact on Holders of Common Stock; Anti-takeover
Provisions; Rights Plan. The Board of Directors may issue one or more series of
Preferred Stock, without any action on the part of the stockholders of the
Company, the terms of which may adversely affect the rights of holders of Common
Stock. Issuance of Preferred Stock, which may be accomplished through a public
offering or a private placement, may dilute the voting power of holders of
Common Stock (such as by issuing Preferred Stock with super voting rights) and
may render more difficult the removal of current management, even if such
removal may be in the stockholders' best interests. Further, the issuance of
Preferred Stock may be used as an "anti-takeover" device without further action
on the part of the stockholders. On February 14, 1997, the Board of Directors of
Alexion declared a dividend distribution of one preferred stock purchase right
(a "Right") for each outstanding share of Common Stock of the Company. The
Rights are not exercisable until the date of the earlier to occur of (i) ten
business days following the time of a public announcement or notice to the
Company that a person or group of affiliated or associated persons has acquired
beneficial ownership of 20% or more of the outstanding shares of Common Stock of
the Company (such 20% beneficial owner, an "Acquiring Person"), or (ii) ten
business days, or such later date as may be determined by the Board of Directors
of the Company, after the date of the commencement or announcement by a person
of an intention to make a tender offer or exchange offer for an amount of Common
Stock which, together with the shares of such stock already owned by such
person, constitutes 20% or more of the outstanding shares of such Common Stock.
The Rights and the Rights Agreement, as well as certain provisions of Delaware
law are designed to prevent any unsolicited acquisitions of the Company's Common
Stock. These provisions and any issuance of Preferred Stock could prevent the
holders of Common Stock from realizing a premium on their shares.
Ownership by Management and Principal Stockholders. On March 4, 1998,
directors and officers of the Company and certain principal stockholders and
their affiliates beneficially owned in the aggregate approximately 6,080,000
shares of Common Stock, representing 54% of the outstanding shares of Common
Stock. Accordingly, they have the ability to influence significantly the affairs
of the Company and matters requiring a stockholder vote, including the election
of the Company's directors, the amendment of the Company's charter documents,
the merger or dissolution of the Company and the sale of all or substantially
all of the Company's assets. The voting power of these holders may also
discourage or prevent any proposed takeover of the Company pursuant to a tender
offer.
-10-
<PAGE>
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the shares of
Common Stock by the Selling Stockholders. The proceeds, if any, received by the
Company upon the exercise of the Warrants will be utilized by the Company for
working capital purposes.
SELLING STOCKHOLDERS
The following table sets forth certain information, as of March 4, 1998
regarding the beneficial ownership of Common Stock of each Selling Stockholder
and as adjusted to give effect to the sale of the Shares offered hereby. The
Shares are being registered to permit public secondary trading of the Shares,
and the Selling Stockholders may offer the Shares for resale from time to time.
See "Plan of Distribution."
-11-
<PAGE>
<TABLE>
<CAPTION>
Amount of Amount of
Beneficial Beneficial
Ownership Ownership
Prior to Offering After Offering
--------------------------- ----------------------------
Number of
Number Shares Number Percent
Name of of Common Percent Being of Common of Common
Selling Stockholder Shares of Class Offered Shares Shares
------------------- --------- -------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Biotech Target S.A. (1) 1,824,113 16.3% 740,831 1,083,732 9.7%
Matthew Balk (2) 8,452 * 8,452 0 *
Franklin Berger (3) 25,126 * 17,826 7,300 *
Lawrence Borgman (2) 226 * 226 0 *
Dennis Burke (2) 226 * 226 0 *
Paul Fitzgerald (2) 20,403 * 20,403 0 *
Anthony Guzzi (2) 97 * 97 0 *
Josepthal Holdings (2) 10,000 * 10,000 0 *
Steve Kowitski (2) 226 * 226 0 *
Sherwood P. Larkin (4) 19,642 * 18,642 1,000 *
Michael Loew (2) 2,887 * 2,887 0 *
Raymond Mando (2) 65 * 65 0 *
James Raphalian (2) 5,000 * 5,000 0 *
Charles Roden (2) 7,694 * 7,694 0 *
Lawrence Rice (2) 10,871 * 10,871 0 *
Dan Purjes (2) 84,886 * 84,886 0 *
Scott A. Weisman (5) 22,080 * 21,580 500 *
WBM, LLC (2) 10,919 * 10,919 0 *
</TABLE>
- ----------
* Less than one percent
(1) Of the 740,831 shares being offered by this Selling Stockholder, 670,000
shares were issued by the Company in connection with a private placement in
March 1998 and the remaining 70,831 shares of Common Stock were issued as a
dividend on the Company's Series B Preferred Stock.
(2) The shares of Common Stock attributable to such Selling Stockholder
represent shares issuable upon exercise of Warrants.
(3) The 17,826 shares being offered by this Selling Stockholder are issuable
upon the exercise of Warrants.
(4) The 18,642 shares being offered by this Selling Stockholder are issuable
upon the exercise of Warrants.
(5) The 21,580 shares being offered by this Selling Stockholder are issuable
upon the exercise of Warrants.
-12-
<PAGE>
PLAN OF DISTRIBUTION
The distribution of the shares of Common Stock by the Selling Stockholders
may be effected from time to time in one or more transactions (which may involve
block transactions) in the over-the-counter market or on NASDAQ (or any exchange
on which the Common Stock may then be listed) in negotiated transactions,
through the writing of options (whether such options are listed on an options
exchange or otherwise), or a combination of such methods of sale, at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices. The Selling Stockholders may effect such
transactions by selling shares to or through broker-dealers, and such
broker-dealer may receive compensation in the form of underwriting discounts,
concessions or commissions from the Selling Stockholders and/or purchasers of
shares for whom they may act as agent (which compensation may be in excess of
customary commissions). The Selling Stockholders may also sell such shares
pursuant to Rule 144 promulgated under the Securities Act, or may pledge shares
as collateral for margin accounts and such shares could be resold pursuant to
the terms of such accounts. The Selling Stockholders and any broker-dealers that
act in connection with the sale of the Common Stock might be deemed to be
"underwriters" within the meaning of Section 2(11) of the Securities Act and any
commission received by them and any profit on the resale of the shares of Common
Stock as principal might be deemed to be underwriting discounts and commissions
under the Securities Act. The Selling Stockholders may agree to indemnify any
agent, dealer or broker-dealer that participates in transactions involving sales
of the shares against certain liabilities, including liabilities arising under
the Securities Act.
Because the 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 prospectus delivery requirements under the Securities Act.
Furthermore, in the event of a "distribution" of the shares, such Selling
Stockholders, any selling broker or dealer and any "affiliated purchasers" may
be subject to Rule 10b-6 under the Exchange Act or Regulation M promulgated
thereunder, which prohibits, with certain exceptions, any such person from
bidding for or purchasing any security which is the subject of such distribution
until his participation in that distribution is completed. In addition, Rule
10b-7 under the Exchange Act or Regulation M promulgated thereunder, prohibits
any "stabilizing bid" or "stabilizing purchase" for the purpose of pegging,
fixing or stabilizing the price of Common Stock in connection with this
offering.
In order to comply with certain state securities laws, if applicable, the
Common Stock will not be sold in a particular state unless such securities have
been registered or qualified for sale in such state or any exemption from
registration or qualification is available and complied with.
The Company will not receive any of the proceeds from the sale of Common
Stock by the Selling Stockholders. The proceeds, if any, from the exercise of
the Warrants will be received by the Company; no brokerage commissions or
discounts will be paid in connection therewith.
LEGAL MATTERS
The validity of the issuance of the shares of Common Stock offered hereby
will be passed upon for the Company by Fulbright & Jaworski L.L.P., New York,
New York.
EXPERTS
The audited financial statements incorporated by reference in this
Prospectus and elsewhere in the Registration Statement have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect thereto, and is incorporated herein in reliance upon the
authority of said firm as experts in giving said report.
-13-
<PAGE>
PART II
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the Company's estimates (other than the SEC
registration fee) of the expenses in connection with the issuance and
distribution of the shares of Common Stock being registered. None of the
following expenses are being paid by the Selling Stockholders.
SEC registration fee $ 3,880.00
Legal fees and expenses $15,000.00
Accounting fees and expenses $ 5,000.00
Miscellaneous expenses $ 1,120.00
----------
Total: $25,000.00
==========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law (the "DGCL") empowers a
Delaware corporation to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of such corporation) by reason of the
fact that such person is or was a director, officer, employee or agent of such
corporation, or is or was serving at the request of such corporation as a
director, officer, employee or agent of another corporation or enterprise. A
corporation may, in advance of the final disposition of any civil, criminal,
administrative or investigative action, suit or proceeding, pay the expenses
(including attorneys' fees) incurred by any officer, director, employee or agent
in defending such action, provided that the director or officer undertakes to
repay such amount if it shall ultimately be determined that he is not entitled
to be indemnified by the corporation. A corporation may indemnify such person
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.
A Delaware corporation may indemnify officers and directors in an action by
or in the right of the corporation to procure a judgment in its favor under the
same conditions, except that no indemnification is permitted without judicial
approval if the officer or director is adjudged to be liable to the corporation.
Where an officer or director is successful on the merits or otherwise in the
defense of any action referred to above, the corporation must indemnify him
against the expenses (including attorneys' fees) which he actually and
reasonably incurred in connection therewith. The indemnification provided is not
deemed to be exclusive of any other rights to which an officer or director may
be entitled under any corporation's by-law, agreement, vote or otherwise.
In accordance with Section 145 of the DGCL, Section EIGHTH of the Company's
Certificate of Incorporation, as amended (the "Certificate") provides that the
Company shall indemnify each person who is or was a director, officer, employee
or agent of the Company (including the heirs, executors, administrators or
estate of such person) or is or was serving at the request of the Company as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, to the fullest extent permitted. The
indemnification provided by the Certificate shall not be deemed exclusive of any
other rights to which any of those seeking indemnification or advancement of
expenses may be entitled under any by-law, agreement, vote of shareholders or
disinterested directors or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office, and shall
continue as to a person who has ceased to be a director, officer, employee or
agent and shall inure to the benefit of the heirs, executors and administrators
of such a person. Expenses (including attorneys' fees) incurred in defending a
civil, criminal, administrative or investigative action, suit or proceeding
shall be paid by the Company in advance of the final disposition of such action,
suit or proceeding upon receipt of an undertaking by or on behalf of the
indemnified person to repay such amount if it shall ultimately be determined
that he is not entitled to be indemnified by the Company. Section NINTH of the
Certificate provides that a director of the Company shall not be personally
liable to the Company or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the Company or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the DGCL, or (iv) for any
transaction from which the director derived an improper personal benefit.
II-1
<PAGE>
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits.
3.1 Certificate of Incorporation, as amended+
5.1 Opinion of Fulbright & Jaworski L.L.P.*
10.1 Stock Purchase Agreement between the Registrant and Biotech Target S.A.,
dated March 4, 1998.
10.2 Form of warrant certificate representing the right to purchase Common
Stock at an exercise price of $9.90 per share.
23.1 Consent of Fulbright & Jaworski L.L.P. (included in Exhibit 5.1).
23.2 Consent of Arthur Andersen LLP.
24.1 Power of Attorney (included on signature page).
- ----------
+ Incorporated by reference from the Company's Registration Statement on
Form S-1 (Registration No. 333-00202).
* To be filed by Amendment.
ITEM 17. 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 of this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement of
any material change to such information in the registration statement.
Provided, however, that paragraphs (a)(1)(i) and (a)(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 of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the provisions described under Item 15 above, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-2
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THE
REGISTRANT HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF NEW HAVEN
AND STATE OF CONNECTICUT ON THE 9TH DAY OF MARCH, 1998.
ALEXION PHARMACEUTICALS, INC.
By: /s/ LEONARD BELL
-----------------------------------
Leonard Bell, M.D.
President, Chief Executive Officer,
Secretary and Treasurer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints LEONARD BELL, M.D. and DAVID W. KEISER,
or either of them, his true and lawful attorney-in-fact and agent with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same
with all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting said attorney-in-fact and agent,
and each of them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the premises, as fully
to all intents and purposes as he or she might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact and agent or any of
them, or their or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
/s/ LEONARD BELL President, Chief Executive March 9, 1998
- ---------------------------- Officer, Secretary, Treasurer
Leonard Bell, M.D. and Director (principal
executive officer)
/s/ DAVID W. KEISER Executive Vice President and March 9, 1998
- ---------------------------- Chief Operating Officer
David W. Keiser (principal financial officer)
/s/ BARRY P. LUKE Senior Director of Finance March 9, 1998
- ---------------------------- and Administration (principal
Barry P. Luke accounting officer)
/s/ JOHN H. FRIED Chairman of the Board of March 9, 1998
- ---------------------------- Directors
John H. Fried, Ph.D.
/s/ JOSEPH A. MADRI Director March 9, 1998
- ----------------------------
Joseph A. Madri, Ph.D., M.D.
/s/ LEONARD MARKS Director March 9, 1998
- ----------------------------
Leonard Marks, Jr., Ph.D.
/s/ MAX LINK Director March 9, 1998
- ----------------------------
Max Link, Ph.D.
/s/ EILEEN M. MORE Director March 9, 1998
- ----------------------------
Eileen M. More
/s/ TIMOTHY F. HOWE Director March 9, 1998
- ----------------------------
Timothy F. Howe
II-3
<PAGE>
EXHIBIT INDEX
Exhibit
Number Exhibit
- ------- -------
3.1 Certificate of Incorporation, as amended+
5.1 Opinion of Fulbright & Jaworski L.L.P.*
10.1 Stock Purchase Agreement between the Registrant and Biotech Target S.A.,
dated March 4, 1998.
10.2 Form of warrant certificate representing the right to purchase Common Stock
at an exercise price of $9.90 per share.
23.1 Consent of Fulbright & Jaworski L.L.P. (included in Exhibit 5.1).
23.2 Consent of Arthur Andersen LLP.
24.1 Power of Attorney (included in signature page).
- ----------
+ Incorporated by reference from the Company's Registration Statement on
Form S-1 (Registration No. 333-00202).
* To be filed by Amendment.
II-4
STOCK PURCHASE AGREEMENT
Alexion Pharmaceuticals, Inc.
25 Science Park
New Haven, CT 06511
Ladies & Gentlemen:
The undersigned, Biotech Target S.A. (the "Investor"), hereby confirms its
agreement with you as follows:
1. This Stock Purchase Agreement (the "Agreement") is made as of March 4,
1998 between Alexion Pharmaceuticals, Inc., a Delaware corporation (the
"Company"), and the Investor.
2. The Company has authorized the sale and issuance of up to 670,000 shares
of Common Stock of the Company (the "Stock"), subject to adjustment by the
Company's Board of Directors.
3. The Company and the Investor agree that the Investor will purchase and
the Company will sell, for a purchase price of $13.175 per share, or an
aggregate purchase price of $8,827,250, 670,000 shares pursuant to the Terms and
Conditions for Purchase of Shares attached hereto as Annex I and incorporated
herein by reference as if fully set forth herein. Unless otherwise requested by
the Investor, certificates representing the shares purchased by the Investor
will be registered in the Investor's name and address as set forth below.
4. The Investor represents that, except as set forth below, (a) it has had
no position, office or other material relationship within the past three years
with the Company or its affiliates, (b) neither it, nor any group of which it is
a member or to which it is related, beneficially owns (including the right to
acquire or vote) any securities of the Company, except for (1) the shares of
Series B Preferred Stock purchased by the Investor and the Common Stock issuable
upon conversion thereof or as payment as a dividend thereon, and (2) 147,500
shares of Common Stock, and (c) it has no direct or indirect affiliation or
association with any NASD member. Exceptions:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(If no exceptions, write "none." If left blank, response will be deemed to
be "none.")
<PAGE>
Please confirm that the foregoing correctly sets forth the agreement
between us by signing in the space provided below for that purpose.
BIOTECH TARGET S.A.
By: /s/ A. Bremer /s/ A. Hove
----------------------------------------------
Name: A. Bremer A. Hove
Title: Signatory Authority Signatory Authority
Address: Swiss Bank Tower, Obarie Street,
Panama, Panama
Tax ID No.: 000 000
Contact name:
Telephone:
Name in which shares should be
registered (if different):
AGREED AND ACCEPTED:
ALEXION PHARMACEUTICALS, INC.
By: /s/ Leonard Bell
-------------------
Name: Leonard Bell, M.D.
Title: President and Chief Executive Officer
-2-
<PAGE>
ANNEX I
TERMS AND CONDITIONS FOR PURCHASE OF SHARES
1. Authorization and Sale of the Shares. Subject to the terms and
conditions of this Agreement, the Company has authorized the sale of up to
670,000 shares of the Common Stock, $.0001 par value (the "Stock"), of the
Company.
2. Agreement to Sell and Purchase the Stock. At the Closing (as defined in
Section 3), the Company will sell to the Investor, and the Investor will
purchase from the Company, upon the terms and conditions hereinafter set forth,
the Stock at the purchase price set forth on the signature page hereto.
3. Delivery of the Stock at Closing. The completion of the purchase and
sale of the Stock (the "Closing") shall occur at a place and time (the "Closing
Date") specified by the Company, not later than 90 days after the date the
Registration Statement (as hereinafter defined) is filed, and of which the
Investor will be notified in advance by the Company. At the Closing, the Company
shall deliver to the Investor one or more stock certificates representing the
number of shares of Stock set forth on the signature page hereto, each such
certificate to be registered in the name of the Investor or, if so indicated on
the signature page hereto, in the name of a nominee designated by the Investor.
The Company's obligation to close the transaction shall be subject to the
following conditions, any one or more of which may be waived by the Company: (a)
receipt by the Company of a certified or official bank check or wire transfer of
funds in the full amount of the purchase price for the Stock being purchased
hereunder; and (b) the accuracy of the representations and warranties made by
the Investor and the fulfillment of those undertakings of the Investor to be
fulfilled prior to the Closing.
The Investor's obligation to close the transaction shall be subject to the
following condition: the Company shall have filed a registration statement
within ten (10) business days of the date on which the Agreement is executed
(the "Pricing Date") and the Registration Statement shall have been declared
effective by the Securities and Exchange Commission ("SEC") on or prior to the
90th day after the date of its filing. The Investor acknowledges that the
Closing shall occur simultaneously with the SEC's granting of the effectiveness
of the Registration Statement.
4. Representations, Warranties and Covenants of the Company. The Company
hereby represents and warrants to, and covenants with, the Investor as follows:
4.1. Organization. The Company is duly organized and validly existing in
good standing under the laws of the State of Delaware. The Company has full
power and authority to own, operate and occupy its properties and conduct its
business as presently conducted and as described in its Annual Report on Form
10-K for the year ended July 31, 1997 (the "10-K"), the Company's Quarterly
Report on Form 10-Q for the fiscal quarter ended October 31, 1997, and the
Company's Proxy Statement dated
<PAGE>
November 13, 1997 relating to the Company's 1998 Annual Meeting of Stockholders;
the foregoing filings constitute all documents filed by the Company since the
date of the 10-K with the Securities and Exchange Commission (the "SEC") under
the Securities Exchange Act of 1934, as amended (all such documents are
hereinafter referred to as the "1934 Act Filings"), and is registered or
qualified to do business and in good standing in each jurisdiction in which it
owns or leases property or transacts business and where the failure to be so
qualified would have a material adverse effect upon the business, financial
condition, properties or operations of the Company. The Company has no
subsidiaries.
4.2. Due Authorization. The Company has all requisite power and authority
to execute, deliver and perform its obligations under this Agreement, and this
Agreement has been duly authorized and validly executed and delivered by the
Company and constitutes the legal, valid and binding agreement of the Company
enforceable against the Company in accordance with its terms, except as rights
to indemnity and contribution may be limited by state or federal securities laws
or the public policy underlying such laws, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' and contracting parties' rights generally and
except as enforceability may be subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
4.3. Non-Contravention. The execution and delivery of the Agreement, the
issuance and sale of the Stock to be sold by the Company hereunder, the
fulfillment of the terms of the Agreement and the consummation of the
transactions contemplated hereby will not conflict with or constitute a
violation of, or default (with the passage of time or otherwise) under, any
material agreement or instrument to which the Company is a party or by which it
is bound or the charter, by-laws or other organizational documents of the
Company, nor result in the creation or imposition of any lien, encumbrance,
claim, security interest or restriction whatsoever upon any of the material
properties or assets of the Company or an acceleration of indebtedness pursuant
to any obligation, agreement or condition contained in any material bond,
debenture, note or any other evidence of indebtedness or any material indenture,
mortgage, deed of trust or any other agreement or instrument to which the
Company is a party or by which it is bound or to which any of the property or
assets of the Company is subject, nor conflict with, or result in a violation
of, any law, administrative regulation, ordinance or order of any court or
governmental agency, arbitration panel or authority applicable to the Company.
No consent, approval, authorization or other order of, or registration,
qualification or filing with, any regulatory body, administrative agency, or
other governmental body in the United States is required for the valid issuance
and sale of the Securities, other than such as have been or will be made or
obtained.
4.4. Capitalization. The capitalization of the Company as of July 31, 1997
is as set forth in the 10-K. The Company has not issued any capital stock since
that date other than as contemplated by or described in the 1934 Act Filings,
including the issuance in March 1998 of shares of Common Stock in conversion of
the Company's
-2-
<PAGE>
Series B Preferred Stock and payment of dividends thereon. At March 4, 1998 the
Company had outstanding 10,551,888 shares of Common Stock, holds in treasury
11,875 shares of Common Stock and has outstanding options and warrants to
purchase 1,599,586 and 220,000 shares of Common Stock, respectively. The Stock
to be sold pursuant to the Agreement has been duly authorized, and when issued
and paid for in accordance with the terms of the Agreement, will be validly
issued, fully paid and nonassessable. All outstanding shares of capital stock of
the Company have been duly and validly issued and are fully paid and
nonassessable. Except as set forth above there are no outstanding rights
(including, without limitation, preemptive rights), warrants or options to
acquire, or instruments convertible into or exchangeable for, any shares of
capital stock or other equity interest in the Company, or any contract,
commitment, agreement, understanding or arrangement of any kind relating to the
issuance of any capital stock of the Company, any such convertible or
exchangeable securities or any such rights, warrants or options, except for the
rights granted to the holders of Common Stock pursuant to the Rights Agreement,
dated February 14, 1997, by and between the Company and Continental Stock
Transfer & Trust Company.
4.5. Legal Proceedings. There is no material legal or governmental
proceeding pending or, to the knowledge of the Company, threatened or
contemplated to which the Company is or may be a party or of which the business
or property of the Company is or may be subject that is not disclosed in the
1934 Act Filings, and to the Company's knowledge no basis exists for any (i)
legal proceeding by or against the Company or (ii) governmental proceeding or
investigation of the Company.
4.6. No Violations. The Company is not in violation of its charter, bylaws,
or other organizational document, in violation of any law, administrative
regulation, ordinance, order, judgment or decree of any court or governmental
agency, arbitration panel or authority applicable to the Company, except for any
violations which, individually or in the aggregate, would have a material
adverse effect on the business or financial condition of the Company. The
Company is not in default in any material respect in the performance of any
obligation, agreement or condition contained in any bond, debenture, note or any
other evidence of indebtedness in any indenture, mortgage, deed of trust or any
other agreement or instrument to which the Company is a party or by which the
Company is bound or by which the properties of the Company are bound or
affected, and there exists no condition which, with the passage of time or
otherwise, would constitute a material default under any such document or
instrument or result in the imposition of any material penalty or the
acceleration of any material indebtedness.
4.7. Governmental Permits, Etc. The Company has all necessary franchises,
licenses, permits, certificates and other authorizations from any foreign,
federal, state or local government or governmental agency, department, or body
that are currently necessary for the operation of the business of the Company as
currently conducted and as described in the 1934 Act Filings, the absence of
which would have a material adverse effect on the Company.
-3-
<PAGE>
4.8. Intellectual Property. Except as described in the 1934 Act Filings,
the Company owns or possesses sufficient rights to use all material patents,
patent rights, trademarks, copyrights, licenses, inventions, trade secrets and
know-how described or referred to in the 1934 Act Filings as owned or used by it
or that are necessary for the conduct of its business as now conducted as
described in the 1934 Act Filings. Except as described in the 1934 Act Filings,
the Company has not received any notice of, and has no knowledge of or reason to
believe that, any infringement of or conflict with any right of others with
respect to any patent, patent right, trademark, copyright, invention, trade
secret or know-how that, individually or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a material adverse effect on
the condition (financial or otherwise), earnings, operations, business or
business prospects of the Company. Except as described in 1934 Act Filings, the
Company has not entered into or become party to any development, work for hire,
license or other agreement pursuant to which they have secured the right or
obligation to use, or granted others the right or obligation to use, any
trademarks, servicemarks, trade names, copyrights, patents or any other
intellectual property right. All proprietary technical information developed by
or belonging to the Company which has not been patented has been kept
confidential.
4.9. Financial Statements. The financial statements of the Company and the
related notes contained in the 1934 Act Filings present fairly, subject to
customary year end adjustments in the case of the quarterly statements, the
financial position of the Company as of the dates indicated, and the results of
its operations and cash flows for the periods therein specified and the assets
and liabilities of the Company have not changed significantly since the date of
the most recent 1934 Act Filing except for changes in the ordinary course of
business or resulting from the Company's conversion of its Series B Preferred
Stock and payment of dividends thereon. Such financial statements (including the
related notes) have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods
therein specified, except as disclosed in the 1934 Act Filings. The other
financial information contained in the 1934 Act Filings has been prepared on a
basis consistent with the financial statements of the Company.
4.10. No Material Adverse Change. Subsequent to the respective dates as of
which information is given in the 1934 Act Filings, and except as contemplated
or described in the 1934 Act Filings, the Company has not incurred any material
liabilities or obligations, direct or contingent, other than in the ordinary
course of business, and there has not been any material adverse change in its
condition (financial or other), results of operations, business, prospects, key
personnel or capitalization.
4.11. Additional Information. The Company has filed in a timely manner all
documents that the Company was required to file under the Securities Exchange
Act of 1934, as amended (the "Exchange Act") during the 12 months preceding the
date of this Agreement. The 1934 Act Filings complied in all material respects
with the SEC's requirements as of their respective filing dates, and the
information contained therein as of the respective dates thereof did not contain
any untrue statement of material fact
-4-
<PAGE>
or omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading.
4.12. Listing. The Company shall comply with all requirements of the
National Association of Securities Dealers, Inc. with respect to the issuance of
the Stock and the listing thereof on the Nasdaq National Market.
4.13. Operation of the Business. Except as described in the 1934 Act
Filings, the Company owns and retains all such assets, tangible or intangible,
contractual, license and leasehold rights necessary for it (i) to operate its
business as described in the 1934 Act Filings, and (ii) to utilize the assets
and contractual, license and leasehold rights in the same manner as they were
utilized at the Closing Date, except where the failure to own, retain or utilize
such assets or rights will not have a material adverse effect upon the business
or financial condition of the Company.
4.14. Environmental Matters. The Company is in compliance in all respects
with all applicable local, state and federal safety and environmental laws,
rules, orders and regulations ("Environmental Laws") under the jurisdiction of
the USDA, BATF, USNRC and CTDEP and any other federal or state agency with
applicable programs relating to biosafety, chemical hygiene, radiation safety,
blood borne pathogens, hazard communication, hazardous waste management and
chemical, medical and radiation waste disposal, except where the failure to
comply with the Environmental Laws will not have a material adverse effect upon
the business or financial condition of the Company.
4.15. Reliance. The Company acknowledges that the Investor has reviewed and
relied upon the 1934 Act Filings in making its decision to purchase the Stock.
5. Representations, Warranties and Covenants of the Investor.
(a) The Investor represents and warrants to, and covenants with, the
Company that: (i) the Investor is an "accredited investor" as defined in
Regulation D under the Securities Act of 1933, as amended (the "Securities Act")
and the Investor is also knowledgeable, sophisticated and experienced in making,
and is qualified to make decisions with respect to investments in shares
presenting an investment decision like that involved in the purchase of the
Stock, including investments in securities issued by the Company and investments
in comparable companies, and has requested, received, reviewed and considered
all information it deemed relevant in making an informed decision to purchase
the Stock; (ii) the Investor is acquiring the Stock in the ordinary course of
its business and for its own account for investment only and with no present
intention of distributing the Stock or any arrangement or understanding with any
other persons regarding the distribution of the Stock; (iii) the Investor will
not, directly or indirectly, offer, sell, pledge, transfer or otherwise dispose
of (or solicit any offers to buy, purchase or otherwise acquire or take a pledge
of) any of the shares of Stock except in compliance with the Securities Act,
applicable state securities laws and the respective rules and regulations
promulgated thereunder; (iv) the Investor has answered all questions on the
signature page hereto for use in preparation for the
-5-
<PAGE>
Registration Statement (referred to below) and the answers thereto are true and
correct as of the date hereof and will be true and correct as of the Closing
Date; (v) the Investor will notify the Company immediately of any change in any
of such information until such time as the Investor has sold all of its shares
of Stock or until the Company is no longer required to keep the Registration
Statement effective; and (vi) the Investor has, in connection with its decision
to purchase the number of shares of Stock set forth on the signature page
hereto, relied only upon the representations and warranties of the Company
contained herein.
(b) The Investor acknowledges, represents and agrees that no action has
been or will be taken in any jurisdiction outside the United States by the
Company that would permit an offering of the shares of Stock, or possession or
distribution of offering materials in connection with the issue of the shares of
Stock, in any jurisdiction outside the United States where action for that
purpose is required. The Investor will comply with all applicable laws and
regulations in each foreign jurisdiction in which it purchases, offers, sells or
delivers shares of Stock or has in its possession or distributes any offering
material, in all cases at its own expense.
(c) The Investor hereby covenants with the Company not to make any sale of
the shares of Stock without complying with the provisions of this Agreement,
including Section 7.2 hereof, and without effectively causing the prospectus
delivery requirement under the Securities Act to be satisfied. The Investor
acknowledges that there may occasionally be times when the Company, based on the
advice of its counsel, determines that it must suspend the use of the prospectus
forming a part of the Registration Statement until such time as an amendment to
the Registration Statement has been filed by the Company and declared effective
by the SEC or until the Company has amended or supplemented such prospectus.
(d) The Investor further represents and warrants to, and covenants with,
the Company that (i) the Investor has full right, power, authority and capacity
to enter into this Agreement and to consummate the transactions contemplated
hereby and has taken all necessary action to authorize the execution, delivery
and performance of this Agreement, and (ii) upon the execution and delivery of
this Agreement, this Agreement shall constitute a valid and binding obligation
of the Investor enforceable in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' and contracting
parties' rights generally and except as enforceability may be subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law) and except as the indemnification agreement of
the Investor herein may be legally unenforceable.
(e) Investor will not, prior to the effectiveness of the Registration
Statement, sell, offer to sell, solicit offers to buy, dispose of, loan, pledge
or grant any right with respect to (collectively, a "Disposition"), the Common
Stock of the Company, nor will Investor engage in any hedging or other
transaction which is designed to or could reasonably be expected to lead to or
result in a Disposition of Common Stock of the Company by the Investor or any
other person or entity. Such prohibited hedging or
-6-
<PAGE>
other transactions would include without limitation effecting any short sale or
having in effect any short position (whether or not such sale or position is
against the box and regardless of when such position was entered into) or any
purchase, sale or grant of any right (including without limitation any put or
call option) with respect to the Common stock of the Company or with respect to
any security (other than a broad-based market basket or index) that includes,
relates to or derives any significant part of its value from the Common Stock of
the Company.
(f) The Investor understands that nothing in the 1934 Act Filings, this
Agreement or any other materials presented to the Investor in connection with
the purchase and sale of the Stock constitutes legal, tax or investment advice.
The Investor has consulted such legal, tax and investment advisors as it, in its
sole discretion, has deemed necessary or appropriate in connection with the
purchase of the Stock.
6. Survival of Representations, Warranties and Agreements. Notwithstanding
any investigation made by any party to this Agreement, all covenants,
agreements, representations and warranties made by the Company and the Investor
herein shall survive the execution of this Agreement, the delivery to the
Investor of the shares of Stock being purchased and the payment therefor.
7. Registration of the Stock; Compliance with the Securities Act.
7.1. Registration Procedures and Expenses. The Company shall:
(a) use its best efforts, subject to receipt of necessary information
from the Investor, to prepare and file with the SEC, within ten (10) business
days of the Pricing Date, a Registration Statement on Form S-3 (the
"Registration Statement") to enable the sale of the Stock by the Investor from
time to time through the automated quotation system of the Nasdaq National
Market or in privately-negotiated transactions;
(b) use its best efforts, subject to receipt of necessary information
from the Investor, to cause the Registration Statement to become effective
within 90 days after the Registration Statement is filed by the Company;
(c) prepare and file with the SEC such amendments and supplements to
the Registration Statement and the prospectus used in connection therewith as
may be necessary to keep the Registration Statement effective for a period not
exceeding, with respect to each Investor's shares purchased hereunder, the
earlier of (i) the second anniversary of the Closing Date, (ii) such time after
the first anniversary of the Closing Date when such Investor's shares of Stock
purchased hereunder and then owned by such Investor represent no more than one
percent of the Company's outstanding Common Stock, or (iii) such time as all
shares purchased by such Investor in this offering have been sold pursuant to a
registration statement.
(d) furnish to the Investor with respect to the Stock registered under
the Registration Statement (and to each underwriter, if any, of such Stock) such
-7-
<PAGE>
number of copies of prospectuses and preliminary prospectuses in conformity with
the requirements of the Securities Act and such other documents as the Investor
may reasonably request, in order to facilitate the public sale or other
disposition of all or any of the Stock by the Investor, provided, however, that
the obligation of the Company to deliver copies of prospectuses or preliminary
prospectuses to the Investor shall be subject to the receipt by the Company of
reasonable assurances from the Investor that the Investor will comply with the
applicable provisions of the Securities Act and of such other securities or blue
sky laws as may be applicable in connection with any use of such prospectuses or
preliminary prospectuses;
(e) file documents required of the Company for normal blue sky
clearance in states specified in writing by the Investor; provided, however,
that the Company shall not be required to qualify to do business or consent to
service of process in any jurisdiction in which it is not now so qualified or
has not so consented; and
(f) bear all expenses in connection with the procedures in paragraph
(a) through (e) of this Section 7.1 and the registration of the Stock pursuant
to the Registration Statement, other than fees and expenses, if any, of counsel
or other advisers to the Investor.
The Company understands that the Investor disclaims being an underwriter,
but the Investor being deemed an underwriter shall not relieve the Company of
any obligations it has hereunder.
7.2. Transfer of Stock After Registration.
(a) The Investor agrees that it will not effect any disposition of the
Stock or its right to purchase the Stock that would constitute a sale within the
meaning of the Securities Act except as contemplated in the Registration
Statement referred to in Section 7.1 and described below, and that it will
promptly notify the Company of any changes in the information set forth in the
Registration Statement regarding the Investor or its Plan of Distribution.
(b) The Investor agrees that to sell shares pursuant to the
Registration Statement, the Investor will follow the requirements of this
Section 7.2(b).
(i) The Investor must notify the Company three (3) business days prior
to sale through the Company's counsel, Fulbright & Jaworski L.L.P., at the
address provided in Section 8(b) hereto, of its intent to sell, so as to confirm
that no event has occurred or is expected to occur which would make the
Registration Statement false or misleading, and to ensure that the Registration
Statement in its possession is current and has not been suspended. The Company
may refuse to permit the Investor to resell pursuant to the Registration
Statement, provided that it must notify the Investor within three (3) business
days that such a sale would violate federal securities laws unless the
Registration Statement is updated. In such an event, the Company shall use its
best efforts to amend the Registration Statement if necessary and take all other
actions necessary to allow such sale under the federal securities laws within 10
business
-8-
<PAGE>
days of Investor's initial notification, and shall notify the Investor promptly
after it has determined that such sale has become permissible under the federal
securities laws. Notwithstanding the foregoing, within any twelve (12) month
period the Company shall not, except upon advice of counsel as to the necessity
pursuant to federal securities laws exercise its right to refuse to permit
resale of any shares of Stock pursuant to the Registration Statement (i) more
than three (3) times or (ii) for an aggregate period in excess of forty-five
(45) days. The Investor hereby covenants and agrees that it will not sell any
shares of Stock pursuant to the Registration Statement during the periods the
Registration Statement is withdrawn as set forth in this Section.
(ii) If the Company or its counsel does not, within such three business
days, notify the Investor that it is exercising its right to delay such sale,
the Investor may proceed with such sale provided that it arranges for delivery
of a current prospectus to the transferee. Upon receipt of a request therefor,
the Company has agreed to provide an adequate number of current prospectuses to
the Investor and to supply copies to any other parties requiring such
prospectuses.
(iii) The Investor must also deliver to the Company's counsel a Notice
of Sale substantially in the form attached hereto as Exhibit A, so that the
shares may be properly transferred.
7.3. Indemnification. For the purpose of this Section 7.3:
(i) the term "Selling Stockholder" shall include the Investor and any
affiliate of such Investor;
(ii) the term "Registration Statement" shall include any final prospectus,
exhibit, supplement or amendment included in or relating to the Registration
Statement referred to in Section 7.1;
(iii) the term "untrue statement" shall include any untrue statement or
alleged untrue statement, or any omission or alleged omission to state in the
Registration Statement a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(a) The Company agrees to indemnify and hold harmless each Selling
Stockholder from and against any losses, claims, damages or liabilities to which
such Selling Stockholder may become subject (under the Securities Act or
otherwise) insofar as such Losses (as used herein the term "Losses" means any
and all claims, demands, costs, losses, damages and liabilities, net of
insurance proceeds, and includes reasonable attorney's fees and costs incurred
in the investigation and defense of a claim, demand, cost, loss or liability),
claims, damages or liabilities (or actions or proceedings in respect thereof)
arise out of, or are based upon a breach by the Company of its representations,
warranties, covenants or obligations in this Agreement or any untrue statement
of a material fact contained in the Registration Statement on the effective date
thereof, or arise out of any failure by the Company to fulfill any undertaking
included in the
-9-
<PAGE>
Registration Statement and the Company will reimburse such Selling Stockholder
for any reasonable legal or other expenses reasonably incurred in investigating,
defending or preparing to defend any such action, proceeding or claim, or
preparing to defend any such action, proceeding or claim, provided, however,
that the Company shall not be liable in any such case to the extent that such
loss, claim, damage or liability arises out of, or is based upon, an untrue
statement made in such Registration Statement in reliance upon and in conformity
with written information furnished to the Company by or on behalf of such
Selling Stockholder specifically for use in preparation of the Registration
Statement, or the failure of such Selling Stockholder to comply with the
covenants and agreements contained in Sections 5(c) or 7.2 hereof respecting
sale of the Stock or any statement or omission in any Prospectus that is
corrected in any subsequent Prospectus that was delivered to the Investor prior
to the pertinent sale or sales by the Investor.
(b) The Investor agrees to indemnify and hold harmless the Company (and
each person, if any, who controls the Company within the meaning of Section 15
of the Securities Act, each officer of the Company who signs the Registration
Statement and each director of the Company) from and against any Losses, claims,
damages or liabilities to which the Company (or any such officer, director or
controlling person) may become subject (under the Securities Act or otherwise),
insofar as such Losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon, any failure to
comply with the covenants and agreements contained in Section 5(c) or 7.2 hereof
respecting sale of the Stock, or any untrue statement of a material fact
contained in the Registration Statement on the effective date thereof if such
untrue statement was made in reliance upon and in conformity with written
information furnished by or on behalf of the Investor specifically for use in
preparation of the Registration Statement, and the Investor will reimburse the
Company (or such officer, director or controlling person), as the case may be,
for any legal or other expenses reasonably incurred in investigating, defending
or preparing to defend any such action, proceeding or claim; provided, however,
that (i) the obligations of the Investor hereunder shall be limited to an amount
equal to the aggregate public offering price of the registered stock of such
Investor sold as contemplated herein, unless such liability arises out of or is
based upon willful misconduct by the Investor and (ii) the indemnity for untrue
statements or omissions described above, and the reimbursement obligation
relating thereto, shall not apply if the Investor provides the Company with
additional written information a reasonable time prior to the effectiveness of
the Registration Statement as is required to make the previously supplied
written information true and complete, together with a description in reasonable
detail of the information previously supplied which was untrue or complete.
(c) Promptly after receipt by any indemnified person of a notice of a claim
or the beginning of any action in respect of which indemnity is to be sought
against an indemnifying person pursuant to this Section 7.3, such indemnified
person shall notify the indemnifying person in writing of such claim or of the
commencement of such action, and, subject to the provisions hereinafter stated,
in case any such action shall be brought against an indemnified person and such
indemnifying person shall be entitled to participate therein, and, to the extent
it shall wish, to assume the defense
-10-
<PAGE>
thereof, with counsel reasonably satisfactory to such indemnified person. After
notice from the indemnifying person to such indemnified person of its election
to assume the defense thereof, such indemnifying person shall not be liable to
such indemnified person for any legal expenses subsequently incurred by such
indemnified person in connection with the defense thereof, provided, however,
that if there exists or shall exist a conflict of interest that would make it
inappropriate, in the opinion of counsel to the indemnified person, for the same
counsel to represent both the indemnified person and such indemnifying person or
any affiliate or associate thereof, the indemnified person shall be entitled to
retain its own counsel at the expense of such indemnifying person; provided,
however, that no indemnifying person shall be responsible for the fees and
expenses of more than one separate counsel for all indemnified parties.
(d) If the indemnification provided for in this Section 7.3 is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
or proceedings in respect thereof) referred to therein, then each indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative fault of
the Company on the one hand and the Investor on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company on the one hand or the Investor on the
other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the Investor agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by pro rata allocation or by any
other method of allocation which does not take into account the equitable
considerations referred to above in this subsection (d). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this subsection
(d) shall be deemed to include any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this subsection (d), the
Investor shall not be required to contribute any amount in excess of the amount
by which the net amount received by the Investor from the sale of the Stock to
which such loss relates exceeds the amount of any damages which such Investor
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
7.4. Termination of Conditions and Obligations. The conditions precedent
imposed by Section 5 or this Section 7 upon the transferability of the Stock
shall cease and terminate as to any particular number of the shares of Stock
when such Stock shall have been effectively registered under the Securities Act
and sold or otherwise disposed
-11-
<PAGE>
of in accordance with the intended method of disposition set forth in the
Registration Statement covering such Stock or at such time as an opinion of
counsel satisfactory to the Company shall have been rendered to the effect that
such conditions are not necessary in order to comply with the Securities Act.
7.5. Information Available. So long as the Registration Statement is
effective covering the resale of Stock owned by the Investor, the Company will
furnish to the Investor:
(a) as soon as practicable after available one copy of (i) its Annual
Report to Stockholders (which Annual Report shall contain financial statements
audited in accordance with generally accepted accounting principles by a
national firm of certified public accountants), (ii) if not included in
substance in the Annual Report to Stockholders, its Annual Report on Form 10-K,
(iii) if not included in substance in its Quarterly Reports to Stockholders, its
Quarterly Reports on Form 10-Q, and (iv) a full copy of the particular
Registration Statement covering the Stock (the foregoing, in each case,
excluding exhibits);
(b) upon the reasonable request of the Investor, all exhibits excluded by
the parenthetical to subparagraph (a)(iv) of this Section 7.5 and all other
information that is made available to stockholders; and
(c) upon the reasonable request of the Investor, an adequate number of
copies of the prospectuses to supply to any other party requiring such
prospectuses;
and the Company, upon the reasonable request of the Investor, will meet with the
Investor or a representative thereof at the Company's headquarters to discuss
all information relevant for disclosure in the Registration Statement covering
the Stock and will otherwise cooperate with any Investor conducting an
investigation for the purpose of reducing or eliminating such Investor's
exposure to liability under the Securities Act, including the reasonable
production of information at the Company's headquarters; provided, that, the
Company shall not be required to disclose any confidential information to or
meet at its headquarters with any Investor until and unless the Investor shall
have entered into a confidentiality agreement in the form and substance
reasonably satisfactory to the Company with the Company with respect thereto.
8. Notices. All notices, requests, consents and other communications
hereunder shall be in writing, shall be mailed by first-class registered or
certified airmail, or nationally recognized overnight express courier, postage
prepaid, and shall be deemed given when so mailed and shall be delivered as
addressed as follows:
(a) if to the Company, to:
Alexion Pharmaceuticals, Inc.
25 Science Park, Suite 360
New Haven, Connecticut 06511
-12-
<PAGE>
Attn: David W. Keiser or Barry Luke
Phone: 203-776-1790
Telecopy: 203-776-2089
with a copy mailed to:
Fulbright & Jaworski L.L.P.
666 Fifth Avenue
New York, NY 10103
Attn: Lawrence A. Spector or Merrill M. Kraines
Phone: 212-318-3000
Telecopy: 212-752-5958
(b) if to the Investor, at its address on the signature page
hereto, or at such other address or addresses as may have been
furnished to the Company in writing.
with a copy mailed to:
Baker & McKenzie
815 Connecticut Avenue, N.W.
Washington, D.C. 20006
Attn: Daniel Goelzer, Esq.
Phone: (202) 452-7000
Facsimile: (202) 452-7074
9. Changes. This Agreement may not be modified or amended except pursuant
to an instrument in writing signed by the Company and the Investor.
10. Headings. The headings of the various section of this Agreement have
been inserted for convenience of reference only and shall not be deemed to be
part of this Agreement.
11. Severability. In case any provision contained in this Agreement should
be invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way
be affected or impaired thereby.
12. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware and the federal law of the
United States of America.
13. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument, and shall become effective
when one or more counterparts have been signed by each party hereto and
delivered to the other parties.
-13-
<PAGE>
Exhibit A
---------
Date: ______________
Lawrence A. Spector, Esq. or Merrill Kraines, Esq.
Fulbright & Jaworski L.L.P.
666 Fifth avenue
New York, NY 10103
Re: Alexion Pharmaceuticals, Inc.
INVESTOR'S CERTIFICATE OF SUBSEQUENT SALE
The undersigned, an officer of, or other person duly authorized by
[official name of shareholder] ____________________ ("Shareholder") hereby
certifies that Shareholder has sold [number] ______ shares of Alexion
Pharmaceuticals, Inc. Common Stock on [date] in accordance with registration
statement number [fill in number or otherwise identify registration statement]
__________ and the requirements of delivering a current prospectus has been
connection with such sale.
Print or Type:
Name of Investor
(Individual or Institution): _____________________________
Name of Individual representing
Investor (if an Institution): ____________________________
Title of Individual representing
Investor (if an Institution): ____________________________
Signature by:
Individual Investor or
Individual representing Investor: ________________________
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES ISSUABLE
UPON EXERCISE THEREOF MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (i) AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), (ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE ACT (OR ANY
SIMILAR RULE UNDER THE ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii)
AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO
COUNSEL FOR THE ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER THE ACT IS
AVAILABLE.
THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.
EXERCISABLE ON OR BEFORE
5:30 P.M., NEW YORK TIME, February 27, 2001
No. W-___ Warrants to Purchase
________ Shares of Common Stock
WARRANT CERTIFICATE
This Warrant Certificate certifies that _______, or registered
assigns, is the registered holder of _______ Warrants to purchase initially, at
any time from August 27, 1997 until 5:30 p.m. New York time on February 27, 2001
("Expiration Date"), up to _________ fully-paid and non-assessable shares of
common stock, ("Common Stock") of ALEXION PHARMACEUTICALS, INC., a Delaware
corporation (the "Company"), (one share of Common Stock referred to individually
as a "Security" and collectively as the "Securities") at the initial exercise
price, subject to adjustment in certain events (the "Exercise Price"), of $9.90
per share of Common Stock upon surrender of this Warrant Certificate and payment
of the Exercise Price at an office or agency of the Company, but subject to the
conditions set forth herein and in the warrant agreement dated as of February
28, 1996 between the Company and JOSEPHTHAL LYON & ROSS INCORPORATED (the
"Warrant Agreement"). Payment of the Exercise Price shall be made by certified
or official bank check in New York Clearing House funds payable to the order of
the Company.
No Warrant may be exercised after 5:30 p.m., New York time, on
the Expiration Date, at which time all Warrants evidenced hereby, unless
exercised prior thereto, hereby shall thereafter be void.
The Warrants evidenced by this Warrant Certificate are part of
a duly authorized issue of Warrants issued pursuant to the Warrant Agreement,
which Warrant Agreement is hereby incorporated by reference in and made a part
of this
<PAGE>
instrument and is hereby referred to for a description of the rights, limitation
of rights, obligations, duties and immunities thereunder of the Company and the
holders (the words "holders" or "holder" meaning the registered holders or
registered holder) of the Warrants.
The Warrant Agreement provides that upon the occurrence of
certain events the Exercise Price and the type and/or number of the Company's
securities issuable thereupon may, subject to certain conditions, be adjusted.
In such event, the Company will, at the request of the holder, issue a new
Warrant Certificate evidencing the adjustment in the Exercise Price and the
number and/or type of securities issuable upon the exercise of the Warrants;
provided, however, that the failure of the Company to issue such new Warrant
Certificates shall not in any way change, alter, or otherwise impair, the rights
of the holder as set forth in the Warrant Agreement.
Upon due presentment for registration of transfer of this
Warrant Certificate at an office or agency of the Company, a new Warrant
Certificate or Warrant Certificates of like tenor and evidencing in the
aggregate a like number of Warrants shall be issued to the transferee(s) in
exchange for this Warrant Certificate, subject to the limitations provided
herein and in the Warrant Agreement, without any charge except for any tax or
other governmental charge imposed in connection with such transfer.
Upon the exercise of less than all of the Warrants evidenced
by this Certificate, the Company shall forthwith issue to the holder hereof a
new Warrant Certificate representing such number of unexercised Warrants.
The Company may deem and treat the registered holder(s) hereof
as the absolute owner(s) of this Warrant Certificate (notwithstanding any
notation of ownership or other writing hereon made by anyone), for the purpose
of any exercise hereof, and of any distribution to the holder(s) hereof, and for
all other purposes, and the Company shall not be affected by any notice to the
contrary.
All terms used in this Warrant Certificate which are defined
in the Warrant Agreement shall have the meanings assigned to them in the Warrant
Agreement.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be duly executed under its corporate seal.
Dated as of March 4, 1996
ALEXION PHARMACEUTICALS, INC.
[SEAL]
By: /s/ Leonard Bell
---------------------------------------------
Name: Leonard Bell
Title: President and Chief Executive Officer
Attest:
/s/ David Keiser
- ------------------------------
David Keiser
Executive Vice President and
Chief Operating Officer
ARTHUR ANDERSON LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated August 29, 1997,
included in Alexion Pharmaceuticals, Inc.'s Form 10-K for the year ended July
31, 1997, and to all references to our firm included in this registration
statement.
/s/ Arthur Andersen LLP
Hartford, Connecticut
March 6, 1998
