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FILED PURSUANT TO RULE 424(B)(3) REGISTRATION NO. 333-52886
[ALEXION LOGO]
151,898 SHARES OF COMMON STOCK
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Alexion Pharmaceuticals, Inc.'s common stock trades on the Nasdaq National
Market under the ticker symbol "ALXN." On December 27, 2000, the closing sale
price of the common stock was $65.00.
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The stockholders of Alexion Pharmaceuticals, Inc. listed in this
prospectus are offering and selling an aggregate of 151,898 shares of our common
stock under this prospectus. We issued these selling stockholders their common
stock on September 23, 2000 in connection with our acquisition of Prolifaron,
Inc., which was owned by these stockholders.
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The selling stockholders (and their donees and pledgees) may offer their
Alexion common stock through public or private transactions, on or off the
United States exchanges, at prevailing market prices, or at privately negotiated
prices.
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SEE "RISK FACTORS" BEGINNING ON PAGE 3 FOR A DISCUSSION OF CERTAIN FACTORS
THAT YOU SHOULD CONSIDERED BEFORE YOU INVEST IN THE SHARES BEING SOLD WITH THIS
PROSPECTUS.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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The date of this Prospectus is January 5, 2001
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TABLE OF CONTENTS
PAGE
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Our Company..................................................................i
Recent Developments..........................................................2
Risk Factors.................................................................3
Special Note Regarding Forward-Looking Statements............................9
Use of Proceeds..............................................................9
Dividend Policy..............................................................9
Selling Stockholders.........................................................9
Plan of Distribution........................................................10
Legal Matters...............................................................11
Experts.....................................................................11
Where You Can Find More Information.........................................11
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OUR COMPANY
THIS SUMMARY PROVIDES AN OVERVIEW OF SELECTED INFORMATION AND DOES NOT
CONTAIN ALL THE INFORMATION YOU SHOULD CONSIDER. YOU SHOULD READ THE ENTIRE
PROSPECTUS, INCLUDING THE SECTION ENTITLED "RISK FACTORS," CAREFULLY BEFORE
MAKING AN INVESTMENT DECISION.
We are a biopharmaceutical company developing treatments for diseases in
humans. Our program for developing genetically altered, or humanized, antibodies
for the treatment of disease is our most extensive and advanced product
development program.
Antibodies are proteins that bind to specific targets and are used by the
immune system to protect the body. We have proprietary rights to humanized
antibodies that can potentially be used in treatments for heart disease,
diseases of the immune system, inflammation and cancer. In September 2000, we
augmented our antibody product development program through the acquisition of
Prolifaron, Inc. Prolifaron was a biopharmaceutical company with rights to a
portfolio of potential antibody product candidates and with know-how and
proprietary technology for developing antibodies.
Two of our antibody product candidates are undergoing clinical trials that
test for safety, dosing and effectiveness in humans. These antibodies target
specific diseases that arise when the human immune system induces undesired
inflammation. These antibodies are designed to block the components of the human
immune system that cause undesired inflammation while allowing beneficial
components of the immune system to remain functional. The specific component of
the human immune system which these two product candidates are designed to block
is called "complement."
We call one of the antibodies that is in clinical trials Pexelizumab
(5G1.1-SC). Pexelizumab (5G1.1-SC) is being tested in Phase IIb clinical trials
for the treatment of acute inflammation in patients caused by the trauma of
heart and lung bypass procedures during open heart surgery and in Phase II
clinical trials for the treatment of acute inflammation in patients caused by
heart attacks. We call the second antibody product candidate that is in clinical
trials 5G1.1. 5G1.1 is in Phase II trials for the treatment of rheumatoid
arthritis, a chronic autoimmune disease, and membranous nephritis, a kidney
disease. We are also testing 5G.1.1 in Phase Ib clinical trials in patients for
the treatment of psoriasis, a skin disorder, dermatomyositis, a muscle disorder,
and pemphigoid, a severe inflammatory skin disorder.
We have retained all of our rights to 5G1.1. We have a collaboration
agreement with Procter & Gamble Pharmaceuticals with respect to the development
and commercialization of Pexelizumab (5G1.1-SC). The initial subject of the
collaboration is to study the use of Pexelizumab (5G1.1-SC) for the treatment of
inflammation caused by heart and lung bypass procedures during open heart
surgery, heart attacks and angioplasty procedures for un-blocking clogged
arteries.
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In addition to our program for developing products that inhibit the
inflammatory effects of complement and our technology programs focusing on human
antibody discovery and development, we are developing another type of
anti-inflammatory drug known as Apogens. Apogens are designed to block
disease-causing T-cells, another component of the human immune system. We are
currently completing preclinical studies of our first Apogen, targeting the
treatment of patients with multiple sclerosis.
We are also developing methods of blocking the human immune system to
permit the use of cells and organs from non-human species in the treatment of
diseases in humans. This product development program is initially targeting the
treatment of patients with Parkinson's disease and patients with spinal cord
injury with genetically altered pig cells.
We were incorporated in Delaware in January 1992. Our principal executive
offices are located at 352 Knotter Drive, Cheshire, Connecticut 06410, and our
telephone number is (203) 272-2596.
RECENT DEVELOPMENTS
CLINICAL STUDIES
In December 2000, we announced that we had completed enrollment and
treatment in a Phase II clinical trial testing the safety and efficacy of 5G1.1
in approximately 200 patients with rheumatoid arthritis. These patients received
treatment with either 5G1.1 or placebo for a three-month period. In August 2000
we also announced that we had commenced enrollment in an open-label trial of
5G1.1 in rheumatoid arthritis patients, which is designed to test safety over a
twelve-month treatment period.
In September 2000, we announced that we had completed enrollment in a
Phase IIb clinical trial testing the safety and efficacy of Pexelizumab
(5G1.1-SC) in approximately 1,000 patients undergoing heart and lung bypass
procedures during open heart surgery. In September 2000, we also announced that
the FDA designated Pexelizumab (5G1.1-SC) for the treatment of patients
undergoing heart and lung bypass procedures during open heart surgery as a "fast
track" product eligible for expedited development and FDA review.
In October 2000, we announced that the FDA granted Orphan Drug status to
5G1.1 for the treatment of patients with dermatomyositis, a severe inflammatory
muscle disorder. We are currently enrolling patients in a Phase Ib pilot
clinical trial that is designed to gather data regarding the safety and
biological and clinical effects of 5G1.1 in this patient population. The Orphan
Drug designation provides us with market exclusivity for seven years from the
drug's approval date.
PROLIFARON ACQUISITION
On September 23, 2000, we acquired Prolifaron, Inc., a privately-held
biopharmaceutical company located in San Diego, California. Prolifaron is
developing therapeutic antibodies addressing multiple diseases, including
cancer.
The acquisition was in the form of a merger of our new wholly owned
subsidiary, Alexion Antibody Technologies, Inc., and Prolifaron. In the merger,
we issued 355,594 shares of our common stock, to the stockholders of Prolifaron
and we are obligated to issue up to 44,364 shares of our common stock upon the
exercise of fully vested options granted under Prolifaron's stock option plan.
We accounted for the acquisition of Prolifaron using the purchase method of
accounting through the issuance of common stock and fully vested options having
an aggregate fair value of approximately $43.9 million. We agreed to register
the possible resale of those shares of common stock by the Prolifaron
stockholders. We are required to file a registration statement with the SEC
covering the resale of approximately half of the shares within 15 days after the
publication of consolidated financial statements for our fiscal quarter ending
October 31, 2000, for which this registration statement is intended. We are
required to file a registration statement with the SEC covering the resale of
the remaining half of the shares on or before April 30, 2001.
ARRADIAL LICENSE AGREEMENT
In October 2000, we entered into a license agreement with Arradial, Inc.,
a start-up company dedicated to the development and commercialization of
microarray assay technologies. We licensed our microarray assay technologies in
exchange for a 15% equity interest in Arradial and $200,000 in license payments.
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RISK FACTORS
YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS BEFORE YOU DECIDE
TO INVEST IN THE SECURITIES. YOU SHOULD ALSO CONSIDER THE OTHER INFORMATION IN
THIS PROSPECTUS AND INFORMATION INCORPORATED BY REFERENCE IN THIS PROSPECTUS.
THE RISKS AND UNCERTAINTIES BELOW ARE NOT THE ONLY ONES FACING ALEXION BECAUSE
WE ARE ALSO SUBJECT TO ADDITIONAL RISKS AND UNCERTAINTIES NOT PRESENTLY KNOWN TO
US. IF ANY OF THESE RISKS ACTUALLY OCCURS, OUR BUSINESS, FINANCIAL CONDITION,
OPERATING RESULTS OR CASH FLOWS COULD BE HARMED.
IF WE CONTINUE TO INCUR OPERATING LOSSES, WE MAY BE UNABLE TO CONTINUE OUR
OPERATIONS.
We have incurred losses since we started our company in January 1992. As
of October 31, 2000, we had an accumulated deficit of approximately $96.8
million. If we continue to incur operating losses and fail to become a
profitable company, we may be unable to continue our operations. Since we began
our business, we have focused on research and development of product candidates.
We have no products that are available for sale. We expect to continue to
operate at a net loss for at least the next several years as we continue our
research and development efforts, continue to conduct clinical trials and
develop manufacturing, sales, marketing and distribution capabilities. Our
future profitability depends on our receiving regulatory approval of our product
candidates and our ability to successfully manufacture and market approved
drugs. The extent of our future losses and the timing of our profitability are
highly uncertain.
IF WE DO NOT OBTAIN REGULATORY APPROVAL FOR OUR DRUG PRODUCTS WE WILL NOT BE
ABLE TO SELL OUR DRUG PRODUCTS.
We cannot sell or market our drugs without regulatory approval. If we
cannot obtain regulatory approval for our products, the value of our company and
our results of operations will be harmed. In the United States, we must obtain
approval from the U.S. Food and Drug Administration, or FDA, for each drug that
we intend to sell. Obtaining FDA approval is typically a lengthy and expensive
process, and approval is highly uncertain. Foreign governments also regulate
drugs distributed outside the United States. None of our product candidates has
received regulatory approval to be marketed and sold in the United States or any
other country. We do not anticipate receiving regulatory approval of any of our
product candidates for at least the next several years.
IF OUR DRUG TRIALS ARE DELAYED OR ACHIEVE UNFAVORABLE RESULTS, WE WILL NOT BE
ABLE TO OBTAIN REGULATORY APPROVAL FOR OUR PRODUCTS.
We must conduct extensive testing of our product candidates before we can
obtain regulatory approval for our products. We need to conduct both preclinical
animal testing and clinical human trials. These tests and trials may not achieve
favorable results. We would need to reevaluate any drug that did not test
favorably and either alter the drug or the dose, or abandon the drug development
project. In such circumstances, we would not be able to obtain regulatory
approval on a timely basis, if ever.
There are other reasons why drug testing could be delayed. For human
trials, patients must be recruited and each product candidate must be tested for
each clinical indication, at various doses and formulations. Also, to ensure
safety and effectiveness, the effect of drugs often must be studied over a long
period of time, especially for the chronic diseases that we are studying.
Unfavorable results or insufficient patient enrollment in our clinical trials
could delay or cause us to abandon a product development program.
Additional factors that can cause delay or termination of our clinical
trials include:
o slow patient enrollment;
o long treatment time required to demonstrate effectiveness;
o lack of sufficient supplies of the product candidate;
o adverse medical events or side effects in treated patients;
o lack of effectiveness of the product candidate being tested; and
o lack of sufficient funds.
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WE MAY EXPAND OUR BUSINESS THROUGH NEW ACQUISITIONS THAT COULD DISRUPT OUR
BUSINESS AND HARM OUR FINANCIAL CONDITION.
Our business strategy includes expanding our products and services, and we
may seek acquisitions to expand our business. Acquisitions involve numerous
risks, including
o substantial cash expenditures;
o potentially dilutive issuance of equity securities;
o incurrance of debt and contingent liabilities;
o difficulties in assimilating the operations of the acquired
companies;
o diverting our management's attention away from other business
concerns;
o risks of entering markets in which we have limited or no direct
experience; and
o the potential loss of key employees of the acquired companies.
We cannot assure you that any acquisition will result in long-term
benefits to us or that our management will be able to effectively manage the
acquired businesses. We may also incorrectly judge the value or worth of an
acquired company or business. In addition, our future success will depend in
part on our ability to manage the rapid growth associated with these
acquisitions. We cannot give assurances that we will be able to make the
combination of our business with the businesses of acquired companies work or be
successful. Furthermore, the development or expansion of our business or any
acquired business may require a substantial capital investment by us. We may not
have these necessary funds nor may they be readily available to us on acceptable
terms or at all. We may also seek to raise funds by selling shares of our stock,
which could dilute your ownership interest in our company.
On September 22, 2000, we purchased all of the capital stock and other
outstanding securities of Prolifaron, Inc., a privately held biopharmaceutical
company that is developing therapeutic antibodies addressing multiple disease,
including cancer, for approximately 400,000 shares of our outstanding capital
stock. We cannot give assurances that the integration of our businesses with the
businesses of Prolifaron will be successful or that we will be able to achieve
the synergies we anticipate.
IF WE FAIL TO OBTAIN THE CAPITAL NECESSARY TO FUND OUR OPERATIONS, WE WILL BE
UNABLE TO CONTINUE OR COMPLETE OUR PRODUCT DEVELOPMENT.
In the future, we will need to raise substantial additional capital to
fund operations and complete our product development. We may not get funding
when we need it or on favorable terms. If we cannot raise adequate funds to
satisfy our capital requirements, we may have to delay, scale-back or eliminate
our research and development activities or future operations. We might have to
license our technology to others. This could result in sharing revenues which we
might otherwise retain for ourselves. Any of these actions may harm our
business.
o The amount of capital we may need depends on many factors,
including:
o the progress, timing and scope of our research and development
programs;
o the progress, timing and scope of our preclinical studies and
clinical trials;
o the time and cost necessary to obtain regulatory approvals;
o the time and cost necessary to further develop manufacturing
processes, arrange for contract manufacturing or build manufacturing
facilities and obtain the necessary regulatory approvals for those
facilities;
o the time and cost necessary to develop sales, marketing and
distribution capabilities; and
o any new collaborative, licensing and other commercial relationships
that we may establish.
IF OUR COLLABORATION WITH PROCTER & GAMBLE IS TERMINATED, WE MAY BE UNABLE TO
COMMERCIALIZE PEXELIZUMAB (5G1.1-SC) IN THE TIME EXPECTED, IF AT ALL, AND OUR
BUSINESS WOULD BE HARMED.
We rely exclusively on Procter & Gamble to provide funding and
additional resources for the development and commercialization of Pexelizumab
(5G1.1-SC) These include funds and resources for:
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o clinical development and manufacturing;
o obtaining regulatory approvals; and
o sales, marketing and distribution efforts worldwide.
We cannot guarantee that Procter & Gamble will devote the resources
necessary to successfully develop and commercialize Pexelizumab (5G1.1-SC).
Either party may terminate our collaboration agreement for specified reasons,
including a material breach or the occurrence of a change of control.
Termination of our agreement with Procter & Gamble would cause
significant delays in the development of Pexelizumab (5G1.1-SC) and result in
additional development costs. We would need to fund the development and
commercialization of Pexelizumab (5G1.1-SC) on our own or identify a new
development partner. We might also have to repeat testing already completed
with Procter & Gamble.
IF WE ARE UNABLE TO ENGAGE AND RETAIN THIRD-PARTY COLLABORATORS, OUR RESEARCH
AND DEVELOPMENT EFFORTS MAY BE DELAYED.
We depend upon third-party collaborators to assist us in the development
of our product candidates. If any of our existing collaborators breaches or
terminates its agreement with us or does not perform its development work under
the agreement, we would experience significant delays in the development or
commercialization of our product candidates. We would also experience
significant delays if we cannot engage additional collaborators when required.
In either event, we would be required to devote additional funds or other
resources to these activities or to terminate them.
We cannot assure you that:
o we will be able to negotiate acceptable collaborative agreements to
develop or commercialize our products;
o any arrangements with third parties will be successful; or
o current or potential collaborators will not pursue treatments for
other diseases or seek other ways of developing treatments for our
disease targets.
IF WE CANNOT PROTECT THE CONFIDENTIALITY AND PROPRIETARY NATURE OF OUR TRADE
SECRETS, OUR BUSINESS AND COMPETITIVE POSITION WILL BE HARMED.
Our business requires using sensitive technology, techniques and
proprietary compounds which we protect as trade secrets. However, since we are a
small company, we also rely heavily on collaboration with suppliers, outside
scientists and other drug companies. Collaboration presents a strong risk of
exposing our trade secrets. If our trade secrets were exposed, it would help our
competitors and adversely affect our business prospects.
In order to more effectively protect our drugs and technology, we need to
obtain patents covering the drugs and technologies we develop. Our drugs are
expensive and time-consuming to test and develop. Without patent protection,
competitors may copy our methods, or the chemical structure or other aspects of
our drug. Even if we obtain patents, the patents may not be broad enough to
protect our drugs from copy-cat products.
IF WE ARE FOUND TO BE INFRINGING ON PATENTS OWNED BY OTHERS, WE MAY BE FORCED TO
OBTAIN A LICENSE TO CONTINUE THE SALE OR DEVELOPMENT OF OUR DRUGS AND/OR PAY
DAMAGES.
Parts of our technology, techniques and proprietary compounds and
potential drug candidates may conflict with patents owned by or granted to
others. If we cannot resolve these conflicts, we may be liable for damages or be
required to obtain costly licenses. For example, we are aware of broad patents
owned by others relating to the manufacture, use and sale of recombinant
humanized antibodies, recombinant humanized single chain antibodies, recombinant
human antibodies, recombinant human single chain antibodies, and genetically
engineered animals. Many of our products are genetically engineered antibodies,
including recombinant humanized antibodies, recombinant humanized single chain
antibodies, recombinant human antibodies, and recombinant human single chain
antibodies, and other products are tissues from animals.
We have received notices from the owners of some of these patents claiming
that their patents may be relevant to the development of some of our drug
candidates. In response to some of these notices, we have obtained licenses.
However, with regard to other patents, we have either determined in our judgment
that:
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o our products do not infringe the patents;
o we do not believe the patents are valid; or
o we have identified and are testing various modifications which we
believe should not infringe the patents and which should permit
commercialization of our product candidates.
Any patent holders could sue us for damages and seek to prevent us from
selling or developing our drugs. Legal disputes can be costly and time consuming
to defend. If any of these actions are successful, we could be required to pay
damages or to obtain a license to sell or develop our drugs. A required license
may not be available on acceptable terms, if at all.
IF THE TESTING OR USE OF OUR PRODUCTS HARMS PEOPLE, WE COULD BE SUBJECT TO
COSTLY AND DAMAGING PRODUCT LIABILITY CLAIMS.
The testing, manufacturing, marketing and sale of drugs for use in humans
exposes us to product liability risks. Side effects and other problems from
using our products could give rise to product liability claims against us. We
might have to recall our products, if any, from the marketplace. Some of these
risks are unknown at this time. For example, little is known about the potential
long-term health risks of transplanting pig tissue into humans, a goal of our
UniGraft product development program.
In addition, we may be sued by people who participate in our clinical
trials. A number of patients who participate in such trials are already
critically ill when they enter a study. Any waivers we may obtain from people
who sign up for our trials may not protect us from liability or litigation. Our
product liability insurance may not cover all potential liabilities. Moreover,
we may not be able to maintain our insurance on acceptable terms. As a result of
these factors, a product liability claim, even if successfully defended, could
have a material adverse effect on our business, financial condition or results
of operations.
IF WE CANNOT MANUFACTURE OUR DRUG CANDIDATES IN SUFFICIENT AMOUNTS AT ACCEPTABLE
COSTS AND ON A TIMELY BASIS, WE MAY BE UNABLE TO HAVE THE NECESSARY MATERIALS
FOR PRODUCT TESTING AND LATER, FOR POTENTIAL SALE IN THE MARKET. EITHER EVENT
WOULD HARM OUR BUSINESS.
For our drug trials, we need to produce sufficient amounts of product for
testing. We do not have the capacity to produce more than one product candidate
at a time. In addition, our small manufacturing plant cannot manufacture enough
of our product candidates for later stage clinical development. We depend on a
few outside suppliers for manufacturing. If we experience interruptions in the
manufacture of our products for testing, our drug development efforts will be
delayed. If any of our outside manufacturers stops manufacturing our products or
reduces the amount manufactured, we will need to find other alternatives. If we
are unable to find an acceptable outside manufacturer on reasonable terms, we
will have to divert our own resources to manufacturing. As a result, our ability
to conduct testing would be materially adversely affected. Submission of
products and new development programs for regulatory approval would be delayed.
Our competitive position and our prospects for achieving profitability could be
materially and adversely affected.
We have no experience or capacity for manufacturing drug products in
volumes that will be necessary to support commercial sales. If we are unable to
establish and maintain commercial scale manufacturing within our planned time
and cost parameters, sales of our products and our financial performance will be
adversely affected.
We may encounter problems in any of the following areas as we attempt to
increase the scale, process or size of manufacturing:
o design, construction and qualification of manufacturing facilities
that meet regulatory requirements;
o production yields from the manufacturing process;
o purity of our drug products;
o quality control and assurance;
o shortages of qualified personnel; and
o compliance with FDA regulations.
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IF OUR BUSINESS AND PRODUCTS, EVEN AFTER REGULATORY APPROVAL IS OBTAINED, FAIL
TO COMPLY WITH REGULATORY REQUIREMENTS, OUR ABILITY TO SELL PRODUCTS AND CONDUCT
BUSINESS WILL BE HARMED.
Even if we receive regulatory approval for any product, our business will
always be subject to substantial regulation by the FDA or a comparable foreign
regulatory agency. The discovery of previously unknown problems with a product
or its manufacture may result in restrictions on the product or manufacturer,
including withdrawal of the product from the market. The consequences for
failure to comply with applicable regulatory requirements can be serious,
resulting in:
o warning letters;
o fines and other civil penalties;
o suspended regulatory approvals;
o refusal to approve pending applications or supplements to approved
applications;
o refusal to permit exports from the United States;
o product recalls;
o seizure of products;
o injunctions;
o operating restrictions;
o total or partial suspension of production; and/or
o criminal prosecutions.
Any of these consequences could result in withdrawal of approval, or
require reformulation of the drug, additional preclinical testing or clinical
trials, changes in labeling of the product, and/or additional marketing
applications. We would be required to expend time and resources in correcting
the problem, including any adverse publicity associated with the problem, in
order to put the product back on the market. These delays and uses of resources
would hurt our business, profitability and reputation.
IF WE ARE UNABLE TO ESTABLISH SALES, MARKETING AND DISTRIBUTION CAPABILITIES, OR
TO ENTER INTO AGREEMENTS WITH THIRD PARTIES TO DO SO, WE WILL BE UNABLE TO
SUCCESSFULLY MARKET AND SELL FUTURE DRUG PRODUCTS.
We have no sales, marketing or distribution personnel or capabilities.
If we are unable to establish those capabilities, either by developing our
own capabilities or entering into agreements with others, we will not be able
to successfully sell our products. In that event, we will not be able to
generate significant revenues. We cannot guarantee that we will be able to
hire the qualified sales and marketing personnel we need. We may not be able
to enter into any marketing or distribution agreements on acceptable terms,
if at all. We are relying on Procter & Gamble for sales, marketing and
distribution of Pexelizumab (5G1.1-SC). Procter & Gamble, or any future
collaborators, may not succeed at selling any of our future drug products.
IF WE ARE UNABLE TO OBTAIN REIMBURSEMENT FROM GOVERNMENT HEALTH ADMINISTRATION
AUTHORITIES, PRIVATE HEALTH INSURERS AND OTHER ORGANIZATIONS FOR OUR FUTURE
PRODUCTS, OUR PRODUCTS MAY BE TOO COSTLY FOR REGULAR USE AND OUR ABILITY TO
GENERATE REVENUES WOULD BE HARMED.
Our future revenues and profitability will be affected by the continuing
efforts of governmental and private third-party payors to contain or reduce the
costs of health care through various means. If these entities refuse to provide
reimbursement with respect to our products or determine to provide a low level
of reimbursement, our products may be too costly for general use. Any limitation
on the use of our products will have a material adverse effect on our ability to
generate revenues and achieve profitability. We expect a number of federal,
state and foreign proposals to control the cost of drugs through government
regulation. We are unsure of the form that any health care reform legislation
may take or what actions any of these authorities and private payors may take in
response to the proposed reforms. Therefore, we cannot precisely predict the
effect of any reform on our business.
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EVEN IF WE SUCCESSFULLY DEVELOP OUR PRODUCTS FOR TRANSPLANTING ANIMAL CELLS INTO
HUMANS, THIS TECHNOLOGY MAY NOT BE ACCEPTED BY THE MARKET DUE TO MEDICAL
CONCERNS OR UNANTICIPATED REGULATION.
Our program for the development of animal cells for transplantation into
humans may never result in any therapeutic products. This technology is subject
to extensive clinical testing and we are not aware of any such technology that
has been approved for sale by the FDA or comparable foreign regulatory
authorities. Even if we succeed in developing these products, our products may
not be widely accepted by the medical community or third-party payors until more
facts are established and ethical consensus is reached regarding the use of
animal cells. In addition, concerns relating to the risk of introducing new
animal viruses to infect the human species through the transplantation process
may also create additional regulatory hurdles for FDA approval. If accepted, the
degree of acceptance may limit the size of the market for our products.
Moreover, due to the controversial nature of transplantation of animal cells
into humans generally, market prices for our securities, may be subject to
increased volatility.
IF OUR COMPETITORS GET TO THE MARKETPLACE BEFORE WE DO WITH BETTER OR CHEAPER
DRUGS, OUR DRUGS MAY NOT BE PROFITABLE TO SELL OR TO CONTINUE TO DEVELOP.
Each of Avant Immunotherapeutics, Inc, Leukosite Inc., a subsidiary of
Millenium Pharmaceuticals, Inc., Tanox, Inc., Abbott Laboratories, Gliatech Inc.
and Biocryst Pharmaceuticals have publicly announced their intentions to develop
drugs which target the inflammatory effects of complement in the immune system.
We are also aware that Pfizer, Inc., SmithKline Beecham Plc and Merck & Co.,
Inc. are also attempting to develop complement inhibitor therapies. Each of
Cambridge Antibody Technology, PLC, MorphoSys AG and Dyax Corporation have
publicly announced intentions to develop therapeutic human antibodies from
libraries of human antibody genes. Additionally, each of Abgenix Inc. and
Medarex, Inc. have publicly announced intentions to develop therapeutic human
antibodies from mice that have been bred to include some human antibody genes.
These and other large pharmaceutical companies with significantly greater
resources than ours, may develop, manufacture and market better or cheaper drugs
than our product candidates. They may establish themselves in the marketplace
before we are able to even finish our clinical trials. Larger pharmaceutical
companies also compete with us to attract academic research institutions as drug
development partners, including for licensing these institutions' proprietary
technology. If our competitors successfully enter into such arrangements with
academic institutions, we will be precluded from pursuing those specific unique
opportunities and may not be able to find equivalent opportunities elsewhere.
IF WE FAIL TO RECRUIT AND RETAIN PERSONNEL, OUR RESEARCH AND PRODUCT DEVELOPMENT
PROGRAMS MAY BE DELAYED.
We are highly dependent upon the efforts of our senior management and
scientific personnel. There is intense competition for qualified scientific and
technical personnel. Since our business is very science-oriented and
specialized, we need to continue to attract and retain such people. We may not
be able to continue to attract and retain the qualified personnel necessary for
developing our business. If we lose the services of, or fail to recruit, key
scientific and technical personnel, our research and product development
programs would be significantly and detrimentally affected.
In particular, we highly value the services of Dr. Leonard Bell, our
President and Chief Executive Officer. The loss of his services could materially
and adversely affect our ability to achieve our development objectives.
THE RIGHTS THAT HAVE BEEN AND MAY IN THE FUTURE BE GRANTED TO OUR STOCKHOLDERS
MAY FRUSTRATE ATTEMPTS BY OTHERS TO TAKE OVER OUR COMPANY.
We have in place a shareholder rights plan, or "poison pill," which
enables our board of directors to issue rights to purchase preferred stock when
someone acquires 20% or more of the outstanding shares of our common stock. As a
result of the plan, anyone wishing to take over the company would most likely be
forced to negotiate a transaction with the company in order not to trigger the
pill. If we refused to negotiate, or negotiations were unsuccessful, a proposed
takeover could be frustrated. This would prevent our stockholders from
participating in a takeover or tender offer which might be of substantial value
to them.
In addition, under our certificate of incorporation, our board of
directors is authorized to issue one or more series of preferred stock with
rights and preferences determined by the board. The preferences and rights of
any preferred stock may be superior to those of the holders of our common stock.
By issuing preferred stock with superior rights to the common stock, the board
could frustrate a person who wishes to take over the company through a tender
offer for the outstanding common stock. These provisions are also intended to
encourage any
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person interested in acquiring us to negotiate with and obtain the approval of
our board of directors. These provisions could also delay, deter or frustrate a
merger or change in control.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains some "forward-looking statements" as defined in
the Private Securities Litigation Reform Act of 1995 and information relating to
us that are based on the beliefs of our management, as well as assumptions made
by and the information currently available to our management. When used in this
prospectus, the words "estimate," "project," "believe," "anticipate," "intend,"
"expect" and similar expressions are intended to identify forward-looking
statements. These statements reflect our current views with respect to future
events and are subject to risks and uncertainties that could cause actual
results to differ materially from those contemplated in these forward-looking
statements, including those risks discussed in this prospectus.
You are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this prospectus. Except for
special circumstances in which a duty to update arises when prior disclosure
becomes materially misleading in light of subsequent events, we do not intend to
update any of these forward-looking statements to reflect events or
circumstances after the date of this prospectus or to reflect the occurrence of
unanticipated events.
USE OF PROCEEDS
We will not receive any proceeds from the sale of common stock by the
selling stockholders.
DIVIDEND POLICY
We have never declared or paid any dividends on our stock. We currently
anticipate that we will retain all future earnings to support our growth
strategy. Accordingly, we do not anticipate paying cash dividends on our stock
in the foreseeable future. The payment of any future dividends will be at the
discretion of our board of directors and will depend upon, among other things,
future earnings, operations, capital requirements, our general financial
condition, and general business conditions.
SELLING STOCKHOLDERS
The following table sets forth information regarding the selling
stockholders' beneficial ownership of our common stock as of December 7, 2000.
<TABLE>
<CAPTION>
NUMBER OF SHARES NUMBER OF
OF COMMON STOCK NUMBER OF SHARES OF
BENEFICIARY SHARES OF COMMON STOCK
OWNED COMMON STOCK BENEFICIALLY
PRIOR TO REGISTERED OWNED AFTER
SELLING STOCKHOLDER(1) OFFERING HEREIN THIS OFFERING(2)
---------------------- -------- ------ ----------------
<S> <C> <C> <C>
Carlos F. Barba 19,019 9,510 9,509
Shana M. Barbas 19,019 9,510 9,509
Carlos Barbas (TRSI) 201 101 100
John Bentley 5,187 2,594 2,593
Ernest Beutler and Bonnie
Beutler
TTEE Ernest Beutler and
Bonnie M. Beutler
Trust U/A DTE 12/4/69 3,528 1,764 1,764
Dennis R. Burton 38,037 19,019 19,018
Christopher John Connolly and
Rhonda Marie Connolly Family
Trust 5,187 2,594 2,593
Chris Cruce 70 35 35
Glen Dautherty 18,393 9,197 9,196
9
<PAGE>
Beth Fawsett 103 52 51
James C. Gilstrap Trust dated
1/16/95 15,561 7,781 7,780
Gui-Rong Guo (3) 52 52 0
Ernie Huang 1,296 648 648
James E. Iverson and Patricia
Iverson 29,392 14,696 14,696
Kasirer Yeladim Holdings, LLC 10,374 5,187 5,187
August Kee 70 35 35
J. Jeffrey Kinsell 10,374 5,187 5,187
John R. Larson 13,832 6,916 6,916
Richard Alan Lerner, Nicole
Green Lerner,
Trustees U.D.T. dated
11/14/94 50,141 25,071 25,070
Richard Lerner (TRSI) 201 101 100
Marshall Linn and Joyce Linn 5,187 2,594 2,593
Lippman Living Trust DTD
8/11/89 20,748 10,374 10,374
Benjamin List (TRSI) 57 29 28
Paul Mailander 282 141 141
Richard P. Maisto 10,374 5,187 5,187
Thomas McDermott 51 26 25
Doug Mertz 141 71 70
Katharine Tate Overton Trust,
Katharine Overton Coady,
TTEE 10,374 5,187 5,187
Staats M. Pellett, Jr 7,187 2,594 4,593
Christoph Rader (TRSI) 21 11 10
Jerico Radoc (3) 20 20 0
Daniel B. Rifkin 3,528 1,764 1,764
Don Sandberg 211 106 105
The Scripps Research Institute 1,945 973 972
Joy Sprink 70 35 35
Robin M. Thomas 5,187 2,594 2,593
Sue Wood 70 35 35
Rich Younger 141 71 70
Guofu Zhong (TRSI) 72 36 36
============================================
305,796 151,898 153,805
--------------
</TABLE>
----------
(1) The selling stockholders received their shares of common stock in connection
with our acquisition of Prolifaron, Inc. on September 23, 2000.
(2) Assumes that all shares offered by each selling stockholder are sold in this
offering.
(3) Received their shares of common stock in connection with their exercise of
Prolifaron stock option that were assumed by Alexion.
PLAN OF DISTRIBUTION
Pursuant to an agreement and plan of merger effective September 23, 2000,
we acquired Prolifaron, Inc., a privately held biopharmaceutical company located
in San Diego, California. In the merger, we issued 355,594 shares of our common
stock to the former stockholders of Prolifaron and we are obligated to issue up
to 44, 364 shares of our common stock upon the exercise of fully vested options
granted under Prolifaron's stock option plan. We agreed to register the possible
resale of those shares of common stock by the Prolifaron stockholders. We are
required to file a registration statement with the SEC covering the resale of
approximately half of those shares within 15 days after the publication of
consolidated financial statements for the fiscal quarter ending October 31,
2000, for which this registration statement is intended. We are required to file
a registration statement with the SEC covering the resale of the remaining
approximately half of the shares on or before April 30, 2001.
10
<PAGE>
The shares of common stock are being registered to permit the resale of
the common stock by the holders thereof from time to time after the date of this
prospectus. We have agreed, among other things, to bear all expenses, other than
underwriting discounts, selling commissions and fees and expenses of other
advisors to holders of the common stock, in connection with the registration and
sale of the common stock covered by this prospectus.
We will not receive any of the proceeds from the offering of the shares of
common stock by the selling securityholders. We have been advised by the selling
securityholders that the selling securityholders (and their donees and pledgees)
may sell all or a portion of the shares of common stock beneficially owned by
them and offered hereby from time to time on any exchange on which the
securities are listed on terms to be determined at the times of such sales. The
selling securityholders may also make private sales directly or through a broker
or brokers. Alternatively, any of the selling securityholders may from time to
time offer the shares of common stock beneficially owned by them through
underwriters, dealers or agents, who may receive compensation in the form of
underwriting discounts, commissions or concessions from the selling
securityholders and the purchasers of the shares of common stock for whom they
may act as agent. The aggregate proceeds to the selling securityholders from the
shares of common stock offered by them hereby will be the purchase price of such
shares of common stock less discounts and commissions, if any.
Our outstanding common stock is listed for trading on the Nasdaq National
Market.
The shares of common stock may be sold from time to time in one or more
transactions at fixed offering prices, which may be changed, or at varying
prices determined at the time of sale or at negotiated prices. Such prices will
be determined by the holders of such securities or by agreement between such
holders and underwriters or dealers who may receive fees or commissions in
connection therewith.
In order to comply with the securities laws of certain states, if
applicable, the shares of common stock will be sold in such jurisdictions only
through registered or licensed brokers or dealers. In addition, in certain
states the shares of common stock may not be sold unless they have been
registered or qualified for sale in the applicable state or an exemption from
the registration or qualification requirement is available and is complied with.
The selling securityholders and any broker-dealers, agents or underwriters
that participate with the selling securityholders in the distribution of the
shares of common stock may be deemed to be "underwriters" within the meaning of
the Securities Act, in which event any commissions received by such
broker-dealers, agents or underwriters and any profit on the resale of the
shares of common stock purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act.
LEGAL MATTERS
Fulbright & Jaworski L.L.P. New York, New York will pass upon the validity
of the securities offered hereby and some other legal matters on behalf of
Alexion.
EXPERTS
The audited consolidated 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 are included herein in reliance
upon the authority of said firm as experts in accounting and auditing in
giving said report.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission. You may read and copy
any reports, statements or other information filed by us at the Commission's
public reference room 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. Copies of such material can be also
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, and its public reference rooms in New
York, New York and Chicago, Illinois, at prescribed rates. Please call the
Commission at 1-800-SEC-0330 for further information on the public reference
rooms. 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, N.W., Washington, D.C. 20006. Our filings with the Commission are also
available to the public from commercial document retrieval services and at the
Commission's web site at "http://www.sec.gov."
11
<PAGE>
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and information that we file later
with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings we
will make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 until the selling stockholders sell all their
shares of Alexion stock. This prospectus is part of a registration statement we
filed with the SEC (Registration No. 333-52886):
(i) our amended current report on Form 8-K/A, filed on November 20, 2000;
(ii) our current reports on Form 8-K, filed on September 25, 2000, October
3, 2000 and October 27, 2000;
(iii) our quarterly report on Form 10-Q for the quarter ended October 31,
2000, filed on December 15, 2000;
(iv) our annual report on Form 10-K for the fiscal year ended July 31,
2000, filed on October 6, 2000;
(v) our registration statement on Form 8-A, filed on February 21, 1997, as
amended on October 6, 2000; and
(vi) our registration statement on Form 8-A, filed on February 12, 1996.
We will furnish without charge to you, upon written or oral request, a
copy of any or all of the documents described above, except for exhibits to
such documents, unless such exhibits are specifically incorporated by
reference into such documents. Requests should be addressed to: Alexion
Pharmaceuticals, Inc., 352 Knotter Drive, Cheshire, Connecticut 06410, (203)
272-2596, Attention: David W. Keiser, Executive Vice President and Chief
Operating Officer.
You should rely only on the information incorporated by reference or
provided in this prospectus or any supplement. We have not authorized anyone
else to provide you with different information. The selling stockholders will
not make an offer of these shares in any state where the offer is not permitted.
You should not assume that information in this prospectus or any supplement is
accurate as of any date other than the date on the front of these documents.
12
