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Rule 424(b)(4)
Registration No. 333-33710
PROSPECTUS
1,312,375 SHARES
TITAN PHARMACEUTICALS, INC.
COMMON STOCK
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Selling stockholders named in this prospectus are offering all of the shares
to be sold in this offering. We will not receive any of the proceeds from the
sale of the shares.
Our common stock is traded on the American Stock Exchange under the symbol
TTP. On April 24, 2000, the closing price of the common stock was $24.125.
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AN INVESTMENT IN OUR SECURITIES INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 3.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is April 25, 2000
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PROSPECTUS SUMMARY
THIS SUMMARY HIGHLIGHTS INFORMATION CONTAINED ELSEWHERE IN THIS PROSPECTUS
OR INCORPORATED BY REFERENCE HEREIN. IT IS NOT COMPLETE AND MAY NOT CONTAIN ALL
OF THE INFORMATION THAT YOU SHOULD CONSIDER BEFORE INVESTING IN OUR SECURITIES.
YOU SHOULD READ THE ENTIRE PROSPECTUS CAREFULLY, INCLUDING THE "RISK FACTORS"
SECTION, AND THE FINANCIAL STATEMENTS AND RELATED NOTES WHICH ARE INCORPORATED
BY REFERENCE HEREIN.
We are a biopharmaceutical company developing proprietary therapeutics for
the treatment of central nervous system disorders, cancer and other serious and
life-threatening diseases.
Our most advanced product candidate, Zomaril-TM- (iloperidone), is a novel
antipsychotic agent under development for the treatment of patients with
schizophrenia. Zomaril is currently in Phase III clinical testing through a
licensing and development agreement with Novartis Pharma AG. Also in the CNS
area, we are developing a unique cell based therapeutic, Spheramine-TM-, for the
treatment of patients with Parkinson's disease. In November 1999, we received
approval from the FDA to commence Phase I/II clinical testing with Spheramine.
We have entered into a collaboration with Schering AG for the development,
manufacture and commercialization of Spheramine for Parkinson's disease, and
Schering is funding the manufacturing, development and clinical studies of the
product in exchange for worldwide commercialization rights. Our cancer portfolio
includes three therapeutic monoclonal antibodies--CeaVac-Registered Trademark-,
TriAb-Registered Trademark-, and TriGem-TM---that are designed to stimulate a
patient's immune system against cancer cells. CeaVac is currently being
evaluated in a large multi-center, double-blind placebo-controlled Phase II/III
clinical trial in patients with Stage IV metastatic colorectal cancer. TriAb is
currently being evaluated in a double-blind, placebo-controlled Phase II
clinical study in patients with breast cancer. TriGem has completed Phase I
testing in melanoma, and we are pursuing later stage clinical trials through
co-operative clinical oncology research groups. We are also currently conducting
a Phase II clinical trial with Pivanex-TM-, a novel synthetic analog of butyric
acid, for the treatment of patients with non-small cell lung cancer. Our other
programs in pre-clinical development include a cancer gene therapy product and
an implantable drug delivery technology.
A portion of our operations are currently conducted through two consolidated
subsidiaries: Ingenex, Inc., engaged in the development of proprietary
gene-based therapies and ProNeura, Inc., engaged in research and development
activities relating to a polymeric implantable drug delivery technology.
References in this prospectus to our company and our products include the
operations and products of our operating subsidiaries.
Our executive offices are located at 400 Oyster Point Blvd., Suite 505,
South San Francisco, California 94080, and our telephone number is (650)
244-4990.
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RISK FACTORS
An investment in our shares involves various risks. You should carefully
consider the following risk factors and other information incorporated by
reference herein before deciding to purchase shares.
WE HAVE A HISTORY OF OPERATING LOSSES AND MAY NEVER BE PROFITABLE. Through
December 31, 1999, we had accumulated net losses since inception of
approximately $65.4 million. We will continue to incur losses for the
foreseeable future as a result of the various costs associated with our
research, development, financial, administrative, regulatory and management
activities. We may never achieve or sustain profitability.
OUR PRODUCTS ARE AT AN EARLY STAGE OF DEVELOPMENT AND MAY NOT BE
SUCCESSFULLY DEVELOPED OR COMMERCIALIZED. Our proposed products are at various
stages of development, but all will require significant further development,
testing and regulatory clearances prior to commercialization. We are subject to
the risk that some or all of our proposed products:
- will be found to be ineffective or unsafe;
- will not receive necessary regulatory clearances;
- will not be capable of being produced in commercial quantities at
reasonable costs; or
- will not be successfully marketed.
We may experience unanticipated problems relating to product development,
testing, regulatory compliance, manufacturing, marketing and competition, and
our costs and expenses could exceed current estimates. We cannot predict whether
we will successfully develop and commercialize any products.
WE MUST COMPLY WITH EXTENSIVE GOVERNMENT REGULATIONS. Our research,
development, pre-clinical and clinical trial activities and the manufacturing
and marketing of any products which we may successfully develop are subject to
an extensive regulatory approval process by the FDA and other regulatory
agencies in the U.S. and other countries. The process of obtaining required
regulatory approvals for drugs, including conducting preclinical and clinical
testing, is lengthy, expensive and uncertain. Even after such time and
expenditures, we may not obtain necessary regulatory approvals for clinical
testing or for the manufacturing or marketing of any products. Regulatory
approval may entail limitations on the indicated usage of a drug, which may
reduce the drug's market potential. Even if regulatory clearance is obtained,
post-market evaluation of the products, if required, could result in
restrictions on a product's marketing or withdrawal of the product from the
market as well as possible civil or criminal sanctions. We depend on
laboratories and medical institutions conducting preclinical studies and
clinical trials to maintain both good laboratory and good clinical practices. We
will also depend upon the manufacturers of any products we may successfully
develop to comply with cGMP.
In addition, we and our collaborative partners may be subject to regulation
under state and federal laws, including requirements regarding occupational
safety, laboratory practices, environmental protection and hazardous substance
control, and may be subject to other local, state, federal and foreign
regulation. We cannot predict the impact of such regulation on us, although it
could be material and adverse.
WE MAY BE UNABLE TO PROTECT OUR PATENTS AND PROPRIETARY RIGHTS.
Our future success will depend to a significant extent on our ability to:
- enforce patent protection on our products and technologies;
- maintain trade secrets; and
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- operate and commercialize products without infringing on the patents or
proprietary rights of others.
Our patents may not afford any competitive advantages and may be challenged
or circumvented by third parties. Further, patents may not issue on pending
patent applications. Because of the extensive time required for development,
testing and regulatory review of a potential product, it is possible that before
a potential product can be commercialized, any related patent may expire, or
remain in existence for only a short period following commercialization,
reducing any advantage of the patent.
Our business may be materially adversely affected if others independently
develop similar technologies or duplicate any technology we develop.
Furthermore, costly and time consuming litigation may be necessary to:
- enforce any of our patents;
- determine the scope and validity of the patent rights of others; or
- respond to a legal action against us claiming damages for infringement of
patent rights or other proprietary rights or seeking to enjoin commercial
activities relating to the affected product or process.
The outcome of any such litigation is highly uncertain.
To the extent that consultants, key employees or other third parties apply
technological information independently developed by them or by others to our
proposed products, disputes may arise as to the proprietary rights to such
information which may not be resolved in our favor. Most of our consultants are
employed by or have consulting agreements with third parties and any inventions
discovered by such individuals generally will not become our property. There is
a risk that other parties may breach confidentiality agreements or that our
trade secrets become known or independently discovered by competitors, which
could adversely affect us.
WE FACE INTENSE COMPETITION. Competition in the pharmaceutical and
biotechnology industries is intense and is expected to increase. We will face
competition from numerous companies that currently market, or are developing,
products for the treatment of the diseases and disorders we have targeted. Many
of these entities have significantly greater research and development
capabilities, experience in obtaining regulatory approvals and manufacturing,
marketing, financial and managerial resources than us. We also compete with
universities and other research institutions in the development of products,
technologies and processes, as well as the recruitment of highly qualified
personnel. Our competitors may succeed in developing technologies or products
that are more effective than the ones we have under development or that render
our proposed products or technologies noncompetitive or obsolete. In addition,
certain of such competitors may achieve product commercialization or patent
protection earlier than us.
WE ARE DEPENDENT UPON OUR KEY COLLABORATIVE RELATIONSHIPS AND LICENSE AND
SPONSORED RESEARCH AGREEMENTS. As a small company with limited resources, we
rely significantly on the resources of third parties to conduct research and
development on our behalf. For example, our ability to ultimately derive
revenues from Zomaril is almost entirely dependent upon Novartis conducting the
Phase III trials and completing the regulatory approval process and implementing
the marketing program necessary to commercialize Zomaril if the trials are
successful. Our success in the future will depend, in part, on our ability to
maintain existing collaborative relationships and to develop new collaborative
relationships with third parties. Our license agreements relating to the
in-licensing of technology generally require the payment of up-front license
fees and royalties based on sales with minimum annual royalties, the use of due
diligence in developing and bringing products to market, the achievement of
funding milestones and, in some cases, the grant of stock to the licensor. Our
sponsored research agreements generally require periodic payments on an annual
or quarterly basis.
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Our failure to meet financial or other obligations under license or sponsored
research agreements in a timely manner could result in the loss of our rights to
proprietary technology or our right to have the applicable university or
institution conduct research and development efforts.
WE MAY BE DEPENDENT ON THIRD PARTIES TO MANUFACTURE AND MARKET ANY PRODUCTS
WE MAY SUCCESSFULLY DEVELOP. To date, we have not introduced any products on the
commercial market. We may not have the resources in the foreseeable future to
allocate to the commercial manufacture or direct marketing of any proposed
products. Collaborative arrangements may be pursued regarding the manufacture
and marketing of any products that may be successfully developed. We may be
unable to enter into additional collaborative arrangements to manufacture or
market any proposed products or, in lieu thereof, establish our own
manufacturing operations or sales force.
WE MAY NOT BE ABLE TO RETAIN OUR KEY MANAGEMENT AND SCIENTIFIC PERSONNEL. As
a small company with a limited number of personnel, we are highly dependent on
the services of Dr. Louis R. Bucalo, our Chairman, President and Chief Executive
Officer, as well as the other principal members of our management and scientific
staff. The loss of one or more of such individuals could substantially impair
ongoing research and development programs and could hinder our ability to obtain
corporate partners. Our success depends in large part upon our ability to
attract and retain highly qualified personnel. We compete in our hiring efforts
with other pharmaceutical and biotechnology companies, as well as universities
and nonprofit research organizations, and we may have to pay higher salaries to
attract and retain personnel.
WE MAY NEED ADDITIONAL FINANCING. At March 15, 2000, we had approximately
$84.7 million of cash which we believe will enable us to fund our operations at
least through 2003. We may need to seek additional financing after such time to
continue our product development activities, and will be required to obtain
substantial funding to commercialize any products that we may successfully
develop. We do not have any funding commitments or arrangements other than our
bank line of credit. If we are unable to enter into a corporate collaboration,
complete a debt or equity offering, or otherwise obtain any needed financing, we
will be required to reduce, defer or discontinue our product development
programs. We may be required to obtain funds on terms that are not favorable to
us and our stockholders.
FUTURE SALES OF OUR COMMON STOCK IN THE PUBLIC MARKET COULD ADVERSELY IMPACT
OUR STOCK PRICE. Future sales of our common stock by existing stockholders
pursuant to Rule 144 under the Securities Act, pursuant to an effective
registration statement or otherwise, could have an adverse effect on the price
of our securities.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares by the selling
stockholders.
DIVIDEND POLICY
We have never paid cash dividends on our common stock and do not anticipate
paying cash dividends in the near future.
FORWARD-LOOKING STATEMENTS
Statements in this prospectus or in the documents incorporated by reference
herein that are not descriptions of historical facts are forward-looking
statements within the meaning of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995. Reference is made in particular to the
description of our plans and objectives for future operations, assumptions
underlying such plans and objectives and other forward-looking terminology such
as "may," "expects," "believes," "anticipates," "intends," "expects,"
"projects," or similar terms, variations of such terms or the negative
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of such terms. Forward-looking statements are based on management's current
expectations. Actual results could differ materially from those currently
anticipated due to a number of factors, including those set forth under "Risk
Factors" including, in particular, risks relating to:
- the results of ongoing research and development activities;
- uncertainties relating to pre-clinical and clinical testing, financing and
strategic agreements and relationships;
- the early stage of products under development;
- government regulation;
- patent matters; and
- competition.
We expressly disclaim any obligation or undertaking to release publicly any
updates or revisions to any forward-looking statements contained herein to
reflect any change in our expectations or any changes in events, conditions or
circumstances on which any such statement is based.
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SELLING STOCKHOLDERS
On March 1, 2000, we completed a private placement in which we sold an
aggregate of 1,200,000 shares to all but one of the selling stockholders listed
in the table below. The last selling stockholder listed below received the
shares it is offering hereby upon exercise of a warrant which granted piggy-
back registration rights to the holder. We agreed to bear expenses, other than
fees and expenses of counsel to the selling stockholders, in connection with the
registration and sale of the shares. See "Plan of Distribution."
The following table sets forth information regarding the beneficial
ownership of our common stock by the selling stockholders and as adjusted to
give effect to the sale of the shares offered hereby. Other than as set forth
below, no selling stockholder has held any position nor had any material
relationship with Titan or its affiliates during the past three years.
<TABLE>
<CAPTION>
NUMBER OF
MAXIMUM SHARES
NUMBER OF SHARES NUMBER BENEFICIALLY PERCENTAGE
BENEFICIALLY OWNED OF SHARES OWNED OWNERSHIP
NAME OF SELLING STOCKHOLDER PRIOR TO OFFERING TO BE SOLD AFTER OFFERING AFTER OFFERING
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<S> <C> <C> <C> <C>
Invesco VIF--Health Services Fund (1)..... 20,310 11,400 8,810 (1)
Invesco Health Sciences Fund (1).......... 475,965 187,350 288,615 (1)
Invesco Global Health Sciences Fund (1)... 211,065 76,250 134,815 (1)
Invesco Endeavor Fund (1)................. 55,000 55,000 0 (1)
Turner Technology Fund (2)................ 70,000 70,000 0 --
Turner MicroCap Fund (2).................. 20,000 20,000 0 --
BlackRock Funds, Smallcap Growth Equity
Portfolio............................... 640,000(3) 400,000 240,000 *
Franklin Biotechnology Discover Fund...... 400,000 380,000 20,000 *
Biotechnology Value Fund, L.P............. 112,375 112,375 0 --
</TABLE>
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* Less than 1%
(1) These selling stockholders are affiliated entities. According to a Schedule
13G filed on February 4, 2000 on behalf of a group of reporting persons,
including various Invesco entities (the "Group"), the Group beneficially
owned 704,110 shares, currently representing approximately 2.7% of our
outstanding common stock, which amount excludes the 330,000 purchased by
these selling stockholders in the March 2000 private placement.
(2) These selling stockholders are affiliated entities.
(3) Includes 240,000 shares beneficially owned by BlackRock Funds, Micro-Cap
Equity Portfolio.
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PLAN OF DISTRIBUTION
The selling stockholders may sell shares from time to time:
- in transactions on the American Stock Exchange;
- in privately negotiated transactions;
- through the writing of options on the shares;
- or a combination of such methods of sale.
They may sell their shares:
- at fixed prices which may be changed;
- 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 sell shares to or through broker-dealers, and
such broker-dealers may receive compensation in the form of discounts,
concessions or commissions from either the selling stockholders, the purchasers
of the shares for whom such broker-dealers may act as agent or to whom they sell
as principal, or both. Compensation to a particular broker-dealer might be in
excess of customary commissions.
The selling stockholders and any broker-dealers who act in connection with
the sale of shares hereunder may be deemed to be "underwriters" as that term is
defined in the Securities Act of 1933, and any commissions received by them and
profit on any resale of the shares as principal might be deemed to be
underwriting discounts and commissions under the Securities Act.
We have agreed to indemnify the selling stockholders against certain
liabilities, including certain liabilities under the Securities Act.
LEGAL MATTERS
The validity of the securities offered hereby have been passed upon for
Titan by Loeb & Loeb LLP, New York, New York.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents which we have filed with the Commission (File
No. 0-27436) pursuant to the Exchange Act of 1934 are incorporated herein by
reference:
1. Our Annual Report on Form 10-K for the fiscal year ended December 31,
1999, including any documents or portions thereof incorporated by reference
therein;
2. Our Registration Statement on Form 8-A registering the common stock
under the Exchange Act; and
3. All other documents filed by us pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this prospectus and prior to
the termination of this offering.
Any statement contained in any document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this prospectus to the extent that a statement contained herein
or in any subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
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statement so modified or superseded shall not be deemed, except as modified or
superseded, to constitute a part of this prospectus.
We will provide without charge to each person to whom this prospectus is
delivered, upon written or oral request of any such person, a copy of any or all
of the documents incorporated herein by reference, other than exhibits to such
documents which are not specifically incorporated by reference into such
documents. Requests for documents should be directed to us at 400 Oyster Point
Boulevard, South San Francisco, California 94080, Attention: Chief Financial
Officer, telephone (650) 244-4990.
AVAILABLE INFORMATION
We have filed with the Commission a Registration Statement on Form S-3 under
the Securities Act of 1993 covering the shares offered by this prospectus. This
prospectus does not contain all of the information set forth in the Registration
Statement and the exhibits thereto. Statements contained in this prospectus as
to the contents of any contract or other document referred to are not
necessarily complete and in each instance such statement is qualified by
reference to each such contract or document. The Company is subject to the
informational requirements of the Exchange Act, and in accordance therewith
files reports and other information with the Commission. 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 at prescribed rates. The Company is an
electronic filer, and the Commission maintains a web site that contains reports,
proxy and information statements and other information regarding the Company at
www.sec.gov./edgar.html.
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NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY
SECURITIES OFFERED HEREBY BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER, OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THE INFORMATION HEREIN CONTAINED IS CORRECT AS OF ANY TIME SUBSEQUENT TO
THE DATE OF THIS PROSPECTUS.
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TABLE OF CONTENTS
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PAGE
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<S> <C>
Prospectus Summary.................... 2
Risk Factors.......................... 3
Use Of Proceeds....................... 5
Dividend Policy....................... 5
Forward-Looking Statements............ 5
Selling Stockholders.................. 7
Plan Of Distribution.................. 8
Legal Matters......................... 8
Incorporation Of Certain Documents By
Reference........................... 8
Available Information................. 9
</TABLE>
TITAN
PHARMACEUTICALS, INC.
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PROSPECTUS
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APRIL 25, 2000
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