As filed with the Securities and Exchange Commission on January 26, 1999
Registration Statement No. 333-17389
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 2
ON FORM S-3
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------------------------------
ANDRX CORPORATION
(Exact name of registrant as specified in its charter)
----------------------------------------------
FLORIDA 65-0366879
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
DR. ELLIOT F. HAHN, PRESIDENT
ANDRX CORPORATION
4001 SOUTHWEST 47TH AVENUE, SUITE 201
FORT LAUDERDALE, FLORIDA 33314
(954) 584-0300
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
COPIES OF COMMUNICATIONS TO:
DALE S. BERGMAN, P.A.
BROAD AND CASSEL
201 SOUTH BISCAYNE BOULEVARD
MIAMI CENTER, SUITE 3000
MIAMI, FLORIDA 33131
TELEPHONE: (305) 373-9400
TELECOPIER: (305) 373-9443
----------------------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box: [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration 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. [ ]
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 SECTION 8(A), MAY
DETERMINE.
<PAGE>
The information in this Prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This Prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED JANUARY 26, 1999
196,347 SHARES
ANDRX CORPORATION
COMMON STOCK
The selling shareholders are offering for sale up to 196,347 shares of
common stock. The shares were issued pursuant to the exercise of warrants issued
in private offerings consummated in December 1993 and January 1994.
We are registering these shares pursuant to commitments with these
shareholders to register the shares. We will pay the expenses of registering the
shares. We will not receive any proceeds from the sale of the shares, but we did
receive proceeds from the exercise of the warrants.
The selling shareholders may sell their shares in public or private
transactions, at prevailing market prices or at privately negotiated prices.
Our common stock is quoted on The Nasdaq National Market under the
symbol "ADRX." On January 25, 1999, the last reported sale price of our common
stock on The Nasdaq National Market was $45.50 per share.
YOU SHOULD CAREFULLY CONSIDER THE
"RISK FACTORS" BEGINNING ON PAGE 5 OF THIS PROSPECTUS.
THE SHARES HAVE NOT BEEN APPROVED BY THE SECURITIES AND EXCHANGE COMMISSION
(THE "SEC") OR ANY OTHER STATE SECURITIES COMMISSION. THESE ORGANIZATIONS
HAVE NOT DETERMINED WHETHER THIS PROSPECTUS IS TRUTHFUL OR COMPLETE.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
YOU SHOULD ONLY RELY 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. OUR COMMON STOCK IS NOT BEING
OFFERED IN ANY STATE WHERE THE OFFER IS NOT PERMITTED. YOU SHOULD
NOT ASSUME THAT THE INFORMATION IN THIS PROSPECTUS OR ANY
SUPPLEMENT IS ACCURATE AS OF ANY DATE OTHER THAN THE
DATE ON THE FRONT OF THOSE DOCUMENTS.
The date of this Prospectus is January __, 1999
<PAGE>
TABLE OF CONTENTS
PAGE
PROSPECTUS SUMMARY.............................................................1
FORWARD-LOOKING STATEMENTS.....................................................5
RISK FACTORS...................................................................5
USE OF PROCEEDS...............................................................12
SELLING SHAREHOLDERS..........................................................13
DESCRIPTION OF SECURITIES.....................................................15
PLAN OF DISTRIBUTION..........................................................17
LEGAL MATTERS.................................................................18
EXPERTS.......................................................................18
WHERE YOU CAN FIND MORE INFORMATION...........................................19
-i-
<PAGE>
PROSPECTUS SUMMARY
This is only a summary and does not contain all of the information that
may be important to you. You should read the more detailed information contained
in this Prospectus and all other information, including the financial
information and statements with notes, referred to in this Prospectus as
discussed in the "Where You Can Find More Information" section of this
Prospectus.
ABOUT THE COMPANY
GENERAL
We formulate and commercialize controlled-release oral pharmaceuticals
using our proprietary drug delivery technologies. To date, we have developed
eight different drug delivery technologies that we have patented or for which we
have filed patent applications. We believe that our technologies are flexible
and can be modified to apply to a variety of pharmaceutical products. We are
applying our proprietary drug delivery technologies and formulation skills,
either directly or through collaborative arrangements, to the development of:
/bullet/ generic versions of selected controlled-release brand name
pharmaceuticals;
/bullet/ brand name controlled-release formulations of existing
immediate-release or controlled-release drugs where we believe that
the application of our drug delivery technologies may improve the
efficacy or other characteristics of that product; and
/bullet/ controlled-release versions of existing drugs and drugs under
development for other pharmaceutical companies.
We do not presently intend to develop new chemical entities.
We believe that pharmaceutical companies are increasingly using
controlled-release drug delivery technologies to improve drug therapy.
Controlled-release drug delivery technologies generally provide more consistent
and appropriate drug levels in the bloodstream than immediate-release dosage
forms and may improve drug efficacy and reduce side effects by releasing drug
dosages at specific times and in specific locations in the body. These
technologies also allow for the development of "patient-friendly" dosage forms,
which reduce the number of times a drug must be taken, thus improving patient
compliance. Controlled-release pharmaceuticals can be especially beneficial for
certain patient populations, such as the elderly, who often require several
medications with differing dosing regimens.
We believe the market for advanced drug delivery systems is large and
growing rapidly. Based on published data, the market for orally-administered
drugs that utilize sustained and controlled-release drug delivery systems is
expected to increase to approximately $50.0 billion in 2005 from approximately
$5.8 billion in 1995. We also believe that pharmaceutical companies that do not
have controlled-release drug delivery technology expertise will rely upon third
parties like us to develop such technologies for their product candidates.
PRODUCT DEVELOPMENT
Following is a list of some of the products we have developed or are
developing:
Dilacor/registered trademark/ XR In October 1997, we received approval from the
U.S. Food and Drug Administration ("FDA") and
commenced selling our generic version of
Dilacor/registered trademark/ XR, which is
used for the treatment of hypertension
and chronic stable angina and is currently
being marketed by Watson Pharmaceuticals, Inc.
("Watson").
- 1 -
<PAGE>
Cardizem/registered In July 1998, we received FDA approval to
trademark/CD sell our generic version of Cardizem/registered
trademark/CD, which is also used for the
treatment of hypertension and chronic stable
angina and is currently being marketed by
Hoechst Marion Roussel, Inc. ("HMR"). We have
not started selling this product.
Prilosec/registered trademark/ In April 1998, we submitted an Abbreviated
New Drug Application ("ANDA") to the FDA to
sell our generic version of Prilosec/registered
trademark/, which is used for the treatment of
ulcers and is currently being marketed by Astra
Merck.
Tiazac/registered trademark/ In September 1998, we submitted an ANDA to the
FDA to sell our generic version of
Tiazac/registered trademark, which is used for
the treatment of hypertension and is currently
being marketed by Biovail Corporation
International.
Naprelan/registered trademark/ In September 1998, we submitted an ANDA to the
FDA to sell our generic version of
Naprelan/registered trademark/, which is used
for the treatment of inflammation and is
currently being marketed by Elan Corporation
plc.
After we submitted our ANDA for the generic version of
Cardizem/registered trademark/ CD to the FDA, HMR and Carderm Capital L.P.
(collectively, "HMRI"), the holders of the patents relating to
Cardizem/registered trademark/ CD, brought a patent infringement action against
us (the "HMR Litigation"). While we have always been, and remain, confident that
we will prevail in that patent litigation, the risks inherent in any litigation
- -- much less a patent infringement matter -- required us to consider the
possible consequences of an adverse decision. Thus, in September 1997, we
entered into a Stipulation and Agreement (the "Stipulation") with HMRI related
to the HMR Litigation. The Stipulation provides that upon receiving final FDA
approval of our ANDA, we would begin to receive interim payments from HMRI of
$10.0 million quarterly which, absent certain defaults by us, are nonrefundable.
The FDA approval received in July 1998 triggered the $10.0 million quarterly
payments to us. These payments will continue until the HMR Litigation is
concluded or other events occur. The payments will increase retroactively to
$100.0 million per year, less the amounts previously received by us, if we win
in the HMR Litigation. The Stipulation also provides us with the option of
licensing HMRI's patents covering the Cardizem/registered trademark/ CD product
at certain times.
We are a 50% partner in ANCIRC Pharmaceuticals ("ANCIRC"), a joint
venture with Watson, for the development of up to eight generic
controlled-release pharmaceuticals. Watson also owns approximately 18% of our
outstanding common stock and has warrants to acquire 337,000 additional shares.
In April and December 1997, ANCIRC submitted ANDAs to the FDA for two
controlled-release products. In September 1998, the FDA approved the ANDA for
ANCIRC's generic version of Trental/registered trademark/ and ANCIRC immediately
launched this product. Pursuant to the ANCIRC joint venture agreement, this
product was formulated by us, is being manufactured by Watson and is being
marketed by us.
In addition to these products, either directly or through ANCIRC, we
currently have numerous additional generic versions of controlled-release drugs
under development, the brand name versions of which had combined 1997 United
States sales of approximately $5.0 billion. We are continually evaluating other
potential product candidates. In selecting these product candidates, we focus on
pharmaceuticals with high sales volume for which marketing exclusivity or patent
rights have expired or are near expiration.
We are also applying our proprietary drug delivery technologies to the
development of brand name controlled-release formulations of existing
immediate-release and controlled-release drugs. In selecting these product
candidates, we focus on pharmaceuticals with high sales volume whose marketing
exclusivity or patent rights have expired or are near expiration. We believe
that the application of our drug delivery technologies will improve the efficacy
or other characteristics of these products, for example, by decreasing undesired
side effects or reducing the number of times a drug must be taken. We currently
have five product candidates under development which had combined 1997 United
States sales of approximately $5.0 billion.
- 2 -
<PAGE>
The FDA approval process for the brand name controlled-release
pharmaceuticals which we are developing will require the filing of a New Drug
Application ("NDA") with the FDA. We will generally study the existing product
and evaluate whether it can be improved upon with respect to efficacy and side
effect profile. After a formulation is developed and evaluated, an
Investigational New Drug Application ("IND") must be submitted before clinical
trials begin. We nonetheless believe that the development process, approval
process or both will be shorter than typically associated with most new drugs
because our development efforts involve chemical entities, the which have
previously been approved by the FDA. In order to facilitate development of these
products, we plan to undertake formulation development and studies, where
appropriate, on our own. Thereafter, we may enter into collaborative
arrangements with other pharmaceutical companies to commercialize these
products.
We are also using our proprietary drug delivery technologies in
collaborative arrangements with other pharmaceutical companies to formulate
controlled-release versions of existing commercialized drugs and drugs under
development for these companies. In addition to improving drug efficacy, we
believe that our drug delivery technologies will provide pharmaceutical
companies with the opportunity to enhance the commercial value of their existing
products and new drug candidates.
GENERIC PHARMACEUTICAL DISTRIBUTION OPERATIONS
In addition to developing controlled-release pharmaceuticals, we market
and distribute generic drugs manufactured by third parties. These operations
generated substantially all of our revenues prior to the fourth quarter of 1997,
when we commenced selling our generic version of Dilacor/registered trademark/
XR, our first manufactured product. The customer base for this operation
consists primarily of independent pharmacies, pharmacy chains which do not
maintain their own central warehousing facilities and pharmacy buying groups. We
are using our distribution operations to assist in the marketing of our generic
versions of Dilacor/registered trademark/ XR and Trental/trademark/ and plan to
use these operations to assist in the marketing of other controlled-release
products being developed by us and our collaborative partners. These operations
also provide us with an ability to directly observe and participate in
developments and trends in the generic pharmaceutical industry.
CYBEAR, INC.
In 1997, we formed a subsidiary called Cybear, Inc. In November 1998,
Cybear merged with 1997 Corp., a Delaware corporation with a registration
statement on file with the SEC seeking to acquire or merge with a company with
operations. As a result of this merger, Cybear, Inc. changed its name to Cybear,
Inc. (FL) and became a wholly owned subsidiary of 1997 Corp., which changed its
name to Cybear Inc. We now own over 90% of Cybear Inc.
Cybear is a development stage information technology company utilizing
the Internet to develop business solutions. Cybear is designing Internet-based
applications using technologies such as Java that are designed for the web and
are therefore able to cross platforms and run on any browser. Cybear is uniquely
positioned to develop customized business solutions that provide advantages and
value to the business user because it has (i) proficiency in the sharing of data
between disparate computer systems and (ii) patent pending technologies for
updating and managing large databases via the web.
Cybear plans to combine its development capability with a national
network that allows it to serve as an Internet Service Provider ("ISP") from any
location. As an ISP, Cybear can establish secure Intranets and virtual private
networks ("VPNs") to ensure the protection of sensitive data.
Cybear was initially formed as a healthcare communications technology
company to develop technologies and products to address the growing
communication and information problems within the healthcare community.
Healthcare remains paper based, disconnected, inefficient and unable to capture
and manage important clinical and administrative information. Despite ongoing
requirements, little has been done to effectively leverage technology for
business process purposes and, currently, there is little or no
interconnectivity. Managed care has intensified the
- 3 -
<PAGE>
need for solutions to these problems, by creating imperatives to reduce
healthcare costs and improve efficiencies, while maintaining access and quality.
As a result, the Cybear system has been designed to satisfy managed
care's demand for a cost effective solution to the communication and information
system dilemma. Cybear is developing software products to bridge the commination
chasm between and among Physician Practice Management companies, Managed Care
Organizations ("MCOs") and physician organizations (collectively, "Providers")
and insurance companies, governmental programs and other third parties
responsible for the payment of healthcare expenses ("Payors") within the managed
care chain. The Cybear system is intended to provide on-line real time
communication among MCOs, physicians, pharmacies, labs, hospitals and other
healthcare providers, an objective within healthcare for more than a decade. We
believe this will provide operating efficiencies, overhead reductions, cost
relief and improved patient care for each of the interrelated Providers and
Payors.
Cybear believes its ability to develop proprietary solutions-based
applications combined with its Intranet and virtual private network
connectivity, is not limited to healthcare and can be applied to any industry
having diverse, complex and data intensive markets. For this reason, Cybear is
considering designing applications for universities, graduate schools and other
areas. These areas and other business sectors will be investigated as CyBear's
products and technologies mature. Designing business solutions for other
business sectors may be approached through licensing relationships or through
strategic partnerships.
We were incorporated on August 28, 1992 under the name "Andrx
Pharmaceuticals, Inc.," commenced operations and assumed our present name in
November, 1992. We are located at 4001 Southwest 47th Avenue, Fort Lauderdale,
Florida 33314, and our telephone number is (954) 584-0300.
ABOUT THE OFFERING
Common stock offered...................... 196,347 shares
Common stock outstanding.................. 15,174,532 shares
Use of proceeds........................... The Company will not receive any
proceeds from the sale of the
shares but did receive proceeds
from the exercise of the
warrants. These proceeds were
used for working capital
requirements and other general
corporate purposes. See "Use of
Proceeds."
Nasdaq National Market symbol............. ADRX
- 4 -
<PAGE>
FORWARD-LOOKING STATEMENTS
Certain important factors may affect our actual results and could cause
those results to differ materially from any forward-looking statements made in
this Prospectus or that are otherwise made by us or on our behalf.
"Forward-looking statements" are not based on historical facts and are typically
phrased using words such as "may," "will," "expect," "believe," "anticipate,"
"intent," "could," "estimate" or "continue" and similar expressions or
variations.
Differences in actual results may be caused by factors such as those
discussed in the "Risk Factors" below as well as those discussed elsewhere in
this Prospectus and in our filings with the SEC.
RISK FACTORS
The securities offered are speculative. You should purchase them only if
you can afford to lose your entire investment in the Company. You should
carefully consider the following matters, as well as all other information in
this Prospectus, before investing.
PATENT LITIGATION
There has been substantial litigation in the pharmaceutical, biomedical
and biotechnology industries with respect to the manufacture, use and sale of
new products that are the subject of patent rights. Most of the brand name
controlled-release products for which we are developing generic versions are
covered by one or more patents. Under the Drug Price Competition and Patent
Restoration Act of 1984 (the "Waxman-Hatch amendments"), when a drug developer
files an ANDA for a generic drug, the developer must certify to the FDA that the
developer believes that an unexpired patent which has been listed with the FDA
as covering the relevant brand-name product will not be infringed by the
developer's product or that the unexpired patent is invalid or unenforceable (a
"Paragraph IV Certification"). That Paragraph IV Certification must also be
provided to the patent holder, who may challenge the developer's certification
by filing a lawsuit for patent infringement. If a lawsuit is filed within 45
days from the day the patent holder received the certification, the FDA can
review and tentatively approve the ANDA, but cannot make the marketing approval
effective until a judgment in the action has been rendered in favor of the
developer or approximately 30 months from the date the patent holder received
the certification, whichever is sooner. If a patent holder commences a lawsuit
like this, the outcome of such litigation is difficult to predict because of the
uncertainties inherent in patent litigation. To date, five such actions have
been filed against us. One of these actions was dismissed without prejudice; one
is the HMR Litigation relating to our generic version of Cardizem/registered
trademark/ CD, and the other actions relate to our ANDAs generic versions of
Prilosec/registered trademark/, Tiazac/registered trademark/ and
Naprelan/registered trademark/. We anticipate that additional actions may be
filed as we or our collaborative partners file additional ANDAs containing
Paragraph IV Certifications. We evaluate the probability of patent infringement
litigation on a case-by-case basis and have provided for the estimated costs
relating to existing litigation. Our business could be harmed by the delay in
obtaining FDA approval to market our products as a result of litigation, the
expense of litigation whether or not it is successful, or an outcome against us
in such litigation.
ANTITRUST LITIGATION AND INVESTIGATION
Class action lawsuits have been filed against us in the courts of
Alabama, California, Florida, Illinois, Michigan, Minnesota, Tennessee,
Wisconsin and the District of Columbia. In each of these suits, Hoechst
Aktiengesellschaft and HMR (collectively "Hoechst") have been named as
co-defendants. The complaint in each action alleges that Hoechst alone and us
and Hoechst, by way of the Stipulation, have engaged in state antitrust and
other statutory and common law violations which allegedly have given Hoechst and
us a near monopoly in the U.S. market for Cardizem/registered trademark/ CD and
a generic version of Cardizem/registered trademark/ CD. Each complaint seeks
compensatory damages on behalf of each class member in an unspecified amount
and, in some cases, treble damages, as well as costs and counsel fees,
disgorgement, injunctive relief and other remedies. In addition, in October
1998, we were advised that
- 5 -
<PAGE>
the U.S. Federal Trade Commission ("FTC") is conducting an investigation to
determine whether Andrx, HMRI or any other persons have engaged in unfair
methods of competition. We are cooperating with the FTC's investigation which we
believe relates to the Stipulation with HMRI. The expense of such litigation,
whether or not it is successful, or an adverse outcome in the litigation and/or
the investigation could harm our business.
MEDIX LITIGATION
In March, 1998, we received a letter from the attorneys for Medix
Resources, Inc. and its subsidiary Cymedix Lynx Corporation alleging we and
certain of our officers, directors and employees stole certain computer medical
software and Internet medical communications technology owned by Medix. The
letter demands $396.6 million. We believe that these accusations and threatened
claims are without merit and, in March 1998, filed a Complaint against Medix and
Cymedix for libel and slander arising from the improper public distribution of
the contents of the demand letter. In June 1998 Medix filed a Complaint against
us and certain of our directors, officers and employees, making the same
allegations that were in the demand letter and seeking damages of $396.0
million. We intend to vigorously defend ourselves against these claims. However,
an adverse outcome in the litigation could harm our business.
RISK OF PRODUCT LIABILITY CLAIMS; NO ASSURANCE OF ADEQUATE INSURANCE
The design, development and manufacture of our products or the products
we distribute involve a risk of product liability claims. We have obtained
product liability insurance that covers substantially all products marketed by
us in our generic drug distribution operations, bioequivalence and other studies
for our controlled-release product candidates and the products we intend to
commercialize. We believe that our product liability insurance is adequate for
our current operations, but may seek to increase our coverage prior to the
commercial introduction of our product candidates. We cannot assure you that the
coverage limits of our insurance will be sufficient to cover potential claims.
Product liability insurance is expensive and difficult to obtain and may not be
available in the future on acceptable terms or in sufficient amounts, if
available at all. We could be harmed by a successful claim against us in excess
of our insurance coverage.
HISTORY OF LOSSES AND UNCERTAINTY OF FUTURE RESULTS
We became profitable for the first time in the quarter ended September
30, 1998 as a result of fees generated by us pursuant to the Stipulation. While
we recorded net income of $2.2 million for the nine months ended September 30,
1998, we incurred net losses of approximately $5.2 million during 1995, $4.0
million during 1996 and $7.6 million during 1997. As of September 30, 1998, we
had an accumulated deficit of approximately $20.0 million. Through October 9,
1997, our distribution operations had generated substantially all of our
revenues. On October 10, 1997, the FDA granted final approval of the ANDA for
our generic version of Dilacor/registered trademark/ XR, our first manufactured
product, which we immediately launched. In July 1998, we received FDA final
marketing approval of our ANDA for the generic version of Cardizem/registered
trademark/ CD, which we have not launched because of the HMR Litigation. In
September 1998, ANCIRC received FDA final marketing approval of its ANDA for a
generic version of Trental/registered trademark/, which ANCIRC immediately
launched. None of the other controlled-release products submitted to the FDA or
under development by us have been approved by the FDA for marketing, and we
cannot assure that these products will be approved or generate substantial
revenues or profits. To continue profitable operations, we must continue to
expand our pharmaceutical distribution operations to cover our operating
overhead or successfully continue to develop, manufacture and market
pharmaceuticals utilizing our proprietary drug delivery technologies, either
alone or through collaborative arrangements with joint venture partners and/or
licensees. We only recently reached profitability and cannot assure that we will
be able to maintain profitability.
- 6 -
<PAGE>
MANAGEMENT OF EXPANDING OPERATIONS
We have experienced significant growth of our operations, necessitating
expansion, upgrading and improvement of our administrative, operational and
management systems, controls and resources. We anticipate additional growth in
connection with the expansion of our manufacturing operations, our marketing and
sales efforts for the products developed by the ANCIRC joint venture, and the
development and marketing efforts for our products. If we fail to manage growth
effectively or to develop a successful marketing approach our business will be
harmed.
COMPETITION
The pharmaceutical industry is highly competitive and is affected by new
technologies, new developments, government regulations, healthcare legislation,
availability of financing and other factors. Many of our competitors have longer
operating histories and greater financial, research and development, marketing
and other resources than us. We expect to be subject to competition from
numerous other entities that currently operate or intend to operate in the
pharmaceutical industry, including companies that are engaged in the development
of controlled-release drug delivery technologies and products and other
manufacturers that may decide to undertake in-house development of these
products. We cannot assure we will be able to successfully compete with these
companies. In our generic pharmaceutical distribution business, we compete with
a number of large wholesalers and other distributors of generic pharmaceuticals.
LIMITED NUMBER OF COMMERCIALIZED PRODUCTS
We are focusing our product development efforts on the development of
generic versions and brand-name controlled-release formulations of existing
controlled-release and immediate-release pharmaceuticals utilizing our
proprietary drug delivery technologies. Our product candidates are in various
stages of development and may involve patent infringement litigation after they
are submitted to the FDA. The period necessary to achieve market success for any
individual product is uncertain and may be lengthy. We have submitted ANDAs to
the FDA for generic versions of Cardizem/registered trademark/ CD,
Dilacor/registered trademark/ XR, Prilosec/registered trademark/,
Tiazac/registered trademark/ and Naprelan/registered trademark/. Through our
ANCIRC joint venture, we have also submitted ANDA's to the FDA for two other
controlled-release products. To date, we have only received FDA approval of our
ANDA's for three products and only commenced marketing two of such products.
While we have not submitted any NDA's for our brand-name controlled-release
formulations, we do have six product candidates under development. With respect
to the product candidates under development, we cannot assure that our product
development efforts will be successfully completed, that required regulatory
approvals will be obtained or that products under development or products
submitted to the FDA will be approved by the FDA. Moreover, with respect to any
of our products, we cannot assure that we will be successful in our patent
litigation, or that approved products can be manufactured at an acceptable cost
with appropriate quality or successfully marketed by us or our collaborators.
GOVERNMENT REGULATION
Drug manufacturers are required to obtain FDA approval before marketing
their new drug product candidates. The FDA approval process is costly and time
consuming. We cannot assure that our bioequivalence or clinical studies and
other data will result in FDA approval to market our new drug products. We
believe that the FDA's abbreviated application procedures will apply to our
generic versions of controlled-release drugs. We cannot assure that any of our
generic versions of controlled-release drugs will be suitable for, or approved
as part of, abbreviated applications. Certain abbreviated application procedures
for generic controlled-release drugs and other products are presently the
subject of petitions filed by brand name drug manufacturers, which seek changes
from the FDA in the approval process for generic drugs. We cannot predict at
this time whether the FDA will make any changes to our abbreviated application
procedures as a result of such petitions or the effect that such changes may
have on us. Any changes in FDA regulations or policies may make abbreviated
application approvals more difficult and, thus, may have a material adverse
effect on our business. Patent certification requirements for generic
- 7 -
<PAGE>
controlled-release drugs could also result in significant delays in obtaining
FDA approval if patent infringement litigation is initiated by the holder or
holders of the brand name patents. Delays in obtaining FDA approval of
abbreviated applications can also result from a marketing exclusivity period
and/or an extension of patent terms. If some of our drugs do not qualify for
abbreviated application procedures, as will be the case with certain of our
controlled-release formulations, the FDA approval process may require time
consuming and expensive clinical studies and NDA filings.
The FDA also regulates the development, manufacture, distribution,
labeling and promotion of prescription drugs, requires that certain records be
kept and reports be made, mandates registration of drug manufacturers and
listing of their products and has the authority to inspect manufacturing
facilities for compliance with cGMP standards. As a wholesale distributor of
generic pharmaceuticals manufactured by third parties, we are subject to state
licensure and other requirements pertaining to the wholesale distribution of
prescription drugs. We could be materially adversely affected by any failure to
comply with licensing and other requirements. Other requirements exist for
controlled drugs, such as narcotics, which are regulated by the U.S. Drug
Enforcement Administration (the "DEA"). Further, the FDA has the authority to
withdraw approvals of previously approved drugs for cause, to request recalls of
products, to debar companies and individuals from future abbreviated application
submissions and, through action in court, to seize products, institute criminal
prosecution or close manufacturing plants in response to violations. The DEA has
similar authority. We could be materially adversely affected by such
requirements or FDA or DEA actions.
We have submitted ANDAs to the FDA for five controlled-release products,
the generic versions of Cardizem/registered trademark/ CD, Dilacor/registered
trademark/ XR, Prilosec/registered trademark/, Tiazac/registered trademark/ and
Naprelan/registered trademark/. ANCIRC has submitted an ANDA for two additional
controlled-release products. Of these ANDAs, the FDA has approved the ANDAs for
the generic versions of Dilacor/registered trademark/ XR, Cardizem/registered
trademark/, CD and Trental/registered trademark/. There can be no assurance that
approval of the additional ANDAs submitted to the FDA, approval of any
subsequent ANDAs, or other product approval requests submitted to the FDA will
be received or that, if received, such approvals will be made effective. Even if
regulatory approvals are obtained, we will be required to comply with
post-approval requirements for the manufacturing and marketing of our products.
DEPENDENCE ON PATENTS AND TRADE SECRETS
We believe that patent and trade secret protection, particularly of our
drug delivery technologies, is important to our business and that our future
success will depend in part on our ability to obtain patents, maintain trade
secret protection and operate without infringing on the rights of others. We
have been issued numerous U.S. patents relating to our controlled-release drug
delivery technologies and have filed additional U.S. patent applications and
various foreign patent applications relating to our drug delivery technologies.
We expect to apply for additional U.S. and foreign patents in the future. The
issuance of a patent is not conclusive as to its validity or as to the
enforceable scope of the claims of the patent. We cannot assure that our patents
or any future patents will prevent other companies from developing similar or
functionally equivalent products or from successfully challenging the validity
of our patents. Furthermore, we cannot assure you that (i) any of our future
processes or products will be patentable; (ii) any pending or additional patents
will be issued in any or all appropriate jurisdictions; (iii) our processes or
products will not infringe upon the patents of third parties; or (iv) we will
have the resources to defend against charges of patent infringement to protect
our own patent rights against third parties. We could be materially adversely
affected if we fail to protect our patent rights and we fail to avoid
infringement of the patent or proprietary rights of others.
We also rely on trade secrets and proprietary knowledge, which we
generally seek to protect by confidentiality and non-disclosure agreements with
employees, consultants, licensees and pharmaceutical companies. We cannot assure
that these agreements will not be breached, that we will have adequate remedies
for any breach or that our trade secrets will not otherwise become known by
competitors.
- 8 -
<PAGE>
DEPENDENCE ON COLLABORATIVE PARTNERS
We are a 50% partner in ANCIRC, a joint venture with Watson, and share
the costs of the joint venture with Watson. We have no control over the
resources Watson will devote to the commercialization of ANCIRC products and
cannot assure you that products developed by the joint venture will be approved
for marketing by the FDA. Further, as ANCIRC products are approved by the FDA,
we will be dependent upon Watson to manufacture most of the products developed
by ANCIRC. We are exploring, and intend to continue to explore, additional
collaborative opportunities. We cannot assure you that we will be able to
negotiate acceptable collaborative arrangements in the future or that ANCIRC or
any future collaborative arrangement will ultimately be successful.
SUPERVISION OF DEVELOPMENT
The agreements with Watson governing the ANCIRC joint venture require
Dr. Chih-Ming J. Chen, our Co-Chairman and Chief Scientist, to supervise
personally the development of all ANCIRC products and to devote such time and
effort as may be necessary to such activities until at least five products have
been successfully developed by ANCIRC. If Dr. Chen does not perform such
supervisory services prior to ANCIRC developing five products (other than by
reason of his death or disability) Watson can (i) require us to repurchase
Watson's interests in ANCIRC and Andrx for an amount equal to Watson's
investments therein, plus interest compounded at 15% per annum, or (ii) assume
our rights to develop and market the products. Once ANCIRC has developed three
products, Watson is limited to the option set forth in clause (ii) above. If
Watson were to allege successfully that Dr. Chen was not performing supervisory
services and were to demand that we repurchase its investment, we may not have
the financial resources to do so and/or such demand may harm our business.
DEPENDENCE UPON MANAGEMENT AND KEY PERSONNEL
Our success for the foreseeable future depends upon the services of Dr.
Chih-Ming J. Chen, Co-Chairman and Chief Scientist; Alan P. Cohen, Co-Chairman
and Chief Executive Officer; and Dr. Elliot F. Hahn, President. We do not have
employment agreements with these individuals. We have secured $4.0 million in
key man life insurance covering Dr. Chen and $2.0 million in key man life
insurance covering each of Mr. Cohen and Dr. Hahn. Our success will depend in
large part on our ability to attract and retain highly qualified scientific,
technical and business personnel experienced in the development, manufacture and
marketing of pharmaceuticals. We would be harmed by the loss of the services of
any of these three officers, or the inability to attract or retain qualified
personnel.
LIMITED MANUFACTURING EXPERIENCE
We have an approximately 35,000 square foot commercial manufacturing
facility. This facility is currently being used to manufacture the generic
version of Dilacor/registered trademark/ XR. We intend to use the facility for
the manufacture of Cardizem/registered trademark/ CD. Although this facility is
expected to be sufficient for these products, it will not be suitable for the
manufacture of all of the additional products which we intend to develop and
manufacture. The FDA has inspected the facility with regard to our versions of
Dilacor/registered trademark/ XR and Cardizem/registered trademark/ CD, and has
advised us that the manufacturing site is in compliance with current Good
Manufacturing Practices ("cGMP"). Our facility will be subject to periodic
inspections by the FDA on an ongoing basis and we cannot assure you that the
facility will continue to be in compliance with cGMP or other regulatory
requirements. Failure to comply with such requirements could result in
significant delays in the development, approval and distribution of our planned
products, and require us to incur significant additional expense to comply with
cGMP or other regulatory requirements. We cannot assure you that we will be able
to manufacture our products successfully on a commercial scale. Further, we will
depend on other companies to manufacture certain of the product candidates under
development.
- 9 -
<PAGE>
YEAR 2000
The Year 2000 issue is the result of computer programs being written
using two digits rather than four to define the applicable year. Our computer
equipment and software and devices with embedded technology that are
time-sensitive may recognize a date using "00" as the year 1900 rather than the
year 2000. This could result in a system failure or a miscalculation, causing
disruptions of operations, including, among other things, a temporary inability
to process transactions, send invoices or engage in similar normal business
activities. We have undertaken various steps intended to ensure that our
computer equipment and software will function properly with respect to dates in
the Year 2000 and thereafter. However, if all Year 2000 issues are not properly
identified or Year 2000 problems that are identified are not resolved, the Year
2000 issue could harm our business. Additionally, the Year 2000 issues of other
entities could harm our systems or our business.
UNCERTAINTIES RELATED TO CLINICAL TRIALS
Prior to seeking FDA approval for the commercial sale of brand name
controlled-release formulations under development, we must demonstrate through
clinical trials that such products are safe and effective for use in the target
indications. We have limited experience in conducting clinical trials. There are
a number of difficulties associated with clinical trials. The results of these
clinical trials may not be indicative of results that would be obtained from
large-scale testing. Clinical trials are often conducted with patients having
advanced stages of disease and, as a result, during the course of treatment
these patients can die or suffer adverse medical effects for reasons that may
not be related to the pharmaceutical agents being tested, but which
nevertheless, affect the clinical trial results. Moreover, we cannot assure you
that our clinical trials will demonstrate sufficient efficacy to obtain the
regulatory approvals. A number of companies in the pharmaceutical industry have
suffered significant setbacks in advance clinical trials even after promising
results in pre-clinical studies. If any of our products under development are
not shown to be safe and effective in clinical trials, we would be harmed by any
resulting delays in developing other compounds and conducting related clinical
trials.
CONCENTRATION OF COMMON STOCK OWNERSHIP
Our directors and executive officers currently own approximately 29.6%
of the outstanding common stock. Watson currently owns approximately 19.8% of
the issued and outstanding shares. There are no agreements between management
and Watson with respect to voting of their respective shares of common stock.
Moreover, Watson entered into a standstill agreement with us pursuant to which
it agreed, among other matters, not to acquire more than a 25% equity interest
in Andrx or engage in certain transactions with us (including a merger), prior
to June 13, 2000, without the prior approval of our Board of Directors. However,
each of management and Watson will have the ability to influence significantly
our affairs and operations following completion of this offering and, voting
together, could elect the Board of Directors and otherwise control us.
POSSIBLE VOLATILITY OF STOCK PRICE
The market prices for securities of companies engaged in pharmaceutical
development activities historically have been highly volatile. From June 14,
1996 (the date the common stock commenced trading) through January 21, 1999, the
common stock has traded at prices ranging from $11.00 to $51.688, as reported by
The Nasdaq National Market. In addition, the market price of the common stock
may be impacted by announcements of technological innovations or new commercial
products by us or our competitors, delays in the development or approval of our
product candidates, developments or disputes concerning patent or proprietary
rights, publicity regarding actual or potential medical results relating to
products under development by us or our competitors, regulatory developments in
both the U.S. and foreign countries, public concern as to the safety of drug
technologies and economic and other external factors, as well as
period-to-period fluctuations in financial results.
- 10 -
<PAGE>
POTENTIAL ADVERSE MARKET IMPACT OF SHARES ELIGIBLE FOR FUTURE SALE
Our stock price may be hurt by future sales of our shares or the
perception that such sales may occur. We have 15,174,532 shares of common stock
outstanding. As of the date of this Prospectus, approximately 12,644,532 shares
of common stock held by existing stockholders constitute "restricted shares" as
defined in Rule 144 under the Securities Act. These shares may only be sold if
they are registered under the Securities Act or sold under Rule 144 or another
exemption form registration under the Securities Act. Sales under Rule 144 are
subject to the satisfaction of certain holding periods, volume limitations,
manner or sale requirements, and the availability of current public information
about us.
Substantially all of our restricted shares of common stock are eligible
for sale pursuant to Rule 144 or have been registered under the Securities Act
for resale by the holders, including the common stock covered by this
Prospectus. This will permit the sale of registered shares of common stock in
the open market or in privately negotiated transactions without compliance with
the requirements of Rule 144. We are unable to estimate the amount, timing or
nature of future sales of outstanding common stock. Sales of substantial amounts
of the common stock in the public market may hurt the stock's market price.
UNCERTAINTY OF AVAILABILITY OF HEALTHCARE REIMBURSEMENTS
Our ability to maintain profitability in our distribution business or to
commercialize our product candidates depends in part on the extent to which
reimbursement for the cost of such products will be available from government
health administration authorities, private health insurers and other
organizations. Our controlled-release pharmaceuticals utilize unique methods of
drug delivery. In addition, third party payors are attempting to control costs
by limiting the level of reimbursement for medical products, including
pharmaceuticals, which may adversely effect the pricing of our product
candidates. Moreover, healthcare reform has been, and may continue to be, an
area of national and state focus, which could result in the adoption of measures
which could adversely affect the pricing of pharmaceuticals or the amount of
reimbursement available from third party payors. We cannot assure you that
healthcare providers, patients or third party payors will accept our
pharmaceuticals. In addition, there can be no assurance that healthcare
reimbursement laws or policies will not have a material adverse effect on our
ability to sell our products profitably or prevent us from realizing an
appropriate return on our investment in product development.
ANTI-TAKEOVER EFFECT OF CERTAIN CHARTER AND BYLAW PROVISIONS AND CERTAIN
PROVISIONS OF FLORIDA LAW
Certain provisions of our Amended and Restated Articles of Incorporation
(the "Articles") and Bylaws may have anti-takeover effects and may delay, defer
or prevent a takeover attempt of the Company. In addition, Florida has enacted
legislation that may deter or hinder takeovers of Florida corporations. The
Florida Control Share Act generally provides that shares acquired in excess of
certain specified thresholds will not have any voting rights unless such voting
rights are approved by a majority of the corporation's disinterested
shareholders. The Florida Affiliated Transactions Act generally requires
supermajority approval by disinterested shareholders of certain specified
transactions between a public corporation and holders of more than 10% of the
outstanding voting shares of the corporation (or their affiliates).
NO DIVIDENDS
We have not paid any dividends on our common stock and anticipate for
the foreseeable future that all earnings, if any, will be retained for the
operation and expansion of our business.
- 11 -
<PAGE>
USE OF PROCEEDS
We will receive no proceeds from the sale of any of or all of the shares
being offered by the selling shareholders under this Prospectus. We did receive
proceeds from the exercise of the warrants for which we are registering the
underlying shares of common stock. These proceeds were used for working capital
requirements and other general corporate purposes. We estimate we will spend
$70,000 in registering the offered shares.
- 12 -
<PAGE>
SELLING SHAREHOLDERS
The selling shareholders have not been employed by, held office in, or
had any other material relationship with us or any of our affiliates within the
past three years.
The following table sets forth certain information regarding the
beneficial ownership of the common stock by each Selling Shareholder as of the
date of this Prospectus, based on information made available to us by the
Selling Shareholders:
<TABLE>
<CAPTION>
NUMBER OF
SHARES
NUMBER OF BENEFICIALLY PERCENTAGE OF CLASS
SHARES NUMBER OF OWNED ----------------------------
NAME OF SELLING BENEFICIALLY SHARES AFTER THE BEFORE OFFERING AFTER
SHAREHOLDER OWNED(1) TO BE REGISTERED OFFERING(2) OFFERING
<S> <C> <C> <C> <C> <C>
Clarke and Barbara S. Adams 11,240 11,240 0 * 0%
David and Maria N. Bernard 2,399 2,399 0 * 0%
G. Thomas Catalona 2,810 2,810 0 * 0%
Sidney Devorsetz 1,124 1,124 0 * 0%
James C. Gale and Judith S. Haselton 9,000 9,000 0 * 0%
Michael Gironta 6,430 6,430 0 * 0%
Ira Goodman 2,810 2,810 0 * 0%
Parry F. and Ivy Goodman, JTWROS 27,906 11,240 16,666 * *
Gruntal & Co., LLC 20,096(3) 20,096(3) 0 * 0%
Joseph Haddad 11,240 5,620 5,620 * 0%
Rose Haddad 11,240 5,620 5,620 * 0%
David T. Harrington 5,620 5,620 0 * 0%
Dean G. and Henrietta J. Holefca, JTWROS 5,620 5,620 0 * 0%
Victor Ianno 2,248 2,248 0 * 0%
Steven B. Kase 5,620 5,620 0 * 0%
Elliot Levine 25,120 4,620 20,500 * *
Steven J. Levinson 11,240 11,240 0 * 0%
Thomas B. Low As Trustee for Low Family 5,620 5,620 0 * 0%
Trust
Andrew J. Potts 11,240 11,240 0 * 0%
Oliver Price 2,810 2,810 0 * 0%
Edward M. Reardon 14,050 14,050 0 * 0%
Barry Richter 5,620 5,620 0 * 0%
Ronald Ross 1,000 1,000 0 * 0%
Lois Mettler and Carroll Saks 2,810 2,810 0 * 0%
Trustees for Aaron A. Alfred
David Saks and Carroll Saks 22,480 11,240 11,240 * 0%
Arthur Steinberg 5,120 5,120 0 * 0%
Walter F. Toombs 16,860 16,860 0 * 0%
David Ward 1,000 1,000 0 * 0%
Jack Weinstein 2,810 2,810 0 * 0%
Donald Wessel 2,810 2,810 0 * 0%
</TABLE>
*Less than 1%.
- 13 -
<PAGE>
(1) Except as otherwise indicated, the persons named in this table have sole
voting and investment power with respect to all shares of common stock
listed. Includes shares of common stock that such persons have the right
to acquire a beneficial interest in within 60 days from the date of this
Prospectus.
(2) Assumes that all shares of common stock registered for the account of the
Selling Shareholders are sold.
(3) Does not include shares of common stock held of record in the accounts of
Gruntal & Co. Incorporated ("Gruntal") and for the benefit of its
customers and, with respect to such shares, Gruntal disclaims beneficial
ownership.
- 14 -
<PAGE>
DESCRIPTION OF SECURITIES
Our authorized capital stock consists of (i) 25,000,000 shares of common
stock, par value $.001 per share, 15,174,532 shares of which are presently
outstanding and (ii) 1,000,000 shares of preferred stock, par value $.001 per
share, none of which are outstanding.
COMMON STOCK
Subject to the rights of the holders of any preferred stock that may be
outstanding, each holder of common stock is entitled to receive such dividends
as may be declared by the Board of Directors from legally available funds. Upon
liquidation, the holders of common stock would be entitled to share pro rata in
any distribution of our assets after payment of our liabilities and the
liquidation preference of any outstanding preferred stock. Each holder of common
stock is entitled to one vote for each share held on all matters submitted to a
vote of shareholders. Holders of common stock have no cumulative voting rights
or preemptive rights to purchase or subscribe for any stock or other securities,
and there are no conversion rights or redemption or sinking fund provisions with
respect to such stock. All outstanding shares of common stock are fully paid and
nonassessable.
PREFERRED STOCK
Our Board of Directors has the authority to issue up to 1,000,000 shares
of preferred stock in one or more series and to determine voting powers, and
such designations, preferences and relative, participating, optional or other
special rights, if any, and the qualifications, limitations or restrictions
thereof, if any, including the number of shares in such series (which the Board
may increase or decrease as permitted by Florida law), liquidation preferences,
dividend rates, conversion or exchange rights, redemption provisions of the
shares constituting any series and such other special rights and protective
provisions with respect to any class or series as the Board may deem advisable
without any further vote or action by the shareholders. Any shares of preferred
stock so issued could have priority over the common stock with respect to
dividend or liquidation rights or both and could have voting and other rights of
shareholders. We have no present plans to issue shares of preferred stock.
CERTAIN FLORIDA LEGISLATION
Florida has enacted legislation that may deter or frustrate takeovers of
Florida corporations. The Florida Control Share Act generally provides that
shares acquired in excess of certain specific limitations will not have any
voting rights unless such voting rights are approved by a majority of the
corporation's disinterested shareholders. The Florida Affiliated Transactions
Act generally requires supermajority approval by disinterested shareholders of
certain specified transactions between a public corporation and holders of more
than 10% of the outstanding voting shares of the corporation (or their
affiliates). Florida law and our Articles and Bylaws also authorize us to
indemnify our directors, officers, employees and agents. In addition, our
Articles and Florida law presently limit the personal liability of corporate
directors for monetary damages, except where the directors (i) breach their
fiduciary duties, and (ii) such breach constitutes or includes certain
violations of criminal law, a transaction from which the directors derived an
improper personal benefit, certain unlawful distributions or certain other
reckless, wanton or willful acts or misconduct.
ANTI-TAKEOVER EFFECTS OF CERTAIN PROVISIONS OF OUR ARTICLES OF INCORPORATION AND
BYLAWS
Certain provisions of our Articles and Bylaws may be deemed to have an
anti-takeover effect and may delay, defer or prevent a tender offer or takeover
attempt, including attempts that might result in a premium being paid over the
market price for the shares held by shareholders. The following provisions may
not be amended in our Articles or Bylaws without the affirmative vote of the
holders of two-thirds of the outstanding shares of common stock.
CLASSIFIED BOARD OF DIRECTORS. The Articles and Bylaws provide for the
Board of Directors to be divided into three classes serving staggered terms. As
a result, approximately one-third of the Board of Directors will be elected
- 15 -
<PAGE>
each year. The Articles and Bylaws also provide that directors may only be
removed for cause and only upon the affirmative vote of the holders of at least
two-thirds of the outstanding shares of capital stock entitled to vote. These
provisions, when coupled with the provision of the Articles and Bylaws
authorizing only the Board of Directors to fill vacant directorships or increase
the size of the Board, may deter a shareholder from removing incumbent directors
and simultaneously gaining control of the Board of Directors by filling the
vacancies created by such removal with its own nominees.
SPECIAL MEETING OF SHAREHOLDERS, PROHIBITION OF ACTION BY UNANIMOUS
CONSENT. The Articles and Bylaws prohibit the taking of shareholder action by
written consent without a meeting and provide that special meetings of our
shareholders be called only by a majority of the Board of Directors, our Chief
Executive Officer or holders of not less than one-third of our outstanding
voting stock.
ADVANCE NOTICE REQUIREMENTS FOR SHAREHOLDER PROPOSALS AND DIRECTOR
NOMINATIONS. The Bylaws provide that shareholders seeking to bring business
before an annual meeting of shareholders, or to nominate candidates for election
as directors at an annual or special meeting of shareholders, must provide
timely notice thereof in writing. To be timely, a shareholder's notice must be
delivered to or mailed and received at our principal executive offices not less
than 60 days nor more than 90 days prior to the meeting; provided, however, that
in the event that less than 70 days' notice or prior public disclosure of the
date of the meeting is given or made to shareholders, notice by the shareholder,
to be timely, must be received no later than the close of business on the 10th
day following the day on which such notice of the date of the meeting was mailed
or such public disclosure was made, whichever is first. The Bylaws also specify
certain requirements as to the content and form of a shareholder's notice. These
provisions may preclude shareholders from bringing matters before the
shareholders at an annual or special meeting or from making nominations for
directors at an annual or special meeting.
AMENDMENT OF BYLAWS. Except for the provisions identified above
requiring a two-thirds vote of the outstanding shares to alter, amend or repeal,
the Bylaws may only be altered, amended or repealed by the Board or the
affirmative vote of the holders of at least a majority of the outstanding shares
of our capital stock.
TRANSFER AGENT
The transfer agent for our common stock is American Stock Transfer &
Trust Company, New York, New York.
- 16 -
<PAGE>
PLAN OF DISTRIBUTION
The selling shareholders may sell their shares of common stock in
various ways and at various prices. Some of the methods by which the selling
shareholders may sell their shares include:
/bullet/ ordinary brokerage transactions and transactions in which the
broker solicits purchasers;
/bullet/ privately negotiated transactions;
/bullet/ block trades in which a broker or dealer will attempt to sell the
shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction;
/bullet/ purchases by a broker or dealer as principal and resale by such
broker or dealer for the selling shareholder's account pursuant
to this Prospectus;
/bullet/ sales under Rule 144 rather than by using this Prospectus;
/bullet/ from time to time by pledgees, donees, transferees or other
successors in interest, including but not limited to Bear,
Stearns Securities Corp;
/bullet/ a combination of any such methods of sale; or
/bullet/ any other legally permitted method.
The applicable sales price may be affected by the type of transaction.
The selling shareholders may also pledge their shares pursuant to the
margin provisions of their customer agreements with their brokers. If there is a
default by the selling shareholders, the brokers may offer and sell the pledged
shares.
Brokers or dealers may receive commissions or discounts from the selling
shareholders (or, if the broker-dealer acts as agent for the purchaser of the
shares, from such purchaser) in amounts to be negotiated which are not expected
to exceed those customary in the types of transactions involved. We cannot
estimate at the present time the amount of commissions or discounts, if any,
that will be paid by the selling shareholders in connection with sales of the
shares.
The selling shareholders and any broker-dealers or agents that
participate with the selling shareholders in sales of the shares may be deemed
to be "underwriters" within the meaning of the Securities Act in connection with
such sales. In that event, any commissions received by such broker-dealers or
agents and any profit on the resale of the shares purchased by them may be
deemed to be underwriting commissions or discounts under the Securities Act.
Under the securities laws of certain states, the shares may be sold in
those states only through registered or licensed broker-dealers or pursuant to
available exemptions from such requirements. In addition, in certain states the
shares may not be sold therein unless the shares have been registered or
qualified for sale in such state or an exemption from such requirement is
available and is complied with.
We have agreed to pay all fees and expenses incident to the registration
of the shares, including certain fees and disbursements of counsel to the
selling shareholders. We have agreed to indemnify the selling shareholders
against certain losses, claims, damages and liabilities, including liabilities
under the Securities Act.
- 17 -
<PAGE>
The selling shareholders have also agreed to indemnify us, our
directors, officers, agents and representatives against certain liabilities,
including certain liabilities under the Securities Act.
The selling shareholders and other persons participating in the
distribution of the shares offered hereby are subject to the applicable
requirements of Regulation M promulgated under the Exchange Act in connection
with sales of the shares.
LEGAL MATTERS
The validity of the shares of common stock offered hereby will be passed
upon for us by Broad and Cassel, a partnership including professional
associations, Miami, Florida.
EXPERTS
The financial statements and schedules incorporated by reference in the
registration statement have been audited by Arthur Andersen LLP, independent
certified public accountants, as indicated in their reports with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in giving said reports.
- 18 -
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any report or document we
file at the public reference facilities maintained by the SEC at 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549 and at the SEC's regional
offices located at Seven World Trade Center, Suite 1300, New York, New York
10048, and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Please
call the SEC at 1-800-SEC-0880 for more information about the public reference
rooms. Our SEC filings are also available from the SEC's website located at
HTTP://WWW.SEC.GOV.
Quotations for the prices of our common stock appear on the Nasdaq
National Market, and reports, proxy statements and other information about us
can also be inspected at the offices of the National Association of Securities
Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20006. Quotations also
appear on the Boston and Philadelphia Stock Exchanges and the previously
mentioned information may be inspected at One Boston Place, Boston,
Massachusetts 02108, and 1900 Market Street, Philadelphia, Pennsylvania 19103,
respectively.
The SEC allows us to "incorporate by reference" the information we file
with it, 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 later information that we file
with the SEC will automatically update and supersede this information.
We incorporate by reference the following filings and any future filings
made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934 (the "Exchange Act"):
/bullet/ Our Annual Report on Form 10-K for the year ended December 31, 1997;
and
/bullet/ Our Quarterly Reports on Form 10-Q for the quarterly periods ended
March 31, 1998, June 30, 1998 and September 30, 1998.
We have filed with the SEC a Registration Statement on Form S-3 under
the Securities Act with respect to the common stock covered by this Prospectus.
This Prospectus, which is a part of the Registration Statement, does not contain
all the information set forth in, or annexed as exhibits to, the Registration
Statement, as permitted by the SEC's rules and regulations. For further
information about us and the common stock offered under this Prospectus, please
refer to the Registration Statement, including the exhibits. Copies of the
Registration Statement, including exhibits, may be obtained from the SEC's
public reference facilities listed above upon payment of the fees prescribed by
the SEC, or may be examined without charge at these facilities. Statements
concerning any document filed as an exhibit are not necessarily complete and, in
each instance, we refer you to the copy of the document filed as an exhibit to
the Registration Statement.
We will provide without charge to each person, including any beneficial
owner, to whom a Prospectus is delivered, upon written or oral request of that
person, a copy of any and all of the information that has been incorporated by
reference in this Prospectus (excluding exhibits unless those exhibits are
specifically incorporated by reference into the documents requested). Please
direct such requests to Chief Financial Officer, Angelo C. Malahias, 4001
Southwest 47th Avenue, Suite 201, Fort Lauderdale, Florida 33314, telephone
number (954) 584-0300.
- 19 -
<PAGE>
======================================================
196,347 SHARES
ANDRX CORPORATION
COMMON STOCK
--------------------
PROSPECTUS
--------------------
JANUARY ____, 1999
======================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The Registrant estimates that expenses payable by the Registrant in
connection with the offering described in this registration statement (other
than underwriting discounts and commissions) will be as follows:
Securities and Exchange Commission registration fee.................. $ 3,285
Printing and engraving expenses...................................... 15,000
Accounting fees and expenses......................................... 15,000
Legal fees and expenses.............................................. 30,000
Transfer Agent's fees and expenses................................... 5,000
Miscellaneous........................................................ 2,500
-----
TOTAL................................................................ $70,785
=======
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant has authority under Section 607.0850 of the Florida
Business Corporation Act to indemnify its directors and officers to the extent
provided for in such statute. The Registrant's Amended and Restated Articles of
Incorporation and Bylaws provide that the Registrant may insure, shall indemnify
and shall advance expenses on behalf of its officers and directors to the
fullest extent not prohibited by law. The Company is also a party to
indemnification agreements with each of its directors and officers. The
Registrant has also agreed to indemnify the Selling Shareholders named in the
Registration Statement against certain liabilities, including liabilities under
the Securities Act.
<TABLE>
<CAPTION>
ITEM 16. EXHIBITS.
EXHIBIT DESCRIPTION
- ------- -----------
<S> <C>
3.1 Form of Registrant's Amended and Restated Articles of Incorporation(1)
3.2 Form of Registrant's Amended and Restated Bylaws(1)
4.1 Specimen common stock Certificate(1)
5.1 Opinion of Broad and Cassel(2)
10.1 Form of Stock Incentive Plan, as amended(1)*
10.2 Employment Agreement between the Registrant and Alan P. Cohen, as amended(1)*
10.3 Employment Agreement between the Registrant and Elliot E Hahn, as amended(1)*
10.4 Employment Agreement between the Registrant and Chih-Ming J. Chen, as amended(1)*
10.5 Severance Agreement between the Registrant and Scott Lodin (1)*
10.6 Royalty Agreement between the Registrant and Chih-Ming J. Chen, as amended(1)*
10.7 Form of Indemnification Agreement between the Registrant and its officers
and directors(1)*
10.8 Development and License Agreement dated as of June 28, 1993 by and between
Zenith Laboratories, Inc. and the Registrant(1)(3)
10.9 Technical Transfer Agreement dated as of July 30, 1993 by and between Yung Shin
Pharmaceutical Ind. Co. Ltd. and the Registrant(1)(3)
10.10 Development and License Agreement dated as of September 22, 1993 by and between Circa
Pharmaceuticals, Inc. and the Registrant(1)(3)
</TABLE>
<PAGE>
<TABLE>
<S> <C>
10.11 Development and License Agreement dated as of November 10, 1993 by and between
Mylan Pharmaceuticals Inc. and the Registrant(1)(3)
10.12 Development and License Agreement dated as of December 7, 1993 by and between Circa
Pharmaceuticals, Inc. and the Registrant(1)(3)
10.13 Development and License Agreement dated as of January 17, 1994 by and between Purzer
Pharmaceutical Co., Ltd. and the Registrant(1)(3)
10.14 Lease Agreement relating to premises located at 4001 S.W. 47th Avenue, Fort Lauderdale,
Florida(1)
10.15 Lease Agreement relating to premises located at 4011 S.W. 47th Avenue, Fort Lauderdale,
Florida(1)
10.16 Lease Agreement relating to premises located at 3436 University Drive, Davie, Florida(1)
10.17 Loan and Security Agreement by and between Congress Financial Corporation (Florida) and
the Registrant, as amended(1)
10.18 ANCIRC General Partnership Agreement between Circa Pharmaceuticals, Inc. and the
Registrant, as amended(1)
10.19 Research and Development Services Agreement dated as of July 8, 1994 by and between
ANCIRC and the Registrant, as amended(1)
10.20 Manufacturing and Regulatory Approval Agreement dated as of July 8, 1994 by and
between Circa Pharmaceuticals, Inc. and ANCIRC, as amended(1)
10.21 Distribution and Marketing Agreement dated as of July 8, 1994 between ANCIRC and the
Registrant, as amended(1)
10.22 Patent and Know How License Agreement dated as of July 8, 1994 between ANCIRC and
the Registrant, as amended(1)
10.23 Patent and Know How License Agreement dated as of July 8, 1994 between Circa
Pharmaceuticals, Inc. and ANCIRC, as amended(1)
10.24 Securities Purchase Agreement dated as of July 8, 1994 between the Registrant and
Circa Pharmaceuticals, Inc.(1)
10.25 Securities Purchase Agreement dated as of August 17, 1995 between the Registrant and
Watson Pharmaceuticals, Inc.(1)
10.26 Securities Purchase Agreement dated October 30, 1995 between Circa Pharmaceuticals, Inc.
and the Registrant(1)
10.27 Development Agreement between Sepracor, Inc. and the Registrant(1)(3)
10.28 Sixth Amendment to the Loan and Security Agreement by and between Congress Financial
Corporation (Florida) and Registrant(4)
10.29 Employment Agreement between the Registrant and Angelo C. Malahias(5)*
10.30 First Amendment to Lease Agreement relating to the premises located at 3436 University
Drive, Davie, Florida(5)
10.31 Third Addendum to Lease between the Registrant and New Town Commerce Center, Ltd.,
relating to the premises at 4011 S.W. 47th Avenue, Davie, Florida(6)
10.32 Fourth Addendum to Lease between the Registrant and New Town Commerce Center, Ltd.,
relating to the premises at 4001 S.W. 47th Avenue, Davie, Florida(6)
10.33 Lease by and between Registrant and New Town Commerce Center, Ltd., relating to the
premises at 4111 S.W. 47th Avenue, Davie, Florida(6)
10.34 Amendment to Royalty Agreement between the Registrant and Chih-Ming J. Chen(7)
10.35 Lease Agreement relating to premises located at 500 Blue Lake Drive, Boca Raton, Florida(7)
10.36 Lease Agreement relating to premises located at 2915 Weston Road, Weston, Florida(7)
21.1 Subsidiaries of the Registrant(1)
23.1 Consent of Broad and Cassel (included in its opinion filed as Exhibit 5.1)(2)
23.2 Consent of Arthur Andersen LLP(8)
24.1 Powers of Attorney (included on the signature page of this Registration Statement)(2)
</TABLE>
* Management Compensation Plan or Arrangement
<PAGE>
(1) Filed as an Exhibit of the same number to the Company's
Registrant Statement on Form S-1 (File No. 333- 03614) and
incorporated herein by reference.
(2) Previously filed.
(3) A request for confidential treatment pursuant to Rule 406 under
the Securities Act has been made and granted for certain portions
of this Exhibit.
(4) Filed as an Exhibit of the same number to the Company's Quarterly
Report on Form 10-Q for the Period Ended September 30, 1996 and
incorporated herein by reference.
(5) Filed as an Exhibit of the same number to the Company's Annual
Report on Form 10-K for the Year Ended December 31, 1996 and
incorporated herein by reference.
(6) Filed as an Exhibit of the same number to the Company's Annual
Report on Form 10-K for the Year Ended December 31, 1997 and
incorporated herein by reference.
(7) Filed as an Exhibit of the same number to the Company's Quarterly
Report on Form 10-Q for the Period Ended September 31, 1998 and
incorporated herein by reference.
(8) Filed herewith.
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 to 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.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high and of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no
more than 20 percent change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table
in the effective registration statement; and
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
(2) That, for purposes of determining any liability under the
Securities Act, each filing of the Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plans annual report
pursuant to Section 15(d) 0 f 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.
<PAGE>
(3) 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.
(4) 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) 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 foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other that 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.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registrant Statement to be signed on its behalf by the undersigned, thereto duly
authorized, in the City of Fort Lauderdale, State of Florida, on January
26, 1999.
ANDRX CORPORATION
By: /S/ ALAN P. COHEN
-----------------------------
Alan P. Cohen, Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
- ----------------------------------------- ------------------------------------ ---------------------------
<S> <C> <C>
/S/ ALAN P. COHEN Co-Chairman, Chief Executive January 26, 1999
- ----------------------------------------- Officer and Director (principal
Alan P. Cohen executive officer)
/S/ ELLIOT F. HAHN President and Director January 26, 1999
- -----------------------------------------
Elliot F. Hahn, Ph.D.
/S/ CHIH-MING J. CHEN Co-Chairman, Vice President and January 26, 1999
- ----------------------------------------- Director
Chih-Ming J. Chen, Ph.D.
/S/ ANGELO C. MALAHIAS Vice President and Chief Financial January 26, 1999
- ----------------------------------------- Officer (principal financial and
Angelo C. Malahias accounting officer)
* Director January 26, 1999
- -----------------------------------------
Elaine Bloom
* Director January 26, 1999
- -----------------------------------------
Irwin C. Gerson
* Director January 26, 1999
- -----------------------------------------
Michael Schwartz, Ph.D.
* Director January 26, 1999
- -----------------------------------------
Melvin Sharoky, M.D.
</TABLE>
By: /S/ ELLIOT F. HAHN
--------------------------------
Elliot F. Hahn, Ph.D.,
Attorney-in Fact
<PAGE>
EXHIBIT INDEX
EXHIBIT
- -------
23.2 Consent of Arthur Andersen LLP
EXHIBIT 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
As independent certified public accountants, we hereby consent to the
use of our reports (and to all references to our firm) included in or made a
part of this registration statement.
ARTHUR ANDERSEN LLP
Fort Lauderdale, Florida,
January 26, 1999.
