<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 30, 1998
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
------------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
CUBIST PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 2830 22-3192085
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Numbers) identification No.)
</TABLE>
24 EMILY STREET
CAMBRIDGE, MA 02139
(617) 576-1999
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
------------------------------
SCOTT M. ROCKLAGE, PH.D.
PRESIDENT AND CHIEF EXECUTIVE OFFICER
CUBIST PHARMACEUTICALS, INC.
24 EMILY STREET
CAMBRIDGE, MA 02139
(617) 576-1999
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
------------------------------
WITH COPIES TO:
JUSTIN P. MORREALE, ESQ.
JULIO E. VEGA, ESQ.
BINGHAM DANA LLP
150 FEDERAL STREET
BOSTON, MA 02110
(617) 951-8000
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this Registration Statement becomes effective
------------------------
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
TO BE REGISTERED BE REGISTERED(1) PER SHARE(2) OFFERING PRICE(2) REGISTRATION FEE
<S> <C> <C> <C> <C>
Common Stock Par Value $.01 per share............. 9,098,343 $2.47 $22, 472,907.21 $6,629.51
</TABLE>
(1) Pursuant to Rule 429 promulgated under the Securities Act of 1933, as
amended, the Prospectus included in the Registration Statement is a combined
Prospectus that relates also to the Registration Statement on Form S-1 (File
No. 333-33883) previously filed by the Registrant on August 18, 1997 and
amended on Form S-3 (File No. 333-33883) filed on January 9, 1998, which
registers 1,265,307 shares of Common Stock. A filing fee in the amount of
$1,989.02 was previously paid with respect to such shares.
(2) Estimated solely for the purpose of determining the registration fee.
Calculated in accordance with Rule 457(c), based on the offering of up to
9,098,343 shares at a purchase price of $2.47 per share, which is the
average of the high and low sale prices reported in the consolidated
reporting system of the Nasdaq National Market on September 28, 1998. It is
not known how many shares will be purchased under this Registration
Statement or at what price such shares will be purchased.
------------------------------
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.
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<PAGE>
PROSPECTUS
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD UNTIL THE
REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO
SELL AND IS NOT A SOLICITATION OF AN OFFER TO BUY IN ANY STATE IN WHICH AN
OFFER, SOLICITATION OR SALE IS NOT PERMITTED.
Subject to Completion, dated September 30, 1998
9,098,343 SHARES
CUBIST PHARMACEUTICALS, INC.
COMMON STOCK
------------------
All of the 9,098,343 shares (the "Shares") of Common Stock, par value $0.001
per share (the "Common Stock") offered hereby are being sold by certain
stockholders (the "Selling Stockholders") of Cubist Pharmaceuticals, Inc.
("Cubist" or the "Company"). See "Principal and Selling Stockholders." The
Company will not receive any of the proceeds from the sale of shares by the
Selling Stockholders. The Company's Common Stock is listed on the Nasdaq
National Market under the symbol "CBST". On September 28, 1998, the closing sale
price of the Common Stock, as reported on the Nasdaq National Market, was $2.50
per share.
The term "Selling Stockholders" includes the holders listed below and the
beneficial owners of the Shares and their transferees, pledgees, donees and
other successors in interest (other than purchasers of the Shares pursuant to
this Prospectus).
THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS," BEGINNING ON PAGE 3.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
The Company has been advised by the Selling Stockholders that all or a
portion of the shares of Common Stock offered hereby may be sold by the Selling
Stockholders from time to time in one or a combination of the following
transactions: (a) transactions (which may involve crosses or block transactions)
on the National Market System of the Nasdaq Stock Market, or otherwise, at fixed
prices, at market prices prevailing at the time of sale, at prices related to
such prevailing market prices or at varying prices determined at the time of
sale; or (b) privately negotiated transactions at negotiated prices. The Selling
Stockholders may effect such transactions by selling such shares directly to
purchasers or by selling such shares to or through brokers or dealers and such
brokers or dealers may receive compensation in the form of discounts,
concessions or commissions from the Selling Stockholders or the purchasers of
such shares for whom such brokers or dealers may act as agent, or to whom they
sell as principal, or both. See "Plan of Distribution."
<TABLE>
<CAPTION>
UNDERWRITING PROCEEDS TO
DISCOUNTS AND SELLING
PRICE TO PUBLIC COMMISSIONS STOCKHOLDER
<S> <C> <C> <C>
Per Share................................................ (l) (1)(2) (1)(2)
Total.................................................... (1) (1)(2) (1)(2)
</TABLE>
(1) The Selling Stockholders may from time to time effect the sale of the Shares
at prices and at terms then prevailing or at prices related to the
then-current market price, or in negotiated transactions. Under the
securities laws of certain states, the Shares may be sold in such states
only through registered or licensed brokers or dealers. See "Plan of
Distribution" and "Selling Stockholders."
(2) The Company has agreed to prepare and file this Prospectus and the related
Registration Statement and supplements and amendments thereto required by
the Securities Act with the Securities and Exchange Commission, and to
deliver copies of the Prospectus to the Selling Stockholders. The expenses
incurred in connection with the same, estimated at $35,000, will be borne by
the Company. The Selling Stockholders and any broker-dealers, agents or
underwriters who participate in a sale of the Shares may be deemed
"underwriters" within the meaning of the Securities Act, and any commissions
paid or discounts allowed to, and any profits received on resale of the
Shares by, any of them may be deemed to be underwriting discounts or
commissions under the Securities Act. See "Plan of Distribution." The
Company will not be responsible for any discounts, concessions, commissions
or other compensation due to any broker or dealer in connection with the
sale of any of the shares offered hereby, which expenses will be borne by
the Selling Stockholders.
THE DATE OF THIS PROSPECTUS IS , 1998.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT"), and in accordance
therewith files periodic reports and other information with the Securities and
Exchange Commission (the "COMMISSION"). Such reports, proxy statements and other
information concerning the Company may be inspected and copies may be obtained
(at prescribed rates) at public reference facilities maintained by the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549
and at the regional offices of the Commission located at Seven World Trade
Center, 13th Floor, New York, New York 10048 and at Northwest Atrium Center, 500
W. Madison Street, Suite 1400, Chicago, Illinois 60661-2511. In addition,
electronically filed documents, including reports, proxy and information
statements and other information regarding the Company, can be obtained from the
Commission's Web site at http://www.sec.gov. The Company's Common Stock is
listed on the Nasdaq National Market, and reports, proxy statements and other
information concerning the Company can also be inspected the offices of the
National Association of Securities Dealers, Inc. at 1735 K Street, Washington,
DC 20006.
The Company has filed a Registration Statement on Form S-3 (the
"REGISTRATION STATEMENT") under the Securities Act with the Commission with
respect to the Common Stock being offered pursuant to this Prospectus. As
permitted by the rules and regulations of the Commission, this Prospectus omits
certain of the information contained in the Registration Statement. For further
information with respect to the Company and the Common Stock being offered
pursuant to this Prospectus, reference is hereby made to such Registration
Statement, including the exhibits filed as part thereof. Statements contained in
this Prospectus concerning the provisions of certain documents filed with, or
incorporated by reference in, the Registration Statement are not necessarily
complete, each such statement being qualified in all respects by such reference.
Copies of all or any part of the Registration Statement, including the documents
incorporated by reference therein or exhibits thereto, may be obtained upon
payment of the prescribed rates at the offices of the Commission set forth
above.
Upon request, the Company will provide without charge to each person to whom
a copy of this Prospectus has been delivered a copy of any information that was
incorporated by reference in the Prospectus (other than exhibits to documents,
unless such exhibits are specifically incorporated by reference into the
Prospectus). The Company will also provide upon specific request, without charge
to each person to whom a copy of this Prospectus has been delivered, a copy of
all documents filed from time to time by the Company with the Commission
pursuant to the Exchange Act. Requests for such copies should be directed to
Thomas A. Shea, Senior Director of Finance and Administration, Treasurer, Cubist
Pharmaceuticals, Inc. 24 Emily Street, Cambridge, MA 02139. Telephone requests
may be directed to Mr. Shea at (617) 576-4155.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
There is incorporated herein by reference the Annual Report on Form 10-K of
the Company for the fiscal year ended December 31, 1997, the Quarterly Reports
on Form 10-Q of the Company for the fiscal quarters ended March 31, 1998 and
June 30, 1998, filed with the Commission pursuant to Section 13(a) of the
Exchange Act, the Current Report on Form 8-K filed with the Commission on
September 15, 1998, and the description of the Common Stock contained in the
Company's Registration Statement filed with the Commission under to Section
12(g) of the Exchange Act including any amendment or report filed for the
purpose of updating such description.
All documents filed by the Company 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 the offering of the Common Stock shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing such documents. Any statement contained herein or in a document,
all or a portion of which is 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 other
subsequently filed document or portion thereof which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
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<PAGE>
RISK FACTORS
PROSPECTIVE INVESTORS IN THE SHARES OFFERED HEREBY SHOULD CAREFULLY CONSIDER
THE FOLLOWING RISK FACTORS, IN ADDITION TO THE OTHER INFORMATION APPEARING IN
THIS PROSPECTUS AND THE DOCUMENTS INCORPORATED HEREIN BY REFERENCE. THIS
PROSPECTUS CONTAINS, AND INCORPORATES BY REFERENCE, FORWARD-LOOKING STATEMENTS
WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933 AND SECTION 21E
OF THE SECURITIES AND EXCHANGE ACT OF 1934, INCLUDING BUT NOT LIMITED TO (I)
STATEMENTS ABOUT THE ADEQUACY OF THE COMPANY'S CASH, CASH EQUIVALENTS, OTHER
CAPITAL RESOURCES, INTEREST INCOME, OTHER INCOME AND FUTURE REVENUES DUE UNDER
THE COMPANY'S COLLABORATIVE AGREEMENTS TO FUND ITS OPERATING EXPENSES AND
CAPITAL REQUIREMENTS AS CURRENTLY PLANNED, (II) STATEMENTS ABOUT THE AMOUNT OF
CAPITAL EXPENDITURES THAT THE COMPANY EXPECTS TO INCUR, (III) STATEMENTS ABOUT
WHEN THE COMPANY'S PLANS TO BEGIN CLINICAL TRIALS OF DAPTOMYCIN, AND (IV)
CERTAIN STATEMENTS IDENTIFIED OR QUALIFIED BY WORDS SUCH AS "LIKELY", "WILL",
"SUGGESTS", "MAY", "WOULD", "COULD", "SHOULD", "EXPECTS", "ANTICIPATES",
"ESTIMATES", "PLANS", "PROJECTS", "BELIEVES", OR SIMILAR EXPRESSIONS (AND
VARIANTS OF SUCH WORDS OR EXPRESSIONS). INVESTORS ARE CAUTIONED THAT
FORWARD-LOOKING STATEMENTS ARE INHERENTLY UNCERTAIN. ACTUAL PERFORMANCE AND
RESULTS OF OPERATIONS MAY DIFFER MATERIALLY FROM THOSE PROJECTED OR SUGGESTED IN
THE FORWARD LOOKING STATEMENTS DUE TO CERTAIN RISKS AND UNCERTAINTIES INCLUDING,
BUT NOT LIMITED TO, THE FOLLOWING RISKS AND UNCERTAINTIES AND THE RISKS AND
UNCERTAINTIES DESCRIBED OR DISCUSSED IN THE SECTION "RISK FACTORS" IN THE
COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31,
1997. THE FORWARD-LOOKING STATEMENTS CONTAINED HEREIN REPRESENT THE COMPANY'S
JUDGMENT AS OF THE DATE OF THIS PROSPECTUS, AND THE COMPANY CAUTIONS READERS NOT
TO PLACE UNDUE RELIANCE ON SUCH STATEMENTS.
EARLY STAGE OF PRODUCT DEVELOPMENT; NO ASSURANCE OF SUCCESSFUL
COMMERCIALIZATION. Since inception, the Company has generated no revenue from
product sales. The Company's research and development programs are at an early
stage, and the Company does not expect that any drugs resulting from its
research and development efforts, or from the joint efforts of the Company and
its collaborative partners, will be commercially available for a significant
number of years, if at all. The Company has one drug candidate which has prior
Phase II data and is currently in the process of optimizing lead candidates to
select other drug candidates for preclinical development. To date, the Company
has not, independently or with its collaborative partners, completed the
optimization of any lead candidates. Any drug candidates developed by the
Company will require significant additional research and development efforts,
including extensive preclinical (animal and IN VITRO data) and clinical testing
and regulatory approval, prior to commercial sale. Only one of the Company's
drug candidates has advanced to any phase of preclinical or clinical trials.
There can be no assurance that the Company's approach to drug discovery, acting
independently or with the efforts of any collaborative partner of the Company,
will be effective or will result in the development of any drug. The Company's
drug candidates will be subject to the risks of failure inherent in the
development of pharmaceutical products based on new technologies. These risks
include the possibilities that any or all of the Company's drug candidates will
be found to be unsafe, ineffective or toxic or otherwise fail to meet applicable
regulatory standards or receive necessary regulatory clearances; that these drug
candidates, if safe and effective, will be difficult to develop into
commercially viable drugs or to manufacture on a large scale or will be
uneconomical to market; that proprietary rights of third parties will preclude
the Company from marketing such drugs; or that third parties will market
superior or equivalent drugs. The failure to develop safe, commercially viable
drugs would have a material adverse effect on the Company's business, operating
results and financial condition.
UNCERTAINTY DUE TO UNPROVEN TECHNOLOGY. The Company's drug discovery
approach faces technical issues which have not been resolved and requires the
development of multiple novel technologies to create a successful drug
candidate. While the Company has demonstrated that certain compounds have the
ability to inhibit the activity of certain molecular targets, the Company has
not proven that this activity can be utilized clinically as a therapeutic.
Furthermore, there can be no assurance that the inhibitory activity already
demonstrated in primary screening will continue to be encouraging in further
screening or drug discovery studies. The Company has not tested any drug
candidates developed from the Company's drug discovery program in humans, and
there can be no assurance that there will be clinical benefits associated
3
<PAGE>
with any such drug candidates. Furthermore, there can be no assurance that the
Company will successfully address these technological challenges or others that
may arise in the course of development. Any failure of the Company to anticipate
or respond adequately to technological developments will have a material adverse
effect on the Company's business, operating results and financial condition.
There can be no assurance that the Company will be able to employ its drug
discovery approach successfully.
DEPENDENCE ON COLLABORATIVE PARTNERS AND OTHERS. A key element of the
Company's strategy is to enhance certain of its drug discovery and development
programs and to fund its capital requirements, in part, by entering into
collaborative agreements with major pharmaceutical companies. The Company is a
party to collaborative agreements with Bristol-Myers Squibb and Merck
(collectively, the "Collaborative Agreements"). Under the Collaborative
Agreements, each of Bristol-Myers Squibb and Merck is responsible for (i)
providing libraries of compounds for screening against certain of the Company's
aminoacyl-tRNA synthetase targets, (ii) selecting, in collaboration with Cubist,
compounds determined to be leads in the screening for subsequent development,
(iii) conducting preclinical and clinical trials and obtaining required
regulatory approvals of drug candidates, and (iv) manufacturing and
commercializing resulting drugs. As a result, the Company's receipt of revenues
(whether in the form of continued research funding, drug development milestones
or royalties on sales) under the Collaborative Agreements is dependent upon the
decisions made by the manufacturing and marketing resources of its collaborative
partners. The Company's collaborative partners are not obligated to develop or
commercialize any drug candidates resulting from the Collaborative Agreements.
The amount and timing of resources dedicated by the Company's collaborative
partners to their respective collaborations with the Company is not within the
Company's control. Moreover, certain drug candidates discovered by the Company
may be viewed by the Company's collaborative partners as competitive with such
partners' drugs or drug candidates. Accordingly, there can be no assurance that
the Company's collaborative partners will elect to proceed with the development
of drug candidates which the Company believes to be promising or that they will
not pursue their existing or alternative technologies in preference to such drug
candidates. There can be no assurance that the interests of the Company will
continue to coincide with those of its collaborative partners, that some of the
Company's collaborative partners will not develop independently or with third
parties drugs that could compete with drugs of the types contemplated by the
Collaborative Agreements, or that disagreements over rights or technology or
other proprietary interests will not occur.
If any of the Company's collaborative partners breaches or terminates its
agreement with the Company, or otherwise fails to conduct its collaborative
activities in a timely manner, the development or commercialization of any drug
candidate or research program under these Collaborative Agreements may be
delayed, the Company may be required to undertake unforeseen additional
responsibilities or to devote unforeseen additional resources to such
development or commercialization, or such development or commercialization could
be terminated. Any such event could materially adversely affect the Company's
financial condition, intellectual property position and operations. In addition,
there have been a significant number of recent consolidations among
pharmaceutical companies. Such consolidations among the companies with which the
Company is collaborating could result in the diminution or termination of, or
delays in, the development or commercialization of drug candidates or research
programs under one or more of the Collaborative Agreements.
ADDITIONAL FINANCING REQUIREMENTS; UNCERTAINTY OF AVAILABLE FUNDING. The
Company will require substantial additional funds for its drug discovery and
development programs, for operating expenses, for pursuing regulatory
clearances, for the development of manufacturing, marketing and sales
capabilities and for prosecuting and defending its intellectual property rights
before it can expect to realize significant revenues from commercial sales. The
Company intends to seek such additional funding through public or private
financing or collaborative or other arrangements with corporate partners. If
additional funds are raised by issuing equity securities, further dilution to
existing stockholders may result and future investors may be granted rights
superior to those of existing stockholders. There can be no assurance, however,
that additional financing will be available from any of these sources or, if
available, will be available on
4
<PAGE>
acceptable or affordable terms. If adequate funds are not available, the Company
may be required to delay, reduce the scope of or eliminate one or more of its
research and development programs or to obtain funds by entering into
arrangements with collaborative partners or others that require the Company to
issue additional equity securities or to relinquish rights to certain
technologies or drug candidates that the Company would not otherwise issue or
relinquish in order to continue independent operations.
HISTORY OF LOSSES AND EXPECTATION OF FUTURE LOSSES; UNCERTAINTY OF FUTURE
PROFITABILITY. The Company has incurred a cumulative operating loss of
approximately $28.9 million through June 30, 1998. Losses have resulted
principally from costs incurred in research and development activities related
to the Company's efforts to commence clinical trials, develop target assays,
acquisition and chemical optimization of compounds, automated high throughput
screening and from the associated administrative costs. The Company expects to
incur significant additional operating losses over the next several years and
expects cumulative losses to increase substantially due to expanded research and
development efforts, preclinical and clinical trials and development of
manufacturing, marketing and sales capabilities. In the next few years, the
Company's revenues may be limited to research support payments under the
Collaborative Agreements and any amounts received under other research or drug
development collaborations that the Company has established or will establish.
There can be no assurance, however, that the Company will be able to establish
any additional collaborative relationships on terms acceptable to the Company or
maintain in effect the current Collaborative Agreements. The Company's ability
to achieve significant revenue or profitability is dependent on its or its
collaborative partners' ability to successfully complete the development of drug
candidates, to develop and obtain patent protection and regulatory approvals for
the drug candidates and to manufacture and commercialize the resulting drugs.
The Company will not receive revenues or royalties from commercial sales for a
significant number of years, if at all. Failure to receive significant revenues
or achieve profitable operations would impair the Company's ability to sustain
operations. There can be no assurance that the Company will ever successfully
develop, commercialize, patent, manufacture and market any products, obtain
required regulatory approvals or achieve profitability.
UNCERTAINTY OF PATENTS AND PROPRIETARY RIGHTS. The Company's success will
depend in part on its ability to obtain U.S. and foreign patent protection for
its drug candidates and processes, preserve its trade secrets and operate
without infringing the proprietary rights of third parties. Because of the
length of time and expense associated with bringing new drug candidates through
the development and regulatory approval process to the marketplace, the
pharmaceutical industry has traditionally placed considerable importance on
obtaining patent and trade secret protection for significant new technologies,
products and processes. There can be no assurance that any additional patents
will issue from any of the patent applications owned by, or licensed to, the
Company. Further, there can be no assurance that any rights the Company may have
under issued patents will provide the Company with significant protection
against competitive products or otherwise be commercially viable. Legal
standards relating to the validity of patents covering pharmaceutical and
biotechnological inventions and the scope of claims made under such patents are
still developing. There is no consistent policy regarding the breadth of claims
allowed in biotechnology patents. The patent position of a biotechnology firm is
highly uncertain and involves complex legal and factual questions. There can be
no assurance that any existing or future patents issued to, or licensed by, the
Company will not subsequently be challenged, infringed upon, invalidated or
circumvented by others. In addition, patents may have been granted, or may be
granted, covering products or processes that are necessary or useful to the
development of the Company's drug candidates. If the Company's drug candidates
or processes are found to infringe upon the patents, or otherwise impermissibly
utilize the intellectual property of others, the Company's development,
manufacture and sale of such drug candidates could be severely restricted or
prohibited. In such event, the Company may be required to obtain licenses from
third parties to utilize the patents or proprietary rights of others. There can
be no assurance that the Company will be able to obtain such licenses on
acceptable terms, or at all. There has been significant litigation in the
industry regarding patents and other proprietary rights. If the Company becomes
involved in litigation regarding its intellectual property rights or the
intellectual property rights of
5
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others, the potential cost of such litigation and the potential damages that the
Company could be required to pay could be substantial.
In addition to patent protection, the Company relies on trade secrets,
proprietary know-how and technological advances which it seeks to protect, in
part, by confidentiality agreements with its collaborative partners, employees
and consultants. There can be no assurance that these confidentiality agreements
will not be breached, that the Company would have adequate remedies for any such
breach, or that the Company's trade secrets, proprietary know-how and
technological advances will not otherwise become known or be independently
discovered by others.
UNCERTAINTY ASSOCIATED WITH PRECLINICAL AND CLINICAL TESTING. Before
obtaining regulatory approvals for the commercial sale of any of the Company's
potential drugs, the drug candidates will be subject to extensive preclinical
and clinical trials to demonstrate their safety and efficacy in humans. The
Company is dependent on its collaborative partners to conduct clinical trials
for the drug candidates resulting from the Collaborative Agreements and may
become dependent on other third parties to conduct future clinical trials of its
internally developed drug candidates. The Company has no experience in
conducting preclinical or clinical trials, and preclinical or clinical trials
have been commenced with respect to only one of the Company's drug candidates
and none of the drug candidates being developed jointly by the Company and its
collaborative partners. Furthermore, there can be no assurance that preclinical
or clinical trials of any drug candidates will demonstrate the safety and
efficacy of such drug candidates at all or to the extent necessary to obtain
regulatory approvals. Companies in the biotechnology industry have suffered
significant setbacks in advanced clinical trials, even after demonstrating
promising results in earlier trials. The failure to adequately demonstrate the
safety and efficacy of a drug candidate under development could delay or prevent
regulatory approval of the drug candidate and would have a material adverse
effect on the Company's business, operating results and financial condition.
NO ASSURANCE OF MARKET ACCEPTANCE. There can be no assurance that any drugs
successfully developed by the Company, independently or with its collaborative
partners, if approved for marketing, will achieve market acceptance. The
antiinfective drugs which the Company is attempting to develop will compete with
a number of well-established antiinfective drugs manufactured and marketed by
major pharmaceutical companies. The degree of market acceptance of any drugs
developed by the Company will depend on a number of factors, including the
establishment and demonstration of the clinical efficacy and safety of the
Company's drug candidates, their potential advantage over existing therapies and
reimbursement policies of government and third-party payors. There is no
assurance that physicians, patients or the medical community in general will
accept and utilize any drugs that may be developed by the Company independently
or with its collaborative partners.
INTENSE COMPETITION. The biotechnology and pharmaceutical industries are
intensely competitive and subject to rapid and significant technological change.
Competitors of the Company in the United States and elsewhere are numerous and
include, among others, major multinational pharmaceutical and chemical
companies, specialized biotechnology firms and universities and other research
institutions. Many of these competitors employ greater financial and other
resources, including larger research and development staffs and more effective
marketing and manufacturing organizations, than the Company or its collaborative
partners. Acquisitions of competing companies and potential competitors by large
pharmaceutical companies or others could enhance financial, marketing and other
resources available to such competitors. As a result of academic and government
institutions becoming increasingly aware of the commercial value of their
research findings, such institutions are more likely to enter into exclusive
licensing agreements with commercial enterprises, including competitors of the
Company, to market commercial products. There can be no assurance that the
Company's competitors will not succeed in developing technologies and drugs that
are more effective or less costly than any which are being developed by the
Company or which would render the Company's technology and future drugs obsolete
and noncompetitive.
6
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In addition, some of the Company's competitors have greater experience than
the Company in conducting preclinical trials and obtaining U.S. Food and Drug
Administration ("FDA") and other regulatory approvals. Accordingly, the
Company's competitors may succeed in obtaining FDA or other regulatory approvals
for drug candidates more rapidly than the Company. Companies that complete
clinical trails, obtain required regulatory agency approvals and commence
commercial sale of their drugs before their competitors may achieve a
significant competitive advantage, including certain patent and FDA marketing
exclusivity rights that would delay the Company's ability to market certain
products. There can be no assurance that drugs resulting from the Company's
research and development efforts, or from the joint efforts of the Company and
its collaborative partners, will be able to compete successfully with
competitors' existing products or products under development or that they will
obtain regulatory approval in the United States or elsewhere.
IMPACT OF EXTENSIVE GOVERNMENT REGULATION. The FDA and comparable agencies
in foreign countries impose substantial requirements upon the introduction of
pharmaceutical products through lengthy and detailed preclinical, laboratory and
clinical testing procedures, sampling activities and other costly and
time-consuming procedures to establish their safety and efficacy. All of the
Company's drug candidates will require governmental approvals for
commercialization, none of which have been obtained. Preclinical and clinical
trials and manufacturing of the Company's drug candidates will be subject to the
rigorous testing and approval processes of the FDA and corresponding foreign
regulatory authorities. Satisfaction of these requirements typically take a
significant number of years and can vary substantially based upon the type,
complexity and novelty of the product. There can be no assurance as to when
Cubist, independently or with its collaborative partners, might first submit an
IND for FDA or other regulatory review. Government regulation also affects the
manufacturing and marketing of pharmaceutical products.
The effect of government regulation may be to delay marketing of the
Company's potential drugs for a considerable or indefinite period of time,
impose costly procedural requirements upon the Company's activities and furnish
a competitive advantage to larger companies or companies more experienced in
regulatory affairs. Delays in obtaining governmental regulatory approval could
adversely affect the Company's marketing as well as the Company's ability to
generate significant revenues from commercial sales. There can be no assurance
that FDA or other regulatory approvals for any drug candidates developed by the
Company will be granted on a timely basis or at all. Moreover, if regulatory
approval of a drug candidate is granted, such approval may impose limitations on
the indicated use for which such drug may be marketed. Even if initial
regulatory approvals for the Company's drug candidates are obtained, the
Company, its drugs and its manufacturing facilities would be subject to
continual review and periodic inspection, and later discovery of previously
unknown problems with a drug, manufacturer or facility may result in
restrictions on such drug or manufacturer, including withdrawal of the drug from
the market. The regulatory standards are applied stringently by the FDA and
other regulatory authorities and failure to comply can, among other things,
result in fines, denial or withdrawal of regulatory approvals, product recalls
or seizures, operating restrictions and criminal prosecution.
The FDA has developed two "fast track" policies for certain new drugs
(including antibiotics), one policy for expedited development and review and one
policy for accelerated approval. The expedited development and review policy
applies to new drug therapies that are intended to treat persons with life-
threatening and severely debilitating illnesses, especially where no
satisfactory alternative therapy exists. The accelerated approval policy applies
to certain new drugs that are intended to treat persons with serious or
life-threatening illnesses that provide a meaningful therapeutic benefit to
patients over existing treatments. There can be no assurance that any drug
candidate contemplated by the Company will qualify for the FDA's various fast
track or priority approval policies. Nor can there be any assurance that such
policies will remain as currently implemented by the FDA.
As with many biotechnology and pharmaceutical companies, the Company is
subject to numerous environmental and safety laws and regulations. Any violation
of, and the cost of compliance with, these regulations could materially
adversely affect the Company's business, operating results and financial
7
<PAGE>
condition. The Company is subject to periodic inspections and has not received
notice of any material violations of any environmental or safety law or
regulation.
DEPENDENCE ON KEY PERSONNEL. The Company is highly dependent upon the
efforts of its senior management and scientific team, including its President
and Chief Executive Officer. Although Dr. Rocklage has entered into an
employment agreement with the Company, the terms of the employment agreement
provide that Dr. Rocklage may terminate his employment with the Company at any
time upon thirty days' written notice. None of the Company's other executive
officers or key employees has entered into an employment agreement with the
Company. The loss of the services of one or more of these individuals might
impede the achievement of the Company's development objectives. Because of the
specialized scientific nature of the Company's business, the Company is highly
dependent upon its ability to attract and retain qualified scientific and
technical personnel. There is intense competition among major pharmaceutical and
chemical companies, specialized biotechnology firms and universities and other
research institutions for qualified personnel in the areas of the Company's
activities. There can be no assurance that the Company will be able to continue
to attract and retain the qualified personnel necessary for the development of
its business. Loss of the services of, or failure to recruit, key scientific and
technical personnel could adversely affect the Company's business, operating
results and financial condition.
LACK OF MANUFACTURING, MARKETING AND SALES CAPABILITY AND
EXPERIENCE. Cubist has not yet invested in the development of manufacturing,
marketing or sales capabilities. The Company has no experience in, and currently
lacks the facilities and personnel to, manufacture products in accordance with
Good Manufacturing Practices ("GMP") as prescribed by the FDA or to produce an
adequate supply of compounds to meet future requirements for clinical trials. If
the Company is unable to develop or contract for manufacturing capabilities on
acceptable terms, the Company's ability to conduct preclinical and clinical
trials with the Company's drug candidates will be adversely affected, resulting
in delays in the submission of drug candidates for regulatory approvals and in
the initiation of new development programs, which in turn could materially
impair Cubist's competitive position and the possibility of achieving
profitability.
The Company has no experience in marketing drugs. The Company has granted
marketing rights to its collaborative partners with respect to drugs developed
through the Collaborative Agreements. The Company may seek to collaborate with a
third party to market those drugs for which it has retained or licensed
marketing rights or may seek to market and sell such drugs directly. If the
Company seeks to collaborate with a third party, there can be no assurance that
a collaborative agreement can be reached on acceptable terms. If the Company
seeks to market and sell such drugs directly, the Company will need to hire
additional personnel skilled in marketing and sales as it develops drugs with
commercial potential. There can be no assurance that the Company will be able to
acquire, or establish third-party relationships to provide, any or all of these
capabilities.
REIMBURSEMENT AND DRUG PRICING UNCERTAINTY. The successful
commercialization of, and the interest of potential collaborative partners to
invest in, the development of the Company's drug candidates will depend
substantially on reimbursement of the costs of the resulting drugs and related
treatments at acceptable levels from government authorities, private health
insurers and other organizations, such as health maintenance organizations
("HMOs"). There can be no assurance that reimbursement in the United States or
elsewhere will be available for any drugs the Company may develop or, if
available, will not be decreased in the future, or that reimbursement amounts
will not reduce the demand for, or the price of, the Company's drugs, thereby
adversely affecting the Company's business. If reimbursement is not available or
is available only to limited levels, there can be no assurance that the Company
will be able to obtain collaborative partners to manufacture and commercialize
drugs, or would be able to obtain a sufficient financial return on its own
manufacture and commercialization of any future drugs.
8
<PAGE>
Third-party payors are increasingly challenging the prices charged for
medical products and services. Also, the trend toward managed health care in the
United States and the concurrent growth of organizations such as HMOs, which can
control or significantly influence the purchase of health care services and
products, as well as legislative proposals to reform health care or reduce
government insurance programs, may result in lower prices for pharmaceutical
products. The cost containment measures that health care providers are
instituting, including practice protocols and guidelines and clinical pathways,
and the effect of any health care reform, could materially adversely affect the
Company's ability to sell any of its drugs if successfully developed and
approved. Moreover, the Company is unable to predict what additional legislation
or regulation, if any, relating to the health care industry or third-party
coverage and reimbursement may be enacted in the future or what effect such
legislation or regulation would have on the Company's business.
POTENTIAL PRODUCT LIABILITY AND AVAILABILITY OF INSURANCE. The Company's
business exposes it to potential liability risks that are inherent in the
testing, manufacturing and marketing of pharmaceutical products. The use of the
Company's drug candidates in clinical trials may expose the Company to product
liability claims and possible adverse publicity. These risks will expand with
respect to the Company's drug candidates, if any, that receive regulatory
approval for commercial sale. Product liability insurance for the biotechnology
industry is generally expensive, if available at all. The Company does not have
product liability insurance but intends to obtain such coverage if and when its
drug candidates are tested in clinical trials. However, such coverage is
becoming increasingly expensive and there can be no assurance that the Company
will be able to obtain insurance coverage at acceptable costs or in a sufficient
amount, if at all, or that a product liability claim would not adversely affect
the Company's business, operating results or financial condition.
CONTROL BY EXISTING STOCKHOLDERS. The Company's officers, directors and
principal stockholders and their affiliates will own or control approximately
65.9%of the Company's outstanding Common Stock. As a result, these stockholders,
acting together, will have the ability to control most matters requiring
approval by the stockholders of the Company, including the election of the
Company's Board of Directors.
POTENTIAL ANTI-TAKEOVER EFFECT OF CERTAIN CHARTER AND BY-LAW
PROVISIONS. Pursuant to the Company's Restated Certificate of Incorporation
(the "Restated Certificate of Incorporation"), special meetings of stockholders
may be called only by the Chairman of the Board, the President or a majority of
the Board of Directors of the Company. In addition, the Restated Certificate of
Incorporation authorizes the Board of Directors to issue preferred stock and to
determine its rights and preferences in order to eliminate delays associated
with a stockholder vote on specific issuances. The Company has no present plans
to issue any shares of preferred stock. The Restated Certificate of
Incorporation also provides for staggered elections of the Company's Board of
Directors and specific procedures for director nominations by stockholders and
submission of other proposals for consideration at stockholder meetings. These
provisions may have the effect of deterring hostile takeovers or delaying or
preventing changes in control or management of the Company, including
transactions in which stockholders might otherwise receive a premium for their
shares over then-current market prices. Certain provisions of Delaware law
applicable to the Company could also delay or make more difficult a merger,
tender offer or proxy contest involving the Company, including Section 203 of
the Delaware General Corporation Law (the "DGCL"), which prohibits a Delaware
corporation from engaging in any business combination with any stockholder
owning 15% or more of Company's outstanding voting stock ("interested
stockholder") for a period of three years from the date a stockholder becomes an
interested stockholder unless certain conditions are met. These provisions could
also limit the price that investors might be willing to pay in the future for
shares of Common Stock.
ABSENCE OF DIVIDENDS. The Company has never declared or paid cash dividends
and does not intend to declare or pay any cash dividends in the foreseeable
future.
9
<PAGE>
THE COMPANY
Cubist Pharmaceuticals, Inc. ("Cubist" or the "Company") is a
biopharmaceutical company engaged in the research, development and
commercialization of novel antiinfective drugs to treat infectious diseases
caused by bacteria and fungi, primarily those resistant to existing
antiinfective drugs. The mailing address and telephone number of the Company's
principal executive office is 24 Emily Street, Cambridge, MA 02139 (617)
576-1999.
RECENT DEVELOPMENTS
On September 10, 1998, the Company entered into a definitive agreement with
the Selling Stockholders to raise approximately $13.7 million in a private
placement of the Company's Common Stock. At the closing of the private placement
held September 23, 1998, upon payment of the $13,647,510 purchase price, the
Company issued 6,065,560 shares of Common Stock (the "Purchased Shares") in the
aggregate to the Selling Stockholders and, as additional consideration for the
purchase of the shares by the Selling Stockholders, the Company issued to the
Selling Stockholders Common Stock Purchase Warrants exercisable in the aggregate
for 3,032,783 shares of Common Stock (the "Warrant Shares") with an exercise
price of $2.25 per share. The Common Stock Purchase Warrants are exercisable at
any time or from time to time after 9:00 A.M., Boston, Massachusetts time, on
September 23, 1998 and prior to 5:00 P.M., Boston, Massachusetts time, on
September 23, 2003. So long as Sofinov Societe Financiere d'Innovation Inc., or
its affiliates, owns at least one third of the Purchased Shares purchased by it
in the private placement, it has the right to nominate one member of the Board
of Directors of the Company. Likewise, so long as the rest of the purchasers in
the private placement own in the aggregate at least one third of the Purchased
Shares (other than those purchased by Sofinov) such purchasers as a group shall
have the right to nominate one director to the Board of Directors of the
Company. This Prospectus relates to all of the Purchased Shares and the Warrant
Shares.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the shares of
Common Stock offered hereby by the Selling Stockholders.
SELLING STOCKHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of September 28, 1998, by each of the
Selling Stockholders. The term "Selling Stockholders" includes the holders
listed below and the beneficial owners of the Shares and their transferees,
pledgees, donees and other successors in interest (other than purchasers of the
Shares pursuant to this Prospectus).
The information provided in the table below with respect to each Selling
Stockholder has been obtained from such Selling Stockholder. Except as otherwise
disclosed below, none of the Selling Stockholders has, or within the past three
years has had, any position, office or other material relationship with the
Company or any of its predecessors or affiliates. Because the Selling
Stockholders may sell all or some portion of the shares of Common Stock
beneficially owned by them, only an estimate (assuming each Selling Stockholder
sells all of their shares offered hereby) can be given as to the number of
shares of Common Stock that will be beneficially owned by the Selling
Stockholders after the consummation of this offering. In addition, the Selling
Stockholders may have sold, transferred or otherwise disposed of, or may sell,
transfer or otherwise dispose of, at any time or from time to time since the
date on which they provided to the Company the information regarding the shares
of Common Stock beneficially owned by them, all or a portion of the shares of
Common Stock beneficially owned by them in transactions exempt from the
registration requirements of the Securities Act. Except in the case of Dr.
Schimmel each number of shares representing the "Shares Beneficially Owned Prior
to Offering" and the "Number of Shares
10
<PAGE>
Being Offered" for each Selling Stockholder, includes a certain number of shares
issuable to such Selling Stockholder upon the exercise of the Common Stock
Purchase Warrant issued to such Selling Stockholder on September 23, 1998.
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY OWNED
SHARES NUMBER AFTER OFFERING(1)
NAME AND ADDRESS OF BENEFICIAL BENEFICIALLY OWNED OF SHARES ------------------
OWNER PRIOR TO OFFERING (1) BEING OFFERED NUMBER PERCENT
- ------------------------------ --------------------- ------------- --------- -------
<S> <C> <C> <C> <C>
SOFINOV SOCIETE FINANCIERE 3,497,335(2) 3,333,335(2) 164,000 *
D'INNOVATION INC............
1981 Avenue McGill College
7e etage
Montreal, Quebec H3A 3C7
Entities Affiliated with:..... 857,143(3) 500,001(3) 357,142 2.1%
ADVENT INTERNATIONAL
CORPORATION
c/o Advent International
Corporation
101 Federal Street
Boston, MA 02110
BIOTECHNOLOGY DEVELOPMENT 122,220(4) 122,220(4) -0- *
FUND, L.P...................
c/o BioAsia Investments LLC
575 High Street, Suite 201
Palo Alto, CA 94301
BIOTECHNOLOGY DEVELOPMENT FUND 44,448(5) 44,448(5) -0- *
III, L.P....................
c/o BioAsia
575 High Street, Suite 201
Palo Alto, CA 94301
BIOCAPITAL INVESTMENTS LIMITED 225,000(6) 225,000(6) -0- *
PARTNERSHIP.................
3690, rue de la Montague
Montreal, H3G 248 CANADA
CLARION CAPITAL CORPORATION... 233,334(7) 233,334(7) -0- *
1801 East 9th Street
Cleveland, OH 44114
SPECIAL SITUATIONS PRIVATE 400,001(8) 400,001(8) -0- *
EQUITY FUND, L.P............
153 East 53rd Street
New York, NY 10022
SPECIAL SITUATIONS FUND III, 700,001(9) 700,001(9) -0- *
L.P.........................
153 East 53rd Street
New York, NY 10022
SPECIAL SITUATIONS CAYMAN 233,334(10) 233,334(10) -0- *
FUND, L.P...................
153 East 53rd Street
New York, NY 10022
INTERNATIONAL BIOTECHNOLOGY 1,449,661(12) 1,149,662(12) 299,999 1.8%
TRUST plc(11)...............
c/o Rothschild Asset
Management
5 Arrows House
St. Swithin's Lane
London, EC48 NR ENGLAND
Entities Affiliated with:..... 1,918,739(13) 1,163,268(13) 755,471 4.4%
H & Q CAPITAL MANAGEMENT,
INC.
50 Rowes Wharf
Boston, MA 02110-3328
LANCASTER INVESTMENT 150,000(14) 150,000(14) -0- *
PARTNERS....................
500 N. Gulph, Suite 110
King of Prussia, PA 19406
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY OWNED
SHARES NUMBER AFTER OFFERING(1)
NAME AND ADDRESS OF BENEFICIAL BENEFICIALLY OWNED OF SHARES ------------------
OWNER PRIOR TO OFFERING (1) BEING OFFERED NUMBER PERCENT
- ------------------------------ --------------------- ------------- --------- -------
<S> <C> <C> <C> <C>
CPR (USA) INC................. 150,000(15) 150,000(15) -0- *
c/o Liberty View Capital
101 Hudson Street, Suite
3700
Jersey City, NJ 07302
NEW YORK LIFE INSURANCE 1,333,332(16) 1,333,332(16) -0- *
COMPANY.....................
51 Madison Avenue
New York, NY 10010
PORTER PARTNERS, L.P.......... 150,000(17) 150,000(17) -0- *
100 Shoreline Suite 211B
Mill Valley, CA 94941
MICHAEL T. JACKSON TRUST,..... 190,001(18) 190,001(18) -0- *
NEW TECHNOLOGIES FUND
c/o Emerging Growth MGMT Co.
One Embarcadero Center, Ste
2410
San Francisco, CA 94111
PAUL R. SCHIMMEL, Ph.D........ 303,296(19) 285,713 17,583 *
</TABLE>
- ------------------------
* Less than 1% of the outstanding shares of Common Stock.
(1) Beneficial ownership is determined in accordance with Rule 13d-3(d)
promulgated by the Commission under the Securities and Exchange Act of 1934,
as amended. Shares of Common Stock issuable pursuant to options, warrants
and convertible securities, to the extent such securities are currently
exercisable or convertible within 60 days of September 25, 1998, are treated
as outstanding for computing the percentage of the person holding such
securities but are not treated as outstanding for computing the percentage
of any other person. Unless otherwise noted, each person or group identified
possesses sole voting and investment power with respect to shares, subject
to community property laws where applicable. Shares not outstanding but
deemed beneficially owned by virtue of the right of a person or group to
acquire them within 60 days are treated as outstanding only for purposes of
determining the number of and percent owned by such person or group.
(2) Includes 1,111,112 shares of Common Stock which Sofinov Societe Financiere
D'Innovation Inc. has the right to acquire within 60 days of September 25,
1998 upon the exercise of Common Stock Purchase Warrants.
(3) Includes the ownership by the following venture capital funds managed by
Advent International Corporation: 628,572 shares held by Rovent II Limited
Partnership, 59,523 shares held by Advent Performance Materials Limited
Partnership, 2,381 shares held by Advent International Investors II Limited
Partnership and 166,667 shares of Common Stock which Rovent II Limited
Partnership has the right to acquire within 60 days of September 25, 1998
upon the exercise of Common Stock Purchase Warrants.. In its capacity as
manager of these funds, Advent International Corporation exercises sole
voting and investment power with respect to all shares held by these funds.
Advent International Corporation may be deemed to beneficially own all
857,143 shares.
(4) Includes 40,740 shares of Common Stock which Biotechnology Development Fund,
L.P. has the right to acquire within 60 days of September 25, 1998 upon the
exercise of Common Stock Purchase Warrants.
(5) Includes 14,816 shares of Common Stock which Biotechnology Development Fund
III, L.P. has the right to acquire within 60 days of September 25, 1998 upon
the exercise of Common Stock Purchase Warrants.
(6) Includes 75,000 shares of Common Stock which Biocapital Investments Limited
Partnership has the right to acquire within 60 days of September 25, 1998
upon the exercise of Common Stock Purchase Warrants.
(7) Includes 77,778 shares of Common Stock which Clarion Capital Corporation has
the right to acquire within 60 days of September 25, 1998 upon the exercise
of Common Stock Purchase Warrants.
(8) Includes 133,334 shares of Common Stock which Special Situations Private
Equity Fund, L.P. has the right to acquire within 60 days of September 25,
1998 upon the exercise of Common Stock Purchase Warrants.
(9) Includes 233,334 shares of Common Stock which Special Situations Fund, III,
L.P. has the right to acquire within 60 days of September 25, 1998 upon the
exercise of Common Stock Purchase Warrants.
12
<PAGE>
(10) Includes 77,778 shares of Common Stock which Special Situations Cayman
Fund, L.P. has the right to acquire within 60 days of September 25, 1998
upon the exercise of Common Stock Purchase Warrants.
(11) Pursuant to the terms of the Stock Purchase Agreement dated July 18, 1997,
by and between the Company and International Biotechnology Trust plc
("IBT"), IBT has the right to nominate one member of the Board of Directors
of the Company. David Martin is IBT's current nominee.
(12) Includes 111,112 shares of Common Stock which IBT has the right to acquire
within 60 days of September 25, 1998 upon the exercise of Common Stock
Purchase Warrants. Pursuant to a Lock Up Agreement dated September 21, 1998,
IBT has agreed not to sell any shares of Common Stock until March 22, 1999.
(13) Consists of 928,056 shares held by H&Q Healthcare Investors and 657,349
shares held by H&Q Life Sciences Investors. H&Q Capital Management, Inc. is
the general partner of H&Q Healthcare Investors and H&Q Life Sciences
Investors and as such H&Q Capital Management, Inc. shares voting and
investment power with respect to the shares owned by H&Q Healthcare
Investors and H&Q Life Sciences Investors. H&Q Capital Management, Inc. may
be deemed to beneficially own all of the shares owned by H&Q Healthcare
Investors and H&Q Life Sciences Investors although H&Q Capital Management,
Inc. disclaims beneficial ownership except to the extent of its
proportionate partnership interest in each of H&Q Healthcare Investors and
H&Q Life Sciences Investors. Also includes 200,001 shares of Common Stock
which H&Q Healthcare Investors has the right to acquire within 60 days of
September 25, 1998 upon the exercise of Common Stock Purchase Warrants and
133,333 shares of Common Stock which H&Q Life Sciences Investors has the
right to acquire within 60 days of September 25, 1998 upon the exercise of
Common Stock Purchase Warrants. Pursuant to a Lock Up Agreement dated
September 21, 1998, H&Q Healthcare Investors and H&Q Life Sciences Investors
have agreed not to sell any shares of Common Stock until March 22, 1999.
(14) Includes 50,000 shares of Common Stock which Lancaster Investment Partners
has the right to acquire within 60 days of September 25, 1998 upon the
exercise of Common Stock Purchase Warrants.
(15) Includes 50,000 shares of Common Stock which CPR (USA) Inc.. has the right
to acquire within 60 days of September 25, 1998 upon the exercise of Common
Stock Purchase Warrants.
(16) Includes 444,444 shares of Common Stock which New York Life Insurance
Company has the right to acquire within 60 days of September 25, 1998 upon
the exercise of Common Stock Purchase Warrants.
(17) Includes 50,000 shares of Common Stock which Porter Partners, L.P. has the
right to acquire within 60 days of September 25, 1998 upon the exercise of
Common Stock Purchase Warrants.
(18) Includes 63,334 shares of Common Stock which Michael T. Jackson Trust, New
Technologies Fund has the right to acquire within 60 days of September 25,
1998 upon the exercise of Common Stock Purchase Warrants.
(19) Includes 17,583 shares of Common Stock which Dr. Schimmel has the right to
acquire within 60 days of September 25, 1998 upon the exercise of stock
options, and 65,714 shares held by the Paul R. Schimmel Profit-Sharing Plan.
Dr. Schimmel is a director of the Company.
PLAN OF DISTRIBUTION
The Company has been advised by the Selling Stockholders that the shares of
Common Stock offered hereby may be sold from time to time to purchasers directly
by the Selling Stockholders. Alternatively, the Selling Stockholders may from
time to time offer any or all of the shares of Common Stock offered hereby to or
through underwriters, broker/dealers or agents, who may receive compensation in
the form of underwriting discounts, concessions or commissions from the Selling
Stockholders or the purchasers of such shares of Common Stock for whom they may
act as agents. The Selling Stockholders and any underwriters, broker/dealers or
agents that participate in the distribution of the shares of Common Stock
offered hereby may be deemed to be "underwriters" within the meaning of the
Securities Act and any profit realized by them on the sale of such shares of
Common Stock and any discounts, commissions, concessions or other compensation
received by any such underwriter, broker/dealer or agent may be deemed to be
underwriting discounts and commissions under the Securities Act.
The Company has been advised by the Selling Stockholders that the shares of
Common Stock offered hereby may be sold from time to time in one or more
transactions at fixed prices, at market prices prevailing at the time of sale,
at varying prices determined at the time of sale or at negotiated prices. The
sale of the shares of Common Stock offered hereby may be effected in
transactions (which may involve crosses or block transactions) (i) on any
national securities exchange or quotation service on which the Common Stock may
be listed or quoted at the time of sale, (ii) in the over-the-counter market,
(iii) in
13
<PAGE>
transactions otherwise than on such exchanges or in the over-the-counter market
or (iv) through the writing of options. At the time a particular offering of any
of the shares of Common Stock offered hereby is made, a supplement to this
Prospectus, if required, will be distributed which will set forth the aggregate
number of shares of Common Stock being offered and the terms of such offering,
including the name or names of any underwriters, broker/dealers or agents, any
discounts, commissions and other terms constituting compensation from the
Selling Stockholders and any discounts, commissions or concessions allowed or
reallowed to be paid to broker/dealers.
To comply with the securities laws of certain jurisdictions, if applicable,
the shares of Common Stock offered hereby will be offered or sold in such
jurisdictions only through registered or licensed brokers or dealers. In
addition, in certain jurisdictions the shares of Common Stock offered hereby may
not be offered or sold unless they have been registered or qualified for sale in
such jurisdictions or an exemption from registration or qualification is
available and complied with.
Under applicable rules and regulations of the Exchange Act, any person
engaged in a distribution of any of the shares of Common Stock offered hereby
may not simultaneously engage in market-making activities with respect to the
Common Stock of the Company for a period of nine business days prior to the
commencement of such distribution. In addition to and without limiting the
foregoing, each Selling Stockholder and any other person participating in a
distribution will be subject to applicable provisions of the Exchange Act and
the rules and regulations thereunder, including without limitation Rules 10b-6
and 10b-7, which provisions may limit the timing of purchases and sales of any
shares of Common Stock of the Company by the Selling Stockholders or any such
other person. All of the foregoing may affect the marketability of the Common
Stock of the Company and the ability of brokers or dealers to engage in
market-making activities with respect to the Common Stock of the Company.
Pursuant to the agreements with the Selling Stockholders, all expenses of
the registration of the Securities will be paid by the Company, including
without limitation, Commission filing fees and expenses of compliance with state
securities or "blue sky" laws; provided, however, that the Selling Stockholders
will pay all underwriting discounts and selling commissions, if any. The Selling
Stockholders will be indemnified by the Company against certain civil
liabilities, including certain liabilities under the Securities Act, or will be
entitled to contribution in connection therewith. The Company will be
indemnified by the Selling Stockholders against certain civil liabilities,
including certain liabilities under the Securities Act, or will be entitled to
contribution in connection therewith.
LEGAL MATTERS
Bingham Dana LLP, Boston, Massachusetts will opine that the Shares offered
hereby have been validly issued and are fully paid and non-assessable. Justin P.
Morreale, a partner at Bingham Dana LLP, is the Secretary of the Company and
owns a total of 42,856 shares of Common Stock of the Company. Other partners and
associates at Bingham Dana LLP own a total of approximately 6,982 shares of
Common Stock of the Company.
EXPERTS
The balance sheets of the Company as of December 31, 1996 and 1997 and the
related statements of operations, changes in stockholders' equity and cash flows
for each of the three years in the period ended December 31, 1997 incorporated
by reference into this Prospectus and in this Registration Statement have been
incorporated herein in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given upon the authority of that firm as experts in
accounting and auditing.
14
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS OR
ANY PROSPECTUS SUPPLEMENT, AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY. NEITHER THIS PROSPECTUS NOR ANY PROSPECTUS SUPPLEMENT CONSTITUTES AN
OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED
HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN
OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS OR ANY
PROSPECTUS SUPPLEMENT NOR ANY SALE MADE THEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THEREOF.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
Available Information........................... 2
Incorporation of Certain Documents by
Reference..................................... 2
Risk Factors.................................... 3
The Company..................................... 9
Recent Developments............................. 9
Use of Proceeds................................. 9
Selling Stockholders............................ 9
Plan of Distribution............................ 13
Legal Matters................................... 14
Experts......................................... 14
</TABLE>
9,098,343 SHARES
CUBIST PHARMACEUTICALS, INC.
COMMON STOCK
-----------------
PROSPECTUS
, 1998
------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses in connection with the issuance and distribution of the
securities being registered are set forth in the following table (all amounts
except the registration fee and the listing fee are estimated):
<TABLE>
<S> <C>
SEC Registration Fee............................................ $6,629.51
Nasdaq National Market Listing Fees............................. 17,500.00
Legal Fees and Expenses......................................... 5,000.00
Accountants' Fees and Expenses.................................. 5,000.00
Miscellaneous Costs............................................. 870.49
Total....................................................... 35,000.00
</TABLE>
All expenses in connection with the issuance and distribution of the
securities being offered shall be borne by the Company.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law empowers a Delaware
corporation to indemnify its officers and directors and certain other persons to
the extent and under the circumstances set forth therein.
The Restated Certificate of Incorporation and the Amended and Restated
By-Laws of the Company, copies of which are filed herein as Exhibit 3.3 and 3.4,
provide for advancement of expenses and indemnification of officers and
directors of the Registrant and certain other persons against liabilities and
expenses incurred by any of them in certain stated proceedings and under certain
stated conditions to the fullest extent permissible under Delaware law.
The Registration Rights Agreement, dated as of September 10, 1998, provides
for indemnification by the Registrant of each of the Selling Stockholders
against certain liabilities under the Securities Act, the Securities Exchange
Act, state securities laws or otherwise, and provides for indemnification by the
Selling Stockholders of the Registrant and its directors, its officers and
certain control persons against certain liabilities under the Securities Act,
the Securities Exchange Act, state securities laws or otherwise.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBITS
- -----------
<C> <S>
*3.3 Restated Certificate of Incorporation of the Registrant.
*3.4 Amended and Restated By-Laws of the Registrant, as amended to date.
*4.1 Specimen certificate for shares of Common Stock.
5 Opinion of Bingham Dana LLP
23.1 Consent of Bingham Dana LLP (included in Exhibit 5.1)
23.2 Consent of PricewaterhouseCoopers LLP
</TABLE>
- ------------------------
* Incorporated by reference from the Registrant's Registration Statement on
Form S-1 (Registration No. 333-6795).
II-1
<PAGE>
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made
pursuant to this Registration Statement, a post-effective amendment to this
Registration Statement to include any material information with respect to the
plan of distribution not previously disclosed in this Registration Statement or
any material change to such information in this Registration Statement;
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15 (d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
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 described in Item 15 above, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or 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
Securities Act and will be governed by the final adjudication of such issue.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant, Cubist Pharmaceuticals, Inc., 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 registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Cambridge,
Commonwealth of Massachusetts, on this 30th day of September, 1998.
CUBIST PHARMACEUTICALS, INC.
BY: /S/ SCOTT M. ROCKLAGE
-----------------------------------------
Scott M. Rocklage
PRESIDENT AND CHIEF EXECUTIVE OFFICER
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated:
SIGNATURE TITLE DATE
- ------------------------------ --------------------------- -------------------
President, Chief Executive
/s/ SCOTT M. ROCKLAGE Officer and Director
- ------------------------------ (Principal Executive September 29, 1998
Scott M. Rocklage Officer)
Senior Director of
/s/ THOMAS A. SHEA Administration & Finance,
- ------------------------------ Treasurer (Principal September 29, 1998
Thomas A. Shea Financial and Accounting
Officer)
/s/ JOHN K. CLARKE
- ------------------------------ Chairman of the Board of September 29, 1998
John K. Clarke Directors
/s/ BARRY BLOOM
- ------------------------------ Director September 29, 1998
Barry Bloom
/s/ GEORGE CONRADES
- ------------------------------ Director September 29, 1998
George Conrades
/s/ ELLEN M. FEENEY
- ------------------------------ Director September 29, 1998
Ellen M. Feeney
/s/ DAVID MARTIN
- ------------------------------ Director September 29, 1998
David Martin
- ------------------------------ Director September , 1998
Terrance G. McGuire
/s/ PAUL R. SCHIMMEL
- ------------------------------ Director September 29, 1998
Paul R. Schimmel
II-3
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBITS
- ---------
<C> <S>
*3.3 Restated Certificate of Incorporation of the Registrant.
*3.4 Amended and Restated By-Laws of the Registrant, as amended to date.
*4.1 Specimen certificate for shares of Common Stock.
5 Opinion of Bingham Dana LLP
23.1 Consent of Bingham Dana LLP (included in Exhibit 5.1)
23.2 Consent of PricewaterhouseCoopers LLP
</TABLE>
- ------------------------
* Incorporated by reference from the Registrant's Registration Statement on
Form S-1 (Registration No. 333-6795).
II-4
<PAGE>
Exhibit 5
September 30, 1998
Cubist Pharmaceuticals, Inc.
24 Emily Street
Cambridge, Massachusetts 02139
Re: Registration Statement on Form S-3 Under the Securities Act
of 1933, as amended
Ladies and Gentlemen:
We have acted as counsel to Cubist Pharmaceuticals, Inc., a Delaware
corporation (the "Company"), in connection with the registration under the
Securities Act of 1933, as amended (the "Act"), of 9,098,343 shares (the
"Shares") of the Company's Common Stock, $0.001 par value per share, to be
offered by certain stockholders of the Company (the "Selling Stockholders"),
pursuant to a Registration Statement on Form S-3 initially filed by the Company
with the Securities and Exchange Commission on September 30, 1998. Of the
Shares being registered pursuant to the Registration Statement, 3,032,783 shares
(the "Warrant Shares") are issuable to the Selling Stockholders upon the
exercise of Common Stock Purchase Warrants dated September 23, 1998 (the
"Warrants"). That portion of the Shares that are not Warrant Shares are
referred to herein as "Purchased Shares".
As such counsel, we have reviewed the corporate proceedings taken by the
Company with respect to the authorization of the issuance of the Shares. We
have also examined and relied upon originals or copies, certified or otherwise
authenticated to our satisfaction, of such corporate records, documents,
agreements or other instruments of the Company. As to all matters of fact
(including factual conclusions and characterizations and descriptions of
purpose, intention or other state of mind) we have entirely relied upon
certificates of officers of the Company, and have assumed, without independent
inquiry, the accuracy of those certificates.
We have assumed the genuineness of all signatures, the conformity to the
originals of all documents reviewed by us as copies, the authenticity and
completeness of all original documents reviewed by us in original or copy form
and the legal competence of each individual executing a document. We have also
assumed that the registration requirements of the Act and all applicable
<PAGE>
requirements of state laws regulating the sale of securities will have been duly
satisfied.
With respect to our opinion set forth below with respect to the Purchased
Shares, we have assumed that the Company has received the specified purchase
price therefor.
This opinion is limited solely to the Delaware General Corporation Law as
applied by courts located in the State of Delaware.
Subject to the foregoing, it is our opinion that (i) the Purchased Shares
have been duly authorized and that the Shares have been validly issued and fully
paid and are non-assessable, and (ii) the Warrant Shares have been duly and
validly reserved for issuance and, when and if issued in accordance with the
Warrants and against the payment of the specified purchase price therefor, will
be validly issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to this firm under the heading
"Legal Matters" in the Prospectus included in the Registration Statement.
Very truly yours,
/s/ BINGHAM DANA LLP
Bingham Dana LLP
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement on
Form S-3 to register 9,098,343 shares of common stock, of our report dated
January 19, 1998, on our audits of the financial statements of Cubist
Pharmaceuticals, Inc. We also consent to the reference to our firm under the
caption "Experts."
/s/ PRICEWATERHOUSECOOPERS LLP
Boston, Massachusetts
September 30, 1998
