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As filed with the Securities and Exchange Commission on November 2, 1999
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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CUBIST PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 22-3192085
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification No.)
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)
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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)
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with copies to:
Justin P. Morreale, Esq.
Julio E. Vega, Esq.
Bingham Dana LLP
150 Federal Street
Boston, MA 02110
(617) 951-8000
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Approximate date of commencement of proposed sale to the public:
As soon as practicable after this Registration Statement becomes effective
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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.
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
----------------------------- ------------------ ------------------- --------------------- --------------------
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 $.001 per share 2,503,333 $8.34 $20,887,810.52 $5,806.81
----------------------------- ------------------ ------------------- --------------------- --------------------
</TABLE>
(1) Pursuant to Rule 429 promulgated under the Securities Act of 1933,
as amended, the prospectus included in this 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, amended on
Form S-3 (File No.333-33883) filed on January 9, 1998, which registers 1,265,307
shares of common stock, and to the Registration Statement on Form S-3 (File No.
333-64943) filed on September 30, 1998, which registers 9,098,343 shares of
common stock. A filing fee in the amount of $8,618.53 was previously paid with
respect to such shares.
(2) Estimated solely to determine the registration fee. Calculated in
accordance with Rule 457(c), based on the offering of up to 2,503,333 shares at
a purchase price of $8.34 per share, which is the average of the high and low
sale prices reported in the consolidated reporting system of the Nasdaq
<PAGE>
National Market on October 29, 1999. 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.
TABLE OF CONTENTS
<TABLE>
<S> <C>
Where You Can Get More Information..................................... 2
Certain Information We Are Incorporating by Reference.................. 2
Forward Looking Statements............................................. 3
Risk Factors........................................................... 3
Cubist Pharmaceuticals, Inc. ..........................................12
Recent Developments....................................................12
Use of Proceeds........................................................12
Selling Stockholders...................................................12
Plan of Distribution...................................................19
Legal Matters..........................................................20
Experts................................................................20
</TABLE>
<PAGE>
PROSPECTUS
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THESE
SECURITIES SHALL NOT BE SOLD UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL AND IS NOT A SOLICITATION OF AN OFFER TO BUY THESE SECURITIES IN ANY
STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
Subject to Completion, dated November 2, 1999
2,503,333 SHARES
CUBIST PHARMACEUTICALS, INC.
COMMON STOCK
Selling stockholders identified in this prospectus may sell up to
2,503,333 shares of common stock of Cubist Pharmaceuticals, Inc. Cubist will not
receive any of the proceeds from the sale of shares by the selling stockholders.
Cubist's common stock is listed on the Nasdaq National Market under the symbol
"CBST". On November 1, 1999, the closing sale price of the common stock, as
reported on the Nasdaq National Market, was $8.625 per share.
INVESTING IN THE COMMON STOCK 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 selling stockholders may sell the shares of common stock described
in this prospectus in public or private transactions, on or off the National
Market System of the Nasdaq Stock Market, at prevailing market prices, or at
privately negotiated prices. The selling stockholders may sell shares directly
to purchasers or through brokers or dealers. Brokers or dealers may receive
compensation in the form of discounts, concessions or commissions from the
selling stockholders. More information is provided in the section titled "Plan
of Distribution."
The date of this prospectus is __________, 1999.
<PAGE>
WHERE YOU CAN GET MORE INFORMATION
Cubist is subject to the reporting requirements of the Securities
Exchange Act of 1934 and files annual, quarterly and current reports, proxy
statements and other information with the SEC. You may read and copy these
reports, proxy statements and other information at the SEC's public reference
facilities at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549,
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.
You can request copies of these documents by writing to the SEC and paying a fee
for the copying cost. Please call the SEC at 1-800-SEC-0330 for more information
about the operation of the public reference facilities. SEC filings are also
available at the SEC's Web site at http://www.sec.gov. Cubist's common stock is
listed on the Nasdaq National Market, and you can read and inspect our filings
at the offices of the National Association of Securities Dealers, Inc. at 1735 K
Street, Washington, D.C. 20006.
The SEC allows us to "incorporate by reference" information that we
file with them. Incorporation by reference allows us to disclose important
information to you by referring you to those other documents. The information
incorporated by reference is an important part of this prospectus, and
information that we file later with the SEC will automatically update and
supersede this information. Cubist has filed a Registration Statement on Form
S-3 under the Securities Act of 1933 with the SEC with respect to the common
stock being offered pursuant to this prospectus. This prospectus omits certain
information contained in the Registration Statement on Form S-3, as permitted by
the SEC. Refer to the Registration Statement on Form S-3, including the
exhibits, for further information about Cubist and the common stock being
offered pursuant to this prospectus. Statements in this prospectus regarding the
provisions of certain documents filed with, or incorporated by reference in, the
Registration Statement are not necessarily complete and each statement is
qualified in all respects by that reference. Copies of all or any part of the
Registration Statement, including the documents incorporated by reference or the
exhibits, may be obtained upon payment of the prescribed rates at the offices of
the SEC listed above.
Upon request, Cubist 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 the exhibits are specifically incorporated by reference into the
prospectus). Cubist will also provide upon 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 Cubist with the SEC pursuant to the
Exchange Act of 1934. Requests for copies should be directed to Thomas A. Shea,
Vice President and Chief Financial Officer, Cubist Pharmaceuticals, Inc. 24
Emily Street, Cambridge, MA 02139. Telephone requests may be directed to Mr.
Shea at (617) 576-4155.
CERTAIN INFORMATION WE ARE INCORPORATING BY REFERENCE
We incorporate by reference the documents listed below and any future
filings we will make with the SEC under Section 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934:
-- Annual Report on Form 10-K for the fiscal year ended December 31,
1998
-- Quarterly Reports on Form 10-Q filed on August 12, 1999 and May
13, 1999
-- Registration Statement on Form 8-A filed on August 2, 1999
-- Current Reports on Form 8-K filed on October 18, 1999, July 30,
1999 and June 29, 1999
-- The Definitive Proxy Statement filed on April 13, 1999
-- The description of the common stock contained in Cubist's
Registration Statement filed with the SEC under Section 12(g) of
the Securities Exchange Act including any amendment or report
filed for the purpose of updating such description.
You may request a copy of these filings at no cost, by writing,
telephoning or e-mailing us at the following address:
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<PAGE>
Cubist Pharmaceuticals, Inc.
24 Emily Street
Cambridge, MA 02139
Attn: Thomas A. Shea
(617) 576-1999
e-mail: [email protected]
This prospectus is part of a Registration Statement we filed with the
SEC. You should rely only on the information incorporated by reference or
provided in this prospectus. No one else is authorized to provide you with
different information. We are not making an offer of these securities in any
state where the offer is not permitted. You should not assume that the
information in this prospectus is accurate as of any date other than the date on
the front of this document.
FORWARD-LOOKING STATEMENTS
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 Exchange Act of 1934, including statements
regarding Cubist's drug development programs, clinical trials, receipt of
regulatory approval, capital needs, collaborative agreements, intellectual
property, expectations and intentions. Forward-looking statements may be
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 those words or
expressions.
Forward-looking statements necessarily involve risks and uncertainties,
and Cubist's actual results could differ materially from those anticipated in
the forward-looking statements due to a number of factors, including those set
forth below under "Risk Factors" and elsewhere in this prospectus. The factors
set forth below under "Risk Factors" and other cautionary statements made in
this prospectus should be read and understood as being applicable to all related
forward-looking statements wherever they appear in this prospectus. The
forward-looking statements contained in this prospectus represent our judgment
as of the date of this prospectus. Cubist cautions readers not to place undue
reliance on such statements. We undertake no obligation to update publicly any
forward-looking statements for any reason, even if new information becomes
available or other events occur in the future.
RISK FACTORS
INVESTING IN CUBIST'S COMMON STOCK IS RISKY. YOU SHOULD BE ABLE TO BEAR
A COMPLETE LOSS OF YOUR INVESTMENT. YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING
FACTORS, IN ADDITION TO THE OTHER INFORMATION IN THIS PROSPECTUS.
OUR DRUG CANDIDATES MAY NOT PROVE TO BE
SAFE AND EFFECTIVE IN HUMAN CLINICAL TRIALS.
We are currently testing daptomycin in human clinical trials. Clinical
trials of drug candidates involve the testing of potential therapeutic agents in
humans to determine whether the drug candidates are safe and effective and, if
so, to what degree. Many drugs in human clinical trials fail to demonstrate the
desired safety and efficacy characteristics. Drugs in later stages of clinical
development may fail to show the desired safety and efficacy traits despite
having progressed through initial human testing. The clinical trials of any of
our drug candidates may not be successful which may prevent us from
commercializing the drug, substantially impairing our business, financial
condition and results of operations.
3
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WE ARE IN VARIOUS STAGES OF PRODUCT DEVELOPMENT AND
THERE CAN BE NO ASSURANCE OF SUCCESSFUL COMMERCIALIZATION.
Many of Cubist's research and development programs are at an early
stage of development. The FDA (the United States Food and Drug Administration)
has not approved any of our product candidates. To date, we have not,
independently or with our collaborative partners, optimized any lead drug
candidates. Any drug candidates developed by Cubist will require significant
additional research and development efforts, including extensive pre-clinical
and clinical testing and regulatory approval, prior to commercial sale. Only
daptomycin has advanced to any phase of pre-clinical testing or clinical trials.
We cannot be sure our approach to drug discovery, acting independently or with
our collaborative partners, will be effective or will result in the development
of any drug. We cannot expect that any drugs that do result from our research
and development efforts will be commercially available for many years.
We have limited experience in conducting pre-clinical testing and
clinical trials. Even if we receive initially positive pre-clinical results,
such results do not mean that similar results will be obtained in the later
stages of drug development, such as additional pre-clinical testing or human
clinical trials. All of our potential drug candidates are prone to the risks of
failure inherent in pharmaceutical product development, including the
possibility that none of our drug candidates will or can
- be safe, non-toxic and effective
- otherwise meet applicable regulatory standards
- receive the necessary regulatory approvals
- develop into commercially viable drugs
- be manufactured or produced economically and on a large
scale
- be successfully marketed
- be reimbursed by government or private consumers
- achieve customer acceptance.
In addition, third parties may preclude us from marketing our drugs
through enforcement of their proprietary rights. Or, third parties may succeed
in marketing equivalent or superior drug products. Our failure to develop safe,
commercially viable drugs would have a material adverse effect on our business,
financial condition and results of operations.
THERE IS UNCERTAINTY OF SUCCESS DUE TO THE USE
OF OUR UNPROVEN DRUG DISCOVERY TECHNOLOGY.
Cubist's drug discovery approach faces technical issues which have not
been resolved. Our drug discovery approach requires the development of multiple
novel technologies to create a successful drug candidate. While we have
demonstrated that certain compounds have the ability to inhibit the activity of
certain molecular targets, we have not proven that this activity can be utilized
clinically as a therapeutic drug. Furthermore, we cannot be assured that any
preliminary potential demonstrated in primary screening will continue to be
encouraging in further screening or drug discovery studies. Cubist has not
tested any drug candidates developed from its drug discovery program in humans,
and there can be no assurance that there will be clinical benefits associated
with any drug candidates it does develop. Furthermore, there can be no assurance
that we will be successful in addressing the technological challenges of others
that may arise in the course of development. Our failure to anticipate or
respond adequately to any technological developments will have a material
adverse effect on our business, operating results and financial condition. There
can be no assurance that Cubist will be able to employ its drug discovery
approach successfully.
4
<PAGE>
WE DEPEND ON OUR COLLABORATIVE PARTNERS.
A key element of Cubist'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. We currently have collaborative agreements with Bristol-Myers Squibb
and Merck. Under these collaborative agreements, each of Bristol-Myers Squibb
and Merck is responsible for, among other things
- providing libraries of compounds for screening against
certain Cubist's aminoacyl-tRNA synthetase targets
- selecting, in collaboration with Cubist, compounds
determined to be leads in the screening for subsequent
development,
- conducting pre-clinical testing and clinical trials and
obtaining required regulatory approvals of drug
candidates, and
- manufacturing and commercializing resulting drugs.
We also have a collabortive agreement with Novartis Pharma AG with
respect to our VITA-Registered Trademark- drug discovery technology. Under the
Novartis collaborative agreement, Novartis is responsible for, among other
things
- screening against certain Cubist targets
- selecting compounds determined to be leads in the
screening for subsequent development,
- conducting pre-clinical testing and clinical trials and
obtaining required regulatory approvals of drug
candidates, and
- manufacturing and commercializing resulting drugs.
As a result, our receipt of revenues (whether in the form of continued
research funding, drug development milestone payments or royalty payments on
sales of drugs) from these collaborative agreements is dependent upon the
decisions made by the drug discovery, drug development, manufacturing and
marketing resources of our collaborative partners. Therefore, the amount and
timing of resources dedicated by our collaborative partners to their respective
collaborations with Cubist is not under our control.
Moreover, certain drug candidates discovered by Cubist may be viewed by
our collaborative partners as competitive with their drugs or drug candidates.
Accordingly, our collaborative partners may not elect to proceed with the
development of drug candidates which we believe to be promising. In addition,
our collaborative partners may pursue their existing or alternative technologies
in preference to Cubist's drug candidates. We advise you that
- the interests and goals of our collaborative partners
might not always coincide with ours
- some of our collaborative partners might develop
independently (or with others) drugs that could compete
with ours, or
- disagreements over rights or technology or other
proprietary might occur leading to delays in research or
in the development and commercialization of certain
product candidates (such disputes could also require or
result in litigation or arbitration, which is
time-consuming and expensive).
If any of our collaborative partners breaches or terminates its
agreement with us, or otherwise fails to conduct its collaborative activities in
a timely manner
5
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- the development or commercialization of any drug candidate or
research program under these collaborative agreements may be
delayed,
- we 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 our 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 Cubist is
collaborating could result in the diminution or termination of, or delays in,
the development or commercialization of drug candidates or research programs.
Moreover, although each of our collaboration agreements may be extended past its
current term, we cannot be sure that these contracts will be extended or
renewed, or that any renewal, if made, will be on terms favorable to us.
WE HAVE SIGNIFICANT DEVELOPMENT COSTS AND ARE
UNCERTAIN AS TO THE AVAILABILITY OF FUTURE FUNDING.
Cubist will require substantial additional funds in order to
- finance its drug discovery and development programs,
- fund its operating expenses, pursue regulatory clearances,
- develop manufacturing, marketing and sales capabilities and
- prosecute and defend its intellectual property rights.
Cubist intends to seek additional funding through public or private
financing or other arrangements with collaborative partners. If we raise
additional funds by issuing equity securities, further dilution to existing
stockholders may result. In addition, as a condition to giving additional funds
to Cubist, future investors may demand, and may be granted, rights superior to
those of existing stockholders. We cannot be sure, however, that additional
financing will be available from any of these sources or, if available, will be
available on acceptable or affordable terms.
If adequate additional funds are not available, Cubist may be required
to delay, reduce the scope of or eliminate one or more of its research and
development programs. In order to obtain additional funding, Cubist may be
required to relinquish rights to certain technologies or drug candidates that we
would not otherwise relinquish in order to continue independent operations.
WE HAVE A HISTORY OF LOSSES AND
AN EXPECTATION OF FUTURE LOSSES.
Cubist has incurred a cumulative net operating loss of approximately
$46.5 million through September 30, 1999. These losses have resulted principally
from costs incurred in research and development activities related to our
efforts to (1) commence clinical trials, (2) develop target assays, (3) acquire
and optimize chemical compounds, (4) conduct automated high throughput
screening, and (5) from associated administrative costs. Cubist expects to incur
significant additional operating losses over the next several years and expects
cumulative losses to increase. We expect this increase to be substantially due
to expanded research and development efforts, pre-clinical testing and clinical
trials and the development of manufacturing, marketing and sales capabilities.
In the next few years, Cubist's revenues may be limited to support payments from
any collaborative agreements it has established or will establish. We cannot be
sure, however, that Cubist will be able to establish any additional
collaborative relationships on terms acceptable to Cubist or maintain in effect
its current collaborative agreements. Our ability to achieve significant revenue
or profitability depends on our and our collaborative partners' ability to
- successfully complete the development of drug candidates,
6
<PAGE>
- develop and obtain patent protection and regulatory approvals for
our drug candidates and
- to manufacture and commercialize the resulting drugs.
Cubist will not receive revenues or royalties from commercial sales for
a significant number of years, if at all. Our failure to receive significant
revenues or achieve profitable operations will impair our ability to sustain
operations. We cannot provide assurance that we will ever successfully develop,
commercialize, patent, manufacture and market any products, obtain required
regulatory approvals or achieve profitability.
UNCERTAINTY OF PATENTS AND PROPRIETARY
RIGHTS COULD EFFECT OUR ABILITY TO COMPETE.
Cubist's success will depend in part on its ability to obtain United
States and foreign patent protection for its drug candidates and processes,
preserve its trade secrets, and operate without infringing the proprietary
rights of third parties. We place considerable importance on obtaining patent
protection for significant new technologies, products and processes. 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. Our patent position is highly uncertain and involves
complex legal and factual questions. We cannot be certain that the named
applicants or inventors of the subject matter covered by our patent applications
or patents (whether directly owned by us or licensed to us) were the first to
invent or the first to file patent applications for such inventions. Third
parties may challenge, infringe upon, circumvent or seek to invalidate existing
or future patents owned by or licensed to us. A court or other agency with
jurisdiction may find our patents unenforceable. Even if we have valid patents,
these patents still may not provide sufficient protection against competitive
products or other commercially valuable products or processes.
If a third party claims the same or overlapping subject matter as we
have claimed in a United States patent application or patent, then we may decide
or be required to participate in interference proceedings in the United States
Patent and Trademark Office in order to determine who invented the subject
matter first. If we lost such an interference proceeding, then we would be
deprived of the patent protection we previously sought or obtained. Indeed,
regardless of whether we win or lose in such proceedings, we would still incur
substantial costs.
If our drug candidates or processes are found to infringe upon the
patents of others or are found to impermissibly utilize the intellectual
property of others, our development, manufacture and sale of our infringing drug
candidates could be severely restricted or prohibited. In this case, we may have
to obtain licenses from third parties to continue utilizing the patents or
proprietary rights of others. Obtaining these licenses may be expensive, if
Cubist is able to obtain them at all. If Cubist becomes involved in litigation
involving its intellectual property rights or the intellectual property rights
of others, the potential costs of such litigation and the potential damages that
Cubist could be required to pay could be substantial.
In addition to patent protection, Cubist relies on trade secrets,
proprietary know-how, and confidentiality provisions in agreements with our
collaborative partners, employees and consultants to protect our intellectual
property. We also rely on invention assignment provisions in agreements with
employees and certain consultants. It is possible that these agreements could be
breached or that we might not have adequate remedies for any such breaches.
Third parties may learn of or independently discover our trade secrets,
proprietary know-how and intellectual property, which could have a material
adverse effect on our business, financial condition and results of operations.
7
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THERE IS UNCERTAINTY ASSOCIATED
WITH PRE-CLINICAL AND CLINICAL TESTING.
Before obtaining regulatory approvals for the commercial sale of any of
our potential drugs, our drug candidates will be subject to extensive
pre-clinical testing and clinical trials to demonstrate their safety and
efficacy in humans. Cubist 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. Cubist has limited
experience in conducting pre-clinical testing or clinical trials, and
pre-clinical testing or clinical trials have been commenced with respect to only
one of our licensed drug candidates (daptomycin) and none of the drug candidates
being developed jointly by Cubist and its collaborative partners. Furthermore,
we cannot be sure that pre-clinical testing 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 our business, operating
results and financial condition.
THERE IS NO ASSURANCE OF
MARKET ACCEPTANCE OF OUR DRUGS.
We cannot be sure that any drugs successfully developed by us,
independently or with our collaborative partners, even if they are approved by
the appropriate regulatory agencies, will be accepted by the pharmaceutical
market. The anti-infective drugs we are attempting to develop will compete with
a number of well-established anti-infective drugs manufactured and marketed by
major pharmaceutical companies. The degree of market acceptance of any drugs
developed by Cubist depends on a number of factors, including
- the establishment and demonstration by us of the clinical efficacy
and safety of our drug candidates,
- their potential advantage of our drugs over existing therapies and
- the reimbursement policies of government and third-party payors.
We cannot be sure that physicians, patients or the medical community in
general will accept and utilize any drugs we develop.
INTENSE COMPETITION CREATES RISKS.
The biotechnology and pharmaceutical industries are intensely
competitive. Cubist has many competitors both in the United States and abroad,
including major, multinational pharmaceutical and chemical companies,
specialized biotechnology firms and universities and other research
institutions. Many of our competitors have greater financial and other
resources, such as larger research and development staffs and more effective
marketing and manufacturing organizations. Our competitors may succeed in
developing or licensing on an exclusive basis technologies and drugs that are
more effective or less costly than any which we are currently developing, which
could render our technology and future drug products obsolete and
noncompetitive. It is possible for our competitors to obtain FDA or other
regulatory approvals for drug candidates before we can. In general, companies
that begin commercial sale of their drugs before their competitors have a
significant competitive advantage in the marketplace, including the ability to
obtain certain patent and FDA marketing exclusivity rights that would delay our
ability to market certain products. Even if our drugs or drug products are
approved for sale, we cannot assure our ability to compete successfully with
competitors' existing products or products under development.
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OUR DRUG CANDIDATES ARE SUBJECT TO EXTENSIVE
GOVERNMENT REGULATION AND PRODUCT APPROVALS.
The FDA and comparable agencies in foreign countries impose substantial
requirements upon the introduction of pharmaceutical products to establish their
safety and efficacy. These include lengthy and detailed pre-clinical, laboratory
and clinical testing procedures, sampling activities and other costly and
time-consuming procedures. All of Cubist's drug candidates will require
governmental approvals for commercialization, none of which have been obtained.
Pre-clinical testing and clinical trials and manufacturing of our 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 takes a significant number of years and can vary
substantially based upon the type, complexity and novelty of the product. We
cannot be sure when Cubist, independently or with its collaborative partners,
might submit drug candidates for FDA or other regulatory review. Government
regulation also affects the manufacturing and marketing of pharmaceutical
products like ours.
The effect of government regulation may be to
- delay the marketing of our potential drugs for a considerable or
indefinite period of time,
- impose costly procedural requirements upon our 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 our marketing as well as our ability to generate significant revenues
from commercial sales. We cannot be sure that FDA or other regulatory approvals
for any drug candidates developed by us 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 the drug may be
marketed. Even if initial regulatory approvals for our drug candidates are
obtained, Cubist, its drugs and its manufacturing facilities would be subject to
continual review and periodic inspection. Later discovery of previously unknown
problems with a drug, manufacturer or facility may result in restrictions on
such drug or Cubist, including withdrawal of the drug from the market. The FDA
stringently applies the regulatory standards. 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 is for expedited development and review and
the other policy is 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. We cannot be sure that any drug candidate
contemplated by Cubist will qualify for the FDA's various fast track or priority
approval policies. Nor can we be sure that such policies will remain as
currently implemented by the FDA.
As with many biotechnology and pharmaceutical companies, Cubist 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 our business, operating results and financial condition. Cubist
is subject to periodic inspections and has not received notice of any material
violations of any environmental or safety law or regulation.
RAPID TECHNOLOGICAL CHANGE
COULD RENDER PRODUCTS OBSOLETE.
Biotechnology and related pharmaceutical technology have undergone and
are subject to rapid and significant change. Cubist expects that the
technologies associated with biotechnology research and development will
continue along this rapid path. Our success will depend in large part on our
ability to maintain a competitive position in the rapidly changing environment.
Because of the rapid changes in technology, our compounds, products
9
<PAGE>
or processes may become obsolete before we can recover the expenses incurred
in developing such compounds, products or processes. We cannot assure that we
can maintain our technological competitiveness.
WE DEPEND ON KEY PERSONNEL.
We believe that our ability to successfully implement our business
strategy is highly dependent on our senior management and scientific team,
including Dr. Rocklage, our President and Chief Executive Officer. Although Dr.
Rocklage has entered into an employment agreement with Cubist, Dr. Rocklage may
terminate his employment at any time upon thirty days' written notice. No other
senior executive officer or key employee has entered into an employment
agreement with Cubist. Losing the services of one or more of these individuals
might hinder our ability to achieve our development objectives. We are highly
dependent upon our ability to attract and retain qualified scientific and
technical personnel. The competition for these employees is intense. We cannot
be sure that we will be able to continue to attract and retain the qualified
personnel necessary for our business. Loss of the services of, or failure to
recruit, key scientific and technical personnel could adversely affect our
business, operating results and financial condition.
WE LACK MANUFACTURING, MARKETING
AND SALES CAPABILITY AND EXPERIENCE.
Cubist depends on third parties to manufacture its product
candidates and is aware of only a limited number of manufacturers which it
believes has the ability and capability to manufacture its drug candidates
for pre-clinical testing and clinical trials. Cubist has an agreement with
ACS Dobfar of Milan, Italy for the production of daptomycin for our clinical
trials and for any commercial sales. If we were required to transfer
manufacturing processes to other third-party manufacturers, we could
experience significant delays in supply. If, at any time, we are unable to
maintain, develop or contract for manufacturing capabilities on acceptable
terms, then our ability to conduct pre-clinical testing and clinical trials
with our drug candidates will be adversely affected, resulting in delays in
the submission of drug candidates for regulatory approvals. We have no
experience in manufacturing and we currently lack the facilities and
personnel to manufacture products in accordance with Good Manufacturing
Practices as prescribed by the FDA or to produce an adequate supply of
compounds to meet future requirements for pre-clinical testing and clinical
trials.
Cubist has no experience in marketing drugs. Therefore, we have granted
marketing rights to our collaborative partners with respect to drugs developed
through the collaborative agreements. Cubist may seek to collaborate with a
third party to market those drugs for which we retain or license marketing
rights or may seek to market and sell those drugs by ourselves. If we seek to
collaborate with a third party, we cannot be sure that a collaborative agreement
can be reached on terms acceptable to us. If we seek to market and sell our
drugs directly, we will need to hire additional personnel skilled in marketing
and sales. We cannot be sure that we will be able to acquire, or establish
third-party relationships to provide, any or all of these marketing and sales
capabilities.
FUTURE REVENUE DEPENDS ON
REIMBURSEMENT AND DRUG PRICING.
Acceptable levels of reimbursement of the costs of the developing and
manufacturing of the drugs and the treatments related to such drugs by
government authorities, private health insurers and other organizations, such as
HMOs, will have an effect on the successful commercialization of, and attracting
collaborative partners to invest in, the development of Cubist's drug. We cannot
be sure that reimbursement in the United States or elsewhere will be available
for any drugs we may develop or, if already available, will not be decreased in
the future. Also, we cannot be sure that reimbursement amounts will not reduce
the demand for, or the price of, our drugs. Such reduction in demand would
adversely affect our business. If reimbursement is not available or is available
only to limited levels, Cubist may not be able to obtain collaborative partners
to manufacture and commercialize drugs, and may not be able to obtain a
sufficient financial return on its own manufacture and commercialization of any
future drugs.
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, as well
as legislative proposals to reform health care or reduce government insurance
programs, may result in lower prices for our pharmaceutical products. The cost
cutting measures that health care providers are instituting, and the effect of
any health care reform, could materially adversely affect our ability to sell
any of its drugs if
10
<PAGE>
successfully developed and approved. Moreover, we are 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 our business.
POTENTIAL PRODUCT LIABILITY
AND AVAILABILITY OF INSURANCE.
The nature of our business exposes Cubist to potential liability
risks that are inherent in the testing, manufacturing and marketing of
pharmaceutical products. Using our drug candidates in clinical trials may
expose us to product liability claims and possible adverse publicity. These
risks will expand with respect any drug candidates, if any, that receive
regulatory approval for commercial sale. Product liability insurance we have
obtained, and additional product liability insurance we will need for the
testing and commercialization of other drug candidates, is generally
expensive. We cannot be sure that we will be able to maintain or obtain
insurance coverage at acceptable costs or in a sufficient amount, or that a
product liability claim would not adversely affect our business, operating
results or financial condition.
CERTAIN EXISTING STOCKHOLDERS
HOLD A SUBSTANTIAL PORTION OF OUR STOCK.
Cubist's officers, directors and principal stockholders own or control
approximately _____% of the outstanding common stock. As a result, these
stockholders, acting together, will have the ability to control most matters
requiring approval by the stockholders.
POTENTIAL ANTI-TAKEOVER EFFECT OF
CERTAIN CHARTER AND BY-LAW PROVISIONS.
Pursuant to Cubist's corporate governing documents, special meetings of
stockholders may be called only by the Chairman of the Board, the President or a
majority of the Board of Directors. In addition, the Board of Directors may
issue preferred stock and to determine its rights and preferences in order to
eliminate delays associated with a stockholder vote on specific issuances.
Cubist has no present plans to issue any shares of preferred stock. Cubist's
governing documents also provide for staggered elections of its Board of
Directors and specific procedures for director nominations by stockholders and
submission of other proposals for consideration at stockholder meetings. In
addition, Cubist has instituted a shareholder rights plan commonly known as a
poison pill pursuant to which all stockholders have the right to receive
additional shares of Cubist common stock to prevent certain changes in control.
These provisions may have the effect of deterring hostile takeovers or
delaying or preventing changes in control or management of Cubist, 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 Cubist could also delay or make more difficult a merger, tender
offer or proxy contest involving Cubist, including Section 203 of the Delaware
General Corporation Law which prohibits a Delaware corporation from engaging in
any business combination with any stockholder owning 15% or more of Cubist's
outstanding voting stock 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.
WE HAVE NOT DECLARED ANY DIVIDENDS.
We have never declared or paid cash dividends. We do not intend to
declare or pay any cash dividends in the foreseeable future.
11
<PAGE>
CUBIST PHARMACEUTICALS, INC.
Cubist Pharmaceuticals, Inc. is a specialty biopharmaceutical company
focused on the research, development and commercialization of novel
anti-microbial drugs to combat serious life-threatening bacterial and fungal
infections. The mailing address and telephone number of Cubist's principal
executive office is 24 Emily Street, Cambridge, MA 02139 (617) 576-1999.
RECENT DEVELOPMENTS
On October 15, 1999, Cubist entered into an agreement with the selling
stockholders to raise approximately $18.8 million in a private placement of its
common stock. At the closing of the private placement held October 21, 1999,
upon payment of the $18,774,997.50 purchase price, Cubist issued 2,503,333
shares of common stock to the selling stockholders.
USE OF PROCEEDS
Cubist 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 Cubist's common stock as of November 2, 1999, by each of
the selling stockholders. The selling stockholders covered by this prospectus
are persons who received Cubist common stock in connection with (1) the private
placement of Cubist's common stock which occurred on September 10, 1998, and/or
(2) the private placement of Cubist's common stock which occurred on October 15,
1999.
1998 Private Placement. Under a Registration Rights Agreement dated
September 10, 1998 among Cubist and certain selling stockholders, we agreed to
register the Cubist common stock sold to those selling stockholders in the
private placement and to use our best efforts to keep the Registration Statement
effective for two years, or until all of the shares are sold under the
Registration Statement, whichever comes first.
1999 Private Placement. Under a Registration Rights Agreement dated
October 15, 1999 among Cubist and certain selling stockholders, we agreed to
register the Cubist common stock sold to those selling stockholders in the
private placement and to use our best efforts to keep the Registration Statement
effective for two years, or until all of the shares are sold under the
Registration Statement, whichever comes first.
Our registration of the shares of common stock covered by this
prospectus does not necessarily mean that the selling stockholders will sell all
or any of the shares. 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 Cubist 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 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 last
provided to Cubist any 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 of 1933. Certain selling stockholders have
not provided updated information to us regarding the shares of common stock
beneficially owned by them.
12
<PAGE>
<TABLE>
<CAPTION>
Shares Number Shares
Beneficially Owned of Shares Beneficially Owned
Name and Address of Beneficial Owner Prior to Offering (1) Being Offered After Offering(1)
------------------------------------ --------------------- ------------- --------------------
Number Percent
--------- --------
<S> <C> <C> <C> <C>
SOFINOV SOCIETE FINANCIERE D'INNOVATION INC. [ ] (2) [ ] (2) [ ] [ ]
1981 Avenue McGill College
7e etage
Montreal, Quebec H3A 3C7
Entities Affiliated with: [ ] (3) [ ] (3) [ ] [ ]
ADVENT INTERNATIONAL CORPORATION
c/o Advent International Corporation
101 Federal Street
Boston, MA 02110
BIOTECHNOLOGY DEVELOPMENT FUND, L.P. [ ] (4) [ ] (4) [ ] [ ]
c/o BioAsia Investments LLC
575 High Street, Suite 201
Palo Alto, CA 94301
BIOTECHNOLOGY DEVELOPMENT FUND III, L.P. [ ] (5) [ ] (5) [ ] [ ]
c/o BioAsia
575 High Street, Suite 201
Palo Alto, CA 94301
BIOCAPITAL INVESTMENTS LIMITED PARTNERSHIP [ ] (6) [ ] (6) [ ] [ ]
3690, rue de la Montague
Montreal, H3G 248 CANADA
SPECIAL SITUATIONS PRIVATE EQUITY FUND, L.P. [ ] (7) [ ] (7) [ ] [ ]
153 East 53rd Street
New York, NY 10022
SPECIAL SITUATIONS FUND III, L.P. [ ] (8) [ ] (8) [ ] [ ]
153 East 53rd Street
New York, NY 10022
SPECIAL SITUATIONS CAYMAN FUND, L.P. [ ] (9) [ ] (9) [ ] [ ]
153 East 53rd Street
New York, NY 10022
INTERNATIONAL BIOTECHNOLOGY TRUST plc(10) [ ] (11) [ ] (11) [ ] [ ]
c/o Rothschild Asset Management
5 Arrows House
St. Swithin's Lane
London, EC48 NR ENGLAND
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
Shares Number Shares
Beneficially Owned of Shares Beneficially Owned
Name and Address of Beneficial Owner Prior to Offering (1) Being Offered After Offering(1)
------------------------------------ --------------------- ------------- --------------------
Number Percent
--------- --------
<S> <C> <C> <C> <C>
Entities Affiliated with: [ ] (12) [ ] (13) [ ] [ ]
H & Q CAPITAL MANAGEMENT, INC.
50 Rowes Wharf
Boston, MA 02110-3328
LANCASTER INVESTMENT PARTNERS [ ] (14) [ ] (14) [ ] [ ]
500 N. Gulph, Suite 110
King of Prussia, PA 19406
CPR (USA) INC. [ ] (15) [ ] (15) [ ] [ ]
c/o Liberty View Capital
101 Hudson Street, Suite 3700
Jersey City, NJ 07302
NEW YORK LIFE INSURANCE COMPANY [ ] (16) [ ] (16) [ ] [ ]
51 Madison Avenue
New York, NY 10010
PORTER PARTNERS, L.P. [ ] (17) [ ] (17) [ ] [ ]
100 Shoreline Suite 211B
Mill Valley, CA 94941
MICHAEL T. JACKSON TRUST, [ ] (18) [ ] (18) [ ] [ ]
NEW TECHNOLOGIES FUND
c/o Emerging Growth MGMT Co.
One Embarcadero Center, Ste 2410
San Francisco, CA 94111
PAUL R. SCHIMMEL, Ph.D [ ] (19) [ ] (19) [ ] [ ]
DVG DEUTSCHE VERMOGENSBILDUNGSGESELLSCHAFT mbH 500,000 500,000 -0- *
Feldbergstrasse 22
60323 Frankfurt, Germany
CARDINAL HEALTH PARTNERS, L.P. 533,333 533,333 -0- *
221 Nassau Street
Princeton, NJ 08542
CLARION CAPITAL CORPORATION 258,334(20) 258,334(20) -0- *
Ohio Savings Plaza
Suite 1120
1801 East Ninth Street
Cleveland, OH 44114
CLARION OFFSHORE FUND LTD 6,750 6,750 -0- *
Ohio Savings Plaza
Suite 1120
1801 East Ninth Street
Cleveland, OH 44114
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
Shares Number Shares
Beneficially Owned of Shares Beneficially Owned
Name and Address of Beneficial Owner Prior to Offering (1) Being Offered After Offering(1)
------------------------------------ --------------------- ------------- --------------------
Number Percent
--------- --------
<S> <C> <C> <C> <C>
CLARION PARTNERS, L.P. 18,250 18,250 -0- *
Ohio Savings Plaza
Suite 1120
1801 East Ninth Street
Cleveland, OH 44114
MARCUARD COOK & CIE S.A. 50,000 50,000 -0- *
7, Rue Des Alpes
Case Postale 1380
Geneva, Switzerland 1211
DEUTSCHE GESELLSCHAFT FUR WERTPAPIERSPAREN, FRANKFURT 500,000 500,000 -0- *
c/o Deutsche Bank, New York
1251 Avenue of the Americas
26th Floor
New York, NY 10020-1104
FIDELITY NATIONAL TITLE INSURANCE COMPANY 25,000 25,000 -0- *
3916 State Street
Santa Barbara, CA 93105
WHITNEY PARTNERS, LP 50,000 50,000 -0- *
17 East Sir Francis Drake Blvd
Suite 100
Larkspur, CA 94939-1727
MERLIN BIOMED, L.P. 20,000 20,000 -0- *
237 Park Avenue
Suite 801
New York, NY 10017
MERLIN BIOMED INTERNATIONAL, LTD 10,000 10,000 -0- *
237 Park Avenue
Suite 801
New York, NY 10017
B. Metzler seel. Sohn & Co KgaA 300,000 300,000 -0- *
(a.k.a METZLER INVESTMENTS)
c/o Brown Brothers Harriman & Co.
Attn: Ralph Firnen/Trade Processing
59 Wall Street
New York, NY 10005-2818
NARRAGANSETT I, L.P. 58,500 58,500 -0- *
375 Park Avenue
Suite 1407
New York, NY 10152
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
Shares Number Shares
Beneficially Owned of Shares Beneficially Owned
Name and Address of Beneficial Owner Prior to Offering (1) Being Offered After Offering(1)
------------------------------------ --------------------- ------------- --------------------
Number Percent
--------- --------
<S> <C> <C> <C> <C>
NARRAGANSETT OFFSHORE, LTD 16,500 16,500 -0- *
375 Park Avenue
Suite 1407
New York, NY 10152
RITCHIE CAPITAL INVESTMENTS, LTD 100,000 100,000 -0- *
210 East State Street
Batavia, IL 60510
RAM CAPITAL, LLC 100,000 100,000 -0- *
210 East State Street
Batavia, IL 60510
VERITAS SG INVESTMENT TRUST GMBH 100,000 100,000 -0- *
Bettinastrasse, 62
Frankfurt, Germany 60325
BANKBOSTON, N.A., TRUSTEE U/I C.P. KNIGHT, JR. 5,000 5,000 -0- *
RESIDUARY TRUST
c/o BankBoston
Mail Stop: T - 0405
1 BankBoston Plaza
Providence, RI 02903
GARY ROSENBACH 25,000 25,000 -0- *
c/o Galleon Capital
135 East 57th Street, 26th Floor
New York, NY 10022
RICHARD H. OSGOOD 20,000 20,000 -0- *
4 Maritime Plaza
San Francisco, CA 94111-3416
STEPHEN J. MASSOCCA 20,000 20,000 -0- *
4 Maritime Plaza
San Francisco, CA 94111-3416
HANS KHUNL-BRADY 20,000 20,000 -0- *
Horlgasse 5
1090 Vienna, Austria
</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 November 2,
1999, 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.
16
<PAGE>
(2) Includes [ ] shares of common stock which Sofinov Societe
Financiere D'Innovation Inc. has the right to acquire within 60 days of
November 2, 1999 upon the exercise of common stock purchase warrants.
(3) Includes the ownership by the following venture capital funds managed
by Advent International Corporation: [ ] shares held by Rovent II
Limited Partnership, [ ] shares held by Advent Performance Materials
Limited Partnership, [ ] shares held by Advent International
Investors II Limited Partnership and [ ] shares of common stock
which Rovent II Limited Partnership has the right to acquire within 60
days of November 2, 1999 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 [ ] shares.
(4) Includes [ ] shares of common stock which Biotechnology Development
Fund, L.P. has the right to acquire within 60 days of November 2, 1999
upon the exercise of common stock purchase warrants.
(5) Includes [ ] shares of common stock which Biotechnology Development
Fund III, L.P. has the right to acquire within 60 days of November 2,
1999 upon the exercise of common stock purchase warrants.
(6) Includes [ ] shares of common stock which Biocapital Investments
Limited Partnership has the right to acquire within 60 days of November
2, 1999 upon the exercise of common stock purchase warrants.
(7) Includes [ ] shares of common stock which Special Situations
Private Equity Fund, L.P. has the right to acquire within 60 days of
November 2, 1999 upon the exercise of common stock purchase warrants.
(8) Includes [ ] shares of common stock which Special Situations Fund,
III, L.P. has the right to acquire within 60 days of November 2, 1999
upon the exercise of common stock purchase warrants.
(9) Includes [ ] shares of common stock which Special Situations Cayman
Fund, L.P. has the right to acquire within 60 days of November 2, 1999
upon the exercise of common stock purchase warrants.
(10) Pursuant to the terms of the Stock Purchase Agreement dated July 18,
1997, by and between Cubist 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.
(11) Includes [ ] shares of common stock which IBT has the right to
acquire within 60 days of November 2, 1999 upon the exercise of common
stock purchase warrants.
(12) Consists of [ ] shares held by H&Q Healthcare Investors and [ ]
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 [ ] shares of common stock which H&Q Healthcare Investors
has the right to acquire within 60 days of November 2, 1999 upon the
exercise of common stock purchase warrants and [ ] shares of common
stock which H&Q Life Sciences Investors has the right to acquire within
60 days of November 2, 1999 upon the exercise of common stock purchase
warrants.
(13) Consists of [ ] shares held by H&Q Healthcare Investors and [ ]
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 [ ] shares of common stock which H&Q Healthcare Investors
has the right to acquire within 60 days of November 2, 1999 upon the
exercise of common stock purchase warrants and [ ] shares of common
stock which H&Q Life Sciences Investors has the right to acquire within
60 days of November 2, 1999 upon the exercise of common stock purchase
warrants.
(14) Includes [ ] shares of common stock which Lancaster Investment
Partners has the right to acquire within 60 days of November 2, 1999
upon the exercise of common stock purchase warrants.
17
<PAGE>
(15) Includes [ ] shares of common stock which CPR (USA) Inc. has the
right to acquire within 60 days of November 2, 1999 upon the exercise
of common stock purchase warrants.
(16) Includes [ ] shares of common stock which New York Life Insurance
Company has the right to acquire within 60 days of November 2, 1999
upon the exercise of common stock purchase warrants.
(17) Includes [ ] shares of common stock which Porter Partners, L.P. has
the right to acquire within 60 days of November 2, 1999 upon the
exercise of common stock purchase warrants.
(18) Includes [ ] shares of common stock which Michael T. Jackson Trust,
New Technologies Fund has the right to acquire within 60 days of
November 2, 1999 upon the exercise of common stock purchase warrants.
(19) Includes [ ] shares of common stock which Dr. Schimmel has the right
to acquire within 60 days of November 2, 1999 upon the exercise of
stock options, and [ ] shares held by the Paul R. Schimmel
Profit-Sharing Plan. Dr. Schimmel is a director of the Company.
(20) Includes [ ] shares of common stock which Clarion Capital
Corporation has the right to acquire within 60 days of November 2, 1999
upon the exercise of common stock purchase warrants.
18
<PAGE>
PLAN OF DISTRIBUTION
The shares of common stock may be sold from time to time by the selling
stockholders or their donees, transferees and other successors in interest in
one or more transactions at fixed prices, at market prices at the time of sale,
at varying prices determined at the time of sale or at negotiated prices. The
shares of common stock may be sold in one or more of the following transactions:
- on any national securities exchange or quotation service on which
the common stock may be listed or quoted at the time of sale,
including the Nasdaq National Stock Market,
- in the over-the-counter market,
- in private transactions,
- through options, or
- a combination of any of the above transactions.
If required, we will distribute a supplement to this prospectus to
describe material changes in the terms of the offering. The supplement 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 the 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.
The shares of common stock described in this prospectus may be sold
from time to time directly by the selling stockholders. Alternatively, the
selling stockholders may from time to time offer shares of common stock to or
through broker/dealers or agents. The selling stockholders and any
broker/dealers or agents that participate in the distribution of the shares
of common stock may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933. Any profits on the resale of shares of common stock
and any compensation received by any broker/dealer or agent may be deemed to
be underwriting discounts and commissions under the Securities Act of 1933.
Any shares covered by this prospectus which qualify for sale pursuant
to Rule 144 under the Securities Act of 1933 may be sold under Rule 144 rather
than pursuant to this prospectus. The selling stockholders may not sell all of
the shares. The selling stockholders may transfer, devise or gift such shares by
other means not described in this prospectus.
To comply with the securities laws of certain jurisdictions, if
applicable, the common stock must be offered or sold only through registered or
licensed brokers or dealers. In addition, in certain jurisdictions, the common
stock may not be offered or sold unless they have been registered or qualified
for sale or an exemption is available and complied with.
Under applicable rules and regulations under the Securities Exchange
Act of 1934, any person engaged in a distribution of the common stock offered
hereby may not simultaneously engage in market-making activities with respect
to our common stock for a specified period prior to the start of the
distribution. In addition, each selling stockholder and any other person
participating in a distribution will be subject to the Securities Exchange
Act and the rules and regulations promulgated under the Exchange Act,
including Regulation M, which may limit the timing of purchases and sales of
common stock by the selling stockholders or any such other person. These
factors may affect the marketability of the common stock and the ability of
brokers or dealers to engage in market-making activities.
All expenses of this registration will be paid by Cubist. These
expenses include the SEC's filing fees and fees under state securities or "blue
sky" laws. The selling stockholders will pay all underwriting discounts and
selling commissions, if any.
19
<PAGE>
LEGAL MATTERS
Bingham Dana LLP, Boston, Massachusetts will give its opinion that the
shares offered in this prospectus have been validly issued and are fully paid
and non-assessable. Justin P. Morreale, a partner at Bingham Dana LLP, is the
Secretary of Cubist.
EXPERTS
The Financial Statements incorporated in this Prospectus by
reference to the Annual Report on Form 10-K for the year ended December 31,
1998 have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority
of said firm as experts in auditing and accounting.
20
<PAGE>
<TABLE>
<S> <C>
WE HAVE NOT AUTHORIZED ANY DEALER, SALESPERSON OR
OTHER PERSON TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS OR
ANY PROSPECTUS SUPPLEMENT. YOU MUST NOT RELY ON ANY
UNAUTHORIZED INFORMATION. NEITHER THIS PROSPECTUS NOR 2,503,333 Shares
ANY PROSPECTUS SUPPLEMENT IS AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY OF THESE
SECURITIES IN ANY JURISDICTION WHERE AN OFFER OR
SOLICITATION IS NOT PERMITTED. NO SALE MADE PURSUANT
TO THIS PROSPECTUS SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT THERE HAS NOT BEEN ANY
CHANGE IN THE AFFAIRS OF CUBIST SINCE THE DATE OF THIS
PROSPECTUS. Cubist Pharmaceuticals, Inc.
Common Stock
-------------------
TABLE OF CONTENTS PROSPECTUS
- -------------------------------------
Page ____________ , 1999
Where You Can Get More
Information.................. 2
-------------------
Certain Information We are
Incorporating by Reference... 2
Forward Looking Statements... 3
Risk Factors................. 3
Cubist Pharmaceuticals, Inc.. 12
Recent Developments.......... 12
Use of Proceeds.............. 12
Selling stockholders......... 12
Plan of Distribution......... 19
Legal Matters................ 20
Experts...................... 20
</TABLE>
<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....................................................................... $ 5,806.81
Nasdaq National Market Listing Fees........................................................ $17,500
Legal Fees and Expenses.................................................................... 5,000
Accountants' Fees and Expenses............................................................. 3,000
Miscellaneous Costs........................................................................ 2,000
---------
Total................................................................................ $33,306.81
</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 October 15, 1999,
provides for indemnification by the Registrant of each of the selling
stockholders against certain liabilities under the Securities Act of 1933, the
Securities Exchange Act of 1934, 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 of 1933, the Securities Exchange Act of
1934, state securities laws or otherwise.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBITS
<S> <C>
3.1 Restated Certificate of Incorporation of Cubist
(incorporated by reference to Exhibit 3 to Cubist's Quarterly
Report on Form 10-Q filed on August 12, 1999)
(File no. 000-21379).
3.2 Amended and Restated By-Laws of the Registrant, as amended to
date (incorporated by reference to Exhibit 3.4 to Cubist's
Registration Statement on Form S-1) (Registration No. 333-6795).
4.1 Specimen certificate for shares of common stock (incorporated
by reference to Exhibit 3.4 to Cubist's Registration Statement
on Form S-1 (Registration No. 333-6795).
4.2 Rights Agreement dated as of July 21, 1999 between Cubist and
BankBoston, N.A. as Rights Agent (incorporated by reference to
Exhibit 99.1 to Cubist's Report on Form 8-K filed on July 30,
1999) (File No. 000-21379).
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>
<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 of 1933 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, 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 1st day of November, 1999.
CUBIST PHARMACEUTICALS, INC.
By: /s/ Scott M. Rocklage
-------------------------------------
Scott M. Rocklage
PRESIDENT AND CHIEF EXECUTIVE OFFICER
POWER OF ATTORNEY
Each person whose signature appears below hereby appoint each of Scott
M. Rocklage and Thomas A. Shea severally, acting alone and without the other,
his/her true and lawful attorney-in-fact with the authority to execute in the
name of each such person, any and all amendments (including without limitation,
post-effective amendments) to this Registration Statement on Form S-3, to sign
any and all additional registration statements relating to the same offering of
securities as this Registration Statement that are filed pursuant to Rule 462(b)
of the Securities Act, and to file such registration statements with the
Securities and Exchange Commission, together with any exhibits thereto and other
documents therewith, necessary or advisable to enable the Registrant to comply
with the Securities Act, and any rules, regulations and requirements of the
Securities and Exchange Commission in respect thereof, which amendments may make
such other changes in the Registration Statement as the aforesaid
attorney-in-fact executing the same deems appropriate.
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:
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott M. Rocklage President, Chief Executive Officer and Director November 1, 1999
- ----------------------------- (Principal Executive Officer)
Scott M. Rocklage
/s/ Thomas A. Shea Vice President and Chief Financial Officer November 1, 1999
- ----------------------------- (Principal Financial and Accounting Officer)
Thomas A. Shea
/s/ John K. Clarke Chairman of the Board of Directors November 1, 1999
- -----------------------------
John K. Clarke
/s/ Barry M. Bloom Director November 1, 1999
- -----------------------------
Barry M. Bloom
/s/ George Conrades Director November 1, 1999
- -----------------------------
George Conrades
/s/ Trudy Resch Director November 1, 1999
- -----------------------------
Trudy Resch
/s/ David Martin Director November 1, 1999
- -----------------------------
David Martin
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Walter Maupay Director November 1, 1999
- -----------------------------
Walter Maupay
/s/ Paul R. Schimmel Director November 1, 1999
- -----------------------------
Paul R. Schimmel
/s/ John Zabriskie Director November 1, 1999
- -----------------------------
John Zabriskie
*By: ________________________
Thomas A. Shea,
Attorney-in-Fact
</TABLE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBITS
<S> <C>
3.1 Restated Certificate of Incorporation of the Registrant
(incorporated by reference to Exhibit 3 to Cubist's Quarterly
Report on Form 10-Q filed on August 12, 1999)
(File no. 000-21379).
3.2 Amended and Restated By-Laws of the Registrant, as amended to
date (incorporated by reference to Exhibit 3.4 to Cubist's
Registration Statement on Form S-1) (Registration No. 333-6795).
4.1 Specimen certificate for shares of common stock (incorporated
by reference to Exhibit 3.4 to Cubist's Registration Statement
on Form S-1 (Registration No. 333-6795).
4.2 Rights Agreement dated as of July 21, 1999 between Cubist and
BankBoston, N.A. as Rights Agent (incorporated by reference to
Exhibit 99.1 to Cubist's Report on Form 8-K filed on July 30,
1999) (File No. 000-21379).
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>
- -----------
<PAGE>
Exhibit 5
BINGHAM DANA LLP
150 Federal Street
Boston, MA 02110
November 2, 1999
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 2,503,333 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 November 2, 1999.
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
requirements of state laws regulating the sale of securities will have been duly
satisfied. We have also assumed that the Company has received the specified
purchase price for the Shares.
This opinion is limited solely to the Delaware General Corporation Law
as applied by courts located in the State of Delaware.
<PAGE>
-2-
Subject to the foregoing, it is our opinion that the Shares have been
duly authorized and validly issued and are 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 hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 to register 2,503,333 shares of Common Stock of our
report dated February 15, 1999 relating to the financial statements, which
appear in Cubist Pharmaceuticals, Inc.'s Annual Report on Form 10-K for the
year ended December 31, 1998. We also consent to the references to us under
the heading "Experts" in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
November 1, 1999
