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Filed Pursuant to Rule 424(b)(3) and relates to
Registration No. 333-90137
SUPPLEMENTED PROSPECTUS
10,809,702 SHARES
CUBIST PHARMACEUTICALS, INC.
COMMON STOCK
Selling stockholders identified in this prospectus may sell up to
10,809,702 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 January 19, 2000, the closing sale price of the
common stock, as reported on the Nasdaq National Market, was $23.3125 per share.
INVESTING IN THE COMMON STOCK INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS," BEGINNING ON PAGE 2.
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 supplemented prospectus is January 20, 2000
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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 November 12, 1999, 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
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-- 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:
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.
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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.
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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 collaborative 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
- the development or commercialization of any drug candidate or research
program under these collaborative agreements may be delayed,
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- 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,
- develop and obtain patent protection and regulatory approvals for our
drug candidates and
- to manufacture and commercialize the resulting drugs.
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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.
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.
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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.
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.
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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 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
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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 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 22.2% 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
9
<PAGE>
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.
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, (unless
otherwise noted) 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
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<PAGE>
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.
<TABLE>
<CAPTION>
Shares Beneficially Number of
Owned Prior Shares Being Shares Beneficially Owned
Name and Address of Beneficial Owner to Offering (1) Offered After Offering (1)
---------- ----- -- -------- ------- ----- --------
Number Percent
------ -------
<S> <C> <C> <C> <C>
SOFINOV SOCIETE FINANCIERE 2,997,335 (2) 2,997,335 (2) -0- *
D'INNOVATION INC.
1981 Avenue McGill College
7e etage
Montreal, Quebec H3A 3C7
Entities Affiliated with:
ADVENT INTERNATIONAL CORPORATION 732,143 (3) 500,001 (3) 232,142 1.1%
c/o Advent International Corporation
75 State Street
Boston, MA 02109
BIOCAPITAL INVESTMENTS LIMITED 225,000 (4) 225,000 (4) -0- *
PARTNERSHIP
3690, rue de la Montague
Montreal, H3G 248 CANADA
SPECIAL SITUATIONS PRIVATE EQUITY FUND, L.P. 178,334 (5) 178,334 (5) -0- *
153 East 53rd Street
New York, NY 10022
SPECIAL SITUATIONS FUND III, L.P. 344,334 (6) 344,334 (6) -0- *
153 East 53rd Street
New York, NY 10022
SPECIAL SITUATIONS CAYMAN FUND, L.P. 110,778 (7) 110,778 (7) -0- *
153 East 53rd Street
New York, NY 10022
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
Shares Beneficially Number of
Owned Prior Shares Being Shares Beneficially Owned
Name and Address of Beneficial Owner to Offering (1) Offered After Offering (1)
---------- ----- -- -------- ------- ----- -------- -
Number Percent
------ -------
<S> <C> <C> <C> <C>
INTERNATIONAL BIOTECHNOLOGY TRUST plc(8) 1,199,661 (9) 1,121,884 (9) 77,777 *
c/o Rothschild Asset Management
Five Arrows House, St. Swithin's Lane
London, EC4N N8R ENGLAND
Entities Affiliated with:
H & Q CAPITAL MANAGEMENT, INC. 1,952,839 (10) 1,163,268 (11) 790,571 3.8%
50 Rowes Wharf
Boston, MA 02110-3328
CPR (USA) INC. 40,000 (12) 40,000 (12) -0- *
c/o Liberty View Capital
101 Hudson Street, Suite 3700
Jersey City, NJ 07302
NEW YORK LIFE INSURANCE COMPANY 1,150,832 (13) 1,150,832 (13) -0- *
51 Madison Avenue
New York, NY 10010
PORTER PARTNERS, L.P. 50,000 (14) 50,000 (14) -0- *
100 Shoreline Suite 211B
Mill Valley, CA 94941
MICHAEL T. JACKSON TRUST, 63,334 (15) 63,334 (15) -0- *
NEW TECHNOLOGIES FUND
c/o Emerging Growth MGMT Co.
One Embarcadero Center, Ste 2410
San Francisco, CA 94111
PAUL R. SCHIMMEL, Ph.D 320,465 (16) 285,713 (16) 34,752 *
The Scripps Research Institute
10550 North Torrey Pines Road
La Jolla, CA 92037
DVG DEUTSCHE 500,000 500,000 -0- *
VERMOGENSBILDUNGSGESELLSCHAFT mbH
Feldbergstrasse 22
60323 Frankfurt, Germany
CLARION CAPITAL CORPORATION 72,778 (18)(19) 72,778 (18) -0- *
11 Old Westbury Road
Old Westbury, New York 11568
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
Shares Beneficially Number of
Owned Prior Shares Being Shares Beneficially Owned
Name and Address of Beneficial Owner to Offering (1) Offered After Offering (1)
---------- ----- -- -------- ------- ----- -------- -
Number Percent
------ -------
<S> <C> <C> <C> <C>
CLARION OFFSHORE FUND LTD 6,750 (19) 6,750 -0- *
11 Old Westbury Road
Old Westbury, New York 11568
CLARION PARTNERS, L.P. 18,250 (19) 18,250 -0- *
11 Old Westbury Road
Old Westbury, NY 11568
MARCUARD COOK & CIE S.A. 50,000 50,000 -0- *
7, Rue Des Alpes
Case Postale 1380
Geneva, Switzerland 1211
DEUTSCHE GESELLSCHAFT FUR 750,000 500,000 250,000 1.2%
WERTPAPIERSPAREN, FRANKFURT
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>
13
<PAGE>
<TABLE>
<CAPTION>
Shares Beneficially Number of
Owned Prior Shares Being Shares Beneficially Owned
Name and Address of Beneficial Owner to Offering (1) 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 5,000 5,000 -0- *
U/I C.P. KNIGHT, JR. 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
LOS ANGELES COUNTY EMPLOYEES RETIREMENT ASSOCIATION 85,863 85,863 -0- *
LACERA (17)
300 North Lake Avenue
Suite 850
Pasadena, CA 91101
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
Shares Beneficially Number of
Owned Prior Shares Being Shares Beneficially Owned
Name and Address of Beneficial Owner to Offering (1) Offered After Offering (1)
---------- ----- -- -------- ------- ----- -------- -
Number Percent
------ -------
<S> <C> <C> <C> <C>
NASSAU CAPITAL FUNDS, L.P. (17) 132,203 77,277 54,926 *
Nassau Capital, LLC
22 Chambers Street
Princeton, NJ 08542
THE ROBERT WOOD JOHNSON FOUNDATION (17) 64,397 64,397 -0- *
College Road East
P. O. Box 2316
Princeton, NJ 08543-2316
THE STATE TEACHERS RETIREMENT SYSTEM OF OHIO (17) 60,045 60,045 -0- *
275 East Broad Street
Columbus, OH 43215-3771
Attn: Joseph B. Michael
SUMMIT BANCORP (17) 42,932 42,932 -0- *
Summit Bank
301 Carnegie Center
P. O. Box 2066
Princeton, NJ 08543
NORTHWESTERN UNIVERSITY (17) 42,932 42,932 -0- *
Investment Department
633 Clark Street, Suite 1-209 Crown
Evanston, IL 60208-1122
NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, 42,932 42,932 -0- *
PA (17)
c/o AIG Global Investment Corporation
175 Water Street, 24th Floor
New York, NY 10038
BANK OF AMERICA CAPITAL CORPORATION (17) 25,759 25,759 -0- *
231 South LaSalle Street, Suite 1410
Chicago, IL 60697
FIRST UNION NATIONAL BANK PENSION
PLAN & TRUST VENTURE CAPITAL ACCOUNT (17) 25,759 25,759 -0- *
First Union Bank
First Capital Group
123 South Broad Street, PA 4399
MBO - 2nd Floor
Philadelphia, PA 19109
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
Shares Beneficially Number of
Owned Prior Shares Being Shares Beneficially Owned
Name and Address of Beneficial Owner to Offering (1) Offered After Offering (1)
---------- ----- -- -------- ------- ----- -------- -
Number Percent
------ -------
<S> <C> <C> <C> <C>
THE BANK OF NEW YORK AS TRUSTEE OF 21,466 21,466 -0- *
THE UNISYS MASTER TRUST (17)
Bank of New York
One Wall Street, 12th Floor
New York, NY 10286
VENTURE INVESTMENT ASSOCIATES II, LP (17) 17,173 17,173 -0- *
Venture Investment Associates
1300 Mt. Kemble Avenue (Route 202)
Morristown, NJ 07962
S.R. ONE, LIMITED (17) 12,879 12,879 -0- *
Four Tower Bridge
200 Barr Harbor Drive, Suite 250
W. Conshohocken, PA 19428-2977
HILLSIDE CAPITAL INCORPORATED (17) 8,586 8,586 -0- *
Hillside Capital Corporation
405 Park Avenue, Suite 1202
New York, NY 10022
JOHN K. CLARKE (17) 79,667 (20) 2,493 77,174 *
c/o Cardinal Health Partners
221 Nassau Street
Princeton, NJ 08542
BRANDON H. HULL (17) 1,586 1,586 -0- *
c/o Cardinal Health Partners
221 Nassau Street
Princeton, NJ 08542
JOHN J. PARK (17) 6,808 453 6,355 *
c/o Cardinal Health Partners
221 Nassau Street
Princeton, NJ 08542
BERGMAN FAMILY, LLC (17) 91,522 (21) 267 91,255 *
c/o Domain Associates
28202 Cabot Road, Suite 200
Laguna Nigel, CA 92677
MORTON COLLINS (17) 96,522 267 96,255 *
c/o DSV Partners
221 Nassau Street
Princeton, NJ 08542
DOMAIN ASSOCIATES, L.L.C. (17) 267 267 -0- *
One Palmer Square, Suite 515
Princeton, NJ 08542
</TABLE>
16
<PAGE>
* 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,
(unless otherwise noted) 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
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: 514,778 shares held by Rovent II
Limited Partnership, 48,748 shares held by Advent Performance Materials
Limited Partnership, 1,950 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 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 732,143 shares.
(4) Includes 75,000 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.
(5) Information presented is as of November 9, 1999. Includes 133,334 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.
(6) Information presented is as of November 9, 1999. Includes 233,334 shares
of common stock which Special Situations Fund, III, L.P. has the right to
acquire within 60 days of November 9, 1999 upon the exercise of common
stock purchase warrants.
(7) Information presented is as of November 9, 1999. Includes 77,778 shares
of common stock which Special Situations Cayman Fund, L.P. has the right
to acquire within 60 days of November 9, 1999 upon the exercise of common
stock purchase warrants.
(8) 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.
(9) Information presented is as of November 16, 1999.
(10) Consists of 949,056 shares held by H&Q Healthcare Investors and 671,449
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 November 2, 1999 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 November 2,
1999 upon the exercise of common stock purchase warrants.
17
<PAGE>
(11) Consists of 400,001 shares held by H&Q Healthcare Investors and 266,666
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 November 2, 1999 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 November 2,
1999 upon the exercise of common stock purchase warrants.
(12) Consists of 40,000 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.
(13) Includes 444,444 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.
(14) Consists of 50,000 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.
(15) Consists of 63,334 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.
(16) Includes 24,752 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 warrants, and 65,714 shares held by the Paul R. Schimmel
Profit-Sharing Plan. Dr. Schimmel is a director of the Company.
(17) Information presented is as of January 20, 2000.
(18) Includes 47,778 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.
(19) Morton A. Cohen has sole voting and investment power for each of Clarion
Capital Corporation, Clarion Offshore Fund Ltd and Clarion Partners, L.P.
Mr. Cohen is Chairman of Clarion Capital Corporation and the investment
manager for Clarion Offshore Fund Ltd and Clarion Partners, L.P.
(20) Includes 8,054 shares of common stock which Mr. Clarke has the right
to acquire within 60 days of January 20, 1999 upon the exercise of stock
options.
(21) Consists of 46,242 shares held by Bergman Family, LLC and 45,280 shares
held by James R. Bergman. The voting and investment power for the shares
held by the Bergman Family, LLC is held solely by Mr. Bergman. The voting
and investment power for the shares held by James R. Bergman is held
solely by Mr. Bergman.
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,
18
<PAGE>
- 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.
LEGAL MATTERS
Bingham Dana LLP, Boston, Massachusetts has given 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.
19
<PAGE>
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 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 10,809,702 Shares
SUPPLEMENTED
PROSPECTUS
January 20, 2000
TABLE OF CONTENTS
<TABLE>
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Information 1
Certain Information We are
Incorporating by Reference 1
Forward Looking Statements 2
Risk Factors................ 2
Cubist Pharmaceuticals, Inc.. 10
Recent Developments.......... 10
Use of Proceeds.............. 10
Selling stockholders......... 10
Plan of Distribution......... 18
Legal Matters................ 19
Experts...................... 19
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