<PAGE> 1
As filed with the Securities and Exchange Commission on March 20, 1998
Registration No. 333-_______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
----------------
QUINTILES TRANSNATIONAL CORP.
(Exact name of registrant as specified in its charter)
NORTH CAROLINA 56-1714315
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4709 CREEKSTONE DRIVE
RIVERBIRCH BUILDING, SUITE 200
DURHAM, NORTH CAROLINA 27703-8411
(919) 941-2000
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
DENNIS B. GILLINGS, PH.D.
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
QUINTILES TRANSNATIONAL CORP.
4709 CREEKSTONE DRIVE
RIVERBIRCH BUILDING, SUITE 200
DURHAM, NORTH CAROLINA 27703-8411
(919) 941-2000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
-------------------------
COPIES TO:
GERALD F. ROACH, ESQ.
AMY J. MEYERS, ESQ.
SMITH, ANDERSON, BLOUNT,
DORSETT, MITCHELL & JERNIGAN, L.L.P.
2500 First Union Capitol Center
Raleigh, North Carolina 27601
(919) 821-1220
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable after this registration statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Proposed Proposed
Title of Each Class Maximum Maximum
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, $.01 par value per share. . . . 460,366 $48.6250 $22,385,296.75 $6,603.66
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</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee,
based upon the average of the high and low prices of the Common Stock
on the Nasdaq National Market on March 18, 1997 in accordance with Rule
457(c).
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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 SAID SECTION 8(a),
MAY DETERMINE.
================================================================================
<PAGE> 2
460,366 SHARES
QUINTILES TRANSNATIONAL CORP.
COMMON STOCK
(PAR VALUE $.01 PER SHARE)
-------------
The shares offered hereby (the "Shares") consist of 460,366 shares of
common stock, par value $.01 per share (the "Common Stock"), of Quintiles
Transnational Corp., a North Carolina corporation ("Quintiles" or the
"Company"), which are owned by the selling stockholders listed herein under
"Selling Stockholders" (collectively, the "Selling Stockholders"). The Shares
were acquired by the Selling Stockholders pursuant to the Company's acquisition
of Technology Assessment Group, Inc., a privately held company, and a related
partnership (collectively, "TAG") (the "Transaction"). The Common Stock issued
to the Selling Shareholders in the Transaction was issued in reliance on
exemptions from the registration requirements of the Securities Act of 1933, as
amended (the "Securities Act"). In accordance with the terms of the Transaction,
the Company has agreed to register the Shares for resale by the Selling
Stockholders.
SEE "RISK FACTORS" BEGINNING ON PAGE 4 FOR CERTAIN CONSIDERATIONS
RELEVANT TO AN INVESTMENT IN THE COMMON STOCK.
The Shares may be offered from time to time by the Selling Stockholders
after the date of this Prospectus. The Company shall pay all expenses of
registration incurred in connection with this offering, except that each Selling
Stockholder shall pay any discounts and commissions and stock transfer fees
applicable to the Shares, as well as legal fees incurred by the Selling
Stockholders. None of the Shares has been registered prior to the filing of the
Registration Statement of which this Prospectus is a part. The Company will not
receive any of the proceeds from the sale of the Shares by the Selling
Stockholders.
The Selling Stockholders have not advised Quintiles of any specific
plans for the distribution of the Shares covered by this Prospectus. The Shares
may be sold from time to time on the Nasdaq National Market of The Nasdaq Stock
Market (the "Nasdaq National Market") at the market price then prevailing,
although sales may also be made in negotiated transactions or otherwise. The
Selling Stockholders and the brokers and dealers through whom sales of the
Shares may be made may be deemed to be "underwriters" within the meaning of the
Securities Act, and their commissions or discounts and other compensation may be
regarded as underwriters' compensation. See "Plan of Distribution."
The Company's Common Stock is quoted on the Nasdaq National Market
under the symbol "QTRN." On March 19, 1998, the last reported sale price of
the Common Stock was $48 per share.
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.
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The date of this Prospectus is ________, 1998.
<PAGE> 3
NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE HEREBY TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED OR INCORPORATED
BY REFERENCE IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR THE SELLING STOCKHOLDERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITY OTHER THAN THE SHARES OF
COMMON STOCK OFFERED HEREBY, NOR DOES IT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY TO ANY
PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR
SOLICITATION TO SUCH PERSON. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
OFFER OR SALE MADE HEREBY SHALL UNDER ANY CIRCUMSTANCE IMPLY THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE
HEREOF OR THEREOF.
AVAILABLE INFORMATION
Quintiles is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith, files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Reports, proxy
statements and other information filed by Quintiles may be inspected and copied
at the public reference facilities maintained by the Commission at Room 1024,
450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549, and at the
Commission's regional offices located at 7 World Trade Center, New York, New
York 10048 and Citicorp Center, 500 W. Madison Street, Suite 1400, Chicago,
Illinois 60661-2511; and copies of such materials may be obtained from the
Public Reference Section of the Commission, Washington, D.C. 20549, at
prescribed rates. Copies of such materials may also be obtained from the web
site that the Commission maintains at http://www.sec.gov. Quotations relating to
Quintiles' Common Stock appear on the Nasdaq National Market and such reports,
proxy statements, and other information concerning Quintiles also can be
inspected and copied at the offices of The Nasdaq Stock Market, 1735 K Street,
N.W., Washington, D.C. 20006-1506.
The Company has filed with the Commission a Registration Statement on
Form S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act with respect to the Shares.
This Prospectus does not contain all of the information set forth in the
Registration Statement, certain portions of which are omitted in accordance with
the rules and regulations of the Commission. For further information, reference
is hereby made to the Registration Statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission (File No. 340-23520)
pursuant to the Exchange Act are incorporated herein by reference:
(1) Quintiles' Annual Report on Form 10-K for the fiscal year
ended December 31, 1996;
(2) Quintiles' Quarterly Reports on Form 10-Q for the fiscal
quarters ended March 31, 1997, June 30, 1997, and September 30, 1997;
(3) Quintiles' Current Reports on Form 8-K dated February 7,
1997, March 5, 1997, August 29, 1997, October 17, 1997, November 26,
1997, December 11, 1997, February 2, 1998, February 4, 1998, February
26, 1998 (as amended by Form 8-K/A on March 20, 1998), February 26,
1998, and March 20, 1998;
(4) the description of Quintiles' Common Stock contained in
its Registration Statement on Form 8-A as filed with the Commission on
April 11, 1994; and
(5) all other documents filed by Quintiles pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
this Prospectus and prior to the termination of the offering of the
Shares.
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<PAGE> 4
Any statement contained in a document, all or a portion of which is
incorporated or deemed to be incorporated by reference herein, shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent that
a statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified shall not be deemed to
constitute a part of this Prospectus except as so modified, and any statement so
superseded shall not be deemed to constitute part of this Prospectus. In
particular, reference is made to the Company's Current Report on Form 8-K dated
October 17, 1997, which includes restated consolidated financial statements and
the related management's discussion and analysis of financial condition and
results of operation of the Company, giving effect to the Company's pooling of
interests transactions consummated between January 1, 1997 and August 31, 1997.
The Company will provide without charge to each person, including a
beneficial owner, to whom this Prospectus is delivered, upon written or oral
request of any such person, a copy of any and all of the documents which are
incorporated herein by reference, other than exhibits to such information
(unless such exhibits are specifically incorporated by reference into such
documents). Requests for such information should be directed to the Company,
4709 Creekstone Drive, Riverbirch Building, Suite 200, Durham, North Carolina,
27703-8411, Attention: Corporate Secretary, telephone number (919) 941-2000.
STOCK SPLIT
On December 1, 1997, the Company effected a two-for-one stock split
paid in the form of a stock dividend. The stock split is not reflected in the
information presented in the Company's reports on Form 10-K, Form 10-Q or Form
8-K filed prior to December 1, 1997 and incorporated by reference herein.
FORWARD LOOKING STATEMENTS
Information contained or incorporated by reference herein contains
various "forward looking statements" within the meaning of Section 27A of the
Securities Act and Section 21E of the Exchange Act, which statements represent
the Company's judgment concerning the future and are subject to risks and
uncertainties that could cause the Company's actual operating results and
financial position to differ materially. Such forward looking statements can be
identified by the use of forward looking terminology, such as "may," "will,"
"expect," "anticipate," "estimate," or "continue" or the negative thereof or
other variations thereof or comparable terminology. The Company cautions that
any such forward looking statements are further qualified by important factors
that could cause the Company's actual operating results and financial position
to differ materially from the forward looking statements, including without
limitation considerations described in connection with specific forward looking
statements, factors set forth in this Prospectus under the caption "Risk
Factors," and other cautionary statements set forth herein or in the documents
incorporated by reference in this Prospectus.
THE COMPANY
The Company is a market leader in providing full-service contract
research, sales, marketing and health care policy consulting and health
information management services to the global pharmaceutical, biotechnology and
medical device and health care industries. Supported by its extensive
information technology capabilities, the Company provides a broad range of
fully-integrated contract services in order to accelerate the time from
discovery to peak market acceptance of a new therapy. The Company's principal
executive offices are located at 4709 Creekstone Drive, Riverbirch Building,
Suite 200, Durham, North Carolina 27703-8411, and its telephone number is (919)
941-2000.
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<PAGE> 5
RISK FACTORS
In addition to the other information contained or incorporated by
reference in this Prospectus, prospective purchasers should consider the
following factors carefully in evaluating the Company and its business. See also
"Forward Looking Statements."
DEPENDENCE ON CERTAIN INDUSTRIES AND CUSTOMERS
Quintiles' revenues are highly dependent upon the research and
development and sales and marketing expenditures of the pharmaceutical and
biotechnology industries. Quintiles has benefited to date from the growing
tendency of pharmaceutical and biotechnology companies to engage independent
outside organizations to conduct large clinical research and sales and marketing
projects. Quintiles' operations could be materially and adversely affected by a
general economic decline in these industries or by any reduction in the
outsourcing of development or sales and marketing expenditures. Quintiles has in
the past derived, and may in the future derive, a significant portion of its net
revenue from a relatively limited number of major projects or customers. In
1997, 10 customers accounted for approximately 46% of Quintiles' consolidated
net revenue. As pharmaceutical companies continue to outsource large projects
and studies to fewer full-service global providers, the concentration of
business could increase. Quintiles is likely to continue to experience such
concentration in future years. The loss of a major project or any such customer
could materially and adversely affect Quintiles.
MANAGEMENT OF GROWTH
Quintiles has experienced rapid growth over the past 10 years.
Quintiles believes that its sustained growth places a strain on operational,
human and financial resources. In order to manage its growth, Quintiles must
continue to improve its operating and administrative systems and to attract and
retain qualified management, professional, scientific and technical personnel.
Foreign operations may involve the additional risks of assimilating differences
in foreign business practices, hiring and retaining qualified personnel, and
overcoming language barriers. Quintiles has a transnational organizational
structure, comprised of four service groups performing complementary functions,
with a holding company performing management functions. While this transnational
structure has successfully supported Quintiles' growth to date, Quintiles
recently has completed a number of acquisitions, and there can be no assurance
that this structure will continue to be effective. Failure to manage growth
effectively could have a material adverse effect on Quintiles.
ACQUISITION RISKS
Acquisitions involve numerous risks, including difficulties and
expenses incurred in connection with the acquisition and the assimilation of the
operations and services of the acquired companies, the diversion of management's
attention from other business concerns and the potential loss of key employees
of the acquired companies. Acquisitions of foreign companies also may involve
the additional risks of assimilating differences in foreign business practices
and overcoming language barriers. Since January 1, 1998, Quintiles has completed
several acquisitions, both within the United States and internationally. There
can be no assurance that Quintiles' past and any future acquisitions will be
successfully integrated into its operations. Quintiles reviews many acquisition
candidates in the ordinary course of business, and Quintiles continually is
evaluating new acquisition opportunities. Quintiles expects to continue to
evaluate and compete for suitable acquisition candidates. There can be no
assurance that Quintiles will successfully complete future acquisitions or that
acquisitions, if completed, will contribute favorably to Quintiles' operations
and future financial condition. Although Quintiles performs due diligence
investigations on each company or business it seeks to acquire, there may be
liabilities that Quintiles fails or is unable to discover for which Quintiles,
as a successor owner, may be liable. Quintiles generally seeks to minimize its
exposure to such liabilities by obtaining indemnification from each seller,
which may be supported by deferring payment of a portion of the purchase price.
However, there is no assurance that such indemnifications, even if obtainable,
enforceable and collectible (as to which there also is no assurance), will be
sufficient in amount, scope or duration to offset fully the potential
liabilities arising from the acquisitions.
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<PAGE> 6
RISKS RELATING TO CONTRACT SALES SERVICES
Outsourced contract sales services is a relatively new industry in some
countries in which Quintiles does business. Quintiles believes that the contract
sales industry emerged in the 1980s because of regulatory cost containment
pressure on pharmaceutical companies. As a result, large pharmaceutical
companies began to outsource their sales and marketing activities incident to
product launch. There is a relatively low level of market penetration for
outsourced sales and marketing services in many countries, including the United
States. As such, companies in this industry are subject to all of the risks
inherent in a new or emerging industry, including an inability to attract and
retain customers, changes in the regulatory regime, an absence of an established
earnings history, the availability of adequately trained sales representatives
and additional and unforeseen costs and expenses.
COMPETITION; INDUSTRY CONSOLIDATION
The market for Quintiles' contract research services is highly
competitive, and Quintiles competes against traditional contract research
organizations, the in-house research and development departments of
pharmaceutical companies, as well as universities and teaching hospitals. In
sales and marketing services, Quintiles competes against the in-house sales and
marketing departments of pharmaceutical companies and other contract sales
organizations in each country in which it operates. Quintiles also competes
against consulting firms offering healthcare consulting services and medical
communications services, including boutique firms specializing in the healthcare
industry and the healthcare departments of large firms. Expansion by these
competitors into other areas in which Quintiles operates could affect Quintiles'
competitive position. Increased competition may lead to price and other forms of
competition that may affect Quintiles' margins. Consolidation within the
pharmaceutical industry, as well as a trend by pharmaceutical companies to limit
outsourcing to fewer organizations, has heightened the competition for contract
research and contract sales services. As a result, consolidation also has
occurred among the providers of contract research and contract sales services.
If these consolidation trends continue, they may result in greater competition
among the larger contract research and contract sales providers for customers
and acquisition candidates.
LOSS OR DELAY OF LARGE CONTRACTS; VARIABILITY OF BACKLOG; FIXED PRICE NATURE OF
CONTRACTS
Most of Quintiles' contracts are terminable upon 15-90 days' notice by
the customer. Although the contracts typically provide for payment of certain
fees for winding down the project and, in some cases, a termination fee, the
loss or delay of a large contract or the loss or delay of multiple contracts
could adversely affect Quintiles' future net revenue and profitability. In
addition, Quintiles reports backlog based on anticipated net revenue from
uncompleted projects which have been authorized by the customer. Backlog may be
affected by a number of factors, including the variable size and duration of
projects, many of which are performed over several years, the loss or delay of
projects, or a change in the scope of work during the course of a project. There
can be no assurance that backlog will be indicative of future results.
Furthermore, since most of Quintiles' contracts for the provision of its
services are fixed price, fixed price with variable components or
fee-for-service subject to a cap, Quintiles bears the risk of cost overruns.
Underpricing of contracts or significant cost overruns could have a material
adverse effect on Quintiles.
IMPACT OF YEAR 2000
The Year 2000 Issue is the result of computer programs being written
using two digits rather than four to define the applicable year. Any of the
Company's computer programs that have time-sensitive software may recognize a
date using "00" as the year 1900 rather than the year 2000. This could result in
a system failure or data corruption causing disruptions of operations,
including, among other things, a temporary inability to process transactions or
engage in similar business activities.
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<PAGE> 7
The Company's computing infrastructure is based upon industry standard
systems. The Company is not dependent on large legacy systems and does not use
mainframes. Many of the specially developed systems the Company uses have been
developed within the past few years and are Year 2000 compliant.
The Company has appointed a Year 2000 Project Team to conduct an
assessment of the Company's operations worldwide from an internal, supplier and
customer perspective. The assessment, which is currently in progress, addresses
all computer systems, applications and any other systems that may be vulnerable
to the Year 2000 Issue. As part of the assessment, the Company is preparing
detailed plans to address Year 2000 Issues. The Company is utilizing both
internal and external resources to implement the plans. The Company currently
anticipates addressing all business critical systems during 1998 and will
address follow-up issues and all remaining systems during 1999. The Company's
assessment of Year 2000 Issues is ongoing and there can be no assurance that
Year 2000 Issues or the costs of addressing them will not have a material impact
on the Company's financial statements, business or operations.
DEPENDENCE ON PERSONNEL
Quintiles relies on a number of key executives, including Dennis B.
Gillings, Ph.D., its Chairman of the Board of Directors and Chief Executive
Officer. Quintiles maintains key man life insurance on Dr. Gillings in the
amount of $3 million. The loss of the services of any key executive could have a
material adverse effect on Quintiles. In addition, Quintiles' performance
depends on its ability to attract and retain qualified management and
professional, scientific and technical operating staff, as well as its ability
to recruit qualified representatives for its contract sales services. There can
be no assurance that Quintiles will be able to continue to attract and retain
qualified personnel.
POTENTIAL LIABILITY
In connection with its provision of contract research services,
Quintiles contracts with physicians to serve as investigators in conducting
clinical trials to test new drugs on human volunteers. Such testing creates risk
of liability for personal injury to or death of volunteers, particularly to
volunteers with life-threatening illnesses, resulting from adverse reactions to
the drugs administered. Although Quintiles does not believe it is legally
accountable for the medical care rendered by third party investigators, it is
possible that Quintiles could be held liable for the claims and expenses arising
from any professional malpractice of the investigators with whom it contracts or
in the event of personal injury to or death of persons participating in clinical
trials. In addition, as a result of its Phase I clinical trial facilities,
Quintiles could be liable for the general risks associated with a Phase I
facility including, but not limited to, adverse events resulting from the
administration of drugs to clinical trial participants or the professional
malpractice of Phase I medical care providers. Quintiles also could be held
liable for errors or omissions in connection with the services it performs
through each of its service groups. Quintiles believes that its risks are
reduced by contractual indemnification provisions with customers and
investigators, insurance maintained by customers and investigators and by
Quintiles, various regulatory requirements, including the use of institutional
review boards and the procurement of each volunteer's informed consent to
participate in the study. The contractual indemnifications generally do not
fully protect Quintiles against certain of its own actions such as negligence.
The contractual arrangements are subject to negotiation with customers and the
terms and scope of such indemnification vary from customer to customer and from
trial to trial. The financial performance of any of these indemnities is not
secured. Therefore, Quintiles bears the risk that the indemnifying party may not
have the financial ability to fulfill its indemnification obligations. Quintiles
maintains professional liability insurance that covers worldwide territories in
which Quintiles currently does business and includes drug safety issues as well
as data processing errors and omissions. There can be no assurance that
Quintiles will be able to maintain such insurance coverage on terms acceptable
to Quintiles or that such insurance will cover all losses. Quintiles could be
materially and adversely affected if it were required to pay damages or bear the
costs of defending any claim outside the scope of or in excess of a contractual
indemnification provision or beyond the level of insurance coverage or in the
event that an indemnifying party does not fulfill its indemnification
obligations.
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<PAGE> 8
DEPENDENCE ON GOVERNMENT REGULATION
Quintiles' contract research business has benefited from the extensive
governmental regulation of the drug development process, particularly in the
United States. In Europe, the general trend has been towards establishing common
standards for clinical testing of new drugs, leading to changes in the various
requirements currently imposed by each country. Quintiles believes that the
level of regulation is generally less burdensome outside the United States. From
time to time legislation is introduced in the U.S. Congress to substantially
modify regulations administered by the Food and Drug Administration ("FDA")
governing the drug approval process. Changes in regulation in the United States
or elsewhere, including mandatory substitution of generic drugs for patented
drugs, relaxation in the scope of regulatory requirements or the introduction of
simplified drug approval procedures, could decrease the business opportunities
available to Quintiles. In addition, the failure on the part of Quintiles to
comply with applicable regulations could result in the termination of ongoing
clinical research or sales and marketing projects or the disqualification of
data for submission to regulatory authorities, either of which could have a
material adverse effect on Quintiles.
UNCERTAINTY IN HEALTHCARE INDUSTRY AND POSSIBLE HEALTHCARE REFORM
The healthcare industry is subject to changing political, economic and
regulatory influences that may affect the pharmaceutical, biotechnology and
medical device industries. Numerous governments have undertaken efforts to
control growing healthcare costs through legislation, regulation and voluntary
agreements with medical care providers and pharmaceutical companies.
Implementation of government healthcare reform may adversely affect research and
development expenditures by pharmaceutical, biotechnology and medical device
companies, which could decrease the business opportunities available to
Quintiles. Management is unable to predict the likelihood of healthcare reform
legislation being enacted or the effects such legislation would have on
Quintiles.
EXCHANGE RATE FLUCTUATIONS
Approximately 50.0%, 57.0%, and 60.1% of Quintiles' net revenue for the
years ended December 31, 1997, 1996, and 1995, respectively, were derived from
Quintiles' operations outside the United States. Quintiles' operations and
financial results could be significantly affected by factors associated with
international operations such as changes in foreign currency exchange rates and
uncertainties relative to regional economic circumstances, as well as by other
risks sometimes associated with international operations. Since the revenue and
expenses of Quintiles' foreign operations are generally denominated in local
currencies, exchange rate fluctuations between such local currencies and the
U.S. dollar will subject Quintiles to currency translation risk with respect to
the reported results of its foreign operations. Also, Quintiles may be subject
to foreign currency transaction risks when Quintiles' service contracts are
denominated in a currency other than the currency in which Quintiles incurs
expenses related to such contracts. Quintiles limits its foreign currency
transaction risks through exchange rate fluctuation provisions stated in its
contracts with customers, or Quintiles may hedge its transaction risk with
foreign currency exchange contracts or options. There can be no assurance that
Quintiles will not experience fluctuations in financial results from Quintiles'
operations outside the United States, and there can be no assurance Quintiles
will be able to contractually or otherwise favorably reduce its currency
transaction risk associated with its service contracts.
VARIATION IN QUARTERLY OPERATING RESULTS
Quintiles' results of operations have been and can be expected to be
subject to quarterly fluctuations. Quarterly results can fluctuate as a result
of a number of factors, including the timing of start-up expenses for new
offices, acquisitions, the completion or commencement of significant contracts,
changes in the mix of services offered and foreign exchange fluctuations.
Quintiles believes that quarterly comparisons of its financial results should
not be relied upon as an indication of future performance.
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<PAGE> 9
VOLATILITY OF STOCK PRICE
The market price of Quintiles' Common Stock has been and may continue
to be subject to wide fluctuations in response to variations in operating
results from quarter to quarter, changes in earnings estimates by analysts,
market conditions in the industry and general economic conditions.
USE OF PROCEEDS
The Shares are being offered hereby for the account of the Selling
Stockholders, and the Company is not selling any of the Shares. Accordingly, the
Company will not receive any proceeds from the sale of Shares. See "Plan of
Distribution."
SELLING STOCKHOLDERS
The Selling Stockholders are former holders of interest in TAG who
received the Shares in connection with the Transaction. The following table sets
forth certain information as of March 16, 1998. All of the Shares being offered
by the Selling Stockholders may be sold pursuant to this Prospectus. The Shares
are being registered to permit public secondary trading in the Shares, and the
Selling Stockholders may offer the Shares for resale from time to time. See
"Plan of Distribution."
<TABLE>
<CAPTION>
Shares Beneficially Shares
Owned Prior Being Shares Beneficially Owned
To Offering (1) Offered After Offering (1)
------------------------- ------- --------------------------
Name Number Percent Number Percent
---- ------ ------- ------ -------
<S> <C> <C> <C> <C> <C>
Sheila Fifer, Ph.D. ..................... 172,414(2) * 171,944 470 *
Peter Mazonson, M.D. .................... 141,120(3) * 140,650 470 *
Christopher Santas ...................... 36,062(4) * 35,592 470 *
Caremark International Inc............... 112,180 * 112,180 0 *
</TABLE>
- --------------------------
* Less than one percent
(1) Based on 75,001,244 shares of Common Stock outstanding as of February 27,
1998, and the same number of shares outstanding after the offering. Pursuant
to the rules of the Commission, certain shares of the Common Stock that a
person has the right to acquire within 60 days pursuant to the exercise of
stock options are deemed to be outstanding for the purpose of computing the
percentage ownership of such person but are not deemed outstanding for the
purpose of computing the percentage ownership of any other person.
(2) Includes 17,194 Shares held in escrow pursuant to the terms of the
Transaction, which escrowed Shares may be sold only upon distribution to the
Selling Stockholder under the terms of the escrow. Also includes 470 shares
of Common Stock subject to stock options exercisable within 60 days of March
16, 1998. Dr. Fifer is Chairperson and Senior Vice President of Lewin-TAG,
Inc., a wholly-owned subsidiary of Quintiles.
(3) Includes 14,065 Shares held in escrow pursuant to the terms of the
Transaction, which Shares may be sold only upon distribution to the Selling
Stockholder under the terms of the escrow. Also includes 470 shares of
Common Stock subject to stock options exercisable within 60 days of March
16, 1998. Dr. Mazonson is a Director and Senior Vice President of Lewin-TAG,
Inc., a wholly-owned subsidiary of Quintiles.
(4) Includes 3,559 Shares held in escrow pursuant to the terms of the
Transaction, which escrowed Shares may be sold only upon distribution to the
Selling Stockholder under the terms of the escrow, and 470 shares of Common
Stock subject to stock options exercisable within 60 days of March 16, 1998.
Mr. Santas is Vice President of Lewin-TAG, Inc., a wholly-owned subsidiary
of Quintiles.
8
<PAGE> 10
PLAN OF DISTRIBUTION
The Shares offered hereby by the Selling Stockholders may be sold from
time to time by the Selling Stockholders. The decision to offer and sell the
Shares, and the timing and amount of any offers or sales that are made, is and
will be within the sole discretion of the Selling Stockholders. The Shares may
be sold from time to time on the Nasdaq National Market, at prices then
prevailing, in negotiated transactions or otherwise. The Shares may be sold by
one or more of the following methods, without limitation: (a) a block trade in
which the broker-dealer so engaged will attempt to sell the Shares as agent but
may position and resell a portion of the block as principal to facilitate the
transaction; (b) purchases by a broker or dealer as principal and resale by such
broker or dealer for its account pursuant to this Prospectus; (c) ordinary
brokerage transactions and transactions in which the broker solicits purchasers;
and (d) privately negotiated transactions between the Selling Stockholders and
purchasers without a broker-dealer. In effecting sales, brokers or dealers
engaged by the Selling Stockholders may arrange for other brokers or dealers to
participate. Such brokers or dealers may receive commissions or discounts from
the Selling Stockholders. The Selling Stockholders and the brokers and dealers
through whom sales may be made may be deemed to be "underwriters" under the
Securities Act, and their commissions or discounts regarded as underwriters'
compensation. In addition, any securities covered by this Prospectus that
qualify for sale pursuant to Rule 144 under the Securities Act might be sold
under Rule 144 rather than pursuant to this Prospectus.
The Company anticipates that the Registration Statement shall remain
effective until the earlier of (i) the date on which all of the Shares included
in the Registration Statement have been distributed to the public; or (ii) the
date which is 365 days from the date of this Prospectus.
Because of the restrictions imposed by pooling of interests accounting
rules, and notwithstanding any effectiveness of the Registration Statement, the
Selling Stockholders are prohibited from selling or otherwise reducing their
risk relative to the Shares until Quintiles has published financial statements
covering at least 30 days of combined operations of Quintiles and TAG. Thus, the
Selling Stockholders may be unable to immediately sell any or all of the Shares.
The Company shall pay its own legal and accounting fees, all
registration and filing fees attributable to the registration of the Shares, any
legal fees and filing fees relating to state securities or "blue sky" filings,
the filing fee payable to The Nasdaq Stock Market, and all printing fees
incurred in connection herewith. Each Selling Stockholder shall pay his, her or
its own legal fees. Any selling discounts and commissions and stock transfer
taxes applicable to the Shares shall be borne by the Selling Stockholder selling
such Shares.
The Company has agreed to indemnify the Selling Stockholders and their
officers and directors, and each person who controls any Selling Stockholder, in
certain circumstances against certain liabilities, including liabilities arising
under the Securities Act. Each Selling Stockholder has agreed to indemnify the
Company and its directors and officers and each person who controls the Company
in certain circumstances against certain liabilities, including liabilities
arising under the Securities Act.
There can be no assurance that the Selling Stockholders will sell any
or all of the Shares offered by them hereunder.
LEGAL MATTERS
Certain legal matters in connection with this offering will be passed
upon for the Company by Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan,
L.L.P., 2500 First Union Capitol Center, Raleigh, North Carolina 27601. Members
of Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P. own in the
aggregate approximately 3,250 shares of Quintiles Common Stock.
9
<PAGE> 11
EXPERTS
The consolidated financial statements of the Company as of December 31,
1997 and 1996 and for each of the three years in the period ended December 31,
1997 incorporated herein by reference from the Company's Current Report on Form
8-K dated March 20, 1998 have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon included therein and incorporated
herein by reference, which, as to the year 1995, are based in part on the
reports of other independent auditors. Such consolidated financial statements
are incorporated herein by reference in reliance upon such reports given upon
the authority of such firm as experts in accounting and auditing.
10
<PAGE> 12
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. Other Expenses of Issuance and Distribution.
The following table shows the estimated expenses of the issuance and
distribution of securities offered hereby.
<TABLE>
<CAPTION>
<S> <C>
SEC Registration Fee....................................... $ 6,603.66
Legal Fees and Expenses.................................... $ 10,000.00
Accounting Fees and Expenses............................... $ 15,000.00
Printing and Related Expenses.............................. $ 1,500.00
Miscellaneous Expenses..................................... $ 635.00
-------------
Total............................................. $ 33,738.66
=============
</TABLE>
ITEM 15. Indemnification of Directors and Officers
Sections 55-8-50 through 55-8-58 of the North Carolina Business
Corporation Act permit a corporation to indemnify its directors, officers,
employees or agents under either or both a statutory or nonstatutory scheme of
indemnification. Under the statutory scheme, a corporation may, with certain
exceptions, indemnify a director, officer, employee or agent of the corporation
who was, is, or is threatened to be made, a party to any threatened, pending or
completed legal action, suit or proceeding, whether civil, criminal,
administrative or investigative, because of the fact that such person was a
director, officer, agent or employee of the corporation, or is or was serving at
the request of such corporation as a director, officer, employee or agent of
another corporation or enterprise. This indemnity may include the obligation to
pay any judgment, settlement, penalty, fine (including an excise tax assessed
with respect to an employee benefit plan) and reasonable expenses incurred in
connection with a proceeding (including counsel fees), but no such
indemnification may be granted unless such director, officer, agent or employee
(i) conducted himself in good faith, (ii) reasonably believed (1) that any
action taken in his official capacity with the corporation was in the best
interest of the corporation or (2) that in all other cases his conduct at least
was not opposed to the corporation's best interest, and (iii) in the case of any
criminal proceeding, had no reasonable cause to believe his conduct was
unlawful. Whether a director has met the requisite standard of conduct for the
type of indemnification set forth above is determined by the board of directors,
a committee of directors, special legal counsel or the shareholders in
accordance with Section 55-8-55. A corporation may not indemnify a director
under the statutory scheme in connection with a proceeding by or in the right of
the corporation in which the director was adjudged liable to the corporation or
in connection with a proceeding in which a director was adjudged liable on the
basis of having received an improper personal benefit.
In addition to, and separate and apart from the indemnification
described above under the statutory scheme, Section 55-8-57 of the North
Carolina Business Corporation Act permits a corporation to indemnify or agree to
indemnify any of its directors, officers, employees or agents against liability
and expenses (including attorney's fees) in any proceeding (including
proceedings brought by or on behalf of the corporation) arising out of their
status as such or their activities in any of the foregoing capacities; provided,
however, that a corporation may not indemnify or agree to indemnify a person
against liability or expenses such person may incur on account of activities
that were, at the time taken, known or believed by the person to be clearly in
conflict with the best interests of the corporation. The Company's bylaws
provide for indemnification to the fullest extent permitted under the North
Carolina Business Corporation Act, provided, however, that the Company will
indemnify any person seeking indemnification in connection with a proceeding
initiated by such person only if such proceeding was authorized by the Board of
Directors of the Company. Accordingly, the Company may indemnify its directors,
officers and employees in accordance with either the statutory or the
non-statutory standard.
II-1
<PAGE> 13
Sections 55-8-52 and 55-8-56 of the North Carolina Business Corporation
Act require a corporation, unless its articles of incorporation provide
otherwise, to indemnify a director or officer who has been wholly successful, on
the merits or otherwise, in the defense of any proceeding to which such director
or officer was a party. Unless prohibited by the articles of incorporation, a
director or officer also may make application and obtain court-ordered
indemnification if the court determines that such director or officer is fairly
and reasonably entitled to such indemnification as provided in Sections 55-8-54
and 55-8-56.
Finally, Section 55-8-57 of the North Carolina Business Corporation Act
provides that a corporation may purchase and maintain insurance on behalf of an
individual who is or was a director, officer, employee or agent of the
corporation against certain liabilities incurred by such persons, whether or not
the corporation is otherwise authorized by the North Carolina Business
Corporation Act to indemnify such party. The Company's directors and officers
are currently covered under directors' and officers' insurance policies
maintained by the Company.
As permitted by North Carolina law, Article XI of the Company's
Articles of Incorporation limits the personal liability of directors for
monetary damages for breaches of duty as a director provided that such
limitation will not apply to (i) acts or omissions that the director at the time
of the breach knew or believed were clearly in conflict with the best interests
of the Company, (ii) any liability for unlawful distributions under N.C. Gen.
Stat. Section 55-8-33 of the North Carolina Business Corporation Act, (iii) any
transaction from which the director derived an improper personal benefit, or
(iv) acts or omissions occurring prior to the date the provision became
effective.
ITEM 16. Exhibits
The following documents (unless indicated) are filed herewith and made
a part of this Registration Statement.
Exhibit
Number Description of Exhibit
- ------- ----------------------
4.01(1) Specimen Common Stock Certificate
4.02(2) Amended and Restated Articles of Incorporation, as amended
4.03(3) Amended and Restated Bylaws
4.04 Terms of registration rights granted by Quintiles to the
Selling Stockholders
5.01 Opinion of Smith, Anderson, Blount, Dorsett, Mitchell &
Jernigan, L.L.P. regarding legality of securities being
registered
23.01 Consent of Ernst & Young LLP
23.02 Consent of Coopers & Lybrand L.L.P.
23.03 Consent of KPMG
23.04 Consent of Smith, Anderson, Blount, Dorsett, Mitchell &
Jernigan, L.L.P. (included in Exhibit 5.01 hereto)
24.01 Power of Attorney (included on the signature page hereof)
---------------
(1) Exhibit to the Company's Registration Statement on Form S-1
(Registration No. 33-75766) as filed February 28, 1994, and
incorporated herein by reference.
(2) Exhibit to the Company's Registration Statement on Form S-3
(Registration No. 333-19009) as filed December 30, 1996, and
incorporated herein by reference.
(3) Exhibit to the Company's Annual Report on Form 10-K as filed
with the Commission on for the fiscal year ended December 31,
1995, and incorporated herein by reference.
II-2
<PAGE> 14
ITEM 17. Undertakings
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers and sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement; and
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the registration statement or any material change to such
information in the registration statement.
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed with or
furnished to the Commission by the registrant pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act, 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 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, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other 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
II-3
<PAGE> 15
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
II-4
<PAGE> 16
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Durham, State of North Carolina, on March 20, 1998.
QUINTILES TRANSNATIONAL CORP.
By: /s/ Dennis B. Gillings
----------------------------------
Dennis B. Gillings, Ph.D.
Chairman of the Board of Directors
and Chief Executive officer
II-5
<PAGE> 17
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Dennis B. Gillings and Rachel R. Selisker
and each of them, each with full power to act without the other, his true and
lawful attorneys-in-fact and agents, with full powers of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all amendments to this Registration Statement on Form
S-3 and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents full power and authority to do and perform
each and every act and thing requisite and necessary to be done in and about the
premises, as fully for all intents and purposes as he or she might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or their substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons as of
March 20, 1998 in the capacities indicated.
Signature Title
/s/ Dennis B. Gillings Chairman of the Board of Directors and
- --------------------------- Chief Executive Officer
Dennis B. Gillings, Ph.D.
/s/ Santo J. Costa President, Chief Operating Officer and
- --------------------------- Director
Santo J. Costa
/s/ Rachel R. Selisker Chief Financial Officer, Executive Vice
- --------------------------- President Finance, and Director
Rachel R. Selisker (Principal accounting and financial
officer)
Director
- ---------------------------
Robert C. Bishop, Ph.D.
/s/ E.G.F. Brown Director
- ---------------------------
E.G. F. Brown
/s/ Vaughn D. Bryson Director
- ---------------------------
Vaughn D. Bryson
/s/ Chester W. Douglass Director
- ---------------------------
Chester W. Douglass, Ph.D.
/s/ Lawrence S. Lewin Director
- ---------------------------
Lawrence S. Lewin
/s/ Arthur M. Pappas Director
- ---------------------------
Arthur M. Pappas
/s/ Ludo J. Reynders Director
- ---------------------------
Ludo J. Reynders, Ph.D
/s/ Eric J. Topol Director
- ---------------------------
Eric J. Topol, M.D.
/s/ Virginia V. Weldon Director
- ---------------------------
Virginia V. Weldon, M.D.
Director
- ---------------------------
David F. White
II-6
<PAGE> 18
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
- ------- ----------------------
4.01(1) Specimen Common Stock Certificate
4.02(2) Amended and Restated Articles of Incorporation, as amended
4.03(3) Amended and Restated Bylaws
4.04 Terms of registration rights granted by Quintiles to the
Selling Stockholders
5.01 Opinion of Smith, Anderson, Blount, Dorsett, Mitchell &
Jernigan, L.L.P. regarding legality of securities being
registered
23.01 Consent of Ernst & Young LLP
23.02 Consent of Coopers & Lybrand L.L.P.
23.03 Consent of KPMG
23.04 Consent of Smith, Anderson, Blount, Dorsett, Mitchell &
Jernigan, L.L.P. (included in Exhibit 5.01 hereto)
24.01 Power of Attorney (included on the signature page hereof)
---------------
(1) Exhibit to the Company's Registration Statement on Form S-1
(Registration No. 33-75766) as filed February 28, 1994, and
incorporated herein by reference.
(2) Exhibit to the Company's Registration Statement on Form S-3
(Registration No. 333-19009) as filed December 30, 1996, and
incorporated herein by reference.
(3) Exhibit to the Company's Annual Report on Form 10-K as filed
with the Commission on for the fiscal year ended December 31,
1995, and incorporated herein by reference.
II-7
<PAGE> 1
EXHIBIT 4.04
TERMS OF REGISTRATION RIGHTS GRANTED BY QUINTILES TO THE SELLING STOCKHOLDERS
8.5 Registration Rights
(a) The Purchaser shall use its reasonable best efforts to (i)
file by March 31, 1998 a registration statement on Form S-3 (or another
applicable form of registration statement if Form S-3 is unavailable to the
Purchaser) under the Securities Act with respect to the shares of the
Purchaser's Common Stock to be issued in connection with the TAG Transactions
(the "Registration Statement"), and thereafter to cause the Registration
Statement to be declared effective by the SEC as to resales by the TAG, Inc.
Stockholders and Caremark (collectively, the "Holders") on or before the date
the Purchaser publishes the Pooling Financials; (ii) cause the Registration
Statement to remain effective for not less than three hundred sixty-five (365)
days; and (iii) cause the shares of its Common Stock to be issued in the TAG
Transactions to be approved for listing on the National Market System of the
Nasdaq Stock Market on or before the date the Registration Statement is declared
effective by the SEC. No Holder shall, or shall be entitled to, resell any such
shares in reliance upon the Registration Statement after the passage of such
365-day resale period.
(b) Notwithstanding subsection (a) above, the Purchaser shall
not be required to take any action with respect to the registration or the
declaration or continuation of effectiveness of the Registration Statement
following notice to the Holders from the Purchaser (a "Suspension Notice") of
the existence of any state of facts or the happening of any event (including
without limitation pending negotiations relating to, or the consummation of, a
transaction, or the occurrence of any event which in the opinion of the
Purchaser might require additional disclosure of material, non-public
information by the Purchaser in the Registration Statement as to which the
Purchaser believes it has a bona fide business purpose for preserving
confidentiality or which renders the Purchaser unable to comply with the
published rules and regulations of the SEC promulgated under the Securities Act
or the 1934 Act, as in effect at any relevant time) which might reasonably
result in (1) the Registration Statement, any amendment or post-effective
amendment thereto, or any document incorporated therein by reference containing
an untrue statement of a material fact or omitting to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or (2) the prospectus issued under the Registration Statement, any
prospectus supplement, or any document incorporated therein by reference
including an untrue statement of material fact or omitting to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading (provided that for the
continuous thirty (30) day period beginning on the first trading day after the
Purchaser releases the Pooling Financials (or the first trading day after the
Registration Statement is declared effective, if later) no Suspension Notice
shall be issued or in effect with respect to such shares; and provided further
that the Purchaser shall not issue a Suspension Notice for any period during
which the Purchaser's executive officers are not similarly restrained from
disposing of shares of in the Purchaser's Common Stock). Upon receipt of a
Suspension Notice from the Purchaser, the Holders will forthwith discontinue
disposition of all such shares pursuant to the Registration Statement until
receipt from the Purchaser of copies of prospectus supplements or amendments
prepared by or on behalf of the Purchaser, together with a notification that the
Suspension Notice
<PAGE> 2
is no longer in effect, and, if so directed by the Purchaser, the Holders will
deliver to the Purchaser all copies in their possession of the prospectus
covering such shares current at the time of receipt of any Suspension Notice.
(c) Expenses of Registration. All expenses incurred in
connection with the registration pursuant to this Section 8 shall be borne by
the Purchaser, except that all selling discounts and commissions (if any) and
stock transfer taxes applicable to the shares covered by the Registration
Statement and all fees and disbursements of counsel for the Holders relating
thereto shall be borne by the Holders.
(d) Information by Holders. The Holders shall furnish to the
Purchaser such information regarding the Holders, their shares and the
distribution proposed by the Holders as the Purchaser may reasonably request in
writing and as shall be required in connection with any registration referred to
in this Section 8. Each Holder shall notify the Purchaser as promptly as
practicable of any inaccuracy or change in information previously furnished by
such Holder to the Purchaser or of the occurrence of any event as a result of
which any prospectus included in the Registration Statement contains or would
contain an untrue statement of a material fact regarding such Holder or such
Holder's intended method of distribution of shares or omits to state any
material fact regarding the Holder or the Holder's intended method of
distribution of shares necessary to make the statements therein, in light of the
circumstances then existing, not misleading, and promptly to furnish to the
Purchaser any additional information required to correct and update any
previously furnished information or required so that such prospectus shall not
contain, with respect to such Holder or the distribution of such shares, an
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in light of the circumstances then existing, not
misleading.
<PAGE> 3
(e) Indemnification
(i) The Purchaser will indemnify each Holder, each of
such Holder's directors and officers, and each person who controls a Holder
within the meaning of Section 15 of the Securities Act against all expenses,
claims, losses, damages, or liabilities (or actions in respect thereof),
including any of the foregoing incurred in settlement of any litigation,
commenced or threatened, arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any registration
statement, prospectus, offering circular or other document, or any amendment or
supplement thereto, incident to any such registration, or based on any omission
(or alleged omission) to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, or any violation by the
Purchaser of the Securities Act or any rule or regulation promulgated under the
Securities Act applicable to the Purchaser in connection with any such
registration, and the Purchaser will reimburse each Holder for any legal and any
other expenses reasonably incurred in connection with investigating, preparing
or defending any such claim, loss, damage, liability or action, provided that
the Purchaser will not be liable in any such case to the extent that any such
claim, loss, damage, liability or expense arises out of or is based on any
untrue statement or omission or alleged untrue statement or omission made in
conformity with information furnished to the Purchaser by a Holder.
(ii) Each Holder will indemnify the Purchaser, each
of the Purchaser's directors and officers, each person who controls the
Purchaser within the meaning of Section 15 of the Securities Act, and each other
person or entity including securities in such registration and each controlling
person thereof against all claims, losses, damages and liabilities (or actions
in respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular or other document, or any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
the Purchaser and all such directors, officers and persons for any legal or any
other expenses reasonably incurred in connection with investigating or defending
any such claim, loss, damage, liability or action, in each case to the extent,
but only to the extent, that such untrue statement (or alleged untrue statement)
or omission (or alleged omission) is made in such registration statement,
prospectus, offering circular or other document in conformity with information
furnished to the Purchaser by such Holder.
(f) Transfer of Registration Rights. The registration rights
in this Section 8 are not transferable by any Holder.
<PAGE> 1
EXHIBIT 5.01
SMITH, ANDERSON, BLOUNT, DORSETT, MITCHELL & JERNIGAN, L.L.P.
Lawyers
2500 First Union Capitol Center
Raleigh, North Carolina 27601
Phone: 919-821-1220
Fax: 919-821-6800
March 20, 1998
Quintiles Transnational Corp.
4709 Creekstone Drive
Riverbirch Building, Suite 200
Durham, North Carolina 27703
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as counsel to Quintiles Transnational Corp. (the
"Company"), in connection with the preparation of a Registration Statement on
Form S-3 (the "Registration Statement") to be filed by the Company with the
Securities and Exchange Commission under the Securities Act of 1933, as amended
(the "Act"), relating to the registration of 460,366 shares (the "Shares") of
the Company's common stock, par value $.01 per share ("Common Stock"), which
have been included in the Registration Statement for the respective accounts of
the persons identified in the Registration Statement as Selling Stockholders.
This opinion is furnished pursuant to the requirement of Item 601(b)(5) of
Regulation S-K under the Act.
We have examined the Amended and Restated Articles of Incorporation, as
amended, and the Amended and Restated Bylaws of the Company, minutes of meetings
of its Board of Directors, and such other corporate records of the Company and
other documents and have made such examination of law as we have deemed
necessary for purposes of this opinion. We also have relied upon a certificate
of an officer of the Company, dated of even date herewith, relating to the
Registration Statement.
Based on and subject to the foregoing and to the additional
qualifications set forth below, it is our opinion that the Shares are validly
issued, fully paid and nonassessable.
We hereby consent to the reference to our firm in the Registration
Statement under the heading "Legal Matters" and to the filing of this opinion as
an exhibit to the Registration Statement. Such consent shall not be deemed to be
an admission that this firm is within the category of persons whose consent is
required under Section 7 of the Act or the regulations promulgated pursuant to
the Act.
<PAGE> 2
This opinion is limited to the laws of the State of North Carolina, and
no opinion is expressed as to the laws of any other jurisdiction.
The opinion expressed herein does not extend to compliance with federal
and state securities law relating to the sale of the Shares.
Our opinion is as of the date hereof, and we do not undertake to advise
you of matters that might come to our attention subsequent to the date hereof
which may affect our legal opinion expressed herein.
This opinion is rendered solely for your benefit in connection with the
transaction described above and may not be used or relied upon by any other
person without our prior written consent in each instance.
Sincerely yours,
SMITH, ANDERSON, BLOUNT, DORSETT,
MITCHELL & JERNIGAN, L.L.P.
/s/ Smith, Anderson, Blount, Dorsett,
Mitchell & Jernigan, L.L.P.
<PAGE> 1
EXHIBIT 23.01
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
the Registration Statement (Form S-3) and related Prospectus of Quintiles
Transnational Corp. for the registration of 460,366 shares of its common stock
and to the incorporation by reference therein of our report dated January 26,
1998 with respect to the consolidated financial statements of Quintiles
Transnational Corp., included in its Current Report on Form 8-K dated March 20,
1998 filed with the Securities and Exchange Commission.
/s/ Ernst & Young
Raleigh, North Carolina
March 20, 1998
<PAGE> 1
EXHIBIT 23.02
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration
Statement of Quintiles Transnational Corp. ("Quintiles") on Form S-3 of our
report dated May 15, 1996, on our audits of the consolidated financial
statements of BRI International, Inc. as of November 30, 1995 and 1994, and for
the years then ended, which report is included as an exhibit to Quintiles'
Current Report on Form 8-K dated March 20, 1998.
/s/ Coopers & Lybrand L.L.P.
McLean, Virginia
March 20, 1998
<PAGE> 1
EXHIBIT 23.03
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement on Form S-3 (dated March 20, 1998) of Quintiles Transnational Corp. of
our report dated July 24, 1996, with respect to the combined financial
statements of the Innovex Companies, which report is included in the Current
Report on Form 8-K of Quintiles Transnational Corp. dated March 20, 1998.
/s/ KPMG
Reading, England
March 20, 1998
