<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 25, 2000
REGISTRATION NO. 333-___________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
LA JOLLA PHARMACEUTICAL COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 33-0361285
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
6455 NANCY RIDGE DRIVE
SAN DIEGO, CALIFORNIA
(858) 452-6600
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
STEVEN B. ENGLE
LA JOLLA PHARMACEUTICAL COMPANY
6455 NANCY RIDGE DRIVE
SAN DIEGO, CALIFORNIA
(858) 452-6600
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPY TO:
LEONARD J. MCGILL, ESQ.
GIBSON, DUNN & CRUTCHER LLP
4 PARK PLAZA
IRVINE, CA 92614
(949) 451-3800
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC:
From time to time after this registration statement becomes effective.
If any of the securities being registered on this form are to be
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>
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AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED(1) SHARE(2) PRICE(2) REGISTRATION FEE
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 4,040,000 $6.72 $27,148,800 $7,167
par value $0.01 per share
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</TABLE>
(1) Each share of Common Stock includes a right to purchase one one-thousandth
of a share of Series A Junior Participating Preferred Stock pursuant to the
Rights Agreement between the Registrant and American Stock Transfer & Trust
Company, as Rights Agent.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rules 457(c) and 457(h) and based on the average of the high
and the low price of the Common Stock of the Registrant as reported on
February 23, 2000 on the Nasdaq National Market System.
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, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION
8(a), MAY DETERMINE.
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PROSPECTUS
[LJP LOGO]
4,040,000 SHARES
COMMON STOCK
The selling stockholders listed below under the caption "Selling
Stockholders" may sell, from time to time, up to 4,040,000 shares of our common
stock and associated rights. All of the net proceeds from the sale of these
shares of common stock will go to the selling stockholders. We will not receive
any proceeds from sales of these shares. The selling stockholders may offer the
shares through public or private transactions at prevailing market prices, at
prices related to prevailing market prices, or at privately negotiated prices.
See "Plan of Distribution" on page 12.
The selling stockholders received these shares of our common stock in
private transactions.
Our common stock is traded on the Nasdaq National Market under the
symbol "LJPC." February 23, 2000, the last reported sale price of our common
stock was $6.75 per share.
You should read this prospectus carefully before you invest.
INVESTING IN OUR COMMON STOCK INVOLVES SUBSTANTIAL RISKS. SEE "RISK
FACTORS" BEGINNING ON PAGE 2.
----------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The information in this prospectus is not complete and may be changed.
These securities will not be sold until the registration statement filed with
the Securities and Exchange Commission is effective. This prospectus is not an
offer to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
----------------
THE DATE OF THIS PROSPECTUS IS FEBRUARY 25, 2000
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LA JOLLA PHARMACEUTICAL COMPANY
La Jolla Pharmaceutical Company (referred to in this prospectus as
either the "Company" or "LJP") is a biopharmaceutical company focused on the
research and development of highly specific therapeutics for the treatment of
certain life-threatening antibody-mediated diseases. These diseases include
autoimmune conditions such as systemic lupus erythematosus ("lupus") and
antibody-mediated stroke. Current therapies for these autoimmune disorders
target the symptoms of the disease or nonspecifically suppress the normal
operation of the immune system, frequently resulting in severe, adverse side
effects and hospitalization. Our drug candidates, called Toleragens, are
designed to treat the underlying cause of many antibody-mediated diseases
without these severe, adverse side effects. Our clinical drug candidate is known
as LJP 394, a lupus treatment drug.
We are registering for resale a total of up to 4,040,000 shares of our
common stock previously sold by the Company to third parties in private
transactions.
We are incorporated in the State of Delaware. Our principal executive
offices are located at 6455 Nancy Ridge Drive, San Diego, California 92121 and
our telephone number is (858) 452-6600.
RISK FACTORS
An investment in our common stock involves a high degree of risk. You
should carefully consider the following risk factors related to our common stock
offered by this prospectus and to our business and operations. You should also
carefully consider the other information in this prospectus and in the documents
incorporated by reference. Some of these factors have affected our financial
condition or operating results in the past or are currently affecting us. All of
these factors could affect our future financial condition or operating results.
If any of the following risks actually occurs, our business, including our
financial condition and results of operations, could be harmed. If that happens,
the trading price of our common stock could decline, and you may lose all or
part of your investment.
I. RISK FACTORS RELATED TO THE INDUSTRY IN WHICH WE OPERATE.
Our success depends partially on healthcare reimbursement policies.
The continuing efforts of government and healthcare insurance companies
to reduce the costs of healthcare may negatively impact our business. For
example, in certain foreign markets, pricing and profitability of prescription
pharmaceuticals are subject to government control. In the United States, we
expect that there will continue to be a number of federal and state proposals to
implement similar government controls. In addition, increasing emphasis on
managed care in the United States will continue to put pressure on
pharmaceutical pricing. Cost control initiatives could decrease the revenue that
we receive for any products we may develop and sell in the future and negatively
impact our business. In addition, these cost control measures may impact our
commercial partners and our ability to continue to work with these partners.
Our business depends in part on the reimbursement policies of Medicare and
healthcare companies. These policies can be unpredictable.
Newly approved drugs may not be accepted for reimbursement by health
insurers or Medicare. It is possible that these organizations will not offer
coverage for our products. Government and other third-party payors increasingly
attempt to contain healthcare costs by limiting both coverage and the level of
reimbursement for new therapeutic products. If adequate coverage and
reimbursement levels are not provided by government and other third-party payors
for our products, the market acceptance of these products would be adversely
affected.
Our industry has numerous other companies that compete with LJP and we face
rapid technological change from within our industry.
The biotechnology and pharmaceutical industries are subject to rapid
technological change. Competition from domestic and foreign biotechnology
companies, large pharmaceutical companies and other institutions is
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intense and is expected to increase. A number of companies and institutions are
pursuing the development of pharmaceuticals in our targeted areas. These include
companies that are conducting clinical trials and preclinical studies for the
treatment of lupus. Our competitors may develop or obtain regulatory approval
for products more rapidly than we do, or develop and market technologies and
products that are more effective than those being developed by us or that would
render our technology and proposed products obsolete or noncompetitive.
II. RISK FACTORS RELATING TO LA JOLLA PHARMACEUTICAL PARTICULARLY.
Our drug candidates may not perform well in clinical trials and we may not be
permitted to conduct further clinical trials. Without successful clinical
trials, we will not be able to market or sell any products.
We must demonstrate in clinical trials that LJP 394, our only drug
candidate that has advanced to the clinical trial stage, is safe and effective
for use before we apply for any regulatory approvals. We announced on May 12,
1999 that Abbott Laboratories and the Company, in discussion with the FDA,
elected to stop the enrollment and treatment of the more than 200 patients
enrolled in the jointly conducted Phase II/III clinical trial of LJP 394 until
the data could be validated and analyzed. This announcement was made following a
planned interim analysis of the Phase II/III clinical trial in which an
independent data monitoring committee reported lower than expected efficacy. No
major safety concerns were observed, and patients receiving LJP 394 appeared to
have a reduction in circulating antibodies to double-stranded DNA that are
associated with lupus nephritis.
We are continuing to analyze the results of this clinical program and
expect to complete this analysis by the end of the first quarter of 2000. Early
analysis of these results seems to indicate that those patients who exhibited a
certain trait (high antibody affinity for LJP 394) suffered fewer renal flares,
the chosen endpoint for the Phase II/III clinical studies. A Phase II
dose-ranging study of LJP 394 involving 75 lupus patients was recently
completed, and we are currently analyzing the data from this study. We must
understand the effects of LJP 394 on endpoints from these studies before
deciding whether any further development is warranted.
If LJP 394 is ultimately not found to be safe and effective, we would
be unable to obtain regulatory approval for its commercialization. If that were
to occur, there is no assurance that we would be able to develop an alternative
drug candidate. Because LJP 394 is our only drug candidate that has advanced to
clinical trials, our inability to commercialize it would have a material adverse
effect on our business, financial condition and results of operation.
Our products are in the early stage of development and the technology underlying
our products is uncertain and unproven.
All of our product development efforts are based on unproven
technologies and therapeutic approaches that have not been widely tested or
used. LJP 394 has not been proven to be effective in humans and its tolerance
technology has been used only in our preclinical tests and clinical trials.
Application of LJP 394's tolerance technology to antibody-mediated diseases
other than lupus is in even earlier research stages.
LJP 394 and our other potential drug candidates require significant
additional research and development and are subject to significant risks. For
example, potential products that appear to be promising at early stages of
development may be ineffective or cause harmful side effects during preclinical
testing or clinical trials, not receive necessary regulatory approvals, be
difficult to manufacture, be uneconomical to produce, not be accepted by
consumers, or be precluded from commercialization by the proprietary rights of
others. We may not successfully complete development of LJP 394 or any other
drug candidate or may not obtain required regulatory approvals. If introduced,
LJP 394 or any other drug candidate may not generate sales.
Even if proven effective, our products may never reach market.
Potential products that appear to be promising at early stages of
development may nevertheless fail to reach market or become profitable for
reasons such as the following:
o products may be ineffective or cause harmful side effects
during preclinical testing or clinical trials,
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o products may fail to receive necessary regulatory approvals,
o products may be difficult to manufacture,
o products may be uneconomical to produce particularly if high
dosages are required, and
o products may fail to achieve market acceptance or be precluded
from commercialization because of proprietary rights of third
parties.
There can be no assurance that our product development efforts with
respect to LJP 394 or any other drug candidate will be successfully completed,
that required regulatory approvals will be obtained, or that any product, if
introduced, will be successfully marketed or achieve commercial acceptance.
The technology underlying LJP 394 appears effective in humans. However,
no therapeutic products have been developed to date that utilize this
technology. There can be no assurance that LJP 394 will work as intended.
Furthermore, clinical trials of LJP 394 may be viewed as a test of the Company's
entire Tolerance Technology approach. If the data from these clinical trials
indicate that LJP 394 is ineffective, the applicability of our Tolerance
Technology to other antibody-mediated diseases will be highly uncertain.
Therefore, there is significant risk that our therapeutic approaches will not
prove to be successful, and there can be no assurance that our drug discovery
technologies will result in any commercially successful products.
We may need to establish collaborative agreements.
We may seek to collaborate with pharmaceutical companies to access
their research, drug development, manufacturing, marketing and financial
resources. In December 1996, we entered into a collaborative agreement with
Abbott. This agreement granted Abbott the exclusive right to market and sell LJP
394 throughout the world in exchange for royalties on sales, development
financing, and milestone payments. Abbott's obligations to make payments to us
and to conduct development activities were conditioned on the progress of
clinical trials and the attainment of milestones related to regulatory approvals
and sales levels. Following the May 1999 suspension of the jointly conducted
Phase II/III clinical trial, Abbott and LJP terminated their collaborative
agreement in September 1999.
We may pursue collaborative arrangements with other pharmaceutical
companies to assist in our research programs and the clinical development and
commercialization of our other drug candidates. However, we may not be able to
negotiate arrangements with any other collaborative partners on acceptable
terms, if at all. Any additional collaborative relationships that we enter into
may include conditions comparable to those in the Abbott agreement. Once a
collaborative arrangement is established, the collaborative partner may not
continue funding any particular program or may pursue alternative technologies
or develop alternative drug candidates, either alone or with others, to develop
treatments for the diseases we are targeting. Competing products, developed by a
collaborative partner or to which a collaborative partner has rights, may result
in the collaborative partner withdrawing support as to all or a portion of our
technology.
Without collaborative arrangements, we must fund our own research and
development activities, accelerating the depletion of our capital and requiring
us to develop our own marketing capabilities. Therefore, if we are unable to
establish and maintain collaborative arrangements, we could experience a
material adverse effect on our business, financial condition and results of
operations.
We will need additional funds to support operations and may need to reduce
operations, sell stock or assets, or merge with another entity to continue
operations.
Our operations to date have consumed substantial capital resources, and we
will continue to expend substantial and increasing amounts of capital for
research, product development, preclinical testing and clinical trials of drug
candidates, to establish commercial-scale manufacturing capabilities, and to
market potential products.
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Our future capital requirements will depend on many factors, including:
o continued scientific progress in our research and development
programs and the size and complexity of these programs,
o the scope and results of preclinical testing and clinical
trials,
o the time and costs involved in applying for regulatory
approvals,
o the costs involved in preparing, filing, prosecuting,
maintaining and enforcing patent claims,
o competing technological and market developments,
o our ability to establish and maintain collaborative research
and development arrangements, and
o the cost of manufacturing scale-up and effective
commercialization activities and arrangements.
We expect to incur substantial and increasing losses each year for at
least the next several years as our clinical trial, research, development and
manufacturing scale-up activities increase. We expect our existing capital
resources (including the capital raised through the sale of stock that may be
offered for resale under this prospectus) to be sufficient to fund our
activities, as currently planned, for approximately the next 15 months. However,
the amounts expended by the Company for various purposes may vary significantly,
and it is possible that our cash requirements will exceed current projections
and that we will therefore need additional financing sooner than currently
expected. In the future, it is possible that we will not have adequate resources
to support our business activities.
We actively seek additional funding, including through collaborative
arrangements and public and private financings. Our choice of financing
alternatives may vary from time to time depending upon various factors,
including the market price of our securities, conditions in the financial
markets, and the interest of other entities in strategic transactions with LJP.
There can be no assurance that additional financing will be available on
acceptable terms, if at all, whether through collaborative arrangement, issuance
of securities, or otherwise. If adequate funds are not available, we may be
required to delay, scale back or eliminate one or more of our research and
development programs or obtain funds through arrangements with collaborative
partners or others that require us to relinquish rights to certain technologies
or potential products. This could have a negative impact on our business.
We have a history of losses and may not become profitable.
We have incurred operating losses each year since our inception in 1989
and had an accumulated deficit of approximately $71.8 million as of December 31,
1999. Our losses are likely to exceed those experienced in prior years due to
the termination of the Abbott collaborative relationship, unless we are
successful in establishing additional collaborative relationships to help
finance our research and development costs. To achieve profitability we must,
among other things, complete the development of our products, obtain all
necessary regulatory approvals and establish commercial manufacturing and
marketing capabilities. We expect to incur significant losses each year for at
least the next several years as our clinical trial, research, development and
manufacturing scale-up activities increase. The amount of losses and the time
required by us to reach sustained profitability are highly uncertain, and we do
not expect to generate revenues from the sale of products, if any, for at least
several years. We may never achieve product revenues or profitability.
If LJP 394 fails in clinical trials, we will be unable to obtain FDA approval
and will not be able to sell those products.
In order to sell our products that are under development, we must first
receive regulatory approval. To obtain those approvals, we must conduct clinical
studies demonstrating that our products are safe and effective. If we cannot
obtain FDA approval for LJP 394, currently our sole drug candidate, our business
will be significantly impacted and our prospects for profitable sales will
significantly decrease.
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Although LJP 394 appears promising, it may not be successful in future
clinical trials. Our prior clinical study of LJP 394, in collaboration with
Abbott, was halted, and any renewed clinical study may also be delayed or halted
for various reasons, including:
o the product is not effective, or physicians think
that it is not effective,
o patients experience severe side effects during
treatment,
o patients do not enroll in the study at the rate we
expect, or
o product supplies are not sufficient to treat the
patients in the study.
In addition, the FDA and foreign regulatory authorities have
substantial discretion in the approval process. The FDA and foreign regulatory
authorities may not agree that we have demonstrated that LJP 394 is safe and
effective after we complete clinical trials. Even if the results of prior
clinical trials are positive, the FDA may require us to design and conduct new
Phase II and Phase III clinical trials, which will result in significant expense
and delay. The FDA may require new clinical trials because of inconclusive
results from earlier trials, a possible failure to conduct prior trials in
complete adherence to FDA good clinical practice standards, and identification
of new clinical trial endpoints.
Our success depends significantly upon our ability to obtain patent protection
for our therapeutic approach, LJP 394, and any other developed products. In
addition, we will need to successfully preserve our trade secrets and operate
without infringing on the rights of others.
We own 87 issued Patents and 58 pending patent applications covering
various technologies and drug candidates. However, there can be no assurance
that any additional patents will be issued, or that the scope of any patent
protection will be sufficient, or that any current or future issued patent will
be held valid if subsequently challenged. There is a substantial backlog of
biotechnology patent applications at the U.S. Patent and Trademark Office that
may delay the review and issuance of any patents. The patent position of
biotechnology firms like ours generally is highly uncertain and involves complex
legal and factual questions, and no consistent policy has emerged regarding the
breadth of claims covered in biotechnology patents or protection afforded by
these patents. Presently, we have a number of patent applications pending in the
United States relating to our technology, as well as foreign counterparts to
some of our U.S. patent applications. We intend to continue to file applications
as appropriate for patents covering both our products and processes. There can
be no assurance that patents will be issued from any of these applications, or
that the scope of any issued patents will protect our technology.
Patent applications in the United States are kept secret until a patent
is issued. As a result, we do not know if others, including competitors, have
filed patent applications for technology covered by our pending applications,
nor can we be certain that we were the first to invent or to file patent
applications for our technologies. Competitors may have patents or patent
applications pending that relate to compounds or processes that overlap or
compete with our intellectual property. In particular, we are aware of one
currently pending U.S. patent application that, if allowed, may contain claims
covering subject matter that may compete or conflict with some of our patents
and patent applications. Any conflict between our patents and patent
applications, and patents or patent applications of third parties, could result
in a significant reduction of the coverage of our existing patents or any future
patents that may be issued. In addition, we may have to incur significant
expenses in defending our patents. If the U.S. Patent Office or any foreign
counterpart issues to a competitor patents containing competitive or conflicting
claims, and if these claims are valid, there can be no assurance that we would
be able to obtain licenses to these patents, that any licensing fees would be
reasonable, or that we would be able to develop or obtain alternative
technology.
We also rely on unpatented intellectual property such as trade secrets
and improvements, know-how, and continuing technological innovation. While we
seek to protect these rights, it is possible that: (i) inventions relevant to
our business will be developed by a person not bound by an LJP invention
assignment agreement, (ii) binding LJP confidentiality agreements will be
breached and we will not have adequate remedies for such a breach, or (iii) our
trade secrets will otherwise become known or be independently discovered by
competitors. We could incur substantial costs in defending suits brought against
the Company by others for infringement of
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intellectual property rights or in aprosecuting suits that we might bring
against others to protect our intellectual property rights.
We currently have only limited manufacturing capabilities.
The manufacture of our potential products for clinical trials and the
manufacture of any resulting products for commercial purposes are subject to
certain FDA standards. While we are producing limited quantities of LJP 394 for
clinical trials, our current facilities are not FDA approved for commercial
production of our potential products. Substantial capital investment in the
expansion and build-out of our manufacturing facilities will be required to
enable manufacture of any products in commercial quantities. While we have
initiated the process of obtaining FDA approval for our facilities, we have
never operated an FDA-approved manufacturing facility and may not obtain
necessary approvals. We have limited manufacturing experience, and we may be
unable to successfully transition to commercial production. We may enter into
arrangements with contract manufacturing companies to expand our own production
capacity in order to meet requirements for our products, or to attempt to
improve manufacturing efficiency. If we choose to contract for manufacturing
services and encounter delays or difficulties in establishing relationships with
manufacturers to produce, package and distribute our finished products, the
clinical trials, market introduction and subsequent sales of these products
would be adversely affected. If we become dependent on third parties for the
manufacture of our products, our profit margins and our ability to develop and
deliver products on a timely and competitive basis may be adversely affected.
We lack experience in marketing products for commercial sale.
In order to commercialize any drug candidate approved by the FDA, we
must either develop a marketing and sales force or enter into marketing
arrangements with others. We currently have no marketing arrangements with
others, and there can be no assurance that we will be able to enter into any
marketing agreements on favorable terms, or that any such agreements that will
result in payments to LJP. To the extent that we enter into co-promotion or
other marketing and sales arrangements with other companies, any revenues that
we may receive will be dependent on the efforts of others. There can be no
assurance that these efforts will be successful. If we attempt to develop our
own marketing and sales capabilities, we will compete with other companies that
have experienced and well-funded marketing and sales operations. Furthermore, if
we attempt to establish sales and distribution capabilities, we may experience
delays and expenditures and have difficulty in gaining market acceptance for our
drug candidates.
The use of LJP 394 and other potential products in clinical trials, and the sale
of any approved products may expose us to liability claims resulting from the
use of these products.
We have not received marketing approval from the FDA for any drug
candidates and we currently use LJP 394 only in clinical trials. The use and
possible sale of LJP 394 and other potential products may expose us to legal
liability and generate negative publicity. These claims might be made directly
by consumers, pharmaceutical companies, or others. We maintain $10.0 million of
product liability insurance for claims arising from the use of LJP products in
clinical trials. However, coverage is becoming increasingly expensive, and there
can be no assurance that we will be able to maintain insurance or that insurance
can be acquired at a reasonable cost or in sufficient amounts to protect us
against possible losses. Furthermore, it is possible that our financial
resources would be insufficient to satisfy potential product liability claims. A
successful product liability claim or series of claims brought could negatively
impact our business and financial condition.
Our research and development and operations depend in part on certain key
employees and consultants. Losing these employees or consultants would
negatively impact our product development and operations.
We are highly dependent upon the principal members of our scientific
and management staff, the loss of whose services would delay the achievement of
our research and development objectives. Our anticipated growth and expansion
into areas requiring additional expertise, such as clinical trials, government
approvals, manufacturing, and marketing, is expected to place increased demands
on our resources and require the addition of new management personnel as well as
the development of additional expertise by existing management personnel.
Retaining our current key employees and recruiting additional qualified
scientific personnel to perform research and development work in the future will
also be critical to our success. Because competition for experienced scientists
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among numerous pharmaceutical and biotechnology companies and research and
academic institutions is intense, we may not be able to attract and retain these
people. In addition, we rely upon consultants and advisors to assist us in
formulating our research and development, clinical, regulatory and manufacturing
strategies. All of our consultants and advisors are employed outside the Company
and may have commitments or consulting or advisory contracts with other entities
that may affect their ability to contribute to our business.
It is possible that we may face environmental liabilities related to certain
hazardous materials used in our operations.
Due to the nature of our manufacturing processes, we are subject to
stringent federal, state and local laws, rules, regulations and policies
governing the use, generation, manufacture, storage, emission, discharge,
handling and disposal of certain materials and wastes. It is possible that we
may have to incur significant costs to comply with environmental regulations as
manufacturing is increased to commercial volumes. Our operations may be
significantly impacted by current or future environmental laws, rules,
regulations and policies or by any releases or discharges of hazardous
materials. In our research activities, we utilize radioactive and other
materials that could be hazardous to human health, safety, or the environment.
These materials and various wastes resulting from their use are stored at our
facility pending ultimate use and disposal. The risk of accidental injury or
contamination from these materials cannot be eliminated. In the event of such an
accident, we could be held liable for any resulting damages, and any such
liability could exceed our resources.
III. RISK FACTORS RELATED SPECIFICALLY TO OUR STOCK.
Our common stock price has historically been very volatile.
The market prices for securities of biotechnology and pharmaceutical
companies, including ours, have historically been highly volatile, and the
market has from time to time experienced significant price and volume
fluctuations that are unrelated to the operating performance of particular
companies. Factors such as the following can have a negative effect on the
market price of our securities:
o announcements of technological innovations or new therapeutic
products by LJP or others,
o clinical trial results,
o developments concerning agreements with collaborators,
o government regulation,
o developments in patent or other proprietary rights,
o public concern as to the safety of drugs discovered or
developed by LJP or others,
o future sales of substantial amounts of our common stock by
existing stockholders, and
o comments by securities analysts and general market conditions.
The realization of any of the risks described in these "Risk Factors" could have
an adverse effect on the market price of our common stock.
In the future, our stock may be removed from listing on the Nasdaq quotation
system and may not qualify for listing on any stock exchange.
Currently our securities are traded on the Nasdaq National Market.
Nasdaq has certain continued listing requirements, including a minimum trading
price. Previously, we have received notice from Nasdaq that our stock price fell
below this minimum trading price. While we have since come back into compliance
with this Nasdaq requirement, it is possible that we will fall out of compliance
with this and/or other Nasdaq continued listing criteria
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at some point in the future. Failure to comply with any one of several Nasdaq
requirements may cause our stock to be removed from listing on Nasdaq. Should
this happen, we may not be able to secure listing on other exchanges or
quotation systems. This would have a negative effect on the price and liquidity
of our stock.
Potential adverse effects of shares eligible for future sale.
Sales of our common stock in the public market, or the perception that
such sales could occur, could negatively impact the market price of our
securities and impair our ability to complete equity financings. In addition to
the shares to be sold in this offering, the Company has outstanding the
following shares of common stock:
o 8,530,000 shares of Common Stock that have been
issued in registered public offerings and are freely
tradable in the public markets.
o Approximately 8,900,000 shares of Common Stock
currently eligible for resale in the public market
pursuant to Rule 144 under the Securities Act of
1933, as amended (the "Securities Act").
o An additional 2,000,000 shares issued to an overseas
investor pursuant to Regulation S under the
Securities Act may also be resold.
o In addition, an aggregate of 4,745,619 shares of
Common Stock are issuable upon exercise of warrants
and stock options outstanding as of December 31,
1999, as follows: (i) 1,494,550 shares issuable upon
exercise of the Company's publicly traded Redeemable
Common Stock Purchase Warrants at an exercise price
of $6.00 per share; (ii) 961,219 shares issuable upon
exercise of various privately held warrants and
options at a weighted average exercise price of $6.54
per share, and (iii) 2,259,851 shares issuable upon
exercise of stock options outstanding under our
various stock option plans at a weighted average
exercise price of $2.49 per share.
o We have in effect or intend to file registration
statements under the Securities Act registering
approximately 2,800,000 shares of common stock
reserved under our employee stock option and purchase
plans, and up to 1,494,550 shares of common stock
reserved for issuance upon exercise of our publicly
traded Redeemable common stock Purchase Warrants.
Approximately 197,000 shares of common stock issuable
upon future exercise of outstanding stock options
will be available for public resale under Rule 144
pursuant to Rule 701 under the Securities Act.
We are unable to estimate the number of shares of common stock that may
actually be resold in the public market since this will depend upon the market
price for the common stock, the individual circumstances of the sellers and
other factors. We also have a number of institutional stockholders that own
significant blocks of our common stock. If these stockholders sell large
portions of their holdings in a relatively short time, for liquidity or other
reasons, the prevailing market price of our common stock could be negatively
affected.
Certain anti-takeover plans and statutes may prevent hostile takeovers or
prevent or delay the change in control within the Company.
There are certain anti-takeover devices in place that may discourage or
deter a potential acquirer from attempting to gain control of us. Certain
provisions of the Delaware General Corporation Law may have the effect of
deterring hostile takeovers or delaying or preventing changes in the control or
management of us, including transactions in which stockholders might otherwise
receive a premium for their shares over then-current market prices.
We may also issue shares of preferred stock without stockholder
approval and upon such terms as our Board of Directors may determine. The
issuance of preferred stock could have the effect of making it more difficult
for a third party to acquire a majority of our outstanding stock, and the
holders of such preferred stock could have voting, dividend, liquidation and
other rights superior to those of holders of the common stock. In 1998, we
designated 75,000 shares of preferred stock as Series A Junior Participating
Preferred Stock in connection with our Rights Plan. The Rights Plan could cause
an unapproved takeover to be much more expensive to an acquirer, resulting in a
strong incentive to negotiate with our Board of Directors.
9
<PAGE> 11
Our certificate of incorporation was recently amended to provide for a
board of directors that is separated into three classes, with their respective
terms in office staggered over three year periods. This has the effect of
delaying a change in control of the board of directors without the cooperation
of the incumbent board. In addition, our bylaws do not allow stockholders to
call a special meeting of stockholders, require stockholders to give written
notice of any proposal or director nomination to us within a certain period of
time prior to the stockholder annual meeting, and establish certain
qualifications for a person to be elected or appointed to the Board of Directors
during the pendency of certain business combination transactions.
Absence of dividends.
We have not paid any cash dividends since our inception and do not
anticipate paying any cash dividends in the foreseeable future.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares of common
stock by the selling stockholders.
SELLING STOCKHOLDERS
In a series of private transactions completed on February 17, 2000, we
issued a total of 4,040,000 shares of our common stock to the stockholders
listed below. The selling stockholders may from time to time offer and sell
pursuant to this prospectus any or all of 4,040,000 shares of our common stock.
The following table sets forth, as of February 17, 2000, the number of shares of
our common stock that each selling stockholder beneficially owns. The term
"selling stockholders" includes the holders listed below and their transferees,
pledgees, donees or other successors. We have prepared this table based upon
information furnished to us by or on behalf of the selling stockholders.
The selling stockholders confirmed at the time they acquired the shares
listed below that they acquired the shares for investment purposes only and not
with a view toward their resale, and acknowledged the existence of restrictions
on resale applicable to these shares. This offering relates only to the sale of
shares held or to be held by the selling stockholders named in the following
table. Since the date on which they provided us with the information below, the
selling stockholders may have sold, transferred or otherwise disposed of some or
all of their shares of our common stock in transactions exempt from the
Securities Act's registration requirements.
<TABLE>
<CAPTION>
Beneficial Ownership Beneficial Ownership
Prior to Offering After Offering
----------------------------- ----------------------
Number Percent Shares Number Percent
of of to be of of
Name of Beneficial Owner Shares Class(1) Sold(2) Shares(2) Class(2)
- ------------------------ ------ -------- ------- --------- --------
<S> <C> <C> <C> <C> <C>
State of Wisconsin Investment
Board .............................. 2,332,500 9.5% 880,000 1,452,500 5.9%
Alta BioPharma Partners, LP ........ 913,731 3.8% 913,731 -- --
La Jolla Chase Partners (Alta
Bio), LLC .......................... 521,828 2.2% 521,828 -- --
Deutsche
Vermogesbildungsgesellschaft mbH ... 450,000 1.9% 450,000 -- --
Deutsche Asset Management (NAVAP)... 450,000 1.9% 450,000 -- --
Special Situations Private Equity
Fund, LP ........................... 300,000 1.2% 300,000 -- --
Special Situations Fund III, LP .... 1,213,500 5.0% 275,000 938,500 3.9%
Special Situations Cayman Fund, LP.. 409,700 1.7% 100,000 309,700 1.3%
Deutsche Asset Management
(Dirfonds - AP) .................... 100,000 * 100,000 -- --
Alta Embarcadero BioPharma, LLC .... 34,441 * 34,441 -- --
ChaseEquity Associates LLC ......... 15,000 * 15,000 -- --
</TABLE>
- ---------------
*Less than 1%
(1) Computed based on 24,309,006 shares of common stock outstanding as of
February 24, 2000.
(2) Assumes all the shares of common stock that may be offered hereunder
are sold.
The information regarding the selling stockholders may change from time
to time. If required, we will set forth these changes in one or more prospectus
supplements.
10
<PAGE> 12
PLAN OF DISTRIBUTION
The selling stockholders can use this prospectus to sell the shares at
any time while the prospectus is in effect, unless we have notified the selling
stockholders that the prospectus is not then available. The selling stockholders
will determine if, when and how they will sell the shares they own. Any sales
may occur in one or more of the following types of transactions (including block
transactions):
o transactions on the Nasdaq National Market or any
other organized market or quotation system where the
shares may be traded,
o privately negotiated transactions between a selling
stockholder and a purchaser, or
o transactions effected with or through a broker-dealer
acting as either agent or principal.
These transactions may involve the transfer of the shares upon exercise
or settlement of put or call options, or the delivery of the shares to replace
shares that were previously borrowed from another stockholder or a combination
of such methods. If a broker-dealer is used in the sale of shares, that person
may solicit potential purchasers. The shares may also be transferred as a gift
or pursuant to a pledge, or may be sold to a broker-dealer acting as principal.
These persons may then sell the shares to another person, either directly or
through another broker-dealer, subject to compliance with the requirements of
the Securities Act.
The price at which sales of the shares occur may be based on market
prices or may be negotiated between the parties, and the consideration may be
cash or another form negotiated between the parties. Broker-dealers acting as
agents or principals may be paid compensation in the form of discounts,
concessions or commissions from the selling stockholder and/or from the
purchasers of the shares, or both. Brokers or dealers may be deemed to be
"underwriters" within the meaning of the Securities Act. Any profits on the
resale of shares by a broker-dealer acting as principal might be deemed to be
underwriting discounts or commissions under the Securities Act. Discounts,
concessions, commissions and similar selling expenses, if any, attributable to
the sale of shares will be borne by the selling stockholder and/or the
purchasers. We have agreed to pay certain of the costs, expenses and fees of
preparing, filing and maintaining this prospectus and the registration statement
of which this prospectus is a part, but we will not receive any proceeds from
sale of these shares. The selling stockholders may agree to indemnify any agent,
dealer or broker-dealer that participates in transactions involving sales of the
shares if liabilities are imposed on it under the Securities Act.
The selling stockholders have advised us that they have not entered
into any agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of their shares, nor is there an underwriter
11
<PAGE> 13
or coordinating broker acting in connection with a proposed sale of shares by
any selling stockholder. If we are notified by any selling stockholder that any
material arrangement has been entered into with a broker-dealer for the sale of
shares, if required, we will file a supplement to this prospectus.
If the selling stockholders use this prospectus for any sale of the
shares, they will be subject to the prospectus delivery requirements of the
Securities Act. For transactions effected on or through the Nasdaq, those
requirements may be satisfied by our delivery of copies of this prospectus to
the Nasdaq in compliance with Securities Act Rule 153. Instead of using this
prospectus for any sale of the shares, a selling stockholder may resell shares
in compliance with the criteria and requirements of Securities Act Rule 144.
The anti-manipulation rules of Regulation M under the Securities
Exchange Act of 1934 may apply to sales of our common stock and activities of
the selling stockholder.
WHERE YOU CAN FIND
MORE INFORMATION
We file periodic reports, proxy statements and other information with
the Securities and Exchange Commission. You may inspect and copy these reports
and other information at the SEC's public reference facilities in Washington,
D.C. (located at 450 Fifth Street, N.W., Washington, D.C. 20549), Chicago
(located at Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661) and New York (located at Seven World Trade Center, 13th
Floor, New York, New York 10048). You can also obtain copies of these materials
from the SEC's public reference section (located at 450 Fifth Street, N.W.,
Washington, D.C. 20549) at prescribed rates. Please call the SEC at
1-800-SEC-0300 for further information about the public reference rooms. The SEC
also maintains a site on the World Wide Web at http://www.sec.gov. This site
contains reports, proxy and information statements and other information about
registrants that file electronically with the SEC.
The SEC permits us to "incorporate by reference" the information and
reports we file with it. This means that we can disclose important information
to you by referring to another document. The information that we incorporate by
reference is considered to be part of this prospectus, and later information
that we file with the SEC automatically updates and supersedes this information.
Specifically, we incorporate by reference:
1. Our Annual Report on Form 10-K for the fiscal year ended
December 31, 1999,
2. The description of our common stock contained in our
Registration Statements on Form 8-A12G, filed on June 2, 1994
and December 4, 1998; and
3. All documents we file with the SEC pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act after the date of this
prospectus and prior to the termination of the offering of the
shares offered by this prospectus.
We have also filed a registration statement on Form S-3 with the SEC
under the Securities Act of 1933, as amended. This prospectus does not contain
all of the information set forth in the registration statement. You should read
the registration statement for further information about us and our common
stock.
We will provide a copy of these filings to each person, including any
beneficial owner, to whom we deliver this prospectus, upon written or verbal
request. You may request a copy of these filings at no cost by writing or
telephoning us at the following address:
Corporate Secretary
La Jolla Pharmaceutical Company
6455 Nancy Ridge Drive
San Diego, California 92121
(858) 452-6600
12
<PAGE> 14
You should rely only on the information contained in this prospectus.
We have authorized no one 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 prospectus.
FORWARD-LOOKING STATEMENTS
We have made forward-looking statements in this prospectus that are
based on our management's beliefs and assumptions and on information currently
available to our management. Forward-looking statements include information
concerning our possible or assumed future results of operations and statements
preceded by, followed by or that include the words "believes," "expects,"
"anticipates," "intends," "plans," "estimates" or similar expressions.
Forward-looking statements involve risks, uncertainties and
assumptions. Actual results may differ materially from those expressed in these
forward-looking statements. You are cautioned not to put undue reliance on any
forward-looking statements. Except as may be required by law, we do not have any
intention or obligation to update forward-looking statements after we distribute
this prospectus. These statements appear in a number of places in this
prospectus and include statements regarding our intentions, plans, strategies,
beliefs or current expectations and those of our directors or our officers with
respect to, among other things:
o our financial prospects
o our financing plans
o trends affecting our financial condition or operating
results
o our strategies for growth, operations, and product
development and commercialization
o conditions or trends in or factors affecting the
biotech industry.
You should understand that a number of factors could cause our results
to differ materially from those expressed in the forward-looking statements. The
information incorporated by reference or provided in this prospectus identifies
important factors that could cause such differences. Those factors include,
among others, the high cost and uncertainty of technology and drug development,
which can result in loss of profitability and long delays in getting products to
market.
LEGAL MATTERS
The validity of the shares of common stock covered by this prospectus
was passed upon by Gibson, Dunn & Crutcher LLP, Irvine, California.
EXPERTS
The consolidated financial statements of La Jolla Pharmaceutical
Company incorporated by reference in La Jolla Pharmaceutical Company's Annual
Report (Form 10-K) for the year ended December 31, 1999, have been audited by
Ernst & Young LLP, independent auditors, as set forth in their report thereon
and incorporated herein by reference. Such financial statements are incorporated
herein by reference in reliance upon such report given on the authority of such
firm as experts in accounting and auditing.
13
<PAGE> 15
================================================================================
NO PERSON HAS BEEN AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE UNDER
THIS PROSPECTUS TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER
THAN THOSE CONTAINED IN THIS PROSPECTUS. IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY US OR THE
SELLING STOCKHOLDERS. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
UNDER THIS PROSPECTUS WILL, UNDER ANY CIRCUMSTANCES, IMPLY THAT THERE HAS BEEN
NO CHANGE IN OUR AFFAIRS OR THAT THE INFORMATION IN THIS PROSPECTUS IS CORRECT
AS OF ANY TIME SUBSEQUENT TO THE DATE AS OF WHICH THE INFORMATION IS GIVEN. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF ANY OFFER
TO BUY ANY OF THE SECURITIES OFFERED UNDER THIS PROSPECTUS TO ANYONE IN ANY
JURISDICTION IN WHICH THE OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH
THE PERSON MAKING THE OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO
ANYONE TO WHOM IT IS UNLAWFUL TO MAKE THE OFFER OR SOLICITATION.
----------------
TABLE OF CONTENTS
RISK FACTORS..................................................2
USE OF PROCEEDS..............................................10
SELLING STOCKHOLDERS.........................................10
PLAN OF DISTRIBUTION.........................................11
WHERE YOU CAN FIND MORE INFORMATION..........................12
FORWARD-LOOKING STATEMENTS...................................13
LEGAL MATTERS................................................13
INDEPENDENT AUDITORS.........................................13
================================================================================
================================================================================
[LJP LOGO]
4,040,000 SHARES
COMMON STOCK
----------------
PROSPECTUS
----------------
FEBRUARY 25, 2000
================================================================================
<PAGE> 16
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth all expenses payable by us in connection
with the offering of our common stock being registered hereby. All amounts are
estimated except the SEC registration fee.
SEC Registration Fee......................... $ 7,167
Printing Expenses............................
-------
Legal Fees and Expenses...................... $15,000
-------
Accounting Fees and Expenses................. $12,000
-------
Miscellaneous................................ $20,000
-------
Total.............................. $54,167
=======
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS
Section 145(a) of the General Corporation Law of the State of Delaware
(the "DGCL") provides that a Delaware corporation may indemnify any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative, other than an action by or in the right of the corporation, by
reason of the fact that such person is or was a director, officer, employee or
agent of the corporation or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation or enterprise,
against expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding if he or she acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of the corporation, and,
with respect to any criminal action or proceeding, had no cause to believe his
or her conduct was unlawful.
Section 145(b) of the DGCL provides that a Delaware corporation may
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action or suit by or in the right of
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses actually
and reasonably incurred by such person in connection with the defense or
settlement of such action or suit if he or she acted under similar standards to
those set forth above, except that no indemnification may be made in respect to
any claim, issue or matter as to which such person shall have been adjudged to
be liable to the corporation unless and only to the extent that the court in
which such action or suit was brought shall determine that despite the
adjudication of liability, but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to be indemnified for such
expenses which the court shall deem proper.
Section 145 of the DGCL further provides that to the extent a director
or officer of a corporation has been successful in the defense of any action,
suit or proceeding referred to in subsection (a) and (b) of Section 145 or in
the defense of any claim, issue or matter therein, he or she shall be
indemnified against expenses actually and reasonably incurred by him or her in
connection therewith; that indemnification provided for by Section 145 shall not
be deemed exclusive of any other rights to which the indemnified party may be
entitled; and that the corporation may purchase and maintain insurance on behalf
of a director or officer of the corporation against any liability asserted
against such officer or director and incurred by him or her in any such capacity
or arising out of his or her status as such, whether or not the corporation
would have the power to indemnify him or her against such liabilities under
Section 145.
As permitted by Section 102(b)(7) of the DGCL our certificate of
incorporation provides that a director shall not be liable to us or our
stockholders for monetary damages for breach of fiduciary duty as a director.
However, such provision does not eliminate or limit the liability of a director
for acts or omissions not in good faith or for breaching his or her duty of
loyalty, engaging in intentional misconduct or knowingly violating the law,
paying a dividend or approving a stock repurchase which was illegal, or
obtaining an improper personal benefit. A provision of this type has no effect
on the availability of equitable remedies, such as injunction or rescission, for
breach of fiduciary duty.
II-1
<PAGE> 17
Our bylaws require that directors and officers be indemnified to the
maximum extent permitted by Delaware law.
The Company has entered into indemnity agreements with each of its
directors and executive officers. These indemnity agreements require that the
Company pay on behalf of each director and officer party thereto any amount that
he or she is or becomes legally obligated to pay because of any claim or claims
made against him or her because of any act or omission or neglect or breach of
duty, including any actual or alleged error or misstatement or misleading
statement, which he or she commits or suffers while acting in his or her
capacity as a director and/or officer of the Company and solely because of his
or her being a director and/or officer. Under the General Corporation Law,
absent such an indemnity agreement, indemnification of a director or officer is
discretionary rather than mandatory (except in the case of a proceeding in which
a director or officer is successful on the merits). Consistent with the
Company's Bylaw provision on the subject, the indemnity agreements require the
Company to make prompt payment of defense and investigation costs and expenses
at the request of the director or officer in advance of indemnification,
provided that the recipient undertakes to repay the amounts if it is ultimately
determined that he or she is not entitled to indemnification for such expenses
and provided further that such advance shall not be made if it is determined
that the director or officer acted in bad faith or deliberately breached his or
her duty to the Company or its stockholders and, as a result, it is more likely
than not that it will ultimately be determined that he or she is not entitled to
indemnification under the terms of the indemnity agreement. The indemnity
agreements make the advance of litigation expenses mandatory absent a special
determination to the contrary, whereas under the General Corporation Law absent
such an indemnity agreement, such advance would be discretionary. Under the
indemnity agreement, the director or officer is permitted to petition the court
to seek recovery of amounts due under the indemnity agreement and to recover the
expenses of seeking such recovery if he or she is successful. Without the
indemnity agreement, the Company would not be required to pay or reimburse the
director or officer for his or her expenses in seeking indemnification recovery
against the Company. By the terms of the indemnity agreement, its benefits are
not available if the director or officer has other indemnification or insurance
coverage for the subject claim or, with respect to the matters giving rise to
the claim, (i) received a personal benefit, (ii) violated Section 16(b) of the
Securities Exchange Act of 1934 or analogous provisions of law, or (iii)
committed certain acts of dishonesty. Absent the indemnity agreement,
indemnification that might be made available to directors and officers could be
changed by amendments to the Company's Certificate of Incorporation or Bylaws.
The Company has a policy of directors and officers liability insurance
that insures the Company and its directors and officers against damages,
settlements, and defense costs under certain circumstances.
ITEM 16. EXHIBITS
The following exhibits are filed herewith or incorporated by reference:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------ ----------------------
<C> <S>
4.1 Amended and Restated Certificate of Incorporation of the Company(1)
4.2 Amended and Restated Bylaws of the Company(2)
4.3 Form of Common Stock Certificate(3)
4.4 Rights Agreement dated December 3, 1998 between the Company and
American Stock Transfer & Trust Company(4)
4.5 Certificate of Designation, Preferences and Rights of Series A
Junior Participating Preferred Stock of the Company(5)
5.1 Opinion of Gibson, Dunn & Crutcher LLP as to legality of the
securities registered hereby
23.1 Consent of Gibson, Dunn & Crutcher LLP (included in Exhibit 5.1).
23.2 Consent of Ernst & Young LLP, independent auditors
24.1 Power of Attorney (contained on signature page of this document)
</TABLE>
II-2
<PAGE> 18
- ----------
(1) Incorporated by reference to our Quarterly Report on Form 10-Q, Exhibit
3.3, filed November 15, 1999.
(2) Incorporated by reference to our Quarterly Report on Form 10-Q, Exhibit
3.2, filed November 15, 1999.
(3) Incorporated by reference to Amendment No. 4 to our Registration
Statement on Form S-1, Exhibit 4.1, filed June 2, 1994 (Registration
No. 33-76480).
(4) Previously filed with the Company's Registration Statement on Form 8-A
(No. 000-24274) as filed with the Securities and Exchange Commission on
December 4, 1998.
(5) Incorporated by reference to our Quarterly report on Form 10-Q, Exhibit
4.1, filed August 13, 1999.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act;
(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;
(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
Securities Exchange Commission by the registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act that are incorporated by reference
in the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered herein,
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, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered herein, 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 may be permitted to directors, officers and controlling persons of the
registrant, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
II-3
<PAGE> 19
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
I certify that I have reasonable grounds to believe that La Jolla Pharmaceutical
Company 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 Irvine, State of California, on
February 25, 2000.
LA JOLLA PHARMACEUTICAL COMPANY
By: /s/ STEVEN B. ENGLE
------------------------------------
Steven B. Engle
Chairman and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints
Steven B. Engle and Gail A. Sloan his or her true and lawful attorneys-in-fact
and agents, each acting alone, with full powers of substitution and
resubstitution, for him or her and in his or her name, place and stead, in any
and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement 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, each acting alone, 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 full to 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, each acting alone, or his substitute or 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 in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
NAME AND SIGNATURE TITLE DATE
------------------ ----- ----
<S> <C> <C>
/s/ STEVEN B. ENGLE Chairman of the Board, Chief February 25, 2000
- ------------------------------------ Executive Officer, President,
Steven B. Engle and Director (Principal Executive
Officer)
/s/ GAIL A. SLOAN Secretary and Controller (Principal February 25, 2000
- ------------------------------------ Financial and Accounting Officer)
Gail A. Sloan
/s/ THOMAS H. ADAMS, PH.D. Director February 25, 2000
- ------------------------------------
Thomas H. Adams, Ph.D.
/s/ WILLIAM E. ENGBERS Director February 25, 2000
- ------------------------------------
William E. Engbers
/s/ ROBERT A. FILDES, PH.D. Director February 25, 2000
- ------------------------------------
Robert A. Fildes, Ph.D.
/s/ W. LEIGH THOMPSON, M.D., PH.D. Director February 25, 2000
- ------------------------------------
W. Leigh Thompson, M.D., Ph.D.
</TABLE>
II-4
<PAGE> 20
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------ ----------------------
<C> <S>
4.1 Amended and Restated Certificate of Incorporation of the Company(1)
4.2 Amended and Restated Bylaws of the Company(2)
4.3 Form of Common Stock Certificate(3)
4.4 Rights Agreement dated December 3, 1998 between the Company and
American Stock Transfer & Trust Company(4)
4.5 Certificate of Designation, Preferences and Rights of Series A
Junior Participating Preferred Stock of the Company(5)
5.1 Opinion of Gibson, Dunn & Crutcher LLP as to legality of the
securities registered hereby
23.1 Consent of Gibson, Dunn & Crutcher LLP (included in Exhibit 5.1).
23.2 Consent of Ernst & Young LLP, independent auditors
24.1 Power of Attorney (contained on signature page of this document)
</TABLE>
- ----------
(1) Incorporated by reference to our Quarterly Report on Form 10-Q, Exhibit
3.3, filed November 15, 1999.
(2) Incorporated by reference to our Quarterly Report on Form 10-Q, Exhibit
3.2, filed November 15, 1999.
(3) Incorporated by reference to Amendment No. 4 to our Registration
Statement on Form S-1, Exhibit 4.1, filed June 2, 1994 (Registration
No. 33-76480).
(4) Previously filed with the Company's Registration Statement on Form 8-A
(No. 000-24274) as filed with the Securities and Exchange Commission on
December 4, 1998.
(5) Incorporated by reference to our Quarterly report on Form 10-Q, Exhibit
4.1, filed August 13, 1999.
II-5
<PAGE> 1
EXHIBIT 5.1
[GD&C Letterhead]
February 25, 2000
(949) 451-3800 C 51286-00036
La Jolla Pharmaceutical Company
6455 Nancy Ridge Drive
San Diego, California 92121
Re: Registration Statement on Form S-3 of La Jolla Pharmaceutical
Company
Ladies and Gentlemen:
We refer to the registration statement on Form S-3 (the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities Act")
filed by La Jolla Pharmaceutical Company, a Delaware corporation (the
"Corporation"), with the Securities and Exchange Commission (the "Commission")
on the date hereof in connection with the registration under the Securities Act
of 4,040,000 shares of the Corporation's common stock, par value $ 0.01 per
share (the "Shares") issued by the Corporation pursuant to that certain Stock
Purchase Agreement, dated February 10, 2000, by and between the Corporation and
the purchasers listed on Schedule A thereto (the "Stock Purchase Agreement").
For purposes of rendering this opinion, we have examined the originals
or certified copies of such corporate records, certificates of officers of the
Corporation and/or public officials and such other documents, including the
Stock Purchase Agreement, and have made such other factual and legal
investigations, as we have deemed relevant, necessary or appropriate. In such
examination, we have assumed the genuineness of all signatures, the authenticity
of all documents submitted to us as originals, the conformity to original
documents of all documents submitted to us as conformed or photostatic copies
and the authenticity of the originals of such copies.
Based on our examination described above, subject to the assumptions
stated above and relying on the statements of fact contained in the documents
that we have examined, we are of the opinion that the Shares have been duly
authorized and are validly issued, fully paid and non-assessable.
This opinion is limited to the General Corporation Law of the State of
Delaware and United States federal law.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement, and we further consent to the use of our name under the
caption "Legal Matters" in the Prospectus forming a part of said Registration
Statement. In giving this consent, we do not thereby admit that we are within
the category of persons whose consent is required under Section 7 of the
Securities Act or the Rules and Regulations of the Commission.
Very truly yours,
/s/ GIBSON, DUNN & CRUTCHER LLP
------------------------------------
GIBSON, DUNN & CRUTCHER LLP
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement and related Prospectus of La Jolla Pharmaceutical
Company for the registration of 4,040,000 shares of its common stock and to the
incorporation by reference therein of our report dated February 11, 2000, with
respect to the financial statements of La Jolla Pharmaceutical Company included
in its Annual Report (Form 10-K) for the year ended December 31, 1999, filed
with the Securities and Exchange Commission.
ERNST & YOUNG LLP
San Diego, California
February 24, 2000
