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As filed with the Securities and Exchange Commission on November 17, 2000
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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TARGETED GENETICS CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
Washington 91-1549568
(Stateor other jurisdiction of incorporation or organization) (I.R.S. Employer Identification Number.)
</TABLE>
1100 Olive Way, Suite 100
Seattle, Washington 98101
(206) 623-7612
(Address, including zip code, and telephone number including area code, of
registrant's principal executive offices)
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H. STEWART PARKER
President and Chief Executive Officer
Targeted Genetics Corporation
1100 Olive Way, Suite 100
Seattle, Washington 98101
(206) 623-7612
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Copies to:
STEPHEN M. GRAHAM
ANN L. McGUIRE
Orrick, Herrington & Sutcliffe LLP
701 Fifth Avenue, Suite 6500
Seattle, Washington 98104
(206) 839-4300
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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 of 1933, 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 of 1933, 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. [_]
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CALCULATION OF REGISTRATION FEE
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<CAPTION>
Proposed Proposed
Title of each Class of Maximum Maximum Amount of
Securities to be Amount to be Offering Price Aggregate Offering Registration
Registered Registered Per Share(1) Price (1) Fee
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<S> <C> <C> <C> <C>
Common Stock, par value
$0.01 per share....... 5,950,798 Shares $10.46875 $62,297,417 $16,447
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</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933, based on the high
and low sales prices of the common stock on November 13, 2000.
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The registrant hereby undertakes to amend 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 that specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until this Registration Statement
shall become effective on such date as the Commission, acting pursuant to
Section 8(a), may determine.
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[TARGETED GENETICS LOGO]
5,950,798 Shares
TARGETED GENETICS CORPORATION
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Common Stock
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The selling shareholders listed on page 9 are the former stockholders of
Genovo, Inc., which we acquired on September 19, 2000. The selling shareholders
may offer for sale up to 5,950,798 shares of Targeted Genetics common stock
from time to time. We will not receive any proceeds from the sale of these
shares.
The selling shareholders may sell the shares in transactions on the Nasdaq
National Market, in privately negotiated transactions or otherwise.
Our common stock is quoted on the Nasdaq National Market under the symbol
"TGEN." On November 16, 2000, the last reported sales price of our common stock
was $10.56 per share.
Investing in this stock involves risks. See "Risk Factors" beginning on page
3.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.
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The date of this prospectus is November 17, 2000.
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements contained in or incorporated by reference into this
prospectus are forward-looking statements. Forward-looking statements involve
current expectations or forecasts of future events and other statements that
are not historical facts. Inaccurate assumptions and known or unknown risks and
uncertainties can affect the accuracy of forward-looking statements. Any or all
of the forward-looking statements contained in this prospectus, incorporated by
reference into this prospectus, or included in any materials we release to the
public from time to time may turn out to be incorrect. Actual results could
differ materially from those expressed in the forward-looking statements for a
number of reasons, including the factors discussed in the section of this
prospectus entitled Risk Factors.
You should not unduly rely on these forward-looking statements, which speak
only as of the date of this prospectus. We undertake no obligation to update
any forward-looking statement to reflect new information or circumstances or
the occurrence of unanticipated events. Other risks besides those described in
this prospectus could also affect actual results. Moreover, we cannot assess
the impact of any particular risk factor on our business or the extent to which
any factor, or combination of factors, may cause actual results to differ
materially from those contained in any forward-looking statement.
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RISK FACTORS
In addition to the other information contained in this prospectus, you should
read and consider the following risk factors. If any of these risks actually
occur, our business, financial condition or operating results could be
adversely affected and the trading price of our stock could decline.
If we are unable to secure financing on terms acceptable to us for future
capital needs, we will be unable to fund continuing operations.
Developing and commercializing our potential products will require
substantial additional financial resources. Because internally generated cash
flow will not fund development and commercialization of our products, we will
look to outside sources for funding. These sources could involve one or more of
the following types of transactions:
. technology partnerships;
. technology sales;
. technology licenses;
. issuing debt; or
. issuing equity.
If we cannot obtain additional financing when needed or on acceptable terms, we
will be unable to fund continuing operations.
We have a history of losses and may never become profitable, which could result
in a decline in the value of our common stock and a loss of your investment.
We have generated small amounts of revenue and incurred significant net
losses since we began business. As of September 30, 2000, we have incurred
cumulative losses totaling $138.9 million. We expect to continue to incur
substantial additional losses in the future, due primarily to the following
factors:
. all of our products are in a testing phase and have not received
regulatory approval; and
. we will spend significant amounts on operating expenses.
We may never generate profits, and if we do become profitable, we may be unable
to sustain or increase profitability on a quarterly or annual basis. As a
result, the trading price of our stock could decline and you could lose all or
part of your investment.
If our clinical trials are unsuccessful or we do not receive regulatory
approval for our products, which are in the early stage of product development,
we may be unable to generate sufficient revenue to maintain our business.
All of our potential products are in research and development or in early-
stage clinical trials. We cannot apply for regulatory approval of our potential
products until we have performed additional research and development and
testing. Our clinical trials may not demonstrate the safety and efficacy of any
potential product, and we may encounter unacceptable side effects or other
problems in the clinical trials. Should this occur, we may have to delay or
discontinue development of the potential product. After a successful clinical
trial, we cannot market any product in the United States until we receive
regulatory approval. If we are unable to gain regulatory approval of any
product after successful clinical trials, we may be unable to generate
sufficient product revenue to maintain our business.
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Delays or unexpected costs in obtaining approval of our potential products or
complying with governmental regulatory requirements could make it more
difficult to maintain or improve our financial condition.
The regulatory process in the gene therapy industry is costly, time consuming
and subject to unpredictable delays. Accordingly, we cannot predict how long it
will take or how much it will cost to obtain regulatory approvals for clinical
trials or for manufacturing or marketing our potential products. Delays in
bringing a potential product to market or unexpected costs in obtaining
regulatory approval could decrease our ability to generate product sales
revenue. In addition, all manufacturing operations are subject on an ongoing
basis to the current Good Manufacturing Practices, or GMP, requirements of the
Food and Drug Administration, or FDA. While we currently anticipate that we
will be able to manufacture products that meet this requirement, we may be
unable to attain or maintain compliance with current or future GMP
requirements. If we discover previously unknown problems after we receive
regulatory approval of a potential product or fail to comply with applicable
regulatory requirements, we may suffer restrictions on our ability to market
the product, including mandatory withdrawal of the product from the market.
This, or an unexpected increase in the cost of compliance, could make it more
difficult to maintain or improve our financial condition.
Failure to recruit patients could delay or prevent clinical trials of our
potential products, which could cause a delay or inability to develop our
potential products.
Identifying and qualifying patients to participate in testing our potential
products is critical to our near-term success. The timing of our clinical
trials depends on the speed at which we can recruit patients to participate in
testing our products. Delays in recruiting or enrolling patients to test our
products could result in increased costs, delays in advancing our product
development, delays in proving the usefulness of our technology or termination
of the clinical trials altogether. Any of these could delay or prevent the
development of our product candidates.
Our business will not succeed if our technology and products fail to achieve
market acceptance.
Even if our or our corporate partners' potential products succeed in clinical
trials and are approved for marketing, these products may never achieve market
acceptance. Competing gene delivery products or alternative treatment methods,
including more traditional approaches to treating disease, may be more
effective or may be more economically feasible than our products. Moreover,
doctors, patients, the medical community in general or the public may never
accept or use any products based on gene delivery or other technologies
developed by us or our corporate partners.
We may be unable to adequately protect our proprietary rights, which may limit
our ability to compete effectively.
Our success depends in part on our ability to protect our proprietary rights.
We own or have licenses to patents on a number of genes, processes, practices
and techniques critical to our present and potential products. If we fail to
obtain and maintain patent protection for this technology, our competitors
could market competing products using those genes, processes, practices and
techniques. The failure of our licensors to obtain and maintain patent
protection for technology they license to us could similarly harm our business.
Patent positions in the field of biotechnology are highly uncertain and involve
complex legal, scientific and factual questions. Our patent applications may
not result in issued patents. Even if we secure a patent, the patent may not
provide meaningful protection.
We also rely on unpatented proprietary technology. Because this technology
does not benefit from the protection of patents, we may be unable to
meaningfully protect this proprietary technology from unauthorized use or
misappropriation by a third party.
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Intellectual property claims and litigation could subject us to significant
liability for damages and invalidation of our proprietary rights.
As the biotechnology industry expands, the risk increases that other
companies may claim that our processes and potential products infringe on their
patents. Defending these claims would be costly and would likely divert
management's attention and resources away from our operations. If we infringe
on another company's patented processes or technology, we may have to pay
damages or obtain a license in order to continue manufacturing or marketing the
affected product or using the affected process. If we are unable to obtain a
license, or obtain a license on acceptable terms, we may be unable to develop
or commercialize some or all of our potential products and our business could
be harmed.
Our potential tgAAV-CF product uses our proprietary AAV delivery technology
to deliver a normal copy of a CFTR gene to which we have rights under a
nonexclusive license. The United States Patent and Trademark Office has
declared an interference proceeding to determine the priority of invention of
this gene. If the eventual outcome does not favor our licensor, we would have
to secure a license to the CFTR gene from the prevailing party to continue
developing tgAAV-CF. The costs of licensing the CFTR gene could be substantial
and could include royalties greater than those we currently pay. If we cannot
secure this license on acceptable terms and on a timely basis, we may be unable
to develop or deliver our potential tgAAV-CF product.
We may be unable to develop and commercialize some of our potential products if
our relationships with scientific collaborators and corporate partners are not
successful.
Our success also depends on the continued availability of outside scientific
collaborators to perform research and develop processes to advance and augment
our internal efforts. Competition for collaborators in gene therapy is intense.
If we are unsuccessful in recruiting or maintaining our relationships with
scientific collaborators, we could experience delays in our research and
development or loss of access to important enabling technology. Even if we
establish new scientific collaborations or other partnerships, they may never
result in the successful development of products.
The development and commercialization of many of our potential products, and
therefore the success of our business, substantially depends on the performance
of our collaborators. If our corporate partners do not commit sufficient
resources to our research and development programs or the commercialization of
our products, the preclinical or clinical development related to the
collaboration could be delayed or terminated. Our current or future
collaborators may develop or market competing products or alternative
technologies. In addition, disputes may arise with respect to ownership of
technology developed under any such collaborations. Moreover, our corporate
partners may terminate existing partnerships and we may be unable to enter into
additional collaborations on acceptable terms, or at all.
If we are unable to license necessary technology from third parties, we may be
unable to successfully develop and commercialize our potential products.
Our success depends on our ability to enter into licensing arrangements with
commercial or academic organizations to obtain technology used in developing or
commercializing our or our partners' product candidates. Various license
agreements give us and our partners rights to use technologies owned or
licensed by third parties in research, development and commercialization of our
potential products. Disputes may arise regarding rights to inventions and know-
how resulting from the joint creation or use of intellectual property by us and
our licensors or scientific collaborators. In addition, many of our in-
licensing agreements contain milestone-based termination provisions. If we or
any of our corporate partners fail to meet agreed milestones, a licensor could
terminate the relevant agreement.
If we are unable to maintain our current licenses and obtain additional
licenses in the future on acceptable terms, we and our corporate partners may
be required to expend significant time and resources to develop or
5
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in-license replacement technology. If we are unable to do so, we may be unable
to develop or commercialize some or all of our potential products and our
business may suffer.
If we or our business partners are unable to successfully market and distribute
any potential product, our business will be harmed.
We have no experience in sales and marketing. To market any products that may
result from our development programs, we will need to develop marketing and
sales capabilities, either on our own or with others. We intend to enter into
collaborations with corporate partners to utilize the mature marketing and
distribution capabilities of our partners. While we believe that these
collaborative partners will be motivated to market and distribute our potential
products, our current and potential future partners may not commit sufficient
resources to commercializing our technology on a timely basis. If our business
partners do not successfully market and distribute our products and we are
unable to develop sufficient marketing and distribution capabilities on our
own, our business will be harmed.
The intense competition and rapid technological change in our market may result
in pricing pressures and failure of our potential products to achieve market
acceptance.
We presently face competition from other companies developing gene therapy
technologies and from companies using more traditional approaches to treating
human diseases. Most of our competitors have substantially more experience and
financial and infrastructure resources than we do in the following areas:
. research and development;
. clinical trials;
. obtaining FDA and other regulatory approvals;
. manufacturing; and
. marketing and distribution.
Consequently, our competitors may be able to commercialize new products more
rapidly than we do, or manufacture and market competitive products more
successfully than we do. This could result in pricing pressures or our products
failing to achieve market acceptance.
In addition, gene therapy is a new and rapidly evolving field and is expected
to continue to undergo significant and rapid technological change. Rapid
technological development by our competitors could result in our actual and
proposed technologies, products or processes losing market share or becoming
obsolete.
If we do not attract and retain qualified personnel, we will be unable to
successfully and timely develop our potential products.
Our future success depends in part on our ability to attract and retain key
employees. We have programs in place to retain personnel, including programs to
create a positive work environment and competitive compensation packages.
Because competition for employees in our field is intense, however, we may be
unable to retain our existing personnel or attract additional qualified
employees. If we experience turnover or difficulties recruiting new employees,
our research and development could be delayed and we could experience
difficulties in generating sufficient revenue to maintain our business.
Our limited manufacturing capability may limit our ability to successfully
introduce our potential products.
We currently do not have the capacity to manufacture large-scale clinical or
commercial quantities of our potential products. To do so, we will need to
expand our current facilities and staff or supplement them through
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the use of contract providers. We have recently leased a building for the
purpose of developing a facility to manufacture AAV vectors for Phase III and
early commercial purposes. This manufacturing facility, if successfully
developed, as well as any future manufacturing facilities that we may
construct, will be subject to initial and ongoing regulation by the FDA and
other governmental agencies. We may be unable to obtain regulatory approval for
or maintain in operation this or any other manufacturing facility. If we are
unable to obtain and maintain the necessary manufacturing capabilities, either
alone or through third parties, we will be unable to introduce sufficient
product to sustain our business.
Our use of hazardous materials to develop our potential products exposes us to
liability risks and the risk of regulatory limitation of our use of these
materials, either of which could harm our financial condition and reduce our
ability to generate product sales revenue.
Our research and development activities involve the controlled use of
hazardous materials. Although we believe that our safety procedures for
handling and disposing of these materials comply with applicable laws and
regulations, we cannot eliminate the risk of accidental contamination or injury
from hazardous materials. If a hazardous material accident occurred, we would
be liable for any resulting damages. This liability could exceed our financial
resources. Additionally, hazardous materials are subject to regulatory
oversight. Accidents unrelated to our operations could cause federal, state or
local regulatory agencies to restrict our access to hazardous materials needed
in our research and development efforts. If our access to these materials is
limited, we could experience delays in our research and development programs.
Paying damages or experiencing delays caused by restricted access could reduce
our ability to generate product sales revenue and make it more difficult to
fund our operations.
The costs of product liability and other claims and product recalls could
exceed the amount of our insurance, which could significantly harm our
financial condition or our reputation.
Our business activities expose us to the risk of liability claims or product
recalls and any adverse publicity that might result from a liability claim
against us. We currently have only limited amounts of liability insurance, and
the amounts of claims against us may exceed our insurance coverage. Liability
insurance is expensive and may not continue to be available on acceptable
terms. A product liability or other claim not covered by insurance or in excess
of our insurance or a product recall could significantly harm our financial
condition or our reputation.
Our recent acquisition of Genovo, Inc. and any future acquisitions could be
costly, difficult to integrate and disruptive of our business.
In September 2000, we acquired Genovo, Inc., a privately held biotechnology
company specializing in viral gene delivery. In the future, we may acquire
additional complementary companies, products or technologies. Managing the
Genovo acquisition entails, and any future acquisition will entail, numerous
operational and financial risks and strains, including:
. difficulties in assimilating the operations, technologies, products or
potential products and personnel of the acquired company;
. potential loss of key employees of the acquired company;
. disruption of our business;
. diversion of management's attention from our core business;
. assumption of known and unknown liabilities;
. higher-than-expected acquisition and integration costs and charges
against earnings; and
. potentially dilutive issuances of equity securities.
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We may be unable to successfully integrate Genovo or any future acquisition
with our existing operations or successfully develop any acquired product
candidates or technologies. We may not gain any substantial benefit from the
Genovo acquisition or any products, technologies or businesses that we acquire
in the future, notwithstanding the expenditure of a significant amount of time
and financial, personnel and other resources.
Market fluctuations or volatility could cause the market price of our common
stock to decline.
In recent years the stock market in general and the market for biotechnology-
related companies in particular have experienced extreme price and volume
fluctuations, often unrelated to the operating performance of the affected
companies. Our common stock has experienced, and is likely to continue to
experience, these fluctuations in price, regardless of our performance. These
fluctuations could cause the market price of our common stock to decline.
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SELLING SHAREHOLDERS
On September 19, 2000, we acquired Genovo, Inc., a privately held
biotechnology company specializing in viral gene delivery. The selling
shareholders are the former stockholders of Genovo, who received Targeted
Genetics common stock in exchange for their Genovo capital stock.
The following table provides information regarding the selling shareholders
and the number of shares of common stock they are offering. The percentage
ownership data is based on 43,297,560 shares of our common stock outstanding as
of November 16, 2000. Under the rules of the Securities and Exchange
Commission, beneficial ownership includes shares over which the indicated
beneficial owner exercises voting or investment power. Shares of common stock
subject to options that are currently exercisable or will become exercisable
within 60 days are deemed outstanding for computing the percentage ownership of
the person holding the options, but are not deemed outstanding for computing
the percentage ownership of any other person. Unless otherwise indicated in the
footnotes below, we believe that the persons and entities named in the table
have sole voting and investment power with respect to all shares beneficially
owned, subject to applicable community property laws. The information regarding
shares beneficially owned after the offering assumes the sale of all shares
offered by each of the selling shareholders.
<TABLE>
<CAPTION>
Number of Shares Number Shares Beneficially
Beneficially of Shares Owned After Offering
Owned Before Being -----------------------
Name and Address Offering Offered Number Percent
---------------- ---------------- --------- ------------ ----------
<S> <C> <C> <C> <C>
Dennis N. Berman........... 91,232 91,232 -- --
Biogen, Inc. .............. 4,008,868 4,008,868 -- --
Dompe Farmaceutici
S.P.A. ................... 241,101 241,101 -- --
Robert Dresing............. 14,052 14,052 -- --
Genzyme Corporation........ 575,910 264,615 311,295 *
John Greenwood............. 826 826 -- --
Mariann Grossman........... 224,280 224,280 -- --
Trustees of the University
of Pennsylvania........... 128,128 128,128 -- --
James M. Wilson............ 792,190 792,190 -- --
James M. Wilson and Ann
Wilson, Trustees.......... 185,506 185,506 -- --
under Trust Agreement
</TABLE>
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* Less than 1%
In connection with our September 2000 acquisition of Genovo, we established a
multi-product development and commercialization collaboration with Biogen, Inc.
In connection with this collaboration, Biogen has paid us $8 million in up-
front payments, will pay milestone payments related to the development of
product candidates and will provide us with ongoing research and development
funding. In addition, Biogen has agreed to make a future $10 million equity
investment in Targeted Genetics and provide us with a $10 million line of
credit, each accessible at our discretion. Biogen currently owns approximately
9% of our outstanding common stock.
In connection with our acquisition of Genovo, we assumed Genovo's rights and
obligations under a multiple-year collaboration with Genzyme Corporation to
develop gene therapy products for lysosomal storage disorders. Under this
agreement, Genzyme will make payments to us upon the achievement of specified
regulatory milestones and will pay us royalties on sales of any products
developed under the agreement.
Through Genovo, we license gene delivery technology and related intellectual
property from the University of Pennsylvania.
Except as a shareholder, none of the other selling shareholders has had any
material relationship with Targeted Genetics or any of our affiliates within
the past three years.
The selling shareholders have represented to us that they purchased their
shares for their own account, for investment only and not with a view toward
publicly selling or distributing them, except in sales either
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registered under the Securities Act of 1933 or exempt from registration. In
recognition of the fact that the selling shareholders, even though purchasing
their shares for investment, may wish to be legally permitted to sell their
shares when they deem appropriate, we agreed with the selling shareholders to
file a registration statement to register the shares for resale and to prepare
and file all amendments and supplements necessary to keep the registration
statement effective until the earliest of
. September 19, 2002;
. the date on which the selling shareholders may resell all the shares
covered by the registration statement without limitations under Rule 144
under the Securities Act; and
. the date on which the selling shareholders have sold all the shares
covered by the registration statement.
In addition, we have agreed that, after September 19, 2002 and subject to
limited exceptions, upon the request of a selling shareholder deemed under the
Securities Act to be an affiliate of Targeted Genetics, we will file a
registration statement to register eligible shares owned by that affiliate. All
but one of the selling shareholders have agreed not to sell or otherwise
dispose of their shares for up to 30 months following the effective date of the
Genovo merger, subject to periodic releases.
PLAN OF DISTRIBUTION
The selling shareholders or their transferees or other successors-in-interest
may sell the shares of common stock offered by this prospectus from time to
time, in one or more transactions. The selling shareholders may sell the shares
at fixed prices that may change, at market prices at the time of sale or at
negotiated prices. The selling shareholders may sell the shares
. through the Nasdaq National Market or any other national securities
exchange on which our common stock is then listed;
. in privately negotiated transactions; or
. through a combination of these.
The selling shareholders may sell the shares to or through broker-dealers,
who may receive compensation in the form of discounts, concessions or
commissions from the selling shareholders or the purchasers. Any broker-dealer
may act as a broker-dealer on behalf of a selling shareholder in connection
with the offering of the shares. Any broker-dealers who assist in the sale of
the shares covered by this prospectus may be considered "underwriters" within
the meaning of Section 2(11) of the Securities Act, and any commissions they
receive or profits they earn on the resale of the shares may be underwriting
discounts and commissions under the Securities Act.
If required, we will distribute a supplement to this prospectus to describe
any material changes in the terms of the offering. The selling shareholders may
sell any shares covered by this prospectus that qualify for sale under Rule 144
of the Securities Act in transactions complying with Rule 144, rather than
through this prospectus. We will not receive any proceeds from the sale of the
shares by the selling shareholders.
Subject to limited exceptions, we have agreed to bear all expenses in
connection with the registration and sale of the shares being offered by the
selling shareholders. We have also agreed to indemnify the selling shareholders
against specified liabilities they incur in connection with an actual or
alleged untrue statement or omission of a material fact in the registration
statement, including liabilities under the Securities Act. The selling
shareholders have agreed to indemnify us against specified liabilities we incur
in connection with our reliance on written information furnished by the selling
shareholders expressly for use in connection with this prospectus.
The selling shareholders may not sell any or all of the shares covered by
this prospectus.
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LEGALITY OF COMMON STOCK
Orrick, Herrington & Sutcliffe LLP, Seattle, Washington, has provided us with
an opinion that the shares of common stock offered by this prospectus are duly
authorized, validly issued, fully paid and nonassessable.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our financial
statements included in our annual report on Form 10-K for the year ended
December 31, 1999, as described in their report, which is incorporated by
reference into this prospectus and elsewhere into the registration statement of
which this prospectus is a part. Our financial statements are incorporated by
reference in reliance on Ernst & Young LLP's report, given on their authority
as experts in accounting and auditing.
Ernst & Young, chartered accountants, have audited the financial statements
of Emerald Gene Systems, Ltd. included in our annual report on Form 10-K for
the year ended December 31, 1999, as described in their report, which is
incorporated by reference into this prospectus and elsewhere in the
registration statement of which this prospectus is a part. The financial
statements of Emerald Gene Systems, Ltd. are incorporated by reference in
reliance on Ernst & Young, chartered accountants' report, given on their
authority as experts in accounting and auditing.
KPMG LLP, independent auditors, have audited the financial statements of
Genovo, Inc. as of June 30, 2000 and 1999 and for the years then ended and for
the period from September 12, 1992 (inception) to June 30, 2000, included in
our current report on Form 8-K/A dated September 19, 2000 and amended November
9, 2000, which is incorporated by reference into this prospectus and elsewhere
in the registration statement of which this prospectus is a part, in reliance
on the report of KPMG LLP, incorporated by reference into this prospectus and
the registration statement, and on the authority of that firm as experts in
accounting and auditing.
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. Our SEC filings are available to the public over the
Internet at the SEC's website at http://www.sec.gov. The SEC's website
contains reports, proxy statements and other information regarding issuers,
such as Targeted Genetics, that file electronically with the SEC. You may also
read and copy any document we file with the SEC at the SEC's Public Reference
Room at 450 Fifth Street, N.W., Washington, D.C. 20549. You may also obtain
copies of the documents at prescribed rates by writing to the SEC's Public
Reference Section at 450 Fifth Street, N.W., Washington, D.C. 20549. Please
call the SEC at 1-800-SEC-0330 for further information on the operation of its
Public Reference Room.
The SEC allows us to "incorporate by reference" into this prospectus the
information we have filed with the SEC, which is considered to be a part of
this prospectus. We have previously filed and are incorporating by reference
into this prospectus the following documents:
. Our annual report on Form 10-K for the year ended December 31, 1999,
which contains audited financial statements for the most recent fiscal
year for which we have filed audited financial statements;
. Our quarterly reports on Form 10-Q for the quarters ended March 31,
2000, June 30, 2000 and September 30, 2000;
. Our current reports on Form 8-K, filed on August 23, 2000, September 13,
2000 and October 2, 2000 (as amended November 9, 2000); and
. The description of our common stock contained in our registration
statements on Form 8-A filed on April 26, 1994 and October 22, 1996
under Section 12(g) of the Securities Exchange Act of 1934, including
any amendments or reports filed for the purpose of updating that
description.
We also incorporate by reference all documents we file under Section 13(a),
13(c), 14 or 15(d) of the Exchange Act (a) after the filing date of the
registration statement of which this prospectus is a part and before the
effectiveness of the registration statement and (b) after the effectiveness of
the registration statement and before all of the shares offered by the
registration statement are sold. The most recent information that we file with
the SEC automatically updates and supersedes older information. The
information contained in any such filing will be deemed to be a part of this
prospectus as of the date on which the document is filed, and any older
information that has been modified or superceded will not be deemed to be a
part of this prospectus.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Targeted Genetics Corporation
Attention: Investor Relations
1100 Olive Way, Suite 100
Seattle, Washington 98101
(206) 623-7612
12
<PAGE>
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You should rely only on the information contained in this prospectus.
Neither we nor any of the selling shareholders has authorized anyone to give
you different information or representations. This prospectus is an offer to
sell, and a solicitation of offers to buy, the shares offered by this
prospectus only in jurisdictions where offers and sales are permitted.
The information contained in this prospectus is correct only as of the date
of this prospectus, regardless of the time of delivery of this prospectus or
any sale of the common stock offered by this prospectus.
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TABLE OF CONTENTS
<TABLE>
<S> <C>
Special Note Regarding Forward-Looking Statements........................... 2
Risk Factors................................................................ 3
Selling Shareholders........................................................ 9
Plan of Distribution........................................................ 10
Legality of Common Stock.................................................... 11
Experts..................................................................... 11
Where You Can Find More Information......................................... 12
</TABLE>
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5,950,798 Shares
[TARGETED GENETICS LOGO]
TARGETED GENETICS
CORPORATION
Common Stock
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P R O S P E C T U S
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The date of this prospectus is November 17, 2000.
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table lists the costs and expenses payable by the registrant in
connection with the sale of the common stock covered by this prospectus. All
amounts are estimates except for the SEC registration fee.
<TABLE>
<S> <C>
SEC registration fee................................................ $16,447
Printing and engraving expenses..................................... 20,000
Legal fees and expenses............................................. 10,000
Accounting fees and expenses........................................ 6,000
Miscellaneous fees and expenses..................................... 1,553
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Total............................................................. $54,000
=======
</TABLE>
Item 15. Indemnification of Directors and Officers
Sections 23B.08.500 through 23B.08.600 of the Washington Business Corporation
Act authorize a court to award, or a corporation's board of directors to grant,
indemnification to directors and officers on terms sufficiently broad to permit
indemnification under some circumstances for liabilities arising under the
Securities Act. Section 10 of the registrant's bylaws provides for
indemnification of the registrant's directors, officers, employees and agents
to the maximum extent permitted by Washington law. The registrant maintains a
liability insurance policy for this purpose.
Section 23B.08.320 of the Washington Business Corporation Act authorizes a
corporation to limit a director's liability to the corporation or its
shareholders for monetary damages for acts or omissions as a director, except
in certain circumstances involving intentional misconduct, self-dealing or
illegal corporate loans or distributions, or any transactions from which the
director personally receives a benefit in money, property or services to which
the director is not entitled. Article 11 of the registrant's articles of
incorporation contains provisions implementing, to the fullest extent permitted
by Washington law, these limitations on a director's liability to the
registrant and its shareholders.
The registrant has entered into indemnification agreements with some of its
executive officers and directors, in which the registrant has agreed to hold
harmless and indemnify each such officer or director to the fullest extent
permitted by Washington law. Under these indemnification agreements, the
officer or director is not indemnified for any action, suit, claim or
proceeding instituted by or at the direction of the officer or director unless
such action, suit, claim or proceeding is or was authorized by the registrant's
board of directors or unless the action is to enforce the provisions of the
indemnification agreements.
No indemnity pursuant to the indemnification agreements may be provided by
the registrant on account of any suit in which a final, unappealable judgment
is rendered against an executive officer or director for an accounting of
profits made from the purchase or sale by the executive officer or director of
the registrant's securities in violation of the provisions of Section 16(b) of
the Exchange Act, or for damages that have been paid directly to the executive
officer or director by an insurance carrier under the directors' and officers'
liability insurance policy maintained by the registrant.
Item 16. Exhibits
<TABLE>
<C> <S>
5.1 Opinion of Orrick, Herrington & Sutcliffe LLP, counsel to the registrant,
regarding the legality of the common stock being registered
23.1 Consent of Ernst & Young LLP, independent auditors
</TABLE>
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<PAGE>
<TABLE>
<C> <S>
23.2 Consent of Ernst & Young, chartered accountants
23.3 Consent of KPMG LLP, independent auditors
23.4 Consent of Orrick, Herrington & Sutcliffe LLP (contained in Exhibit 5.1)
24.1 Power of attorney (contained in signature page)
</TABLE>
Item 17. Undertakings
A. 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 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 of the registration statement) that,
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) may be reflected in the form of a prospectus
filed with the Securities and Exchange Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price represent
no more than 20 percent change in the maximum aggregate offering price
set forth in the "Calculation of Registration Fee" table in the
effective registration statement; or
(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 (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment is contained
in periodic reports filed with or furnished to the Commission by the registrant
pursuant to Section 13 or 15(d) of the 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 such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered in such post-
effective amendment, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering of such securities; and
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered that remain unsold at the
termination of the offering.
B. 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
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 in the registration statement, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering of such
securities.
C. Insofar as indemnification for liabilities arising under the Securities
Act 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 Commission such indemnification is
against public policy as expressed in the Securities Act and is therefore
unenforceable. If 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 a
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<PAGE>
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of whether such indemnification by it is
against public policy as expressed in the Securities Act, and will be governed
by the final adjudication of the issue.
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<PAGE>
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, thereunder duly
authorized, in the city of Seattle, state of Washington, on the 17th day of
November, 2000.
TARGETED GENETICS CORPORATION
/s/ H. Stewart Parker
By: _________________________________
H. Stewart Parker
President and Chief Executive
Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints James A.
Johnson or H. Stewart Parker, or either of them, his or her attorney-in-fact,
for him or her in any and all capacities, to sign any amendments to this
registration statement and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that the attorney-in-fact, or his or her
substitute, may 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 indicated
below on the 17th day of November, 2000.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ H. Stewart Parker President, Chief Executive Officer and
________________________________________ Director (Principal Executive Officer)
H. Stewart Parker
/s/ James A. Johnson Senior Vice President, Finance and
________________________________________ Administration, Chief Financial Officer,
James A. Johnson Treasurer and Secretary (Principal
Financial and Accounting Officer)
/s/ Jeremy L. Curnock Cook Chairman of the Board of Directors
________________________________________
Jeremy L. Curnock Cook
/s/ Jack L. Bowman Director
________________________________________
Jack L. Bowman
/s/ Joseph M. Davie Director
________________________________________
Joseph M. Davie
/s/ James D. Grant Director
________________________________________
James D. Grant
/s/ Louis P. Lacasse Director
________________________________________
Louis P. Lacasse
/s/ Nelson L. Levy Director
________________________________________
Nelson L. Levy, Ph.D., M.D.
/s/ Mark Richmond Ph.D Director
________________________________________
Mark Richmond, Ph.D.
</TABLE>
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<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number
-------
<C> <S>
5.1 Opinion of Orrick, Herrington & Sutcliffe LLP, counsel to the
registrant, regarding the legality of the common stock being
registered
23.1 Consent of Ernst & Young LLP, independent auditors
23.2 Consent of Ernst & Young, chartered accountants
23.3 Consent of KPMG LLP, independent auditors
23.4 Consent of Orrick, Herrington & Sutcliffe LLP (contained in Exhibit
5.1)
24.1 Power of attorney (contained in signature page)
</TABLE>
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