UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13D/A AND 13D
(Rule 13d-101)
UNDER THE SECURITIES EXCHANGE ACT OF 1934
Discovery Laboratories Inc.
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(Name of Issuer)
Common Stock, par value $.001 per share
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(Title of Class of Securities)
254668 10 6
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(CUSIP Number)
Lindsay A. Rosenwald, M.D.
787 Seventh Avenue, 48th Floor
New York, New York 10019
(212) 554-4300
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
June 16, 1998 and November 25, 1997
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(Date of Event which Requires Filing
of This Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(b)(3) or (4), check the following box |_|.
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
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* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
<PAGE>
CUSIP No. 254668 10 6 SCHEDULE 13D
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1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Lindsay A. Rosenwald, M.D.
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2 Check the Appropriate Box If a Member of a Group*
a. |_|
b. |_|
- --------------------------------------------------------------------------------
3 SEC Use Only
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4 Source of Funds*
00
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5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to Item
2(d) or 2(e) |_|
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6 Citizenship or Place of Organization
United States
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7 Sole Voting Power
Number of
Shares 153,437
Beneficially --------------------------------------------------------
Owned By 8 Shared Voting Power
Each
Reporting 1,483,320
Person --------------------------------------------------------
With 9 Sole Dispositive Power
153,437
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10 Shared Dispositive Power
1,483,320
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11 Aggregate Amount Beneficially Owned by Each Reporting Person
1,636,757
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12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares* |_|
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13 Percent of Class Represented By Amount in Row (11)
33.3%
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14 Type of Reporting Person*
IN
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<PAGE>
CUSIP No. 254668 10 6 SCHEDULE 13D
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1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
RAQ, LLC
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2 Check the Appropriate Box If a Member of a Group*
a. |_|
b. |_|
- --------------------------------------------------------------------------------
3 SEC Use Only
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4 Source of Funds*
00
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5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to Item
2(d) or 2(e) |_|
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization
United States
- --------------------------------------------------------------------------------
7 Sole Voting Power
Number of
Shares NONE
Beneficially --------------------------------------------------------
Owned By 8 Shared Voting Power
Each
Reporting 1,001,739
Person --------------------------------------------------------
With 9 Sole Dispositive Power
NONE
--------------------------------------------------------
10 Shared Dispositive Power
1,001,739
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11 Aggregate Amount Beneficially Owned by Each Reporting Person
1,001,739
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12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares* |_|
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13 Percent of Class Represented By Amount in Row (11)
22.9%
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14 Type of Reporting Person*
00
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<PAGE>
CUSIP No. 254668 10 6 SCHEDULE 13D
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1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
The Aries Fund, a Cayman Island Trust
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2 Check the Appropriate Box If a Member of a Group*
a. |_|
b. |_|
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3 SEC Use Only
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4 Source of Funds*
PF and 00
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5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to Item
2(d) or 2(e) |_|
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6 Citizenship or Place of Organization
United States
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7 Sole Voting Power
Number of
Shares NONE
Beneficially --------------------------------------------------------
Owned By 8 Shared Voting Power
Each
Reporting 337,107
Person --------------------------------------------------------
With 9 Sole Dispositive Power
NONE
--------------------------------------------------------
10 Shared Dispositive Power
337,107
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11 Aggregate Amount Beneficially Owned by Each Reporting Person
337,107
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12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares* |_|
- --------------------------------------------------------------------------------
13 Percent of Class Represented By Amount in Row (11)
7.3%
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14 Type of Reporting Person*
00
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<PAGE>
CUSIP No. 254668 10 6 SCHEDULE 13D
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1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Paramount Capital Asset Management, Inc.
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2 Check the Appropriate Box If a Member of a Group*
a. |_|
b. |_|
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3 SEC Use Only
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4 Source of Funds*
00
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5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to Item
2(d) or 2(e) |_|
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6 Citizenship or Place of Organization
United States
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7 Sole Voting Power
Number of
Shares NONE
Beneficially --------------------------------------------------------
Owned By 8 Shared Voting Power
Each
Reporting 481,581
Person --------------------------------------------------------
With 9 Sole Dispositive Power
NONE
--------------------------------------------------------
10 Shared Dispositive Power
481,581
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11 Aggregate Amount Beneficially Owned by Each Reporting Person
481,581
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12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares* |_|
- --------------------------------------------------------------------------------
13 Percent of Class Represented By Amount in Row (11)
10.1%
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14 Type of Reporting Person*
CO
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<PAGE>
Item 1. Security and Issuer.
Common Stock, $.001 par value ("Discovery Common")
Discovery Laboratories, Inc. (the "Company")
509 Madison Avenue, 14th Floor
New York, New York 10022
Item 2. Identity and Background.
Names of Person Filing:
(a) This amendment is filed on behalf of Dr. Lindsay A. Rosenwald and RAQ,
LLC ("RAQ") and, as an initial statement on Schedule 13D, on behalf of The Aries
Fund, a Class of the Aries Trust, a Cayman Island Trust ("Aries Trust") and
Paramount Capital Asset Management, Inc. ("Paramount Capital") (collectively,
the "Reporting Parties"). See attached Exhibit A which is a copy of the
agreement in writing of the Reporting Parties to file this statement on behalf
of each of them.
(b) Each of Dr. Rosenwald, RAQ and Paramount Capital, a Subchapter S
corporation incorporated in Delaware,(1) has a business address at 787 Seventh
Avenue, 48th Floor, New York, New York, 10019. Aries Trust(2) has a business
address c/o MeesPierson (Cayman) Limited, P.O. Box 2003, British American
Centre, Phase 3, Dr. Roy's Drive, George Town, Grand Cayman.
(c) Dr. Rosenwald is an investment banker, venture capitalist and fund
manager and sole shareholder of Paramount Capital. Dr. Rosenwald is the managing
member of RAQ, which is a member-managed limited liability company formed under
the laws of the State of New York. Paramount Capital is the general partner in
Aries Domestic Fund, L.P., a Delaware limited partnership ("Aries Domestic").
Paramount Capital is the investment manager to Aries Trust.
(d) Dr. Rosenwald, RAQ, Paramount Capital and Aries Trust and their
respective officers, directors, investment managers, trustees and managing
members have not, during the five years prior to the date hereof, been convicted
in a criminal proceeding (excluding traffic violations or similar misdemeanors).
(e) Dr. Rosenwald, RAQ, Paramount Capital and Aries Trust and their
respective officers, directors, investment managers, trustees and managing
members have not, during the five years prior to the date hereof, been parties
to a civil proceeding of a judicial or administrative body of competent
jurisdiction, as a result of which such person was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws or finding any
violation with respect to such laws.
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(1) Please see the attached Exhibit B indicating the managing members, executive
officers and directors of Paramount Capital and providing information called for
by Items 2-6 of this statement as to said managing members, officers and
directors. Exhibit B is herein incorporated by reference.
(2) Please see the attached Exhibit C indicating the managing members, executive
officers and directors of the investment manager of Aries Trust and providing
information called for by Items 2-6 of this statement as to said managing
members, officers and directors. Exhibit C is herein incorporated by reference.
<PAGE>
(f) Dr. Rosenwald is a citizen of the United States.
Item 3. Source and Amount of Funds or Other Consideration.
On November 25, 1997, pursuant to an Agreement and Plan of Merger
(the "Merger Agreement") dated as of July 16, 1997, between the Company and
Discovery Laboratories, Inc., a former Delaware corporation ("Old Discovery"),
Old Discovery merged with and into the Company (the "1997 Merger"). In
connection with the 1997 Merger, the Company (which was until such time named
Ansan Pharmaceuticals, Inc.) changed its name to Discovery Laboratories, Inc.
Concurrently with the effectiveness of the 1997 Merger, the Company effected a
1-for-3 reverse split (the "Reverse Split") of its outstanding shares of
Discovery Common. Dr. Rosenwald, through Aries Domestic, Aries Trust and RAQ,
and Paramount Capital, through Aries Domestic and Aries Trust, held Common
Stock, $.001 par value, of Old Discovery ("Old Discovery Common") and Series A
Convertible Preferred Stock, $.001 par value, of Old Discovery ("Old Discovery
Preferred") that were cancelled in the 1997 Merger. Dr. Rosenwald, through Aries
Domestic, Aries Trust and RAQ, Paramount Capital, through Aries Domestic and
Aries Trust, and Dr. Rosenwald individually held warrants for the purchase of
Old Discovery Common and Old Discovery Preferred. As a consequence of the 1997
Merger and the Reverse Split, (i) each of the aforementioned shares of Old
Discovery Common were exchanged for 0.389157 (the "Common Exchange Ratio")
shares of Discovery Common, (ii) each of the aforementioned shares of Old
Discovery Preferred were exchanged for one share of Series B Convertible
Preferred Stock, $.001 par value, of the Company ("Discovery Preferred") having
rights, privileges and preferences substantially similar to those of the Old
Discovery Preferred (with the conversion ratio of the Discovery Preferred
adjusted in proportion to the Common Exchange Ratio) and (iii) each of the
aforementioned warrants for the purchase of Old Discovery Common and Old
Discovery Preferred was assumed by Discovery and became exercisable for the
number and type of securities of Discovery that would have been received by the
holder of such warrant in the 1997 Merger had such warrant been exercised prior
thereto.
Additionally, Dr. Rosenwald holds options to purchase 111 shares of
Discovery Common. These options were received by Dr. Rosenwald as compensation
for serving on the Board of Directors of the Company prior to the 1997 Merger.
As a consequence of the Reverse Split, each of Dr. Rosenwald's options to
purchase shares of Old Discovery Common prior to the 1997 Merger became
exercisable for one share of Discovery Common at an exercise price of $0.87 per
share.
On June 16, 1998, ATI Acquisition Corp., a wholly owned subsidiary
of the Company ("Acquisition Corp."), merged (the "ATI Merger") with and into
Acute Therapeutics, Inc., a majority-owned subsidiary of the Company ("ATI"),
pursuant to an Agreement and Plan of Merger dated as of March 5, 1998 among the
Company, ATI and Acquisition Corp. Pursuant to the ATI Merger, each share of
ATI's Common Stock, par value $0.001 per share, was converted into 3.90 shares
of Discovery Common, resulting in an aggregate issuance of approximately
1,033,500 new shares of Discovery Common upon the closing of the ATI Merger.
None of the Reporting Parties received any securities of the Company in
connection with the ATI Merger.
Item 4. Purpose of Transaction.
Except as indicated in this Schedule 13D/A and 13D, the Reporting
Parties currently have no plans or proposals that relate to or would result in
any of the matters described in subparagraphs (a) through (j) of Item 4 of
Schedule 13D.
<PAGE>
Item 5. Interest in Securities of the Issuer.
(a) As of the above date, Dr. Rosenwald, through acquisitions by RAQ, and,
together with Paramount Capital, through acquisitions by Aries Trust and Aries
Domestic, beneficially owned 1,636,757 shares, or 33.3%, of the Discovery
Common, as follows:
Amount Owned
Dr. Rosenwald 153,437
RAQ 1,001,739
Aries Domestic 144,474
Aries Trust 337,107
,RAQ beneficially owned the 1,001,739 shares, or 22.9%, of the Discovery Common
(as indicated above), Aries Trust beneficially owned the 337,107 shares, or
7.3%, of the Discovery Common (as indicated above) and Paramount Capital,
together with Dr. Rosenwald, through acquisitions by Aries Trust and Aries
Domestic, beneficially owned 481,581 shares, or 10.1%, of the Discovery Common,
as follows: Amount Owned Aries Domestic 144,474 Aries Trust 337,107
(b) Dr. Rosenwald shares the power to vote or to direct the vote and to
dispose or to direct the disposition of all those shares beneficially owned by
each of RAQ, Paramount Capital and Aries Trust. Each of RAQ, Aries Trust and
Paramount Capital shares the power to vote or to direct the vote and to dispose
or to direct the disposition of all shares beneficially owned by it.
(c) During the sixty days preceding the filing of this statement, Aries
Trust acquired the following shares of Discovery Common in the open market:
Date Number of Shares Price Per Share
---- ---------------- ---------------
August 17, 1998 2,500 $3.125
August 20, 1998 3,700 $3.125
August 21, 1998 3,000 $3.125
August 24, 1998 2,000 $3.125
August 26, 1998 3,700 $3.125
August 27, 1998 3,700 $3.125
September 2, 1998 10,000 $3.125
September 3, 1998 4,900 $3.125
September 4, 1998 3,700 $3.125
and Aries Domestic acquired the following shares of Discovery Common in the
open market:
Date Number of Shares Price Per Share
---- ---------------- ---------------
August 17, 1998 2,500 $3.125
August 20, 1998 1,300 $3.125
August 26, 1998 1,300 $3.125
August 27, 1998 1,300 $3.125
September 2, 1998 3,500 $3.125
September 3, 1998 1,600 $3.125
September 4, 1998 1,300 $3.125
As of the date of filing of this statement, taking such purchases into account,
Dr. Rosenwald beneficially owns 1,686,757 shares of Discovery Common (34.3%);
Paramount Capital beneficially owns 531,578 shares of Discovery Common (11.1%);
and Aries Fund beneficially owns 387,105 shares of Discovery Common (8.1%).
<PAGE>
Item 6. Contracts, Arrangements, Understandings or Relationships
with respect to Securities of the Issuer
Paramount Capital is the investment manager of the Aries Trust and
the General Partner of Aries Domestic and in such capacities has the authority
to make certain investment decisions on behalf of such entities, including
decisions relating to the securities of the Company. In connection with its
investment management duties, Paramount Capital receives certain management fees
and performance allocations from Aries Trust and Aries Domestic. Dr. Rosenwald
is the sole shareholder of Paramount Capital. Dr. Rosenwald is the managing
member, President and sole member of RAQ.
Except as indicated in this Schedule 13D/A and 13D and the attached
exhibits, there is no contract, arrangement, understanding or relationship
between the Reporting Parties and any other person with respect to any
securities of the Company.
Item 7. Material to be Filed as Exhibits:
EXHIBIT A Copy of an Agreement among Dr. Rosenwald, RAQ, Paramount Capital
and Aries Trust to file this amendment on Schedule 13D on behalf of
each of them.
EXHIBIT B List of executive officers and directors of Aries Trust and
information called for by Items 2-6 of this Statement relating to
said officers and directors.
EXHIBIT C List of executive officers and directors of Paramount Capital and
information called for by Items 2-6 of this Statement relating to
said officers and directors.
<PAGE>
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete and
correct.
Dated: September 11, 1998
New York, New York By: /s/ Linsday Rosenwald
---------------------------------
Dr. Lindsay A. Rosenwald
RAQ, LLC
Dated: September 11, 1998
New York, New York By: /s/ Linsday Rosenwald
---------------------------------
Name: Dr. Lindsay A. Rosenwald
Title: President
The Aries Trust, a Cayman Island
Trust
By Paramount Capital Asset
Management, Inc., Investment Manager
Dated: September 11, 1998
New York, New York By: /s/ Linsday Rosenwald
---------------------------------
Name: Dr. Lindsay A. Rosenwald
Title: Chairman
Paramount Capital Asset Management,
Inc.
Dated: September 11, 1998
New York, New York By: /s/ Linsday Rosenwald
---------------------------------
Name: Dr. Lindsay A. Rosenwald
Title: Chairman
<PAGE>
EXHIBIT A
AGREEMENT
JOINT FILING OF SCHEDULE 13D/A AND 13D
The undersigned hereby agree to jointly prepare and file with
regulatory authorities a Schedule 13D/A and 13D and any future amendments
thereto reporting each of the undersigned's ownership of securities of Discovery
Laboratories, Inc. and hereby affirms that such Schedule 13D/A AND 13D is being
filed on behalf of each of the undersigned.
Dated: September 11, 1998
New York, New York /s/ Linsday Rosenwald
---------------------------------
Dr. Lindsay A. Rosenwald
RAQ, LLC
Dated: September 11, 1998
New York, New York By: /s/ Linsday Rosenwald
---------------------------------
Name: Dr. Lindsay A. Rosenwald
Title: President
The Aries Trust, a Cayman Island
Trust
By Paramount Capital Asset
Management, Inc., Investment Manager
Dated: September 11, 1998
New York, New York By: /s/ Linsday Rosenwald
---------------------------------
Name: Dr. Lindsay A. Rosenwald
Title: President
Paramount Capital Asset Management,
Inc.
Dated: September 11, 1998
New York, New York By: /s/ Linsday Rosenwald
---------------------------------
Name: Dr. Lindsay A. Rosenwald
Title: President
<PAGE>
EXHIBIT B
The name and principal occupation or employment, which in each
instance is with Paramount Capital at 787 Seventh Avenue, 48th Floor, New York,
New York 10017, of each executive officer and director of Paramount Capital, the
investment manager of Aries Trust, is as follows:
NAME PRINCIPAL OCCUPATION
OR EMPLOYMENT
Exhibit C is hereby incorporated by reference.
Item 2.
During the five years prior to the date hereof, neither of the above
persons (to the best of Aries Trust's knowledge) have been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors)or was
a party to a civil proceeding of a judicial or administrative body of competent
jurisdiction, as a result of which such person was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws or finding any
violation with respect to such laws.
Item 3-6.
Please refer to Items 3-6 herein reporting the beneficial ownership.
<PAGE>
EXHIBIT C
The name and principal occupation or employment, which in each
instance is with Paramount Capital located at 787 Seventh Avenue, 48th Floor,
New York, New York 10017, of each executive officer and director of Paramount
Capital is as follows:
NAME PRINCIPAL OCCUPATION
OR EMPLOYMENT
Dr. Lindsay Rosenwald Chairman of the Board, Paramount
Capital Asset Management,
Inc., Paramount Capital LLC and
Paramount Capital, Inc.
Dr. Mark C. Rogers President, Paramount
Capital Asset Management,
Inc., Paramount Capital LLC and
Paramount Capital, Inc.
Peter Morgan Kash Director of Paramount Capital Asset
Management, Inc.
Senior Managing Director, Paramount
Capital, Inc.
Dr. Yuichi Iwaki Director of Paramount Capital Asset
Management, Inc.
Professor, University of Southern
California School of Medicine
Item 2.
During the five years prior to the date hereof, none of the above
persons (to the best of Paramount Capital's knowledge) was convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors)or was
a party to a civil proceeding of a judicial or administrative body of competent
jurisdiction, as a result of which such person was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws or finding any
violation with respect to such laws.
Item 3-6.
Please refer to Items 3-6 herein reporting the beneficial ownership.
