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PROSPECTUS
Filed Pursuant to Rule 424(b)(2)
Registration Statement No. 333-44792
1,655,000 SHARES
COULTER PHARMACEUTICAL, INC.
COMMON STOCK
The selling stockholders listed on page 14 are offering up to 1,655,000
shares of common stock of Coulter Pharmaceutical, Inc., a Delaware corporation.
We sold shares to the selling stockholders on August 29, 2000 in a private
transaction.
Please see "Where You Can Find More Information" on page 12 for additional
information about us on file with the United States Securities and Exchange
Commission.
Our common stock trades on the Nasdaq National Market under the symbol
CLTR. On September 7, 2000, the last reported sale price of our common stock was
$30.69 per share.
We will not be paying any underwriting discounts or commissions in this
offering.
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 3.
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 date of this prospectus is September 8, 2000.
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TABLE OF CONTENTS
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THE COMPANY................................................. 1
RISK FACTORS................................................ 3
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS........ 12
WHERE YOU CAN FIND MORE INFORMATION......................... 12
USE OF PROCEEDS............................................. 13
SELLING STOCKHOLDERS........................................ 14
PLAN OF DISTRIBUTION........................................ 15
LEGAL MATTERS............................................... 15
EXPERTS..................................................... 15
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WE HAVE NOT AUTHORIZED ANY DEALER, SALESPERSON OR OTHER PERSON TO GIVE ANY
INFORMATION OR REPRESENT ANYTHING NOT CONTAINED IN THIS PROSPECTUS. YOU SHOULD
NOT RELY ON ANY UNAUTHORIZED INFORMATION. THIS PROSPECTUS DOES NOT OFFER TO SELL
OR BUY ANY SHARES IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL. THE INFORMATION
IN THIS PROSPECTUS IS CURRENT AS OF THE DATE ON THE COVER.
Bexxar(TM) is a trademark of Coulter Pharmaceutical. This prospectus also
may contain trademarks of other companies.
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THE COMPANY
We are engaged in the development of novel drugs and therapies for the
treatment of people with cancer and autoimmune diseases. We are currently
developing a family of potential therapeutics based upon two drug discovery
programs: therapeutic antibodies and targeted oncologics. Within these broad
drug discovery programs, we are currently concentrating on several distinct
platform technologies: therapeutic antibodies consisting of both conjugated and
unconjugated antibody technology, and targeted oncologics based on tumor
activated pro-drug ("TAP") technology and tumor specific targeting ("TST")
technology. We are also developing a portfolio of proprietary ultra potent
compounds which we believe will be suitable payloads for both our TAP and TST
platforms. Ultra potent compounds generally are at least 1,000 times more potent
than standard chemotherapeutic agents and are active against resistant tumor
cells.
Our most advanced product candidate, Bexxar(TM)(tositumomab, iodine I 131
tositumomab), consists of a monoclonal antibody conjugated with a radioisotope.
We intend to seek a priority review for the initial approval of Bexxar for the
treatment of low-grade and transformed low-grade non-Hodgkin's lymphoma ("NHL")
in patients who have relapsed after or are refractory to chemotherapy, while
simultaneously pursuing clinical trials to expand the potential use of Bexxar to
other indications. In a Phase I/II clinical trial of Bexxar, 42 patients with
low-grade or transformed low-grade NHL who had relapsed from previous
chemotherapy regimens achieved an 83% overall response rate and a 48% complete
response rate. Of those patients who experienced a complete response, the
average duration of response was 20.2 months as of July 1997, the date of the
final study report. In December 1997, we presented data on a multi-center, Phase
II clinical trial in heavily pre-treated low-grade and transformed low-grade NHL
patients. Of the 45 evaluable patients, 31% achieved a complete response with
the median duration of complete response not yet reached (longest complete
response of greater than 20 months). In December 1998, we presented data from
our pivotal Phase III clinical trial on 60 NHL patients who were refractory to
chemotherapy. The results showed, with statistical significance, that more
patients experienced remission with a single therapeutic dose of Bexxar compared
to their last chemotherapy regimen and that these remissions were of longer
duration. The investigator assessed overall response rate was 65% with a median
duration of response of 6.5 months. We also announced in December 1998, that the
United States Food and Drug Administration ("FDA") had designated Bexxar as a
Fast Track Product for which the agency will take appropriate actions to
expedite development and review. The designation was awarded because one of the
targeted indications for the therapy is transformed, low-grade NHL, a
life-threatening disease, representing an unmet medical need. We believe that
Bexxar, if approved, would become the first radioimmunotherapy approved in the
United States for the treatment of people with cancer. Significant uncertainty
exists as to the extent to which the Fast Track designation will result in a
priority review and approval, and this designation does not ensure product
approval. The FDA could require additional clinical trials or other information
before approving Bexxar. We cannot predict the ultimate impact, if any, of the
Fast Track designation on the timing or likelihood of FDA approval of Bexxar.
We are conducting, and intend to pursue, additional trials to expand the
potential use of Bexxar to other indications, both as a single agent and in
combination with chemotherapy. We have completed enrollment of a single-center
Phase II trial in newly diagnosed low-grade NHL patients and presented data from
this trial in May 2000. Of the 76 patients enrolled in the trial, 97% responded
to Bexxar with 76% achieving a complete response. Additionally, 84% of the 37
patients with evidence of NHL at the molecular level at the start of the trial
showed no evidence of NHL at molecular levels using polymerase chain reaction
analysis following treatment with Bexxar. We also have completed enrollment of a
single-center Phase II trial in newly diagnosed low-grade NHL patients
evaluating a sequential combination regimen of the chemotherapeutic agent
fludarabine followed by Bexxar. In December 1999, we presented an interim
analysis of fourteen patients for whom adequate data was available. Overall
response rate following the fludarabine portion of the regimen was 93%, of which
14% achieved a complete response. The combined overall response rate and
complete response rate of these patients after receiving both fludarabine and
Bexxar increased to 100%, and 71%, respectively.
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The objective of our TAP program is to broaden significantly the
therapeutic windows of conventional chemotherapeutic compounds. We are currently
developing a pro-drug version of doxorubicin to treat certain solid tumor
cancers with the objective of filing an Investigational New Drug ("IND")
application and commencing clinical trials in the second half of 2001. The
objective of our TST program is to selectively target ultra potent compounds to
tumor cells with the goal of developing better tolerated and more efficacious
anti-tumor therapeutics. Ultra potent compounds generally are at least 1,000
times more potent than standard chemotherapeutic agents and are active against
resistant tumor cells.
The objective of our Type I interferon research and development program is
to develop monoclonal antibodies specific for the Type I interferon receptor as
potential therapeutics for the treatment of autoimmune diseases. We have
developed human versions of our lead monoclonal, 64G12, and expect to select our
lead candidate in the first half of 2001.
We were incorporated under the laws of Delaware in February 1995. Our
conjugated antibody program is based upon the antibody therapeutics program
which originated in the late 1970s at Coulter Corporation, a recognized leader
in the field of hematology. Upon our formation in February 1995, we acquired
worldwide rights to Bexxar and related intellectual property, know-how and other
assets from Coulter Corporation. In October 1997, Coulter Corporation was
acquired by Beckman Instruments, Inc., and is now known as Beckman Coulter, Inc.
("Beckman Coulter"). In December 1998, we announced a joint collaboration
agreement with SmithKline Beecham Corporation ("SB") granting them joint
marketing rights in the United States and exclusive commercial rights
internationally, except Japan, for Bexxar. In April 2000, we announced an
amendment to our collaboration with SB for Bexxar. Under the amended agreement,
effective June 30, 2000, we reacquired from SB exclusive rights outside of the
United States for the development and commercialization of Bexxar. We continue
to retain exclusive rights in Japan. In addition, we announced an expansion of
our collaboration with SB to include a co-promotion agreement that will
temporarily use our sales force for the United States promotion of certain SB
oncology products.
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RISK FACTORS
You should carefully consider the following risks factors and all other
information in this prospectus and incorporated by reference herein before
purchasing our common stock. Investing in our common stock has a high degree of
risk. The risks and uncertainties described below are not the only ones facing
our company. Additional risks and uncertainties that are not yet identified or
that we currently think are immaterial may also materially adversely affect our
business. If any of the following risks actually occur, our business, financial
condition or results of operations would likely suffer and the trading price of
our common stock could decline. In addition to historical information, this
prospectus contains forward-looking statements. These forward-looking statements
involve certain risks and uncertainties that could cause actual results to
differ materially from those in such forward-looking statements.
WE MAY NOT BE ABLE TO DEVELOP PRODUCTS SUCCESSFULLY.
Our product candidates are generally in early stages of development, with
only one in clinical trials. The development of safe and effective therapies for
the treatment of people with cancer or autoimmune diseases is highly uncertain
and subject to numerous risks. Product candidates that may appear to be
promising at early stages of development may not reach the market for a number
of reasons. Product candidates may be found ineffective or cause harmful side
effects during clinical trials, may take longer to progress through clinical
trials than had been anticipated, may fail to receive necessary regulatory
approvals, may prove impracticable to manufacture in commercial quantities at
reasonable cost and with acceptable quality or may fail to achieve market
acceptance.
The results of initial preclinical and clinical testing of the products
under development by us are not necessarily indicative of results that will be
obtained from subsequent or more extensive preclinical studies and clinical
testing. Our clinical data gathered to date with respect to Bexxar are from a
Phase I/II dose escalation trial which was designed to develop and refine the
therapeutic protocol, to determine the maximum tolerated dose of total body
radiation and to assess the safety and efficacy profile of treatment with a
radiolabeled antibody. Further, the data from this Phase I/II dose escalation
trial were compiled from testing conducted at a single site and with a
relatively small number of patients per NHL histology and disease stage. We have
since completed a multi-center Phase II dosimetry clinical trial and a multi-
center pivotal Phase III clinical trial. However, substantial additional
development, clinical testing and investment may be required prior to seeking
any regulatory approval for commercialization of this potential product. There
can be no assurance that clinical trials of Bexxar or other product candidates
under development will demonstrate the safety and efficacy of such products to
the extent necessary to obtain regulatory approvals for the indications being
studied, or at all. Companies in the pharmaceutical and biotechnology industries
have suffered significant setbacks in advanced clinical trials, even after
obtaining promising results in earlier trials. The failure to demonstrate
adequately the safety and efficacy of Bexxar or any other therapeutic product
under development could delay or prevent regulatory approval of the product and
would have a material adverse effect on our business, financial condition and
results of operations.
Furthermore, the timing and completion of current and planned clinical
trials of Bexxar, as well as clinical trials of other products, are dependent
upon, among other factors, the rate at which patients are enrolled, which is a
function of many factors, including the size of the patient population, the
proximity of patients to the clinical sites, the number of clinical sites, the
eligibility criteria for the study and the existence of competing clinical
trials. There can be no assurance that delays in patient enrollment in clinical
trials will not occur, and any such delays may result in increased costs,
program delays or both, which could have a material adverse effect on our
business, financial condition and results of operations.
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ACCEPTANCE OF BEXXAR IN THE MARKETPLACE IS UNCERTAIN AND FAILURE TO ACHIEVE
MARKET ACCEPTANCE WILL HARM OUR BUSINESS.
Even if our product candidates are approved for marketing by the FDA and
other regulatory authorities, there can be no assurance that our products will
be commercially successful. If our most advanced product candidate, Bexxar, is
approved, it would represent a significant departure from currently approved
methods of treatment for NHL and would require the handling of radioactive
materials. Accordingly, Bexxar may experience under-utilization by oncologists
and hematologists who are unfamiliar with the application of Bexxar in the
treatment of NHL. Further, oncologists and hematologists are not typically
licensed to administer radioimmunotherapies such as Bexxar and will need to
engage a nuclear medicine physician or receive specialty training to administer
Bexxar. Nuclear Regulatory Commission regulations permit Bexxar to be
administered on an outpatient basis in most cases as is currently contemplated
by us. However, market acceptance could be affected adversely because some
hospitals may be required to administer the therapeutic dose of Bexxar on an
inpatient basis under applicable state or local or individual hospital
regulations. As with any new drug, doctors may be inclined to continue to treat
patients with conventional therapies, in this case chemotherapy and biologics.
Market acceptance also could be affected by the availability of third-party
reimbursement. Failure of Bexxar to achieve significant market acceptance would
have a material adverse effect on our business, financial condition and results
of operations.
WE HAVE A LIMITED OPERATING HISTORY.
Since our inception in 1995, we have been engaged in the development of
drugs and related therapies for the treatment of people with cancer and
autoimmune diseases. Our product candidates are generally in early stages of
development, with only one in clinical trials. No revenues have been generated
from product sales or product royalties; and there can be no assurance that
products resulting from our research and development efforts will be available
within a specific timeframe. No assurance can be given that our product
development efforts, including clinical trials, will be successful, that
required regulatory approvals for the indications being studied can be obtained,
that our products can be manufactured at acceptable cost and with appropriate
quality or that any approved products can be successfully marketed.
OUR BUSINESS IS REGULATED BY THE GOVERNMENT AND WE CANNOT ASSURE YOU OF
REGULATORY APPROVAL OF OUR PRODUCTS.
All new drugs and biologics, including our products under development, are
subject to extensive and rigorous regulation by the federal government,
principally the FDA under the Food, Drug and Cosmetic Act and other laws
including, in the case of biologics, the Public Health Services Act, in the case
of radioactive products, the Nuclear Regulatory Commission; and by state and
local governments. Such regulations govern, among other things, the development,
testing, manufacture, labeling, storage, pre-market approval, criteria for
release of patients relating to administration of radioactive materials,
advertising, promotion, sale and distribution, and post-marketing surveillance
of such products. If drug products are marketed abroad, they also are subject to
extensive regulation by foreign governments.
The regulatory process, which includes physicochemical studies, preclinical
studies and clinical trials of each potential product, is lengthy, expensive and
uncertain. Prior to commercial sale in the United States, most new drugs and
biologics, including our products under development, must be approved by the
FDA. Securing FDA marketing approvals often requires the submission of
extensive, physicochemical preclinical and clinical data and supporting
information to the FDA. Product approvals, if granted, can be withdrawn for
failure to comply with regulatory requirements or upon the occurrence of
unforeseen problems following initial marketing. Moreover, regulatory approvals
for products such as new drugs and biologics, even if granted, may include
significant limitations on the uses for which such products may be marketed.
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There can be no assurance that we will be able to obtain necessary
regulatory approvals on a timely basis, if at all, for any of our product
candidates, and delays in receipt or failures to receive such approvals or
failures to comply with existing or future regulatory requirements could have a
material adverse effect on our business, financial condition and results of
operations. Certain material manufacturing changes to new drugs and biologics
also are subject to FDA review and approval. There can be no assurance that any
approvals that are required, once obtained, will not be withdrawn or that
compliance with other regulatory requirements can be maintained. Further,
failure to comply with applicable FDA and other regulatory requirements can
result in sanctions being imposed on us or the manufacturers of our products,
including warning letters, fines, product recalls or seizures, injunctions,
refusals to permit products to be imported into or exported out of the United
States, refusals of the FDA to grant pre-market approval of drugs and biologics
or to allow us to enter into government supply contracts, withdrawals of
previously approved marketing applications and criminal prosecutions.
Manufacturers of drugs and biologics also are required to comply with the
applicable FDA Good Manufacturing Practices ("GMP") regulations, which include
requirements relating to quality control and quality assurance as well as the
corresponding maintenance of records and documentation. Manufacturing facilities
are subject to inspection by the FDA, including unannounced inspection, and must
be licensed before they can be used in commercial manufacturing of our products.
We rely on Nordion for centralized radiolabeling of the Anti-B1 Antibody at
Nordion's radiolabeling facility in Canada. To our knowledge, Nordion's
radiolabeling facilities previously have not been licensed by the FDA as
suitable for commercial manufacturing of a drug or biologic. There can be no
assurance that we or our suppliers will be able to comply with the applicable
GMP regulations and other FDA regulatory requirements. Such failure could have a
material adverse effect on our business, financial condition and results of
operations.
In December 1998, we announced that we had been notified by the FDA that
Bexxar met the criteria for Fast Track designation because one of the targeted
indications is transformed low-grade NHL, a life-threatening disease,
representing unmet medical need. However, significant uncertainty exists as to
the extent to which Bexxar's Fast Track designation will result in priority
review and approval. Further, the FDA retains considerable discretion to
determine eligibility for a priority review and approval and is not bound by
discussions that an applicant may have had with FDA staff. Accordingly, the FDA
could employ such discretion to deny eligibility of Bexxar as a candidate for a
priority review or to require additional clinical trials or other information
before approving Bexxar. A determination that Bexxar is not eligible for a
priority review or delays and additional expenses associated with generating a
response to any such request for additional trials could have a material adverse
effect on our business, financial condition and results of operations.
WE HAVE LIMITED MANUFACTURING EXPERIENCE AND THUS RELY HEAVILY UPON CONTRACT
SUPPLIERS AND MANUFACTURERS.
We have no existing internal capacity or experience with respect to
manufacturing products for large-scale clinical trials or commercial purposes.
We rely upon BI Pharma KG for the production of Anti-B1 Antibody. We have
entered into an agreement with BI Pharma KG for the production of bulk Anti-B1
Antibody and the filling of the individual product vials with Anti-B1 Antibody.
We have contracted with BI Pharma KG and a third-party supplier for labeling and
packaging services. These manufacturers have limited experience producing,
labeling and packaging the Anti-B1 Antibody, and there can be no assurance that
they will be able to produce our requirements in commercial quantities or with
acceptable quality.
We rely upon Nordion for radiolabeling of the Anti-B1 Antibody at Nordion's
centralized radiolabeling facility. We have entered into an agreement with
Nordion for supply of the radiolabeled Anti-B1 Antibody for both clinical trials
and commercial sale. Given the eight-day half-life of the (131)I radioisotope,
Nordion currently is producing radiolabeled Anti-B1 Antibody in a clinical scale
facility sufficient to support on-going clinical trials. Nordion will transition
the production of radiolabeled Anti-B1 Antibody to a commercial scale facility
prior to anticipated FDA approval in support of potential product launch.
However, there can be no assurance that Nordion will be able to successfully
transition to the commercial scale facility and, if Bexxar is approved and is
successful in the market, there can be no
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assurance that Nordion's capacity to radiolabel antibodies will be sufficient to
meet all of our commercial requirements.
We are aware of only a limited number of manufacturers capable of producing
the Anti-B1 Antibody in commercial quantities or radiolabeling the antibody with
(131)I on a commercial scale. To establish and qualify a new facility to
centrally radiolabel antibodies could take three years or longer. Further,
radiolabeled antibody cannot be stockpiled against future shortages due to the
eight-day half-life of the (131)I radioisotope. Accordingly, any change in our
existing contractual relationships with, or interruption in supply from, our
producer of unlabeled antibody or our radiolabeler could affect adversely our
ability to complete our ongoing clinical trials and to market Bexxar, if
approved. Any such change or interruption would have a material adverse effect
on our business, financial condition and results of operations. Although we are
evaluating additional sources of supply for production and radiolabeling of the
Anti-B1 Antibody, no assurance can be given that such sources will be secured on
commercially reasonable terms, on a timely basis, or at all.
Prior to August 1997, we obtained Anti-B1 Antibody from an inventory
produced by Beckman Coulter, and radiolabeling was performed by radiopharmacies
at the individual clinical trial sites. In order to begin using Lonza Anti-B1
Antibody, BI Pharma KG Anti-B1 Antibody, and the centrally radiolabeled Anti-B1
Antibody from Nordion, we filed and the FDA cleared IND amendments to allow the
use of these materials in clinical trials. We are collecting data from our
clinical trials to be filed with the FDA to establish that Anti-B1 Antibody from
these different sources and that Nordion radiolabeled and on-site radiolabeled
Anti-B1 antibody are clinically comparable. However, there can be no assurance
that we will be able to establish clinical comparability. A failure to establish
clinical comparability could lead to a requirement that we conduct additional
clinical trials, which would increase costs and potentially delay regulatory
approval for Bexxar.
We currently obtain the (131)I radioisotope from Nordion under purchase
orders placed from time to time. Nordion intends to change its source of (131)I
from tellurium-derived (131)I to fission-derived (131)I. We will need to obtain
FDA approval of the fission-derived (131)I prior to its use in clinical trials
or commercial supply. While fission-derived (131)I has been approved for human
use in other applications, there can be no assurance that the fission-derived
(131)I labeled Anti-B1 Antibody will be suitable for human use, and that
clinical trials or commercial supply will not be delayed or disrupted if we are
unable to obtain such FDA approval.
Third-party manufacturers must comply with GMP regulations prescribed by
the FDA and other standards prescribed by various federal, state and local
regulatory agencies in the United States and any other relevant country. Failure
to comply with these regulations could have a material adverse effect on our
business, financial condition and results of operations.
WE LACK MARKETING AND SALES EXPERIENCE AND THUS DEPEND UPON MARKETING PARTNERS.
We intend to market and sell Bexxar in the United States through a direct
sales force and in collaboration with SB. Internationally, we intend to directly
market Bexxar in Europe upon approval to specialized centers and may seek
partners as appropriate in specific countries. We currently do not possess the
resources and experience necessary to commercialize any of our product
candidates. We have hired approximately one-half of the direct sales force and
marketing personnel necessary to launch Bexxar, however, our ability to market
Bexxar, if approved, will be contingent upon recruitment, training and
deployment of the remainder of our sales and marketing force as well as the
performance of SB under the collaboration agreement. Development of an effective
sales force will require significant financial resources and time. There can be
no assurance that we will be able to establish such a sales force in a timely or
cost effective manner, if at all, or that such a sales force will be capable of
generating demand for Bexxar or other product candidates. Failure to establish
such a sales force and marketing capability could have a material adverse effect
on our business, financial condition and results of operations.
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WE OPERATE IN A HIGHLY COMPETITIVE MARKET AND OUR COMPETITORS MAY DEVELOP
ALTERNATIVE THERAPIES.
The pharmaceutical and biotechnology industries are intensely competitive.
Any product candidate developed by us would compete with existing drugs and
therapies. There are many pharmaceutical companies, biotechnology companies,
public and private universities and research organizations actively engaged in
research and development of products for the treatment of people with cancer and
autoimmune disease. Many of these organizations have financial, technical,
manufacturing and marketing resources greater than those of ours. Several of
them may have developed or are developing therapies that could be used for
treatment of the same diseases targeted by us. If a competing company were to
develop or acquire rights to a more efficacious or safer therapy for treatment
of the same diseases targeted by us, or one which offers significantly lower
costs of treatment, our business, financial condition and results of operations
could be materially adversely affected. We believe that our product development
programs will be subject to significant competition from companies utilizing
alternative technologies as well as to increasing competition from companies
that develop and apply technologies similar to our technologies. Other companies
may succeed in developing products earlier than us, obtaining approvals for such
products from the FDA more rapidly than us or developing products that are safer
and more effective than those under development or proposed to be developed by
us. There can be no assurance that research and development by others will not
render our technology or product candidates obsolete or non-competitive or
result in treatments superior to any therapy developed by us, or that any
therapy developed by us will be preferred to any existing or newly developed
technologies.
WE DEPEND UPON PROPRIETARY TECHNOLOGY; THE STATUS OF PATENTS AND PROPRIETARY
TECHNOLOGY IS UNCERTAIN.
The pharmaceutical and biotechnology fields are characterized by a large
number of patent filings. A substantial number of patents have already been
issued to other pharmaceutical and biotechnology companies. Research has been
conducted for many years in the monoclonal antibody field by pharmaceutical and
biotechnology companies and other organizations. Competitors may have filed
applications for or have been issued patents and may obtain additional patents
and proprietary rights related to products or processes competitive with or
similar to those of our company. In some jurisdictions, including the United
States, patent applications are maintained in secrecy for a period after filing.
Publication of discoveries in the scientific or patent literature tends to lag
behind actual discoveries and the filing of related patent applications. We may
not be aware of all of the patents potentially adverse to our interests that may
have been issued to other companies, research or academic institutions, or
others. No assurance can be given that such patents do not exist, have not been
filed, or could not be filed or issued, which contain claims relating to our
technology, products or processes.
If patents have been or are issued to others containing preclusive or
conflicting claims and such claims are determined ultimately to be valid, we may
be required to obtain licenses to one or more of such patents or to develop or
obtain alternative technology. We are aware of various patents that have been
issued to others that pertain to a portion of our prospective business; however,
we believe that we do not infringe any patents that ultimately would be
determined to be valid. There can be no assurance that patents do not exist in
the United States or in foreign countries or that patents will not be issued to
third parties that contain preclusive or conflicting claims with respect to
Bexxar or any of our other product candidates or programs. Commercialization of
monoclonal antibody-based products may require licensing and/or cross-licensing
of one or more patents with other organizations in the field. There can be no
assurance that the licenses that might be required for our processes or products
would be available on commercially acceptable terms, if at all.
Our breach of an existing license or failure to obtain a license to
technology required to commercialize our product candidates may have a material
adverse effect on our business, financial condition and results of operations.
Litigation, which could result in substantial costs to us, may also be necessary
to enforce any patents issued us or to determine the scope and validity of
third-party proprietary rights. If our competitors prepare and file patent
applications in the United States that claim technology also claimed by us, we
may have to participate in interference proceedings declared by the United
States Patent and Trademark Office to determine priority of invention, which
could result in substantial cost to
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us, even if the eventual outcome is favorable to us. An adverse outcome in court
or administrative agency proceedings could subject us to significant liabilities
to third parties and require us to license disputed rights from third parties or
to cease using such technology.
We also rely on trade secrets to protect our technology, especially where
patent protection is not believed to be appropriate or obtainable. We protect
our proprietary technology and processes, in part, by confidentiality agreements
with our employees, consultants, advisory board members, collaborators and
certain contractors. There can be no assurance that these agreements will not be
breached, that we would have adequate remedies for any breach, or that our trade
secrets or those of our collaborators or contractors will not otherwise become
known or be discovered independently by competitors.
Patents issued and patent applications filed internationally relating to
biologics are numerous and there can be no assurance that current and potential
competitors and other third parties have not filed or in the future will not
file applications for, or have not received or in the future will not receive,
patents or obtain additional proprietary rights relating to products or
processes used or proposed to be used by us. Moreover, statutory differences in
patentable subject matter may limit the protection we can obtain on some of our
inventions in certain jurisdictions. For example, methods of treating humans are
not patentable in many countries outside of the United States. These and/or
other issues may prevent us from obtaining patent protection in certain markets
which would have a material adverse effect on our business, financial condition
and results of operations.
WE WILL NEED ADDITIONAL CAPITAL AND OUR ABILITY TO FIND ADDITIONAL FUNDING IS
UNCERTAIN.
Our operations to date have consumed substantial and increasing amounts of
cash. The negative cash flow from operations is expected to continue and to
accelerate in the next several years. The development of our technology and
potential products will require a commitment of substantial funds. We expect
that our existing capital resources will be adequate to satisfy the requirements
of our current and planned operations through 2001. However, the rate at which
we expend our resources is variable, may be accelerated and will depend on many
factors, including the scope and results of preclinical studies and clinical
trials, the cost, timing and outcome of regulatory approvals, continued progress
of our research and development of product candidates, the timing and cost of
establishment or procurement of requisite production radiolabeling and other
manufacturing capacities, the cost involved in preparing, filing, prosecuting,
maintaining, defending and enforcing patent claims, the expenses of establishing
a sales and marketing force, the acquisition of technology licenses, the status
of competitive products and the availability of other financing.
We may need to raise substantial additional capital to fund our operations
and, if needed, we intend to seek such additional funding through public or
private equity or debt financings, as well as through collaborative
arrangements. There can be no assurance that such additional funding will be
available on acceptable terms, if at all. If additional funds are raised by
issuing equity securities, substantial dilution to stockholders may result. If
adequate funds are not available, we may be required to delay, reduce the scope
of, or eliminate one or more of our research and development programs or obtain
funds through arrangements with collaborative partners or others that may
require us to relinquish rights to certain of our technologies, product
candidates or products that we would otherwise seek to develop or commercialize.
WE HAVE A HISTORY OF LOSSES AND ANTICIPATE FUTURE LOSSES.
We have a limited history of operations and have experienced significant
losses since inception. As of June 30, 2000, our accumulated deficit was
approximately $120.9 million. We expect to incur significant additional
operating losses over the next several years and expect cumulative losses to
increase substantially due to expanded research and development efforts,
preclinical studies and clinical trials and development of manufacturing,
marketing and sales capabilities. We expect that losses will fluctuate from
quarter to quarter and that such fluctuations may be substantial. All of our
product candidates are in development in preclinical studies and clinical
trials, and no revenues have been generated from product sales. To achieve and
sustain profitable operations, we, alone or with others, must develop
successfully,
8
<PAGE> 11
obtain regulatory approval for, manufacture, introduce, market and sell our
products. The time frame necessary to achieve market success is long and
uncertain. Product revenues resulting from our research and development efforts
will not occur until commercial availability of such product. There can be no
assurance that we will ever generate sufficient product revenues to become
profitable or to sustain profitability.
WE DEPEND ON KEY PERSONNEL.
We are dependent upon a limited number of key management and technical
personnel. The loss of the services of one or more of such key employees could
have a material adverse effect on our business, financial condition and results
of operations. In addition, our success will be dependent upon our ability to
attract and retain additional highly qualified sales, management, manufacturing
and research and development personnel. We face intense competition in our
recruiting activities, and there can be no assurance that we will be able to
attract and/or retain qualified personnel.
WE MAY BE EXPOSED TO PRODUCT LIABILITY.
The manufacture and sale of human therapeutic products involve an inherent
risk of product liability claims and associated adverse publicity. We have only
limited product liability insurance for clinical trials and no commercial
product liability insurance. There can be no assurance that we will be able to
maintain existing insurance or obtain additional product liability insurance on
acceptable terms or with adequate coverage against potential liabilities. Such
insurance is expensive, may be difficult to obtain and may not be available in
the future on acceptable terms, if at all. An inability to obtain sufficient
insurance coverage on reasonable terms or to otherwise protect against potential
product liability claims brought against us in excess of our insurance coverage,
if any, or a product recall could have a material adverse effect upon our
business, financial condition and results of operations.
WE ARE SUBJECT TO UNCERTAINTIES REGARDING HEALTHCARE REIMBURSEMENT AND REFORM.
Political, economic and regulatory influences are subjecting the health
care industry in the United States to fundamental change. Initiatives to reduce
the federal deficit and to reform health care delivery are increasing
cost-containment efforts. We anticipate that Congress, state legislatures and
the private sector will continue to review and assess alternative benefits,
controls on health care spending through limitations on the growth of private
health insurance premiums and Medicare and Medicaid spending, the creation of
large insurance purchasing groups, price controls on pharmaceuticals and other
fundamental changes to the health care delivery system. Any such proposed or
actual changes could cause us to limit or eliminate spending on development
projects and affect our ultimate profitability. Legislative debate is expected
to continue in the future, and market forces are expected to drive reductions of
health care costs. We cannot predict what impact the adoption of any federal or
state health care reform measures or future private sector reforms may have on
our business.
In both domestic and foreign markets, sales of our proposed products will
depend in part upon the availability of reimbursement from third-party payors,
such as government health administration authorities, managed care providers,
private health insurers and other organizations. Third-party payors are
increasingly challenging the price and cost effectiveness of medical products
and services. Significant uncertainty exists as to the reimbursement status of
newly approved health care products. Bexxar, as potentially the first
radioimmunotherapy for cancer, faces particular uncertainties due to the absence
of a comparable, approved therapy to serve as a model for pricing and
reimbursement decisions. Further, if Bexxar is not administered in most cases on
an outpatient basis, as is contemplated currently by us, the projected cost of
the therapy will be higher than anticipated. In addition, there can be no
assurance that products can be manufactured on a commercial scale for a cost
that will enable us to price our products within reimbursable rates.
Consequently, there can be no assurance that our product candidates will be
considered cost effective or that adequate third-party reimbursement will be
available to enable us to maintain price levels sufficient to realize an
appropriate return on our investment in product development. If adequate
coverage and reimbursement rates are not provided by the government and
third-party payors
9
<PAGE> 12
for our products, the market acceptance of these products could be adversely
affected, which could have a material adverse effect on our business, financial
condition and results of operations.
WE USE HAZARDOUS AND RADIOACTIVE MATERIALS.
The manufacturing and administration of Bexxar requires the handling, use
and disposal of (131)I, a radioactive isotope of iodine. These activities must
comply with various state and federal regulations. Violations of these
regulations could delay significantly completion of clinical trials and
commercialization of Bexxar. For our ongoing clinical trials and for
commercial-scale production, we rely on Nordion to radiolabel the Anti-B1
Antibody with (131)I at a single location in Canada. Violations of safety
regulations could occur with this manufacturer, and, therefore, there is a risk
of accidental contamination or injury. In the event of any such noncompliance or
accident, the supply of radiolabeled Anti-B1 Antibody for use in clinical trials
or commercially could be interrupted, which could have a material adverse effect
on our business, financial condition and results of operations.
We also use hazardous chemicals and radioactive compounds in our ongoing
research activities. We could be held liable for any damages that result from
such an accident, contamination or injury from the handling and disposal of
these materials, as well as for unexpected remedial costs and penalties that may
result from any violation of applicable regulations, which could result in a
material adverse effect on our business, financial condition and results of
operations. In addition, we may incur substantial costs to comply with
environmental regulations.
THE PRICE OF OUR COMMON STOCK MAY BE VOLATILE.
The securities markets have from time to time experienced significant price
and volume fluctuations that are unrelated to the operating performance of
particular companies. The market prices of the common stock of many publicly
held biotechnology and pharmaceutical companies have in the past been, and can
in the future be expected to be, especially volatile. Announcements of
technological innovations or new products by us or our competitors, release of
reports by securities analysts, sales of stock by large holders, developments or
disputes concerning patents or proprietary rights, regulatory developments,
changes in regulatory or medical reimbursement policies, economic and other
external factors, as well as period-to-period fluctuations in our financial
results, may have a significant and adverse impact on the market price of our
common stock.
SUBSTANTIAL SALES OF SHARES OF OUR COMMON STOCK ELIGIBLE FOR FUTURE SALE COULD
CAUSE OUR STOCK PRICE TO FALL.
Sales of shares of our common stock (including shares issued upon the
exercise of outstanding options) in the public market could adversely affect the
market price of our common stock. Such sales also might make it more difficult
for us to sell equity securities or equity-related securities in the future at a
time and price that we deem appropriate.
ADVERSE IMPACT OF POSSIBLE ISSUANCES OF PREFERRED STOCK; ANTI-TAKEOVER EFFECT OF
CERTAIN CHARTER AND BYLAW PROVISIONS
Our board of directors has authority to issue up to 3,000,000 shares of
preferred stock and to fix the price, rights, preferences, privileges and
restrictions, including voting rights, of those shares without any further vote
or action by the stockholders. The rights of the holders of our common stock
will be subject to, and may be adversely affected by, the rights of the holders
of any preferred stock that may be issued in the future. The issuance of
preferred stock could affect adversely the voting power of holders of our common
stock and the likelihood that such holders will receive dividend payments and
payments upon liquidation. Additionally, the issuance of preferred stock may
have the effect of delaying, deferring or preventing a change in control of
Coulter Pharmaceutical, may discourage bids for our common stock at a premium
over the market price of such common stock and may affect adversely the market
price of and the voting and other rights of the holders of our common stock. In
addition, our bylaws provide that
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<PAGE> 13
special meetings of stockholders may be called only by the Chairman of the Board
of Directors, the Chief Executive Officer or our Board of Directors pursuant to
a resolution approved by a majority of our Board of Directors. In July 1997, we
adopted a Share Purchase Rights Plan, commonly referred to as a "poison pill."
In addition, we are subject to the anti-takeover provisions of Section 203 of
the Delaware General Corporation Law, which prohibits us from engaging in a
"business combination" with an "interested stockholder" for a period of three
years after the date of the transaction in which the person became an interested
stockholder, unless the business combination is approved in a prescribed manner.
These provisions, along with certain provisions of California law that may be
applicable to us, could have the effect of discouraging certain attempts to
acquire us which could deprive our stockholders of the opportunity to sell their
shares of our common stock at prices higher than prevailing market prices.
11
<PAGE> 14
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements in this prospectus and the documents incorporated by
reference are forward-looking statements. These statements are based on our
current expectations, assumptions, estimates and projections about our business
and our industry, and involve known and unknown risks, uncertainties and other
factors that may cause our or our industry's results, levels of activity,
performance or achievement to be materially different from any future results,
levels of activity, performance or achievements expressed or implied in or
contemplated by the forward-looking statements. Words such as "believe,"
"anticipate," "expect," "intend," "plan," "will," "may," "should," "estimate,"
"predict," "potential," "continue," or the negative of such terms or other
similar expressions, identify forward-looking statements. In addition, any
statements that refer to expectations, projections or other characterizations of
future events or circumstances are forward-looking statements. Our actual
results could differ materially from those anticipated in such forward-looking
statements as a result of several factors more fully described under the caption
"Risk Factors" and in the documents incorporated by reference. The
forward-looking statements made in this prospectus relate only to events as of
the date on which the statements are made. We do not intend to update publicly
any forward-looking statements for any reason, even if new information becomes
available or other events occur in the future.
WHERE YOU CAN FIND MORE INFORMATION
AVAILABLE INFORMATION
You should rely only on the information provided or incorporated by
reference 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 or any prospectus supplement is accurate as of
any date other than the date on the front of the document.
We have filed with the SEC a registration statement on Form S-3 to register
the common stock offered by this prospectus. However, this prospectus does not
contain all of the information contained in the registration statement and the
exhibits and schedules to the registration statement. We strongly encourage you
to carefully read the registration statement and the exhibits and schedules to
the registration statement.
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference rooms in Washington, DC, New York, New York and Chicago,
Illinois. You can request copies of these documents by contacting the SEC and
paying a fee for the copying cost. Please call the SEC at 1-800-SEC-0330 for
further information on the public reference rooms. Our SEC filings are also
available to the public from the SEC's website at www.sec.gov.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" the information contained
in documents that we file with them, which means that we can disclose important
information to you by referring to those documents. The information incorporated
by reference is considered to be part of this prospectus. Information in this
prospectus supersedes information incorporated by reference which we filed with
the SEC prior to the date of this prospectus, while information that we file
later with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed
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<PAGE> 15
below and any future filings we will make with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934.
The following documents filed with the SEC are incorporated by reference in
this prospectus:
1. Our Annual Report on Form 10-K for the fiscal year ended December 31,
1999, filed on March 27, 2000, including all material incorporated by
reference therein and any amendments or reports filed for the purpose of
updating any of such reports, statements or descriptions;
2. Our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31,
2000, filed on May 16, 2000, including all material incorporated by
reference therein and any amendments or reports filed for the purpose of
updating any of such reports, statements or descriptions;
3. Our Quarterly Report on Form 10-Q for the fiscal quarter ended June 30,
2000, filed on August 11, 2000, including all material incorporated by
reference therein and any amendments or reports filed for the purpose of
updating any of such reports, statements or descriptions;
4. The description of our common stock set forth in our Registration
Statement on Form 8-A, filed on December 20, 1996, including any
amendments or reports filed for the purpose of updating any of such
reports, statements or descriptions; and
5. The Proxy Statement for our 2000 Annual Meeting of Stockholders,
including any amendments or reports filed for the purpose of updating
any of such reports, statements or descriptions.
We will furnish without charge to you, on written or oral request, a copy
of any or all of the documents incorporated by reference, including exhibits to
these documents. You should direct any requests for documents to Coulter
Pharmaceutical, Inc., 600 Gateway Boulevard, South San Francisco, California
94080, telephone: (650) 553-2000.
USE OF PROCEEDS
The proceeds from the sale of the common stock offered pursuant to this
prospectus are solely for the account of the selling stockholders. We will not
receive any proceeds from the sale of these shares of common stock.
13
<PAGE> 16
SELLING STOCKHOLDERS
In August 2000, we agreed to sell 1,655,000 shares of our common stock at a
price of $21.625 per share pursuant to (i) a Stock Purchase Agreement, dated
August 11, 2000, by and among us and the Purchasers named therein and (ii) a
Registration Rights Agreement, dated August 11, 2000, by and among us and the
Purchasers named therein. In connection with this sale, we agreed to file a
registration statement with the SEC covering the shares issued to each selling
stockholder and agreed to indemnify each selling stockholder against claims made
against them arising out of, among other things, statements made in this
registration statement. We have agreed to cause this registration statement to
remain effective until (a) all the common stock has been re-sold or (b) two
years after August 29, 2000, whichever is earlier.
The following table provides certain information with respect to shares of
common stock held and to be offered under this prospectus from time to time by
each selling stockholder. Because the selling stockholders may sell all or part
of their common stock pursuant to this prospectus, and this offering is not
being underwritten on a firm commitment basis, only an estimate can be given as
to the number and percentage of shares of common stock that will be held by each
selling stockholder upon termination of this offering.
We are unaware of any material relationship between any of the selling
stockholders and us in the past three years other than as a result of the
ownership of the shares of common stock.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED PRIOR OWNED AFTER
TO OFFERING NUMBER OFFERING(1)
---------------------- ----------------------
NUMBER OF NUMBER OF SHARES NUMBER OF
NAME SHARES PERCENT(2) BEING OFFERED SHARES PERCENT(2)
---- --------- ---------- ---------------- --------- ----------
<S> <C> <C> <C> <C> <C>
Alta BioPharma, LP..................... 287,173 1.68 % 287,173 0 *
Four Partners.......................... 231,000 1.35 % 231,000 0 *
Three Arch Partners III, L.P........... 231,000 1.35 % 219,219 0 *
Coulter Pharmaceuticals Chase Partners
(Alto Bio), LLC...................... 164,003 * 164,003 0 *
Baker/Tisch Investments LLC............ 92,400 * 92,400 0 *
Baker Bros. Investments................ 92,400 * 92,400 0 *
Veritas SG Investment Trust GmbH....... 80,000 * 80,000 0 *
Narragansett Offshore Ltd.............. 57,000 * 57,000 0 *
The Timken Living Trust UAD 9/14/99.... 50,000 * 50,000 0 *
Commonfund Group....................... 49,000 * 49,000 0 *
FBB Associates......................... 46,200 * 46,200 0 *
Narragansett I LP...................... 43,000 * 43,000 0 *
General Board of Church of Nazarene.... 21,000 * 21,000 0 *
Marcuard Cook & Cie, SA................ 20,000 * 20,000 0 *
International Trust & Engine
Corp. -- Salaried.................... 15,600 * 15,600 0 *
St. Joseph Health System............... 15,500 * 15,500 0 *
Alta Embarcadero BioPharma, LLC........ 10,824 * 10,824 0 *
International Truck & Engine
Corp. -- Hourly...................... 10,500 * 10,500 0 *
Meijer, Inc. Pension Plan.............. 10,300 * 10,300 0 *
Tremont Temple Baptist Church General
Trust Fund........................... 10,000 * 10,000 0 *
The University of Mississippi
Foundation........................... 8,200 * 8,200 0 *
Wheaton College........................ 8,200 * 8,200 0 *
</TABLE>
14
<PAGE> 17
<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED PRIOR OWNED AFTER
TO OFFERING NUMBER OFFERING(1)
---------------------- ----------------------
NUMBER OF NUMBER OF SHARES NUMBER OF
NAME SHARES PERCENT(2) BEING OFFERED SHARES PERCENT(2)
---- --------- ---------- ---------------- --------- ----------
<S> <C> <C> <C> <C> <C>
International Truck & Engine
Corp. -- VEBA........................ 8,100 * 8,100 0 *
MJH Foundation......................... 6,800 * 6,800 0 *
Bryan N. Danforth #2................... 6,000 * 6,800 0 *
The Evangelical Covenant Church Pension
Fund................................. 4,900 * 4,900 0 *
Trustees of Boston College............. 4,500 * 4,500 0 *
James B. and Bruce R. Murray........... 4,000 * 4,000 0 *
Baillie Lumber Co. Inc. Profit Share
Plan................................. 3,800 * 3,800 0 *
University of Virginia................. 3,800 * 3,800 0 *
Society for the Preservation of New
England Antiquities.................. 3,700 * 3,700 0 *
City of Springfield.................... 3,600 * 3,600 0 *
1101 Foundation........................ 3,300 * 3,300 0 *
Frederick Meijer Charitable Trust...... 3,300 * 3,300 0 *
Meijer Foundation...................... 3,200 * 3,200 0 *
The Berkeley Retirement Home........... 3,000 * 3,000 0 *
Tremont Temple Bobbie Currie Sunday
School Fund.......................... 3,000 * 3,000 0 *
Presbyterian Homes Family Services,
Inc.................................. 2,800 * 2,800 0 *
Ned's Island Investment Corp........... 2,700 * 2,700 0 *
Michigan Botanic Garden Foundation..... 2,300 * 2,300 0 *
John Sullivan IRA...................... 2,200 * 2,200 0 *
Charlottesville, VA Retirement
System............................... 2,100 * 2,100 0 *
Herbert G. Roskind, Jr. IRA............ 2,100 * 2,100 0 *
Dows -- First Calvary Baptist Church... 2,000 * 2,000 0 *
ATP Tour Inc. Player Pension Plan...... 2,000 * 2,000 0 *
Bridgeport Hospital Pension............ 1,700 * 1,700 0 *
Bridgewater College.................... 1,700 * 1,700 0 *
The University of Mississippi Medical
Center............................... 1,700 * 1,700 0 *
Buzz Johnson, IRA...................... 1,600 * 1,600 0 *
Republic National Bank INSIGHT Funds... 1,500 * 1,500 0 *
Richard J. Tavilla..................... 1,500 * 1,500 0 *
Richard M. Drury IRA................... 1,400 * 1,400 0 *
Kirk Ware.............................. 1,200 * 1,200 0 *
The University of Mississippi.......... 1,100 * 1,100 0 *
Dr. G. Timothy Johnson M.D., P.C.,
MPPP................................. 1,000 * 1,000 0 *
Joseph F. and Marlene M. Bonasera...... 1,000 * 1,000 0 *
Bridgeport Hospital Foundation......... 900 * 900 0 *
Frederick G.H. Meijer Trust............ 900 * 900 0 *
Jeffrey S. Meyer....................... 700 * 700 0 *
Lena E.S. Meijer Trust................. 400 * 400 0 *
Joan P. Drury IRA...................... 100 * 100 0 *
</TABLE>
15
<PAGE> 18
<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED PRIOR OWNED AFTER
TO OFFERING NUMBER OFFERING(1)
---------------------- ----------------------
NUMBER OF NUMBER OF SHARES NUMBER OF
NAME SHARES PERCENT(2) BEING OFFERED SHARES PERCENT(2)
---- --------- ---------- ---------------- --------- ----------
<S> <C> <C> <C> <C> <C>
Laura C. Roskind....................... 100 * 100 0 *
------------------------------------------------------------------
TOTAL................................ 1,655,000
</TABLE>
-------------------------
* Less than one percent
(1) Assumes the sale of all shares offered hereby.
(2) Percentage of ownership is based on 17,112,832 shares of common stock
outstanding on August 25, 2000.
16
<PAGE> 19
PLAN OF DISTRIBUTION
We are registering the shares of our common stock offered by the selling
stockholders pursuant to contractual registration rights contained in the
Registration Rights Agreement. The selling stockholders may sell their shares on
the Nasdaq National Market, in the over-the-counter market, in private
transactions, through options, by pledge to secure debts and other obligations
or in a combination of such methods of sale. The selling stockholders may sell
their shares at market prices prevailing at the time of sale, at prices related
to such prevailing market prices or at negotiated or at fixed prices. For their
shares, the selling stockholders will receive the purchase price of the shares
sold less any agents' commissions or underwriters' discounts and other related
expenses. If the selling stockholders sell shares to or through brokers or
dealers, they may pay the brokers or dealers compensation in the form of
discounts, concessions or commissions. We will not receive any proceeds from the
sale of shares by the selling stockholders.
The selling stockholders and any persons who participate in the sale of the
shares may be deemed to be "underwriters" as defined in the Securities Act of
1933, and any discounts, commissions or concessions received by them and any
provided pursuant to the sale of shares by them might be deemed underwriting
discounts and commissions under the Securities Act.
Any shares covered by this prospectus which qualify for sale pursuant to
Rule 144 under the Securities Act may be sold under rule 144 rather than under
the terms of this prospectus. The selling stockholders may transfer, will or
gift such shares by other means not described in this prospectus.
In order to comply with the securities laws of certain states, if
applicable, the common stock may be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
common stock may not be sold unless it has been registered or qualified for sale
or an exemption from registration or qualification requirements is available and
is complied with.
Under applicable rules and regulations under the Securities Exchange Act of
1934, any person engaged in a distribution of the common stock may not
simultaneously engage in market-making activities with respect to the common
stock for nine business days prior to the start of the distribution. In
addition, each selling stockholder and any other person participating in a
distribution will be subject to applicable provisions of the Exchange Act which
may limit the timing of purchases and sales of common stock by the selling
stockholders or any other person. These factors may affect the marketability of
the common stock and the ability of brokers or dealers to engage in
market-making activities.
We are not paying any underwriting commissions or discounts in this
offering. We will, however, pay for the expenses incurred in this offering. We
have agreed to indemnify the selling stockholders and certain other persons
against certain liabilities, including liabilities under the Securities Act.
LEGAL MATTERS
The validity of the shares of common stock offered hereby will be passed
upon by Cooley Godward LLP.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements included in our Annual Report on Form 10-K for the fiscal
year ended December 31, 1999, as set forth in their report, which is
incorporated in this prospectus by reference. Our financial statements are
incorporated by reference in reliance upon Ernst & Young LLP's report, given on
their authority as experts in accounting and auditing.
17
