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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission File Number 0-20815
AVIRON
(Exact name of registrant as specified in its charter)
Delaware 77-0309686
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
297 North Bernardo Avenue, Mountain View, California 94043 (Address
of principal executive offices including zip code)
(415) 919-6500
(Registrant's telephone number, including area code)
---------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Common Stock $.01 par value 13,204,768 shares
- ------------------------------------- ----------------------------
(Class) (Outstanding at May 8, 1997)
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AVIRON
TABLE OF CONTENTS
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PAGE NUMBER
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COVER PAGE 2
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS AND NOTES (UNAUDITED).
Condensed Balance Sheets as of March 31, 1997
and December 31, 1996 3
Condensed Statements of Operations for the three-
month periods ended March 31, 1997 and 1996 4
Condensed Statements of Cash Flows for the three-
month periods ended March 31, 1997 and 1996 5
Notes to Condensed Financial Statements 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS. 8
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS. 12
ITEM 2. CHANGES IN SECURITIES. 12
ITEM 3. DEFAULTS UPON SENIOR SECURITIES. 12
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. 12
ITEM 5. OTHER INFORMATION. 12
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. 13
SIGNATURES 15
EXHIBIT INDEX 16
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2
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
AVIRON
CONDENSED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
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MARCH 31, DECEMBER 31,
1997 1996
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(Unaudited) (Note)
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ASSETS
CURRENT ASSETS:
Cash and cash equivalents .................................................. $ 23,854 $ 12,166
Short-term investments ..................................................... 3,874 5,706
Accounts receivable ........................................................ 305 500
Prepaid expenses and other current assets .................................. 689 813
-------- --------
Total Current Assets ......................................................... 28,722 19,185
Property and equipment, net .................................................. 2,217 2,319
Deposits and other assets .................................................... 88 88
-------- --------
TOTAL ASSETS ................................................................. $ 31,027 $ 21,592
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable ........................................................... $ 433 $ 695
Accrued compensation ....................................................... 167 138
Accrued clinical trial costs ............................................... 620 752
Accrued offering costs ..................................................... 24 474
Accrued expenses and other liabilities ..................................... 221 143
Current portion of capital lease obligations ............................... 552 572
-------- --------
Total Current Liabilities .................................................... 2,017 2,774
Capital lease obligations, noncurrent ........................................ 820 871
STOCKHOLDERS' EQUITY:
Preferred stock, $0.001 par value; 5,000,000 shares ........................ -- --
authorized, issuable in series; none outstanding
at March 31, 1997 and December 31, 1996
Common stock, $0.001 par value; 30,000,000 shares authorized; 13,195,834 and
11,452,033 shares issued and outstanding at March 31, 1997 and
December 31, 1996, respectively .......................................... 13 11
Additional paid-in capital ................................................. 74,180 59,127
Notes receivable from stockholders ......................................... (155) (157)
Deferred compensation ...................................................... (933) (1,099)
Accumulated deficit ........................................................ (44,915) (39,935)
-------- --------
Total Stockholders' Equity ................................................... 28,190 17,947
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ................................... $ 31,027 $ 21,592
======== ========
</TABLE>
Note: The balance sheet at December 31, 1996 has been derived from audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles.
See accompanying notes
3
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AVIRON
STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE DATA)
THREE MONTHS ENDED
MARCH 31,
--------------------------------
1997 1996
------------ ------------
REVENUES:
Contract revenue ..................... $ 305 $ 188
------------ ------------
Total revenue .......................... 305 188
============ ============
OPERATING EXPENSES:
Research and development ............. 4,291 3,044
General and administrative ........... 1,160 1,063
------------ ------------
TOTAL OPERATING EXPENSES ............... 5,451 4,107
------------ ------------
LOSS FROM OPERATIONS ................... (5,146) (3,919)
------------ ------------
OTHER INCOME/(EXPENSE):
Interest income ...................... 222 220
Interest expense ..................... (53) (37)
------------ ------------
TOTAL OTHER INCOME, NET ................ 169 183
------------ ------------
NET LOSS ............................... $ (4,977) $ (3,736)
============ ============
Net loss per share ..................... $ (0.43) --
============
Pro forma net loss per share ........... -- $ (0.41)
============
Shares used in computing net
loss per share ......................... 11,565,464 --
Shares used in calculating pro
forma net loss per share ............... -- 9,223,033
See accompanying notes
4
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AVIRON
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
----------------------
1997 1996
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CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss ................................................................. $ (4,977) $ (3,736)
Adjustment to reconcile net loss to net cash used in operating activities:
Depreciation and amortization .......................................... 154 110
Amortization of deferred compensation .................................. 166 26
Changes in assets and liabilities:
Accounts receivable ................................................. 195 --
Prepaid expenses and other current assets ........................... 124 (194)
Deposits and other assets ........................................... -- 13
Accounts payable .................................................... (172) 391
Accrued expenses and other liabilities .............................. (375) 155
Deferred revenue .................................................... -- 229
-------- --------
NET CASH USED IN OPERATING ACTIVITIES .................................... (4,885) $ (3,006)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of short-term investments .................................... (1,472) (3,147)
Maturities of short-term investments ................................... 3,301 4,928
Expenditures for property and equipment ................................ (33) (545)
-------- --------
NET CASH PROVIDED BY INVESTING ACTIVITIES ................................ 1,796 1,236
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on capital lease obligation ......................... (178) (114)
Proceeds from issuance of:
Series C convertible preferred stock ................................. -- 184
Common stock, net .................................................... 14,955 168
-------- --------
CASH PROVIDED BY FINANCING ACTIVITIES .................................... 14,777 238
-------- --------
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS ..................... 11,688 (1,532)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD ......................... 12,166 11,532
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD ............................... $ 23,854 $ 10,000
======== ========
SUPPLEMENTAL SCHEDULE OF NON-CASH FINANCING AND INVESTING ACTIVITIES:
Equipment acquired under line of credit ................................ $ 107 $ 106
Deferred compensation related to grant of certain stock options, less .. -- 736
cancellations
Warrant issued in lieu of payment of legal fees ........................ 100 --
Common stock issued in exchange for notes receivable, less cancellations -- 262
</TABLE>
See accompanying notes
5
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AVIRON
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 1996 (UNAUDITED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
- ---------------------
The accompanying unaudited condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Article 10 of Regulation
S-X.
The financial information at March 31, 1997 and for the three months ended March
31, 1997 and 1996 is unaudited, but includes all adjustments (consisting only of
normal recurring adjustments) which Aviron (the "Company") considers necessary
for a fair presentation of the financial position at such date and the operating
results and cash flows for those periods. The balance sheet data at December 31,
1996 is derived from audited financial statements at that date. The accompanying
condensed financial statements should be read in conjunction with the financial
statements and notes thereto for the year ended December 31, 1996 included in
the Company's Annual Report on Form 10-K for the year ended December 31, 1996.
The results of the Company's operations for any interim period are not
necessarily indicative of the results of the Company's operations for a full
fiscal year.
2. NET LOSS PER SHARE
Except as noted below, historical net loss per share is computed using the
weighted average number of common shares outstanding. Common equivalent shares
from stock options, convertible preferred stock and warrants are excluded from
the computation as their effect is antidilutive, except that, pursuant to the
Securities and Exchange Commission Staff Accounting Bulletins, common and common
equivalent shares issued during the 12 months prior to the filing of the
Company's initial public offering at prices substantially below the public
offering price have been included in the calculation as if they were outstanding
for the period ended March 31, 1996 (using the treasury stock method and the
assumed public offering price for stock options and warrants and the
if-converted method for convertible preferred stock). Net loss per share
calculated at this basis was $0.81 per share, and 4,624,953 shares were used in
the calculation.
Pro forma per share data for the three months ended March 31, 1996, gives effect
to the conversion of the preferred stock (which converted into shares of common
stock upon the completion of the initial public offering) as if converted from
the original date of issuance.
In February 1997, the Financial Accounting Standards Board issued Statement No.
128, Earnings per Share, which is required to be adopted on December 31, 1997.
At that time, the Company will be required to change the method currently used
to compute loss per share and to restate all prior periods. Under the new
requirements for calculating primary earnings per share, the dilutive effect of
stock options will be excluded. The adoption of SFAS 128 is
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expected to have no impact on reported loss per share as all common equivalent
shares are antidilutive.
3. CHANGES IN SECURITIES
On March 27, 1997, the Company sold and issued to Biotech Target, S.A., a 5%
stockholder of the Company, 1,714,286 shares of common stock, for gross proceeds
of $15,000,000, in a private placement. No underwriter or placement agent was
involved in the transaction.
4. LITIGATION
On July 1, 1996, Chiron Corporation ("Chiron") filed a complaint against the
Company in San Mateo County, California, Superior Court, alleging that certain
of Aviron's patent applications relating to its EBV program are based on Chiron
proprietary information which was improperly conveyed to Aviron by a former
Chiron employee, and that the Company has engaged in unfair competition. The
complaint seeks unspecified monetary damages and seeks to impose a constructive
trust, for Chiron's benefit, over the affected patent applications, an exclusive
assignment by the Company to Chiron of such patent applications and an
injunction against the Company from disclosing, using or applying such alleged
proprietary information. Aviron believes that the allegations in the Chiron
complaint are without merit and intends to vigorously defend itself against such
action. Aviron does not utilize the alleged Chiron proprietary information in
any of its potential products currently under development. Even if Chiron were
to prevail in this action, the Company believes that it is uncertain that a
court would grant a constructive trust over the specified patent applications,
which include many claims (including certain rights the Company licensed to
SmithKline Beecham) not relating to the alleged Chiron proprietary technology.
Were a court to grant a constructive trust over such patent applications, it
could adversely impact the Company's agreement with SmithKline Beecham. There
can be no assurance that Chiron will not ultimately prevail in this action or
that it will not obtain the remedies it is seeking. In addition, the Company
expects that the legal costs incurred in defending itself against this action
could be substantial.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following Management's Discussion and Analysis of Financial Condition
and Results of Operations contains forward-looking statements which involve
risks and uncertainties. The Company's actual results could differ materially
from those anticipated in these forward- looking statements as a result of
certain factors, including those set forth in the Company's Annual Report on
Form 10-K, File No. 0-20815, filed March 26, 1997.
7
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OVERVIEW
Since its inception in April 1992, Aviron has devoted substantially all of
its resources to its research and development programs. To date, Aviron has not
generated any revenues from the sale of products and does not expect to generate
any such revenues for at least several years, if at all. Aviron has incurred
cumulative net losses of approximately $44.9 million as of March 31, 1997, and
it expects to incur increasing operating losses for a number of years.
Aviron has financed its operations through proceeds from a private offering
of common stock in March 1997, a public offering of common stock in November
1996, private placements of preferred stock, revenue from its collaborative
agreements, including reimbursement of certain of Aviron's research and
development expenses, equipment lease financing and investment income earned on
cash balances and short-term investments.
The Company expects its research and development expenditures to increase
substantially over the next several years as the Company expands its research
and development efforts and preclinical testing and clinical trials with respect
to certain of its programs. In addition, general and administrative expenses are
expected to continue to increase as the Company expands its operations and
incurs the additional expenses associated with operating as a public company.
In October 1995, the Company signed an agreement with SmithKline Beecham
defining a collaboration on the Company's Epstein-Barr virus (EBV) vaccine
technology (the SB Agreement). Under the terms of the SB Agreement, the Company
granted SmithKline Beecham an exclusive license to produce, use and sell EBV
vaccines incorporating the Company's technology for prophylactic and therapeutic
uses on a worldwide basis, except in South and North Korea (together, Korea).
The Company has retained the right to co- distribute a monovalent formulation of
the vaccine in certain markets in the United States and to have SmithKline
Beecham supply such vaccine. SmithKline Beecham has agreed to fund research and
development at the Company related to the EBV vaccine, in specified minimum
amounts, during the first two years of the SB Agreement. SmithKline Beecham made
an initial upfront payment to the Company and agreed to make additional payments
upon the achievement of certain product development milestones. The Company is
entitled to royalties from SmithKline Beecham based on net sales of the vaccine.
No assurance can be given, however, that the Company will receive any additional
payments from SmithKline Beecham or that SmithKline Beecham will not terminate
its agreement with the Company.
In May 1995, the Company entered into a Development and License Agreement
with Sang-A. The Company granted to Sang-A exclusive clinical development,
manufacturing and marketing rights in Korea for specified products developed by
Aviron, including vaccines for influenza (cold adapted and recombinant), EBV
(marketing rights only), cytomegalovirus (CMV), herpes simplex virus type 2
(HSV-2) and respiratory syncytial virus (RSV). However, the Company is under no
obligation to develop any product. Sang-A also agreed to make payments to the
Company upon meeting certain regulatory milestones for each
8
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product in Korea and to pay a royalty to the Company on net sales of such
products in Korea. No assurance can be given, however, that the Company will
receive any payments from Sang-A or that Sang-A will not terminate its agreement
with the Company.
On January 23, 1997, Hanbo Steel Industry Company (Hanbo Steel) was
declared bankrupt. Hanbo Steel is a subsidiary of the Hanbo Group, the
conglomerate that owns Sang-A. The Company is unable to predict what, if any,
effect the bankruptcy of Hanbo Steel will have on other Hanbo Group
subsidiaries, including Sang-A. Given that Sang-A has no outstanding financial
obligations to the Company, and that future Korean sales of Company products are
not expected to be a major part of the Company's anticipated revenues, the
Company believes that it is unlikely that the bankruptcy of Hanbo Steel will
have a material impact on the Company.
On July 1, 1996, Chiron filed a complaint against the Company alleging
misappropriation of trade secrets with respect to certain of Aviron's patent
applications related to its EBV program. The Company believes that the
allegations in the complaint are without merit and intends to defend itself
vigorously against such action. However, the Company expects that the legal
costs incurred in defending itself against this action could be substantial. See
Part II - "Legal Proceedings."
In April 1997, the Company signed a Contract Manufacturing Agreement with
Evans Medical Limited, a subsidiary of Medeva plc ("Evans"). Evans currently
supplies the vaccine material used in the Company's ongoing clinical trials. The
agreement provides for the manufacture by Evans of Aviron's live cold adapted
influenza vaccine through the earlier of December 31, 2000 or two years from
Aviron's first commercial sale of the vaccine.
The Company's business is subject to significant risks, including but not
limited to the risks inherent in its research and development efforts, including
preclinical testing and clinical trials, uncertainties associated both with
obtaining and enforcing its patents and with the patent rights of others, the
lengthy, expensive and uncertain process of seeking regulatory approvals,
uncertainties regarding government reforms and product pricing and reimbursement
levels, technological change and competition, manufacturing uncertainties and
dependence on third parties. Even if the Company's product candidates appear
promising at an early stage of development, they may not reach the market for
numerous reasons. Such reasons include the possibilities that the products will
be found unsafe or ineffective during clinical trials, will fail to receive
necessary regulatory approvals, will be difficult to manufacture on a large
scale, will be uneconomical to market or will be precluded from
commercialization by proprietary rights of third parties.
9
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RESULTS OF OPERATIONS
Three Months Ended March 31, 1997 and 1996
Revenues
The Company earned $305,000 in revenue for the three months ended March 31,
1997, compared to $188,000 for the three months ended March 31, 1996. The
revenue for both years resulted from research support payments due to the
Company under its license and development agreement with SmithKline Beecham.
Operating Expenses
Research and development expenses increased 41% to $4.3 million in the
three months ended March 31, 1997 from $3.0 million for the three months ended
March 31, 1996. These increases were primarily due to increases in research and
development staffing, expenses associated with clinical trials of the Company's
cold adapted influenza vaccine and preclinical testing associated with other
programs, and the amortization of deferred compensation in connection with
certain stock options granted by the Company.
General and administrative expenses increased 9% to $1.2 million in the
three months ended March 31, 1997 from $1.1 million for the three months ended
March 31, 1996. These increases were incurred to support the Company's expanded
research and development activities, patent and legal expenses and corporate
development activities.
Net Other Income
The Company's net other income decreased to $169,000 in the three months
ended March 31, 1997, from $183,000 in the three months ended March 31, 1996.
The slight decrease in net other income is due to increased interest expense
resulting from additional equipment leasing.
LIQUIDITY AND CAPITAL RESOURCES
Aviron had cash, cash equivalents and short-term investments at March 31,
1997 of approximately $27.7 million. In order to preserve principal and maintain
liquidity, the Company's funds are invested in United States Treasury
obligations, highly rated corporate obligations and other short-term
investments.
The Company has financed its operations since inception primarily through
private placements of preferred stock, an initial public offering of its common
stock in November 1996, and a $15 million private sale of common stock in March
1997 to Biotech Target, S.A. See Part II - "Changes in Securities." Through
March 31, 1997, the Company had raised approximately $74.2 million from such
sales net of offering expenses. Cash used in operations was $4.9 million and
$3.0 million for the first three months of 1997 and 1996, respectively. Cash
expended for capital
10
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additions and to repay lease financing arrangements amounts to approximately
$211,000 and $659,000 for the first three months of 1997 and 1996, respectively.
Capital expenditures have decreased in 1997, primarily because expenditures for
a pilot manufacturing facility were completed in 1996. The Company expects
expenditures for research and development, clinical trials and general
administrative expenditures to continue to increase during the remainder of 1997
as the Company develops its products and expands its clinical trials.
The Company anticipates that its existing cash, cash equivalents and short-
term investments, the proceeds of its initial public offering and the private
placement to Biotech Target, S.A., together with the interest thereon, and
revenues from existing collaborations, will enable it to maintain its current
and planned operations at least through the first quarter of 1998. The Company's
future cash requirements will depend on numerous factors, including continued
scientific progress in the research and development of the Company's technology
and vaccine programs, the size and complexity of these programs, the ability of
the Company to establish and maintain collaborative arrangements, progress with
preclinical testing and clinical trials, the time and costs involved in
obtaining regulatory approvals, the cost involved in preparing, filing,
prosecuting, maintaining and enforcing patent claims, and product
commercialization activities. The Company is seeking additional collaborative
agreements with corporate partners and may seek access to the public or private
equity markets. There can be no assurance, however, that any such agreements
will be entered into or that they will reduce the Company's funding requirements
or that additional funding will be available. The Company expects that
additional equity or debt financings will be required to fund its operations.
There can be no assurance that such funds will be available on favorable terms,
if at all. If adequate funds are not available, the Company may be required to
delay, reduce the scope of, or eliminate one or more of its research or
development programs or to obtain funds through collaborative agreements with
others that may require the Company to relinquish rights to certain of its
technologies, product candidates or products that the Company would otherwise
seek to develop or commercialize itself, which would materially adversely affect
the Company's business, financial condition and results of operations.
11
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AVIRON
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
On July 1, 1996, Chiron Corporation ("Chiron") filed a complaint against
the Company in San Mateo County, California, Superior Court, alleging
that certain of Aviron's patent applications related to its Epstein Barr
Virus program are based on Chiron proprietary information, which was
improperly conveyed to Aviron by a former Chiron employee, and that the
Company has engaged in unfair competition. The complaint seeks
unspecified monetary damages and seeks to impose a constructive trust,
for Chiron's benefit, over the affected patent applications, an
exclusive assignment by the Company to Chiron of such patent
applications and an injunction against the Company from disclosing,
using or applying such alleged proprietary information. Aviron believes
that the allegations in the complaint are without merit and intends to
defend itself vigorously against the complaint.
ITEM 2. CHANGES IN SECURITIES.
(c) On March 27, 1997, the Company sold and issued to Biotech Target,
S.A., a 5% stockholder of the Company, 1,714,286 shares of the Company's
common stock, for a purchase price of $15,000,000, in a private
placement. The Company is obligated to register the shares as soon as
reasonably practicable after November 5, 1997. No underwriter or
placement agent was involved in the transaction. The sale of shares was
made in reliance on Section 4(2) of the Securities Act of 1933, as
amended. The common stock Purchase Agreement is attached as Exhibit 4.9
hereto.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None
ITEM 5. OTHER INFORMATION.
None
12
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) EXHIBITS
ITEM DESCRIPTION
---- -----------
4.9 Common Stock Purchase Agreement between the
Registrant and Biotech Target, S.A. dated as of
March 27, 1997.
11.1 Statement regarding Computation of Pro Forma Net
Loss Per Share.
27.1 Financial Data Schedules.
-----------
(b) REPORTS ON FORM 8-K
The Company filed no reports on Form 8-K during the
quarter ended March 31, 1997.
13
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AVIRON
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed in its behalf by the
undersigned thereunto duly authorized.
AVIRON
Date: May 14, 1997 By: /s/ J. Leighton Read, M.D.
-------------------- ------------------------------------
J. Leighton Read, M.D.
Chairman and Chief Executive Officer
Date: May 14, 1997 By: /s/ Vera Kallmeyer, M.D., Ph.D.
-------------------- ------------------------------------
Vera Kallmeyer, M.D., Ph.D.
Chief Financial Officer and Vice
President Corporate Development
(Principal Financial and Accounting
Officer)
14
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EXHIBIT INDEX
NO. OF EXHIBIT DESCRIPTION
-------------- -----------
4.9 Common Stock Purchase Agreement between the Registrant
and Biotech Target, S.A. dated as of March 27, 1997.
11.1 Statement regarding Computation of Pro Forma Net Loss
Per Share.
27.1 Financial Data Schedules.
<PAGE>
EXHIBIT 4.9
AVIRON
COMMON STOCK PURCHASE AGREEMENT
MARCH 27, 1997
<PAGE>
TABLE OF CONTENTS
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PAGE
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SECTION 1. PURCHASE AND SALE OF COMMON STOCK............................ 1.
SECTION 2. CLOSING DATE; DELIVERY....................................... 1.
2.1 Closing Date................................................. 1.
2.2 Delivery..................................................... 1.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY................ 1.
3.1 Organization and Standing.................................... 1.
3.2 Corporate Power; Authorization............................... 1.
3.3 Issuance and Delivery of the Shares.......................... 2.
3.4 Full Disclosure.............................................. 2.
3.5 Litigation................................................... 2.
3.6 Governmental Consents........................................ 3.
3.7 No Material Adverse Change................................... 3.
SECTION 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASER....... 3.
4.1 Authorization................................................ 3.
4.2 Investment Experience........................................ 3.
4.3 Investment Intent............................................ 3.
4.4 Registration or Exemption Requirements....................... 4.
4.5 Restriction on Short Sales................................... 4.
4.6 No Legal, Tax or Investment Advice........................... 4.
SECTION 5. CONDITIONS TO CLOSING OF PURCHASER........................... 4.
5.1 Representations and Warranties............................... 4.
5.2 Legal Opinion................................................ 4.
5.3 Officers' Certificate........................................ 5.
5.4 Covenants.................................................... 5.
SECTION 6. CONDITIONS TO CLOSING OF COMPANY............................. 5.
6.1 Representations and Warranties............................... 5.
6.2 Covenants.................................................... 5.
SECTION 7. REGISTRATION RIGHTS.......................................... 5.
7.1 Registration Requirements.................................... 5.
7.2 Indemnification and Contribution............................. 7.
SECTION 8. RESTRICTIONS ON TRANSFERABILITY OF SHARES: COMPLIANCE WITH
Securities Act ............................................. 10.
8.1 Restrictions on Transferability.............................. 10.
8.2 Restrictive Legend........................................... 10.
8.3 Transfer of Shares after Registration........................ 10.
8.4 Purchaser Information........................................ 11.
SECTION 9. MISCELLANEOUS................................................ 11.
9.1 Waivers and Amendments....................................... 11.
9.2 Governing Law................................................ 11.
9.3 Survival..................................................... 11.
9.4 Successors and Assigns....................................... 11.
9.5 Entire Agreement............................................. 11.
9.6 Notices, etc................................................. 11.
9.7 Severability of this Agreement............................... 13.
9.8 Counterparts................................................. 13.
9.9 Further Assurances........................................... 13.
9.10 Expenses..................................................... 13.
</TABLE>
i.
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AVIRON
COMMON STOCK PURCHASE AGREEMENT
This COMMON STOCK PURCHASE AGREEMENT (the "Agreement") is made as of March
27, 1997 (the "Effective Date"), by and between AVIRON, a Delaware corporation
(the "Company") and BIOTECH TARGET, S.A., a corporation organized under the laws
of Panama (the "Purchaser").
SECTION 1. PURCHASE AND SALE OF COMMON STOCK
Subject to the terms and conditions of this Agreement, the Company agrees
to issue and sell to Purchaser and Purchaser agrees to purchase from the Company
1,714,286 shares of the Company's Common Stock, $0.001 par value (the "Shares"),
for a purchase price of $15,000,002.50.
SECTION 2. CLOSING DATE; DELIVERY
2.1 CLOSING DATE. The closing of the purchase and sale of the Shares
hereunder (the "Closing") shall be held at the offices of Cooley Godward LLP,
Five Palo Alto Square, 3000 El Camino Real, Palo Alto, California, 94306 at
10:00 a.m., on March 27, 1997 or at such other time and place upon which the
Company and Purchaser shall agree. The date of the Closing is hereinafter
referred to as the "Closing Date."
2.2 DELIVERY. At the Closing, the Company will deliver to Purchaser a
certificate, registered in Purchaser's name, representing the number of shares
of Common Stock to be purchased by Purchaser. Such delivery shall be against
payment of the purchase price therefor by wire transfer to the Company's bank
account.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Purchaser as of the Closing Date as
follows:
3.1 ORGANIZATION AND STANDING. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and has full power and authority to own and operate its properties and
assets and to carry on its business as presently conducted and as proposed to be
conducted. The Company is qualified as a foreign corporation to do business in
each jurisdiction in the United States in which the ownership of its property or
the conduct of its business requires such qualification, except where any
statutory fines or penalties or any corporate disability imposed for the failure
to qualify would not materially or adversely affect the Company, its assets,
financial condition or operations. The Company has no subsidiaries.
3.2 CORPORATE POWER; AUTHORIZATION. The Company has all requisite
corporate power to, and has taken all requisite corporate action to, execute and
deliver this Agreement,
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to sell and issue the Shares and to carry out and perform all of its obligations
under this Agreement. This Agreement constitutes the legal, valid and binding
obligation of the Company, enforceable in accordance with its terms, except (i)
as limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws relating to or affecting the enforcement of creditors' rights
generally, (ii) as limited by equitable principles generally and (iii) as to
those provisions of Section 7.2 relating to indemnity or contribution, as may be
limited by applicable laws. The execution and delivery of this Agreement does
not, and the performance of this Agreement and the compliance with the
provisions hereof and the issuance, sale and delivery of the Shares by the
Company will not materially conflict with, or result in a material breach or
violation of the terms, conditions or provisions of, or constitute a material
default under, or result in the creation or imposition of any material lien
pursuant to the terms of, the Certificate of Incorporation or Bylaws of the
Company or (a) any governmental statute, law, rule applicable to the Company or
(b) order, writ, judgment, injunction, decree, determination or award which has
been entered against the Company and of which we are aware, the violation of
which would materially and adversely affect the Company, its assets, financial
condition or operations.
3.3 ISSUANCE AND DELIVERY OF THE SHARES. The Shares, when issued and paid
for in compliance with the provisions of this Agreement, will be validly issued,
fully paid and nonassessable. The issuance and delivery of the Shares is not
subject to preemptive, co-sale, right of first refusal or any other similar
rights of the stockholders of the Company or any liens or encumbrances,
provided, however, that the Shares may be subject to restrictions on transfer
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under state and/or federal securities laws as set forth herein or as otherwise
required by such laws at the time a transfer is proposed.
3.4 FULL DISCLOSURE. The Company has furnished to Purchaser the following
documents filed with or to be filed with the Securities and Exchange Commission
(collectively, the "SEC Documents") and the Company warrants that the
information contained in such documents, as of their respective dates, did not
contain any untrue statement of a material fact, and did not omit to state any
material fact necessary to make any statement, in light of the circumstances
under which such statement was made, not misleading:
(a) The prospectus for the Company's initial public offering of Common
Stock, dated November 5, 1996.
(b) The Company's Quarterly Report on Form 10-Q for the quarter ended
December 31, 1996.
(c) The Company's Annual Report on Form 10-K for the year ended
December 31, 1996.
3.5 LITIGATION. Except as set forth in the SEC Documents, there is no
pending or, to the Company's knowledge, threatened action, suit or other
proceeding before any court, governmental body or authority, or arbitrator to
which the Company is a party or to which its property or assets are subject.
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3.6 GOVERNMENTAL CONSENTS. No consent, approval, order or authorization
of, or registration, qualification, designation, declaration or filing with, any
Federal, state, or local governmental authority on the part of the Company is
required in connection with the consummation of the transactions contemplated by
this Agreement except for (a) compliance with the securities and blue sky laws
in the states and other jurisdictions in which shares of Common Stock are
offered and/or sold, which compliance will be effected in accordance with such
laws, and (b) the filing of a registration statement and all amendments thereto
with the SEC as contemplated by Section 7.1 of this Agreement.
3.7 NO MATERIAL ADVERSE CHANGE. Since December 31, 1996, there have not
been any changes in the assets, liabilities, financial condition or operations
of the Company from that reflected in the SEC Documents except changes in the
ordinary course of business or which have not been, either individually or in
the aggregate, materially adverse.
SECTION 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASER
Purchaser hereby represents and warrants to the Company, effective as of
the Closing Date, as follows:
4.1 AUTHORIZATION. Purchaser represents and warrants to the Company that:
(i) Purchaser has all requisite legal and corporate or other power and capacity
and has taken all requisite corporate or other action to execute and deliver
this Agreement, to purchase the Shares and to carry out and perform all of its
obligations under this Agreement; and (ii) this Agreement constitutes the legal,
valid and binding obligation of the Purchaser, enforceable in accordance with
its terms, except (a) as limited by applicable bankruptcy, insolvency,
reorganization, or similar laws relating to or affecting the enforcement of
creditors' rights generally and (b) as limited by equitable principles
generally.
4.2 INVESTMENT EXPERIENCE. Purchaser is an "accredited investor" as
defined in Rule 501(a) under the Securities Act of 1933, as amended (the
"Securities Act"). Purchaser is aware of the Company's business affairs and
financial condition and has had access to and has acquired sufficient
information about the Company to reach an informed and knowledgeable decision to
acquire the Shares. Purchaser has such business and financial experience as is
required to give it the capacity to protect its own interests in connection with
the purchase of the Shares.
4.3 INVESTMENT INTENT. Purchaser is purchasing the Shares for its own
account as principal, for investment purposes only, and not with a view to, or
for, resale, distribution or fractionalization thereof, in whole or in part,
within the meaning of the Securities Act. Purchaser understands that its
acquisition of the Shares has not been registered under the Securities Act or
registered or qualified under any state securities law in reliance on specific
exemptions therefrom, which exemptions may depend upon, among other things, the
bona fide nature of Purchaser's investment intent as expressed herein.
Purchaser has completed or caused to be completed the Purchaser
Certificates/Questionnaire attached hereto as Exhibits A-1 through A-3 for use
in connection with the sale of Shares and in preparation of the Registration
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Statement (as defined below), will deliver the such Certificates/Questionnaires
to the Company on or prior to the Closing Date, and the responses provided
therein shall be true and correct as of the Closing Date. Purchaser has, in
connection with its decision to purchase the Shares, relied solely upon the SEC
Documents and the representations and warranties of the Company contained
herein.
4.4 REGISTRATION OR EXEMPTION REQUIREMENTS. Purchaser further
acknowledges and understands that the Shares must be held for investment
purposes, and they may not be resold or otherwise transferred except in a
transaction registered under the Securities Act or an exemption from such
registration is available. Purchaser understands that the certificate(s)
evidencing the Shares will be imprinted with a legend that prohibits the
transfer of the Shares unless (i) they are registered or such registration is
not required, and (ii) if the transfer is pursuant to an exemption from
registration other than Rule 144 under the Securities Act ("Rule 144") and, if
the Company shall so request in writing, an opinion of counsel satisfactory to
the Company is obtained to the effect that the transaction is so exempt and in
compliance with applicable state law.
4.5 RESTRICTION ON SHORT SALES. Purchaser represents and warrants to and
covenants with the Company that Purchaser has not engaged and will not engage in
any short sales of the Company's Common Stock prior to the effectiveness of the
Registration Statement, except to the extent that any such short sale is fully
covered by shares of Common Stock of the Company other than the Shares.
4.6 NO LEGAL, TAX OR INVESTMENT ADVICE. Purchaser understands that
nothing in this Agreement or any other materials presented to Purchaser in
connection with the purchase and sale of the Shares constitutes legal, tax or
investment advice and that no independent legal counsel has reviewed these
documents and materials on Purchaser's behalf. Purchaser has consulted such
legal, tax and investment advisors as it, in its sole discretion, has deemed
necessary or appropriate in connection with its purchase of the Shares.
SECTION 5. CONDITIONS TO CLOSING OF PURCHASER
Purchaser's obligation to purchase the Initial Shares at the Closing is, at
the option of Purchaser, subject to the fulfillment or waiver as of the Closing
Date of the following conditions:
5.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties
made by the Company in Section 3 hereof shall be true and correct in all
material respects when made, and shall be true and correct in all material
respects on the Closing Date with the same force and effect as if they had been
made on and as of said date.
5.2 LEGAL OPINION. The Company shall have delivered a legal opinion from
Cooley Godward LLP, counsel to the Company, addressed to Purchaser in the form
attached hereto as Exhibit C with respect to the sale of the Shares by the
Company hereunder.
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5.3 OFFICERS' CERTIFICATE. The Company shall deliver to Purchaser a
certificate, dated as of the Closing Date, signed by the President and Chief
Financial Officer of the Company, stating that the representations and
warranties set forth in Section 3 are true as of and all of the closing
conditions set forth in Section 5 have been satisfied on the Closing Date.
5.4 COVENANTS. All covenants, agreements and conditions contained in this
Agreement to be performed by the Company on or prior to the Closing Date shall
have been performed or complied with in all material respects.
SECTION 6. CONDITIONS TO CLOSING OF COMPANY
The Company's obligation to sell and issue the Shares is, at the option of
the Company, subject to the fulfillment or waiver of the following conditions:
6.1 REPRESENTATIONS AND WARRANTIES. The representations made by Purchaser
in Section 4 hereof shall be true and correct in all material respects when
made, and shall be true and correct in all material respects on the Closing Date
with the same force and effect as if they had been made on and as of such date.
6.2 COVENANTS. All covenants, agreements and conditions contained in this
Agreement to be performed by Purchaser on or prior to the Closing Date shall
have been performed or complied with in all material respects.
SECTION 7. REGISTRATION RIGHTS
7.1 REGISTRATION REQUIREMENTS
(a) Except as provided in paragraph (d) below, the Company shall use
its best efforts to prepare and file a registration statement on Form S-3 with
the SEC under the Securities Act to register the resale of the Shares by
Purchaser (the "Registration Statement") on November 5, 1997, or as soon
thereafter as is practicable and to use its best efforts to cause the
Registration Statement to be declared effective as soon as practicable. In the
event that at any time the filing of such Registration Statement is undertaken
or is required to be undertaken the Company fails to qualify for use of Form S-3
for purposes of registering for resale the Shares, the Company shall cause a
registration statement on Form S-1 to be filed as soon as practicable
thereunder. The Purchaser agrees to furnish promptly to the Company in writing
all information reasonably required by the Company to file such Registration
Statement.
(b) The Company shall pay all Registration Expenses (as defined below)
in connection with any registration, qualification or compliance hereunder, and
Purchaser shall pay all Selling Expenses (as defined below) and other expenses
that are not Registration Expenses relating to the Shares resold by Purchaser.
"Registration Expenses" shall mean all expenses, except for Selling Expenses,
incurred by the Company in complying with the registration provisions herein
described, including, without limitation, all registration, qualification and
filing fees, printing expenses, escrow fees, fees and disbursements of counsel
and independent public
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accountants for the Company, blue sky fees, transfer agent fees and expenses and
the expense of any special audits incident to or required by any such
registration. "Selling Expenses" shall mean selling commissions, underwriting
fees and stock transfer taxes applicable to the Shares and, subject to Section
9.10, all fees and disbursements of counsel for Purchaser.
(c) In the case of the registration effected by the Company pursuant
to these registration provisions, the Company will use its best efforts to: (i)
keep such registration effective until the earlier of (A) the second anniversary
of the Closing Date, (B) such date as all of the Shares have been resold or (C)
such time as all of the Shares held by Purchaser can be sold within a given
three-month period without compliance with the registration requirements of the
Securities Act pursuant to Rule 144; (ii) prepare and file with the SEC such
amendments and supplements to the Registration Statement and the prospectus used
in connection with the Registration Statement as may be necessary to comply with
the provisions of the Securities Act with respect to the disposition of all
securities covered by the Registration Statement; (iii) furnish such number of
prospectuses and other documents incident thereto, including any amendment of or
supplement to the prospectus, as Purchaser from time to time may reasonably
request in order to facilitate the public sale or other disposition of all or
any of the Shares held by Purchaser; (iv) cause all Shares registered as
described herein to be listed on each securities exchange and quoted on each
quotation service on which similar securities issued by the Company are then
listed or quoted; (v) provide a transfer agent and registrar for all Shares
registered pursuant to the Registration Statement and a CUSIP number for all
such Shares; (vi) otherwise use its best efforts promptly to comply with all
applicable rules and regulations of the SEC; and (vii) file the documents
required of the Company and otherwise use its best efforts promptly to obtain,
if applicable, and maintain requisite blue sky clearance in (A) all
jurisdictions in which any of the Shares are originally sold and (B) all other
states specified in writing by Purchaser, provided as to clause (B), however,
that the Company shall not be required to qualify to do business or consent to
service of process in any state in which it is not now so qualified or has not
so consented. The Company shall use its best efforts to qualify for use of Form
S-3 under the Securities Act to register the resale of the Shares and to
maintain such qualification during the periods described in paragraph (i).
(d) The Company may delay the filing of the Registration Statement for
up to six months (i.e., until May 5, 1998) by giving written notice to Purchaser
if the Company shall have determined that the Company may be required to
disclose any material corporate development which disclosure may have a material
effect on the Company.
(e) Following the effectiveness of the Registration Statement, the
Company may, at any time, but not more than once in any six-month period,
suspend the effectiveness of such registration statement for up to 45 days, as
appropriate (a "Suspension Period"), by giving notice to Purchaser, if the
Company shall have determined that the Company may be required to disclose any
material corporate development which disclosure may have a material effect on
the Company. The Company agrees to use commercially reasonable efforts to
minimize the length of any suspension. The duration of any Suspension Period
shall be added to the period of time that the Company agrees to keep the
Registration Statement effective. Purchaser agrees that, upon receipt of any
notice from the Company of a Suspension Period, Purchaser shall
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forthwith discontinue disposition of shares covered by such Registration
Statement or prospectus until Purchaser (i) is advised in writing by the Company
that the use of the applicable prospectus may be resumed, (ii) has received
copies of a supplemental or amended prospectus, if applicable, and (iii) has
received copies of any additional or supplemental filings which are incorporated
or deemed to be incorporated by reference in such prospectus.
(f) The Company will, as expeditiously as possible, notify Purchaser
(i) of the effective date of the Registration Statement and the date when any
post-effective amendment the Registration Statement becomes effective; (ii) of
any stop order or notification from Securities and Exchange Commission or any
other jurisdiction as to the suspension of the effectiveness of the Registration
Statement; and (iii) of the end of any suspension hereunder.
(g) With a view to making available to Purchaser the benefits of Rule
144 and any other rule or regulation of the SEC that may at any time permit
Purchaser to sell Shares to the public without registration or pursuant to
registration, the Company covenants and agrees to: (i) make and keep public
information available, as those terms are understood and defined in Rule 144,
until the earlier of (A) the second anniversary of the Closing Date or (B) such
date as all of the Shares shall have been resold; (ii) file with the SEC in a
timely manner all reports and other documents required of the Company under the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and maintain
registration of its Common Stock under Section 12 of the Exchange Act; and (iii)
furnish to Purchaser upon request, as long as Purchaser owns any Shares, (A) a
written statement by the Company that it has complied with the reporting
requirements of the Exchange Act, (B) a copy of the most recent annual or
quarterly report of the Company, and (C) such other information as may be
reasonably requested in order to avail Purchaser of any rule or regulation of
the SEC that permits the selling of any such Shares without registration.
7.2 INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify Purchaser and hold Purchaser
harmless from and against any losses, claims, damages or liabilities (or actions
or proceedings in respect thereof) to which Purchaser may become subject (under
the Securities Act Exchange Act, state securities laws or otherwise) insofar as
such losses, claims, damages or liabilities (or actions proceedings or
settlements in respect thereof) arise out of, or are based upon, (i) any untrue
statement (or alleged untrue statement) of a material fact contained in the
Registration Statement, on the effective date thereof or any preliminary
prospectus or final prospectus contained therein, or any amendment or supplement
thereto, (ii) the omission or the alleged omission of a material fact required
to be stated therein or necessary to make the statements therein not misleading
or (iii) any failure by the Company (or its agents) to fulfill any undertaking
included in the Registration Statement, and the Company will, as incurred,
reimburse Purchaser for any legal or other expenses reasonably incurred in
investigating, defending or preparing to defend any such action, loss, damage,
proceeding or claim; provided, however, that the Company shall not be liable in
any such case to the extent that such loss, claim, damage or liability arises
out of, or is based upon (i) an untrue statement (or omission) made in such
Registration Statement in reliance upon and in conformity with written
information furnished to the Company by or on
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behalf of Purchaser specifically for use in preparation of the Registration
Statement, (ii) the failure of Purchaser to comply with the covenants and
agreements contained in Section 7.1 or 8.3 hereof, or (iii) any untrue statement
(or omission) in any Prospectus that is corrected in any subsequent Prospectus
that was delivered to Purchaser by the Company prior to the pertinent sale or
sales by Purchaser. The Company will reimburse Purchaser for any legal or other
expenses reasonably incurred in investigating, defending or preparing to defend
any such action, proceeding or claim notwithstanding the absence of a judicial
determination as to the propriety and enforceability of the obligations under
this section and the possibility that such payments might later be held to be
improper, provided, that (i) to the extent any such payment is ultimately held
to be improper, the persons receiving such payments shall promptly refund them
and (ii) such persons shall provide to the Company, upon request, reasonable
assurances of their ability to effect any refund, when and if due.
(b) Purchaser agrees to indemnify and hold harmless the Company from
and against any losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) to which the Company may become subject (under
the Securities Act or otherwise) insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of, or are
based upon (i) an untrue statement made in such Registration Statement in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of Purchaser specifically for use in preparation of the
Registration Statement, provided, however, that Purchaser shall not be liable in
any such case for any untrue statement included in any Prospectus which
statement has been corrected, in writing, by Purchaser and delivered to the
Company before the sale from which such loss occurred, (ii) the failure of
Purchaser to comply with the covenants and agreements contained in Section 7.1
or 8.3 hereof, or (iii) any untrue statement in any Prospectus that is corrected
in any subsequent Prospectus that was delivered to the Purchaser prior to the
pertinent sale or sales by Purchaser, provided, further, however, that the
liability of Purchaser hereunder shall be limited to the proceeds received by
Purchaser from the sale of the Shares covered by such Registration Statement;
and provided, further, however, that the obligations of Purchaser hereunder
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability, or action settlement is effected without the consent of Purchaser.
Purchaser will reimburse the Company for any legal or other expenses reasonably
incurred in investigating, defending or preparing to defend any such action,
proceeding or claim notwithstanding the absence of a judicial determination as
to the propriety and enforceability of the obligations under this section and
the possibility that such payments might later be held to be improper, provided,
that (i) to the extent any such payment is ultimately held to be improper, the
persons receiving such payments shall promptly refund them and (ii) such persons
shall provide to Purchaser, upon request, reasonable assurances of their ability
to effect any refund, when and if due.
(c) Promptly after receipt by any indemnified person of a notice of a
claim or the commencement of any action in respect of which indemnity is to be
sought against an indemnifying person pursuant to this Section 7.2, such
indemnified person shall notify the indemnifying person in writing of such claim
or of the commencement of such action, and, subject to the provisions
hereinafter stated, in case any such action shall be brought against an
indemnified person and the indemnifying person shall have been notified thereof,
the
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indemnifying person shall be entitled to participate therein, and, to the extent
that it shall wish, to assume and undertake the defense thereof, with counsel
reasonably satisfactory to the indemnified person. After notice from the
indemnifying person to such indemnified person of the indemnifying person's
election to assume and undertake the defense thereof, the indemnifying person
shall not be liable to such indemnified person for any legal expenses
subsequently incurred by such indemnified person in connection with the defense
thereof; provided, however, that if there exists or shall exist a conflict of
interest that would make it inappropriate in the reasonable judgment of the
indemnified person for the same counsel to represent both the indemnified person
and such indemnifying person or any affiliate or associate thereof, the
indemnified person shall be entitled to retain its own counsel at the expense of
such indemnifying person.
(d) If the indemnification provided for in this Section 7.2 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions proceedings or settlements in respect thereof) referred
to therein, then the indemnifying party shall contribute to the amount paid or
payable by such indemnified party as result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is appropriate
to reflect the relative fault of the Company on the one hand and the Purchaser
on the other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities (or actions in respect thereof), as
well as any other relevant equitable considerations. The relative fault shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or Purchaser on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and Purchaser agree that it would not be just and equitable if
contribution pursuant to this subsection (d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above in this subsection (d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, or liabilities (or actions in respect thereof) referred to
above in this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), Purchaser shall not be required to contribute
any amount in excess of the amount by which the amount received by Purchaser
(net of Selling Expenses) from the sale of the Shares to which such loss relates
exceeds the amount of any damages which Purchaser has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
(e) The obligations of the Company and Purchaser under this Section
7.2 shall be in addition to any liability which the Company and Purchaser may
otherwise have and shall extend, upon the same terms and conditions, to each
person, if any, who controls the Company or Purchaser within the meaning of the
Securities Act.
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SECTION 8. RESTRICTIONS ON TRANSFERABILITY OF SHARES: COMPLIANCE WITH
SECURITIES ACT
8.1 RESTRICTIONS ON TRANSFERABILITY. The Shares shall not be transferable
in the absence of a registration under the Securities Act or an exemption
therefrom or in the absence of compliance with any term of this Agreement. The
Company shall be entitled to give stop transfer instructions to its transfer
agent with respect to the Shares in order to enforce the foregoing restrictions.
8.2 RESTRICTIVE LEGEND. Each certificate representing Shares shall bear
substantially the following legends (in addition to any legends required under
applicable securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT PURPOSES ONLY AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 OR ANY STATE SECURITIES LAWS. THE SHARES MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM.
ADDITIONALLY, THE TRANSFER OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS
SUBJECT TO CERTAIN RESTRICTIONS SPECIFIED IN THE COMMON STOCK PURCHASE
AGREEMENT DATED MARCH [27], 1997 BETWEEN THE COMPANY AND THE ORIGINAL
PURCHASER, AND NO TRANSFER OF SHARES SHALL BE VALID OR EFFECTIVE ABSENT
COMPLIANCE WITH SUCH RESTRICTIONS. ALL SUBSEQUENT HOLDERS OF THIS
CERTIFICATE WILL HAVE AGREED TO BE BOUND BY CERTAIN OF THE TERMS OF THE
AGREEMENT, INCLUDING SECTIONS 7.1 AND 8.3 OF THE AGREEMENT. COPIES OF THE
AGREEMENT MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE
REGISTERED HOLDER OF THIS CERTIFICATE TO THE SECRETARY OF THE COMPANY.
Upon the request of Purchaser, the Company shall remove the foregoing
legend from the certificates evidencing the Shares and issue to Purchaser new
certificates free of any transfer legend if with such request, and at the
request of the Company, the Company shall have received an opinion of counsel
satisfactory to the Company, to the effect that any transfers by Purchaser of
such Shares may be made to the public without compliance with either Section 5
of the Securities Act or Rule 144 thereunder and applicable state securities
laws.
8.3 TRANSFER OF SHARES AFTER REGISTRATION. Purchaser hereby covenants
with the Company not to make any sale of the Shares except either (i) in
accordance with the Registration Statement, in which case Purchaser covenants to
comply with the requirement of delivering a current prospectus, or (ii) in
accordance with Rule 144, in which case Purchaser covenants to comply with Rule
144. Purchaser further acknowledges and agrees that such Shares are not
transferable on the books of the Company unless the certificate submitted to the
Company's transfer agent evidencing such Shares is accompanied by a separate
certificate executed by an
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officer of, or other person duly authorized by, the Purchaser in the form
attached hereto as Exhibit B.
8.4 PURCHASER INFORMATION. Purchaser covenants that it will promptly
notify the Company in writing of any changes in the information set forth in the
Registration Statement regarding Purchaser.
SECTION 9. MISCELLANEOUS
9.1 WAIVERS AND AMENDMENTS. The terms of this Agreement may be waived or
amended with the written consent of the Company and Purchaser.
9.2 GOVERNING LAW. This Agreement shall be governed in all respects by
and construed in accordance with the laws of the State of California without any
regard to conflicts of laws principles.
9.3 SURVIVAL. The representations, warranties, covenants and agreements
made in this Agreement shall survive any investigation made by the Company or
Purchaser and the Closing. With respect to any registration made pursuant to
this Agreement, the covenants and agreements set forth in section 7.1 shall
continue in effect until all obligations hereunder with respect thereto are
fulfilled, and provided that the indemnification and contribution obligations as
set forth in Section 7.2 shall survive for the period of the statute of
limitations with respect thereto.
9.4 SUCCESSORS AND ASSIGNS. The provisions hereof shall inure to the
benefit of, and be binding upon, the successors, assigns, heirs, executors and
administrators of the parties to this Agreement. Notwithstanding the foregoing,
Purchaser shall not assign this Agreement without the prior written consent of
the Company.
9.5 ENTIRE AGREEMENT. This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subjects
thereof.
9.6 NOTICES, ETC. All notices and other communications required or
permitted under this Agreement shall be effective upon receipt and shall be in
writing and may be delivered in person, by telecopy, overnight delivery service
or registered or certified United States mail, addressed to the Company or
Purchaser, as the case may be, at their respective addresses set forth below:
11.
<PAGE>
If to the Company:
Aviron
297 North Bernardo Avenue
Mountain View, CA 94043
Attn: J. Leighton Read, M.D.
President and Chief Executive Officer
Telephone: (415) 919-6500
Facsimile: (415) 919-6610
With a copy to:
Cooley Godward LLP
Five Palo Alto Square
3000 El Camino Real
Palo Alto, CA 94306-2155
Attn: Robert J. Brigham, Esq.
Telephone: (415) 843-5000
Facsimile: (415) 857-0663
If to Purchaser:
Biotech Target, S.A.
Swiss Bank Tower
Panama 1
Republic of Panama
With copies to:
Bellevue Asset Management AG
Grafenauweg 4
CH-6301 Zug
SWITZERLAND
Attn: Dr. Andreas Bremer
Dr. Anders Hove
Telephone: 011-41-724-5920
Facsimile: 011-41-724-5958
12.
<PAGE>
and:
Baker & McKenzie
815 Connecticut Avenue, N.W.
Washington, D.C. 20006
Attn: Diane Roberts, Esq./Daniel L. Goelzer, Esq.
Telephone: (202) 452-7000
Facsimile: (202) 452-7072
All notices and other communications shall be effective upon the earlier of
actual receipt thereof by the person to whom notice is directed or (i) in the
case of notices and communications sent by personal delivery or telecopy, one
business day after such notice or communication arrives at the applicable
address or was successfully sent to the applicable telecopy number, (ii) in the
case of notices and communications sent by overnight delivery service, at noon
(local time) on the second business day following the day such notice or
communication was sent, and (iii) in the case of notices and communications sent
by United States mail, seven days after such notice or communication shall have
been deposited in the United States mail. Any notice delivered to a party
hereunder shall be sent simultaneously, by the same means, to such party's
counsel as set forth above.
9.7 SEVERABILITY OF THIS AGREEMENT. If any provision of this Agreement
shall be judicially determined to be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
9.8 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
9.9 FURTHER ASSURANCES. Each party to this Agreement shall do and perform
or cause to be done and performed all such further acts and things and shall
execute and deliver all such other agreements, certificates, instruments and
documents as the other party hereto may reasonably request in order to carry out
the intent and accomplish the purposes of this Agreement and the consummation of
the transactions contemplated hereby.
9.10 EXPENSES. The Company agrees to bear the cost of reasonable fees and
expenses of one counsel for the Purchaser, in an amount not to exceed $15,000,
and reasonable fees and expenses of one counsel for the Purchaser in connection
with its review of the Registration Statement.
13.
<PAGE>
The foregoing agreement is hereby executed as of the date first above
written.
AVIRON BIOTECH TARGET, S.A.
By: /s/ J. Leighton Read By: /s/ Andreas Bremer
-------------------- ---------------------
J. Leighton Read, M.D. Dr. Andreas Bremer
Chief Executive Officer Authorized Signatory
By: /s/ H. Jorg Graf
-------------------
H. Jorg Graf
Authorized Signatory
14.
<PAGE>
EXHIBIT A
INSTRUCTION SHEET FOR PURCHASER
(to be read in conjunction with the entire
Common Stock Purchase Agreement)
A. Complete the following items in the Common Stock Purchase Agreement:
1. Provide the information regarding the Purchaser requested on the
signature page. The Agreement must be executed by an individual
authorized to bind the Purchaser.
2. Exhibit A-1 - Stock Certificate Questionnaire:
Provide the information requested by the Stock Certificate
Questionnaire;
3. Exhibit A-2 - Registration Statement Questionnaire:
Provide the information requested by the Registration Statement
Questionnaire.
4. Exhibit A-3 - Purchaser Certificate:
Provide the information requested by the Certificate.
5. Return the signed Purchase Agreement including the properly completed
Exhibit A to:
Cooley Godward LLP
Five Palo Alto Square
3000 El Camino Real
Palo Alto, CA 94306
Attn: Robert J. Brigham, Esq.
Fax: (415) 857-0663
B. Instructions regarding the transfer of funds for the purchase of Shares
will be telecopied to Purchaser by the Company at a later date.
C. Upon the resale of the Shares by Purchaser after the Registration Statement
covering the Shares is effective, as described in the Purchase Agreement,
Purchaser:
(i) must deliver a current prospectus, and annual and quarterly
reports of the Company to the buyer (prospectuses, and annual and
quarterly reports may be obtained from the Company at the
Purchaser's request); and
15.
<PAGE>
(ii) must send a letter in the form of Exhibit B to the Company so
that the Shares may be properly transferred.
16.
<PAGE>
EXHIBIT A-1
AVIRON
STOCK CERTIFICATE QUESTIONNAIRE
Pursuant to Section 4.3 of the Agreement, please provide us with the
following information:
1. The exact name that the Shares
are to be registered in (this is
the name that will appear on the
stock certificate(s)). You may use
a nominee name if appropriate:
_______________________________
2. The relationship between the
Purchaser of the Shares and the
Registered Holder listed in response
to item 1 above:
_______________________________
3. The mailing address of the
Registered Holder listed in response
to item 1 above:
_______________________________
_______________________________
_______________________________
_______________________________
_______________________________
4. The Tax Identification Number of
the Registered Holder listed in
response to item 1 above:
_______________________________
<PAGE>
EXHIBIT A-2
AVIRON
REGISTRATION STATEMENT QUESTIONNAIRE
In connection with the preparation of the Registration Statement, please
provide us with the following information regarding the Purchaser.
1. Please state your organization's name exactly as it should appear in
the Registration Statement:
2. Have you or your organization had any position, office or other
material relationship within the past three years with the Company?
___ Yes ___ No
If yes, please indicate the nature of any such relationships below:
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
<PAGE>
EXHIBIT A-3
AVIRON
CERTIFICATE FOR CORPORATE, PARTNERSHIP,
TRUST, FOUNDATION AND JOINT PURCHASERS
If the investor is a corporation, partnership, trust, pension plan,
foundation, joint purchaser (other than a married couple) or other entity, an
authorized officer, partner, or trustee must complete, date and sign this
Certificate.
CERTIFICATE
The undersigned certifies that the representations and responses below are
true and accurate:
(a) The investor has been duly formed and is validly existing and has full
power and authority to invest in the Company. The person signing on behalf of
the undersigned has the authority to execute and deliver the Common Stock
Purchase Agreement on behalf of the Purchaser and to take other actions with
respect thereto.
(b) Indicate the form of entity of the undersigned:
____ Limited Partnership
____ General Partnership
____ Corporation
____ Revocable Trust (identify each grantor and indicate
under what circumstances the trust is revocable by the
grantor): ______________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
(Continue on a separate piece of paper, if necessary.)
<PAGE>
____ Other Type of Trust (indicate type of trust and, for trusts
other than pension trusts, name the grantors and
beneficiaries):
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
(Continue on a separate piece of paper, if necessary.)
____ Other form of organization (indicate form of organization):
________________________________________________________________
(c) Indicate the date the undersigned entity was formed: ________________.
(d) In order for the Company to offer and sell the Shares in conformance
with state and federal securities laws, the following information must be
obtained regarding your investor status. Please initial each category
applicable to you as an investor in the Company.
____ 1. A bank as defined in Section 3(a)(2) of the Securities Act, or
any savings and loan association or other institution as defined in
Section 3(a)(5)(A) of the Securities Act whether acting in its
individual or fiduciary capacity;
____ 2. A broker or dealer registered pursuant to Section 15 of the
Securities Exchange Act of 1934;
____ 3. An insurance company as defined in Section 2(13) of the
securities Act;
____ 4. An investment company registered under the Investment Company
Act of 1940 or a business development company as defined in Section
2(a)(48) of that Act;
____ 5. A Small Business Investment Company licensed by the U.S. Small
Business Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958;
____ 6. A plan established and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or its
political subdivisions, for the benefit of its employees, if such plan
has total assets in excess of $5,000,000;
____ 7. An employee benefit plan within the meaning of the Employee
Retirement Income Security Act of 1974, if the investment decision is
made by a plan fiduciary, as defined in Section 3(21) of such act,
which is either a bank, savings and loan association, insurance
company, or registered investment adviser, or if the employee benefit
plan has total assets in excess of $5,000,000
20.
<PAGE>
or, if a self-directed plan, with investment decisions made solely by
persons that are accredited investors;
____ 8. A private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940;
____ 9. An organization described in Section 501(c)(3) of the
Internal Revenue Code, a corporation, Massachusetts or similar
business trust, or partnership, not formed for the specific purpose of
acquiring the Shares, with total assets in excess of $5,000,000;
____ 10. A trust, with total assets in excess of $5,000,000, not
formed for the specific purpose of acquiring the Shares, whose
purchase is directed by a sophisticated person who has such knowledge
and experience in financial and business matters that such person is
capable of evaluating the merits and risks of investing in the
Company;
____ 11. An entity in which all of the equity owners qualify under
any of the above subparagraphs. If the undersigned belongs to this
investor category only, list the equity owners of the undersigned, and
the investor category which each such equity owner satisfies:
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
(Continue on a separate piece of paper, if necessary.)
(e) The state of incorporation or formation of the investor is ______ and
the investor's principal office is located in the state of __________________.
Dated: __________________, 19___
________________________________
Name of investor
_________________________________
Signature and title of authorized
officer, partner or trustee
21.
<PAGE>
EXHIBIT B
PURCHASER'S CERTIFICATE OF SUBSEQUENT SALE
To: Aviron
297 N. Bernardo Avenue
Mountain View, CA 94043
The undersigned, the Purchaser or an officer of, or other person duly
authorized by the Purchaser, hereby certifies that Biotech Target was the
Purchaser of the shares evidenced by the attached certificate, and as such,
proposes to transfer such shares on or about ________________ either (check the
applicable box) [_] (i) in accordance with the registration statement, file
number __________ in which case the Purchaser certifies that the requirement of
delivering a current prospectus has been complied with or will be complied with
in connection with such sale, or [_] (ii) in accordance with Rule 144 under the
Securities Act of 1933 ("Rule 144"), in which case the Purchaser certifies that
it has complied with or will comply with the requirements of Rule 144.
Print or type:
Name of Purchaser: Biotech Target
Name of Individual
representing Purchaser: _________________________________________________
Title of Individual
representing Purchaser: _________________________________________________
Signature by:
Individual representing
Purchaser: ______________________________________________________________
<PAGE>
EXHIBIT C
FORM OF OPINION
March 27, 1997
Biotech Target, S.A.
Swiss Bank Tower
Panama 1
Republic of Panama
RE: SALE AND PURCHASE OF AVIRON COMMON STOCK
Gentlemen:
We have acted as counsel for Aviron, a Delaware corporation (the "Company"), in
connection with the issuance and sale of 1,714,286 shares of Company Common
Stock to Biotech Target, S.A., a corporation organized under the laws of Panama
("Purchaser"), pursuant to the terms of that certain Stock Purchase Agreement,
dated March 27, 1997, by and between the Company and Purchaser (the
"Agreement"). The shares of Company Common Stock issued to Purchaser at the
closing (the "Closing") are referred to herein as the "Shares". We are
rendering this opinion pursuant to Section 5.2 of the Agreement. Except as
otherwise defined herein, capitalized terms used but not defined herein have the
respective meanings given to them in the Agreement.
In connection with this opinion, we have examined and relied upon the
representations and warranties as to factual matters contained in and made
pursuant to the Agreement by the parties thereto and originals or copies
certified to our satisfaction, of such records, documents, certificates,
opinions, memoranda and other instruments as in our judgment are necessary or
appropriate to enable us to render the opinion expressed below. Where we render
an opinion "to the best of our knowledge" or concerning an item "known to us" or
our opinion otherwise refers to our knowledge, it is based solely upon (i) an
inquiry of attorneys within this firm who perform legal services for the
Company, (ii) receipt of a certificate executed by an officer of the Company
covering such matters, and (iii) such other investigation, if any, that we
specifically set forth herein.
In rendering this opinion, we have assumed: the genuineness and authenticity of
all signatures on original documents; the authenticity of all documents
submitted to us as originals; the conformity to originals of all documents
submitted to us as copies; the accuracy, completeness and authenticity of
certificates of public officials; and the due authorization, execution and
delivery of all documents where authorization, execution and delivery are
prerequisites to the effectiveness of such documents (except the due
authorization, execution and delivery of the
<PAGE>
Biotech Target
March [27], 1997
Page 4
Agreement by the Company). We have also assumed: that all individuals executing
and delivering documents had the legal capacity to so execute and deliver; that
you have received all documents you were to receive under the Agreement; that
the Agreement is an obligation binding upon you; if you are a corporation or
other entity, that you have filed any required California franchise or income
tax returns and have paid any required California franchise or income taxes; and
that there are no extrinsic agreements or understandings among the parties to
the Agreement that would modify or interpret the terms of the Agreement or the
respective rights or obligations of the parties thereunder.
Our opinion is expressed only with respect to the federal laws of the United
States of America and the laws of the State of California and the General
Corporation Law of the State of Delaware. We express no opinion as to whether
the laws of any particular jurisdiction apply, and no opinion to the extent that
the laws of any jurisdiction other than those identified above are applicable to
the subject matter hereof. We are not rendering any opinion as to compliance
with any antifraud law, rule or regulation relating to securities, or to the
sale or issuance thereof.
With regard to our opinion in paragraph 4 below, we have examined and relied
upon a certificate executed by an officer of the Company, to the effect that the
consideration for all outstanding shares of capital stock of the Company was
received by the Company in accordance with the provisions of the applicable
Board of Directors resolutions and any plan or agreement relating to the
issuance of such shares, and we have undertaken no independent verification with
respect thereto.
On the basis of the foregoing, in reliance thereon and with the foregoing
qualifications, we are of the opinion that:
1. The Company has been duly incorporated and is a validly existing
corporation in good standing under the laws of the State of Delaware.
2. The Company has the requisite corporate power to own or lease its
property and assets and to conduct its business as it is currently being
conducted and, to the best of our knowledge, is qualified as a foreign
corporation to do business in each jurisdiction in the United States in which
the ownership of its property or the conduct of its business requires such
qualification and where any statutory fines or penalties or any corporate
disability imposed for
24.
<PAGE>
Biotech Target
March [27], 1997
Page 4
the failure to qualify would materially or adversely affect the Company, its
assets, financial condition or operations.
3. The Agreement has been duly and validly authorized, executed and
delivered by the Company and constitutes a valid, legal and binding agreement of
the Company enforceable against the Company in accordance with its terms, except
as rights to indemnity under Section 7.2 of the Agreement may be limited by
applicable laws and except as enforcement may be limited by applicable
bankruptcy, insolvency, reorganization, arrangement, moratorium or other similar
laws affecting creditors' rights, and subject to general equity principles and
to limitations on availability of equitable relief, including specific
performance.
4. The Shares have been duly authorized and, upon issuance and delivery
in accordance with the terms of the Agreement, will be validly issued, fully
paid and nonassessable.
5. The issuance and sale of the Shares as contemplated by the Agreement
does not violate any provision of the Company's Certificate of Incorporation or
Bylaws and does not violate or contravene (a) any governmental statute, rule or
regulation applicable to the Company or (b) any order, writ, judgment,
injunction, decree, determination or award which has been entered against the
Company and of which we are aware, the violation or contravention of which would
materially and adversely affect the Company, its assets, financial condition or
operations.
6. All consents, approvals, authorizations, or orders of, and filings,
registrations, and qualifications with any regulatory authority or governmental
body in the United States required for the issuance and sale of the Shares as
contemplated by the Agreement, have been made or obtained.
7. The issuance and sale of the Shares as contemplated by the Agreement
is exempt from the registration requirements of the Securities Act of 1933, as
amended.
25.
<PAGE>
Biotech Target
March [27], 1997
Page 4
This opinion is intended solely for your benefit and is not to be made available
to or be relied upon by any other person, firm, or entity without our prior
written consent.
Very truly yours,
COOLEY GODWARD LLP
By ________________________
Alan C. Mendelson
26.
<PAGE>
EXHIBIT 11.1
STATEMENT OF COMPUTATION OF NET LOSS PER SHARE
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
----------------------------
1997 1996
------------ ------------
<S> <C> <C>
Net loss .................................................................... $ (4,977,000) $ (3,736,000)
============ ============
Weighted average shares of Common Stock outstanding.......................... 11,565,464 697,520
Shares related to staff accounting bulletin topic 4D :
Stock options and warrants ................................................ -- 270,351
Common Stock .............................................................. -- 421,503
Convertible Preferred Stock (Series C) .................................... -- 3,235,579
------------- ------------
Shares used in computing net loss per share ................................. 11,565,464 4,624,953
Net loss per share .......................................................... $ (0.43) $ (0.81)
Calculation of shares outstanding for computing pro forma net loss per share:
Shares used in computing net loss per share ............................... -- 4,624,953
Adjusted to reflect the effect of the assumed conversion of
Preferred Stock from the date of issuance .............................. -- 4,598,080
------------
Shares used in computing pro forma net loss per share ....................... -- 9,223,033
Pro forma net loss per share ................................................ -- $ (0.41)
============================================================================================================
</TABLE>
- --------
/1/ Series A and B shares
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS, STATEMENTS OF OPERATIONS AND STATEMENTS OF CASH
FLOWS INCLUDED IN THE COMPANY'S FORM 10-Q FOR THE PERIOD ENDED MARCH 31, 1997,
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS AND
NOTES THERETO.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 23,854
<SECURITIES> 3,874
<RECEIVABLES> 305
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 28,722
<PP&E> 3,622
<DEPRECIATION> (1,405)
<TOTAL-ASSETS> 31,027
<CURRENT-LIABILITIES> 2,017
<BONDS> 0
0
0
<COMMON> 13
<OTHER-SE> 28,177
<TOTAL-LIABILITY-AND-EQUITY> 31,027
<SALES> 0
<TOTAL-REVENUES> 305
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 5,451
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 53
<INCOME-PRETAX> (4,977)
<INCOME-TAX> 0
<INCOME-CONTINUING> (4,977)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,977)
<EPS-PRIMARY> (0.43)
<EPS-DILUTED> (0.43)
</TABLE>