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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 5, 1999
REGISTRATION NO. 333-87185
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
AVIRON
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 77-0306986
(State or Other Jurisdiction of (I.R.S. Employer Identification
Incorporation or Organization) Number)
297 NORTH BERNARDO AVENUE
MOUNTAIN VIEW, CA 94043
(650) 919-6500
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
J. LEIGHTON READ, M.D.
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
AVIRON
297 NORTH BERNARDO AVENUE
MOUNTAIN VIEW, CA 94043
(650) 919-6500
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copy to:
ALAN C. MENDELSON, ESQ.
ROBERT J. BRIGHAM, ESQ.
COOLEY GODWARD LLP
FIVE PALO ALTO SQUARE
3000 EL CAMINO REAL
PALO ALTO, CALIFORNIA 94306
(650) 843-5000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after the effective date of this registration Statement.
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, as amended, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this form is to be a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement of the earlier effective registration statement for
the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SECTION 8(a), MAY DETERMINE.
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SUBJECT TO COMPLETION, DATED OCTOBER 5, 1999
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
PROSPECTUS
AVIRON
_________ Shares of Common Stock
This prospectus will allow us to issue shares of our common stock over time.
This means:
- we will provide a prospectus supplement each time we issue shares of
our common stock;
- the prospectus supplement will inform you about the specific terms of
that offering and also may add, update or change information contained
in this document; and
- you should read this document and any prospectus supplement carefully
before you invest.
Aviron's common stock is traded on the Nasdaq National Market under the
symbol "AVIR". On October 1, 1999, the last reported sale price for our common
stock on the Nasdaq National Market was $23.75 per share.
INVESTING IN SECURITIES ISSUED BY AVIRON INVOLVES CERTAIN RISKS. SEE "RISK
FACTORS" BEGINNING ON PAGE 6.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE SECURITIES OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is _____________ , 1999
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE NUMBER
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<S> <C>
WHERE YOU CAN FIND MORE INFORMATION........................................... 2
SUMMARY....................................................................... 4
THE COMPANY................................................................... 4
THE OFFERING.................................................................. 5
RISK FACTORS.................................................................. 6
FORWARD-LOOKING STATEMENTS.................................................... 11
USE OF PROCEEDS............................................................... 12
PLAN OF DISTRIBUTION.......................................................... 13
LEGAL MATTERS................................................................. 13
EXPERTS....................................................................... 13
</TABLE>
YOU SHOULD RELY ONLY ON THE INFORMATION OR REPRESENTATIONS PROVIDED IN THIS
PROSPECTUS OR INCORPORATED BY REFERENCE INTO THIS PROSPECTUS. WE HAVE NOT
AUTHORIZED ANYONE TO PROVIDE YOU WITH ANY DIFFERENT INFORMATION OR TO MAKE ANY
DIFFERENT REPRESENTATIONS IN CONNECTION WITH ANY OFFERING MADE BY THIS
PROSPECTUS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO BUY, IN ANY STATE WHERE THE OFFER OR SALE IS
PROHIBITED. NEITHER THE DELIVERY OF THIS PROSPECTUS, NOR ANY SALE MADE UNDER
THIS PROSPECTUS SHALL, UNDER ANY CIRCUMSTANCES, IMPLY THAT THE INFORMATION IN
THIS PROSPECTUS IS CORRECT AS OF ANY DATE AFTER THE DATE OF THIS PROSPECTUS.
WE OWN OR HAVE RIGHTS TO TRADEMARKS OR TRADE NAMES THAT WE USE IN CONJUNCTION
WITH THE OPERATION OF OUR BUSINESS. WE OWN THE FLUMIST TRADEMARK IN THE UNITED
STATES. THIS PROSPECTUS ALSO INCLUDES TRADEMARKS OWNED BY OTHER PARTIES.
WHERE YOU CAN FIND MORE INFORMATION
We are a reporting company and file annual, quarterly and current reports, proxy
statements and other information with the SEC. You may read and copy these
reports, proxy statements and other information at the SEC's public reference
rooms in Washington, D.C., New York, NY and Chicago, IL. You can request copies
of these documents by writing to the SEC and paying a fee for the copying cost.
Please call the SEC at 1-800-SEC-0330 for more information about the operation
of the public reference rooms. Our SEC filings are also available at the SEC's
Web site at "http://www.sec.gov". In addition, you can read and copy our SEC
filings at the office of the National Association of Securities Dealers, Inc. at
1735 K Street, Washington, D.C. 20006.
The SEC allows us to "incorporate by reference" information that we file with
them, which means that we can disclose important information to you by referring
you to those documents. The information incorporated by reference is an
important part of this prospectus, and information that we file later with the
SEC will automatically update and supersede this information. Further, all
filings we make under the Securities Exchange Act after the date of the initial
registration statement and prior to effectiveness of the registration statement
shall be deemed to be incorporated by reference into this prospectus. We
incorporate by reference the documents listed below and any future filings we
will make with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934:
1. Our Annual Report on Form 10-K for the year ended December 31, 1998;
2. Our Definitive Proxy Statement dated April 26, 1999 filed in connection
with our 1999 Annual Meeting of Stockholders;
3. Our Quarterly Reports on Form 10-Q for the quarters ended March 31, 1999
and June 30, 1999;
4. Our Current Report on Form 8-K, filed with the SEC on January 21, 1999;
and
5. The description of our common stock set forth in our Registration
Statement on Form 8-A, filed with the SEC on July 16, 1996.
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We will provide to you at no cost a copy of any and all of the information
incorporated by reference into the registration statement of which this
prospectus is a part. You may make a request for copies of this information in
writing or by telephone. Requests should be directed to:
Aviron
Attention: Investor Relations
297 North Bernardo Avenue
Mountain View, CA 94043
(650) 919-6500
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SUMMARY
This prospectus contains forward-looking statements which involve risks and
uncertainties. Our actual results could differ materially from those anticipated
in these forward-looking statements as a result of certain factors appearing
under "Risk Factors" and elsewhere in this prospectus.
The following summary does not contain all the information that may be important
to you. You should read the entire prospectus, including the financial
statements and other information incorporated by reference in this prospectus,
before making an investment decision.
THE COMPANY
Aviron is a biopharmaceutical company which focuses on the prevention of disease
through innovative vaccine technology. Our goal is to become a leader in the
discovery, development, manufacture and marketing of vaccines which are
sufficiently cost effective to justify their use in immunization programs
targeting the general population. Our vaccine programs are based on both live
virus vaccine attenuation techniques which have been previously successful and
our proprietary genetic engineering technologies. Previously successful live
virus vaccines, such as those for smallpox, polio, measles, mumps, rubella and
chicken pox, have had a long record of preventing, and in some cases
eliminating, disease.
FluMist(TM), our lead product candidate, is an investigational influenza vaccine
delivered as a nasal spray which has been tested in over 11,000 children and
adults. It has been shown to provide a high protection rate against influenza in
a Phase 3 clinical trial in children. Protection was also seen in a smaller
Phase 3 trial involving healthy young adults. In a separate trial conducted at
13 sites nationwide in healthy working adults, reductions in illness-associated
absenteeism and health resource use were observed across several illness
definitions. In 1998 we submitted our first application for marketing approval
for FluMist to the U.S. Food and Drug Administration (FDA), who notified us that
our application was not accepted for filing due to lack of data on
manufacturing, validation and stability. Requirements for completion of our
application include data on manufacturing and assay validation, stability and
clinical equivalence. In June 1999, we reported the results of a clinical trial
which we believe demonstrated the required clinical equivalence. If the current
manufacturing validation exercises are successful, we plan to resubmit our
application for FluMist to prevent influenza and its complications in children
and healthy adults later in the fall of 1999.
We have completed Phase 2 clinical trials for an investigational live nasal
vaccine for parainfluenza virus type 3 to protect against croup and other
respiratory illnesses in infants and children. We have developed an
investigational vaccine for Epstein-Barr virus to protect against infectious
mononucleosis which is the subject of a collaboration with SmithKline Beecham
Biologicals, S.A. SmithKline Beecham has completed a successful Phase 1 clinical
trial of this vaccine. The National Institute of Allergy and Infectious Diseases
(NIAID) of the National Institutes of Health (NIH) has filed an IND with the FDA
for our vaccine candidates for cytomegalovirus (CMV). Our collaboration with
NIAID seeks to develop a vaccine to prevent the birth defects caused when
pregnant women are infected with CMV. We expect clinical issues to be resolved
with the FDA in time to begin clinical trials with these candidates in 2000. We
are also using our proprietary Rational Vaccine Design technologies to discover
new live virus vaccines. Rational Vaccine Design involves the deletion or
modification of virulence proteins, or the alteration of the virus' genetic
control signals to slow down its replication or the addition of genetic
information to enhance the virus' stimulation of the immune system. We are
applying these technologies to develop vaccine candidates for diseases caused by
herpes simplex virus type 2 and respiratory syncytial virus.
Our executive offices are located at 297 North Bernardo Avenue, Mountain View,
CA 94043 and our telephone number is (650) 919-6500. Aviron's World Wide Web
address is http://www.aviron.com. Information contained on our World Wide Web
site should not be considered to be part of this prospectus.
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THE OFFERING
Common stock offered in this prospectus...... __________ shares
Common stock outstanding after the offering.. __________ shares
Use of proceeds.............................. For operating costs, capital
expenditures and working
capital needs, including costs
associated with the regulatory
approval, manufacturing, and
potential commercialization of
FluMist; for our research and
development activities related
to other formulations of
FluMist and for our pipeline
products; for the development
of the infrastructure of
administrative and other
support services necessary to
support these activities; and
other general corporate
purposes. See "Use of
Proceeds."
Nasdaq National Market symbol................ AVIR
The number of shares of common stock to be outstanding after this offering is
based on the number of shares outstanding as of August 31, 1999, and excludes:
- 1,994,924 shares subject to options outstanding as of August 31, 1999,
at a weighted average exercise price of $20.29 per share;
- 1,638,503 additional shares that we could issue under our stock option
plans;
- 266,592 additional shares that we could issue under our employee stock
purchase plan;
- 49,182 shares subject to warrants outstanding as of August 31, 1999, at
a weighted average exercise price of $6.98; and
- shares issuable upon conversion of $100 million principal amount of
convertible subordinated notes issued in March 1998.
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RISK FACTORS
An investment in our securities involves a high degree of risk. We operate in a
dynamic and rapidly changing environment that involves numerous risks and
uncertainties. You should not make an investment in these securities if you
cannot afford to lose your entire investment. Before purchasing these
securities, you should carefully consider the following risk factors, as well as
other information contained in this prospectus or incorporated by reference into
this prospectus, in evaluating an investment in the securities offered by this
prospectus.
RISKS RELATED TO FLUMIST
For the foreseeable future, the risks relating to our Company are primarily
related to FluMist. All of our potential near-term revenues are dependent on the
commercialization of FluMist. Because of the seasonality of influenza epidemics,
FluMist must be available in the third and fourth quarter of the year for us to
achieve revenues for that season. Delay in availability of FluMist in the
initial year of commercialization or in subsequent years could cause us to lose
revenues for an entire influenza season.
IF WE POSTPONE THE FILING OF OUR APPLICATION TO THE FDA FOR FLUMIST,
COMMERCIALIZATION OF FLUMIST WILL BE DELAYED.
In 1998, we submitted our first application for FluMist, which was not accepted
for filing by the FDA. Additional information required before we resubmit our
application includes data on manufacturing and assay validation, stability and
clinical equivalence. If our manufacturing validation exercises and studies to
confirm sufficient shelf-life stability are not successful, we will postpone our
filing beyond the fall of 1999, which will delay commercialization of FluMist.
IF THE FDA FINDS THAT OUR APPLICATION FOR FLUMIST DOES NOT SUPPORT APPROVAL, OR
IF THEIR INSPECTORS FIND THAT OUR MANUFACTURING FACILITIES ARE NOT ADEQUATE,
COMMERCIALIZATION OF FLUMIST MAY BE DELAYED BY ONE OR MORE INFLUENZA SEASONS.
APPROVAL RISK RELATED TO MANUFACTURING
If the FDA finds that the data on manufacturing and assay validation, stability
and clinical equivalence in our application is insufficient, it could refuse to
accept our application for filing or could require corrective action or
additional data which could delay or prevent approval. The FDA is likely to
inspect each of our facilities involved in the process of manufacturing FluMist.
FDA inspectors may find deficiencies in the facilities or commercial scale
processes which may lead to substantial delay in FluMist approval or prevent it
from being approved at all.
APPROVAL RISK RELATED TO FLUMIST INDICATIONS AND CLAIMS
We are initially seeking FDA approval for use of FluMist in children and healthy
adults. The FDA may not find our clinical data adequate to support use in any
particular subset of the population and may exclude a large segment of the
potential market. Recent reports of adverse events following the administration
of another live attenuated vaccine may lead the FDA to request additional safety
data for FluMist. We could be required to commence and complete additional
clinical trials to generate additional safety and efficacy data to support
product approval for one or more of our target populations, which may lead to
substantial delay in FluMist approval or prevent it from being approved at all.
IF WE HAVE PROBLEMS PERFORMING THE HIGHLY COMPLEX ANNUAL UPDATE OF FLUMIST
ACCORDING TO GOVERNMENT RECOMMENDATIONS, OUR SALES FOR THAT YEAR WILL BE LIMITED
AND WE MAY HAVE NO SALES AT ALL.
Early each year, the FDA determines which strains will be included in the
following season's influenza vaccines. After the FDA makes its decision, we will
have approximately six months to modify FluMist each year to include the
selected strains and manufacture FluMist for use in the fall. The major factors
that may delay availability of FluMist each fall are:
- - The FDA may delay its selection of strains for a given influenza season.
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- - We may experience difficulty or delay in the complex and technically
demanding process we must follow each year to update FluMist.
- - We may not have sufficient quantities of bulk vaccine in time to assure
availability in the fall due to problems with new updated strains,
performance of Medeva Pharma, our manufacturing partner in England, or due
to availability of the special eggs used in production. Following
inoculation with our updated strains, bulk vaccine is harvested from special
hens eggs. This is a labor-intensive process which must be conducted under
strict controls and tight timelines. We are dependent on Medeva for
successful staffing, training and supervision for this process. We are
currently dependent on a single supplier for an adequate and timely supply
of eggs.
- - We may have difficulty with the blending, filling and packaging of FluMist.
The bulk vaccine for three strains of influenza must be diluted and blended
together prior to filling the nasal spray device. This process must also be
conducted under strict controls and tight timelines. We depend upon a single
supplier for our nasal spray device. We also depend upon our packaging
contractor to tightly control the packaging process and its timeframe.
THE SUCCESS OF FLUMIST IS HIGHLY DEPENDENT ON OUR COMMERCIALIZATION PARTNER,
WYETH-AYERST LABORATORIES, WHO IS PRIMARILY RESPONSIBLE FOR MARKETING,
PROMOTION, SALES AND DISTRIBUTION ACTIVITIES.
We have entered into an exclusive agreement with Wyeth-Ayerst to market, promote
and sell FluMist. We believe that for FluMist to be widely adopted, the efforts
of an experienced pharmaceutical sales force is needed. If Wyeth-Ayerst fails to
devote appropriate resources to market and sell FluMist, sales of FluMist could
be reduced. Wyeth-Ayerst also will participate in the development and
manufacturing of a second generation formulation of FluMist, which will be
particularly important if FluMist is to be accepted outside of the United
States. If Wyeth-Ayerst does not devote sufficient resources to the development
and commercialization of such formulation, its commercial availability will be
delayed. If Wyeth-Ayerst breaches or terminates its agreement with us or
otherwise fails to conduct their FluMist-related activities in a timely manner
or if there is a dispute with them about our or their respective obligations, we
may need to seek another partner, or revenues associated with milestone payments
or FluMist commercialization could be delayed or be substantially more expensive
for us to achieve.
IF DOCTORS, OTHER HEALTH CARE PROVIDERS AND MEDICAL ADVISORY BODIES DO NOT
RECOMMEND FLUMIST OUR MARKET OPPORTUNITY WILL BE LIMITED.
We believe recommendations from advisory bodies such as the Advisory Committee
on Immunization Practices of the Centers for Disease Control and the American
Academy of Pediatrics will be important to encourage doctors and other
healthcare providers to recommend FluMist. If these bodies do not recommend
FluMist, our market opportunity will be limited.
WHETHER OR NOT DOCTORS, OTHER HEALTH CARE PROVIDERS AND MEDICAL ADVISORY BODIES
RECOMMEND FLUMIST, IF FLUMIST IS NOT ACCEPTED BY THE MARKET OUR SALES WILL BE
REDUCED.
The degree of acceptance for FluMist may be limited by a number of factors,
including:
- - perceived effectiveness of competing influenza vaccines, including the flu
shot;
- - unfavorable publicity concerning other vaccines;
- - pricing of FluMist;
- - reimbursement polices of government and third-party payors;
- - side effects, such as the runny nose, sore throat or fever seen in some
clinical trial participants;
- - the lack of familiarity with nasal spray vaccines; and
- - the requirement of frozen storage capacity by those administering the
vaccine.
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WE FACE COMPETITION FROM COMPANIES WITH SUBSTANTIAL FINANCIAL, TECHNICAL, AND
MARKETING RESOURCES, WHICH COULD SERIOUSLY LIMIT OUR FUTURE REVENUES FROM
FLUMIST.
FluMist will be competing against the flu shot, which is sold by large
pharmaceutical companies, including Wyeth-Ayerst and Medeva.
We also operate in a rapidly evolving field. In addition to potential
improvements in the flu shot, we are aware of efforts to develop non-injectable
influenza vaccines that would be more directly competitive with FluMist. For
example:
- - a nasally administered killed vaccine is being developed by Biovector
Therapeutics, S.A and Biochem Pharma, Inc.;
- - a nasally-administered live influenza vaccine has been developed and was
widely used in Russia;
- - antiviral drugs are being developed which may be used to treat or prevent
influenza, such as Relenza, sold by Glaxo Wellcome plc, and Tamiflu,
expected to be sold by Roche Holdings AG.
THE FLUMIST MASTER DONOR STRAINS ARE NOT PROTECTED BY PATENTS AND IF THE STRAINS
ARE DUPLICATED, THIRD PARTIES MAY BE ABLE TO MARKET AND SELL A COMPETING
VACCINE.
We have no issued patents covering the FluMist master donor strains. Our rights
to the master donor strains are substantially based on (1) an exclusive
worldwide license of materials and know-how from the University of Michigan,
which owns the master donor strains from which our vaccine is derived; and (2)
an exclusive license of know-how and clinical trial data from the NIH. Neither
the University of Michigan nor the NIH has been issued any patents covering the
master donor strains. A third party may gain access by some means to the
University of Michigan master donor strains and reproduce FluMist or develop
another live virus influenza vaccine that might be comparable to ours in terms
of safety and effectiveness.
FAILURE TO RAISE ADDITIONAL CAPITAL COULD DELAY OUR COMMERCIALIZATION OF FLUMIST
AND DELAY THE DEVELOPMENT OF A SECOND GENERATION FORMULATION OF FLUMIST AND OF
OUR OTHER POTENTIAL PRODUCTS.
Our operations to date have consumed substantial and increasing amounts of cash.
As of June 30, 1998, we had an accumulated deficit of approximately $138.1
million. The negative cash flow from operations is expected to continue and to
accelerate in the foreseeable future. The commercialization of FluMist will
require a commitment of substantial funds for manufacturing, continued clinical
trial efforts and other commercialization activities. We also expect to spend a
substantial amount to develop a second generation formulation of FluMist. In
addition, we expect to continue funding the research, preclinical testing and
clinical trials necessary to develop our early-stage products. We expect our
current capital resources will enable us to maintain our current and planned
operations into 2000. Our future capital requirements will depend upon many
factors, including:
- - product commercialization activities;
- - time and costs involved in obtaining regulatory approvals;
- - progress of preclinical testing and clinical trials;
- - the addition of other early-stage programs to our product pipeline; and
- - continued scientific progress in the research and development of our vaccine
programs.
If adequate funds are not available, the commercialization of FluMist may be
delayed, we may need to delay the development of a second generation formulation
of FluMist, and we will be required to delay, reduce the scope of, or eliminate
one or more of our research or development programs. If additional funds are
raised by issuing equity or convertible securities, your percentage ownership in
Aviron will be reduced.
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IF WE ARE UNABLE TO ATTRACT AND RETAIN ADDITIONAL QUALIFIED PERSONNEL, OUR
ABILITY TO COMMERCIALIZE FLUMIST AND DEVELOP A SECOND GENERATION FORMULATION OF
FLUMIST MAY BE DELAYED.
Attracting and retaining significant additional qualified personnel will be
critical to our success. To pursue the development and commercialization of
FluMist, we will be required to hire additional qualified personnel, especially
those with expertise in development, commercial-scale manufacturing, and product
launch activities. Expansion in these areas is also expected to require the
addition of management personnel and the development of additional expertise by
existing management personnel. We face competition for qualified individuals
from numerous pharmaceutical, biopharmaceutical and biotechnology companies,
many of which are located in other parts of the country.
OTHER RISKS RELATED TO AVIRON
OTHER THAN FLUMIST, OUR PRODUCT CANDIDATES ARE AT EARLIER STAGES OF DEVELOPMENT,
AND IF WE ARE UNABLE TO SUCCESSFULLY DEVELOP AND COMMERCIALIZE PRODUCTS, WE
WOULD NOT GENERATE REVENUES FROM THESE PRODUCTS.
To date, none of our product candidates have been commercialized. Other than
FluMist, all of our product candidates are in early stages of development. We
face the risk of failure normally found in developing biotechnology products
based on new technologies. Successfully developing, manufacturing, introducing
and marketing our early-stage product candidates, if we can demonstrate safety
and efficacy and gain regulatory approval, will require several years and
substantial additional capital. We are aware of several companies that are
marketing or are in late-stage development of products that would be competitive
with our early-stage product candidates.
WE MAY NOT RECEIVE PATENT PROTECTION FOR OUR POTENTIAL PRODUCTS AND
MANUFACTURING PROCESSES.
Our success depends to a significant degree upon our ability to develop
proprietary products. Since patent applications in the United States are
maintained in secrecy until patents issue and since publication of discoveries
in the scientific or patent literature often lag behind actual discoveries, we
cannot be certain that we were the first to make the inventions covered by each
of our pending patent applications or that we were the first to file patent
applications for these inventions. The patent positions of biotechnology and
pharmaceutical companies can be highly uncertain and involve complex legal and
factual questions. Therefore, the breadth of claims allowed in biotechnology and
pharmaceutical patents, or their enforceability, cannot be predicted. We cannot
assure you that any of our owned or licensed patents or patent applications will
issue or, if issued, will not be invalidated or circumvented, or that the rights
granted by them will provide any protection or competitive advantages to us.
OUR PRODUCTS COULD INFRINGE THE INTELLECTUAL PROPERTY RIGHTS OF OTHERS, CAUSING
COSTLY LITIGATION AND THE LOSS OF SIGNIFICANT RIGHTS.
Our success will also depend upon us not infringing patents issued to others. A
number of pharmaceutical companies, biotechnology companies, universities and
research institutions have filed patent applications or received patents in the
areas of our research and development programs. Some of these patent
applications or patents may limit the scope of claims issuing from our patent
applications, prevent certain claims from being issued, or conflict in certain
respects with claims made under our applications.
COMPUTER SYSTEMS OF OURS OR OTHERS MAY FAIL IN THE YEAR 2000, WHICH COULD
DELAY OUR PRODUCT DEVELOPMENT AND COMMERCIALIZATION.
Many currently installed computer systems are not capable of distinguishing 21st
century dates from 20th century dates. As a result, in less than four months,
computer systems and software used by many companies will experience operating
difficulties unless they have been modified or upgraded to adequately process
information involving the century change.
We use a number of computer programs across our entire operations and we are
dependent upon the proper functioning of our own computer and data-dependent
systems. In addition, we are dependent on others, including our suppliers and
manufacturing and marketing partners, who utilize computer systems and
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software in their operations. Any failure or malfunctioning on the part of these
systems could result in a delay in our product development and
commercialization.
Even if we act in a timely manner to complete all of our Year 2000 assessments
and then identify, develop and implement remediation plans believed to be
adequate, some problems may not be identified or corrected in time to prevent a
negative impact on us.
OUR BUSINESS EXPOSES US TO PRODUCT LIABILITY CLAIMS AND THE DEFENSE OR LOSS OF
ANY SUCH CLAIM COULD BE COSTLY.
Our business exposes us to potential product liability risks that are inherent
in the testing, manufacturing and marketing of vaccines. We have obtained
clinical trial liability insurance for our clinical trials. We also intend to
seek product liability insurance in the future for products approved for
marketing. However, we cannot assure you that we will be able to acquire or
maintain insurance at a reasonable cost or in sufficient amounts to protect us
from liability risks. A successful product liability claim or a series of claims
brought against us could seriously harm our business. We intend to seek
inclusion of certain of our products in the United States National Vaccine
Injury Compensation Program, a no-fault compensation program for claims against
vaccine manufacturers, which administers a trust funded by excise taxes on sales
of certain recommended childhood vaccines. We cannot assure you that this
government program will continue or that our proposed vaccines will be included
in the program.
WE USE HAZARDOUS MATERIALS IN OUR BUSINESS AND AN ACCIDENT COULD BE COSTLY.
Our business activities involve the controlled use of hazardous materials,
chemicals, various radioactive substances and viruses. Although we believe that
our safety procedures for handling and disposing of these materials comply with
state and federal regulations, the risk of accidental contamination or injury
from these materials cannot be completely eliminated. In the event of such an
accident, we could be held liable for any damages that result and any such
liability would seriously harm our business. In addition, we may incur
substantial costs to comply with environmental regulations if we develop
manufacturing capacity.
THE MARKET PRICE OF OUR COMMON STOCK WILL FLUCTUATE AND YOU MAY LOSE ALL OR PART
OF YOUR INVESTMENT.
Our common stock is quoted for trading on the Nasdaq National Market. The market
price for our common stock may continue to be highly volatile for a number of
reasons including:
- - future announcements concerning Aviron or its competitors;
- - quarterly variations in operating results;
- - announcements of technological innovations;
- - the introduction of new products or changes in product pricing policies by
us or competitors;
- - the status of patents or patent litigation; and
- - changes in earnings estimates by analysts or other factors.
In addition, stock prices for many biopharmaceutical companies fluctuate widely
for reasons which may be unrelated to operating results. These fluctuations, as
well as general economic, market and political conditions such as recessions or
military conflicts, may materially and adversely affect the market price of our
common stock.
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FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements. These statements
relate to future events or our future financial performance. In some cases, you
can identify forward-looking statements by terminology such as "anticipates",
"believes," "continue,", "could," "estimates," "expects," "intends," "may,"
"plans," "potential," "predicts," "should," or "will" or the negative of such
terms or other comparable terminology. These statements are only predictions and
involve known and unknown risks, uncertainties and other factors, including the
risks outlined under "Risk Factors," that may cause our or our industry's actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels or activity, performance or
achievements expressed or implied by such forward-looking statements.
Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements. Moreover, neither we nor any
other person assumes responsibility for the accuracy and completeness of such
statements. We are under no duty to update any of the forward-looking statements
after the date of this prospectus to conform such statements to actual results,
unless required by law.
11
<PAGE> 14
USE OF PROCEEDS
We cannot guarantee that we will receive any proceeds in connection with this
offering.
We intend to use the net proceeds of this offering, together with other
available funds, for operating costs, capital expenditures and working capital
needs, which may include costs of FluMist regulatory filings and the
manufacturing and commercialization of FluMist in its current formulation;
development of a second-generation formulation of FluMist; research and
development of other pipeline products; development of the infrastructure
necessary to support these activities; and other general corporate purposes.
We have not identified precisely the amounts we plan to spend on each of these
areas or the timing of such expenditures. Proceeds of this offering may also be
used to acquire companies or products that complement our business, although we
are not planning or negotiating any such transactions as of the date of this
prospectus. The amounts actually expended for each purpose may vary
significantly depending upon numerous factors, including the amount and timing
of the proceeds from this offering progress with the regulatory approval,
manufacturing and commercialization of FluMist and progress with our other
development programs. In addition, expenditures will also depend upon the
establishment of collaborative arrangements with other companies, the
availability of other financing and other factors.
We anticipate that we will be required to raise substantial additional capital
to continue to fund the development and commercialization of FluMist and
development of our other product candidates. Additional capital may be raised
through additional public or private financing, as well as collaborative
relationships, borrowings and other available sources.
12
<PAGE> 15
PLAN OF DISTRIBUTION
We may offer the shares of common stock:
- directly to purchasers;
- to or through underwriters;
- through dealers, agents or institutional investors; or
- through a combination of such methods.
Regardless of the method used to sell the common stock, we will provide a
prospectus supplement that will disclose:
- the identity of any underwriters, dealers, agents or investors who
purchase the securities;
- the material terms of the distribution, including the amount sold
and the consideration paid;
- the amount of any compensation, discounts or commissions to be
received by the underwriters, dealers or agents;
- the terms of any identification provisions, including
indemnification from liabilities under the federal securities laws;
and
- the nature of any transaction by an underwriter, dealer or agent
during the offering that is intended to stabilize or maintain the
market price of the securities.
LEGAL MATTERS
For the purpose of this offering, Cooley Godward LLP, Palo Alto,
California is giving an opinion of the validity of the issuance of the
securities offered in this prospectus.
EXPERTS
Ernst & Young LLP, independent auditors have audited our financial
statements included in our Annual report on form 10-K for the year ended
December 31, 1998, as set forth in their report, which is incorporated by
reference in this prospectus and elsewhere in the registration statement. Our
financial statements are incorporated by reference in reliance on Ernst & Young
LLP's report, given on their authority as experts in accounting and auditing.
13
<PAGE> 16
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee.......... $ 27,800
Nasdaq National Market Additional Shares Listing Fee......... $ 17,500
Legal fees and expenses...................................... $ 75,000
Accountants' fees and expenses............................... $ 5,000
Miscellaneous................................................ $ 49,700
Total................................................ $175,000
=======
</TABLE>
The foregoing items, except for the Securities and Exchange Commission
registration fee, are estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under Section 145 of the Delaware General Corporation Law, Aviron has broad
powers to indemnify its directors and officers against liabilities they may
incur in such capacities, including liabilities under the Securities Act of
1933.
Aviron's certificate of incorporation and by-laws include provisions to (i)
eliminate the personal liability of its directors for monetary damages resulting
from breaches of their fiduciary duty to the extent permitted by Section
102(b)(7) of the General Corporation Law of Delaware and (ii) require Aviron to
indemnify its directors and officers to the fullest extent permitted by Section
145 of the Delaware Law, including circumstances in which indemnification is
otherwise discretionary. Pursuant to Section 145 of the Delaware Law, a
corporation generally has the power to indemnify its present and former
directors, officers, employees and agents against expenses incurred by them in
connection with any suit to which they are, or are threatened to be made, a
party by reason of their serving in such positions so long as they acted in good
faith and in a manner they reasonably believed to be in, or not opposed to, the
best interest of the corporation, and with respect to any criminal action, they
had no reasonable cause to believe their conduct was unlawful. Aviron believes
that these provisions are necessary to attract and retain qualified persons as
directors and officers. These provisions do not eliminate the directors' duty of
care, and, in appropriate circumstances, equitable remedies such as injunctive
or other forms of non-monetary relief will remain available under Delaware law.
In addition, each director will continue to be subject to liability for breach
of the directors' duty of loyalty to Aviron, for acts or omissions not in good
faith or involving intentional misconduct, for knowing violations of law, for
acts or omissions that the director believes to be contrary to the best
interests of Aviron or its stockholders, for any transaction from which the
director derived an improper personal benefit, for acts or omissions involving a
reckless disregard for the directors' duty to Aviron or its stockholders when
the director was aware or should have been aware of a risk of serious injury to
Aviron or its stockholders, for acts or omissions that constitute an unexcused
pattern of inattention that amounts to an abdication of the director's duty to
Aviron or its stockholders, for improper transactions between the director and
Aviron and for improper distributions to stockholders and loans to directors and
officers. The provision also does not affect a director's responsibilities under
any other law, such as the federal securities law or state or federal
environmental laws.
The Registrant has entered into indemnity agreements with each of its
directors and executive officers that require Aviron to indemnify such persons
against expenses, judgments, fines, settlements and other amounts incurred
(including expenses of a derivative action) in connection with any proceeding,
whether actual or threatened, to which any such person may be made a party by
reason of the fact that such person is or was a director or an executive officer
of Aviron or any of its affiliated enterprises, provided such person acted in
good faith and in a manner such persons reasonably believed to be in, or not
opposed to, the best interests of Aviron and, with respect to any criminal
proceeding, has no reasonable cause to believe his conduct was unlawful. The
indemnification agreements also set forth procedures that will apply in the
event of a claim for indemnification thereunder.
At present, there is no pending litigation or proceeding involving a
Director or officer of Aviron as to which indemnification is being sought.
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<PAGE> 17
Aviron has an insurance policy covering the officers and directors of Aviron
with respect to certain liabilities, including liabilities arising under the
Securities Act or otherwise.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF DOCUMENT
- ----------- -----------------------
<S> <C>
5.1 Opinion of Cooley Godward LLP.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Cooley Godward LLP. Reference is made to Exhibit 5.1.
24.1 Power of Attorney.
</TABLE>
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<PAGE> 18
ITEM 17. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities Act of
1933, may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the provisions described in Item 15 or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer, or controlling
person of the Registrant in the successful defense of any action suit, or
proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made
pursuant to this registration statement: (i) To include any prospectus
required by Section 10(a)(3) of the Securities Act of 1933; (ii) To
reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a 20 percent
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement; (iii) To include any material information with respect to
the distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof; and
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrant hereby undertakes that, for the purposes of
determining any liability under the Securities Act of 1933, each filing
of the Registrant's annual report pursuant to Section 13(a) of Section
15(d) of the Securities Exchange Act of 1934 that is incorporated by
reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
The undersigned Registrant undertakes that; (1) for purpose of determining any
liability under the Securities Act of 1933, the information omitted from the
form of prospectus filed as part of the registration statement in reliance upon
Rule 430A and contained in the form of prospectus filed by the Registrant
pursuant to Rule 424(b) (1) or (4) or 497(h) under the Securities Act shall be
deemed to be part of the registration statement as of the time it was declared
effective; and (2) for the purpose of determining any liability under the
Securities act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
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<PAGE> 19
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Amendment
No. 1 to Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized in the City of Mountain View, State of California,
this 4th day of October, 1999.
AVIRON
By: /s/ J. Leighton Read, M.D.
-------------------------------------
J. Leighton Read, M.D.
Chairman and Chief Executive Officer
(Principal Executive Officer)
Power of Attorney
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 1 to Registration Statement has been signed by the following
persons in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
Chairman and Chief Executive Officer October 4, 1999
/s/ J. Leighton Read, M.D. (Principal Executive Officer)
- -----------------------------------
J. Leighton Read, M.D.
/s/ Fred Kurland Senior Vice President and Chief October 4, 1999
- ----------------------------------- Financial Officer (Principal
Fred Kurland Financial and Accounting Officer)
/s/ Reid W. Dennis* Director October 4, 1999
- -----------------------------------
Reid W. Dennis
/s/ Paul H. Klingenstein* Director October 4, 1999
- -----------------------------------
Paul H. Klingenstein
/s/ Bernard Roizman* Director October 4, 1999
- -----------------------------------
Bernard Roizman, Sc.D.
/s/ Jane E. Shaw* Director October 4, 1999
- -----------------------------------
Jane E. Shaw, Ph.D.
*By: /s/ J. Leighton Read, M.D.
-------------------------------
J. Leighton Read, M.D.
Attorney-in-Fact
</TABLE>
17
<PAGE> 20
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION OF DOCUMENT
- ----------- -----------------------
5.1 Opinion of Cooley Godward LLP.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Cooley Godward LLP. Reference is made to Exhibit 5.1.
24.1 Power of Attorney. See signature page.
18
<PAGE> 1
EXHIBIT 5.1
[Cooley Godward LLP Letterhead]
October 4, 1999
Aviron
297 North Bernardo Avenue
Mountain View, CA 94043
RE: REGISTRATION STATEMENT ON FORM S-3
Ladies and Gentlemen:
You have requested our opinion with respect to certain matters in connection
with the filing by Aviron (the "Company") of a Registration Statement on Form
S-3 (the "Registration Statement") with the Securities and Exchange Commission,
including a prospectus (the "Prospectus") covering the offering of a maximum of
$100,000,000 shares of the Company's Common Stock, with .001 par value as
described in the Registration Statement.
In connection with this opinion, we have examined and relied upon the
Registration Statement and related Prospectus, the Company's Amended and
Restated Certificate of Incorporation, the Company's Restated Bylaws, and the
originals or copies certified to our satisfaction of such documents, records,
certificates, memoranda and other instruments as in our judgment are necessary
or appropriate to enable us to render the opinion expressed below. We have
assumed the genuineness and authenticity of all documents submitted to us as
copies thereof, and the due execution and delivery of all documents where due
execution and delivery are a prerequisite to the effectiveness thereof, and that
at the time of issuance the Company will have sufficient unauthorized and
unissued shares of Common Stock and the terms of offer and sale of the shares
will have been authorized by resolutions of the Company's Board of Directors.
On the basis of the foregoing, and in reliance thereon, we are of the opinion
that the shares registered under the Registration Statement, when issued and
paid for in accordance with the Registration Statement and authorizing
resolutions, will be validly issued, fully paid, and nonassessable.
We consent to the reference to our firm under the caption "Legal Matters" in
the Prospectus included in the Registration Statement and to the filing of this
opinion as an exhibit to the Registration Statement.
Very truly yours,
Cooley Godward LLP
/s/ Robert J. Brigham
- -----------------------------
Robert J. Brigham
<PAGE> 1
EXHIBIT 23.1
Consent of Ernst & Young LLP, Independent Auditors
We consent to the reference to our firm under the caption "Experts" in Amendment
No. 1 to the Registration Statement (Form S-3) and related Prospectus of Aviron
for the registration of a maximum of up to $100,000,000 of its common stock and
to the incorporation by reference therein of our report dated February 17, 1999,
with respect to the financial statements of Aviron included in its Annual Report
(Form 10-K) for the year ended December 31, 1998, filed with the Securities and
Exchange Commission.
/s/ ERNST & YOUNG LLP
- ---------------------
Palo Alto, California
October 4, 1999
