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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 14, 2000
REGISTRATION NO. 333-45072
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 4
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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AVIRON
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 77-0309686
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
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297 NORTH BERNARDO AVENUE
MOUNTAIN VIEW, CALIFORNIA 94043
(650) 919-6500
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
C. BOYD CLARKE
PRESIDENT AND CHIEF EXECUTIVE OFFICER
AVIRON
297 NORTH BERNARDO AVENUE
MOUNTAIN VIEW, CALIFORNIA 94043
(650) 919-6500
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPY TO:
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. [ ]
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 THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE
SELLING STOCKHOLDERS 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 IS NOT
SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR
SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED DECEMBER 14, 2000
PROSPECTUS
AVIRON
1,124,872 SHARES
COMMON STOCK
These shares of common stock are being offered by the selling stockholders,
identified in this prospectus. The selling stockholders may sell the shares of
common stock in a number of different ways and at varying prices. We provide
more information about how they may sell their shares in the section entitled
"Plan of Distribution" on page 15.
We are not selling any shares of our common stock under this prospectus and
will not receive any portion of the proceeds from the sale of these shares.
Aviron's common stock is traded on the Nasdaq National Market under the
symbol "AVIR". On December 13, 2000, the last reported sale price for our common
stock on the Nasdaq National Market was $64.25 per share.
INVESTING IN SECURITIES ISSUED BY AVIRON INVOLVES CERTAIN RISKS. SEE "RISK
FACTORS" BEGINNING ON PAGE 4.
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 , 2000
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TABLE OF CONTENTS
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PAGE
NUMBER
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WHERE YOU CAN FIND MORE INFORMATION......................... 1
SUMMARY..................................................... 2
THE COMPANY................................................. 2
RISK FACTORS................................................ 4
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS........... 13
USE OF PROCEEDS............................................. 13
SELLING STOCKHOLDERS........................................ 14
PLAN OF DISTRIBUTION........................................ 15
LEGAL MATTERS............................................... 16
EXPERTS..................................................... 16
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You should rely only on the information contained in, or incorporated into
this prospectus. We have not authorized anyone to provide you with information
different from that contained in this prospectus. The information contained in
this prospectus is accurate only as of the date of this prospectus, regardless
of the time of delivery of this prospectus or of any sale of common stock.
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.
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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 Securities and Exchange
Commission, or 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, 1999,
filed with the SEC on March 8, 2000, and amended by a Form 10-K/A filed
with the SEC on April 3, 2000 and April 28, 2000;
2. Our Definitive Proxy Statement dated May 4, 2000, filed with the SEC on
May 4, 2000, in connection with our 2000 Annual Meeting of Stockholders;
3. Our Quarterly Reports on Form 10-Q for the quarters ended March 31,
2000, June 30, 2000 and September 30, 2000, filed with the SEC on May
15, 2000, August 11, 2000 and November 14, 2000, respectively;
4. Our Current Report on Form 8-K dated June 12, 2000, filed with the SEC
on June 13, 2000;
5. Our Current Report on Form 8-K dated October 19, 2000, filed with the
SEC on October 19, 2000;
6. Our Current Report on Form 8-K dated November 2, 2000, filed with the
SEC on November 2, 2000; and
7. The description of our common stock set forth in our Registration
Statement on Form 8-A, filed with the SEC on July 16, 1996.
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
We are a biopharmaceutical company focused on the prevention of disease
through innovative vaccine technology. We are currently focusing our product
development and commercialization efforts on our lead product candidate,
FluMist, an investigational intranasal live virus vaccine for influenza. Our
goal is to become a leader in the discovery, development, manufacture and
marketing of innovative development vaccines. Our vaccine development programs
are based both on techniques for producing weakened live virus vaccines and on
our proprietary genetic engineering technologies. Live virus vaccines, including
those for smallpox, polio, measles, mumps, rubella and chicken pox, have had a
long record of preventing disease.
According to the Centers for Disease Control and Prevention, or CDC,
epidemics of influenza occur during the winter months nearly every year and are
responsible for an average of approximately 20,000 deaths per year in the United
States. Influenza viruses also can cause global epidemics of disease during
which rates of illness and death from influenza-related complications can
increase dramatically. Influenza viruses cause disease in all age groups. Rates
of infection are highest among children, but rates of serious illness and death
are highest among persons over age 64, and persons of any age who have medical
conditions that place them at high risk for complications from influenza.
FluMist is designed to prevent influenza. We are developing and are
preparing to commercialize FluMist primarily in collaboration with our partner
Wyeth Lederle Vaccines, or Wyeth, a business unit of the pharmaceutical division
of American Home Products Corporation, or AHP. FluMist has been shown to provide
a high protection rate against influenza in Phase 3 clinical trials in children
and healthy adults. In a separate trial conducted in healthy working adults,
reductions in days of illness, antibiotic use, health resource use and missed
work because of illness were observed across several illness definitions. We are
in the process of obtaining approval of FluMist from the U.S. Food and Drug
Administration, or FDA. On October 31, 2000, as a part of this approval process,
we submitted to the FDA our clinical data, together with, among other things,
detailed information on the manufacture and composition of FluMist, in the form
of a biologics license application, or BLA. Previously in 1998, the FDA notified
us that, in order to support a BLA filing for FluMist, we must demonstrate the
clinical equivalence between FluMist produced in our new manufacturing facility
located in Pennsylvania and FluMist used in our Phase 3 trials, and that we must
also provide additional data on manufacturing validation and stability. In June
1999, we reported the results of a clinical trial that we believe demonstrated
the required clinical equivalence. We have also recently completed the
manufacturing validation exercises, stability studies and documentation we
believe necessary to support a BLA for FluMist, and have incorporated the
relevant data and information in our recently-submitted BLA.
We have recently taken a number of steps to prepare for the
commercialization of FluMist, including increasing the size and scope of our
infrastructure. Also, in October 2000 we leased the facility in the United
Kingdom where the bulk manufacturing of FluMist takes place and transferred
approximately 100 employees to our United Kingdom subsidiary, in order to have
direct control over FluMist's manufacturing operations. In addition we began
manufacturing FluMist at commercial scale for use in the 2001-2002 influenza
season pending receipt of marketing approval from the FDA.
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Also in October 2000, we agreed to acquire the remaining 24 years of a 25-year
lease of approximately eight acres of land in the United Kingdom. We intend to
utilize an existing 45,000 sq. foot structure on the property to build a new
FluMist manufacturing facility.
Influenza vaccination rates for healthy children are substantially below
those for the general population. In addition, the majority of healthy adults
currently do not receive the influenza vaccine. We believe that there are
significant market opportunities for FluMist in these two populations.
We believe FluMist can achieve significant market acceptance because:
- In clinical trials, FluMist provided protection rates as high as 93% in
healthy children and 85% in healthy adults;
- FluMist is a nasal spray which pediatricians, parents and vaccine
recipients may find as an attractive new way to prevent influenza;
- In a large clinical trial, FluMist helped reduce the incidence of middle
ear infections in children and the associated antibiotic use;
- As noted in a recent article in the Journal of Pediatrics, FluMist is a
weakened live virus vaccine which triggers an immune response similar to
the natural immune response to influenza, while the response to the flu
shot is more narrowly focused;
- FluMist stimulates immunity in the nose and throat, the point of contact
for airborne infections such as influenza, as well as in the bloodstream;
and
- FluMist has been administered to more than 13,000 people with no serious
adverse events associated with use of the vaccine.
The current formulation of FluMist requires freezer storage throughout
distribution. Because international markets do not have distribution channels
well suited to the sale of frozen vaccines, Wyeth has initiated Phase 3 clinical
trials outside of the United States for our second generation refrigerator
stable, or liquid, formulation of FluMist.
We also have a number of other vaccines in various stages of development:
- a parainfluenza virus type 3 vaccine to prevent the most common cause of
croup, a respiratory infection in infants, for which we have completed a
Phase 2 clinical trial;
- an Epstein-Barr virus vaccine to prevent infectious mononucleosis for
which our collaborative partner, SmithKline Beecham Biologicals S.A., has
completed a Phase 1 clinical trial and has initiated a Phase 2 clinical
trial; and
- a vaccine for cytomegalovirus, the leading infectious cause of birth
defects, for which clinical testing began during the second quarter of
2000.
We are also using our proprietary vaccine design technologies to develop
new vaccines, including vaccine candidates for herpes simplex virus type 2, the
virus responsible for genital herpes, and respiratory syncytial virus, a virus
responsible for a severe lower respiratory infection in infants and young
children.
We were incorporated in California in April 1992, and reincorporated in
Delaware in November 1996. Our executive offices are located at 297 North
Bernardo Avenue, Mountain View, California 94043 and our telephone number is
(650) 919-6500. Aviron's World Wide Web address is http://www.aviron.com.
Information contained in our World Wide Web site should not be considered to be
part of this prospectus.
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RISK FACTORS
You should carefully consider the risks described below before making an
investment decision. The risks described below are not the only ones facing our
company. Additional risks not presently known to us or that we currently deem
immaterial may also impair our business operations.
Our business, financial condition or results of operations could be
materially adversely affected by any of these risks. The trading price of our
Common Stock could decline due to any of these risks, and you may lose all or
part of your investment.
This prospectus also contains forward-looking statements that involve risks
and uncertainties. Our actual results could differ materially from those
anticipated in these forward-looking statements as a result of the risks faced
by us, including those described below and elsewhere in this prospectus.
RISKS RELATED TO FLUMIST
The most significant risks we currently face are those related to the
development and commercialization of FluMist. All of our potential near-term
revenues are dependent on the commercialization of FluMist. Because of the
seasonality of influenza, FluMist must be available in the third or 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
and require us to raise additional capital to cover the costs of additional
research and development, manufacturing and ongoing fixed costs. In addition, we
may incur significant losses as a result of our decision to begin manufacturing
FluMist at commercial scale for use in the 2001-2002 influenza season before
receipt of marketing approval from the United States Food and Drug
Administration, or FDA.
IF THE FDA FINDS THAT OUR BIOLOGICS LICENSE APPLICATION, OR BLA, FOR FLUMIST
DOES NOT SUPPORT APPROVAL FOR MARKETING, COMMERCIALIZATION OF FLUMIST MAY BE
DELAYED BY ONE OR MORE INFLUENZA SEASONS.
On October 31, 2000, we submitted a BLA for FluMist to the FDA. If the FDA
finds that the validation, clinical or other required data in our BLA is
insufficient, the FDA could refuse to accept it for filing or could require
corrective action or additional data which could delay or prevent approval.
We are initially seeking FDA approval for use of FluMist in healthy
children and healthy adults. The FDA may not find our clinical data adequate to
support use in any particular group and may exclude any segment of the
population. The FDA may request additional clinical data to support the safety
or efficacy of FluMist in some or all of those population segments. We may be
required to commence and complete additional clinical trials to generate
additional 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 for any of those population segments. Moreover, although
FluMist has been generally well tolerated in clinical trials to date, we are
continuing to conduct clinical trials and cannot exclude the possibility that
serious adverse events related to use of the vaccine may occur in the future.
IF THE FDA DETERMINES THAT OUR MANUFACTURING FACILITIES ARE NOT ADEQUATE, EITHER
BEFORE OR AFTER RECEIPT OF FDA MARKETING APPROVAL, WE MAY LOSE THE ABILITY TO
MANUFACTURE AND SELL FLUMIST FOR ONE OR MORE INFLUENZA SEASONS.
As part of the BLA approval process and on an ongoing basis thereafter, the
FDA is likely to inspect each of the facilities involved in manufacturing
FluMist. FDA inspectors may find deficiencies in the facilities or processes
that may delay or prevent FluMist marketing approval. Even if the FDA approves
FluMist for marketing, FDA inspectors could find deficiencies during future
inspections and we may lose the ability to manufacture and sell FluMist for one
or more influenza seasons.
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Several key stages of the FluMist manufacturing process take place in a
facility located in the United Kingdom. This facility was formerly owned by
Celltech Medeva, or Medeva, the international marketing arm of Celltech Group
Plc, but has since been acquired by Evans Vaccines Limited, or Evans, a division
of PowderJect Pharmaceuticals Plc. In October 2000, we leased from Evans the
section of the facility where the manufacture of FluMist takes place so that we
can have direct control over the FluMist manufacturing operations. In November
1999, Medeva notified us that it received a warning letter from the FDA
regarding the entire facility. Some of the comments in the letter referred to
the general utility systems in the facility, such as water and clean steam,
which are shared by us and are used to prepare supplies used in the manufacture
of FluMist. We have been assured by Evans that it has taken or is taking the
necessary steps to bring its systems and facility into compliance, and it is
working with the FDA to fulfill that objective. We believe that Evans has taken
the necessary steps to bring the relevant general utility systems into
compliance. However, we have also begun to implement plans to minimize our
dependence on these utilities. Those plans, some of which will require FDA
approval, involve the use of supplies, which will reduce our reliance on the
shared utility systems at Evans.
IF WE ARE UNABLE TO PERFORM THE COMPLEX ANNUAL UPDATE OF THE FLUMIST FORMULATION
FOR NEW INFLUENZA STRAINS IN A TIMELY MANNER, OUR SALES FOR THAT YEAR WILL BE
LIMITED OR WE MAY HAVE NO SALES AT ALL.
Early each year, the FDA determines which influenza strains will be
included in the upcoming season's vaccines. After the FDA selects the strains,
we will have approximately six months to include the selected strains and
manufacture FluMist for use in the upcoming influenza season. Major factors that
may delay availability of FluMist each year are:
- The FDA may delay its selection of strains for a given influenza season.
- We may experience difficulty or delay in the technically demanding
process we follow each year to update the formulation of FluMist.
- The FDA could require as a release test a brief clinical trial designed
to confirm the safety and/or activity (immune response) of the vaccine
including the new strains selected for that particular year.
IF WE HAVE DIFFICULTIES WITH OUR MANUFACTURING PROCESS, WE MAY NOT HAVE
SUFFICIENT QUANTITIES OF VACCINE TO ASSURE AVAILABILITY.
We may not have sufficient quantities of vaccine in time to assure
availability for the season due to problems with updated strains or performance
of suppliers. Following inoculation with our updated influenza strains, bulk
vaccine is harvested from special hens' eggs. 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. We depend upon a single
supplier for our nasal spray device. We also depend upon our packaging
contractor for packaging of the vaccine.
The FluMist manufacturing process is labor intensive and must be conducted
under strict controls and tight timelines. The vaccine is subject to strict
quality control testing during all phases of production and prior to release.
Any quality control testing failures could lead to a reduction in the available
supply of FluMist.
WE DO NOT HAVE EXPERIENCE IN MANUFACTURING FLUMIST AT A SUSTAINED COMMERCIAL
SCALE AND MAY ENCOUNTER UNANTICIPATED DIFFICULTIES IN ITS MANUFACTURE.
We have not yet manufactured FluMist at a sustained commercial scale and
may encounter unanticipated difficulties in its manufacture. As anticipated with
any business' scaling up, our costs
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initially will be high. We may not be able to manufacture FluMist as planned and
benefit as anticipated from economies of scale. Prior to our October 2000 lease
of the Evans manufacturing facility, we had arrangements with an experienced
vaccine manufacturer to produce FluMist on a contract basis. Although we leased
the manufacturing facility in order to have direct control over the FluMist
manufacturing and regulatory approval process, and although we hired the
approximately 100 Evans employees who have been responsible for FluMist
manufacturing, we have not manufactured FluMist at a sustained commercial scale.
MANUFACTURING CAPACITY IS DIFFICULT TO INCREASE WHICH MAY LEAD TO UNEVEN REVENUE
GROWTH.
We initially may be capacity constrained in our supply of vaccine.
Manufacturing capacity is difficult to increase. In order to secure future
production capacity, we may extend and expand existing arrangements, collaborate
with other third parties, or establish additional manufacturing facilities.
Using an alternative supplier or building a new facility would require a
substantial amount of funds and additional clinical trials and testing. We
cannot be sure that an additional source of supply will be established on a
timely basis, or that we will have or be able to obtain funds sufficient for
building or equipping a new facility. If we are unable to increase our
manufacturing capacity, any annual revenue growth may be uneven.
THE SUCCESS OF FLUMIST IS HIGHLY DEPENDENT ON OUR PARTNER, WYETH LEDERLE, OR
WYETH, FOR MARKETING, PROMOTION, SALES AND DISTRIBUTION ACTIVITIES.
We have entered into an exclusive agreement with Wyeth to co-promote, sell,
and distribute FluMist in the United States. We believe that for FluMist to be
widely adopted, the efforts of an experienced pharmaceutical sales force are
needed. If Wyeth fails to devote appropriate resources to promote, sell, and
distribute FluMist, sales of FluMist could be reduced. Distribution of FluMist
will be challenging for several reasons. First, influenza vaccine is a seasonal
product with a shipping period between August and January. Second, FluMist is a
frozen product and must remain frozen under recommended storage conditions prior
to use. Although Wyeth has a distribution system that supports frozen vaccines,
if it does not manage these distribution challenges our revenues could be
reduced. Furthermore, if we do not achieve timely licensure for the sale of
frozen FluMist in the United States, then Wyeth has the option to terminate our
agreement.
Wyeth currently participates in the development of a liquid formula of
FluMist, which will be important if FluMist is to be accepted outside of the
United States. Wyeth will also participate in the manufacturing, promotion,
sales and distribution of the liquid formulation. If Wyeth does not devote
sufficient resources to the development and commercialization of this
formulation, its commercial availability will be delayed.
The aggregate amount of license fees, milestone payments and financing
support due from Wyeth to us under this agreement could exceed $400 million, of
which we have received $35 million to date. If Wyeth 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 about our or their respective
obligations, we may lose some or all of the above remaining payments and may
need to seek another partner. Additionally, the manufacturing and sale of
FluMist could be delayed, reduced or become substantially more expensive for us
to achieve.
IF MEDICAL ADVISORY BODIES, DOCTORS, AND OTHER HEALTH CARE PROVIDERS DO NOT
RECOMMEND FLUMIST ITS MARKET OPPORTUNITY WILL BE LIMITED.
We believe recommendations from advisory bodies such as the Advisory
Committee on Immunization Practices, or ACIP, of the Centers for Disease Control
and Prevention, or CDC, and the American Academy of Pediatrics, or AAP, will be
important to encourage doctors and other healthcare providers to recommend
FluMist. If these bodies do not recommend FluMist, the product's market
opportunity will be limited. We will also need to educate doctors and other
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healthcare advisors of the safety and clinical efficacy of FluMist and its
potential advantages over other influenza vaccines.
WHETHER OR NOT DOCTORS, OTHER HEALTH CARE PROVIDERS AND MEDICAL ADVISORY BODIES
RECOMMEND FLUMIST, IF THE MARKET DOES NOT ACCEPT FLUMIST, OUR SALES WILL BE
REDUCED.
FluMist acceptance may be limited by a number of factors, including:
- perceived clinical benefit of competing influenza vaccines, including the
flu shot, and other influenza related products;
- unfavorable publicity concerning other vaccines;
- pricing of FluMist;
- difficulties in consumer access to 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; and
- the requirement of frozen storage capacity by those distributing and
administering the vaccine.
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
established pharmaceutical companies, including Wyeth, Evans and
Aventis-Pasteur, Inc.
We also operate in a rapidly evolving field. Other companies are working to
improve the clinical profile of flu shots. In addition, we are aware of efforts
to develop non-injectable influenza vaccines that would be more directly
competitive with FluMist. For example:
- A nasally administered inactivated vaccine is being developed by
Biovector Therapeutics, S.A. and Biochem Pharma, Inc. which has been
licensed to SmithKline Beecham;
- A nasally administered inactivated vaccine has been developed by Swiss
Serum Berna which has been licensed for sale in Switzerland; and
- A nasally administered live influenza vaccine has been developed and used
in Russia.
In 1999, the FDA approved two new products for the treatment of influenza:
zanamivir and oseltamivir. Zanamivir is marketed as Relenza and is sold by Glaxo
Wellcome Plc, and oseltamivir is marketed as Tamiflu and is sold by Roche
Holdings AG, or Roche. These products inhibit the ability of the influenza virus
to replicate. Both zanamivir, delivered via an inhaled powder, and oseltamivir,
a pill, were approved for influenza treatment. When administered within two days
of contracting influenza, zanamivir and oseltamivir may reduce the duration of
influenza by approximately one day. Clinical data also has shown that taking
zanamivir or oseltamivir daily for a period of time during the influenza season
can have a preventative effect. Recently, Roche received approval to market and
sell oseltamivir for the prevention of influenza in individuals over the age of
thirteen.
THE FLUMIST MASTER DONOR STRAINS ARE NOT PROTECTED BY PATENTS AND IF THE STRAINS
ARE DUPLICATED, THIRD PARTIES MAY BE ABLE TO DEVELOP, 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 National
Institutes of Health, or 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
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Michigan master donor strains and attempt to reproduce FluMist or develop
another live virus influenza vaccine that might be comparable to FluMist in
terms of safety and effectiveness.
WE MAY INCUR SIGNIFICANT LOSSES AS THE RESULT OF OUR DECISION TO MANUFACTURE
FLUMIST FOR COMMERCIAL USE BEFORE RECEIVING LICENSURE.
The manufacturing of FluMist is a complex process, containing multiple
steps over a period of many months. Therefore, in anticipation of licensure in
time to participate in the 2001-2002 influenza season, we already have begun
manufacturing FluMist for commercial use. The costs associated with our decision
to manufacture will increase at an increasing rate as the year progresses.
However, there is no guaranty that FluMist will be licensed for sale during any
portion of the 2001-2002 influenza season, if at all. If the product is not
approved for marketing in time to allow a launch during the 2001-2002 influenza
season, we will not receive any revenue from FluMist sales during the same
influenza season. Furthermore, because one or more viral strains used in all
influenza vaccines may change annually, we may not be able to utilize, during a
subsequent influenza season, any components of FluMist that we are currently
manufacturing.
FAILURE TO RAISE ADDITIONAL CAPITAL COULD DELAY FLUMIST COMMERCIALIZATION AND
DELAY THE DEVELOPMENT OF A LIQUID FORMULATION OF FLUMIST AND OF OUR OTHER
POTENTIAL PRODUCTS.
Our operations to date have consumed substantial and increasing amounts of
cash. As of September 30, 2000, we had an accumulated deficit of approximately
$251.4 million. The negative cash flow from operations is expected to continue
and to accelerate in the foreseeable future. The commercialization of FluMist
requires substantial funds for manufacturing, continued clinical trial efforts
and other commercialization activities. For the nine months ended September 30,
2000, our research and development expenses and our general, administrative and
marketing expenses, amounted to $54.0 million and $9.3 million, respectively. We
expect to continue to incur significant operating expenses. We also expect to
spend a substantial amount to develop a liquid formulation of FluMist. In
addition, we expect to continue funding the research, preclinical testing and
clinical trials necessary to develop our early-stage products.
As of September 30, 2000, we have raised since inception $390.3 million
through financing activities, such as sales of equity, convertible debt
securities, and other debt financing, which included $127.3 million raised from
equity financing during the nine month period ended September 30, 2000.
Additionally, our current revenues are comprised primarily of amounts earned as
milestone payments and expense reimbursements under our FluMist collaboration
agreement with Wyeth, and other revenues from other contracts and research
grants. For the nine month period ended September 30, 2000, our revenues
amounted to $7.9 million, which primarily consisted of expense reimbursements
under our agreement with Wyeth.
Our future revenues will depend largely on the success of these
collaboration arrangements, contracts and research grants. With respect to our
collaboration agreement with Wyeth, our rights to receive milestone payments are
all "event-driven." These payments are earned only upon our successful
completion of specific activities. We cannot be certain whether these milestone
payments will be realized. Under the agreement, the earliest of the milestone
payments in the amount of $15.5 million is due upon acceptance for filing of our
BLA by the FDA. We do not anticipate receiving notice from the FDA as to whether
our BLA has been accepted for filing until sixty (60) days after the date of
submission. Our BLA was submitted to the FDA on October 31, 2000, and the 60th
day after filing falls on a holiday weekend. Accordingly, acceptance by the FDA
and accounting recognition of the $15.5 million related milestone payment may
not occur in fiscal year 2000. A milestone payment of $20.0 million is due upon
obtaining FDA marketing approval for FluMist. The timing of receipt of those
payments will depend on the progress of the regulatory review of the BLA.
Additional milestone payments related to the application submission and approval
of FluMist for marketing in international markets, for expansions in labeling
claims, for policy
8
<PAGE> 12
recommendations, and for the liquid formulation are dependent upon future
governmental approvals or recommendations by medical advisory bodies and will
not be received until these activities are successfully completed at some time
after 2001.
Additionally, due to the seasonal nature of FluMist, cash will not be
generated from product sales until late each year. Accordingly, a significant
amount of working capital will be required each year to provide for the payment
of expenditures associated with the manufacturing of inventory and other
operating and capital needs in advance of any product sales.
Currently, we expect our existing cash, cash equivalents, short term
investments, and proceeds generated from our collaborative arrangements and
financing commitments, will enable us to maintain our current and planned
operations through 2001. We expect that we will seek to raise additional funds
in the near future. Our future capital requirements will depend upon many
factors, including:
- product commercialization activities;
- time and costs involved in obtaining regulatory approvals;
- increasing manufacturing capacity for FluMist;
- the progress of preclinical testing and clinical trials;
- continued scientific progress in the research and development of our
vaccine programs;
- our ability to establish and maintain collaborative arrangements;
- the cost involved in preparing, filing, prosecuting, maintaining and
enforcing patent claims;
- the cost of constructing additional manufacturing facilities, should they
be deemed necessary; and
- the addition of other early-stage programs to our product pipeline.
If adequate funds are not available, whether through our financing
commitments, additional funding or our current capital sources, such as our
collaboration arrangements, the commercialization of FluMist and the development
of a liquid formulation of FluMist may be delayed, and we will be required to
delay, reduce the scope of, or eliminate one or more of our research or
development programs for our other products. We may also be required to obtain
funds through collaborative agreements with others that may require us to
relinquish rights to certain of our technologies, product candidates or products
we would otherwise seek to develop or commercialize ourselves. If additional
funds are raised by issuing equity or convertible securities, the percentage
ownership in Aviron held by existing stockholders will be reduced.
IF WE ARE UNABLE TO ATTRACT, RETAIN AND MAINTAIN GOOD RELATIONS WITH QUALIFIED
PERSONNEL IN EACH OF OUR THREE LOCATIONS, OUR ABILITY TO COMMERCIALIZE FLUMIST
AND DEVELOP A LIQUID 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 at
appropriate locations, especially those with expertise in development,
commercial-scale manufacturing and quality functions. 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.
Also, some Aviron employees are members of labor unions. Labor actions by
these unions and/or these employees could require us to cease or curtail
operations at affected locations.
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<PAGE> 13
SOME OF OUR CRITICAL MANUFACTURING FACILITIES FOR FLUMIST ARE LOCATED NEAR KNOWN
EARTHQUAKE FAULT ZONES AND THE OCCURRENCE OF AN EARTHQUAKE, OR OTHER
CATASTROPHIC DISASTER, COULD CAUSE DAMAGE TO OUR FACILITIES AND EQUIPMENT, WHICH
COULD REQUIRE US TO CEASE OR CURTAIL OPERATIONS.
The first of three steps in the FluMist manufacturing process takes place
at our facility in Mountain View, California. This manufacturing facility is
located in a known earthquake fault zone. Should an earthquake or other type of
disaster, including fire, flood, power loss, communication failure, or similar
events, disable these facilities, there are no readily available alternative
facilities which meet the current good manufacturing practice standards required
by the FDA. Therefore, should these facilities be disabled, the ability to
manufacture and sell FluMist could be lost for one or more influenza seasons.
The second step in the FluMist manufacturing process takes place at our
facilities in the United Kingdom, and the third step in the process takes place
in Philadelphia, Pennsylvania. Should an earthquake or other type of disaster,
including fire, flood, power loss, communication failure, or similar events,
disable these facilities, there are no readily available alternative facilities
which meet the current good manufacturing practice standards required by the
FDA. Therefore, should either or both of these facilities be disabled for any
reason, the ability to manufacture and sell FluMist could be lost for one or
more influenza seasons.
FAILURE TO INTEGRATE EFFECTIVELY THE ACTIVITIES OF OUR NEWLY ACQUIRED U.K.
OPERATIONS WITH OUR EXISTING OPERATIONS IN PENNSYLVANIA AND CALIFORNIA COULD
SIGNIFICANTLY HINDER OUR ABILITY TO EFFECTIVELY DEVELOP, MANUFACTURE AND
COMMERCIALIZE FLUMIST AND ULTIMATELY GENERATE REVENUE .
In October 2000, we restructured the contract manufacturing agreement
previously in place with Celltech Medeva for bulk manufacture of FluMist in the
Speke, U.K. facility. The new agreement with Evans Vaccines, Ltd., a division of
PowderJect Pharmaceuticals Plc, which runs through June 2006, transferred
responsibility for bulk manufacture of FluMist and transferred approximately 100
Evans employees to Aviron UK Ltd., our U.K. subsidiary. The coordination of
operations at our three sites is critical to manufacturing FluMist. Our
management must expend significant effort in order to integrate the people,
processes, technology and activities of this new site into our existing
operations. However, our management, as a team, has limited experience in
coordinating the operations of a substantial foreign subsidiary with domestic
operations. If our California, Pennsylvania and United Kingdom locations do not
integrate effectively, the development, manufacture and commercialization of
FluMist could be negatively impacted.
OTHER RISKS RELATED TO OUR COMPANY
SAFETY OF VACCINES CAN ONLY BE DETERMINED AFTER WIDESPREAD USE IN THE
POPULATION.
A vaccine could be licensed by the FDA and still be associated with adverse
events which reduce or eliminate revenue. For example, in 1998 the FDA approved
the use of a vaccine to prevent infant diarrhea, but the product was
subsequently withdrawn from the market due to a possible link between a serious
bowel disorder and the vaccine. This adverse event occurred at a frequency that
was not detectable in a typical clinical development program. In addition, there
are a number of theoretical risks related to live virus vaccines, including
changing back to the naturally-occurring, or wild-type, and re-combining to form
a new strain which may cause disease. Also, because of the way it works, a
weakened live virus could make an individual more susceptible to secondary
infection. In addition, a weakened live virus could cause disease resembling a
wild-type virus infection in people with an immune system that is not working
properly because of a pre-existing disease, HIV infection or drug treatment for
cancer or organ transplantation. The potential for serious adverse events after
introduction to the market is an issue for all vaccines, including FluMist.
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<PAGE> 14
OTHER THAN FLUMIST, OUR PRODUCT CANDIDATES ARE AT EARLY STAGES OF DEVELOPMENT,
AND IF WE ARE UNABLE TO SUCCESSFULLY DEVELOP AND COMMERCIALIZE PRODUCTS, WE WILL
NOT GENERATE REVENUES FROM THESE PRODUCTS.
To date, none of our product candidates has 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 will require several years and
substantial additional capital. Currently, we do not have facilities to
manufacture these vaccine product candidates for use in late-stage clinical
trials. Moreover, we must demonstrate safety and efficacy and gain regulatory
approval for these products. In addition, several companies are developing
products that would compete with our early-stage products.
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. We seek to protect our technology and potential products,
when possible, with patents and trade secrets. 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 be sure 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.
We own or have exclusive licenses to various issued patents and pending
patent applications both in the United States Patent and Trademark Office and in
several foreign patent offices. We attempt, when possible, to obtain exclusive
patent protection covering each potential product we are developing. There can
be no assurance that each product we are developing will be protected by or
protectable by issued patents in any or all countries in which we intend to
market the product, if approved for sale by regulatory authorities. 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 National Institutes of
Health, or NIH. We have no issued patents covering the bovine parainfluenza
strain we are developing. Our rights to the bovine parainfluenza strain are
substantially based on an exclusive, worldwide Biological Materials License of
materials, clinical data and research information from the United States Public
Health Service. We do have issued patents and/or pending patent applications in
the United States and abroad which we believe will provide patent protection for
our cytomegalovirus (CMV), herpes simplex virus (HSV), respiratory syncytial
virus (RSV), and recombinant parainfluenza virus type-3 (PIV) program
technologies.
The European Patent Office has informed us of its intention to deny claims
relating to methods and compositions of recombinant non-segmented
negative-strand RNA viruses contained in one of our granted European patents.
Although this decision will not affect our FluMist cold-adapted influenza
product, it may affect the European patent protection afforded our other vaccine
candidates, including recombinant RSV and recombinant PIV.
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<PAGE> 15
OUR PRODUCTS COULD INFRINGE ON 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.
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 be sure 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 some 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 a
number of recommended childhood vaccines. We cannot be sure 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.
RISKS RELATED TO THIS OFFERING
OUR STOCK PRICE IS VOLATILE AND YOU MAY LOSE ALL OR A PART OF YOUR INVESTMENT.
The market price of our common stock has fluctuated significantly to date.
As a result you may be unable to sell your shares of common stock at or above
the offering price. The market price of the common stock may fluctuate
significantly in response to the following factors, most of which are beyond our
control:
- variations in our quarterly operating results;
- changes in securities analysts' estimates of our financial performance;
- changes in market valuations of similar companies;
- announcements by us or our competitors of significant contracts,
acquisitions, strategic partnerships, joint ventures or capital
commitments;
- additions or departures of key personnel; and
- fluctuations in stock market price and volume, which are particularly
common among securities of biopharmaceutical companies.
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<PAGE> 16
WE ARE AT RISK OF SECURITIES CLASS ACTION LITIGATION DUE TO OUR EXPECTED STOCK
PRICE VOLATILITY.
In the past, securities class action litigation has often been brought
against a company following a decline in the market price of its securities.
This risk is especially relevant for us because biopharmaceutical companies have
experienced greater than average stock price volatility in recent years and, as
a result, have been subject to, on average, a greater number of securities class
action claims than companies in other industries. We may in the future be the
target of similar litigation. Securities litigation could result in substantial
costs and divert management's attention and resources, and could seriously harm
our business.
WE HAVE IMPLEMENTED PROVISIONS IN OUR CHARTER DOCUMENTS THAT MAY ULTIMATELY
DELAY, DISCOURAGE OR PREVENT A CHANGE IN MANAGEMENT OR CONTROL OF AVIRON.
Provisions of our amended and restated certificate of incorporation and
bylaws could make it more difficult for our stockholders to replace or remove
our directors, or to effect any corporate action. These provisions include those
which:
- establish a classified board of directors requiring that members of only
one of the three classes of directors be elected at one time;
- prohibit cumulative voting in the election of directors, which would
otherwise allow less than a majority of stockholders to elect director
candidates;
- prohibit holders of less than ten percent of our outstanding capital
stock from calling special meetings of stockholders;
- prohibit stockholder action by written consent, thereby requiring all
stockholder actions to be taken at a meeting of our stockholders; and
- establish advance notice requirements for nominations for election to the
board of directors or for proposing matters that can be acted upon by
stockholders at stockholder meetings.
Some of the above provisions may also have possible anti-takeover effects,
which may make an acquisition of Aviron by a third party more difficult, even if
such an acquisition could be beneficial to our stockholders. Additionally, our
share purchase rights plan, commonly referred to as a "poison pill," and the
terms of our stock option plans, may discourage or delay a change in control of
Aviron.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements in the sections entitled "Summary," "Risk Factors,"
and elsewhere in this prospectus constitute forward-looking statements. These
statements involve known and unknown risks, uncertainties and other factors that
may cause our or our industry's results, levels of activity, or achievements to
be materially different from any future results, levels of activity or
achievements expressed or implied by such forward-looking statements. Such
factors include, among others, those listed under "Risk Factors" and elsewhere
in this prospectus.
In some cases, you can identify forward-looking statements by terminology
such as "may," "will," "should," "intend," "expect," "plan," "anticipate,"
"believe," "estimate," "predict," "potential," or "continue," or the negative of
such terms or other comparable terminology.
Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, events, levels of
activity, performance or achievements.
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of shares of common
stock offered by the selling stockholders.
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<PAGE> 17
SELLING STOCKHOLDERS
We sold to American Home Products Corporation shares of common stock in a
series of private placements. We issued to Evans Vaccines Limited, or Evans,
warrants to purchase common stock in connection with the amendment of a
manufacturing agreement relating to FluMist. Though Evans may exercise the
warrants in full immediately, market standoff provisions allow Evans to sell
only 1/6th of the underlying shares immediately, with an additional 1/6th of the
shares becoming free for sale by Evans on each of the subsequent five
anniversaries of the date of the warrants. We issued to ARCH Development
Corporation a warrant to purchase common stock in connection with a settlement
agreement, and we issued to the other selling stockholders, other than The
Procter & Gamble Company, common stock upon the exercise of warrants in
connection with the licensing of technology relating to recombinant negative
strand RNA virus expression systems and vaccines, and attenuated influenza
viruses.
We agreed to register all of the common stock and the shares of common
stock issuable upon the exercise of the warrants listed below.
The shares being registered represent approximately 4.84 percent of our
outstanding capitalization as of November 29, 2000. The following table sets
forth information known to us with respect to beneficial ownership of our common
stock as of August 30, 2000 by each selling stockholder, except Evans Vaccines
Limited, which is as of October 20, 2000, and ARCH Development Corporation and
The Procter & Gamble Company, which is as of November 22, 2000. The following
table assumes that the selling stockholders sell all of the shares. We are
unable to determine the exact number of shares that actually will be sold.
Beneficial ownership is determined in accordance with the rules of the SEC
and includes sole or shared voting or investment power with respect to shares
shown as beneficially owned. Percentage ownership is based on 23,235,915 shares
of common stock outstanding as of November 29, 2000. Unless otherwise indicated,
the address for each of the individuals listed in the table is c/o Aviron, 297
North Bernardo Avenue, Mountain View, California 94043.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED PRIOR OWNED SUBSEQUENT
TO THE OFFERING SHARES OFFERED TO THE OFFERING
-------------------- BY THIS -------------------
NAME AND ADDRESS OF SELLING STOCKHOLDER SHARES PERCENT PROSPECTUS SHARES PERCENT
--------------------------------------- -------- -------- -------------- ------- --------
<S> <C> <C> <C> <C> <C>
American Home Products Corporation...... 996,840 4.29% 996,840 0 *
5 Giralda Farms
Madison, New Jersey 07940
Evans Vaccines Limited(1)............... 63,162 * 63,162 0 *
Florey House, Robert Robinson Avenue,
Oxford Science Park, Oxford OX44GA
England
Mount Sinai School of Medicine(2)....... 50,642 * 27,309 23,333 *
633 Third Avenue
New York, New York 10017
Mark Krystal............................ 5,338 * 3,758 1,580 *
Jeffrey David Parvin.................... 4,695 * 4,695 0 *
Michael Bergmann........................ 2,669 * 1,503 1,166 *
Thomas Muster........................... 2,668 * 1,502 1,166 *
Reinhard Vlasak(3)...................... 2,001 * 1,126 875 *
Masayoshi Emami(4)...................... 1,502 * 1,502 0 *
ARCH Development Corporation(5)......... 14,077 * 14,077 0 *
5640 South Ellis Avenue, Suite 405
Chicago, Illinois 60637
The Procter & Gamble Company(6)......... 9,398 * 9,398 0 *
1 Procter and Gamble Plaza
Cincinnati, Ohio 45202
</TABLE>
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<PAGE> 18
-------------------------
* Less than 1% of the outstanding shares of common stock.
(1) Includes 63,162 shares issuable upon exercise of warrants held by this
selling stockholder.
(2) Includes 23,976 shares issuable upon exercise of warrants held by this
selling stockholder.
(3) Includes 901 shares issuable upon exercise of warrants held by this selling
stockholder.
(4) Includes 1,202 shares issuable upon exercise of warrants held by this
selling stockholder.
(5) Includes 14,077 shares issuable upon exercise of a warrant held by this
selling stockholder.
(6) Includes 9,398 shares issuable upon exercise of a warrant held by this
selling stockholder.
We are registering the shares for resale by the selling stockholders in
accordance with registration rights granted to the selling stockholders. We will
pay the registration and filing fees, printing expenses, listing fees, blue sky
fees, if any, and fees and disbursements of our counsel in connection with this
offering, but the selling stockholders will pay any underwriting discounts,
selling commissions and similar expenses relating to the sale of the shares. In
addition, we have agreed to indemnify the selling stockholders against certain
liabilities, including liabilities under the Securities Act, in connection with
this offering. The selling stockholders have agreed to indemnify us and our
directors and officers, as well as any person that controls us, against certain
liabilities, including liabilities under the Securities Act. Insofar as
indemnification for liabilities under the Securities Act may be permitted to our
directors or officers, or persons that control us, we have been informed that in
the opinion of the SEC such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable.
PLAN OF DISTRIBUTION
The selling stockholders, or, subject to applicable law, their pledgees,
donees, distributees, transferees or other successors in interest, may sell
shares from time to time in public transactions, on or off the Nasdaq National
Market, or private transactions, at prevailing market prices or at privately
negotiated prices, including but not limited to, one or any combination of the
following types of transactions:
- ordinary brokers' transactions;
- transactions involving cross or block trades or otherwise on the Nasdaq
National Market;
- purchases by brokers, dealers or underwriters as principal and resale by
these purchasers for their own accounts pursuant to this prospectus;
- "at the market," to or through market makers, or into an existing market
for our common stock;
- in other ways not involving market makers or established trading markets,
including direct sales to purchasers or sales effected through agents;
- through transactions in options, swaps or other derivatives (whether
exchange-listed or otherwise);
- in privately negotiated transactions; or
- to cover short sales.
In effecting sales, brokers or dealers engaged by the selling stockholders
may arrange for other brokers or dealers to participate in the resales. The
selling stockholders may enter into hedging transactions with broker-dealers,
and in connection with those transactions, broker-dealers may engage in short
sales of the shares. The selling stockholders also may sell shares short and
deliver the shares to close out such short positions. The selling stockholders
also may enter into option or other transactions with broker-dealers that
require the delivery to the broker-dealer of the shares, which the broker-dealer
may resell pursuant to this prospectus. The selling stockholders also may pledge
the
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<PAGE> 19
shares to a broker or dealer. Upon a default, the broker or dealer may effect
sales of the pledged shares pursuant to this prospectus.
Brokers, dealers or agents may receive compensation in the form of
commissions, discounts or concessions from selling stockholders in amounts to be
negotiated in connection with the sale. The selling stockholders and any
participating brokers or dealers may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales. In such event, any
commission, discount or concession these "underwriters" receive may be deemed to
be underwriting compensation.
To the extent required, the following information will be set forth in a
supplement to this prospectus:
- information as to whether underwriters who the selling stockholders may
select, or any other broker-dealer, is acting as principal or agent for
the selling stockholders;
- the compensation to be received by underwriters that the selling
stockholders may select or by any broker-dealer acting as principal or
agent for the selling stockholder; and
- the compensation to be paid to other broker-dealers, in the event the
compensation of such other broker-dealers is in excess of usual and
customary commissions.
Any dealer or broker participating in any distribution of the shares may be
required to deliver a copy of this prospectus, including a prospectus
supplement, if any, to any person who purchases any of the shares from or
through this dealer or broker.
We have advised the selling stockholders that they are required to comply
with Regulation M promulgated under the Securities Exchange Act during such time
as they may be engaged in a distribution of the shares. With some exceptions,
Regulation M precludes any selling stockholders, any affiliated purchasers and
any broker-dealer or other person who participates in such distribution from
bidding for or purchasing, or attempting to induce any person to bid for or
purchase any security that is the subject of the distribution until the entire
distribution is complete. Regulation M also prohibits any bids or purchases made
in order to stabilize the price of a security in connection with the
distribution of that security. All of the foregoing may affect the marketability
of the common stock.
We will not receive any of the proceeds from the selling stockholders' sale
of our common stock.
This registration statement will remain effective until the earlier of (a)
the date when all of the shares registered by this registration statement have
been distributed to the public, or (b) the date the shares of common stock are
eligible for sale in their entirety under Rule 144. In the event that any shares
remain unsold at the end of such period. We may file a post-effective amendment
to the registration statement for the purpose of deregistering the shares
registered by this prospectus.
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 common stock offered
in this prospectus.
EXPERTS
Ernst & Young LLP, independent auditors have audited our financial
statements included in our Annual Report on Form 10-K/A for the year ended
December 31, 1999, 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.
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<PAGE> 20
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee......... $10,861
Legal Fees and Expenses..................................... 25,000
Accountants' Fees and Expenses.............................. 15,000
Miscellaneous............................................... 4,139
-------
Total..................................................... $55,000
=======
</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 (1)
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 (2) 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.
Aviron 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
II-1
<PAGE> 21
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.
Aviron has a liability policy covering the officers and directors of Aviron
which includes liabilities arising under the Securities Act or otherwise.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------- -----------------------
<C> <S>
4.2 Specimen Stock Certificate.(1)
4.8 Investors Rights Agreement, dated July 18, 1995, among the
Company and the investors named therein.(1)
4.11 Common Stock Purchase Agreement, dated as of December 16,
1999, between the Company and American Home Products
Corporation.(2)
4.12 Common Stock Purchase Agreement, dated as of December 30,
1999, between the Company and American Home Products
Corporation.(2)
4.13 Common Stock Purchase Agreement, dated as of February 3,
2000, between the Company and American Home Products
Corporation.(2)
4.15 Common Stock Purchase Agreement, dated as of April 5, 2000,
between the Company and American Home Products
Corporation.(3)
4.16* Registration Rights Agreement, dated October 10, 2000, by
and between the Company and Evans Vaccines Limited.
4.17 Warrant for Common Stock, issued to ARCH Development
Corporation.(4)
4.18 Warrant for Common Stock, issued to The Procter & Gamble
Company.(5)
5.1* Opinion of Cooley Godward LLP.(6)
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2* Consent of Cooley Godward LLP. Reference is made to Exhibit
5.1.
24.1* Power of Attorney. See signature page.
</TABLE>
-------------------------
(1) Incorporated by reference to the correspondingly numbered exhibit to our
Registration Statement on Form S-1, File No. 333-05209, filed June 5, 1996,
as amended.
(2) Incorporated by reference to the correspondingly numbered exhibit to our
Annual Report on Form 10-K for the year ended December 31, 1999, File No.
0-20815, filed March 8, 2000.
(3) Incorporated by reference to the correspondingly numbered exhibit to our
Quarterly Report on Form 10-Q for the quarter ended March 31, 2000, File No.
0-20815, filed May 15, 2000.
(4) Incorporated by reference to the correspondingly numbered exhibit to our
Quarterly Report on Form 10-Q for the quarter ended June 30, 2000, File No.
0-20815, filed August 11, 2000.
(5) Incorporated by reference to the correspondingly numbered exhibit to our
Quarterly Report on Form 10-Q for the quarter ended September 30, 2000, File
No. 0-20815, filed November 14, 2000.
(6) This opinion amends and supercedes the opinion previously filed on October
24, 2000.
* Previously filed.
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
II-2
<PAGE> 22
Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Securities Act of 1933 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 of 1933 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, a post-effective amendment to this registration statement to include
any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change
to such information in the registration statement;
(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.
II-3
<PAGE> 23
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. 4 to
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Mountain View, County of Santa Clara, State of
California, on December 14, 2000.
AVIRON
By: /s/ C. BOYD CLARKE
------------------------------------
C. Boyd Clarke
President and Chief Executive
Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
THIS AMENDMENT NO. 4 TO REGISTRATION STATEMENT ON FORM S-3 HAS BEEN SIGNED BELOW
BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ C. BOYD CLARKE President, Chief Executive Officer December 14, 2000
---------------------------------- and Director
C. Boyd Clarke (Principal Executive Officer)
/s/ FRED KURLAND Senior Vice President and December 14, 2000
---------------------------------- Chief Financial Officer
Fred Kurland (Principal Financial and
Accounting Officer)
* Chairman of the Board December 14, 2000
----------------------------------
J. Leighton Read, M.D.
Director
----------------------------------
R. Gordon Douglas, Jr., M.D.
* Director December 14, 2000
----------------------------------
Dennis M. Fenton, Ph.D.
* Director December 14, 2000
----------------------------------
Wayne T. Hockmeyer, Ph.D.
* Director December 14, 2000
----------------------------------
Paul H. Klingenstein
* Director December 14, 2000
----------------------------------
Alan C. Mendelson
* Director December 14, 2000
----------------------------------
Bernard Roizman, Sc.D.
*By: /s/ C. BOYD CLARKE
----------------------------------
C. Boyd Clarke
Attorney-in-Fact
</TABLE>
II-4
<PAGE> 24
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------- -----------------------
<S> <C>
4.2 Specimen Stock Certificate.(1)
4.8 Investors Rights Agreement, dated July 18, 1995, among the
Company and the investors named therein.(1)
4.11 Common Stock Purchase Agreement, dated as of December 16,
1999, between the Company and American Home Products
Corporation.(2)
4.12 Common Stock Purchase Agreement, dated as of December 30,
1999, between the Company and American Home Products
Corporation.(2)
4.13 Common Stock Purchase Agreement, dated as of February 3,
2000, between the Company and American Home Products
Corporation.(2)
4.15 Common Stock Purchase Agreement, dated as of April 5, 2000,
between the Company and American Home Products
Corporation.(3)
4.16* Registration Rights Agreement, dated October 10, 2000, by
and between the Company and Evans Vaccines Limited.
4.17 Warrant for Common Stock, issued to ARCH Development
Corporation.(4)
4.18 Warrant for Common Stock, issued to The Procter & Gamble
Company.(5)
5.1* Opinion of Cooley Godward LLP.(6)
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2* Consent of Cooley Godward LLP. Reference is made to Exhibit
5.1.
24.1* Power of Attorney. See signature page.
</TABLE>
-------------------------
(1) Incorporated by reference to the correspondingly numbered exhibit to our
Registration Statement on Form S-1, File No. 333-05209, filed June 5, 1996,
as amended.
(2) Incorporated by reference to the correspondingly numbered exhibit to our
Annual Report on Form 10-K for the year ended December 31, 1999, File No.
0-20815, filed March 8, 2000.
(3) Incorporated by reference to the correspondingly numbered exhibit to our
Quarterly Report on Form 10-Q for the quarter ended March 31, 2000, File No.
0-20815, filed May 15, 2000.
(4) Incorporated by reference to the correspondingly numbered exhibit to our
Quarterly Report on Form 10-Q for the quarter ended June 30, 2000, File No.
0-20815, filed August 11, 2000.
(5) Incorporated by reference to the correspondingly numbered exhibit to our
Quarterly Report on Form 10-Q for the quarter ended September 30, 2000, File
No. 0-20815, filed November 14, 2000.
(6) This opinion amends and supercedes the opinion previously filed on October
24, 2000.
* Previously filed.
