AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 17, 2002.
REGISTRATION NO. 333-82250
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
PRE-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
ATRIX LABORATORIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 84-1043826
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
2579 MIDPOINT DRIVE
FORT COLLINS, COLORADO 80525
(970) 482-5868
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
BRIAN G. RICHMOND
CHIEF FINANCIAL OFFICER, SECRETARY AND TREASURER
ATRIX LABORATORIES, INC.
2579 MIDPOINT DRIVE
FORT COLLINS, COLORADO 80525
(970) 482-5868
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
COPIES TO:
BRIAN V. CAID, ESQ.
JULIE A. HERZOG, ESQ.
MORRISON & FOERSTER LLP
370 SEVENTEENTH STREET, SUITE 5200
DENVER, COLORADO 80202
(303) 592-1500
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
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, 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 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 number 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 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 COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
================================================================================
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
SUBJECT TO COMPLETION, DATED MAY 17, 2002
UP TO 13,649 SHARES
ATRIX LABORATORIES, INC.
COMMON STOCK
Ferghana Partners Inc., the selling stockholder, is selling up to
13,649 shares of our common stock, all of which are issuable upon the exercise
of a warrant issued to the selling stockholder. We will receive proceeds upon
the exercise of the warrant. We will not receive any proceeds from the sale of
shares offered by the selling stockholder.
Our common stock is quoted on the Nasdaq National Market under the
symbol "ATRX." On May 14, 2002, the last reported sale price of our common stock
was $23.60 per share.
----------------
INVESTING IN OUR SECURITIES INVOLVES RISKS. BEFORE BUYING OUR
SECURITIES, YOU SHOULD REFER TO THE RISK FACTORS INCLUDED IN THIS PROSPECTUS
BEGINNING ON PAGE 1.
----------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
____________, 2002
TABLE OF CONTENTS
Atrix Laboratories, Inc.........................................................1
Risk Factors....................................................................1
Forward-Looking Statements.....................................................13
Use of Proceeds................................................................14
Selling Stockholder............................................................14
Plan of Distribution...........................................................15
Legal Matters..................................................................18
Experts........................................................................18
Where You Can Find More Information............................................18
Incorporation of Documents by Reference........................................18
i
ATRIX LABORATORIES, INC.
We are an emerging specialty pharmaceutical company focused on advanced
drug delivery. With five unique, patented, drug delivery technologies, we are
currently developing a diverse portfolio of products, including proprietary
oncology, pain management, growth hormone releasing peptide-1, oral interferon
and dermatology products. We also form strategic alliances with large
pharmaceutical and biotechnology companies utilizing our various drug delivery
systems. We have significant strategic alliances with Pfizer Inc.,
Sanofi-Synthelabo Inc., MediGene AG, Fujisawa Healthcare, Inc., Elan
International Services, Ltd., Geneva Pharmaceuticals, Inc. and CollaGenex
Pharmaceuticals, Inc.
We were incorporated in Delaware in August 1986. In November 1998, we
acquired ViroTex Corporation. In June 1999, we organized our wholly owned
registered subsidiary Atrix Laboratories Limited, which is based in London,
England. In February 2000, we organized our wholly owned registered subsidiary
Atrix Laboratories GmbH, which is based in Frankfurt, Germany, to conduct our
European operations. In June 2000, we entered into a research joint venture,
Transmucosal Technologies, Limited with Elan International, which is a wholly
owned subsidiary of Elan Corporation, plc.
Our principal executive offices are located at 2579 Midpoint Drive,
Fort Collins, Colorado, our telephone number is (970) 482-5868, and our
facsimile number is (970) 482-1152. We maintain a website at
http://www.atrixlabs.com. The reference to our website does not constitute
incorporation by reference of the information contained at the site.
RISK FACTORS
You should carefully consider the following risk factors and the other
information contained or incorporated by reference in this prospectus before
purchasing shares of our common stock. Investing in our common stock involves a
high degree of risk. If any of the events described in the following risk
factors occur, our business and financial condition could be seriously harmed.
In addition, the trading price of our common stock could decline due to the
occurrence of any of such events, and you may lose all or part of your
investment.
WE HAVE A HISTORY OF OPERATING LOSSES AND ANTICIPATE FUTURE LOSSES.
Since our inception, we have invested a significant amount of time and
money in research and development of new products. Our research and development
expenses were $28.6 million, $16.7 million and $15.6 million for the years ended
December 31, 2001, 2000 and 1999, respectively, exceeding our total revenue of
$15.8 million, $10.0 million and $5.6 million, respectively, in such years. Our
research and development expenses were $6.6 million for the three months ended
March 31, 2002. We expect that our research and development expenses will
continue to increase for the fiscal year ending December 31, 2002 and for the
foreseeable future as we continue to develop our current products and continue
to engage in new product discovery and development activities. Because of our
time and financial commitments to our new products, we have operated at a loss
for the previous five years under revenue recognition policies as currently
applied. Our accumulated deficit at March 31, 2002 was $137.0 million.
1
We expect that our research and development activities will result in additional
operating losses for the foreseeable future. If we do not ultimately achieve and
maintain profitability, our stock price may decline.
WE MUST OBTAIN DOMESTIC AND FOREIGN REGULATORY APPROVAL OF OUR PRODUCT
CANDIDATES, WHICH REQUIRES A SIGNIFICANT AMOUNT OF TIME AND MONEY.
The research and development, preclinical studies and clinical trials,
and ultimately, the manufacturing, marketing and labeling of our products, are
subject to extensive regulation by the United States Food and Drug
Administration, or FDA, and other regulatory authorities in the United States
and other countries. Our product candidates must undergo an expensive and
time-consuming approval process with these regulatory authorities. FDA approval
can be delayed, limited or denied for many reasons, including:
o a product candidate may be found to be unsafe or ineffective,
o the FDA may interpret data from preclinical testing and clinical
trials differently and less favorably than the way we interpret
it,
o the FDA might not approve our manufacturing processes or
facilities,
o the FDA may change its approval policies or adopt new regulations
that may negatively affect or delay our ability to bring a
product to market, and
o a product candidate may not be approved for all the indications
we requested and thus our markets may be limited.
The process of obtaining approvals in foreign countries is also subject
to delay and failure for similar reasons. Delays in obtaining approval may
result in our needing to make significant expenditures of additional time and
money to bring a new product to market. If we do not obtain approval for any
particular product, we will have spent a significant amount of time and money in
the approval process and will be unable to market the product to generate
revenue.
We are also required to comply with the FDA's current Good
Manufacturing Practice regulations, or cGMPs, with respect to the manufacture of
our drugs, and quality system regulations, or QSRs, with respect to the
manufacture of our medical devices. These regulations include requirements
relating to quality control, quality assurance and maintenance of records and
documentation. Manufacturing facilities are subject to biennial inspections by
the FDA and must be approved before we can use them in the commercial
manufacturing of our products. If we or our contract manufacturers are unable to
comply with the applicable GMPs, QSRs and other regulatory requirements, the FDA
may seek sanctions and/or remedies against us, including suspending our
manufacturing operations, issuing us warning letters, forcing us to recall or
withdraw our product(s) from the market and, in extreme cases, possibly issuing
civil and/or criminal penalties against us.
2
CLINICAL TRIALS ARE EXPENSIVE AND THEIR OUTCOME IS UNCERTAIN.
Before obtaining regulatory approvals for the commercial sale of any
products, we or our partners must demonstrate through preclinical testing and
clinical trials that our product candidates are safe and effective for use in
humans. The following table details certain information about our pharmaceutical
product candidates under development:
DELIVERY
PRODUCT CANDIDATES SYSTEM INDICATION STATUS
------------------ -------- ---------- ------
Eligard 7.5-mg one-month................ Atrigel Prostate cancer FDA approved
Jan. 2002;
Germany MAA
submitted to
BfArM Dec.
2001
Eligard 22.5-mg three-month............. Atrigel Prostate cancer NDA submitted to
FDA Sept. 2001
Eligard 30-mg four-month................ Atrigel Prostate cancer Phase III
NDA submitted to FDA
April 2002
Eligard unique dosage formulation....... Atrigel Prostate cancer Preclinical
Atrisone................................ SMP(TM) Moderate to severe acne Phase III
Treatment for burn itch Phase II
Treatment of atopic IND submitted
dermatitis
Growth hormone releasing peptide-1...... Atrigel Growth promotion and Preclinical
cacexia (muscle
wasting)
Human Genome Sciences proprietary
protein............................... Atrigel Undisclosed compound Preclinical
BEMA-Fentanyl........................... BEMA(TM) Chronic and Phase I
Breakthrough cancer Orphan drug
Pain status
BEMA-Ondanestron........................ BEMA Emesis (nausea) Preclinical
BEMA-Hydrocodone........................ BEMA Mild to moderate pain Preclinical
BEMA-Migraine........................... BEMA Migraine Preclinical
Oral interferon......................... Lozenge Behcet's disease Preclinical
Oral papillomavirus Phase II
Warts Orphan drug
status for
both
We have multiple compounds in various stages of preclinical
development, a number of which are being developed through partnerships with a
variety of other pharmaceutical
3
companies. We spend and will continue to spend a significant amount of financial
resources conducting preclinical testing and clinical trials.
Clinical trials are expensive and may take several years, and the
length of time can vary substantially. Expenses associated with clinical trials
and the other aspects of the FDA approval process have typically exceeded $5
million for each of the products we are marketing in the United States. The FDA
approval process has taken a minimum of 10 months and as long as two years for
these products. Our initiation and rate of completion of clinical trials may be
delayed by many factors, including:
o our inability to recruit patients at a sufficient rate,
o the failure of clinical trials to demonstrate a product
candidate's efficacy,
o our inability to follow patients adequately after treatment,
o our inability to predict unforeseen safety issues,
o our inability to manufacture sufficient quantities of materials
for clinical trials,
o the potential for unforeseen governmental or regulatory delays,
o lack of sufficient financial resources, and
o inability to satisfy FDA requirements which may result in the
clinical trials being repeated.
In addition, the results from preclinical testing and early clinical
trials do not always predict results of later clinical trials. Within the
pharmaceutical industry, a number of new drugs have shown encouraging results in
early clinical trials, but subsequently failed to establish sufficient safety
and efficacy data to obtain necessary regulatory approvals. If a product
candidate fails to demonstrate safety and efficacy in clinical trials, this
failure may delay development of other product candidates and hinder our ability
to conduct related preclinical testing and clinical trials. As a result of these
potential failures, we may also be unable to find additional collaborators or to
obtain additional financing. Delays in our clinical trials may require us to
expend significant additional amounts of time and money, and termination of our
clinical trials may prevent us from generating any revenue from the product
candidate at issue.
Furthermore, to market our products outside the United States, our
products are subject to additional clinical trials and approvals even though the
products have been approved in the United States. To meet any additional
requirements that might be imposed by foreign governments, we may incur
additional costs that may impact our profitability. If the approvals are not
obtained or will be too expensive to obtain, foreign distribution may not be
feasible, which could harm our business.
4
OUR FUTURE PROFITABILITY DEPENDS ON THE DEVELOPMENT OF NEW PRODUCTS.
For the fiscal year ended December 31, 2001, 48% of our total revenue
was attributable to net sales and royalties, combined with licensing, marketing
rights and milestone revenue. If we fail to take a product or technology from
the development stage to market on a timely basis, our ability to generate
revenue from the product or technology may be seriously impaired and we may
incur significant expenses without a near-term financial return.
We currently have a variety of new products in various stages of
research and development and are working on possible improvements, extensions or
reformulations of some existing products. These research and development
activities, as well as the clinical testing and regulatory approval process,
which must be completed before commercial quantities of these products can be
sold, will require significant commitments of personnel and financial resources.
Delays in the research, development, testing and approval processes will cause a
corresponding delay in revenue generation from those products. Regardless of
whether they are ever released to the market, the expense of such processes will
have already been incurred.
We re-evaluate our research and development efforts regularly to assess
whether our efforts to develop a particular product or technology are
progressing at the rate that justifies our continued expenditures. On the basis
of these re-evaluations, we have abandoned in the past, and may abandon in the
future, our efforts on a particular product or technology.
WE MARKET OUR PRODUCTS THROUGH ARRANGEMENTS WITH THIRD PARTIES, AND IF WE FAIL
TO MAINTAIN SUCH ARRANGEMENTS OUR BUSINESS COULD BE HARMED.
We form strategic relationships with collaborators to help us
commercialize and market our products. These relationships are critical to the
success of our products on the market. The following table identifies the
companies with which we have entered into significant marketing and distribution
agreements and the products and territories covered. Each of these agreements
gives the collaborator exclusive rights in the territory listed.
COLLABORATOR PRODUCT TERRITORY
------------ ------- ---------
CollaGenex Pharmaceuticals Atridox(R), Atrisorb-FreeFlow GTR Barrier and United States
Atrisorb-D GTR Barrier
PharmaScience Atridox, Atrisorb-FreeFlow GTR Barrier and Canada
Atrisorb-D GTR Barrier
Fujisawa Healthcare Atrisone acne treatment product North America
Sanofi-Synthelabo Eligard prostate cancer treatment products North America
MediGene AG Eligard prostate cancer treatment products Europe
F.H. Faulding & Co. Limited Eligard prostate cancer treatment products Australia and New Zealand
Pharmacia & Upjohn Doxirobe Gel Worldwide
5
We expect that a significant amount of our future revenue will be
obtained from royalty payments from sales or a percentage of profits of products
licensed to our collaborators. Failure to make or maintain these arrangements,
failure to form new arrangements or a delay in a collaborator's performance
could reduce our revenue and may require us to expend significant amounts of
time and money to find new collaborators and structure alternative arrangements.
Disputes with a collaborator could delay the program on which we are
working with the collaborator and could result in expensive arbitration or
litigation, which may not be resolved in our favor. For example, Block had
exclusive rights to market and distribute our Atridox, Atrisorb-FreeFlow GTR
Barrier and Atrisorb-D GTR Barrier products in North America. We had disputes
with Block relating to product pricing and the payments due to us upon
achievement of milestones under our commercialization agreement with Block and
were involved in arbitration and litigation proceedings with them until final
settlement of all disputes in September 2001. We then entered into a new
arrangement for the marketing and distribution of these products in the United
States with CollaGenex. Our legal dispute with Block and the transition to
CollaGenex as our new marketing partner for these products were the primary
factors causing our 38% decrease in product net sales and royalty revenue
between our 2000 and 2001 fiscal years and part of the reason for our 28%
increase in administrative and marketing expenses between such years.
In addition, our collaborators could merge with or be acquired by
another company or experience financial or other setbacks unrelated to our
collaboration that could impair their ability to market and sell our products
and cause a decrease in our revenue. For example, GlaxoSmithKline acquired
Block, our North American dental products' marketing partner, and subsequently
discontinued marketing our dental products under the terms of the August 2001
amendment to our agreement with Block. The transition phase of the U.S.
marketing rights from Block to CollaGenex and the Canadian marketing rights to
PharmaScience resulted in a decrease in our dental product net sales revenue for
the fourth quarter of 2001.
WE HAVE LIMITED EXPERIENCE IN MARKETING AND SELLING OUR PRODUCTS.
Our Atridox and Atrisorb-FreeFlow GTR Barrier products, sales of which
accounted for approximately 64% of our net sales and royalty revenue in the
fiscal year ended December 31, 2001, have been marketed by our partners and have
been on the market for only three and a half years. To achieve commercial
success for any products, we must either develop a marketing and sales force or
contract with another party to perform these services for us. In either case, we
are competing with companies that have experienced and well-funded marketing and
sales operations, including Alkermes, Inc., Cima Labs, Inc. and Pharmacia &
Upjohn Co. We have historically relied upon arrangements with third parties to
market and sell our products. If we do not maintain good relationships with
these third parties, we may not be able to make alternative arrangements on
acceptable terms and our product sales may decline. To the extent we undertake
to market or co-market our own products, however, we will require additional
expenditures and management resources.
6
IF OUR PRODUCTS DO NOT ACHIEVE MARKET ACCEPTANCE, OUR REVENUE WILL BE REDUCED.
Our products may not gain market acceptance among physicians, patients,
third-party payors and the medical community. Under Block's marketing of our
dental products in North America, our dental products have been slow in
achieving market acceptance within the dental community. We may not experience
an increase in market acceptance of our dental products in the United States
under CollaGenex's marketing leadership. Additionally, we may not experience an
increase in market acceptance for our dental products in foreign countries as we
establish marketing authorizations and commence marketing within these
countries. In the fiscal year ended December 31, 2001, we generated $3.8
million, or 24% of our $15.8 million total revenue, from net sales and
royalties.
The degree of market acceptance of any of our products and product
candidates depends on a number of factors, including:
o demonstration of their clinical efficacy and safety,
o their cost-effectiveness,
o their potential advantage over alternative existing and newly
developed treatment methods,
o the marketing and distribution support they receive, and
o reimbursement policies of government and third-party payors.
Our products and product candidates, if successfully developed, will
compete with a number of drugs and therapies currently manufactured and marketed
by major pharmaceutical and other biotechnology companies. Our dental products,
sales of which accounted for 64% of our net sales and royalty revenue for the
year ended December 31, 2001, compete against companies such as OraPharma, Inc.,
whose Arestin(TM) product is used for the treatment of periodontal disease. Our
products may also compete with new products currently under development by
others or with products which may cost less than our products. Physicians,
patients, third-party payors and the medical community may not accept or utilize
our products. If our products do not achieve significant market acceptance, we
may not generate enough revenue to offset our research and development expenses
incurred in obtaining the required regulatory approvals and, therefore, may not
realize profitability.
WE GENERATE A MAJORITY OF OUR REVENUE FROM OUR CONTRACT RESEARCH AND DEVELOPMENT
ACTIVITIES, AND ANY ADVERSE EFFECT ON OUR RELATIONSHIPS WITH THESE CUSTOMERS
COULD CAUSE A DECREASE IN OUR REVENUE.
To support our research and development of certain product candidates,
we rely on agreements with collaborators, licensors and others that provide
financial and clinical support. Our contract research and development revenue of
$8.2 million for the fiscal year ended December 31, 2001 represented 52% of our
$15.8 million total revenue. Our significant strategic
7
alliances for developing new chemical entities and life cycle management
products are as follows:
COLLABORATOR TYPE OF ARRANGEMENT PURPOSE
------------ ------------------- -------
Pfizer Non-exclusive comprehensive research Develop and commercialize selected
and worldwide licensing agreement compounds using our patented drug
delivery technologies
Elan International Services Joint venture - Transmucosal Develop and commercialize oncology and
Technologies, Ltd. pain management products using our
patented BEMA and Atrigel drug delivery
technologies
Geneva Pharmaceuticals Collaboration, development and supply Develop and commercialize designated
agreement generic topical prescription
dermatology products
HGS Development agreement Develop a sustained-release formulation
of an HGS new proprietary protein with
our patented Atrigel drug delivery
technologies
If any of our research and development agreements were terminated or
substantially modified, or if our relationships with any of these collaborators
deteriorated, our revenue may decrease and our ability to develop and
commercialize our technologies would be hindered. Approximately 50% of our 2001
contract research and development revenue, and 26% of our total 2001 revenue,
was attributable to our research and development activities for Transmucosal
Technologies. If this joint venture was terminated or if our relationship with
Elan deteriorated, our revenue would likely decrease significantly.
WE CONDUCT OPERATIONS IN FOREIGN COUNTRIES THAT ARE SUBJECT TO RISKS AND OUR
PLANS FOR INTERNATIONAL EXPANSION MAY NOT SUCCEED, WHICH WOULD HARM OUR REVENUE.
We conduct our European operations through our wholly owned
subsidiaries, Atrix Laboratories GmbH, which has a small office in Frankfurt,
Germany, and Atrix Laboratories Limited, in London, England. Revenues
attributable to customers outside the United States amounted to $5.5 million, or
35% of our total revenue, for the fiscal year ended December 31, 2001.
We face foreign exchange rate fluctuations, primarily with respect to
the British Pound and the Euro, because we translate the financial results of
our foreign subsidiaries into U.S. dollars for consolidation and because we
translate the financial results of our transactions with our foreign marketing
partners. As exchange rates vary, our results, when translated, may vary from
expectations and may result in a decrease in our revenue.
8
One of our strategies for increasing our revenue depends on expansion
into international markets. Our international operations may not succeed for a
number of reasons, including:
o difficulties in managing foreign operations or obtaining the
required regulatory approvals from foreign governmental
authorities,
o fluctuations in currency exchange rates or imposition of currency
exchange controls,
o competition from local and foreign-based companies,
o issues relating to uncertainties of laws and enforcement relating
to the protection of intellectual property,
o unexpected changes in trading policies and regulatory
requirements,
o duties and taxation issues,
o language and cultural differences,
o general political and economic trends, and
o expropriation of assets, including bank accounts, intellectual
property and physical assets by foreign governments.
Accordingly, we may not be able to successfully execute our business
plan in foreign markets. If we are unable to achieve anticipated levels of
revenue from our international operations, our revenue and profitability may
decline.
OUR INABILITY TO PROTECT OUR INTELLECTUAL PROPERTY AND DEFEND OURSELVES FROM
INTELLECTUAL PROPERTY SUITS COULD HARM OUR COMPETITIVE POSITION AND OUR
FINANCIAL PERFORMANCE.
We rely heavily on our proprietary information in developing and
manufacturing our products. We currently maintain 46 U.S. patents and 63 foreign
patents and have 28 U.S. and 59 foreign patent applications pending. A number of
the claims contained in these patents and pending patent applications cover
certain aspects of our drug delivery technologies and products based upon these
technologies.
The following chart provides a brief description of our drug delivery
technologies and their applications:
TECHNOLOGY DESCRIPTION APPLICATION
---------- ----------- -----------
Atrigel system Biodegradable sustained release Delivery of drugs from weeks to
in situ implant for local or months
systemic delivery
Bioerodible Mucoadhesive Film Pre-formed bioerodible film for Transmucosal delivery of drugs
System (BEMA) fast-acting local or systemic from minutes to hours
delivery
9
TECHNOLOGY DESCRIPTION APPLICATION
---------- ----------- -----------
Solvent Microparticle System (SMP) Topical gel providing two-stage Dermal delivery of water
dermal delivery insoluble drugs
Mucocutaneous Absorption System Water resistant topical gel Film for either wet or dry
(MCA(TM)) providing sustained delivery surfaces
Biocompatible Polymer System (BCP(TM)) Non-cytotoxic gel/liquid for Protective gel film for wound
topical delivery healing and liquid formulation
for wound washing
Notwithstanding our pursuit of patent protection, other companies may
develop delivery systems, compositions and methods that infringe our patent
rights resulting from outright ownership or non-revocable exclusive licensure of
patents that relate to our delivery systems, composition and/or methods. In that
event, such delivery systems, compositions and methods may compete with our
systems, compositions and methods and may reduce sales of our products. Our
patents may not afford adequate protection against competitors with similar
systems, composition or methods, and other companies may circumvent our patents.
In addition to patents, we also maintain several U.S. and numerous
foreign trademark and service mark applications for registrations of our name,
logo, drug delivery systems and products. We currently have eight U.S. and 38
foreign issued trademarks and seven U.S. and 24 foreign trademark applications
pending. If other companies infringe on our trademarks and service marks, we may
not be able to market our products as effectively and our brand recognition may
decline.
We also rely on our unpatented proprietary knowledge. Despite our
efforts to protect our proprietary rights from unauthorized use or disclosure,
parties, including former employees or consultants of ours, may attempt to
disclose, obtain or use our proprietary information or technologies. Other
companies may also develop substantially equivalent proprietary knowledge. The
steps we have taken may not prevent misappropriation of our proprietary
information and technologies, particularly in foreign countries where laws or
law enforcement practices may not protect our proprietary rights as fully as in
the United States. If other companies obtain our proprietary knowledge or
develop substantially equivalent knowledge, they may develop products that
compete against ours and adversely affect our product sales.
Intellectual property claims brought against us, regardless of their
merit, could result in costly litigation and the diversion of our financial
resources and technical and management personnel. Further, if such claims are
proven valid, through litigation or otherwise, we may be required to change our
trademarks and service marks, stop using our technologies and pay financial
damages, which could harm our profitability and financial performance.
OUR FUTURE PERFORMANCE DEPENDS ON OUR ABILITY TO ATTRACT AND RETAIN KEY
PERSONNEL.
Our success depends in part on our ability to attract and retain highly
qualified management and scientific personnel. Our key management and scientific
personnel include Mr. David R. Bethune, Chairman and Chief Executive Officer;
Dr. Charles P. Cox, Senior Vice
10
President, Corporate Development; Dr. J. Steven Garrett, Vice President,
Clinical Research; and Dr. Stephen L. Warren, Vice President, Research and
Development. We have employment agreements with Mr. Bethune and Dr. Garrett. We
do not maintain key man life insurance on any of our employees. If any of these
employees terminated their employment with us, our business relationships may be
adversely affected, and management's attention may be diverted from our
operations to focusing on transition matters and identifying a suitable
replacement. If any of our key research and development employees terminated
their employment, our research and development efforts may be hindered,
adversely affecting our ability to bring new products to market. Because
competition for personnel in our industry is intense, we may not be able to
locate suitable replacements for any key employees that leave the company, and
we may not be able to offer employment to them on reasonable terms.
WE ARE SUBJECT TO ENVIRONMENTAL COMPLIANCE RISKS.
Our research, development and manufacturing areas involve the
controlled use of hazardous chemicals, primarily flammable solvents, corrosives,
and toxins. The biologic materials include microbiological cultures, animal
tissue and serum samples. Some experimental and clinical materials include human
source tissue or fluid samples. We are not licensed to receive or handle
radioactive materials. We are also subject to federal, state and local
government regulation in the conduct of our business, including regulations on
employee safety and our handling and disposal of hazardous and radioactive
materials. Any new regulation or change to an existing regulation could require
us to implement costly capital or operating improvements for which we have not
budgeted. If we do not comply with these regulations, we may be subject to fines
and other liabilities.
OUR INDUSTRY IS CHARACTERIZED BY INTENSE COMPETITION AND RAPID TECHNOLOGICAL
CHANGE, WHICH MAY LIMIT OUR COMMERCIAL OPPORTUNITIES, RENDER OUR PRODUCTS
OBSOLETE AND REDUCE OUR REVENUE.
The biotechnology and pharmaceutical industries are highly competitive
and subject to rapid and substantial technological change. We face, and will
continue to face, intense competition in the development, manufacturing,
marketing and commercialization of our products and product candidates. Products
utilizing our proprietary drug delivery systems are expected to compete with
other products for specified indications, including drugs marketed in
conventional and alternative dosage forms. New drugs or further developments in
alternative drug delivery methods may provide greater therapeutic benefits for a
specific drug or indication, or may offer comparable performance at lower cost,
than those offered by our drug delivery systems.
Our competitors include academic institutions, government agencies,
research institutions, biotechnology and pharmaceutical companies, including our
collaborators, and drug delivery companies. Several companies have drug delivery
technologies that compete with our technologies, including Alkermes, Inc.,
Emisphere Technologies, Inc., Cima Labs, Inc., and ALZA Corporation. Competitors
of our Eligard prostate cancer treatment products include AstraZeneca's
Zoladex(TM) product, Pharmacia & Upjohn Co.'s Trelstar(TM) product and TAP
11
Pharmaceuticals, Inc.'s Lupron(TM) product. Competitors of our dental products
include OraPharma, Inc., whose Arestin(TM) product is used for the treatment of
periodontal disease.
Many specialized biotechnology companies have formed collaborative
arrangements with large, established pharmaceutical companies to support
research, development and commercialization of products that may be competitive
with our products. Developments by others may render our products, product
candidates or technologies obsolete or noncompetitive, and our collaborators may
choose to use competing drug delivery methods.
Many of our competitors and potential competitors have substantially
greater capital resources, manufacturing and marketing experience, research and
development resources and production facilities than we do. Many of these
competitors also have significantly greater experience than we do in undertaking
preclinical testing and clinical trials of new pharmaceutical products and
obtaining FDA and other regulatory approvals. If our competitors develop and
market products that make our products or product candidates obsolete or
noncompetitive, our commercial opportunities and revenues will be reduced.
IF THIRD-PARTY PAYORS WILL NOT PROVIDE COVERAGE OR REIMBURSE PATIENTS FOR THE
USE OF OUR PRODUCTS, OUR REVENUE WILL SUFFER.
The commercial success of our products is substantially dependent on
whether third-party reimbursement is available for the use of our products by
the medical and dental professions. Medicare, Medicaid, health maintenance
organizations and other third-party payors may not authorize or otherwise budget
for the reimbursement of our products. In addition, they may not view our
products as cost-effective and reimbursement may not be available to consumers
or may not be sufficient to allow our products to be marketed on a competitive
basis. Likewise, legislative proposals to reform health care or reduce
government programs could result in lower prices or rejection of our products.
Changes in reimbursement policies or health care cost containment initiatives
that limit or restrict reimbursement for our products may cause our revenue to
decline.
IF PRODUCT LIABILITY LAWSUITS ARE BROUGHT AGAINST US, WE MAY INCUR SUBSTANTIAL
COSTS.
Our industry faces an inherent risk of product liability claims from
allegations that our products resulted in adverse effects to the patient and
others. These risks exist even with respect to those products that are approved
for commercial sale by the FDA and manufactured in facilities licensed and
regulated by the FDA. We maintain worldwide product liability insurance in the
amount of $10 million with a $10,000 deductible per occurrence and an aggregate
deductible of $100,000. Our insurance may not provide adequate coverage against
potential product liability claims or losses. In the future we may not be able
to obtain adequate insurance coverage on reasonable terms and insurance premiums
and deductibles may increase. Even if we were ultimately successful in product
liability litigation, the litigation would consume substantial amounts of our
financial and managerial resources and may create adverse publicity, all of
which would impair our ability to generate sales. If we were found liable for
any product liability
12
claims in excess of our insurance coverage or outside our coverage, the cost and
expense of such liability could severely damage our business and profitability.
OUR STOCK PRICE IS VOLATILE AND THE VALUE OF YOUR INVESTMENT MAY BE SUBJECT TO
SUDDEN DECREASES.
In recent years, our stock, the stock of other pharmaceutical and
biotechnology companies and the stock market in general have experienced extreme
price fluctuations, which have been unrelated to the operating performance of
the affected companies. The price of our common stock during the last two years
has ranged from a low of $5.0625 per share to a high of $29.18 per share. Our
stock price may fluctuate due to a variety of factors, including:
o announcements of developments related to our business or our
competitors' businesses,
o fluctuations in our operating results,
o sales of our common stock in the marketplace,
o failure to meet, or changes in, analysts' expectations,
o general conditions in the biotechnology and pharmaceutical
industries or the worldwide economy,
o announcements of innovations, new products or product
enhancements by us or by our competitors,
o developments in patents or other intellectual property rights or
any litigation relating to these rights, and
o developments in our relationships with our customers, suppliers
and collaborators.
Decreases in our stock price may adversely affect the trading market for our
stock and may cause you to lose all or a portion of your investment.
FORWARD LOOKING STATEMENTS
This prospectus and documents incorporated by reference in this
prospectus contain "forward-looking statements" within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934 that address, among other things, our strategy, the anticipated
development of our products, our projected capital expenditures and liquidity,
our development of additional revenue sources, our development and expansion in
international markets, and market acceptance of our products. We intend for
these forward-looking statements to be covered by the safe harbor provisions for
forward-looking statements contained in the Private Securities Litigation Reform
Act of 1995, and we are including this statement for purposes of complying with
these safe harbor provisions. We have based these
13
forward-looking statements on our current expectations and projections about
future events. These statements are not guarantees of future performance and are
subject to certain risks, uncertainties and other factors, some of which are
beyond our control, are difficult to predict and could cause actual results to
differ materially from those expressed or forecasted in the forward-looking
statements. These risks and uncertainties include those described in "Risk
Factors" and elsewhere in this prospectus.
We use words such as "believe," "expect," "anticipate," "intend,"
"plan," "estimate," "should," "likely," "potential," "seek" and variations of
these words and similar expressions to identify forward-looking statements. You
should not place undue reliance on these forward-looking statements, which
reflect our management's view only as of the date of this prospectus. Except as
required by law, we do not undertake any obligation to update these statements
or publicly release the result of any revision to the forward-looking statements
that we may make to reflect events or circumstances after the date of this
prospectus or to reflect the occurrence of unanticipated events.
USE OF PROCEEDS
We will not receive any proceeds from the sale of shares by the selling
stockholder. The aggregate exercise price for the warrant is $180,030.31,
subject to adjustment. If the selling stockholder exercises the warrant, any
exercise proceeds we receive will be used for working capital.
SELLING STOCKHOLDER
The selling stockholder, Ferghana Partners Inc., may sell up to 13,649
shares of our common stock pursuant to this prospectus. All of these shares are
issuable upon the exercise of a currently outstanding warrant to purchase common
stock held by the selling stockholder.
As of May 14, 2002, the selling stockholder beneficially owns 13,649
shares of our common stock. Based on 20,419,007 shares of our common stock
outstanding as of May 14, 2002, the selling stockholder will beneficially own
less than 1% of our outstanding common stock both prior to and after completion
of the offering. We have engaged the selling stockholder to assist us in
identifying appropriate counterparties and consummating corporate partnering
arrangements (principally out-licensing) involving our products and technology,
including our BEMA technology and its application to therapeutic drugs for the
treatment of migraines and nausea, and identifying and executing acquisitions by
us of one or more drug delivery or other companies, products or technologies. We
issued the warrant to the selling stockholder in connection with such
engagement. Except as described in the two preceding sentences, the selling
stockholder does not have, and within the past three years has not had, any
position, office or other material relationship with us or any of our
predecessors or affiliates. The information in this section of the prospectus
regarding share ownership by the selling stockholder and material relationships
of the selling stockholder is based on our records and on information provided
to us as of May 14, 2002 by our transfer agent and by the selling stockholder.
We determined beneficial ownership according to Rule 13d-3 of the Securities
Exchange Act as of that date.
14
The selling stockholder may from time to time offer and sell any or all
of its shares that are registered under this prospectus. Because the selling
stockholder is not obligated to sell its shares, and because the selling
stockholder may also acquire publicly traded shares of our common stock, we
cannot estimate how many shares the selling stockholder will own after this
offering. We may update, amend or supplement this prospectus from time to time
to update the disclosure in this section.
PLAN OF DISTRIBUTION
The selling stockholder may offer and sell its shares with this
prospectus. We will not receive any of the proceeds of the sales of these
shares. Offers and sales of shares made with this prospectus must comply with
the terms of the warrant to purchase such shares. However, the selling
stockholder may resell all or a portion of its shares without this prospectus in
open market transactions in reliance upon available exemptions under the
Securities Act, if any, provided they meet the criteria and conform to the
requirements of one of these exemptions.
WHO MAY SELL AND APPLICABLE RESTRICTIONS
The selling stockholder may offer and sell shares with this prospectus
directly to purchasers. The selling stockholder may donate, pledge or otherwise
transfer its shares to any person so long as the transfer complies with
applicable securities laws and the warrant to purchase such shares. As a result,
donees, pledgees, transferees and other successors in interest that receive such
shares as a gift, distribution or other non-sale related transfer may offer
shares of common stock under this prospectus.
The selling stockholder may from time to time offer shares through
brokers, dealers or agents. Brokers, dealers, agents or underwriters
participating in transactions may receive compensation in the form of discounts,
concessions or commissions from the selling stockholder (and, if they act as
agent for the purchaser of the shares, from that purchaser). The discounts,
concessions or commissions may be in excess of those customary in the type of
transaction involved. Any brokerage commissions and similar selling expenses
attributable to the sale of shares covered by this prospectus will be borne by
the selling stockholder. In order to comply with some state securities laws, the
shares may be sold in those jurisdictions only through registered or licensed
brokers or dealers.
The selling stockholder and any brokers, dealers or agents who
participate in the distribution of the shares may be deemed to be underwriters,
and any profits on the sale of shares by them and any discounts, commissions or
concessions received by any broker, dealer or agent may be deemed underwriting
discounts and commissions under the Securities Act. The selling stockholder has
advised us that, as of the date of this prospectus, it has not entered into any
plan, arrangement or understanding with a broker, dealer or underwriter
regarding sales of shares with this prospectus.
15
PROSPECTUS DELIVERY
A prospectus supplement or a post-effective amendment may be filed with
the Securities and Exchange Commission to disclose additional information with
respect to the distribution of the shares. In particular, if we receive notice
from the selling stockholder that a donee, pledgee, transferee or other
successor intends to sell more than 500 shares of our common stock, or that a
selling stockholder has entered into a material arrangement with an underwriter
or broker-dealer for the sale of shares covered by this prospectus, then to the
extent required we will file a supplement to this prospectus.
MANNER OF SALES
The selling stockholder will act independently of the Company in making
decisions with respect to the timing, manner and size of each sale. Sales may be
made over the Nasdaq National Market, the over-the-counter market, or any other
national securities exchange or quotation service on which the securities may be
listed or quoted at the time of sale. The shares may be sold at then prevailing
market prices, at prices related to prevailing market prices, at fixed prices or
at other negotiated prices.
The shares may be sold according to one or more of the following
methods:
o a block trade in which the broker or dealer so engaged will
attempt to sell the shares as agent but may position and resell a
portion of the block as principal to facilitate the transaction;
o purchases by a broker or dealer as principal and resale by the
broker or dealer for its account as allowed under this
prospectus;
o ordinary brokerage transactions and transactions in which the
broker solicits purchasers;
o pledges of shares to a broker-dealer or other person, who may, in
the event of default, purchase or sell the pledged shares;
o an exchange distribution under the rules of the exchange;
o face-to-face transactions between sellers and purchasers without
a broker-dealer;
o through the writing of options; and
o any other method permitted pursuant to applicable law.
16
In addition, selling stockholder may generally enter into option,
derivative or hedging transactions with respect to the shares, and any related
offers or sales of shares may be made under this prospectus. The selling
stockholder may, for example:
o enter into transactions involving short sales of the shares by
broker-dealers in the course of hedging the positions they assume
with the selling stockholder;
o sell shares short themselves and deliver the shares registered
hereby to settle such short sales or to close out stock loans
incurred in connection with their short positions;
o write call options, put options or other derivative instruments
(including exchange-traded options or privately negotiated
options) with respect to the shares, or which they settle through
delivery of the shares;
o enter into option transactions or other types of transactions
that require the selling stockholder to deliver shares to a
broker, dealer or other financial institution, who may then
resell or transfer the shares under this prospectus; or
o loan or pledge the shares to a broker, dealer or other financial
institution, who may sell the loaned shares.
These option, derivative and hedging transactions may require the
delivery to a broker, dealer or other financial institution of shares offered
under this prospectus, and that broker, dealer or other financial institution
may resell those shares under this prospectus.
If a material arrangement with any broker-dealer or other agent is
entered into for the sale of any shares of common stock through a block trade,
special offering, exchange distribution, secondary distribution, or a purchase
by a broker or dealer, a prospectus supplement will be filed, if necessary,
pursuant to Rule 424(b) under the Securities Act disclosing the material terms
and conditions of these arrangements.
Under the Securities Exchange Act of 1934, any person engaged in the
distribution of the shares of common stock may not simultaneously engage in
market-making activities with respect to common stock for five business days
prior to the start of the distribution. In addition, the selling stockholder and
any other person participating in a distribution will be subject to the Exchange
Act, which may limit the timing of purchases and sales of common stock by the
selling stockholder or any other person.
INDEMNIFICATION
The selling stockholder may agree to indemnify any broker-dealer or
agent that participates in transactions involving sales of the shares against
some liabilities, including liabilities arising under the Securities Act.
17
LEGAL MATTERS
The validity of the common stock offered by this prospectus will be
passed upon for us by Morrison & Foerster LLP. As of the date of this
prospectus, members of Morrison & Foerster LLP beneficially owned 1,257 shares
of our common stock and held options to acquire an additional 28,700 shares of
our common stock. Warren L. Troupe, one of our directors, is a partner at
Morrison & Foerster LLP. Any underwriters will be advised about other issues
relating to any offering by their own legal counsel named in the applicable
prospectus supplement.
EXPERTS
The consolidated financial statements incorporated by reference in this
prospectus from the Atrix Laboratories, Inc. Annual Report on Form 10-K for the
year ended December 31, 2001 have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their report, which is incorporated herein by
reference (which report expresses an unqualified opinion and includes an
explanatory paragraph referring to a change in accounting principle), and has
been so incorporated by reference in reliance upon the report of said firm given
upon their authority as experts in accounting and auditing.
The financial statements of Transmucosal Technologies Ltd. incorporated
by reference in this prospectus from our Amendment No. 1 on Form 10-K/A to our
Annual Report on Form 10-K for the year ended December 31, 2001, have been
audited by KPMG, independent auditors, as stated in their report, which is
incorporated herein by reference, and have been so incorporated in reliance upon
the report of such firm given upon their authority as experts in accounting and
auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements and other information with the SEC.
The SEC maintains an Internet site that contains reports, proxy and information
statements and other information regarding issuers that file electronically with
the SEC, including us. The address of the SEC's Internet site is
http://www.sec.gov. You may also read and copy any document we file with the SEC
at the SEC's public reference room at 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549.
Please call the SEC at 1-800-SEC-0330 for more information about their
public reference rooms and their copy charges. Our SEC filings and other
information concerning us are also available at The Nasdaq Stock Market, Inc. at
1735 K Street, N.W., Washington, D.C. 20006.
INCORPORATION OF DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with the SEC, which means that we can disclose important information to you by
referring you to those documents. Any information that we refer to in this
manner is considered part of this prospectus. Any information that we file with
the SEC after the date of this prospectus will automatically update and
supersede the information contained in this prospectus. This prospectus does not
18
include all the information in the registration statement and documents
incorporated by reference. You should refer to the documents and to the exhibits
to the registration statement for a more complete understanding of the matter
involved.
We are incorporating by reference the following documents that we have
previously filed with the SEC:
1. Our Annual Report on Form 10-K for the year ended December 31, 2001,
and Amendment No. 1 on Form 10-K/A to the Annual Report on Form 10-K for the
year ended December 31, 2001 (File No. 000-18231).
2. Our Quarterly Report on Form 10-Q for the quarter ended March 31,
2002 (File No. 000-18231).
3. Our Current Report on Form 8-K dated January 24, 2002, filed with
the SEC on February 5, 2002 (File No. 000-18231).
4. Our Current Report on Form 8-K dated March 6, 2002, filed with the
SEC on March 6, 2002 (File No. 000-18231).
5. The description of our common stock contained in our Registration
Statement on Form 8-A, filed with the SEC on January 12, 1990, including any
amendments or reports filed with the SEC for the purpose of updating such
description.
6. The description of our Series A Preferred Stock Purchase Rights
contained in our Registration Statement on Form 8-A, filed with the SEC on
October 1, 1998, as amended by Amendment No. 1 thereto on Form 8-A/A, filed with
the SEC on November 27, 2001, and any amendments or reports filed with the SEC
for the purpose of updating such description.
We are also incorporating by reference any future filings that we make
with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange
Act of 1934 after the date of this prospectus. In no event, however, will any of
the information that we disclose under Item 9 of any Current Report on Form 8-K
that we may from time to time file with the SEC be incorporated by reference
into, or otherwise included in, this prospectus.
We will furnish you without charge, on written or oral request, a copy
of any or all of the documents incorporated by reference. You should direct any
requests for documents to our Corporate Secretary, Atrix Laboratories, Inc.,
2579 Midpoint Drive, Fort Collins, Colorado 80524, telephone number (970)
482-5868. We maintain a website at http://www.atrixlabs.com. The reference to
our website does not constitute incorporation by reference of the information
contained at the site.
19
YOU SHOULD ONLY RELY ON THE INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
DIFFERENT INFORMATION. IF ANYONE PROVIDES YOU WITH DIFFERENT OR INCONSISTENT
INFORMATION, YOU SHOULD NOT RELY ON IT. WE WILL NOT MAKE AN OFFER TO SELL THESE
SECURITIES IN ANY JURISDICTION WHERE THE OFFER AND SALE IS NOT PERMITTED. YOU
SHOULD ASSUME THAT THE INFORMATION APPEARING IN THIS PROSPECTUS, AS WELL AS
INFORMATION WE PREVIOUSLY FILED WITH THE SEC AND INCORPORATED BY REFERENCE, IS
ACCURATE AS OF THE DATE ON THE FRONT COVER OF THIS PROSPECTUS ONLY. OUR
BUSINESS, FINANCIAL CONDITION, RESULTS OF OPERATIONS AND PROSPECTS MAY HAVE
CHANGED SINCE THAT DATE.
20
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses, other than underwriting discounts and commissions, in
connection with the issuance and distribution of the securities being
registered, for which the selling stockholder has agreed to reimburse us, are as
follows:
Securities Act Registration Fee.................... $ 28.37
Printing and Engraving Expenses.................... 1,000.00*
Legal Fees and Expenses............................ 25,000.00*
Accounting Fees and Expenses....................... 3,000.00*
Miscellaneous...................................... 971.63*
----------------
Total..................................... $ 30,000.00*
================
* Estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware, or
the DGCL, provides that directors and officers of Delaware corporations may,
under certain circumstances, be indemnified against expenses (including
attorneys' fees) and other liabilities actually and reasonably incurred by them
as a result of any suit brought against them in their capacity as a director or
officer, if they acted in good faith and in a manner they reasonably believed to
be in or not opposed to the best interests of the corporation and, with respect
to any criminal action or proceeding, if they had no reasonable cause to believe
their conduct was unlawful. Section 145 also provides that directors and
officers may also be indemnified against expenses (including attorneys' fees)
incurred by them in connection with a derivative suit if they acted in good
faith and in a manner they reasonably believed to be in or not opposed to the
best interests of the corporation, except that no indemnification may be made
without court approval if such person was adjudged liable to the corporation.
The Registrant has implemented such indemnification provisions in its
Amended and Restated Certificate of Incorporation and Bylaws which provide that
officers and directors shall be entitled to be indemnified by the Registrant to
the fullest extent permitted by law against all expenses, liabilities and loss
including attorneys' fees, judgments, fines, ERISA excise taxes or penalties and
amounts paid or to be paid in settlement) reasonably incurred in connection with
any action, suit or proceeding by reason of the fact that he or she is or was an
officer or director of the Registrant.
The above discussion of the Registrant's Amended and Restated
Certificate of Incorporation and Bylaws and of the DGCL is not intended to be
exhaustive and is qualified in its entirety by such Certificate of
Incorporation, Bylaws and statutes.
II-1
Pursuant to Section 145(g) of the DGCL the Registrant maintains
insurance on behalf of the directors and officers serving at the request of the
Registrant.
The Registration Rights Agreement relating to the 7% Convertible
Subordinated Notes due 2004 provides for indemnification by each of the initial
purchasers specified therein, their successors, assigns and direct and indirect
transferees, in specified circumstances, of the Registrant, the other initial
purchasers and other selling holders, and each of their respective directors,
officers, partners, employees, representatives, agents and controlling parties,
and by the Registrant of the initial purchasers specified therein, their
successors, assigns and direct and indirect transferees, each of their
respective directors, officers, partners, employees, representatives, agents and
underwriters, officers and directors of the underwriters, and each person, if
any, controlling any such initial purchaser, transferee, underwriter or holder,
in specified circumstances, for certain liabilities arising under the Securities
Act or otherwise.
ITEM 16. EXHIBITS.
EXHIBIT NO. DESCRIPTION
2.1 Agreement and Plan of Reorganization dated November 24, 1998
by and among Atrix Laboratories, Inc., Atrix Acquisition
Corporation and ViroTex Corporation (1)
2.2 Certificate of Merger of Atrix Acquisition Corporation into
ViroTex Corporation dated November 24, 1998 (1)
4.1 Amended and Restated Certificate of Incorporation (2)
4.2 Certificate of Amendment to Amended and Restated Certificate
of Incorporation filed with the Delaware Secretary of State
on June 1, 2001 (3)
4.3 Ninth Amended and Restated Bylaws (4)
4.4 Form of Common Stock Certificate (5)
4.5 Indenture, dated November 15, 1997, by and among the Company
and State Street Bank and Trust Company of California, N.A.,
as trustee thereunder (6)
4.6 Form of Note (included in Indenture, see Exhibit 4.5)
4.7 Amended and Restated Rights Agreement dated as of November
16, 2001 between the Company and American Stock Transfer &
Trust Company, as Rights Agent (including form of Right
Certificate, as Exhibit A, and the form of Summary of
Rights, as Exhibit B) (7)
4.8 Warrant to purchase 6,750 shares of Atrix Common Stock
issued to Gulfstar Investments, Limited (2)
4.9 Registration Rights Agreement, dated as of November 15,
1997, by and among the Company and NationsBanc Montgomery
Securities, Inc. and SBC Warburg Dillon Read, Inc. (6)
II-2
4.10 Certificate of Designation of the Series A Preferred Stock
filed with the State of Delaware on September 25, 1998 (8)
4.11 Certificate of Designation of Preferences and Rights of
Series A Convertible Exchangeable Preferred Stock filed with
the State of Delaware on July 18, 2000 (9)
4.12 Company Registration Rights Agreement, dated as of July 18,
2000, by and between the Company and Elan International
Services, Ltd., or EIS (9)
4.13 Warrant, dated as of July 18, 2000, issued by the Company
to EIS (9)
4.14 Convertible Promissory Note, dated as of July 18, 2000,
issued by the Company to EIS (9)
4.15* Warrant, dated as of April 4, 2001, issued by the Company
to Ferghana Partners Inc.
5.1* Opinion of Morrison & Foerster LLP
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of KPMG
23.3* Consent of Morrison & Foerster LLP (included in Exhibit 5.1)
24.1* Power of Attorney (See page II-7 of the Registration
Statement filed with the Commission on February 6, 2002.)
----------
* Previously filed.
(1) Incorporated by reference to Registrant's Current Report on Form 8-K dated
November 24, 1998, as filed with the Securities and Exchange Commission.
(2) Incorporated by reference to Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1998, as filed with the Commission.
(3) Incorporated by reference to Exhibit 4.2 of Registrant's Pre-Effective
Amendment No. 1 to Registration Statement on Form S-3/A, as filed with the
Commission on June 5, 2001.
(4) Incorporated by reference to Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 2001, as filed with the Commission on
April 1, 2001.
(5) Incorporated by reference to Registrant's Annual Report on Form 10-K for
the fiscal year ended September 30, 1993 as filed with the Commission.
(6) Incorporated by reference to Registrant's Current Report on Form 8-K dated
November 6, 1997, as filed with the Commission on December 9, 1997.
(7) Incorporated by reference to Exhibit 4.1 to Registrant's Current Report on
Form 8-K dated November 6, 2001, as filed with the Commission on November
27, 2001.
(8) Incorporated by reference to Exhibit 3.1 of Registrant's Registration
Statement on Form 8-A, as filed with the Commission on October 1, 1998.
(9) Incorporated by reference to Registrant's Current Report on Form 8-K dated
July 18, 2000, as filed with the Commission on August 4, 2000.
II-3
ITEM 17. UNDERTAKINGS.
(a) 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:
(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; and
(iii) 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;
provided, however, that paragraphs (a)(1)(i) and (1)(ii) shall not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in any periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference 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.
(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.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to 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.
II-4
(c) 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 foregoing provisions, 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 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.
II-5
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 registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Fort Collins, State of Colorado, on May 17, 2002.
ATRIX LABORATORIES, INC.
By: /s/ Brian G. Richmond
---------------------------
Brian G. Richmond
Chief Financial Officer,
Secretary and Treasurer
II-6
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated:
SIGNATURE TITLE DATE
Chairman of the Board and
** Chief Executive Officer
----------------------------------- (Principal Executive Officer) May 17, 2002
David R. Bethune
Chief Financial Officer, Secretary and
/s/ Brian G. Richmond Treasurer (Principal Financial and
----------------------------------- Accounting Officer) May 17, 2002
Brian G. Richmond
** Director May 17, 2002
-----------------------------------
Nicholas G. Bazan
** Director May 17, 2002
-----------------------------------
H. Stuart Campbell
** Director May 17, 2002
-----------------------------------
Dr. D. Walter Cohen
** Director May 17, 2002
-----------------------------------
Sander A. Flaum
** Director May 17, 2002
-----------------------------------
C. Rodney O'Connor
** Director May 17, 2002
-----------------------------------
Warren L. Troupe
** Director May 17, 2002
-----------------------------------
Dr. George J. Vuturo
** By: /s/ Brian G. Richmond
------------------------------
Brian G. Richmond
Attorney-in-Fact
II-7
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
----------- -----------
2.1 Agreement and Plan of Reorganization dated November 24, 1998
by and among Atrix Laboratories, Inc., Atrix Acquisition
Corporation and ViroTex Corporation (1)
2.2 Certificate of Merger of Atrix Acquisition Corporation into
ViroTex Corporation dated November 24, 1998 (1)
4.1 Amended and Restated Certificate of Incorporation (2)
4.2 Certificate of Amendment to Amended and Restated Certificate
of Incorporation filed with the Delaware Secretary of State
on June 1, 2001 (3)
4.3 Ninth Amended and Restated Bylaws (4)
4.4 Form of Common Stock Certificate (5)
4.5 Indenture, dated November 15, 1997, by and among the Company
and State Street Bank and Trust Company of California, N.A.,
as trustee thereunder (6)
4.6 Form of Note (included in Indenture, see Exhibit 4.5)
4.7 Amended and Restated Rights Agreement dated as of November
16, 2001 between the Company and American Stock Transfer &
Trust Company, as Rights Agent (including form of Right
Certificate, as Exhibit A, and the form of Summary of
Rights, as Exhibit B) (7)
4.8 Warrant to purchase 6,750 shares of Atrix Common Stock
issued to Gulfstar Investments, Limited (2)
4.9 Registration Rights Agreement, dated as of November 15,
1997, by and among the Company and NationsBanc Montgomery
Securities, Inc. and SBC Warburg Dillon Read, Inc. (6)
4.10 Certificate of Designation of the Series A Preferred Stock
filed with the State of Delaware on September 25, 1998 (8)
4.11 Certificate of Designation of Preferences and Rights of
Series A Convertible Exchangeable Preferred Stock filed with
the State of Delaware on July 18, 2000 (9)
4.12 Company Registration Rights Agreement, dated as of July 18,
2000, by and between the Company and Elan International
Services, Ltd., or EIS (9)
4.13 Warrant, dated as of July 18, 2000, issued by the Company
to EIS (9)
4.14 Convertible Promissory Note, dated as of July 18, 2000,
issued by the Company to EIS (9)
4.15* Warrant, dated as of April 4, 2001, issued by the Company
to Ferghana Partners Inc.
5.1* Opinion of Morrison & Foerster LLP
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of KPMG
23.3* Consent of Morrison & Foerster LLP (included in Exhibit 5.1)
24.1* Power of Attorney (See page II-7 of the Registration
Statement filed with the Commission on February 6, 2002.)
----------
* Previously filed.
(1) Incorporated by reference to Registrant's Current Report on Form 8-K dated
November 24, 1998, as filed with the Securities and Exchange Commission.
(2) Incorporated by reference to Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1998, as filed with the Commission.
(3) Incorporated by reference to Exhibit 4.2 of Registrant's Pre-Effective
Amendment No. 1 to Registration Statement on Form S-3/A, as filed with the
Commission on June 5, 2001.
(4) Incorporated by reference to Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 2001, as filed with the Commission on
April 1, 2001.
(5) Incorporated by reference to Registrant's Annual Report on Form 10-K for
the fiscal year ended September 30, 1993 as filed with the Commission.
(6) Incorporated by reference to Registrant's Current Report on Form 8-K dated
November 6, 1997, as filed with the Commission on December 9, 1997.
(7) Incorporated by reference to Exhibit 4.1 to Registrant's Current Report on
Form 8-K dated November 6, 2001, as filed with the Commission on November
27, 2001.
(8) Incorporated by reference to Exhibit 3.1 of Registrant's Registration
Statement on Form 8-A, as filed with the Commission on October 1, 1998.
(9) Incorporated by reference to Registrant's Current Report on Form 8-K dated
July 18, 2000, as filed with the Commission on August 4, 2000.