As Filed with the Securities and Exchange Commission on July 10, 2002
Registration No.____________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
ACCESS PHARMACEUTICALS, INC.
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(Exact name of registrant as specified in its charter)
Delaware 3841
- --------------------------------- ----------------------------
(State or Other Jurisdiction (Primary Standard Industrial
of Incorporation or Organization) Classification Code Number)
83-0221517
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(I.R.S. Employer
Identification No.)
2600 Stemmons Freeway, Suite 176
Dallas, Texas 75207 (214) 905-5100
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(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
Kerry P. Gray
President and Chief Executive Officer
Access Pharmaceuticals, Inc.
2600 Stemmons Freeway, Suite 176
Dallas, Texas 75207
(214) 905-5100
(Name, address, including zip code, and
telephone number, including area code, of agent for service)
with copies to:
John J. Concannon III
Bingham McCutchen LLP
150 Federal Street
Boston, MA 02110
(617) 951-8000
Approximate date of commencement of proposed sale to the public: As
soon as practicable after this Registration Statement is declared effective.
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, please 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. / /
CALCULATION OF REGISTRATION FEE
Title of Securities Proposed Maximum
to be Registered Amount to be Registered Offering Price Per Share(1)
- ------------------- ----------------------- ---------------------------
Common Stock $.01 197,584 shares (2) $2.25
par value per share
Proposed Maximum Aggregate
Offering Price (1) Amount of Registration Fee
- -------------------------- --------------------------
$444,564.00 $ 40.90
(1) Estimated solely for the purpose of determining the registration fee.
Calculated in accordance with Rule 457(c) under the Securities Act of
1933 based on the average of the high and low prices as reported by the
American Stock Exchange on July 5, 2002.
(2) Includes 25,000 shares issuable to selling stockholder upon
exercise of warrants for the purchase of shares of the Registrant's
Common Stock (see "Selling Stockholder").
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
Section 8(a), may determine.
PROSPECTUS
Access Pharmaceuticals, Inc.
Information contained in this prospectus is subject to completion or
amendment. A registration statement relating to these securities has been
filed with the Securities and Exchange Commission. These securities may
not be sold until the registration statement becomes effective. This
prospectus is not an offer to sell and is not a solicitation of an offer to buy
these securities in any state in which an offer, solicitation or sale is not
permitted.
Subject to completion, July 10, 2002.
197,584 Shares of
Common Stock, $.01 par value per share
This prospectus relates to the sale of up to 197,584 shares of our common
stock, or the Shares, $.01 par value per share, by a certain stockholder of
ours, the Selling Stockholder, for its account.
We will not receive any proceeds from the sale of the Shares by the Selling
Stockholder. None of the Shares have been registered prior to the filing of
the Registration Statement of which this Prospectus is a part.
On July 5, 2002, the last sale price of our Common Stock was $2.40 per
share, as reported by the American Stock Exchange, or AMEX, under the
symbol AKC.
Investing in the common stock involves risks. For a discussion of certain
factors you should consider, see "Risk Factors" beginning on Page 2.
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.
The date of this Prospectus is ________, 2002
Table of Contents
Page
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Risk Factors 2
Forward Looking Statements 8
Access Pharmaceuticals, Inc. 8
Use of Proceeds 8
Selling Stockholder 9
Plan of Distribution 9
Legal Matters 10
Experts 10
Where You Can Get More Information 10
Certain Information We Are Incorporating By Reference 11
1
RISK FACTORS
This offering involves a high degree of risk. You should carefully consider
the risks described below and the other information in this prospectus
before purchasing our common stock.
We have experienced a history of losses and we expect to incur future
losses.
We have recorded minimal revenue to date and we have incurred a
cumulative operating loss of approximately $39.8 million through March
31, 2002. Our losses have resulted principally from costs incurred in
research and development activities related to our efforts to develop clinical
candidates and from the associated administrative costs. We expect to incur
significant additional operating losses over the next several years. We also
expect cumulative losses to increase due to expanded research and
development efforts and preclinical and clinical trials.
We do not have significant operating revenue and we may never attain
profitability.
Our ability to achieve significant revenue or profitability depends upon our
ability to successfully complete the development of drug candidates, to
develop and obtain patent protection and regulatory approvals for our drug
candidates and to manufacture and commercialize the resulting drugs. We
have not received significant royalties for sales of our amlexanox products
to date and we may not receive significant revenues or profits from the sale
of these products in the future. Furthermore, we may not be able to ever
successfully identify, develop, commercialize, patent, manufacture, market
and obtain required regulatory approvals for any additional products.
Moreover, even if we do identify, develop, commercialize, patent,
manufacture, market and obtain required regulatory approvals for additional
products, we may not receive revenues or royalties from commercial sales
of these products for a significant number of years, if at all. Therefore, our
proposed operations are subject to all the risks inherent in the establishment
of a new business enterprise. In the next few years, our revenues may be
limited to any amounts that we receive under strategic partnerships and
research or drug development collaborations that we may establish and we
cannot assure you that we will be able to establish any such relationships
on terms acceptable to us. We cannot assure you that we will achieve or
maintain profitability in the future and our failure to achieve significant
revenues or profitable operations would impair our ability to sustain
operations.
We may not successfully commercialize our drug candidates.
Our drug candidates are subject to the risks of failure inherent in the
development of pharmaceutical products based on new technologies. These
risks include the possibilities that some or all of our drug candidates will
be found to be unsafe or ineffective or otherwise fail to meet applicable
regulatory standards or receive necessary regulatory clearances; that these
drug candidates, if safe and effective will be difficult to develop into
commercially viable drugs or to manufacture on a large scale or will be
uneconomical to market; that proprietary rights of third parties will
preclude us from marketing such drugs; or that third parties will market
superior or equivalent drugs. Our failure to develop safe, commercially
viable drugs would have a material adverse effect on our business,
operating results and financial condition.
The success of our research and development activities, upon which we
primarily focus, is uncertain.
Our primary focus is on our research and development activities and the
commercialization of compounds covered by proprietary biopharmaceutical
patents. Research and development activities, by their nature, preclude
definitive statements as to the time required and costs involved in reaching
certain objectives. Actual research and development costs, therefore, could
exceed budgeted amounts and estimated time frames may require extension.
Cost overruns, unanticipated regulatory delays or demands, unexpected
adverse side effects or insufficient therapeutic efficacy will prevent or
substantially slow our research and development effort and our business
could ultimately suffer. We anticipate that we will remain principally
engaged in research and development activities for an indeterminate, but
substantial, period of time.
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We may be unable to obtain necessary additional capital to fund operations
in the future.
We require substantial capital for our development programs and operating
expenses, to pursue regulatory clearances and to prosecute and defend our
intellectual property rights. Although we believe that our existing capital
resources, interest income and revenue from possible licensing agreements
and collaborative agreements will be sufficient to fund our currently
expected operating expenses and capital requirements for approximately
three years, we may need to raise substantial additional capital during that
period because our actual cash requirements may vary materially from those
now planned and will depend upon numerous factors, including :
* the results of our research and development programs;
* the timing and results of preclinical and clinical trials;
* our ability to maintain existing and establish new collaborative
agreements with other companies to provide funding to us;
* technological advances; and
* activities of competitors and other factors.
If we do raise additional funds by issuing equity securities, further dilution
to existing stockholders would result and future investors may be granted
rights superior to those of existing stockholders. If adequate funds are not
available to us through additional equity offerings, we may be required to
delay, reduce the scope of or eliminate one or more of our research and
development programs or to obtain funds by entering into arrangements
with collaborative partners or others that require us to issue additional
equity securities or to relinquish rights to certain technologies or drug
candidates that we would not otherwise issue or relinquish in order to
continue independent operations.
The success of our business may depend, in part, upon relationships with
other companies.
Our strategy for the research, development and commercialization of our
potential pharmaceutical products may require us to enter into various
arrangements with corporate and academic collaborators, licensors,
licensees and others, in addition to our existing relationships with other
parties. Specifically, if we successfully develop any commercially
marketable pharmaceutical products, we may seek to enter joint venture,
sublicense or other marketing arrangements with parties that have an
established marketing capability or we may choose to pursue the
commercialization of such products on our own. We may, however, be
unable to establish additional collaborative arrangements or license
agreements as we may deem necessary to develop and commercialize our
potential pharmaceutical products on acceptable terms. Furthermore, if we
maintain and establish arrangements or relationships with third parties, our
business may depend upon the successful performance by these third parties
of their responsibilities under those arrangements and relationships.
We may depend upon contract manufacturers to assist us with the
commercialization of any new products that we may develop.
We have no experience in the manufacture of pharmaceutical products in
clinical quantities or for commercial purposes and we may not be able to
manufacture any new pharmaceutical products that we may develop, so we
intend to establish arrangements with contract manufacturers to supply
sufficient quantities of products to conduct clinical trials and for the
manufacture, packaging, labeling and distribution of finished pharmaceutical
products if any of our potential products are approved for
commercialization. If we are unable to contract for a sufficient supply of
our potential pharmaceutical products on acceptable terms, our preclinical
and human clinical testing schedule may be delayed, resulting in the delay
of our submission of products for regulatory approval and initiation of new
development programs, which could cause our business to suffer. Delays
or difficulties in establishing relationships with manufacturers to produce,
package, label and distribute our finished pharmaceutical or other medical
products, if any, market introduction and subsequent sales of such products
could cause our business to suffer. Moreover, contract manufacturers that
we may use must adhere to current Good Manufacturing Practices, as
required by the FDA. In this regard, the FDA will not issue a pre-market
approval or product and establishment licenses, where applicable, to a
manufacturing facility for the products until after the
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manufacturing facility passes a pre-approval plant inspection. If we are
unable to obtain or retain third party manufacturing on commercially
acceptable terms, we may not be able to commercialize our products as
planned. Our potential dependence upon third parties for the manufacture
of our products may adversely affect our profit margins and our ability to
develop and deliver such products on a timely and competitive basis.
We are subject to extensive governmental regulation which increases our
cost of doing business and may affect our ability to commercialize any new
products that we may develop.
The FDA and comparable agencies in foreign countries impose substantial
requirements upon the introduction of pharmaceutical products through
lengthy and detailed laboratory, preclinical and clinical testing procedures
and other costly and time-consuming procedures to establish their safety and
efficacy. All of our drug candidates will require governmental approvals for
commercialization, none of which have been obtained. Preclinical and
clinical trials and manufacturing of our drug candidates will be subject to
the rigorous testing and approval processes of the FDA and corresponding
foreign regulatory authorities. Satisfaction of these requirements typically
takes a significant number of years and can vary substantially based upon
the type, complexity and novelty of the product. We cannot assure you
when we, independently or with our collaborative partners, might submit
a New Drug Application, or NDA, for FDA or other regulatory review.
Government regulation also affects the manufacturing and marketing of
pharmaceutical products.
Government regulations may delay marketing of our potential drugs for a
considerable or indefinite period of time, impose costly procedural
requirements upon our activities and furnish a competitive advantage to
larger companies or companies more experienced in regulatory affairs.
Delays in obtaining governmental regulatory approval could adversely affect
our marketing as well as our ability to generate significant revenues from
commercial sales. We cannot assure you that the FDA or other regulatory
approvals for any drug candidates will be granted on a timely basis or at
all. Moreover, if regulatory approval of a drug candidate is granted, such
approval may impose limitations on the indicated use for which such drug
may be marketed. Even if we obtain initial regulatory approvals for our
drug candidates, we, or our drugs and our manufacturing facilities would
be subject to continual review and periodic inspection, and later discovery
of previously unknown problems with a drug, manufacturer or facility may
result in restrictions on the marketing or manufacture of such drug,
including withdrawal of the drug from the market. The FDA and other
regulatory authorities stringently apply regulatory standards and failure to
comply with regulatory standards can, among other things, result in fines,
denial or withdrawal of regulatory approvals, product recalls or seizures,
operating restrictions and criminal prosecution.
The uncertainty associated with preclinical and clinical testing may affect
our ability to successfully commercialize new products.
Before we can obtain regulatory approvals for the commercial sale of any
of our potential drugs, the drug candidates will be subject to extensive
preclinical and clinical trials to demonstrate their safety and efficacy in
humans. We cannot assure you that preclinical or clinical trials of any
future drug candidates will demonstrate the safety and efficacy of such drug
candidates at all or to the extent necessary to obtain regulatory approvals.
In this regard, for example, adverse side effects can occur during the
clinical testing of a new drug on humans or animals which may delay
ultimate FDA approval or even lead us to terminate our efforts to develop
the drug for commercial use. Companies in the biotechnology industry have
suffered significant setbacks in advanced clinical trials, even after
demonstrating promising results in earlier trials. The failure to adequately
demonstrate the safety and efficacy of a drug candidate under development
could delay or prevent regulatory approval of the drug candidate and could
cause our business, operating results and financial condition to suffer.
We may incur substantial product liability expenses due to the use or misuse
of our products for which we may be unable to obtain complete insurance
coverage.
Our business exposes us to potential liability risks that are inherent in the
testing, manufacturing and marketing of pharmaceutical products. These
risks will expand with respect to our drug candidates, if
4
any, that receive regulatory approval for commercial sale and we may face
substantial liability for damages in the event of adverse side effects or
product defects identified with any of our products that are used in clinical
tests or marketed to the public. We generally procure product liability
insurance for drug candidates that are undergoing human clinical trials.
Product liability insurance for the biotechnology industry is generally
expensive, however, if available at all, and we cannot assure you that in the
future we will be able to obtain insurance coverage at acceptable costs or
in a sufficient amount, if at all. We may be unable to satisfy any claims for
which we may be held liable as a result of the use or misuse of products
which we have developed, manufactured or sold and any such product
liability claim could adversely affect our business, operating results or
financial condition.
We may incur significant liabilities if we fail to comply with stringent
environmental regulations or if we did not comply with these regulations in
the past.
Our research and development processes involve the controlled use of
hazardous materials. We are subject to a variety of federal, state and local
governmental laws and regulations related to the use, manufacture, storage,
handling and disposal of such material and certain waste products. Although
we believe that our activities and our safety procedures for storing, using,
handling and disposing of such materials comply with the standards
prescribed by such laws and regulations, the risk of accidental
contamination or injury from these materials cannot be completely
eliminated. In the event of such accident, we could be held liable for any
damages that result and any such liability could exceed our resources.
Intense competition may limit our ability to successfully develop and market
commercial products.
The biotechnology and pharmaceutical industries are intensely competitive
and subject to rapid and significant technological change. Our competitors
in the United States and elsewhere are numerous and include, among
others, major multinational pharmaceutical and chemical companies,
specialized biotechnology firms and universities and other research
institutions. Many of these competitors have and employ greater financial
and other resources, including larger research and development staffs and
more effective marketing and manufacturing organizations, than us or our
collaborative partners. We cannot assure you that our competitors will not
succeed in developing technologies and drugs that are more effective or less
costly than any that we are developing or which would render our
technology and future products obsolete and noncompetitive.
In addition, some of our competitors have greater experience than we do in
conducting preclinical and clinical trials and obtaining FDA and other
regulatory approvals. Accordingly, our competitors may succeed in
obtaining FDA or other regulatory approvals for drug candidates more
rapidly than we do. Companies that complete clinical trials, obtain required
regulatory agency approvals and commence commercial sale of their drugs
before their competitors may achieve a significant competitive advantage.
We cannot assure you that drugs resulting from our research and
development efforts or from our joint efforts with collaborative partners
will be able to compete successfully with our competitors' existing products
or products under development.
Our ability to successfully develop and commercialize our drug candidates
will substantially depend upon the availability of reimbursement funds for
the costs of the resulting drugs and related treatments.
The successful commercialization of, and the interest of potential
collaborative partners to invest in, the development of our drug candidates
will depend substantially upon reimbursement of the costs of the resulting
drugs and related treatments at acceptable levels from government
authorities, private health insurers and other organizations, including health
maintenance organizations, or HMOs. We cannot assure you that
reimbursement in the United States or elsewhere will be available for any
drugs that we may develop or, if available, will not be decreased in the
future, or that reimbursement amounts will not reduce the demand for, or
the price of, our drugs, thereby adversely affecting our business. If
reimbursement is not available or is available only to limited levels, we
cannot assure you that we will be able to obtain
5
collaborative partners to commercialize our drugs, or be able to obtain a
sufficient financial return on our own manufacture and commercialization
of any future drugs.
The market may not accept any pharmaceutical products that we
successfully develop.
The drugs that we are attempting to develop may compete with a number
of well-established drugs manufactured and marketed by major
pharmaceutical companies. The degree of market acceptance of any drugs
developed by us will depend on a number of factors, including the
establishment and demonstration of the clinical efficacy and safety of our
drug candidates, the potential advantage of our drug candidates over
existing therapies and the reimbursement policies of government and third-
party payers. Physicians, patients or the medical community in general may
not accept or use any drugs that we may develop independently or with our
collaborative partners and if they do not, our business could suffer.
Trends toward managed health care and downward price pressures on
medical products and services may limit our ability to profitably sell any
drugs that we may develop.
Lower prices for pharmaceutical products may result from:
* third-party payers' increasing challenges to the prices charged for
medical products and services;
* the trend toward managed health care in the United States and the
concurrent growth of HMOs and similar organizations that can control or
significantly influence the purchase of healthcare services and
products; and
* legislative proposals to reform healthcare or reduce government
insurance programs.
The cost containment measures that healthcare providers are instituting,
including practice protocols and guidelines and clinical pathways, and the
effect of any health care reform, could limit our ability to profitably sell
any drugs that we may successfully develop. Moreover, any future
legislation or regulation, if any, relating to the healthcare industry or third-
party coverage and reimbursement, may cause our business to suffer.
We may not be successful in protecting our intellectual property and
proprietary rights.
Our success depends, in part, on our ability to obtain U.S. and foreign
patent protection for our drug candidates and processes, preserve our trade
secrets and operate our business without infringing the proprietary rights of
third parties. Although we, together with our subsidiaries are either the
owner or licensee of technology to 23 U.S. patents and to 17 U.S. patent
applications now pending, and 6 European and 15 European patent
applications, we cannot assure you that any additional patents will issue
from any of the patent applications owned by, or licensed to, us.
Furthermore, we cannot assure you that any rights we may have under
issued patents will provide us with significant protection against competitive
products or otherwise be commercially viable. Legal standards relating to
the validity of patents covering pharmaceutical and biotechnological
inventions and the scope of claims made under such patents are still
developing and there is no consistent policy regarding the breadth of claims
allowed in biotechnology patents. The patent position of a biotechnology
firm is highly uncertain and involves complex legal and factual questions.
We cannot assure you that any existing or future patents issued to, or
licensed by, us will not subsequently be challenged, infringed upon,
invalidated or circumvented by others. In addition, patents may have been
granted to third parties or may be granted covering products or processes
that are necessary or useful to the development of our drug candidates. If
our drug candidates or processes are found to infringe upon the patents or
otherwise impermissibly utilize the intellectual property of others, our
development, manufacture and sale of such drug candidates could be
severely restricted or prohibited. In such event, we may be required to
obtain licenses from third parties to utilize the patents or proprietary rights
of others. We cannot assure you that we will be able to obtain such licenses
on acceptable terms, if at all. If we become involved in litigation regarding
our intellectual property rights or the intellectual property rights of others,
the potential cost of such litigation, regardless of the strength of our legal
position, and the potential damages that we could be required to pay could
be substantial.
6
Our business could suffer if we lose the services of, or fail to attract, key
personnel.
We are highly dependent upon the efforts of our senior management and
scientific team, including our President and Chief Executive Officer. The
loss of the services of one or more of these individuals could seriously
impede our success. We do not maintain any "key-man" insurance policies
on any of our key employees and we do not intend to obtain such insurance.
In addition, due to the specialized scientific nature of our business, we are
highly dependent upon our ability to attract and retain qualified scientific
and technical personnel. In view of the stage of our development and our
research and development programs, we have restricted our hiring to
research scientists and a small administrative staff and we have made no
investment in manufacturing, production, marketing, product sales or
regulatory compliance resources. If we develop pharmaceutical products
that we will commercialize ourselves, however, we will need to hire
additional personnel skilled in the clinical testing and regulatory compliance
process and in marketing and product sales. There is intense competition
among major pharmaceutical and chemical companies, specialized
biotechnology firms and universities and other research institutions for
qualified personnel in the areas of our activities, however, and we may be
unsuccessful in attracting and retaining these personnel.
Ownership of our shares is concentrated, to some extent, in the hands of a
few individual investors.
Heartland Advisors, Inc., Larry N. Feinberg (Oracle Partners LP, Oracle
Institutional Partners LP and Oracle Investment Management Inc.), and
Howard P. Milstein currently beneficially own approximately 13.1%, 9.3%
and 5.7% respectively, of our issued and outstanding common stock.
Provisions of our charter documents could discourage an acquisition of our
company that would benefit our stockholders.
Provisions of our Certificate of Incorporation, By-laws and Stockholders
Rights Plan may make it more difficult for a third party to acquire control
of our company, even if a change in control would benefit our stockholders.
In particular, shares of our preferred stock may be issued in the future
without further stockholder approval and upon such terms and conditions,
and having such rights, privileges and preferences, as our Board of
Directors may determine, including, for example, rights to convert into our
common stock. The rights of the holders of our common stock will be
subject to, and may be adversely affected by, the rights of the holders of
any of our preferred stock that may be issued in the future. The issuance
of our preferred stock, while providing desirable flexibility in connection
with possible acquisitions and other corporate purposes, could have the
effect of making it more difficult for a third party to acquire control of us.
This could limit the price that certain investors might be willing to pay in
the future for shares of our common stock and discourage these investors
from acquiring a majority of our common stock.
Substantial sales of our common stock could lower our stock price.
The market price for our common stock could drop as a result of sales of
a large number of our presently outstanding shares. Currently, most of the
outstanding shares of our common stock are unrestricted and freely tradable
or tradable under Rule 144 or pursuant to a resale registration statement.
We may not be able to successfully integrate the targeted therapeutic
technology business acquired from Biotech Australia into our business.
We expect that the February 2002 acquisition of the targeted therapeutic
technology business of Biotech Australia Pty. Ltd. by our subsidiary,
Access Pharmaceuticals Australia Pty. Ltd., will result in certain benefits
including the development of a new drug delivery technology platform and
an internal capability to perform biological studies which we previously out-
sourced. Our ability to achieve these and other expected benefits of the
acquisition depends in part upon the integration of the newly acquired
technology and personnel of Access Pharmaceuticals Australia with our
technology, operations and personnel in a timely and efficient manner. We
cannot assure you that we will be able to successfully integrate the targeted
therapeutic technology business and the operations of our foreign subsidiary
and its
7
personnel with our business. In addition, we cannot assure you that our
business will achieve improved revenues, efficiencies or synergies as a
result of the acquisition.
FORWARD LOOKING STATEMENTS
This prospectus contains forward-looking statements that involve risks and
uncertainties. These statements relate to future events or our future
financial performance. In some cases, you can identify forward-looking
statements by terminology such as "may," "will," "should," "expects,"
"plans," "could", "anticipates," "believes," "estimates," "predicts,"
"potential" or "continue" or the negative of such terms or other comparable
terminology. These statements are only predictions and involve known and
unknown risks, uncertainties and other factors, including the risks outlined
under "Risk Factors," that may cause our or our industry's actual results,
levels of activity, performance or achievements to be materially different
from any future results, levels or activity, performance or achievements
expressed or implied by such forward-looking statements.
Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements. We are under no duty to update any
of the forward-looking statements after the date of this prospectus to
conform such statements to actual results.
ACCESS PHARMACEUTICALS, INC.
Access Pharmaceuticals is a Delaware corporation in the development stage.
We are an emerging pharmaceutical company focused on developing both
novel low development risk product candidates and technologies with
longer-term major product opportunities. Together with our subsidiaries, we
have proprietary patents or rights to seven drug delivery technology
platforms: synthetic polymer targeted delivery, vitamin mediated targeted
delivery (including oral), bioerodible hydrogel technology, nanoparticles
and nanoparticle networks, Residerm (R) topical delivery, carbohydrate
targeting technology and agents for the prevention and treatment of viral
disease.
In addition, our partner GlaxoSmithKline is marketing in the United States
our jointly developed drug - Aphthasol (R), the first FDA approved product
for the treatment of canker sores. We have licensed certain rights for the
use of amlexanox in additional indications from GlaxoSmithKline for
numerous markets, excluding the U.S. We are developing new formulations
and delivery forms to evaluate amlexanox in additional clinical indications,
including mucoadhesive disc delivery.
We use our proprietary technology to develop products and product
candidates, including our marketed products, amlexanox 5% paste
(marketed under the trade names Aphthasol (R) and Aptheal (R)) and
Zindaclin (R), and our products that are currently in development status,
polymer platinate (AP 5280), DACH platinum, OraDisc (TM),
mucoadhesive liquid technology, amlexanox cream, amlexanox gel, and
mucoadhesive liquid technology.
Access was founded in 1974 as Chemex Corporation, a Wyoming
corporation, and in 1983 changed its name to Chemex Pharmaceuticals, Inc.
Chemex changed its state of incorporation from Wyoming to Delaware on
June 30, 1989. In connection with the merger of Access Pharmaceuticals,
Inc., a Texas corporation, with and into Chemex on January 25, 1996, we
changed our name to Access Pharmaceuticals, Inc. Our principal executive
office is at 2600 Stemmons Freeway, Suite 176, Dallas, Texas 75207; our
telephone number is (214) 905-5100.
USE OF PROCEEDS
We will not receive any proceeds from the sale of shares by the Selling
Stockholder.
8
SELLING STOCKHOLDER
The following table sets forth certain information regarding the beneficial
ownership of our common stock as of July 9, 2002 and as adjusted to
reflect the sale of our common stock offered hereby, by the Selling
Stockholder.
The Selling Stockholder has not had any position, office or other material
relationship within the past three years with us or our affiliates. In
addition, we believe, based on information provided to us by the Selling
Stockholder, that the Selling Stockholder has sole voting and investment
power with respect to the shares beneficially owned. For more information
regarding the shares offered, see "Plan of Distribution" below.
Shares Shares to be
Beneficially Beneficially
Owned Prior Shares Owned After
Name of Selling Stockholder to Offering Offered Offering
- --------------------------- ------------ ---------- ------------
GroPep Limited 197,584(1) 197,584(1) -
(1) These share amounts include shares issuable upon exercise of warrants
or options.
PLAN OF DISTRIBUTION
The Selling Stockholder may sell or distribute the Shares directly to
purchasers as principals or through one or more underwriters, brokers,
dealers or agents as follows:
* from time to time in one or more transactions, which may involve block
transactions;
* on any exchange or in the over-the-counter market;
* in transactions otherwise than in the over-the-counter market; or
* through the writing of options, whether such options are listed on an
options exchange otherwise, on or settlement of short sales of, the Shares.
Any of these transactions may be effected at market prices at the time of
sale, at prices related to such prevailing market prices, at varying prices
determined at the time of sale or at negotiated or fixed price in each case
as determined by the Selling Stockholder or by agreement between the
Selling Stockholder and underwriters, brokers, dealers or agents, or
purchasers. If the Selling Stockholder effects such transactions by selling
Shares to or through underwriters, brokers, dealers or agents, the Selling
Stockholder may compensate these underwriters, brokers, dealers or agents
in the form of discounts, concessions or commissions from the Selling
Stockholder or commissions from purchasers of securities for whom they
may act as agent. These compensatory discounts, concessions or
commissions may be in excess of those customary in the types of
transactions involved as to particular underwriters, brokers, dealers or
agents. The Selling Stockholder and any brokers, dealers or agents that
participate in the distribution of the Shares may be deemed to be
underwriters, and any profit on the sale of Shares by them and any
discounts, concessions or commissions received by any of these
underwriters, brokers, dealers or agents may constitute underwriting
discounts and commissions under the Securities Act of 1933.
9
Under the securities laws of certain states, the Shares may be sold in such
states only through registered or licensed brokers or dealers. In addition,
in certain states the Shares may not be sold unless the Shares have been
registered or qualified for sale in such state or an exemption from
registration or qualification is available and is complied with.
We will pay all of the expenses incident to the registration, offering and
sale of the Shares to the public hereunder, estimated at $17,000, other than
commissions, fees and discounts of underwriters, brokers, dealers and
agents. Those commissions, fees and discounts, if any, will be borne by the
Selling Stockholder. We have agreed to indemnify the Selling Stockholder
and any underwriters against certain liabilities under the Securities Act. We
will not receive any of the proceeds from the sale of any of the Shares by
the Selling Stockholder.
Certain of the underwriters, dealers, brokers or agents may have other
business relationships with us and our affiliates in the ordinary course.
LEGAL MATTERS
The validity of our common stock to be sold in this offering is being passed
upon for us by Bingham McCutchen LLP, 150 Federal Street, Boston,
Massachusetts 02110. Justin P. Morreale, David L. Engel and John J.
Concannon III, partners of Bingham McCutchen LLP, beneficially own an
aggregate of 181,499 shares of our common stock and warrants to purchase
834 shares of our common stock. Mr. Concannon is the corporate
Secretary.
EXPERTS
Our consolidated financial statements incorporated in this Prospectus by
reference to our Annual Report on Form 10-K for the period ended
December 31, 2001 have been so incorporated in reliance on the report of
Grant Thornton LLP, independent certified public accountants, given on the
authority of said firm as experts in accounting and auditing.
WHERE YOU CAN GET MORE INFORMATION
This prospectus constitutes a part of a registration statement on Form S-3
filed by us with the Securities and Exchange Commission, or SEC, under
the Securities Act of 1933. This prospectus does not contain all of the
information set forth in the Registration Statement, since we have omitted
some parts in accordance with the SEC's rules and regulations. The SEC
permits us to "incorporate by reference" the information we file with it,
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 with the SEC
will automatically update and supersede this information. Access has filed
a Registration Statement on Form S-3 under the Securities Act of 1933 with
the SEC with respect to common stock being offered pursuant to this
prospectus. This prospectus omits certain information contained in the
Registration Statement on Form S-3, as permitted by the SEC. Refer to the
Registration Statement on Form S-3, including the exhibits, for further
information about Access and the common stock being offered pursuant to
this prospectus. Statements in this prospectus regarding provisions of certain
documents filed with, or incorporated by reference in, the Registration
Statement are not necessarily complete and each statement is qualified in all
respects by that reference. Copies of all or any part of the Registration
Statement, including the documents incorporated by reference or the
exhibits, may be obtained without charge at the offices of the SEC listed
below.
We are subject to the reporting requirements of the Securities Exchange Act
of 1934 and we therefore file annual, quarterly and special reports, proxy
statements and other information with the SEC.
10
You may read and copy any document we file at the public reference
facilities of the SEC located at 450 Fifth Street N.W., Washington D.C.
20549. You may obtain information on the operation of the SEC's public
reference facilities by calling the SEC at 1-800-SEC-0330. You can also
access copies of such material electronically on the SEC's home page on the
World Wide Web at http://www.sec.gov.
If you request a copy of any or all of the documents incorporated by
reference, then we will send to you the copies you requested at no charge.
However, we will not send exhibits to such documents, unless such exhibits
are specifically incorporated by reference in such documents. We will also
provide to each person to whom a copy of this prospectus has been
delivered, upon specific request and without charge, a copy of all
documents filed from time to time by us with the SEC pursuant to the
Securities Exchange Act of 1934. You should direct a request for such
copies to Access Pharmaceuticals, Inc., 2600 Stemmons Frwy, Suite 176,
Dallas, Texas 75207, attention Chief Financial Officer. You may direct
telephone requests to the Chief Financial Officer at (214) 905-5100.
CERTAIN INFORMATION WE ARE INCORPORATING BY REFERENCE
We incorporate by reference the documents listed below and any future
filings we make with the SEC under Section 13(a), 13(c), 14 or 15(d) of the
Securities and Exchange Act of 1934:
* Annual Report on Form 10-K for the fiscal year ended December 31, 2001;
* Quarterly Report on Form 10-Q for the quarter ended March 31, 2002;
* Our Definitive Proxy Statement filed on April 17, 2002; and
* The description of the common stock contained in our Registration
Statement (No. 333-95413) filed with the SEC under Section 12(d) of the
Securities Exchange Act including any amendment or report filed for the
purpose of updating such description.
You may request a copy of these filings at no cost, by writing, telephoning
or e-mailing us at the following address:
Access Pharmaceuticals, Inc.
2600 Stemmons Freeway, Suite 176
Dallas, Texas 75207
Attention: Chief Financial Officer
(214) 905-5100
email: akc@accesspharma.com
This prospectus is part of a Registration Statement we filed with the SEC.
You should rely only on the information incorporated by reference or
provided in this prospectus. No one else is authorized to provide you with
different information. We are not making an offer of these securities in any
state where the offer is not permitted. You should not assume that the
information in this prospectus is accurate as of any date other than the date
on the front of this document.
11
We have not authorized any dealer, salesperson or other person to give any
information or to make any representations not contained in this Prospectus
or any Prospectus Supplement. You must not rely on any unauthorized
information. Neither this Prospectus nor any Prospectus Supplement is an
offer to sell or a solicitation of an offer to buy any of these securities in
any jurisdiction where an offer or solicitation is not permitted. No sale made
pursuant to this Prospectus shall, under any circumstances, create any
implication that there has not been any change in the affairs of Access since
the date of this Prospectus.
---------------------------------------------
TABLE OF CONTENTS
Page
----
Risk Factors 2
Forward Looking Statements 8
Access Pharmaceuticals, Inc. 8
Use of Proceeds 8
Selling Stockholder 9
Plan of Distribution 9
Legal Matters 10
Experts 10
Where You Can Get More Information 10
Certain Information We Are Incorporating
By Reference 11
--------------------------------------------
197,584 SHARES
[ LOGO ]
Access Pharmaceuticals, Inc.
COMMON STOCK
PROSPECTUS
____________, 2002
--------------------------------------------
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Estimated expenses (other than underwriting discounts and commissions)
payable in connection with the sale of our common stock offer hereby are
as follows:
SEC registration fee $ 41
Printing and engraving expenses 0
Legal fees and expenses 10,000
Accounting fees and expenses 5,000
Blue Sky fees and expenses (including legal fees) 0
Transfer agent and registrar fees and expenses 0
Miscellaneous 1,959
--------
Total $17,000
========
Item 15. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law (the "DGCL")
empowers a Delaware corporation to indemnify any person who was or is,
or is threatened to be made, a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of such corporation)
by reason of the fact that such person is or was a director, officer,
employee or agent of such corporation, or is or was serving at the request
of such corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, provided
that such person acted in good faith and in a manner that such person
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, such
person had no reasonable cause to believe his conduct was unlawful. The
indemnity may include expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by
such person in connection with such action, suit or proceeding. A
Delaware corporation may also indemnify such persons against expenses
(including attorneys' fees) in actions brought by or in the right of the
corporation to procure a judgment in its favor, subject to the same
conditions set forth in the immediately preceding sentences, except that no
indemnification is permitted in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and to the extent the Court of Chancery of the State of Delaware or
the court in which such action or suit was brought shall determine upon
application that, in view of all the circumstances of the case, such person
is fairly and reasonably entitled to indemnity for such expenses as the Court
of Chancery or other such court shall deem proper. To the extent such
person has been successful on the merits or otherwise in defense of any
action to above, or in defense of any claim, issue or matter therein, the
corporation must indemnify such person against expenses (including
attorneys' fees) actually and reasonably incurred by such person in
connection therewith. The indemnification and advancement of expenses
provided for in, or granted pursuant to, Section 145 is not exclusive of any
other rights to which those seeking indemnification or advancement of
expenses may be entitled under any by-law, agreement, vote of stockholders
or disinterested directors or otherwise.
Section 145 of the DGCL also provides that a corporation may maintain
insurance against liabilities for which indemnification is not expressly
provided by the statute. The Registrant is insured against liabilities which
it may incur by reason of its indemnification obligations under its
Certificate of Incorporation, Bylaws and indemnification agreements.
Article X of the Registrant's Certificate of Incorporation provides that the
Registrant will indemnify, defend and hold harmless directors, officers,
employees and agents or the Registrant to the fullest extent currently
permitted under the DGCL.
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In addition, Article X of the Registrant's Certificate of Incorporation,
provides that neither the Registrant nor its stockholders may recover
monetary damages from the Registrant's directors for a breach of their
fiduciary duty in the performance of their duties as directors of the
Registrant, unless such breach relates to (i) the director's duty of loyalty,
(ii) acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) unlawful payments of
dividends or unlawful stock repurchases or redemptions as provided in
Section 174 of the DGCL or (iv) any transactions for which the director
derived an improper personal benefit. The By-Laws of the Registrant
provide for indemnification of the Registrant's directors, officers,
employees and agents on the terms permitted under Section 145 of the
DGCL described above.
The Registrant has entered into indemnification agreements with certain of
its directors and executive officers. These agreements provide rights of
indemnification to the full extent allowed and provided for by Section 145
of the DGCL and the Certificate of Incorporation and Bylaws of Access.
Item 16. Exhibits
Exhibit Index
-------------
Exhibit Number Description
- --------------- ----------------------------------------------------------
2.1 Amended and Restated Agreement of Merger and Plan of
Reorganization between Access Pharmaceuticals, Inc. and Chemex
Pharmaceuticals, Inc., dated as of October 31, 1995 (Incorporated by
reference to Exhibit A of the our Registration Statement on Form S-4 dated
December 21, 1995, Commission File No. 33-64031)
4.1 Certificate of Incorporation (Incorporated by Reference to Exhibit 3(a)
of our Form 8-B dated July 12, 1989, Commission File Number 9-9134)
4.2 Certificate of Amendment of Certificate of Incorporation filed August
21, 1992
4.3 Certificate of Merger filed January 25, 1996. (Incorporated by
reference to Exhibit E of our Registration Statement on Form S-4 dated
December 21, 1995, Commission File No. 33-64031)
4.4 Certificate of Amendment of Certificate of Incorporation filed January
25, 1996. (Incorporated by reference to Exhibit E of our Registration
Statement on Form S-4 dated December 21, 1995, Commission File No.
33-64031)
4.5 Amended and Restated Bylaws (Incorporated by reference to Exhibit
3.1 of our Form 10-Q for the quarter ended June 30, 1996)
4.6 Certificate of Amendment of Certificate of Incorporation filed July 18,
1996. (Incorporated by reference to Exhibit 3.8 of our Form 10-K for the
year ended December 31, 1996)
4.7 Certificate of Amendment of Certificate of Incorporation filed June 18,
1998. (Incorporated by reference to Exhibit 3.8 of our Form 10-Q for the
quarter ended June 30, 1998)
4.8 Certificate of Amendment of Certificate of Incorporation filed July 31,
2000. (Incorporated by reference to Exhibit 3.8 of our Form 10-Q for the
quarter ended March 31, 2001)
4.9 Certificate of Designations of Series A Junior Participating Preferred
Stock filed November 7, 2001 (Incorporated by reference to Exhibit 4.1.h
of our Registration Statement on Form S-8, dated December 14, 2001,
Commission File No. 333-75136)
5.1 Opinion of Bingham McCutchen, LLP
23.1 Consent of Bingham McCutchen, LLP (included in Exhibit 5.1)
23.2 Consent of Grant Thornton LLP
26 Power of Attorney (included on Signature Page)
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
II-2
(1) To file, during any period in which offers or sales are being made
pursuant to this Registration Statement, a post-effective amendment to this
Registration Statement to include any material information with respect to
the plan of distribution not previously disclosed in this Registration
Statement or any material change to such information in this 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.
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 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.
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 described in Item 15 above,
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 and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Dallas, Texas, on
this 10th day of July, 2002.
ACCESS PHARMACEUTICALS, INC.
By /s/ Kerry P. Gray
-------------------
Kerry P. Gray
President and Chief Executive Officer, Director
POWER OF ATTORNEY AND SIGNATURES
Each person whose signature appears below hereby constitutes and appoints
Kerry P. Gray, as his attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, (i) to sign any and all amendments (including post-
effective amendments) to this Registration Statement, (ii) to sign any
registration statement to be filed pursuant to Rule 462(b) under the
Securities Act of 1933 for the purpose of registering additional shares of
Common Stock for the same offering covered by this Registration
Statement, and (iii) to file any of the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of
them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully
to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their or his substitute or substitutes, may lawfully do or cause to
be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, the Registration
Statement has been signed by the following person in the capacities and on
the dates indicated.
Signature Title Date
- -------------------------- ------------------------------- --------------
/s/ Kerry P. Gray
- -----------------------
Kerry P. Gray President and Chief Executive July 10, 2002
Officer, Director
/s/ Herbert H. McDade, Jr.
- ---------------------------
Herbert H. McDade, Jr. Director July 10, 2002
/s/ J. Michael Flinn
- ---------------------
J. Michael Flinn Director July 10, 2002
/s/ Stephen B. Howell
- ------------------------
Stephen B. Howell Director July 10, 2002
/s/ Max Link
- ----------------------
Max Link Director July 10, 2002
/s/ John J. Meakem, Jr.
- -----------------------
John J. Meakem, Jr. Director July 10, 2002
/s/ Stephen B. Thompson
- ------------------------
Stephen B. Thompson Vice President, Chief Financial July 10, 2002
Officer, Treasurer
II-4