AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 3, 1999
REGISTRATION NO. 333-81745
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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PRE-EFFECTIVE AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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TRIANGLE PHARMACEUTICALS, INC.
(Exact name of Registrant as Specified in Its Charter)
DELAWARE 56-1930728
(State or Other Jurisdiction (I.R.S. Employer
of Identification No.)
Incorporation or Organization)
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4 UNIVERSITY PLACE, 4611 UNIVERSITY DRIVE,
DURHAM, NORTH CAROLINA, 27707 (919) 493-5980
(Address, Including Zip Code, And Telephone Number, Including
Area Code, Of Registrant's Principal Executive Offices)
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DAVID W. BARRY, M.D.
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
TRIANGLE PHARMACEUTICALS, INC.
4 UNIVERSITY PLACE, 4611 UNIVERSITY DRIVE,
DURHAM, NORTH CAROLINA 27707 (919) 493-5980
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent For Service)
------------------------------
COPIES TO:
MARIA P. SENDRA, ESQ.
LANCE S. KURATA, ESQ.
BROBECK, PHLEGER & HARRISON LLP
550 West "C" Street, Suite 1300
San Diego, California 92101
(619) 234-1966
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
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If only the 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, 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: / /
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SEC, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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SUBJECT TO COMPLETION, DATED NOVEMBER 3, 1999
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE
SELLING STOCKHOLDERS MAY NOT SELL THE COMMON STOCK COVERED BY THIS PROSPECTUS
UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THE COMMON
STOCK AND IT IS NOT SOLICITING AN OFFER TO BUY THE COMMON STOCK IN ANY STATE
WHERE THE OFFER OR SALE IS NOT PERMITTED.
PRELIMINARY PROSPECTUS
1,700,000 SHARES
TRIANGLE PHARMACEUTICALS, INC.
COMMON STOCK
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This prospectus relates to the public offering, which is not being
underwritten, of 1,700,000 shares of our common stock by our current
stockholders, Chase Capital Partners and entities affiliated with Alta BioPharma
Partners, L.P.
Our common stock is traded on the Nasdaq National Market under the symbol
"VIRS." On November 1, 1999, the average of the high and low prices for the
common stock was $15.875 per share.
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THE COMMON STOCK OFFERED INVOLVES A HIGH DEGREE OF RISK. SEE "RISK FACTORS"
COMMENCING ON PAGE 3 FOR A DISCUSSION OF SOME IMPORTANT RISKS YOU SHOULD
CONSIDER BEFORE BUYING ANY SHARES OF COMMON STOCK.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION, SEC, NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES,
OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE
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The date of this prospectus is November , 1999
TABLE OF CONTENTS
PAGE
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FORWARD-LOOKING STATEMENTS.................................. 3
OUR BUSINESS................................................ 3
RECENT DEVELOPMENTS......................................... 3
RISK FACTORS................................................ 4
WHERE YOU CAN FIND MORE INFORMATION......................... 17
INFORMATION INCORPORATED BY REFERENCE....................... 17
USE OF PROCEEDS............................................. 18
SELLING STOCKHOLDERS........................................ 18
PLAN OF DISTRIBUTION........................................ 19
LEGAL MATTERS............................................... 21
EXPERTS..................................................... 21
FORWARD-LOOKING STATEMENTS
IN ADDITION TO HISTORICAL INFORMATION, THIS PROSPECTUS MAY CONTAIN
FORWARD-LOOKING STATEMENTS. THESE STATEMENTS INVOLVE RISKS AND UNCERTAINTIES.
OUR ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE PROJECTED IN THE
FORWARD-LOOKING STATEMENTS. FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH
DIFFERENCES INCLUDE THOSE DISCUSSED IN THE SECTION ENTITLED "RISK FACTORS," AS
WELL AS THOSE DISCUSSED ELSEWHERE IN THIS PROSPECTUS OR IN DOCUMENTS
INCORPORATED BY REFERENCE HEREIN. WE UNDERTAKE NO OBLIGATION TO UPDATE THESE
FORWARD-LOOKING STATEMENTS.
OUR BUSINESS
We develop new drug candidates primarily in the antiviral area, with a
particular focus on therapies for HIV, including AIDS, and the hepatitis B
virus. We have an existing portfolio of six licensed drug candidates and one
drug candidate for which we have an option to acquire a license. Members of our
senior management, prior to joining Triangle, played instrumental roles in
developing several leading antiviral therapies. Our goal is to capitalize on our
management team's expertise, as well as on advances in virology and immunology,
to identify, develop and commercialize new drug candidates that can be used
alone or in combination to coactively treat serious diseases.
Triangle was incorporated in Delaware in July 1995. Our principal executive
offices are located at 4 University Place, 4611 University Drive, Durham, North
Carolina 27707, and our telephone number is (919) 493-5980.
RECENT DEVELOPMENTS
On August 3, 1999, Triangle closed its worldwide strategic alliance, the
Abbott Alliance, with Abbott Laboratories. Under the Abbott Alliance, Triangle
and Abbott will collaborate with respect to the development, manufacture,
registration and marketing of various proprietary pharmaceutical products for
the prevention and treatment of HIV and hepatitis B. In the United States,
Abbott and Triangle will co-promote four Triangle drug candidates currently in
active development for HIV and/or hepatitis B, Coactinon-Registered Trademark-,
Coviracil-Registered Trademark-, DAPD and L-FMAU. In addition, Triangle has
rights to co-promote two Abbott HIV compounds in the United States,
Norvir-Registered Trademark-, also known as ritonavir, and ABT-378. Outside the
United States, Abbott will have exclusive sales and marketing rights for the
four Triangle antiviral compounds. Triangle and Abbott will share profits and
losses for all Triangle drug candidates. Triangle will receive detailing fees
and commissions on incremental sales they generate for Abbott's two HIV
products. In addition, Abbott will have the right of first discussion to market
future Triangle compounds.
At the closing of the Abbott Alliance, Abbott purchased 6,571,428 shares of
our common stock at $18 per share. The net proceeds of this issuance, after
deducting issuance costs, were approximately $115.9 million. Additionally, the
Abbott Alliance provides for non-contingent research funding of approximately
$31.7 million to be received by January 15, 2000, up to approximately $185
million of contingent milestone payments and the sharing of future
commercialization costs.
3
RISK FACTORS
IN ADDITION TO THE OTHER INFORMATION IN THIS PROSPECTUS, YOU SHOULD
CAREFULLY CONSIDER THE FOLLOWING RISKS AND UNCERTAINTIES BEFORE DECIDING TO
PURCHASE SHARES OF OUR COMMON STOCK. AN INVESTMENT IN OUR COMMON STOCK INVOLVES
A HIGH DEGREE OF RISK.
ALL OF OUR PRODUCTS ARE IN DEVELOPMENT AND MAY NEVER BE SUCCESSFULLY
COMMERCIALIZED WHICH WOULD HAVE AN ADVERSE IMPACT ON YOUR INVESTMENT AND OUR
BUSINESS.
Many of our drug candidates are at an early stage of development and all of
our drug candidates will require expensive and lengthy testing and regulatory
clearances. None of our drug candidates has been approved by regulatory
authorities. We do not expect any of our drug candidates to be commercially
available until at least the year 2000. There are many reasons that we may fail
in our efforts to develop our drug candidates, including that:
- our drug candidates will be ineffective, toxic or will not receive
regulatory clearances,
- our drug candidates will be too expensive to manufacture or market or will
not achieve broad market acceptance,
- third parties will hold proprietary rights that may preclude us from
marketing our drug candidates, or
- third parties will market equivalent or superior products.
The success of our business depends upon our ability to successfully develop
and market our drug candidates.
WE HAVE INCURRED LOSSES SINCE INCEPTION AND MAY NEVER ACHIEVE PROFITABILITY.
We formed Triangle in July 1995 and we have only a limited operating history
for you to review in evaluating our business. We have incurred losses since our
inception. At September 30, 1999, our accumulated deficit was $190.2 million.
Our historical costs relate primarily to the acquisition and development of our
drug candidates and selling, general and administrative costs. We have not
generated any revenue to date and do not expect to do so before the year 2000.
In addition, we expect annual losses to increase over the next several years as
we expand our drug development and commercialization efforts. To become
profitable, we must successfully develop and obtain regulatory approval for our
drug candidates and effectively manufacture, market and sell any products we
develop. We may never generate significant revenue or achieve profitable
operations.
IF WE NEED ADDITIONAL FUNDS AND ARE UNABLE TO RAISE THEM, WE WOULD HAVE TO
CURTAIL OR CEASE OPERATIONS.
Our drug development programs and potential commercialization of our drug
candidates require substantial capital expenditures, including expenses for
preclinical testing, chemical synthetic scale-up, manufacture of drug substance
for clinical trials and toxicology studies, clinical trials of drug candidates,
sales and marketing expenses and payments to our licensors. We expect our
capital requirements to increase significantly. Our future capital needs will
depend on many factors, including:
- the progress and magnitude of our drug development programs,
- the scope and results of preclinical testing and clinical trials,
- the cost, timing and outcome of regulatory reviews,
- the costs under license and option agreements for our drug candidates,
including the costs of obtaining patent protection for our drug
candidates,
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- the costs of acquiring any additional drug candidates,
- the rate of technological advances,
- the commercial potential of our drug candidates,
- the magnitude of our administrative and legal expenses,
- the costs of establishing sales and marketing functions, and
- the costs of establishing third party arrangements for manufacturing.
We have incurred negative cash flow from operations since we incorporated
Triangle and do not expect to generate positive cash flow from our operations
for at least the next several years. Although the Abbott Alliance provided us
with significant additional funding, there can be no assurance that such funding
will be sufficient to meet our future needs. Therefore, we may need additional
future financings to fund our operations. We may not be able to obtain adequate
financing to fund our operations, and any additional financing we obtain may be
on terms that are not favorable to us. In addition, any additional financings
could substantially dilute our stockholders. If adequate funds are not
available, we will be required to delay, reduce or eliminate one or more of our
drug development programs, to enter into new collaborative arrangements or to
modify the Abbott Alliance on terms that are not favorable to us. These
collaborative arrangements or modifications could result in the transfer to
third parties of rights that we consider valuable. In addition, we often
consider the acquisition of technologies and drug candidates that would increase
our capital requirements.
BECAUSE OUR PRODUCTS MAY NOT SUCCESSFULLY COMPLETE CLINICAL TRIALS REQUIRED FOR
COMMERCIALIZATION, OUR BUSINESS MAY NEVER ACHIEVE PROFITABILITY.
To obtain regulatory approvals needed for the sale of our drug candidates,
we must demonstrate through preclinical testing and clinical trials that each
drug candidate is safe and effective. The clinical trial process is complex and
uncertain and varies widely from country to country. Positive results from
preclinical testing and early clinical trials do not ensure positive results in
pivotal clinical trials. Many companies in our industry have suffered
significant setbacks in pivotal clinical trials, even after promising results in
earlier trials. Any of our drug candidates may produce undesirable side effects
in humans. These side effects could cause us or regulatory authorities to
interrupt, delay or halt clinical trials of a drug candidate. These side effects
could also result in the U.S. Food and Drug Administration, FDA, or foreign
regulatory authorities refusing to approve the drug candidate for any and all
targeted indications. We, the FDA or foreign regulatory authorities may suspend
or terminate clinical trials at any time if we or they believe the trial
participants face unacceptable health risks. Clinical trials may not demonstrate
that our drug candidates are safe or effective.
Clinical trials are lengthy and expensive. They require adequate supplies of
drug substance and sufficient patient enrollment. Patient enrollment is a
function of many factors, including:
- the size of the patient population,
- the nature of the protocol,
- the proximity of patients to clinical sites, and
- the eligibility criteria for the clinical trial.
Delays in patient enrollment can result in increased costs and longer
development times. Even if we successfully complete clinical trials, we may not
be able to file any required regulatory submissions in a timely manner and we
may not receive regulatory approval for the drug candidate.
In addition, if the FDA or foreign regulatory authorities require additional
clinical trials, we could face increased costs and significant development
delays. Changes in regulatory policy or additional
5
regulations adopted during product development and regulatory review of
information we submit could also result in delays or rejections. The FDA has
notified us that three of our drug candidates, Coactinon, Coviracil for the
treatment of HIV, and DAPD for the treatment of HIV, qualify for designation as
"fast track" products under provisions of the Food and Drug Administration
Modernization Act of 1997. The fast track provisions are designed to expedite
the review of new drugs intended to treat serious or life-threatening conditions
and essentially codified the criteria previously established by the FDA for
accelerated approval. These drug candidates may not, however, continue to
qualify for expedited review and our other drug candidates may fail to qualify
for expedited review. Even though some of our drug candidates have qualified for
expedited review, the FDA may not approve them at all or any sooner than other
drug candidates that do not qualify for expedited review.
IF WE OR OUR LICENSORS ARE NOT ABLE TO OBTAIN AND MAINTAIN ADEQUATE PATENT
PROTECTION FOR OUR PRODUCTS, WE MAY BE UNABLE TO COMMERCIALIZE OUR PRODUCTS OR
TO PREVENT OTHER COMPANIES FROM USING OUR TECHNOLOGY IN COMPETITIVE PRODUCTS.
Our success will depend on our ability and the ability of our licensors to
obtain and maintain patents and proprietary rights for our drug candidates and
to avoid infringing the proprietary rights of others, both in the United States
and in foreign countries. We have no patents in our own name and we have a small
number of patent applications of our own pending. One of our patent applications
is a joint application with co-inventors from another institution. We have,
however, licensed or we have an option to license patents, patent applications
and other proprietary rights from third parties for each of our drug candidates.
If we breach our licenses, we may lose rights to important technology and drug
candidates.
Our patent position, like that of many pharmaceutical companies, is
uncertain and involves complex legal and factual questions for which important
legal principles are unresolved. We may not develop or obtain rights to products
or processes that are patentable. Even if we do obtain patents, they may not
adequately protect the technology we own or have in-licensed. In addition,
others may challenge, seek to invalidate, infringe or circumvent any patents we
own or in-license, and rights we receive under those patents may not provide
competitive advantages to us. Further, the manufacture, use or sale of our
products or processes may infringe the patent rights of others.
Several pharmaceutical and biotechnology companies, universities and
research institutions have filed patent applications or received patents that
cover our technologies or technologies similar to ours. Others have filed patent
applications and received patents that conflict with patents or patent
applications we own or have in-licensed, either by claiming the same methods or
compounds or by claiming methods or compounds that could dominate those owned by
or licensed to us. In addition, we may not be aware of all patents or patent
applications that may impact our ability to make, use or sell any of our drug
candidates. For example, United States patent applications are confidential
while pending in the Patent and Trademark Office, PTO, and patent applications
filed in foreign countries are often first published six months or more after
filing. Any conflicts resulting from third party patent applications and patents
could significantly reduce the coverage of our patents and limit our ability to
obtain meaningful patent protection. If other companies obtain patents with
conflicting claims, we may be required to obtain licenses to these patents or to
develop or obtain alternative technology. We may not be able to obtain any such
license on acceptable terms or at all. Any failure to obtain such licenses could
delay or prevent us from pursuing the development or commercialization of our
drug candidates, which would adversely affect our business.
There are significant risks regarding the patent rights of two of our
in-licensed drug candidates. We may not be able to commercialize Coviracil or
DAPD, Triangle drug candidates currently in active development, due to patent
rights held by third parties other than our licensors. Third parties have filed
numerous patent applications and have received numerous issued patents in the
United States and many foreign countries that relate to these drug candidates
and their use alone or coactively to treat
6
HIV and hepatitis B. As a result, our patent position regarding the use of
Coviracil and DAPD to treat HIV and/or hepatitis B is highly uncertain and
involves numerous complex legal and factual questions that are unknown or
unresolved. If any of these questions is resolved in a manner that is not
favorable to us, we would not have the right to commercialize Coviracil and/or
DAPD in the absence of a license from one or more third parties, which may not
be available on acceptable terms or at all. In addition, even if any of these
questions is favorably resolved, we may still attempt to obtain licenses from
one or more third parties to reduce or eliminate the risks relating to some or
all of these matters. Such licenses may not be available on acceptable terms or
at all. Our inability to commercialize either of these drug candidates could
adversely affect our business.
COVIRACIL (EMTRICITABINE)
Coviracil, a purified form of FTC, belongs to the same general class of
nucleosides as lamivudine, also known as 3TC. In the United States, the FDA has
approved 3TC for the treatment of hepatitis B and for use in combination with
zidovudine, also known as AZT, for the treatment of HIV. Regulatory authorities
have approved 3TC for the treatment of hepatitis B in several other countries
and for use in combination with other nucleoside analogues for the treatment of
HIV in a number of other countries. Glaxo Wellcome plc, Glaxo, currently sells
3TC for the treatment of HIV and hepatitis B under a license agreement with
BioChem Pharma Inc., BioChem Pharma. We obtained rights to Coviracil under a
license from Emory University, Emory. In 1990 and 1991, Emory filed in the
United States and thereafter in numerous foreign countries patent applications
with claims to compositions of matter and methods to treat HIV and hepatitis B
with Coviracil. In 1991, Yale University, Yale, filed in the United States
patent applications on FTC, including Coviracil and its use to treat hepatitis
B, and subsequently licensed its rights under those patent applications to
Emory. Our license arrangement with Emory includes all rights to Coviracil and
its uses claimed in the Yale patent applications.
HIV. Emory received a United States patent in 1993 covering a method to
treat HIV with Coviracil. Emory has also received United States and European
patents containing composition of matter claims that cover Coviracil. BioChem
Pharma filed a patent application in the United States in 1989 and received a
patent in 1991 covering a group of nucleosides in the same general class as
Coviracil, but which did not include Coviracil. BioChem Pharma filed foreign
patent applications in 1990, which expanded upon its 1989 United States patent
application to include FTC among a large class of nucleosides. The foreign
patent applications are pending in many countries and have issued in a number of
countries with claims directed to FTC that may cover Coviracil and its use to
treat HIV. In addition, BioChem Pharma filed a United States patent application
in 1991 specifically directed to Coviracil. BioChem Pharma has received two
patents in the United States based on this patent application, one directed to
Coviracil and the other directed to a method for treating viral diseases with
Coviracil. The PTO has determined that there is a conflict between the latter
BioChem Pharma patent and a patent application filed by Emory because they have
overlapping claims to the same technology. The PTO is conducting an adversarial
proceeding to determine whether BioChem Pharma or Emory is entitled to the
patent claims in dispute. Emory may not prevail in the adversarial proceeding,
and the proceeding may also delay the decision of the PTO regarding Emory's
patent application. BioChem Pharma also filed patent applications in many
foreign countries based upon its 1991 United States patent application and has
received patents in certain countries. BioChem Pharma may have additional patent
applications pending in the United States.
In the United States, the first to invent a technology is entitled to patent
protection on that technology. For patent applications filed prior to
January 1, 1996, United States patent law provides that a party who invented a
technology outside the United States is deemed to have invented the technology
on the earlier of the date it introduced the invention in the United States or
the date it filed its patent application. In a filing with the SEC, BioChem
Pharma stated that prior to January 1, 1996, it conducted substantially all of
its research activities outside the United States. BioChem Pharma
7
also stated that it considered this to be a disadvantage in obtaining United
States patents based on patent applications filed before January 1, 1996 as
compared to companies that mainly conducted research in the United States. We do
not know whether Emory or BioChem Pharma was the first to invent the technology
claimed in their respective United States patent applications or patents. We
also do not know whether BioChem Pharma invented the technology disclosed in its
patent applications in the United States or introduced that technology in the
United States before the date of its patent applications.
In foreign countries, the first party to file a patent application on a
technology, not the first to invent the technology, is entitled to patent
protection on that technology. We believe that Emory filed patent applications
disclosing Coviracil as a useful anti-HIV agent in many foreign countries before
BioChem Pharma filed its foreign patent applications on that technology.
However, BioChem Pharma has received patents in several foreign countries. In
addition, BioChem Pharma has filed patent applications on Coviracil and its uses
in certain countries in which Emory did not file patent applications. Emory has
opposed or otherwise challenged patent claims on Coviracil granted to BioChem
Pharma in Australia, Japan and Norway. Emory may not initiate patent opposition
proceedings in any other countries or be successful in any foreign proceeding
attempting to prevent the issuance of, revoke or limit the scope of patents
issued to BioChem Pharma. BioChem Pharma has opposed patent claims on Coviracil
granted to Emory in Europe, Japan, Australia and South Korea. BioChem Pharma may
make additional challenges to Emory patents or patent applications, which Emory
may not succeed in defending. Our sales of Coviracil for the treatment of HIV
may be held to infringe United States and foreign patent rights of BioChem
Pharma. Under the patent laws of most countries, a product can be found to
infringe a third party patent either if the third party patent expressly covers
the product or method of treatment using the product, or if the third party
patent covers subject matter that is substantially equivalent in nature to the
product or method, even if the patent does not expressly cover the product or
method. If it is determined that the sale of Coviracil for the treatment of HIV
infringes a BioChem Pharma patent, we would not have the right to make, use or
sell Coviracil for the treatment of HIV in one or more countries in the absence
of a license from BioChem Pharma. We may be unable to obtain such a license from
BioChem Pharma on acceptable terms or at all.
HEPATITIS B. Burroughs Wellcome Co., Burroughs Wellcome, filed patent
applications in March 1991 and May 1991 in Great Britain on a method to treat
hepatitis B with FTC and purified forms of FTC, that include Coviracil.
Burroughs Wellcome filed similar patent applications in other countries,
including the United States. Glaxo subsequently acquired Burroughs Wellcome's
rights under those patent applications. Those patent applications were filed in
foreign countries prior to the date Emory filed its patent application on the
use of Coviracil to treat hepatitis B. Burroughs Wellcome's foreign patent
applications, therefore, have priority over those filed by Emory. In July 1996,
Emory instituted litigation against Glaxo in the United States District Court to
obtain ownership of the patent applications filed by Burroughs Wellcome,
alleging that Burroughs Wellcome converted and misappropriated Emory's invention
and property and that an Emory employee is the inventor or a co-inventor of the
subject matter covered by the Burroughs Wellcome patent applications. In May
1999, Emory and Glaxo settled the litigation, and we became the exclusive
licensee of the United States and all foreign patent applications and patents
filed by Burroughs Wellcome on the use of Coviracil to treat hepatitis B. Under
the license and settlement agreements, Emory and we were also given access to
development and clinical data and drug substance held by Glaxo relating to
Coviracil.
BioChem Pharma filed a patent application in May 1991 in Great Britain also
directed to a method to treat hepatitis B with FTC. BioChem Pharma filed similar
patent applications in other countries. In January 1996, BioChem Pharma received
a patent in the United States, which included a claim to treat hepatitis B with
Coviracil. The PTO has determined that there is a conflict between the BioChem
Pharma patent and patent applications filed by Yale and Emory. The PTO is
conducting an
8
adversarial proceeding to determine which parties are entitled to the patent
claims in dispute. Yale licensed all of its rights relating to FTC, including
Coviracil, and its uses claimed in this patent application to Emory, which
subsequently licensed these rights to us. Neither Emory nor Yale may prevail in
the adversarial proceeding, and the proceeding may delay the decision of the PTO
regarding Yale's and Emory's patent applications. In addition, the PTO may
determine that it will conduct adversarial proceedings with respect to a patent
application filed by Burroughs Wellcome. Emory may not pursue or succeed in any
such proceedings. We will not be able to sell Coviracil for the treatment of
hepatitis B in the United States unless a United States court or administrative
body determines that the BioChem Pharma patent is invalid or unless we obtain a
license from BioChem Pharma. We may be unable to obtain such a license on
acceptable terms or at all. In July 1991, BioChem Pharma received a United
States patent on the use of 3TC to treat hepatitis B and has corresponding
patent applications pending or issued in foreign countries. If it is determined
that the use of Coviracil to treat hepatitis B is not substantially different
from the use of 3TC to treat hepatitis B, a court could hold that the use of
Coviracil to treat hepatitis B infringes these BioChem Pharma 3TC patents.
In addition, BioChem Pharma has filed in the United States and foreign
countries several patent applications on manufacturing methods relating to a
class of nucleosides that includes Coviracil, from which BioChem Pharma has
received several patents in the United States and many foreign countries. If we
use a manufacturing method that is covered by patents issued on any of these
applications, we will not be able to manufacture Coviracil without a license
from BioChem Pharma. We may not be able to obtain such a license on acceptable
terms or at all.
DAPD
We obtained our rights to DAPD under a license from Emory and the University
of Georgia Research Foundation, Inc., University of Georgia. Our rights to DAPD
include a number of issued United States patents that cover composition of
matter, a method for the synthesis of DAPD, methods for the use of DAPD alone or
in combination with certain other agents for the treatment of hepatitis B, and a
method to treat HIV with DAPD. We also have rights to several foreign patents
and patent applications that cover methods for the use of DAPD alone or in
combination with certain other anti-hepatitis B agents for the treatment of
hepatitis B. Additional foreign patent applications are pending which contain
claims for the use of DAPD to treat HIV. Emory and the University of Georgia
filed patent applications claiming these inventions in the United States in 1990
and 1992. BioChem Pharma filed a patent application in the United States in 1988
on a group of nucleosides in the same general class as DAPD and their use to
treat HIV, and has filed corresponding patent applications in foreign countries.
The PTO issued a patent to BioChem Pharma in 1993 covering a class of
nucleosides that includes DAPD and its use to treat HIV. Corresponding patents
have been issued to BioChem Pharma in many foreign countries. Emory has filed an
opposition to patent claims granted to BioChem Pharma by the European Patent
Office based, in part, upon Emory's assertion that BioChem Pharma's patent does
not disclose how to make DAPD. In a patent opposition hearing held at the
European Patent Office on March 4, 1999, the Opposition Division ruled that the
BioChem Pharma European patent covering DAPD is valid. Emory has informed
Triangle that it has appealed this decision to the European Patent Office
Technical Board of Appeal. If the Technical Board of Appeal affirms the decision
of the Opposition Division, or if Emory or Triangle do not pursue the appeal, we
would not be able to sell DAPD in Europe without a license from BioChem Pharma,
which may not be available on acceptable terms or at all. Patent claims granted
to Emory on a portion of the DAPD technology by the Australian Patent Office
have also been opposed by BioChem Pharma. We cannot assure you that a court or
administrative body would invalidate BioChem Pharma's patent claims. Further, a
sale of DAPD by us may infringe BioChem Pharma's patents. If Emory, the
University of Georgia and we do not challenge, or are not successful in any
challenge to, BioChem Pharma's issued patents, pending patent applications, or
patents that may issue from such applications, we will not be able to
manufacture, use or sell DAPD in the United States and any foreign countries in
which BioChem
9
Pharma receives a patent without a license from BioChem Pharma. We may not be
able to obtain such a license from BioChem Pharma on acceptable terms or at all.
With respect to any of our drug candidates, litigation, patent opposition
and adversarial proceedings, including the currently pending proceedings, could
result in substantial costs to us. We expect the costs of the currently pending
proceedings to increase significantly during the next several years. We
anticipate that additional litigation and/or proceedings will be necessary or
may be initiated to enforce any patents we own or in-license, or to determine
the scope, validity and enforceability of other parties' proprietary rights and
the priority of an invention. Any of these activities could result in
substantial costs and/or delays to us. The outcome of any of these proceedings
may significantly affect our drug candidates and technology. United States
patents carry a presumption of validity and generally can be invalidated only
through clear and convincing evidence. As indicated above, the PTO is conducting
two adversarial proceedings in connection with the emtricitabine technology. We
cannot assure you that a court or administrative body would hold our in-licensed
patents valid or would find an alleged infringer to be infringing. Further, the
license and option agreements with Emory, the University of Georgia, The Regents
of the University of California, The DuPont Pharmaceuticals Company, and
Mitsubishi Chemical Corporation provide that each of these licensors is
primarily responsible for any patent prosecution activities, such as litigation,
patent conflict proceeding, patent opposition or other actions, for the
technology licensed to us. These agreements also provide that in general we are
required to reimburse these licensors for the costs they incur in performing
these activities. Similarly, Yale and the University of Georgia, the licensors
of L-FMAU to Bukwang Pharm. Ind. Co., Ltd., are primarily responsible for patent
prosecution activities with respect to L-FMAU at our expense. As a result, we
generally do not have the ability to institute or determine the conduct of any
such patent proceedings unless our licensors elect not to institute or to
abandon such proceedings. If our licensors elect to institute and prosecute
patent proceedings, our rights will depend in part upon the manner in which
these licensors conduct the proceedings. In any proceedings they elect to
initiate and maintain, these licensors may not vigorously pursue or defend or
may decide to settle such proceedings on terms that are unfavorable to us. An
adverse outcome of these proceedings could subject us to significant liabilities
to third parties, require disputed rights to be licensed from third parties or
require us to cease using such technology, any of which could adversely affect
our business. Moreover, the mere uncertainty resulting from the initiation and
continuation of any technology related litigation or adversarial proceeding
could adversely affect our business pending resolution of the disputed matters.
We also rely on unpatented trade secrets and know-how to maintain our
competitive position, which we seek to protect, in part, by confidentiality
agreements with employees, consultants and others. These parties may breach or
terminate these agreements, and we may not have adequate remedies for any
breach. Our trade secrets may also be independently discovered by competitors.
We rely on certain technologies to which we do not have exclusive rights or
which may not be patentable or proprietary and thus may be available to
competitors. We have filed an application for, but have not obtained, a
trademark registration for our corporate name and corporate logo. An opposition
to the European Community trademark application for the mark Coviracil has been
filed by Orsem and Les Laboratories Serveir based on registrations in certain
countries for the mark Coversyl-Registered Trademark- for pharmaceuticals. We do
not believe that the marks Coviracil and Coversyl are confusingly similar.
However, if we do not prevail in the opposition, we may need to adopt a
different product name for emtricitabine. Several other companies use trade
names that are similar to our name for their businesses. If we are unable to
obtain any licenses that may be necessary for the use of our corporate name, we
may be required to change our name. Our management personnel were previously
employed by other pharmaceutical companies. The prior employers of these
individuals may allege violations of trade secrets and other similar claims
relating to their drug development activities for us.
10
WE ARE SUBJECT TO EXTENSIVE GOVERNMENT REGULATION AND MAY FAIL TO RECEIVE
REGULATORY APPROVAL WHICH COULD PREVENT OR DELAY THE COMMERCIALIZATION OF OUR
PRODUCTS.
In addition to preclinical testing, clinical trials and other approval
procedures for human pharmaceutical products, we are subject to numerous other
regulations covering the development of pharmaceutical products. These
regulations include, for example, domestic and international regulations
relating to the manufacturing, safety, labeling, storage, record keeping and
reporting of pharmaceutical products. We are also regulated with respect to
laboratory practices, safe working conditions and the use and disposal of
hazardous substances, including radioactive compounds and infectious disease
agents used in connection with our development work. The requirements vary
widely from country to country. We expect the process of obtaining these
approvals and complying with appropriate government regulations to be time
consuming and expensive. Even if our drug candidates receive regulatory
approval, we may still face difficulties in marketing and manufacturing those
drug candidates. Further, any approval may require postmarketing studies or
other conditions. The approval of any of our drug candidates may limit the
indicated uses of the drug candidate. A marketed product, its manufacturer and
the manufacturer's facilities are subject to continual review and periodic
inspections. The discovery of previously unknown problems with a product,
manufacturer or facility may result in restrictions on the product or
manufacturer, including withdrawal of the product from the market. The failure
to comply with applicable regulatory requirements can, among other things,
result in:
- fines,
- suspended regulatory approvals,
- refusal to approve pending applications,
- refusal to permit exports from the United States,
- product recalls,
- seizure of products,
- injunctions,
- operating restrictions, and
- criminal prosecutions.
In addition, adverse clinical results by others could negatively impact the
development and approval of our drug candidates. Some of our drug candidates are
intended for use as coactive therapy with one or more other drugs, and adverse
safety, effectiveness or regulatory developments in connection with such other
drugs will also have an adverse effect on our business.
INTENSE COMPETITION MAY RENDER OUR DRUG CANDIDATES NONCOMPETITIVE OR OBSOLETE.
We are engaged in segments of the drug industry that are highly competitive
and rapidly changing. Any of our current drug candidates that we successfully
develop will compete with numerous existing therapies. In addition, many
companies are pursuing novel drugs that target the same diseases we are
targeting. We believe that a significant number of drugs are currently under
development and will become available in the future for the treatment of HIV and
hepatitis B. We anticipate that we will face intense and increasing competition
as new products enter the market and advanced technologies become available. Our
competitors' products may be more effective, or more effectively marketed and
sold, than any of our products. Competitive products may render our products
obsolete or noncompetitive before we can recover the expenses of developing and
commercializing our drug candidates. Furthermore, the development of a cure or
new treatment methods for the diseases we are
11
targeting could render our drug candidates noncompetitive, obsolete or
uneconomical. Many of our competitors:
- have significantly greater financial, technical and human resources than
we have and may be better equipped to develop, manufacture and market
products,
- have extensive experience in preclinical testing and clinical trials,
obtaining regulatory approvals and manufacturing and marketing
pharmaceutical products, and
- have products that have been approved or are in late stage development and
operate large, well-funded research and development programs.
Smaller companies may also prove to be significant competitors, particularly
through collaborative arrangements with large pharmaceutical and biotechnology
companies. Academic institutions, governmental agencies and other public and
private research organizations are also becoming increasingly aware of the
commercial value of their inventions and are more actively seeking to
commercialize the technology they have developed.
If we successfully develop and obtain approval for our drug candidates, we
will face competition based on the safety and effectiveness of our products, the
timing and scope of regulatory approvals, the availability of supply, marketing
and sales capability, reimbursement coverage, price, patent position and other
factors. Our competitors may develop or commercialize more effective or more
affordable products, or obtain more effective patent protection, than we do.
Accordingly, our competitors may commercialize products more rapidly or
effectively than we do, which could hurt our competitive position.
BECAUSE WE FACE RISKS RELATED TO OUR LICENSE AND OPTION AGREEMENTS, WE COULD
LOSE OUR RIGHTS TO OUR DRUG CANDIDATES.
We have in-licensed or obtained an option to in-license our drug candidates
under agreements with our licensors. These agreements permit our licensors to
terminate the agreements under certain circumstances, such as our failure to
achieve certain development milestones or the occurrence of an uncured material
breach by us. The termination of any of these agreements could result in the
loss of our rights to a drug candidate. Upon termination of most of our license
agreements, we are required to return the licensed technology to our licensors.
In addition, most of these agreements provide that our licensors are primarily
responsible for any patent prosecution activities, such as litigation, patent
conflict, patent opposition or other actions, for the technology licensed to us.
These agreements also provide that in general we are required to reimburse our
licensors for the costs they incur in performing these activities. We believe
that these costs as well as other costs under our license and option agreements
will be substantial and may increase significantly during the next several
years. Our inability or failure to pay any of these costs with respect to any
drug candidate could result in the termination of the license or option
agreement for the drug candidate.
BECAUSE WE MAY BE UNABLE TO SUCCESSFULLY MANUFACTURE OUR DRUG CANDIDATES, OUR
BUSINESS MAY NEVER ACHIEVE PROFITABILITY.
We do not have any internal manufacturing capacity and we rely on third
party manufacturers for the manufacture of all of our clinical trial material.
We plan to expand our existing relationships or to establish relationships with
additional third party manufacturers for products that we successfully develop.
The terms of the Abbott Alliance provide that Abbott will manufacture all or a
portion of our product requirements for products that we successfully develop.
We may be unable to maintain our relationship with Abbott or to establish or
maintain relationships with other third party manufacturers on acceptable terms,
and third party manufacturers may be unable to manufacture products in
commercial quantities on a cost effective basis. Our dependence upon third
parties for the manufacture
12
of our products may adversely affect our profit margins and our ability to
develop and commercialize products on a timely and competitive basis. Further,
third party manufacturers may encounter manufacturing or quality control
problems in connection with the manufacture of our products and may be unable to
maintain the necessary governmental licenses and approvals to continue
manufacturing our products.
WE MAY BE UNABLE TO SUCCESSFULLY MARKET, SELL OR DISTRIBUTE OUR DRUG CANDIDATES.
In the United States, we currently intend to market the drug candidates
covered by the Abbott Alliance in collaboration with Abbott and to market other
drug candidates that we successfully develop, that do not become part of the
Abbott Alliance, through a direct sales force. Outside of the United States, we
expect Abbott to market drug candidates covered by the Abbott Alliance and, for
any other drug candidates that we successfully develop that do not become part
of the Abbott Alliance, we intend to market and sell through arrangements or
collaborations with third parties. In addition, we expect Abbott to handle the
distribution and sale of drug candidates covered by the Abbott Alliance both
inside and outside the United States. With respect to the United States, our
ability to market the drug candidates that we successfully develop will be
contingent upon recruitment, training and deployment of a sales and marketing
force as well as the performance of Abbott under the Abbott Alliance. We may be
unable to establish marketing or sales capabilities or to maintain arrangements
or enter into new arrangements with third parties to perform those activities on
favorable terms. In addition, any such third parties may have significant
control or influence over important aspects of the commercialization of our drug
candidates, including market identification, marketing methods, pricing,
composition of sales force and promotional activities. We also may have limited
control over the amount and timing of resources that a third party may devote to
our drug candidates. Our business may never achieve profitability if we fail to
establish or maintain a sales force and marketing, sales and distribution
capabilities.
BECAUSE WE DEPEND ON THIRD PARTIES FOR THE DEVELOPMENT AND ACQUISITION OF DRUG
CANDIDATES, WE MAY NOT BE ABLE TO SUCCESSFULLY ACQUIRE ADDITIONAL DRUG
CANDIDATES OR COMMERCIALIZE OR DEVELOP OUR CURRENT DRUG CANDIDATES.
We have engaged and intend to continue to engage third party contract
research organizations and other third parties to help us develop our drug
candidates. Although we have designed the clinical trials for our drug
candidates, the contract research organizations have conducted many of the
clinical trials. As a result, many important aspects of our drug development
programs have been and will continue to be outside of our direct control. In
addition, the contract research organizations may not perform all of their
obligations under arrangements with us. If the contract research organizations
do not perform clinical trials in a satisfactory manner or breach their
obligations to us, the development and commercialization of any drug candidate
may be delayed or precluded. We do not intend to engage in drug discovery. Our
strategy for obtaining additional drug candidates is to utilize the
relationships of our management team and Scientific Advisory Board to identify
drug candidates for in-licensing from companies, universities, research
institutions and other organizations. We may not succeed in acquiring additional
drug candidates on acceptable terms or at all.
13
BECAUSE WE MAY NOT BE ABLE TO ATTRACT AND RETAIN KEY PERSONNEL AND ADVISORS, WE
MAY NOT SUCCESSFULLY DEVELOP OUR PRODUCTS OR ACHIEVE OUR OTHER BUSINESS
OBJECTIVES.
We are highly dependent on our senior management and scientific staff,
including Dr. David Barry, our Chairman and Chief Executive Officer. We have
entered into employment agreements with the President and each vice president of
Triangle. Dr. Barry's employment agreement contains certain non-competition
provisions. In addition, the employment agreements for the President and each of
the vice presidents provide for certain severance payments which are contingent
upon the officer's refraining from competition with Triangle. The loss of the
services of any member of our senior management or scientific staff may
significantly delay or prevent the achievement of product development and other
business objectives. Our ability to attract and retain qualified personnel,
consultants and advisors is critical to our success. In order to pursue our drug
development programs and marketing plans, we will need to hire additional
qualified scientific and management personnel. Competition for qualified
individuals is intense and we face competition from numerous pharmaceutical and
biotechnology companies, universities and other research institutions. We may be
unable to attract and retain these individuals, and our failure to do so would
have an adverse effect on our business.
HEALTH CARE REFORM MEASURES AND THIRD PARTY REIMBURSEMENT PRACTICES ARE
UNCERTAIN AND MAY ADVERSELY IMPACT THE COMMERCIALIZATION OF OUR PRODUCTS.
The efforts of governments and third party payors to contain or reduce the
cost of health care will continue to affect the business and financial condition
of drug companies. A number of legislative and regulatory proposals to change
the health care system have been proposed in recent years. In addition, an
increasing emphasis on managed care in the United States has and will continue
to increase pressure on drug pricing. While we cannot predict whether
legislative or regulatory proposals will be adopted or what effect those
proposals or managed care efforts may have on our business, the announcement
and/or adoption of such proposals or efforts could have an adverse effect on our
profit margins and financial condition. Sales of prescription drugs depend
significantly on the availability of reimbursement to the consumer from third
party payors, such as government and private insurance plans. These third party
payors frequently require that drug companies give them predetermined discounts
from list prices, and they are increasingly challenging the prices charged for
medical products and services. Present coactive treatment regimens for the
treatment of HIV are expensive; published reports indicate the cost per patient
per year can exceed $13,000, and may increase as new combinations are developed.
These costs have resulted in limitations in the reimbursement available from
third party payors for the treatment of HIV infection, and we expect that
reimbursement pressures will continue in the future. If we succeed in bringing
one or more products to the market, these products may not be considered cost
effective and reimbursement to the consumer may not be available or sufficient
to allow us to sell our products on a competitive basis.
IF OUR DRUG CANDIDATES DO NOT ACHIEVE MARKET ACCEPTANCE, OUR BUSINESS MAY NEVER
ACHIEVE PROFITABILITY.
Our success will depend on the market acceptance of any products we develop.
The degree of market acceptance will depend upon a number of factors, including
the receipt and scope of regulatory approvals, the establishment and
demonstration in the medical community of the safety and effectiveness of our
products and their potential advantages over existing treatment methods, and
reimbursement policies of government and third party payors. Physicians,
patients, payors or the medical community in general may not accept or utilize
any product that we may develop.
IF WE FAIL TO BE YEAR 2000 COMPLIANT, IT COULD DISRUPT OUR BUSINESS ACTIVITIES.
The Year 2000 issue is the result of date-sensitive devices, systems and
computer programs that use a two digit rather than a four digit recognition
system to define an applicable year. We have initiated a program and task force
to assess the Year 2000 compliance of our systems and the systems of our key
14
business vendors. We have inventoried and assessed our significant internal
information and operation systems, and we have replaced or modified those
portions of our software, hardware and other equipment which we have determined
are non-compliant. We have completed the required changes to, and the testing
and verification of, our critical and significant internal systems. Accordingly,
we expect that the Year 2000 issue will not pose significant operational
problems for our internal systems and equipment. If, however, we are unable to
fix any technologies utilizing a two digit recognition system, we could
experience system failures or miscalculations causing disruption of operations,
including the temporary inability to process transactions or conduct normal
business activities in the new millennium.
We are also assessing our key business vendors' Year 2000 compliance. We
have requested information from these vendors regarding their compliance efforts
and written assurances of their Year 2000 compliance. We have completed our risk
assessments, readiness evaluations and action and contingency plans related to
these vendors. However, it is extremely difficult to assess the likelihood of
these third parties' Year 2000 compliance or the impact their noncompliance may
have on our operations. If we fail to implement successfully our Year 2000
compliance plan, our business could be adversely affected. In addition,
significant delays or unanticipated Year 2000 issues with key business vendors
could adversely affect the development of our drug candidates and our financial
condition.
The projected incremental expenditures associated with our Year 2000
compliance program are not expected to be material to our consolidated financial
position, results of operations, and cash flow. We are expensing the Year 2000
compliant costs as incurred. The aggregate cost and dates on which we expect
aspects of the Year 2000 project to be completed are based upon our best
estimates and were derived utilizing assumptions of future events, continued
availability of certain internal and external resources, and other factors.
WE MAY NOT HAVE ADEQUATE INSURANCE PROTECTION AGAINST PRODUCT LIABILITY.
Our business exposes us to potential product liability risks that are
inherent in the testing, manufacturing and marketing of drug products and we may
face product liability claims in the future. We currently have only limited
product liability insurance. We may be unable to maintain our existing insurance
and/or obtain additional insurance in the future at a reasonable cost or in
sufficient amounts to protect against potential losses. A successful product
liability claim or series of claims brought against us could require us to pay
substantial amounts that would decrease our profitability.
WE MAY INCUR SUBSTANTIAL COSTS RELATED TO OUR USE OF HAZARDOUS MATERIALS.
We use hazardous materials, chemicals, viruses and various radioactive
compounds in our drug development programs. Although we believe that our
handling and disposing of these materials comply with state and federal
regulations, the risk of accidental contamination or injury still exists. In the
event of such an accident, we could be held liable for any damages or fines that
result and any such liability could exceed our resources.
OUR CONTROLLING STOCKHOLDERS MAY MAKE DECISIONS WHICH YOU DO NOT CONSIDER TO BE
IN YOUR BEST INTEREST.
As of October 15, 1999, our directors, executive officers and their
affiliates, excluding Abbott, owned approximately 18.4% of our outstanding
common stock and Abbott owned approximately 17.5% of our outstanding common
stock. Pursuant to the terms of the Abbott Alliance, Abbott has the right to
purchase additional amounts of our common stock up to a maximum aggregate
percentage of 21% of our outstanding common stock and has certain rights to
purchase shares directly from the Company in order to maintain its existing
level of ownership, also known as antidilution protection. In addition, we have
granted Abbott the right to appoint one or more representatives to our Board of
Directors, in proportion to its ownership of our common stock. As of
October 31, 1999, one Abbott designee served
15
as a member of our Board of Directors. As a result, our controlling stockholders
are able to significantly influence all matters requiring stockholder approval,
including the election of directors and the approval of significant corporate
transactions. This concentration of ownership could also delay or prevent a
change in control of Triangle that may be favored by other stockholders.
THE MARKET PRICE OF OUR STOCK MAY BE ADVERSELY AFFECTED BY MARKET VOLATILITY.
The market price of our common stock is likely to be volatile and could
fluctuate widely in response to many factors, including:
- announcements of the results of clinical trials,
- developments with respect to patents or proprietary rights,
- announcements of technological innovations by us or our competitors,
- announcements of new products or new contracts by us or our competitors,
- actual or anticipated variations in our operating results due to the level
of development expenses and other factors,
- changes in financial estimates by securities analysts and whether our
earnings meet or exceed such estimates,
- conditions and trends in the pharmaceutical and other industries,
- new accounting standards,
- general economic, political and market conditions and other factors, and
- the occurrence of any of the risks described in these "Risk Factors."
In addition, if our stockholders sell a substantial number of shares of our
common stock in the public market, the market price of our common stock could be
reduced. As of October 15, 1999, there were 37,576,695 shares of common stock
outstanding, of which approximately 22,500,000 were immediately eligible for
resale in the public market without restriction. Holders of approximately
8,500,000 shares have rights to cause us to register them for sale to the
public. We have filed registration statements to register the sale of
approximately 4,200,000 of these shares. In addition, Abbott will have the right
on or after June 30, 2002 to cause us to register for resale in the public
market the 6,571,428 shares of common stock purchased at the closing of the
Abbott Alliance. Any such sales may make it more difficult for us to raise
needed capital through an offering of our equity or convertible debt securities
and may reduce the market price of our common stock.
In the past, following periods of volatility in the market price of the
securities of companies in our industry, securities class action litigation has
often been instituted against those companies. If we face such litigation in the
future, it would result in substantial costs and a diversion of management
attention and resources, which would negatively impact our business.
ANTITAKEOVER PROVISIONS IN OUR CHARTER DOCUMENTS AND DELAWARE LAW COULD DELAY,
DEFER OR PREVENT A TENDER OFFER OR TAKEOVER ATTEMPT THAT YOU CONSIDER TO BE IN
YOUR BEST INTEREST.
We have adopted a number of provisions that could have antitakeover effects.
On January 29, 1999, our Board of Directors adopted a preferred stock purchase
rights plan, commonly referred to as a "poison pill." The rights plan is
intended to deter an attempt to acquire Triangle in a manner or on terms not
approved by the Board. Thus, the rights plan will not prevent an acquisition of
Triangle which is approved by the Board. Our charter authorizes our Board to
issue shares of undesignated preferred stock without stockholder approval on
terms as the Board may determine. Moreover, the issuance of preferred stock may
make it more difficult for a third party to acquire, or may discourage a
16
third party from acquiring, voting control of Triangle. Our bylaws divide the
Board into three classes of directors with each class serving a three year term.
These and other provisions of our charter and our bylaws, as well as certain
provisions of Delaware law, could delay or impede the removal of incumbent
directors and could make more difficult a merger, tender offer or proxy contest
involving Triangle, even if the events could be beneficial to our stockholders.
These provisions could also limit the price that investors might be willing to
pay for our common stock.
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements and other information with the SEC. You
may read and copy any document we file at the SEC's public reference rooms in
Washington, D.C., New York, New York and Chicago, Illinois. Please call the SEC
at 1-800-SEC-0330 for further information on the public reference rooms. Our SEC
filings are also available to the public on the SEC's website at
http://www.sec.gov.
INFORMATION INCORPORATED BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file with
them, which means that we can disclose important information to you by referring
you to those documents. The information incorporated by reference is considered
to be part of this prospectus, and later information filed with the SEC will
update and supersede this information. 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 Exchange Act of 1934 until our offering is
completed.
1. Our Annual Report on Form 10-K for the fiscal year ended December 31,
1998 (file no. 000-21589), including certain information in our
Definitive Proxy Statement in connection with our 1999 Annual Meeting of
Stockholders;
2. Our Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 1999 (file no. 000-21589);
3. Our Quarterly Report on Form 10-Q for the quarterly period ended
June 30, 1999, as amended November 3, 1999 (file no. 000-21589);
4. Our Current Report on Form 8-K filed February 10, 1999
(file no. 000-21589);
5. Our Current Report on Form 8-K filed June 18, 1999, as amended
November 3, 1999 (file no. 000-21589);
6. The description of our common stock contained in our Registration
Statements on Form 8-A filed October 18, 1996, February 10, 1999 and
June 18, 1999 (file no. 000-21589); and
7. The description of our Preferred Stock Purchase Rights, contained in our
Registration Statement on Form 8-A filed February 10, 1999, as amended on
Form 8-A/A filed June 18, 1999 (file no. 000-21589), including any
amendments or reports filed for the purpose of updating such
descriptions.
The reports and other documents that we file after the date of this
prospectus will update and supersede the information in this prospectus.
17
You may request a copy of these filings, at no cost, by writing or
telephoning us at:
Triangle Pharmaceuticals, Inc.,
4 University Place
4611 University Drive
Durham, North Carolina, 27707
(919) 493-5980
Attn: General Counsel.
YOU SHOULD RELY ONLY ON THE INFORMATION PROVIDED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
DIFFERENT INFORMATION. THE SELLING STOCKHOLDERS ARE NOT AUTHORIZED TO MAKE 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 THE DOCUMENT.
Triangle Pharmaceuticals is our trademark. This prospectus also includes
names and trademarks of other companies.
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of the shares by the
selling stockholders.
SELLING STOCKHOLDERS
We are registering all 1,700,000 shares of common stock covered by this
prospectus on behalf of the selling stockholders named in the table below. We
issued all of the shares to the selling stockholders upon the conversion of
shares of Triangle's Series A Preferred Stock, Preferred Stock, held by the
selling stockholders. We issued the Preferred Stock to the selling stockholders
in a private placement transaction on December 24, 1998. We have registered the
shares of common stock to permit the selling stockholders and their pledgees,
donees, transferees or other successors-in-interest that receive their shares
from a selling stockholder as a gift, partnership distribution or other non-sale
related transfer after the date of this prospectus to resell the shares when
they deem appropriate.
The following table sets forth the name of each of the selling stockholders,
the number of shares owned by each of the selling stockholders, the number of
shares that may be offered under this prospectus, and the number of shares of
our common stock owned by each of the selling stockholders after this offering
is completed. Except as set forth in the table below, none of the selling
stockholders has had a material relationship with us within the past three years
other than as a result of the ownership of the shares or other securities of
Triangle. The number of shares in the column "Number of Shares Being Offered"
represent all of the shares that each selling stockholder may offer under this
prospectus. We do not know how long the selling stockholders will hold the
shares before selling them and we currently have no agreements, arrangements or
understandings with any of the selling stockholders regarding the sale of any of
the shares. The shares offered by this prospectus may be offered from time to
time by the selling stockholders named below.
Unless otherwise indicated, each person has sole investment and voting power
with respect to the shares listed in the table, subject to community property
laws, where applicable. For purposes of this table, a person or group of persons
is deemed to have "beneficial ownership" of any shares which such person has the
right to acquire within 60 days. Percentage ownership is based on 37,576,695
shares of common stock of Triangle outstanding on October 15, 1999. For purposes
of computing the percentage of outstanding shares held by each person or group
of persons named above, any security which such person or group of persons has
the right to acquire within 60 days is deemed to be outstanding for the purpose
of computing the percentage ownership for such person or persons, but is not
deemed to be outstanding for the purpose of computing the percentage ownership
of any other person. This
18
registration statement shall also cover any additional shares of common stock
which become issuable in connection with the shares registered for sale hereby
as a result of any stock dividend, stock split, recapitalization or other
similar transaction effected without the receipt of consideration which results
in an increase in the number of Triangle's outstanding shares of common stock.
The number of shares held by entities affiliated with Alta BioPharma Partners
L.P. includes 621,590 shares beneficially owned by Alta BioPharma Partners,
L.P., 354,990 shares beneficially owned by Triangle Pharmaceuticals Chase
Partners (AltaBio), LLC, and 23,420 shares beneficially owned by Alta
Embarcadero BioPharma, LLC.
SHARES
SHARES BENEFICIALLY BENEFICIALLY
OWNED PRIOR OWNED AFTER
TO OFFERING NUMBER OF OFFERING
-------------------- SHARES BEING -------------------
NAME OF SELLING STOCKHOLDER NUMBER PERCENT OFFERED NUMBER PERCENT
- --------------------------- --------- -------- ------------ -------- --------
Entities affiliated with Alta BioPharma 1,000,000 2.7% 1,000,000 0 *
Partners, L.P. .
One Embarcadero Center, Suite 4050
San Francisco, CA 94111
Chase Capital Partners ....................... 700,000 1.9% 700,000 0 *
380 Madison Avenue
New York, NY 10017
--------- --------- --
TOTAL..................................... 1,700,000 1,700,000 0
- ------------------------
* Represents beneficial ownership of less than 1%
PLAN OF DISTRIBUTION
The selling stockholders may sell the shares from time to time. The selling
stockholders will act independently of us in making decisions regarding the
timing, manner and size of each sale. The sales may be made on one or more
exchanges or in the over-the-counter market or otherwise, at prices and at terms
then prevailing or at prices related to the then current market price, or in
negotiated transactions. The selling stockholders may effect such transactions
by selling the shares to or through broker-dealers. The shares may be sold by
one or more of, or a combination of, the following:
- a block trade in which the broker-dealer will attempt to sell the shares
as agent but may position and resell a portion of the block as principal
to facilitate the transaction,
- purchases by a broker-dealer as principal and resale by such broker-dealer
for its account under this prospectus,
- an exchange distribution in accordance with the rules of such exchange,
- ordinary brokerage transactions and transactions in which the broker
solicits purchasers, and
- in privately negotiated transactions.
To the extent required, this prospectus may be amended or supplemented from
time to time to describe a specific plan of distribution. In effecting sales,
broker-dealers engaged by the selling stockholders may arrange for other
broker-dealers to participate in the resales.
The selling stockholders may enter into hedging transactions with
broker-dealers in connection with distributions of the shares or otherwise. In
these transactions, broker-dealers may engage in short sales of the shares in
the course of hedging the positions they assume with selling stockholders. The
selling stockholders also may sell shares short and redeliver the shares to
close out such short positions. The selling stockholders may enter into option
or other transactions with broker-dealers which require the delivery to the
broker-dealer of the shares. The broker-dealer may then resell or otherwise
transfer such shares under this prospectus. The selling stockholders also may
loan or pledge the shares to a
19
broker-dealer. The broker-dealer may sell the shares so loaned, or upon a
default the broker-dealer may sell the pledged shares under this prospectus.
Broker-dealers or agents may receive compensation in the form of
commissions, discounts or concessions from selling stockholders. Broker-dealers
or agents may also receive compensation from the purchasers of the shares for
whom they act as agents or to whom they sell as principals, or both.
Compensation as to a particular broker-dealer might be in excess of customary
commissions and will be in amounts to be negotiated in connection with the sale.
Broker-dealers or agents and any other participating broker-dealers or the
selling stockholders may be deemed to be "underwriters" within the meaning of
Section 2(11) of the Securities Act of 1933, the Securities Act, in connection
with sales of the shares. Accordingly, any such commission, discount or
concession received by them and any profit on the resale of the shares purchased
by them may be deemed to be underwriting discounts or commissions under the
Securities Act. Because selling stockholders may be deemed to be "underwriters"
within the meaning of Section 2(11) of the Securities Act, the selling
stockholders will be subject to the prospectus delivery requirements of the
Securities Act. In addition, any securities covered by this prospectus which
qualify for sale to comply with Rule 144 promulgated under the Securities Act
may be sold under Rule 144 rather than under this prospectus. The selling
stockholders have advised us that they have not entered into any agreements,
understandings or arrangements with any underwriters or broker-dealers regarding
the sale of their securities. There is no underwriter or coordinating broker
acting in connection with the proposed sale of shares by the selling
stockholders.
The shares will be sold only through registered or licensed brokers or
dealers if required under applicable state securities laws. In addition, in
certain states the shares may not be sold unless they have been registered or
qualified for sale in the applicable state or an exemption from the registration
or qualification requirement is available and is complied with.
Under applicable rules and regulations under the Exchange Act, any person
engaged in the distribution of the shares may not simultaneously engage in
market making activities with respect to our common stock for a period of two
business days prior to the commencement of such distribution. In addition, each
selling stockholder will be subject to applicable provisions of the Exchange Act
and the associated rules and regulations under the Exchange Act, including
Regulation M, which provisions may limit the timing of purchases and sales of
shares of our common stock by the selling stockholders. We will make copies of
this prospectus available to the selling stockholders and have informed them of
the need to deliver copies of this prospectus to purchasers at or prior to the
time of any sale of the shares.
We will file a supplement to this prospectus, if required, to comply with
Rule 424(b) under the Securities Act upon being notified by a selling
stockholder that any material arrangements have been entered into with a
broker-dealer for the sale of shares through a block trade, special offering,
exchange distribution or secondary distribution or a purchase by a broker or
dealer, such supplement will disclose:
- the name of each such selling stockholder and of the participating
broker-dealer(s),
- the number of shares involved,
- the price at which such shares were sold,
- the commissions paid or discounts or concessions allowed to such
broker-dealer(s), where applicable,
- that such broker-dealer(s) did not conduct any investigation to verify the
information set out or incorporated by reference in this prospectus, and
- other facts material to the transaction.
20
In addition, upon being notified by a selling stockholder that a donee or
pledgee intends to sell more than 500 shares, we will file a supplement to this
prospectus.
We will bear all costs, expenses and fees in connection with the
registration of the shares. The selling stockholders will bear all commissions
and discounts, if any, attributable to the sales of the shares. The selling
stockholders may agree to indemnify any broker-dealer or agent that participates
in transactions involving sales of the shares against certain liabilities,
including liabilities arising under the Securities Act. The selling stockholders
have agreed to indemnify certain persons, including broker-dealers and agents,
against certain liabilities in connection with the offering of the shares,
including liabilities arising under the Securities Act.
LEGAL MATTERS
For purposes of this offering, Brobeck, Phleger & Harrison LLP, San Diego,
California, is giving its opinion as to the validity of the shares.
EXPERTS
The financial statements included in this prospectus by reference to the
Annual Report on Form 10-K of Triangle for the year ended December 31, 1998,
have been included in this prospectus in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
that firm as experts in auditing and accounting.
21
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WE HAVE NOT AUTHORIZED ANY PERSON TO MAKE A STATEMENT THAT DIFFERS FROM WHAT IS
IN THIS PROSPECTUS. IF ANY PERSON DOES MAKE A STATEMENT THAT DIFFERS FROM WHAT
IS IN THIS PROSPECTUS, YOU SHOULD NOT RELY ON IT. THIS PROSPECTUS IS NOT AN
OFFER TO SELL, NOR IS IT AN OFFER TO BUY, THESE SECURITIES IN ANY STATE IN WHICH
THE OFFER OR SALE IS NOT PERMITTED. THE INFORMATION IN THIS PROSPECTUS IS
COMPLETE AND ACCURATE AS OF ITS DATE, BUT THE INFORMATION MAY CHANGE AFTER THAT
DATE.
1,700,000 SHARES
TRIANGLE
PHARMACEUTICALS, INC.
COMMON STOCK
---------------------
PROSPECTUS
---------------------
NOVEMBER , 1999
- -------------------------------------------
- -------------------------------------------
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth all expenses, other than underwriting
discounts and commissions, payable by the Registrant in connection with the sale
of the common stock being registered. All the amounts shown are estimates,
except for the registration fee.
Registration Fee............................................ $ 7,798
Printing and engraving expenses............................. 10,000
Legal fees and expenses..................................... 5,000
Accounting fees and expenses................................ 1,000
Transfer Agent and Registrar Fees........................... 1,000
Miscellaneous Expenses...................................... 1,000
TOTAL..................................................... $25,798
=======
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Section 145 of the Delaware General Corporation Law permits indemnification
of officers and directors of Triangle under certain conditions and subject to
certain limitations. Section 145 of the Delaware General Corporation Law also
provides that a corporation has the power to purchase and maintain insurance on
behalf of its officers and directors against any liability asserted against such
person and incurred by him or her in such capacity, or arising out of his or her
status as such, whether or not the corporation would have the power to indemnify
him or her against such liability under the provisions of Section 145 of the
Delaware General Corporation Law.
Article VII, Section (i) of the Restated Bylaws of Triangle provides that
Triangle shall indemnify its directors and executive officers to the fullest
extent not prohibited by the Delaware General Corporation Law. The rights to
indemnity thereunder continue as to a person who has ceased to be a director,
officer, employee or agent and inure to the benefit of the heirs, executors and
administrators of the person. In addition, expenses incurred by a director or
officer in defending any civil, criminal, administrative or investigative
action, suit or proceeding by reason of the fact that he or she is or was a
director or officer of Triangle (or was serving at Triangle's request as a
director or officer of another corporation) shall be paid by Triangle in advance
of the final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such amount if
it shall ultimately be determined that he or she is not entitled to be
indemnified by Triangle as authorized by the relevant section of the Delaware
General Corporation Law.
As permitted by Section 102(b)(7) of the Delaware General Corporation Law,
Article 5, Section (a) of Triangle's Second Restated Certificate of
Incorporation provides that a director of Triangle shall not be personally
liable for monetary damages for breach of fiduciary duty as a director, except
for liability (i) for any breach of the director's duty of loyalty to Triangle
or its stockholders, (ii) for acts or omissions not in good faith or acts or
omissions that involve intentional misconduct or a knowing violation of law,
(iii) under Section 174 of the Delaware General Corporation Law or (iv) for any
transaction from which the director derived any improper personal benefit.
Triangle has entered into indemnification agreements with its directors and
executive officers. Generally, the indemnification agreements attempt to provide
the maximum protection permitted by Delaware law as it may be amended from time
to time. Under such additional indemnification provisions, however, an
individual will not receive indemnification for judgments, settlements or
expenses if he or she is found liable to Triangle (except to the extent the
court determines he or she is
II-1
fairly and reasonably entitled to indemnity for expenses), for settlements not
approved by Triangle or for settlements and expenses if the settlement is not
approved by the court. The indemnification agreements provide for Triangle to
advance to the individual any and all reasonable expenses (including legal fees
and expenses) incurred in investigating or defending any such action, suit or
proceeding. In order to receive an advance of expenses, the individual must
submit to Triangle copies of invoices presented to him or her for such expenses.
Also, the individual must repay such advances upon a final judicial decision
that he or she is not entitled to indemnification.
The Registrant has an insurance policy covering the directors and officers
of the Registrant with respect to certain liabilities, including liabilities
arising under the Securities Act or otherwise.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(A) EXHIBITS.
EXHIBIT NO. DESCRIPTION
----------- -----------
+ 4.1 Instruments defining the rights of stockholders. Reference
is made to the Registration Statement on Form 8-A, filed
October 18, 1996 (file no. 000-21589), and the
Registration Statement on Form 8-A, filed February 10,
1999 (file no. 000-21589), as amended on June 18, 1999
(file no. 000-21589).
+ 5.1 Opinion of Brobeck, Phleger & Harrison LLP
23.1 Consent of PricewaterhouseCoopers LLP, Independent
Accountants
+23.2 Consent of Brobeck, Phleger & Harrison LLP. Reference is
made to Exhibit 5.1.
+24.1 Power of Attorney.
- ------------------------
+ Previously filed.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement to include any material
information with respect to the plan of distribution not previously disclosed in
the registration statement or any material change to such information in the
registration statement;
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof;
(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.
(4) If the registrant is a foreign private issuer, to file a post-effective
amendment to the registration statement to include any financial statements
required by Rule 3-19 of Regulation S-X at the state of any delayed offering or
throughout a continuous offering. Financial statements and information otherwise
required by Section 10(a)(3) of the Act need not be furnished, provided, that
the registrant includes in the prospectus, by means of a post-effective
amendment, financial statements required pursuant to this paragraph (a)(4) and
other information necessary to ensure that all other information in the
prospectus is at least as current as the date of those financial statements.
Notwithstanding the foregoing, with respect to registration statements on
Form F-3, a post-effective
II-2
amendment need not be filed to include financial statements and information
required by Section 10(a)(3) of the Act or Rule 3-19 of this chapter if such
financial statements and information are contained in 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 Form F-3.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Act, 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.
The undersigned Registrant hereby undertakes to deliver or cause to be
delivered with the Prospectus, to each person to whom the Prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the Prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X are not set forth in the Prospectus, to deliver, or
cause to be delivered to each person to whom the Prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the Prospectus to provide such interim financial information.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
Triangle pursuant to the foregoing provisions, Delaware Corporation law, the
Underwriting Agreement or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefor, 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 hereunder,
the Registrant will, unless in the opinion of its counsel the question has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question of whether such indemnification by it is against public policy as
expressed in the 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
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 Durham, State of North Carolina, on the 2nd day of
November, 1999.
TRIANGLE PHARMACEUTICALS, INC.
By: /s/ DAVID W. BARRY
-----------------------------------------
David W. Barry
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
Pursuant to the requirements of the Securities Act of 1933, this
pre-effective amendment to the Registration Statement has been signed by the
following persons in the capacities and on the dates indicated:
SIGNATURE TITLE
--------- -----
Chairman of the Board and
/s/ DAVID W. BARRY Chief Executive Officer
------------------------------------------- (Principal Executive November 2, 1999
David W. Barry Officer)
Acting Chief Financial
/s/ THOMAS R. STAAB, II Officer and Treasurer
------------------------------------------- (Principal Financial and November 2, 1999
Thomas R. Staab, II Accounting Officer)
*
------------------------------------------- Director and President November 2, 1999
M. Nixon Ellis
-------------------------------------------
Anthony B. Evnin Director
*
------------------------------------------- Director November 2, 1999
Standish M. Fleming
*
------------------------------------------- Director November 2, 1999
Dennis B. Gillings
II-4
SIGNATURE TITLE
--------- -----
------------------------------------------- Director
Arthur J. Higgins
*
------------------------------------------- Director November 2, 1999
Henry G. Grabowski
*
------------------------------------------- Director November 2, 1999
George McFadden
*By: /s/ DAVID W. BARRY
-------------------------------------------
David W. Barry
ATTORNEY-IN-FACT
II-5
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
----------- -----------
+ 4.1 Instruments defining the rights of stockholders. Reference
is made to the Registration Statement on Form 8-A, filed
October 18, 1996 (file no. 000-21589), and the
Registration Statement on Form 8-A, filed February 10,
1999 (file no. 000-21589), as amended on June 18, 1999
(file no. 000-21589).
+ 5.1 Opinion of Brobeck, Phleger & Harrison LLP.
23.1 Consent of PricewaterhouseCoopers LLP, Independent
Accountants.
+23.2 Consent of Brobeck, Phleger & Harrison LLP. Reference is
made to Exhibit 5.1.
+24.1 Power of Attorney
- ------------------------
+ Previously filed.
II-6