As filed with the Securities and Exchange Commission on January 19, 2000
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
NEUROCRINE BIOSCIENCES, INC.
(Exact name of registrant as specified in its charter)
Delaware 33-0525145
(State of incorporation) (I.R.S. Employer Identification No.)
10555 Science Center Drive
San Diego, California 92121
(858) 658-7600
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
Gary A. Lyons
President, Chief Executive Officer and Director
Neurocrine Biosciences, Inc.
10555 Science Center Drive
San Diego, California 92121
(858) 658-7600
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
John M. Newell
Latham & Watkins
633 West Fifth Street, Suite 4000
Los Angeles, California 90071
(213) 485-1234
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are to be 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, as amended (the "Securities Act"), other than securities offered only in
connection with dividend or interest reinvestment plans, check the following
box.
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.
CALCULATION OF REGISTRATION FEE
======================================================================================================================
Proposed Maximum Proposed Maximum
Title of Each Class of Amount to be Offering Price Per Aggregate Offering Amount of
Securities to be Registered Registered Share (1) Price (1) Registration Fee
- ----------------------------------------- --------------- ----------------- --------------------- -------------------
Common Stock, par value $0.001 per share 2,327,777 $28.50 $66,341,645 $18,443
========================================= =============== ================= ====================== ==================
<FN>
(1) Estimated solely for the purpose of computing the registration fee required
by Section 6(b) of the Securities Act and computed pursuant to Rule 457(c)
under the Securities Act based upon the average of the high and low prices
of the Common Stock on January 14, 2000, as reported on the Nasdaq National
Market.
</FN>
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 or until the Registration Statement shall become effective on
such date as the Securities and Exchange Commission, acting pursuant to said
Section 8(a), may determine.
The information contained in this prospectus is not complete and may
be changed. These securities may not be sold until the registration statement
filed with the Securities and Exchange Commission is effective. This prospectus
is not an offer to sell nor does it seek an offer to buy these securities in any
jurisdiction where the offer or sale is not permitted.
PROSPECTUS
(Subject to completion, dated January 19, 2000)
NEUROCRINE BIOSCIENCES, INC.
2,327,777 Shares of Common Stock
The selling shareholders identified in this prospectus may sell up to 2,327,777
shares of common stock of Neurocrine Biosciences, Inc., a Delaware corporation.
The selling shareholders may offer and sell their shares of common stock from
time to time: on terms to be determined at the time of a sale; in transactions
on the Nasdaq National Market; in privately negotiated transactions; or in a
combination of these methods of sale.
Neurocrine's Common Stock is listed on the Nasdaq National Market under the
symbol "NBIX." On January 14, 2000 the average of the high and low price of the
Common Stock was $28.50 per share.
The shares offered in this Prospectus involve a high degree of risk. You should
carefully consider certain "Risk Factors" in determining whether to buy any
Neurocrine Common Stock. See page 7.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED 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 January__, 2000
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TABLE OF CONTENTS
Page
Summary ............................................................... 3
Risk Factors .......................................................... 7
Business .............................................................. 15
Use of Proceeds ....................................................... 15
Selling Stockholders .................................................. 15
Plan of Distribution .................................................. 16
Legal Matters ......................................................... 17
Experts................................................................ 17
Where You Can Find More Information ................................... 17
Information Incorporated by Reference ................................. 18
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SUMMARY
Neurocrine is a leading neuroscience company focused on the discovery
and development of novel therapeutics for neuropsychiatric, neuroinflammatory
and neurodegenerative diseases and disorders. Our neuroscience, endocrine and
immunology disciplines provide us a unique biological understanding of the
molecular interaction between central nervous, immune and endocrine systems for
the development of therapeutic interventions for anxiety/ depression, insomnia,
glioblastoma, diabetes, multiple sclerosis, endometriosis, Alzheimer's disease,
Stroke and Obesity.
Strategic Alliances
We leverage our resources through strategic alliances and other
financing mechanisms to build internal product development and commercialization
capabilities. We currently have three strategic alliances:
o Janssen Pharmaceutica, N.V. ("Janssen"), a subsidiary of Johnson &
Johnson Development Corporation, focused on corticotropin releasing
factor receptor antagonists for the treatment of anxiety, depression
and substance abuse.
o American Home Products acting through Wyeth-Ayerst Laboratories
Division ("Wyeth-Ayerst") focused on modulation of excitatory amino
acid transporters ("EAATs") for neurodegenerative diseases and
psychiatric disorders.
o Eli Lilly and Co. ("Lilly") focused on corticotropin releasing factor
binding protein antagonists and agonists of corticotropin releasing
factor receptor 2 for the treatment of central nervous system
disorders including obesity and dementias such as Alzheimer's Disease.
Clinical Development
The following table summarizes Neurocrine's products in clinical
development.
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Program Indication Status Commercial Rights
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CRF Receptor Antagonist Anxiety/Depression Phase II Janssen/Neurocrine
GABA Receptor Subtype Agonist Insomnia Phase II Neurocrine
IL-4 Fusion Toxin Glioblastoma Phase I/II Neurocrine
Altered Peptide Ligand Multiple Sclerosis Phase II Neurocrine
Altered Peptide Ligand Type I Diabetes Phase I Neurocrine
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"Phase I" indicates that Neurocrine or its collaborative partner is
conducting clinical trials to determine safety, the maximally tolerated dose
and pharmacokinetics of the compound in human volunteers.
"Phase II" indicates that the Company or its collaborative partner are
conducting clinical trials to evaluate one of the Company's products in
humans to determine safety and efficacy in an expanded patient population.
Corticotropin releasing factor ("CRF") is the central
regulator of the body's overall response to stress. Neurocrine is developing a
new class of therapeutics that target stress-induced anxiety by acting as CRF
receptor antagonists. Our CRF receptor antagonist project is currently in Phase
II clinical development with our partner, Janssen Pharmaceutica, for
anxiety/depression.
According to a Gallup Survey conducted on behalf of the
National Sleep Foundation, 49% of all Americans say they have trouble sleeping.
In the recent past the majority of patients treated for insomnia have utilized
non-benzodiazepine compounds which, while preferable in side effect profile to
the benzodiazepine class compounds, still exhibit certain unfavorable side
effects. We have completed a Phase II clinical trial in insomnia with NBI-34060,
a GABA receptor subtype agonist, NBI-34060. A preliminary analysis of the safety
data indicates that NBI-34060 is well tolerated, and has an incidence of adverse
effects similar to placebo group. Statistical significance was reached for the
primary clinical endpoint (Latency to Persistent Sleep). We are completing data
analysis and we have planned additional Phase II studies.
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Multiple sclerosis is a chronic immune mediated disease
characterized by recurrent attacks of neurologic dysfunction due to damage to
the central nervous system. With our partner, Novartis Pharma A.G. ("Novartis"
as successor in rights of Ciba-Geigy, Limited), we complete a second Phase II
clinical trial with NBI-5788/MSP771, our Altered Peptide Ligand (APL) compound
in patients with multiple sclerosis. On July 7, 1999, Novartis exercised its
right to terminate our collaboration effective January 7, 2000. As a result, we
reacquired the worldwide rights to our multiple sclerosis compound,
NBI-5788/MSP771. On July 20, 1999, the Data and Safety Monitoring Board for our
NBI-5788/MSP771 Phase II trials recommended that the administration of the drug
be stopped due to a number of patients reporting hypersensitivity-type
reactions. As defined in the protocol, all patients treated with NBI-5788/MSP771
will be followed to establish a complete safety and efficacy database. We expect
that the analysis of the results of the trial will be completed in the first
quarter of 2000.
Immunotoxins are a novel form of cancer therapy which combine
a moiety which targets a cancer cell and a toxin which, when delivered to the
cancer cell, will lead to cell death. NBI-3001 is an IL-4 fusion toxin that
combines an IL-4 moiety which targets IL-4 receptors highly expressed in
malignant brain tumors with a Pseudomonas exotoxin. We are conducting a Phase
I/II trial with for NBI-3001, for glioblastoma (malignant brain tumors). In the
pre-clinical setting, NBI-3001 has been found to be highly cytotoxic to brain
tumor cell lines and exhibits anti-tumor activity in in vivo models of brain
cancer.
Type I Diabetes is one of the most prevalent chronic
conditions in North America. We believe that our proprietary altered peptide
ligand specific for autoimmune T cells involved in diabetes may stop or delay
the destruction of insulin secreting cells. We recently commenced a Phase I
safety and dose escalating clinical study with NBI-6024, our APL compound for
Type I Diabetic patients.
Research
The following table summarizes our most advanced research programs:
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Program Indication Status Commercial
Rights
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CRF Receptor Antagonist Anxiety/Depression;
Stroke Development Neurocrine
Gonadotropin Releasing
Hormone Factor Endometriosis Development Neurocrine
Excitatory Amino Neurodegenerative/
Acid Transporters Psychiatric disorder Research Wyeth-Ayerst/
Neurocrine
Melanocortin Receptor Agonist Obesity Research Neurocrine
Orexin Antagonist/ Agonist Sleep Disorders Research Neurocrine
Chemokine Antagonist Inflammatory Disorders Research Neurocrine
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"Research" indicates identification and evaluation of compounds in in vitro
and animal models.
"Development" indicates that lead compounds have been discovered that meets
certain in vitro and in vivo criteria. These compounds may undergo
structural modification and more extensive evaluation prior to selection for
preclinical development.
In addition to our CRF antagonist program which is partnered
with Janssen, we are conducting an independent program directed to the research
and development of novel CRF receptor antagonist compounds for use in anxiety/
depression, stroke and sleep disorder. Our novel CRF antagonist compounds have
shown efficacy in preliminary experiments in animal models.
Gonadotrophin-Releasing Hormone ("GnRH") is a hypothalmic decapeptide
that stimulates the secretion of the pituitary gonatrophins, luteinizing hormone
and follicle stimulating hormone. GnRH receptor antagonists and super-agonists
have been shown to shutdown the reproductive endocrine axis and have utility in
the treatment of hormone dependent proliferative diseases such an endometriosis,
prostate carcinoma and breast cancer. We have screened small molecule libraries
and identified novel GnRH receptor antagonist compounds.
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Excitatory Amino Acid Transporters ("EAATs") modulate the levels of
glutamate in the brain and are novel targets for the development of drugs. We
are collaborating with Wyeth-Ayerst in the research and development of compounds
that modulate EAATs for the treatment of neurodegenerative and psychiatric
disorders.
Melanocortin receptors are involved in the control of endocrine,
autonomic and central nervous system. Our consultants and scientists have cloned
several melancortin receptors and we are conducting research to identify avenues
for the discovery of effective therapies for the treatment of endocrine
functions modulated by these receptors such as obesity.
In humans narcolepsy is characterized by excessive daytime sleepiness
and abnormal REM sleep and affects 0.02% to 0.06% of the population in the
United States and Western Europe. As a possible therapy for the human disease we
are looking at the development of an orexin receptor agonist. The orexins
consist of two small peptides (28 and 33 amino acids) that are expressed in the
brain and have been linked to a variety of activities including, the control of
feeding, cardiovascular regulation, water intake and sleep. There are two
closely related receptors (1 and 2) for the orexin peptides that are expressed
in different areas of the brain and most likely mediate different functions of
the orexin peptides. Both orexin receptor agonists (narcolepsy) and antagonists
(insomnia) may have potential value for drug development. We have recently
screened a small molecule library to identify antagonists for the orexin
receptor. A small number of low affinity molecules resulted from the screen and
these compounds are now being used to further characterize the orexin system.
Chemokines are immune/inflammatory mediators that may have a
role in central nervous system inflammation and leukocyte invasion. We are
engaged in small molecule library screening and structure activity studies to
identify compounds that act as antagonists of these mediators.
Business Strategy
Our strategy is to utilize our understanding of the biology of the
central nervous, immune and endocrine systems to identify and develop novel
therapeutics. There are five key elements to our business strategy:
Target Multiple Product Platforms. We believe that certain central nervous
system drug targets, such as CRF, EAATs and MCH represent significant market
opportunities in psychiatric, neurologic and metabolic disorders. Immunological
targets, such as altered peptide ligands, offer therapeutic strategies related
to autoimmune diseases. Chemokines and GnRH allow us to combine our endocrine
and immunology expertise with new drug discovery technologies to identify novel
product opportunities.
Identify Novel Neuroscience and Immunology Drug Targets for the Development
of Therapeutics Which Address Large Unmet Market Opportunities. We employ
molecular biology as an enabling discipline to identify novel drug targets such
as receptors, genes and gene-related products. We also use advanced
technologies, including combinatorial chemistry, high-throughput screening, gene
sequencing and bioinformatics, to discover and develop novel small molecule
therapeutics.
Leverage Strategic Alliances to Enhance Development and Commercialization
Capabilities. We intend to leverage the development, regulatory and
commercialization expertise of our corporate partners to accelerate the
development of our potential products, while we retain commercial or
co-promotion rights in North America.
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Outsource Capital Intensive and Non-Strategic Activities. We intend to
focus our resources on research and development activities by outsourcing our
requirements for manufacturing, preclinical testing and clinical monitoring
activities.
Acquire Complementary Research and Development Drug Candidates. We plan to
continue to selectively acquire rights to products in various stages of research
and clinical development in the fields of neurology and immunology to take
advantage of the development and future commercialization capabilities we are
developing in cooperation with our strategic partners.
Recent Developments
On November 29, 1999, Neurocrine announced results from a Phase II
clinical trial demonstrating that NBI-34060 is a robust sedative hypnotic as
demonstrated by a highly statistically significant and clinically relevant
effect in inducing sleep when compared to placebo. These data confirm that
NBI-34060 is safe and effective in helping subjects with transient insomnia
achieve rapid sleep induction without next day residual effects associated with
most currently marketed sleep hypnotics.
The results indicate statistical significance was reached for the
primary clinical endpoint (Latency to Persistent Sleep-LPS), the required
regulatory endpoint for approval. In this study, which enrolled 228 transient
insomnia subjects, those subjects receiving NBI-34060 the mean time to LPS was
16 minutes compared to 34 minutes in the placebo group (p less than .001). In
addition, the data indicated that a majority of subjects in the treated group
fell asleep within 9 minutes as indicated by the median time to LPS as compared
to 23 minutes in the placebo group.
The Phase II clinical trial was a randomized-double blinded placebo
controlled, multi-center Phase II clinical trial of NBI-34060 in 228 subjects
with transient insomnia. The study was conducted in a sleep laboratory setting
employing objective polysomnographic assessments. The safety findings indicate
that NBI-34060 was safe and well tolerated at doses up to 30 mg. There were no
serious adverse events reported in this clinical trial. Overall there was a low
incidence of adverse effects, which was comparable to that observed in the
placebo group with no residual next day hangover effects.
Neurocrine is moving rapidly to expand clinical development of
NBI-34060 and plans to initiate a dose-response, randomized-placebo controlled,
multi-center Phase II study in over 550 subjects in the 2nd Quarter 2000. These
studies will be conducted in subjects with chronic insomnia and will include
other subject sub-groups. Neurocrine is also designing a large scale pivotal
Phase III program in more than 1500 subjects scheduled to begin in late 2000.
In addition at an investor conference in early December,
Florian Holsboer, M.D., Ph.D. of the Max Planck Institute for Psychiatry in
Germany presented preliminary safety and efficacy results on 20 subjects in an
open-label Phase II study with a CRF receptor antagonist (R121919/NBI-30775).
Neurocrine and Janssen Pharmaceutica are developing this compound for
anxiety/depression. Results suggests an improvement in widely accepted measures
of anxiety and depression. Comprehensive findings from this trial will be
finalized in early 2000.
On December 21, 1999, the Company signed a definitive agreement with
Paladin Labs Inc. (Vancouver: PLB) for the sale of exclusive worldwide rights to
Neurocrine's neurosteroid program as well as the sale of its Canadian affiliate,
Neuroscience Pharma, Inc. Under the terms of the Agreement, Neurocrine will
receive approximately $2.0 million and will receive royalties on worldwide
product sales.
On December 25, 1999 Neurocrine Biosciences, Inc. signed an exclusive
agreement with Taisho Pharmaceutical Co. LTD providing Taisho an option to
obtain European and Asian commercialization rights for Neurocrine's altered
peptide ligand (APL) for diabetes (NBI-6024). Neurocrine would retain all rights
in the rest of the world, including North America. The resulting collaboration
could be valued at up to $45 million; consisting of licensing and option fees,
payments for certain development and regulatory milestones, and reimbursement of
50% of the worldwide development expenses. In addition, Neurocrine would receive
royalties on product sales in Europe and Japan.
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RISK FACTORS
This Prospectus contains forward-looking statements that involve risks and
uncertainties. Actual results could differ materially from those discussed in
the forward-looking statements, including those set forth below and elsewhere in
this Prospectus. Words such as "expects," "anticipates," "intends," "plans,"
"believes," "seeks," "estimates" and similar expressions or variations of such
words are intended to identify forward-looking statements, but are not the
exclusive means of identifying forward-looking statements. Additionally,
statements concerning future matters such as the development of new services,
technology enhancements, possible changes in legislation and other statements
regarding matters that are not historical are forward-looking statements.
Although forward-looking statements herein reflect the good faith judgment of
the Company's management, such statements can only be based on facts and factors
currently known by the Company. Consequently, forward-looking statements are
inherently subject to risks and uncertainties, and actual results and outcomes
may differ materially from results and outcomes discussed in the forward-looking
statements. Factors that could cause or contribute to such differences in result
and outcomes include without limitation those discussed below as well as those
discussed elsewhere herein. Readers are urged not to place undue reliance on
these forward-looking statements, which speak only as of the date of this
Propectus. The Company's business, results of operations, and financial
condition are, and will continue to be, subject to the following risks:
All of the Company's Product Candidates are at an Early Stage of
Development. All of our product candidates are in research or development. We
have not requested or received regulatory approval to commercialize any product
from the United States Food and Drug Administration ("FDA") or any other
regulatory body. Any products which may result from our research and development
programs are not expected to be commercially available for the foreseeable
future, if at all.
The development of new pharmaceutical products is highly uncertain and
subject to a number of significant risks. Potential products that appear to be
promising at early stages of development may not reach the market for a number
of reasons. Such reasons include the possibilities that the potential products
will:
o be found ineffective or cause harmful side effects during preclinical
testing or clinical trials
o fail to receive necessary regulatory approvals
o be difficult to manufacture on a large scale
o be uneconomical or fail to achieve market acceptance
o be precluded from commercialization by proprietary rights of third parties
Our product candidates require significant additional research and
development efforts. We cannot guarantee that:
o regulatory authorities will approve the continued development of the our
development candidates
o clinical development of any of our development candidates will successfully
proceed through clinical trials
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o later stage clinical trials of our development candidates will show that
they are effective in treatment humans
o required regulatory approvals will be obtained on a timely basis, if at all
o any products for which approval is obtained will be approved for the
indications requested or be commercially successful
If any of these potential problems occurs, our business would be materially
affected and the price of our stock could decline.
The Company is Dependence on Strategic Alliances. We are dependent upon
our corporate partners to provide adequate funding for certain of our programs.
Under these arrangements, the our corporate partners are responsible for (i)
selecting compounds for subsequent development as drug candidates, (ii)
conducting preclinical testing and clinical trials and obtaining required
regulatory approvals for such drug candidates, and/or (iii) manufacturing and
commercializing any resulting drugs. Failure of our partners to select a
compound we have discovered for subsequent development into marketable products,
gain the requisite regulatory approvals or successfully commercialize products
would have a material adverse effect on our business, financial condition and
results of operations. Our strategy for development and commercialization of
certain of our products is dependent upon entering into additional arrangements
with research collaborators, corporate partners and others, and upon the
subsequent success of these third parties in performing their obligations. There
can be no assurance that we will be able to enter into additional strategic
alliances on favorable terms, or at all. If we fail to enter into additional
strategic alliances, it would have a material adverse effect on our business,
financial condition and results of operations.
We cannot control the amount and timing of resources that our corporate
partners devote to our partnered programs or potential products. If any of our
corporate partners breach or terminate their agreements with us or otherwise
fail to conduct their collaborative activities in a timely manner, the
preclinical testing, clinical development or commercialization of product
candidates will be delayed, and we will be required to devote additional
resources to product development and commercialization, or terminate certain
development programs. Our strategic alliances with Janssen, Lilly, and
Wyeth-Ayerst are subject to termination by Janssen, Lilly, or Wyeth-Ayerst,
respectively. There can be no assurance that Janssen, Lilly, or Wyeth-Ayerst
will not elect to terminate its strategic alliance with us prior to its
scheduled expiration. In addition, if our corporate partners effect a merger
with a third party, there can be no assurance that the strategic alliances will
not be terminated or otherwise materially adversely affected. The termination of
any current or future strategic alliances could have a material adverse effect
on our business, financial condition and results of operations. Our corporate
partners may develop, either alone or with others, products that compete with
the development and marketing of our products. Competing products, either
developed by our corporate partners or to which our corporate partners have
rights, may result in their withdrawal of support with respect to all or a
portion of the our technology, which would have a material adverse effect on our
business, financial condition and results of operations. There can be no
assurance that disputes will not arise in the future with respect to the
ownership of rights to any products or technology developed with corporate
partners. These and other possible disagreements with our corporate partners
could lead to delays in the collaborative research, development or
commercialization of certain of our product candidates or could require or
result in litigation or arbitration, which would be time-consuming and
expensive, and would have a material adverse effect on our business, financial
condition and results of operations.
The Company has no Manufacturing Capabilities and Relies on Third Party
Contractors. We have in the past utilized, and intend to continue to utilize,
third party manufacturing for the production of material for use in our clinical
trials and for the potential commercialization of our future products. We have
no experience in manufacturing products for commercial purposes and do not have
any manufacturing facilities. Consequently, we are solely dependent on contract
manufacturers for all production of products for development and commercial
purposes. In the event that we are unable to obtain or retain third-party
manufacturing, we will not be able to commercialize our products as planned. The
manufacture of our products for clinical trials and commercial purposes is
subject to cGMP regulations promulgated by the FDA. No assurance can be given
that our third-party manufacturers will comply with cGMP regulations or other
regulatory requirements now or in the future. Our current dependence upon third
parties for the manufacture of our products may adversely affect our profit
margin, if any, on the sale of our future products and our ability to develop
and deliver products on a timely and competitive basis.
-8-
The Company has no Marketing or Sales Force; The Company's Products
will be Subject to Sales and Pharmaceutical Pricing Controls. We have retained
certain marketing or co-promotion rights in North America to our products under
development, and we plan to establish its own North American marketing and sales
organization. We currently have no experience in marketing or selling
pharmaceutical products and we do not have a marketing and sales staff. In order
to achieve commercial success for any product candidate approved by the FDA, we
must either develop a marketing and sales force or enter into arrangements with
third parties to market and sell our products. There can be no assurance that we
will successfully develop such experience or that we will be able to enter into
marketing and sales agreements with others on acceptable terms, if at all. If we
develop our own marketing and sales capabilities, we will compete with other
companies that currently have experienced and well funded marketing and sales
operations. To the extent that we enter into co-promotion or other marketing and
sales arrangements with other companies, any revenues we receive will be
dependent on the efforts of others, and there can be no assurance that such
efforts will be successful.
Our business may be materially adversely affected by the continuing efforts
of government and third party payers to contain or reduce the costs of health
care through various means. For example, in certain foreign markets, pricing or
profitability of prescription pharmaceuticals is subject to government control.
In the United States, there have been, and we expect that there will continue to
be, a number of federal and state proposals to implement similar government
control in such jurisdictions. In addition, an increasing emphasis on managed
care in the United States has put, and will continue to put, pressure on
pharmaceutical pricing. Such initiatives and proposals, if adopted, could
decrease the price that we receive for any products we may develop and sell in
the future, and thereby have a material adverse effect on our business,
financial condition and results of operations. Further, to the extent that such
proposals or initiatives have a material adverse effect on other pharmaceutical
companies that may be corporate partners or prospective corporate partners for
certain our potential products, our ability to commercialize our potential
products may be materially adversely affected.
Our ability to commercialize pharmaceutical products may depend in part on
the extent to which reimbursement for the costs of such products and related
treatments will be available from government health administration authorities,
private health insurers and other third-party payers. Significant uncertainty
exists as to the reimbursement status of newly approved health care products,
and third-party payers are increasingly challenging the prices charged for
medical products and services. There can be no assurance that any third-party
insurance coverage will be available to patients for any products we develop.
Government and other third-party payors are increasingly attempting to contain
health care costs by limiting both coverage and the level of reimbursement for
new therapeutic products, and by refusing, in some cases, to provide coverage
for uses of approved products for disease indications for which the FDA has not
granted marketing approval. If government and third party payors do not provide
adequate coverage and reimbursement levels for our products, the market
acceptance of our products would be materially adversely affected.
The Company Faces Intense Competition. The biotechnology and
pharmaceutical industries are subject to rapid and intense technological change.
We face, and will continue to face, competition in the development and marketing
of its product candidates from academic institutions, government agencies,
research institutions and biotechnology and pharmaceutical companies.
Competition may arise from other drug development technologies, methods of
preventing or reducing the incidence of disease, including vaccines, and new
small molecule or other classes of therapeutic agents. There can be no assurance
that developments by others will not render our product candidates or
technologies obsolete or noncompetitive.
-9-
We are developing products for the treatment of anxiety disorders, which
will compete with well-established products in the benzodiazepine class,
including Valium, marketed by Hoffman-La Roche, Inc., and depression, which will
compete with well-established products in the anti-depressant class, including
Prozac, marketed by Eli Lilly & Co., Zoloft marketed by Pfizer and Paxil
marketed by Smith Kline Beecham. Certain technologies under development by other
pharmaceutical companies could result in treatments for these and other diseases
and disorders. In addition, a number of companies are conducting research on
molecules to block CRF to treat anxiety and depression.
We are also developing a non-benzodiazepine GABA-A agonist for the
treatment of Insomnia. Ambien (Zolpidem) and Sonata (Zaleplon) are
non-benzodiazepine GABA-A agonists currently marketed for the treatment of
Insomnia by Searle/Synthelabo and American Home Products, respectively.
Guilford Pharmaceuticals, Inc. has developed Gliadel which has been
approved for use as an adjunct to surgery to prolong survival in patients with
recurrent multiforme glioblastoma for whom surgical resection is indicated and
will compete with our IL-4 Fusion toxin product NBI-3001. Temozolomide marketed
by Schering Plough may also compete with NBI-3001.
Products that may be competitive with NBI-5788 APL for Multiple Sclerosis
include Betaseron and Avonex, similar forms of beta-interferon marketed by
Berlex BioSciences and Biogen, Inc., respectively. Copaxone, a peptide polymer
marketed by Teva, has also been approved for the marketing in the United States
and certain other countries for the treatment of relapsing remitting multiple
sclerosis.
There are a number of competitors to products in our research pipeline.
Tacrine, marketed by Warner-Lambert Co., and Aricept, marketed by Pfizer Inc,
have been approved for the treatment of Alzheimer's dementia. Sales of these
drugs may reduce the available market for any product we develop for these
indications. Other biotechnology and pharmaceutical companies are developing
compounds to treat obesity. In the event that one or more of these products
and/or programs are successful, the market for our products may be reduced or
eliminated.
In addition, if we receive regulatory approvals for our products,
manufacturing efficiency and marketing capabilities are likely to be significant
competitive factors. At the present time, we have no commercial manufacturing
capability, sales force or marketing experience. In addition, many of our
competitors and potential competitors have substantially greater capital
resources, research and development resources, manufacturing and marketing
experience and production facilities than we do. Many of these competitors also
have significantly greater experience than we do in undertaking preclinical
testing and clinical trials of new pharmaceutical products and obtaining FDA and
other regulatory approvals.
The Company's Success is Dependent on Patents and Proprietary Rights.
Our success will depend on our ability to obtain patent protection for our
products, preserve our trade secrets, prevent third parties from infringing upon
our proprietary rights, and operate without infringing upon the proprietary
rights of others, both in the United States and internationally. Because of the
substantial length of time and expense associated with bringing new products
through the development and regulatory approval processes in order to reach the
marketplace, the pharmaceutical industry places considerable importance on
obtaining patent and trade secret protection for new technologies, products and
processes. Accordingly, we intend to seek patent protection for our proprietary
technology and compounds. There can be no assurance as to the success or
timeliness in obtaining any such patents, that the breadth of claims obtained,
if any, will provide adequate protection of our proprietary technology or
compounds, or that we will be able to adequately enforce any such claims to
protect its proprietary technology and compounds. Since patent applications in
the United States are confidential until the patents issue, and publication of
discoveries in the scientific or patent literature tend to lag behind actual
discoveries by several months, we cannot be certain that we were the first
creators of inventions covered by pending patent applications or that we were
the first to file patent applications for such inventions. Litigation, which
could result in substantial cost, may be necessary to enforce our patent and
license rights.
-10-
The degree of patent protection afforded to pharmaceutical inventions
is uncertain and any patents that may issue with regard to our potential
products will be subject to this uncertainty. There can be no assurance that
competitors will not develop competitive products outside the protection that
may be afforded by the claims of our patents. Other potential products that we
may develop may be novel and therefore would not be covered by composition of
matter patent claims. In addition, we are aware of a number of patent
applications, both domestic and European, relating to neurological compounds,
and in particular CRF receptor antagonist potential therapeutics, that have been
filed by or are controlled by other entities, including our competitors and
potential competitors. There can be no assurance that our potential products can
be commercialized without a license to any patents which may issue from such
applications.
We may be required to obtain licenses to patents or proprietary rights
of others. As the biotechnology industry expands and more patents are issued,
the risk increases that our potential product may require licenses of third
party technologies. No assurance can be given that any licenses required under
any patents or proprietary rights of third parties would be made available on
acceptable terms, or at all. If we do not obtain such licenses, we could
encounter delays in product introductions while we attempts to design around
such patents, or we could find that the development, manufacture or sale of
products requiring such licenses could be foreclosed. Litigation may be
necessary to defend against or assert such claims of infringement to enforce our
issued patents and to protect our trade secrets or know-how, or to determine the
scope and validity of the proprietary rights of others. In addition,
interference proceedings declared by the United States Patent and Trademark
Office may be necessary to determine the priority of inventions with respect to
our patent applications or those of our licensors. Litigation or interference
proceedings could result in substantial costs to and diversion of effort by, and
may have a material adverse impact on, us. In addition, there can be no
assurance that our efforts would be successful.
We also rely upon unpatented trade secrets and improvements, unpatented
know-how and continuing technological innovation to develop and maintain our
competitive position, which we seek to protect, in part, by confidentiality
agreements with our commercial partners, collaborators, employees and
consultants. We also have invention or patent assignment agreements with our
employees and certain, but not all, commercial partners and consultants. There
can be no assurance that a person not bound by an invention assignment agreement
will not develop relevant inventions. There can be no assurance that binding
agreements will not be breached, that we will have adequate remedies for any
breach, or that our trade secrets will not otherwise become known or be
independently discovered by competitors.
As is commonplace in the biotechnology industry, we employ individuals
who were previously employed at other biotechnology or pharmaceutical companies,
including our competitors or potential competitors. To the extent our employees
are involved in research areas at the Company which are similar to those areas
in which they were involved at their former employer, we may be subject to
claims that such employees and/or the Company have inadvertently or otherwise
used or disclosed the alleged trade secrets or other proprietary information of
the former employers. Litigation may be necessary to defend against such claims,
which could result in substantial costs and be a distraction to management, and
which may have a material adverse effect on the Company, even if we are
successful in defending such claims.
The Company and its Products are Subject to Strict Government
Regulation. Regulation by government authorities in the United States and
foreign countries is a significant factor in the development, manufacture and
marketing of our proposed products and in our ongoing research and product
development activities. All of our products will require regulatory approval by
government agencies prior to commercialization. In particular, human therapeutic
products are subject to rigorous preclinical testing and clinical trials and
other approval procedures of the FDA and similar regulatory authorities in
foreign countries. Various federal and state statutes and regulations also
govern or influence testing, manufacturing, safety, labeling, storage and
record-keeping related to such products and their marketing. The process of
obtaining these approvals and the subsequent substantial compliance with
appropriate federal and state statutes and regulations require the expenditure
of substantial time and financial resources. If we fail or our collaborators or
licensees fail to obtain, or encounter delays in obtaining or maintaining,
regulatory approvals it could adversely affect the marketing of any products we
develop, our ability to receive product or royalty revenues and our liquidity
and capital resources.
-11-
Preclinical testing is generally conducted in laboratory animals to
evaluate the potential safety and the efficacy of a product. The results of
these studies are submitted to the FDA as a part of an IND, which must be
approved before clinical trials in humans can begin. Typically, clinical
evaluation involves a time consuming and costly three-phase process.
Phase I Clinical trials are conducted with a small
number of subjects to determine the early safety
profile, the pattern of drug distribution and
metabolism.
Phase II Clinical trials are conducted with groups of
patients afflicted with a specific disease in
order to determine preliminary efficacy, optimal
dosages and expanded evidence of safety.
Phase III Large-scale, multi-center, comparative
trials are conducted with patients afflicted
with a target disease in order to provide enough
data to demonstrate with substantial evidence
the efficacy and safety required by the FDA.
The FDA closely monitors the progress of each of the three phases of
clinical trials and may, at its discretion, re-evaluate, alter, suspend or
terminate the testing based upon the data which have been accumulated to that
point and its assessment of the risk/benefit ratio to the patient.
The results of preclinical testing and clinical trials are submitted to
the FDA in the form of an NDA or BLA for approval to commence commercial sales.
In responding to an NDA or BLA, the FDA may grant marketing approval, request
additional information or deny the application if the FDA determines that the
application does not satisfy its regulatory approval criteria. There can be no
assurance that approvals will be granted on a timely basis (or at all). If
approved, there can be no assurance that such approval will include acceptable
labeling to adequately commercialize the product. Similar regulatory procedures
must also be complied with in countries outside the United States.
The results from preclinical testing and early clinical trials may not
be predictive of results obtained in later clinical trials. As a result, there
can be no assurance that clinical trials we conduct or our corporate partners
conduct will demonstrate sufficient safety and efficacy to obtain the requisite
regulatory approvals or will result in marketable products or marketable
indications. In addition, late stage clinical trials are often conducted with
patients having the most advanced stages of disease. During the course of
treatment, these patients can die or suffer other adverse medical effects for
reasons that may not be related to the pharmaceutical agent being tested but
which can nevertheless adversely affect clinical trial results. A number of
companies in the biotechnology and pharmaceutical industries have suffered
significant setbacks in advanced clinical trials, even after promising results
in earlier trials. If the our drug candidates are not shown to be safe and
effective in clinical trials, the resulting delays in developing other compounds
and conducting related preclinical testing and clinical trials, as well as the
potential need for additional financing, would have a material adverse effect on
our business, financial condition and results of operations.
The rate of completion of clinical trials we or our corporate partners
conduct may be delayed by many factors, including slower than expected patient
recruitment or unforeseen safety issues. Any delays in, or termination of, the
clinical trials for our products would have a material adverse effect on our
business, financial condition and results of operations. There can be no
assurance that we or our corporate partners will be permitted by regulatory
authorities to undertake clinical trials for our products or, if such trials are
conducted, that any of our product candidates will prove to be safe and
efficacious or will receive regulatory approvals.
-12-
There Can Be No Assurance that the Company's Products will Achieve
Market Acceptance. The commercial success of our products that are approved for
marketing will depend upon their acceptance by the medical community as safe and
effective. Factors we believe will materially affect the market acceptance of
our products are timing of receipt of marketing approvals, safety and efficacy
of the product, emergence of equivalent or superior products and cost
effectiveness of the product
The Company will Require Additional Funding. We will require
substantial additional funding in order to continue our research and product
development programs, including preclinical testing and clinical trials of our
product candidates, for operating expenses, and for the pursuit of regulatory
approvals for product candidates. We may require additional funding for
establishing manufacturing and marketing capabilities in the future. We believe
that our existing capital resources, together with interest income and future
payments due under strategic alliances, will be sufficient to satisfy our
current and projected funding requirements through ---. However, such resources
might be insufficient to conduct research and development programs as planned.
Our future capital requirements will depend on many factors, including:
o continued scientific progress in its research and development programs, o
the magnitude of our R&D programs,
o progress with preclinical testing and clinical trials,
o the time and costs involved in obtaining regulatory approvals,
o the costs involved in filing and prosecuting patent applications and
enforcing patent claims,
o competing technological and market developments,
o the establishment of additional strategic alliances,
o the cost of manufacturing facilities and of commercialization activities
and arrangements, and
o the cost of product in-licensing and any possible acquisitions.
Our cash reserves and other liquid assets together with funding that
may be received under our strategic alliances, and interest income earned
thereon, might be inadequate to satisfy our capital and operating requirements.
We intend to seek additional funding through strategic alliances, and
may seek additional funding through public or private sales of our securities,
including equity securities. In addition, we have obtained equipment leases and
may continue to pursue opportunities to obtain additional debt financing in the
future. However, additional equity or debt financing might not be available on
reasonable terms, if at all. Any additional equity financings would be dilutive
to our stockholders. If adequate funds are not available, we may be required to
curtail significantly one or more of our research and development programs
and/or obtain funds through arrangements with corporate partners or others that
may require us to relinquish rights to certain of our technologies or product
candidates.
The Company Depends on Key Management and Employees. We are highly
dependent on the principal members of our management and scientific staff. The
loss of any of these people could impede the achievement of our development
objectives. Furthermore, recruiting and retaining qualified scientific personnel
to perform research and development work in the future will also be critical to
the our success. We might be unable to attract and retain personnel on
acceptable terms given the competition among biotechnology, pharmaceutical and
health care companies, universities and non-profit research institutions for
experienced scientists. In addition, we rely on members of our Scientific
Advisory Board and a significant number of consultants to assist us in
formulating our research and development strategy. All of the our consultants
and members of the Scientific Advisory Board are employed by employers other
than Neurocrine. They may have commitments to, or advisory or consulting
agreements with, other entities that may limit their availability to us.
-13-
Potential Product Liability Exposure and Limited Insurance Coverage.
The use of any of our potential products in clinical trials, and the sale of any
approved products, may expose us to liability claims. These claims might be made
directly by consumers, health care providers, pharmaceutical companies or others
selling such products. We have obtained limited product liability insurance
coverage for our clinical trials in the amount of $5 million per occurrence and
$5 million in the aggregate. We intend to expand or insurance coverage to
include the sale of commercial products if marketing approval is obtained for
products in development. However, insurance coverage is becoming increasingly
expensive, and we might not be able to maintain insurance coverage at a
reasonable cost or in sufficient amounts to protect us against losses due to
liability. We may be unable to obtain commercially reasonable product liability
insurance for any products approved for marketing. A successful product
liability claim or series of claims brought against us could have a material
adverse effect on our business and cause our stock price to fall.
The Company's Activities Involve Hazardous Materials. Our research
activities involve the controlled use of hazardous materials. We can not
eliminate the risk of accidental contamination or injury from these materials.
In the event of an accident, we may be held liable for any resulting damages
which may materially and adversely affect our financial condition and results of
operations.
The Price of the Company's Common Stock is Volatile. The market prices
for securities of biotechnology and pharmaceutical companies have historically
been highly volatile, and the market has from time to time experienced
significant price and volume fluctuations that are unrelated to the operating
performance of particular companies. The following factors may have an adverse
effect on our stock price:
o fluctuations in operating results,
o announcements of technological innovations or new therapeutic products by
us or others,
o clinical trial results,
o developments concerning strategic alliance agreements,
o government regulation,
o developments in patent or other proprietary rights,
o public concern as to the safety of our drugs,
o future sales of substantial amounts of our Common Stock by existing
stockholders,
o comments by securities analysts and general market conditions.
The realization of any of the risks described in these "Risk Factors"
could cause our stock price to fall dramatically.
Potential Adverse Effect of Anti-takeover Provisions. Our Certificate
of Incorporation provides for staggered terms for the members of our Board of
Directors and does not provide for cumulative voting in the election of
directors. In addition, our Board of Directors has the authority, without
further action by the stockholders, to fix the rights and preferences of, and
issue shares of, Preferred Stock. In April 1997, we adopted a Stockholder Rights
Plan, commonly referred to as a "Poison Pill". Further, we are subject to
Section 203 of the Delaware General Corporation Law which, subject to certain
exceptions, restricts certain transactions and business combinations between a
corporation and a stockholder owning 15% of more of the corporation's
outstanding voting stock for a period of three years from the date the
stockholder becomes an interested stockholder. The Stockholder Rights Plan,
staggered board terms, lack of cumulative voting, Preferred Stock provisions and
other provisions of the our charter and Delaware corporate law may discourage
certain types of transactions involving an actual or potential change in control
of the Company.
-14-
Impact of Year 2000. The Year 2000 Issue is the result of computer
programs being written using two digits rather than four to define the
applicable year. Any of our computer programs or hardware that have
date-sensitive software or embedded chips may recognize a date using "00" as the
year 1900 rather than the year 2000. This could result in a system failure or
miscalculations causing disruptions of operations, including, among other
things, a temporary inability to process transactions, send invoices, or engage
in similar normal business activities.
Lack of Liquidity. Until registered under the Registration Statement,
the Shares will be restricted securities under federal and applicable state
securities laws and, as such, may not be transferred, sold or otherwise disposed
of, except as permitted under federal and applicable state securities laws,
pursuant to registration thereunder or exemption therefrom. Prospective
investors should be prepared to hold, and bear the economic risk of an
investment in, the Shares for an indefinite period. In addition, an Investor
should be able to withstand a total loss of its investment. The rights of
Investors to register the Common Stock is subject and subordinate to certain
registration rights previously granted by the Company to other parties. As a
result, under certain circumstances, the ability of Investors to register the
Common Stock may be delayed.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of common stock
by the selling shareholder in this offering.
SELLING SHAREHOLDERS
On December 22, 1999, the Company agreed to sell 2,327,777 shares of
Common Stock of the Company upon meeting certain closing conditions. In
connection with this sale, we agreed to file a registration statement with the
SEC covering the resale of the shares issued to each selling shareholder and
agreed to indemnify each selling shareholder against claims made against them
arising out of, among other things, statements made in this registration
statement. We have agreed to cause this registration statement to remain
effective until (a) all the common stock has been re-sold or (b) two years after
the closing of the transactions contemplated in the common stock purchase
agreements, whichever is earlier.
The following table provides certain information with respect
to shares of common stock held and to be offered under this prospectus from time
to time by each selling shareholder. Because the selling shareholders may sell
all or part of their common stock pursuant to this prospectus, and this offering
is not being underwritten on a firm commitment basis, only an estimate can be
given as to the number and percentage of shares of common stock that will be
held by each selling shareholder upon termination of this offering. See "Plan of
Distribution."
The Company is unaware of any material relationship between any of the
selling shareholders and us in the past three years other than as a result of
the ownership of the shares of common stock.
-15-
- ------------------------------------------------------------------------------------------------------------
Shares owned Shares sold Shares and
before the in the percentage owned
Name Offering Offering after the Offering
- ------------------------------------------------------------------------------------------------------------
Biotech Target S.A. 750,000 500,000 250,000 (1.2%)
Deutsche Vermogensbildungsgesellschaft mbH 600,000 600,000 - ( * )
Deutsche Asset Mangement Investmentgesellschaft mbH 300,000 300,000 - ( * )
SEB Lakemedelsfund 490,000 385,000 105,000 ( * )
SEB Private Bank S.A., Luxmeborg 85,000 65,000 20,000 ( * )
Activest Management SA 327,000 277,777 50,000 ( * )
DWS Investment GmbH 435,000 200,000 235,000 (1.1%)
- ------------------
<FN>
o Less than 1.00% *
o There were 21,586,717 shares outstanding after the offering.
</FN>
PLAN OF DISTRIBUTION
The Company is registering the shares of common stock offered by the
selling shareholders pursuant to contractual registration rights contained in
the common stock purchase agreements. The selling shareholders may sell their
shares on the Nasdaq National Market, in private transactions or in a
combination of such methods of sale. The selling shareholders may sell their
shares at market prices prevailing at the time of sale, at prices related to
such prevailing market prices or at negotiated or at fixed prices. For their
shares, the selling shareholders will receive the purchase price of the shares
sold less any agents' commissions or underwriters' discounts and other related
expenses. If the selling shareholders sell shares to or through brokers or
dealers, they may pay the brokers or dealers compensation in the form of
discounts, concessions or commissions. We will not receive any proceeds from the
sale of shares by the selling shareholders.
The selling shareholders and any persons who participate in the sale of
the shares may be deemed to be "underwriters" as defined in the Securities Act,
and any discounts, commissions or concessions received by them and any provided
pursuant to the sales of shares by them might be deemed underwriting discounts
and commissions under the Securities Act.
In order to comply with the securities laws of certain states, if
applicable, the common stock may be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
common stock may not be sold unless it has been registered or qualified for sale
or an exemption from registration or qualification requirements is available and
is complied with.
We have agreed in the common stock purchase agreements to register the
shares of our common stock received by the selling shareholders pursuant to the
common stock purchase agreements under applicable federal and state securities
laws under certain circumstances and at certain times. Pursuant to the common
stock purchase agreements, we have filed a registration statement related to the
shares offered hereby and have agreed to keep such registration statement
effective until (a) all the common stock has been re-sold or (b) two years after
the closing of the transactions contemplated in the Common Stock Purchase
Agreement, whichever is earlier.
We will pay for the expenses incurred in this offering.
-16-
LEGAL MATTERS
The validity of the Shares offered hereby will be passed upon by Latham
& Watkins, counsel to the Company.
EXPERTS
The Company's financial statements appearing in its Annual Report on
Form 10-K for the year ended December 31, 1998, have been audited by Ernst &
Young LLP, independent auditors, as set forth in their report thereon included
therein and incorporated herein by reference. Such financial statements are
incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). Accordingly, we file
annual, quarterly and special reports, proxy statements and other information
with the Securities and Exchange Commission (the "SEC"). You may read and copy
any document that we have filed 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. You can
obtain copies of our SEC filings at prescribed rates from the SEC Public
Reference Section at 450 Fifth Street, N.W., Washington, D.C. 20549. Our SEC
filings are also available to you free of charge at the SEC's web site at
http://www.sec.gov.
Shares of our common stock are traded as "National Market Securities"
on the Nasdaq National Market. Documents we have filed can be inspected at the
offices of the National Association of Securities Dealers, Inc., Reports
Section, 1735 K Street, N.W., Washington, D.C. 20006.
You can read and print press releases and additional information about
us, free of charge, at our web site at http://www.neurocrine.com.
This Prospectus is a part of a Registration Statement on Form S-3
(together with all amendments and exhibits, referred to as the "Registration
Statement") filed by us with the SEC under the Securities Act of 1993, as
amended. This Prospectus does not contain all of the information set forth in
the Registration Statement, certain parts of which are omitted in accordance
with the rules and regulations of the SEC. For further information with respect
to Neurocrine and the shares of common stock offered hereby, please refer to the
Registration Statement. The Registration Statement may be inspected at the
public reference facilities maintained by the SEC at the addresses set forth
above. Statements in this Prospectus about any document filed as an exhibit are
not necessarily complete and, in each instance, you should refer to the copy of
such document filed with the SEC. Each such statement is qualified in its
entirety by such reference.
INFORMATION INCORPORATED BY REFERENCE
The SEC allows us to "incorporate by reference" the information filed
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 information that we have filed
later with the SEC will automatically update and supersede previously filed
information, including information contained in this Prospectus.
The Company incorporates by reference the documents listed below and
any future filings it will make with the SEC under Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act until this offering has been completed:
-17-
(1) Annual Report on Form 10-K for the fiscal year ended December 31,1998
(File No. 000-22705)
(2) Quarterly Report on Form 10-Q for the quarters ended March 31, 1999,
June 30, 1999 and September 30, 1999;
(3) Proxy Statement for the Annual Meeting of Stockholders held on May 21,
1999, filed with the SEC on April 23, 1999; and
(4) The description of our Common Stock contained in the Registration
Statement on Form S-1, (Registration No. 333-03172), as amended, which
was declared effective by the SEC on May 22, 1996.
You may request a free copy of these documents by writing to Investor
Relations, Neurocrine Biosciences, Inc., 10555 Science Center Drive, San Diego,
CA 92121, or by calling Neurocrine's Investor Relations department at (858)
658-7600.
You should rely only on the information incorporated by reference or
provided in this Prospectus or a prospectus supplement or amendment. The Company
has not authorized anyone to provide you with different information. The Company
is not making an offer of these securities in any state where the offer is not
permitted. Also, this Prospectus does not offer to sell any securities other
than the securities covered by this Prospectus. You should not assume that the
information in this Prospectus or a prospectus supplement or amendment is
accurate as of any date other than the date on the front of the document.
-18-
======================================================= ====================================================
The Company has not authorized any person NEUROCRINE BIOSCIENCES, INC.
to give any information or to make any
representations 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 seeking an offer to buy, 2,327,777 Shares
any security other than the Shares offered hereby.
This Prospectus is not an offer to sell, nor is it of
seeking an offer to buy, these Shares in any
jurisdiction in which the offer or sale is Common Stock
prohibited. The information in this Prospectus is
complete and accurate as of its date, but the
information may change after that date.
TABLE OF CONTENTS PROSPECTUS
Page
Summary........................................ 3
Risk Factors................................... 4
Business....................................... 15
Use of Proceeds................................ 15
Selling Stockholders........................... 15
Plan of Distribution........................... 16
Legal Matters.................................. 17
Experts........................................ 17
Where You Can Find More Information............ 17
Information Incorporated by Reference.......... 18 January __, 2000
======================================================= ====================================================
-19-
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The Company and Selling Shareholders will pay all expenses incident to
the offering and sale to the public of the shares being registered other than
any commissions and discounts of underwriters, dealers or agents and any
transfer taxes. Such expenses are set forth in the following table. All of the
amounts shown are estimates except the SEC registration fee and the Nasdaq
National Market listing fee.
SEC registration fee..........................................$ 18,443
NASDAQ National Market listing fee..............................17,500
Legal fees and expenses.........................................75,000
Accounting fees and expenses....................................10,000
Miscellaneous expenses..........................................25,000
Total..............................................$ 145,943
Item 15. Indemnification of Directors and Officers.
Section 145 of the General Corporation Law of the State of Delaware
provides that a corporation has the power to indemnify a director, officer,
employee or agent of the corporation and certain other persons serving at the
request of the corporation in related capacities against amounts paid and
expenses incurred in connection with an action or proceeding to which he or she
is or is threatened to be made a party by reason of such position, if such
person has acted in good faith and in a manner he or she reasonably believed to
be in or not opposed to the best interests of the corporation, and, in any
criminal proceeding, if such person had no reasonable cause to believe his or
her conduct was unlawful; provided that, in the case of actions brought by or in
the right of the corporation, no indemnification may be made with respect to any
matter as to which such person has been adjudged to be liable to the corporation
unless and only to the extent that the adjudicating court determines that such
indemnification is proper under the circumstances.
The Registrant's Certificate of Incorporation provides that no director
will be personally liable to the Registrant or its stockholders 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 the Registrant or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) for authorizing the
payment of a dividend or repurchase of stock or (iv) for any transaction in
which the director derived an improper personal benefit.
The Registrant's by-laws provide that the Registrant must indemnify any
person who was or is a party 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 the Registrant) by reason of the fact that he or she is or was a
director or officer of the Registrant, or that such director or officer is or
was serving at the request of the Registrant as a director, officer, employee or
agent of another corporation, partnership, joint venture trust or other
enterprise (collectively "Agent"), against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement (if such settlement is approved
in advance by the Registrant, which approval may not be unreasonably withheld)
actually and reasonably incurred by him or her in connection with such action,
suit or proceeding if he or she acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
Registrant, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, will not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
or she reasonably believed to be in or not opposed to the best interests of the
Registrant, and with respect to any criminal action or proceeding, had
reasonable cause to believe that his or her conduct was unlawful.
Page II-1
The Registrant's by-laws provide further that the Registrant must
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action or suit by or in the right of the
Registrant to procure a judgment in its favor by reason of the fact that he or
she is or was an Agent against expenses (including attorneys' fees) actually and
reasonably incurred by him or her in connection with the defense or settlement
of such action or suit if he or she acted in good faith and in a manner he or
she reasonably believed to be in or not opposed to the best interests of the
Registrant, provided that no indemnification may be made in respect of any
claim, issue or matter as to which such person has been adjudged to be liable to
the Registrant unless and only to the extent that the Delaware Court of Chancery
or the court in which such action or suit was brought determines upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Delaware Court of Chancery or such other
court deems proper.
Pursuant to its by-laws, the Registrant has the power to purchase and
maintain a directors and officers liability policy to insure its officers and
directors against certain liabilities.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling the
registrant pursuant to the foregoing provisions, the registrant has been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable.
Item 16. Exhibits.
Please see Index of Exhibits on Page 24 below.
Item 17. Undertakings.
A. Undertaking Pursuant to Rule 415.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration
Statement:
(i) to include any prospectus required by Section
10(a)(3) Securities Act of 1933 (the "Securities Act");
(ii) to reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form
of prospectus filed with the SEC pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no
more than a 20% change in the maximum aggregate offering price
set forth in the "Calculation of Registration Fee" table in
the effective Registration Statement;
Page II-2
(iii) to include any material information with respect
to the plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement;
provided, however, that paragraphs A(l)(i) and A(l)(ii) do not
apply if the Registration Statement is on Form S-3 or Form S-8,
and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports
filed by the Registrant pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 (the "Exchange Act") that are
incorporated by reference in the Registration Statement;
(2) That, for the purpose of determining any liability
under the Securities Act, 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 this offering.
B. Undertaking Regarding Filings Incorporating Subsequent
Exchange Act Documents by Reference.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) 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.
C. Undertaking in Respect of Indemnification.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the SEC 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.
Page 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 San Diego, California, on this 5th day of January,
2000.
NEUROCRINE BIOSCIENCES, INC.
By: /s/ Paul W. Hawran
Paul W. Hawran,
Chief Financial Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Paul
W. Hawran and Gary A. Lyons, jointly and severally, as attorneys-in-fact, each
with the power of substitution, for him or her in any and all capacities, to
sign any amendment to this Registration Statement and to file the same, with
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting to said attorneys-in-fact, 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 connection therewith, as fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact or any of them, or their or his
or her substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
/s/ GARY A. LYONS President, Chief Executive
- ---------------------- Officer and Director January 19, 2000
Gary A. Lyons (Principal Executive Officer)
/s/ PAUL W. HAWRAN Chief Financial Officer
- ---------------------- (Principal Financial January 19, 2000
Paul W. Hawran and Accounting Officer)
/s/ JOSEPH A. MOLLICA Chairman of the January 19, 2000
- ---------------------- Board of Directors
Joseph A. Mollica
/s/ STEPHEN A. SHERWIN Director January 19, 2000
- ----------------------
Stephen A. Sherwin
/s/ RICHARD F. POPS Director January 19, 2000
- ----------------------
Richard F. Pops
/s/ WYLIE W. VALE Director January 19, 2000
- -------------------------
Wylie W. Vale
Page II-4
INDEX OF EXHIBITS
Exhibit
Number Description
- ------------------ -------------------------------------------------------------
4.1 Stock Purchase Agreement dated December 20 through 23, 1999,
between Neurocrine Biosciences, Inc. and each of the
Purchasers named therin.
5.1 Opinion of Latham & Watkins.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of Counsel (included in Exhibit 5.1).
24.1 Power of Attorney (included on page II-5).
Page II-5