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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 2, 2000
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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ARONEX PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 76-0196535
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
8707 TECHNOLOGY FOREST PLACE
THE WOODLANDS, TEXAS 77381-1191
(281) 367-1666
(Address, including zip code, and telephone
number, including area code, of registrant's
principal executive offices)
GEOFFREY F. COX, PH.D.
CHIEF EXECUTIVE OFFICER
8707 TECHNOLOGY FOREST PLACE
THE WOODLANDS, TEXAS 77381-1191
(281) 367-1666
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copies to:
JEFFREY R. HARDER
ANDREWS & KURTH L.L.P.
2170 BUCKTHORNE PLACE, SUITE 150
THE WOODLANDS, TEXAS 77380
(713) 220-4801
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after the effective date of the Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering.[ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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Proposed maximum Proposed maximum
Title of each class of Amount to be offering price aggregate offering Amount of
Securities to be registered registered(1) per share (2) price (2) registration fee
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Common Stock, par value $0.001 per share.... 4,060,098 $2.50 $10,150,245 $2,679.66
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(1) Includes 1,127,524 shares issuable upon exercise of warrants.
(2) Estimated pursuant to Rule 457(c) solely for the purpose of calculating
the registration fee based on the average of the high and low sales
price per share of the Registrant's common stock on the Nasdaq National
Market on May 31, 2000.
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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 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
Subject to completion, dated June 2, 2000
4,060,098 SHARES
ARONEX PHARMACEUTICALS, INC.
COMMON STOCK
The selling stockholders listed on page 11 may offer and resell up to
4,060,098 shares of our common stock under this prospectus, for each of their
own accounts. The number of shares the selling stockholders may sell includes
shares of common stock currently issued and outstanding, as well as shares of
common stock that they may receive if they exercise their warrants. We will not
receive any proceeds from these sales, but we will receive proceeds from the
exercise of any warrants.
Our common stock is quoted on the Nasdaq National Market under the
symbol "ARNX." On May 31, 2000, the last sale price of our common stock was
$2.50.
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. PLEASE
SEE "RISK FACTORS" BEGINNING ON PAGE 4.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is June 2, 2000.
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the Securities and Exchange Commission ("SEC"). You may
read and copy any document we file at the public reference facilities of the SEC
in Washington, D.C., Chicago, Illinois and New York, New York. 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 from the SEC's web site at
http:\\www.sec.gov.
INCORPORATION BY REFERENCE
The SEC allows us to "incorporate by reference" the information we have
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 any later information that we
file with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any additional documents
we file with the SEC until the offering of the common stock is terminated. This
prospectus is part of a registration statement on Form S-3 that we filed with
the SEC. The documents that we incorporate by reference are:
1. The description of the Company's common stock, par value $0.001 per
share, contained in the Company's registration statement on Form 8-A
filed with the Commission on April 23, 1992, including any
amendments and reports filed for the purpose of updating such
description.
2. Our Annual Report on Form 10-K for the fiscal year ended December
31, 1999.
You may obtain a copy of these filings as set forth under "Where You Can Find
More Information" above or request a copy of these filings, at no cost, by
writing or telephoning us at the following address:
Aronex Pharmaceuticals, Inc.
8707 Technology Forest Place
The Woodlands, Texas 77381-1191
(281) 367-1666
Attention: Secretary
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RISK FACTORS
INVESTING IN OUR COMMON STOCK INVOLVES SUBSTANTIAL RISKS. YOU SHOULD
CONSIDER CAREFULLY THE FOLLOWING RISK FACTORS, TOGETHER WITH ALL OF THE OTHER
INFORMATION INCLUDED IN THIS PROSPECTUS, IN DECIDING WHETHER TO INVEST IN OUR
COMMON STOCK.
THIS PROSPECTUS CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS
AND UNCERTAINTIES. OUR ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE
ANTICIPATED IN THESE FORWARD-LOOKING STATEMENTS AS A RESULT OF CERTAIN FACTORS,
INCLUDING THE RISKS FACED BY US DESCRIBED BELOW AND ELSEWHERE IN THIS
PROSPECTUS.
We are In an Early Stage of Development, Have a History of Operating Losses,
Anticipate Future Losses, May Not Generate Revenues From Product Sales and May
Never Become Profitable
Our business is at an early stage of development. We have not yet
generated any revenues from the commercial sale of our products. We cannot
assure that we will ever generate revenues from product sales.
We have incurred losses and have had negative cash flows from
operations since inception. We have funded our activities primarily from sales
of stock and, to a lesser extent, from revenues under research and development
agreements and grants. As of December 31, 1999, our accumulated deficit was
$101.5 million. To date, we have dedicated most of our financial resources to
the research and development of products, general and administrative expenses,
and the prosecution of patents and patent applications.
We expect to incur operating losses for at least the next several
years. This is primarily attributable to our plan to spend substantial amounts
on research and development of products, including preclinical studies and
clinical trials, and, if we obtain necessary regulatory approvals, on sales and
marketing efforts. We cannot assure that we will ever become profitable or that
we will remain profitable if and when we become profitable.
We Will Require Future Capital and Are Uncertain of the Availability or Terms of
Additional Funding. This May Lead to Bankruptcy if Funding Becomes Unavailable,
or Dilution or other Adverse Effects to the Value of Our Shares or Our
Stockholders' Rights Even if Funding is Available
We will continue to require substantial additional funds for our
operations. We believe that we can conserve our existing financial resources to
satisfy our capital and operating requirements into mid 2001. In the future, we
may need to raise substantial additional capital to fund operations. It is
possible that changes in research and development plans, acquisitions or other
events will require us to make unexpected large future expenditures.
Additional funding may be available in the public or private capital
markets and through collaboration agreements with partners. If, however, the
results of our clinical trials are not favorable, it will be much more difficult
for us to raise additional funds. We do not know if additional funding will be
available at all or on acceptable terms. If we are not able to obtain funding,
it may be necessary to curtail some or all research and development programs or
to obtain funds through arrangements that require us to relinquish rights to
some or all of our products or to declare bankruptcy. If we raise funds by
selling more stock, share ownership by our current stockholders will be diluted.
In addition, we may grant future investors rights which are superior to those of
current stockholders.
Clinical Trial Results May Result in Failure to Obtain FDA Approval and
Inability to Sell Products
Before approving a drug for commercial sale as a treatment for a
disease, the FDA and other regulatory authorities generally require that the
safety and efficacy of a drug be demonstrated in humans. This is provided by
showing results from adequate and well-controlled clinical trials in which the
drug is used to treat patients suffering from the disease. We cannot predict
whether our clinical trials will adequately demonstrate the drug's safety and
efficacy or whether the FDA or other regulatory authority will agree with the
sufficiency of the trial
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results. If our clinical trials do not demonstrate the safety or efficacy of our
products, or if we otherwise fail to obtain regulatory approval for our
products, we will not be able to generate revenues from the commercial sale of
our products.
Delays in Patient Enrollment May Result in Increased Costs, Program Delays, or
Both, to Clinical Trials
Pivotal clinical trials are very costly and time-consuming. The speed
with which we are able to enroll patients in clinical trials is affected by
several factors, including the size of the patient population, competing trials,
the proximity of patients to clinical sites, and the eligibility criteria for
the study. These delays and complications can affect the cost of our clinical
trials as well as our ability to complete clinical trials on schedule.
The FDA Can Impose Other Restrictions On Our Operations Which May Increase Costs
or Delay or Prohibit Sales
The FDA and other regulatory authorities will continue to review our
products and periodically inspect the facilities used to manufacture those
products both before and after the grant of regulatory approvals. If the FDA or
other regulatory authorities identify problems with a product, manufacturer of
our products or its facility, they may impose restrictions that may include
warning letters, suspensions of regulatory approvals, operating restrictions,
delays in obtaining new product approvals, withdrawal of the product from the
market, product recalls, fines, injunctions and criminal prosecution.
Our Products Must Obtain Regulatory Approval In Other Countries Which May Delay
or Prohibit Sales
We and licensees of our products must obtain regulatory approvals in
countries other than the United States before marketing products in those
countries. The requirements governing the conduct of clinical trials, product
licensing, pricing and reimbursement vary widely from country to country. Some
countries require approval of the sale price of a drug before it can be
marketed. In many countries, the pricing review period begins after product
licensing approval is granted. As a result, we or our licensees may obtain
regulatory approval for a product in a particular country, but then be subject
to price regulation that prevents the sale of the product at satisfactory
prices.
We Experience a Substantial Degree of Uncertainty Relating to Patents that, if
Determined to be Unenforceable, Could Result in the Loss of the Patent or Claims
Against Us
Our success will depend to a large extent on our ability to:
o obtain United States and foreign patent protection for drug
candidates and processes,
o preserve trade secrets, and
o operate without infringing the proprietary rights of third parties.
Legal standards relating to the validity of patents covering
pharmaceutical and biotechnological inventions and the scope of claims made
under these patents are still developing. As a result, our ability to obtain and
enforce patents that protect our products is uncertain and involves complex
legal and factual questions.
We also cannot be completely sure that the inventors of subject matter
covered by our patents and patent applications were the first to invent or the
first to file patent applications for such inventions. Furthermore, we cannot
guarantee that any patents will issue from any pending or future patent
applications owned by or licensed to us. Existing or future patents may be
challenged, infringed upon, invalidated, found to be unenforceable or
circumvented by others. We cannot assure that any of our rights under any issued
patents will provide sufficient protection against competitive products or
otherwise cover commercially valuable products or processes. We may not have
identified all United States and foreign patents that pose a risk of
infringement. We are also currently involved in certain interference proceedings
relating to Aroplatin(TM).
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We May Incur Substantial Costs and Delays As a Result of Proceedings and
Litigation Regarding Patents and Other Proprietary Rights
Proceedings involving our patents or patent applications could result
in adverse decisions about:
o the patentability of our inventions and products; and/or
o the enforceability, validity or scope of protection offered by our
patents.
The manufacture, use or sale of our products may infringe on the patent
rights of others. If we are unable to avoid infringement of the patent rights of
others, we may be required to seek a license, defend an infringement action or
challenge the validity of the patents in court. Patent litigation is costly and
time consuming. We may not have sufficient resources to bring these actions to a
successful conclusion. In addition, if we do not obtain a license, and fail
successfully to defend an infringement action or to have infringing patents
declared invalid, we may:
o incur substantial money damages;
o encounter significant delays in bringing products to market; and/or
o be precluded from participating in the manufacture, use or sale of
products or methods of treatment requiring licenses.
Confidentiality Agreements with Employees and Others May Not Adequately Prevent
Disclosure of Trade Secrets and Other Unpatented Proprietary Information, which,
if Disclosed, Could Materially Adversely Affect Our Operations or Financial
Condition
Because trade secrets and other unpatented proprietary information are
critical to our business, we seek protection through confidentiality agreements
with employees, consultants, advisors and collaborators. These agreements may
not effectively prevent disclosure of confidential information and may not
provide an adequate remedy in the event of unauthorized disclosure of
confidential information. In addition, others may independently discover trade
secrets and proprietary information. Costly and time-consuming litigation could
be necessary to enforce and determine the scope of our proprietary rights, and
failure to obtain or maintain trade secret protection could have a material
adverse effect on our business, results of operations and financial condition.
We Do Not Manufacture Our Own Products And May Not Be Able to Obtain Adequate
Supplies, which Could Cause Delays or Reduce Profit Margins
We do not have the facilities necessary to manufacture products in
accordance with FDA good manufacturing practices. As a result, we use contract
manufacturers to produce quantities for clinical testing. We have not entered
into any agreement with our manufacturers except for (1) periodic purchase
orders and (2) an agreement with Abbott, who holds an option to manufacture
Nyotran(R). We do not expect to establish any significant manufacturing capacity
in the near future. Instead, we intend to rely on corporate partners and
contract manufacturers for the manufacture and supply of our products.
Therefore, we may not be able to obtain supplies of products on acceptable terms
or in sufficient quantities, if at all. Our dependence on third parties for the
manufacture of products may also reduce our profit margins and ability to
develop and deliver products with sufficient speed.
Our Products Require Materials that May Not Be Readily Available or Cost
Effective, which May Adversely Affect Our Competitive Position or Profitability
Some of our products, such as Annamycin and Aroplatin(TM), are new
syntheses and are not yet available in commercial quantities. Raw materials
necessary for the manufacture of these and other of our products may not be
available in sufficient quantities or at a reasonable cost in the future.
Complications or delays in obtaining raw materials or in product manufacturing
could delay the submission of products for regulatory approval and the
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initiation of new development programs, which could materially impair our
competitive position and potential profitability.
We Have No Experience In Sales, Marketing and Distribution and Rely on Third
Parties, which May Result in Lower Sales, Higher Costs or Lower Profit Margins
We anticipate relying on one or more pharmaceutical companies to market
our products to customers, and, wherever possible, to retain co-marketing rights
in certain markets such as the United States and Canada. Agreements have already
been entered into with Abbott and Grupo Ferrer for distribution of Nyotran(R).
We have retained co-marketing rights under the Abbott agreement for a limited
period of time. To the extent that we use distribution arrangements with third
parties to market products, our ability to generate revenues and profits will
depend upon the efforts of these third parties.
We are developing our own sales and marketing capabilities that will
require us to make significant expenditures. We may not be successful in
establishing sales, marketing and distribution capabilities. In addition, our
ability to generate revenues and profits will be reduced or eliminated:
o if we fail to establish sales, marketing and/or distribution
capabilities or enter into arrangements with third parties;
o if we or new marketing partners fail to market a product
successfully;
o if physicians do not prescribe our products; or
o if patients do not accept our products.
Our Ability to Enter into Collaborative Arrangements Is Critical to Our
Successful Development, Sales and Licensing of Products and Potential
Profitability
We are a product development company with limited resources. We do not
conduct research and we are just beginning to create a marketing and sales
department. Therefore, our present strategy involves entering into arrangements
with corporate, government and academic collaborators, licensors, licensees and
others. As a consequence, our success may depend in large part on the success of
these other parties in performing their responsibilities. Also, we may not be
able to establish additional collaborative arrangements or license agreements
that are necessary to develop and commercialize products. Even if established,
these collaborative or license agreements may not be successful. Some of these
collaborative agreements and license agreements provide for milestone payments
to us, and others require us to pay milestone payments to others. We may not be
able to achieve the milestones that trigger payments to us. In addition,
payments by us may not result in the development of marketable products by our
collaborators.
Competition in the Biotechnology and Pharmaceutical Industries May Result in
Competing Products, Superior Marketing of Other Products and Lower Revenues or
Profits for Us
We believe that competition will be intense for all of our product
candidates. Our competitors include multinational pharmaceutical and chemical
companies, specialized biotechnology firms, and universities and other research
institutions. Many of these competitors have greater financial and other
resources than we do. These competitors may succeed in developing products that
are safer, more effective or less costly than our products. Even if our products
prove to be more effective than those developed by our competitors, our
competitors may be more successful because of greater financial resources,
greater experience in conducting preclinical and clinical trials and obtaining
regulatory approval, stronger sales and marketing efforts, earlier receipt of
approval for competing products and other factors.
Some of our competitors are active in the development of proprietary
liposomes and in liposomal research and product development to treat cancer and
certain fungal infections. Some of these companies' products have regulatory
approval in the United States and other countries. Any marketing of these and
other products that treat
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diseases targeted by us could reduce the market acceptance of our products. The
presence of directly competitive products could also result in intense price
competition, which could reduce our revenues and profits.
We May Not Be Able to Keep Up With The Rapid Technological Change in the
Biotechnology and Pharmaceutical Industries, Which Could Make Our Products
Obsolete
Biotechnology and related pharmaceutical technologies have undergone
and continue to be subject to rapid and significant change. We expect that the
technologies associated with biotechnology research and development will
continue to develop rapidly. Our future will depend in large part on our ability
to maintain a competitive position with respect to these technologies. Any
compounds, products or processes that we develop may become obsolete before we
recover expenses incurred in developing those products.
Our Success May Depend on Third-Party Reimbursement of Patients' Costs for Our
Products
Our ability to commercialize products successfully will depend in part
on the extent to which various third parties are willing to reimburse patients
for the costs of our products and related treatments. These third parties
include government authorities, private health insurers and other organizations,
such as health maintenance organizations. Third-party payors are increasingly
challenging the prices charged for medical products and services. Accordingly,
if less costly drugs are available, third-party payors may not authorize or may
limit reimbursement for our products, even if they are safer or more effective
than the alternatives. In addition, the trend toward managed healthcare and
government insurance programs could result in lower prices and reduced demand
for our products. Cost containment measures instituted by healthcare providers
and any general healthcare reform could affect our ability to sell products and
may have a material adverse effect on us.
We cannot predict what additional legislation or regulation relating to
the healthcare industry or third-party coverage and reimbursement may be enacted
in the future, or what effect any legislation or regulation might have on our
business.
Our Activities Involve the Use of Hazardous Materials, which Subject Us to
Regulation, Related Costs and Delays and Potential Liabilities
Our activities involve the controlled use of hazardous materials,
chemicals, viruses and various radioactive compounds. Although we believe that
our procedures for handling and disposing of these materials comply with state
and federal regulations, the risk of accidental contamination or injury from
these materials cannot be eliminated. If an accident occurs, we could be held
liable for resulting damages, which could be substantial. We are also subject to
numerous environmental, health and workplace safety laws and regulations,
including those governing laboratory procedures, exposure to blood-borne
pathogens and the handling of biohazardous materials. Additional federal, state
and local laws and regulations affecting our operations may be adopted in the
future. We may incur substantial costs to comply with and substantial fines or
penalties if we violate any of these laws or regulations.
Our Business has a Substantial Risk that Product Liability Claims and Insurance
May be Expensive or Unavailable
We may be subject to product liability claims if the use of our
products is alleged to injure subjects or patients. This risk exists for
products tested in human clinical trials as well as products that are approved
to be sold commercially. Product liability claims could result in a recall of
products or a change in the indications for which they may be used. We presently
have product liability insurance coverage for claims arising from the use of our
products in clinical trials; however, this insurance may not be adequate to
cover all potential claims. Furthermore, product liability insurance is becoming
increasingly expensive. As a result, we may not be able to maintain current
amounts of insurance coverage, obtain additional insurance for clinical trials
or for commercial sales or obtain insurance at a reasonable cost or in
sufficient amounts to protect against losses that could have a material adverse
effect on us.
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We Depend on Key Personnel and Competition for Qualified Personnel is Intense,
which Could Result in Delays or Additional Costs
We believe that our ability to successfully implement our business
strategy is highly dependent on our management and scientific team. The loss of
services of one or more of our executive officers might hinder the achievement
of our development objectives. We are also highly dependent on our ability to
hire and retain qualified scientific and technical personnel. The competition
for these employees is intense. We may not be able to continue to hire and
retain the qualified personnel that we need for our business. Loss of the
services of or failure to recruit key scientific and technical personnel could
substantially hurt us and our product development efforts.
Contingent Stock Rights Could Result in Subsequent Dilution to Net Tangible Book
Value of Shares
Pursuant to the terms of our 1995 merger with Triplex Pharmaceutical
Corporation, we are obligated to issue shares of our common stock to certain of
their former security holders if our board of directors determines that data
from clinical trials of Zintevir(R) on or before September 11, 2000 is
sufficient to file an NDA with the FDA. If that event occurs, these rights will
result in the issuance of up to an aggregate of $5.0 million of our common
stock. These shares will be valued at the current market value of our common
stock at the time the event requiring issuance of the shares occurs. As a
result, current shareholders could experience further dilution in the net
tangible book value per share.
Caution as to Forward-looking Statements
This prospectus contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, including statements regarding our drug development
programs, clinical trials, receipt of regulatory approval, capital needs,
intellectual property, expectations and intentions. These statements can be
identified by the use of forward-looking terminology such as "may," "will,"
"expect," "anticipate," "continue," "estimate," "believe" or other similar
words. Forward-looking statements necessarily involve risks and uncertainties,
and our actual results could differ materially from those anticipated in the
forward-looking statements, including those listed under "Risk Factors" and
elsewhere in this prospectus. The factors set forth under "Risk Factors" and
other cautionary statements made in this prospectus should be read and
understood as being applicable to all related forward-looking statements
wherever they appear in this prospectus.
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USE OF PROCEEDS
We will not receive any proceeds from the sale of common stock by any
of the selling stockholders. We will use any proceeds we receive from the
exercise of warrants for general corporate purposes.
SELLING STOCKHOLDERS
This prospectus covers a total of 4,060,098 shares of common stock to
be sold by the selling stockholders, including
o 2,932,574 shares of common stock issued and outstanding
o 1,127,524 shares of common stock issuable upon exercise of
outstanding warrants
On April 17, 2000, we completed a private placement of 2,932,574 shares
of common stock and warrants to purchase 977,524 shares of common stock. We
granted a warrant to purchase 150,000 shares of our common stock to the finder
who assisted us in placing the common stock, as partial payment of the finder's
fee.
We granted certain registration rights to the investors and the finder
in the above-described transactions. This prospectus serves to register all of
the shares of common stock subject to those registration rights.
The table below lists:
o all of the selling stockholders
o the number of shares of common stock owned by each selling
stockholder immediately prior to the private placement;
o the number of shares of common stock (including those shares of
common stock underlying warrants) covered by this prospectus; and
o the amount of shares of common stock that will be owned by each
selling stockholder assuming that each selling stockholder sells all
of his or her shares of common stock that this prospectus registers.
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SHARES OF COMMON STOCK COVERED BY THIS PROSPECTUS
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SHARES OF NUMBER
COMMON STOCK OF SHARES OF
OWNED ISSUABLE UPON COMMON STOCK
PRIOR TO EXERCISE OF OWNED AFTER THE
NAME OF SELLING STOCKHOLDER THE OFFERING(1) OUTSTANDING WARRANTS TOTAL OFFERING
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Leonard J. Adams 0 27,273 9,091 36,364 0
Ross D. Ain 0 9,091 3,030 12,121 0
Balanced Investments, LLC 0 109,092 36,364 145,456 0
Rhett E. Brown 0 9,091 3,030 12,121 0
Concordia Partners, L.P. 0 181,820 60,607 242,427 0
Archibald Cox, Jr. 0 90,910 30,303 121,213 0
John J. Dougherty 0 9,091 3,030 12,121 0
Essex Woodlands Health Ventures Fund
IV, LP 2,285,715 1,090,920 363,640 1,454,560 2,285,715
Harvey S. Feuerstein 0 9,091 3,030 12,121 0
Marc Florin 0 36,364 12,121 48,485 0
Albert J. Fried, Jr. 0 181,820 60,607 242,427 0
Joseph Galati 0 15,000 5,000 20,000 0
Anthony J. Gerace 0 18,000 6,000 24,000 0
Peter Grabler 0 27,273 9,091 36,364 0
Keys Foundation 0 181,820 60,607 242,425 0
Robert Knox 0 90,910 30,303 121,213 0
Frederick J. Korneiwicz 0 21,818 7,273 29,091 0
Managed Risk Trading, LP 0 18,182 6,061 24,243 0
Mark Mazzer 0 15,000 5,000 20,000 0
Mega International Corporation 0 54,546 18,182 72,728 0
Maria Molinsky 0 36,364 12,121 48,485 0
M.S.B. Research 0 200,002 66,667 266,669 0
Narragansett I, LP 0 114,546 38,182 152,728 0
Narragansett Offshore, Ltd. 0 67,274 22,425 89,699 0
Paramount Capital, Inc. 0 0 150,000 150,000 0
Petrus Fund, L.P. 0 100,001 33,334 133,335 0
Joseph S. Podolski 0 7,273 2,424 9,697 0
Tis Prager 0 18,182 6,061 24,243 0
David W. Ruttenberg 0 18,182 6,061 24,243 0
Wayne Saker 0 36,364 12,121 48,485 0
Carl F. Schwartz 1,000 9,091 3,030 12,121 1,000
Michael H. Schwartz, Profit Sharing Plan 0 27,273 9,091 36,364 0
David M. Steinberg 0 18,182 6,061 24,243 0
Myron Teitelbaum, M.D. 0 10,000 3,333 13,333 0
Mark & Sallie L. Walko 0 18,182 6,061 24,243 0
Robert J. Whetten 0 36,364 12,121 48,485 0
Bruno Widmer 0 18,182 6,061 24,243 0
Totals 2,286,715 2,932,574 1,127,524 4,060,098 2,286,715
- ----------------------------
(1) All of the selling shareholders listed above will hold less than 1% of the
outstanding shares of our common stock after this offering, except for Essex
Woodlands Health Ventures Fund IV, LP which will hold 8.8%.
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PLAN OF DISTRIBUTION
The selling stockholders may offer the shares of common stock subject
to this prospectus from time to time for their own account in transactions on
the Nasdaq National Market, in negotiated transactions or otherwise, at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices. The selling stockholders may effect such
transactions by selling the shares to or through broker-dealers and such
broker-dealers may receive compensation in the form of discounts, concessions or
commissions from the selling stockholders or the purchasers of the shares for
whom such broker-dealers may act as agent or to whom they sell as principal or
both (which compensation to a particular broker-dealer might be in excess of
customary commissions). The methods by which the shares may be sold include:
1. a block trade (which may involve crosses) in which the broker or
dealer so engaged will attempt to sell the securities as agent but
may position and resell a portion of the block as principal to
facilitate the transaction;
2. purchases by a broker or dealer as principal and resale by such
broker or dealer for its account pursuant to this prospectus;
3. ordinary brokerage transactions and transactions in which the broker
solicits purchasers; and
4. privately negotiated transactions.
We will not receive any of the proceeds from the sale of the shares of
common stock subject to this prospectus by the selling stockholders except for
payment of the exercise price in the event that the warrants are exercised. We
have agreed to bear certain expenses in connection with the registration and
sale of the shares being offered by the selling stockholders. The selling
stockholders and any broker-dealers participating in the distribution of the
shares of common stock subject to this prospectus may be deemed to be
"underwriters" within the meaning of the Securities Act, and any profit on the
sale of shares by the selling stockholders and any commissions received by any
such broker-dealers may be deemed to be underwriting commission under the
Securities Act.
The shares of common stock subject to this prospectus have not been
registered for sale by the selling stockholders under the securities laws of any
state as of the date of this prospectus. Brokers or dealers effecting
transactions in the shares should confirm registration thereof under the
securities laws of the states in which such transactions occur, or the existence
of any exemption from registration.
If underwriters are used in any offering of shares of common stock, the
underwriter or underwriters with respect to such offering will be named in a
prospectus supplement. Only underwriters named in a prospectus supplement will
be deemed to be underwriters in connection with the shares of common stock
offered thereby. Firms not so named will have no direct or indirect
participation in the underwriting of such common stock, although such a firm may
participate in the distribution of such common stock under circumstances
entitling it to a dealer's commission. Unless otherwise set forth in the
prospectus supplement relating to such offering, any underwriting agreement
pertaining to any offering of shares of common stock will:
1. entitle the underwriters to indemnification by us and the selling
stockholders against certain civil liabilities under the Securities
Act;
2. provide that the obligations of the underwriters will be subject to
certain conditions precedent; and
3. provide that the underwriters will be obligated to purchase all
shares of such common stock so offered if any shares are purchased.
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If underwriters are used in any offering of common stock, the names of
such underwriters, the anticipated date of delivery and other material terms of
the transaction will be set forth in the prospectus supplement relating to such
offering.
Underwriters, brokers and dealers may engage in transactions with or
perform services for us in the ordinary course of business.
Offers to purchase common stock may be solicited, and sales thereof may
be made, by the selling stockholders directly to one or more purchasers in fixed
price offerings, in negotiated transactions, at market prices prevailing at the
time of sale or at prices related to such market prices. Certain of such
purchasers may be deemed to be underwriters with respect to any resale by them
of common stock so acquired. This prospectus may be delivered by any such
purchaser in connection with any such resales. Such resales may be through
underwriters, brokers or dealers, or directly to one or more purchasers, all in
the manner described above.
LEGAL MATTERS
Andrews & Kurth L.L.P. will issue an opinion about the legality of the
shares for us.
EXPERTS
The financial statements incorporated by reference in this prospectus
and elsewhere in this registration statement have been audited by Arthur
Andersen LLP, independent public auditors, as indicated in their report with
respect thereto, and are included herein in reliance upon the authority of said
firm as experts in giving said report.
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===============================================================================
WE HAVE NOT AUTHORIZED ANY DEALER, SALESPERSON OR OTHER PERSON TO GIVE YOU
WRITTEN INFORMATION (OTHER THAN THIS PROSPECTUS) OR TO MAKE ANY REPRESENTATIONS
AS TO MATTERS NOT STATED IN THIS PROSPECTUS. YOU MUST NOT RELY ON UNAUTHORIZED
INFORMATION. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES OR A
SOLICITATION OF YOUR OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE
THAT WOULD NOT BE PERMITTED OR LEGAL. NEITHER THE DELIVERY OF THIS PROSPECTUS
NOR ANY SALE MADE HEREUNDER AFTER THE DATE OF THIS PROSPECTUS SHALL CREATE AN
IMPLICATION THAT THE INFORMATION CONTAINED HEREIN OR OUR AFFAIRS HAVE NOT
CHANGED SINCE THE DATE THEREOF.
------------------------------------
TABLE OF CONTENTS
Page
----
Where You Can Find More Information........................ 3
Risk Factors............................................... 4
Use of Proceeds............................................ 10
Selling Stockholders....................................... 10
Plan of Distribution....................................... 12
Legal Matters.............................................. 13
Experts.................................................... 13
===============================================================================
===============================================================================
ARONEX
PHARMACEUTICALS,
INC.
4,060,098 Shares
Common Stock
------------------
PROSPECTUS
------------------
June 2, 2000
===============================================================================
15
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.
SEC registration fee ............... $ 2,680
NASD filing fee .................... 17,500
Blue Sky fees and expenses.......... 2,835
Legal fees and expenses ............ 110,000
Accounting fees and expenses........ 25,000
Transfer agent and registrar fees... 3,500
Miscellaneous fees and expenses..... 16,320
-------
TOTAL .............................. $177,835
=======
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS
Section 145 of the Delaware General Corporation Law ("DGCL"), inter
alia, empowers a Delaware corporation to 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 (other than an action by or in the right of
the corporation) by reason of the fact that such person is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation or other enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. Similar
indemnity is authorized for such persons against expenses (including attorneys'
fees) actually and reasonably incurred in connection with the defense or
settlement of any such threatened, pending or completed action or suit if such
person acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation, and provided further that
(unless a court of competent jurisdiction otherwise provides) such person shall
not have been adjudged liable to the corporation. Any such indemnification may
be made only as authorized in each specific case upon a determination by the
stockholders or disinterested directors or by independent legal counsel in a
written opinion that indemnification is proper because the indemnitee has met
the applicable standard of conduct.
Section 145 further authorizes a corporation to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation or enterprise,
against any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the corporation
would otherwise have the power to indemnify him under Section 145. The Company
maintains policies insuring its and its subsidiaries' officers and directors
against certain liabilities for actions taken in such capacities, including
liabilities under the Securities Act of 1933, as amended (the "Securities Act").
Article VII of the Company's Amended and Restated Certificate of
Incorporation, as amended (the "Charter"), limits under certain circumstances
the liability of the Company's directors for a breach of their fiduciary duty as
directors. These provisions do not eliminate the liability of a director (i) for
a breach of the director's duty of loyalty to the Company or its stockholders,
(ii) for acts or omissions not in good faith or that involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL
(relating to the
-15-
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declaration of dividends and purchase or redemption of shares in violation of
the DGCL) or (iv) for any transaction from which the director derived an
improper personal benefit.
Article VIII of the Company's Charter and Article VII of the Company's
Restated Bylaws provide for indemnification of the directors, officers and
employees of the Company to the fullest extent permitted by law. The Company
currently has a liability insurance policy which insures directors and officers
of the Company in certain circumstances. The policy also insures the Company
against losses as to which its directors and officers are entitled to
indemnification.
ITEM 16. EXHIBITS
(a) Exhibits
*5.1 Opinion of Andrews & Kurth L.L.P.
*23.1 Consent of Arthur Andersen LLP.
*23.2 Consent of Andrews & Kurth L.L.P. (included in Exhibit 5.1).
*24.1 Powers of Attorney (included as part of the signature page of this
Registration Statement).
- ---------------------------
* Filed herewith.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(a) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement;
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933, as amended (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;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in this Registration Statement or any material change to such
information in the Registration Statement.
Provided, however, that paragraphs (a)(i) and (a)(ii) do not
apply if 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 and Exchange Act of 1934, as amended (the "Exchange Act")
that are incorporated by reference in the Registration Statement.
(b) 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.
(c) 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.
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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.
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
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Securities Act, and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction
the question of 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.
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18
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 Woodlands, Texas, on the 31st day of May, 2000.
ARONEX PHARMACEUTICALS, INC.
By: /s/ Geoffrey F. Cox
-----------------------------------------------------
Geoffrey F. Cox
Chairman of the Board and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned officers
and directors of Aronex Pharmaceuticals, Inc. (the "Company") hereby constitutes
and appoints Geoffrey F. Cox and Terance A. Murnane, or either of them (with
full power to each of them to act alone), his true and lawful attorney-in-fact
and agent, with full power of substitution and resubstitution, for him and on
his behalf and in his name, place and stead, in any and all capacities, to sign,
execute and file this Registration Statement under the Securities Act of 1933,
as amended, and any or all amendments (including, without limitation,
post-effective amendments), with all exhibits and any and all documents required
to be filed with respect thereto, with the Securities and Exchange Commission or
any regulatory authority, granting unto such attorneys-in-fact and agents, and
each of them acting alone, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the premises
in order to effectuate the same, as fully to all intents and purposes as he
himself might or could do if personally present, hereby ratifying and confirming
all that such attorneys-in-fact and agents, or any of them, or their substitute
or substitutes, may lawfully do or cause to be done.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
SIGNATURE TITLE DATE
- ----------------------------- ------------------------------------------- ------------
/s/ Geoffrey F. Cox
- ----------------------------- Chairman of the Board and May 31, 2000
Geoffrey F. Cox Chief Executive Officer
(Principal Executive Officer)
/s/ Terance A. Murnane
- ----------------------------- Controller May 31, 2000
Terance A. Murnane (Principal Financial and Accounting Officer)
/s/ James R. Butler Director May 31, 2000
- -----------------------------
James R. Butler
/s/ Gabriel Lopez-Berestein Director May 31, 2000
- -----------------------------
Gabriel Lopez-Berestein
/s/ Phyllis I. Gardner, M.D Director May 31, 2000
- -----------------------------
Phyllis I. Gardner, M.D
/s/ Martin P. Sutter Director May 31, 2000
- -----------------------------
Martin P. Sutter
/s/ Gregory F. Zaic Director May 31, 2000
- -----------------------------
Gregory F. Zaic
/s/ David J. McLachlan Director May 31, 2000
- -----------------------------
David J. McLachlan
/s/ Paul W. Hobby Director May 31, 2000
- -----------------------------
Paul W. Hobby
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INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
----------- ------------
*5.1 Opinion of Andrews & Kurth L.L.P.
*23.1 Consent of Arthur Andersen LLP
*23.2 Consent of Andrews & Kurth L.L.P. (included in Exhibit 5.1)
*24.1 Powers of Attorney (included as part of the signature page
of this Registration Statement).
- ---------------------------
* Filed herewith.