As filed with the Securities and Exchange Commission on October 30, 2001
Registration No. 333-51372
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
POST EFFECTIVE AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
IVAX CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
FLORIDA 16-1003559
(State or Other Jurisdiction of Incorporation or (I.R.S. Employer
Organization) Identification Number)
4400 BISCAYNE BOULEVARD
MIAMI, FLORIDA 33137
(305) 575-6000
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
STEVEN D. RUBIN, ESQ.
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
IVAX CORPORATION
4400 BISCAYNE BOULEVARD
MIAMI, FLORIDA 33137
(305) 575-6000
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
Copy to:
KARA L. MACCULLOUGH, ESQ.
AKERMAN, SENTERFITT & EIDSON, P.A.
ONE SOUTHEAST THIRD AVENUE, 28TH FLOOR
MIAMI, FLORIDA 33131
(305) 374-5600
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 being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
--------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
--------------------------------------------------------------------------------
IVAX CORPORATION
$400,000,000
DEBT SECURITIES
COMMON STOCK AND RELATED COMMON STOCK PURCHASE RIGHTS
---------------
From time to time we may sell up to $400,000,000 in the aggregate of
any of the following securities:
- Our debt securities, which may consist of notes, debentures or
other types of debt; and
- Shares of our common stock, together with their related common
stock purchase rights.
We will describe the specific terms of these securities in supplements
to this prospectus. You should read this prospectus and any prospectus
supplement carefully before you invest.
Our common stock is listed on the American Stock Exchange under the
trading symbol "IVX" and on the London Stock Exchange under the symbol "IVX.L."
On October 24, 2001, the last reported sale price of our common stock on the
American Stock Exchange was $22.63 per share.
See "Risk Factors" beginning on page 5 for a discussion of factors that
you should consider before making an investment decision.
---------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is October 30, 2001.
TABLE OF CONTENTS
PAGE
----
About this Prospectus ............................................... 1
The Company.......................................................... 1
Risk Factors ........................................................ 5
Disclosure Regarding Forward-Looking Statements ..................... 13
Use of Proceeds ..................................................... 14
Ratio of Earnings to Fixed Charges .................................. 15
Description of Debt Securities ...................................... 16
Description of Capital Stock ........................................ 25
Material Article, By-Law and Florida Law Provisions ................. 27
Plan of Distribution ................................................ 28
Legal Matters ....................................................... 30
Independent Certified Public Accountants ............................ 30
Where You Can Find More Information ................................. 30
Incorporation by Reference .......................................... 30
i
ABOUT THIS PROSPECTUS
This prospectus is a part of a registration statement that we filed
with the SEC utilizing a "shelf" registration process. Under this shelf
registration process, we may from time to time sell any combination of the
securities that we describe in this prospectus in one or more offerings up to a
total dollar amount of $400,000,000. This prospectus provides you with a general
description of the securities we may offer. Each time we sell securities, we
will provide a prospectus supplement that will contain specific information
about the terms of that offering. The prospectus supplement may also add, update
or change information contained in this prospectus. You should read both this
prospectus and any prospectus supplement together with the additional
information described under the heading "Where You Can Find More Information."
You should rely only on the information contained in this prospectus.
We have not authorized anyone to provide you with information different from
that contained in this prospectus. We are offering to sell securities and making
offers to buy securities only in jurisdictions where offers and sales are
permitted. The information contained in this prospectus is accurate only as of
the date of this prospectus, regardless of the time we deliver this prospectus
or issue any of the securities this prospectus covers.
THE COMPANY
OVERVIEW
We are a multinational company engaged in the research, development,
manufacture and marketing of pharmaceutical products. We have grown through the
development of proprietary and brand-equivalent products and through strategic
acquisitions, focused primarily on countries whose pharmaceutical markets are
developing, where there is the greatest growth potential.
Our full line of brand-equivalent drugs includes the first United
States Food and Drug Administration (FDA) approved equivalent to branded
Taxol(R), a $1.5 billion oncology drug, and we have marketing applications
pending for many other products that are equivalent to important branded drugs.
Based on our unique patented inhalers, we have built a strong franchise in the
asthma market, and we are expanding that franchise by conducting studies to
support marketing applications for respiratory products in the United States and
in other markets served by our global marketing network. Our product pipeline
also includes novel compounds that we have discovered or licensed from third
parties, some of which have already successfully completed Phase II clinical
trials and are now undergoing Phase III trials, which is the final step before
submission of applications for marketing approval.
Our business has grown significantly during the past year. During 2000,
we generated net revenues of $793 million, up from $656 million in 1999, and net
income of $131 million, up from $71 million in 1999.
GROWTH STRATEGIES
We expect our future growth to come from the following:
- Discovering and Developing and/or Acquiring New Products. In
October 1999, we dramatically increased the size and scope of
our new product development capability through our acquisition
of an independent research company, now known as IVAX Drug
Research Laboratories, Ltd. We are committed to the
cost-effective development of
1
proprietary pharmaceuticals directed primarily toward
indications having relatively large patient populations or for
which limited or inadequate treatments are available. We seek
to accelerate product development and commercialization by
in-licensing compounds, especially after clinical testing has
begun, and by developing new dosage forms or new therapeutic
indications for existing products.
- Leveraging Proprietary Technology and Development Strengths.
We intend to continue to leverage our proprietary technology
and development strengths, including our patented inhalation
technology and our expertise in developing and commercializing
respiratory products and experience in the development and
commercialization of oncology drugs to develop a significant
portfolio of proprietary, high value pharmaceutical products.
- Pursuing Complementary, Accretive or Strategic Acquisitions.
We intend to pursue accretive or strategic business
acquisitions or ones that will complement our existing
businesses and provide new product and market opportunities,
as well as leverage our existing assets. In addition, we will
continue to actively pursue strategic product acquisitions and
other collaborative arrangements that permit us to leverage
our existing infrastructure by adding sales from acquired
products while minimizing incremental costs.
- Strategically Expanding Sales and Distribution of Our
Products. We recently completed acquisitions of pharmaceutical
companies in Venezuela, Mexico and Chile and continue the
expansion of our Latin American operations. Our future plans
include (1) acquiring additional manufacturing and
distribution capabilities in Europe and Latin America and (2)
establishing additional joint ventures and selectively
establishing distribution channels for our major products in
Asia.
PHARMACEUTICAL BUSINESS
We have pharmaceutical manufacturing facilities located in Argentina,
Chile, China, the Czech Republic, England, Germany, Hungary, Ireland, Mexico,
Peru, Puerto Rico, the United States, Uruguay, Venezuela and the Virgin Islands.
Marketing and/or research facilities are located in these same countries, and
also in Canada, France, India, Kazakhstan, Latvia, The Netherlands, Poland,
Russia, Sweden, Switzerland, The Slovak Republic, Taiwan and the Ukraine. In
other countries, our products are marketed through distributors or joint
ventures. Our pharmaceutical business has grown through the development and
acquisition of proprietary, brand-equivalent and over-the-counter pharmaceutical
products, the licensing of technology and products from third parties, and the
acquisition of companies engaged in the pharmaceuticals business in various
geographic regions.
Proprietary and Branded Products
We market a number of proprietary and branded products treating a
variety of conditions through our subsidiaries throughout the world. These
products are marketed by our direct sales force to physicians, pharmacies,
hospitals, managed health care organizations and government agencies. These
products are sold primarily to wholesalers, retail pharmacies, distributors,
hospitals and physicians.
We have a strong foundation in the oncology field based on our
proprietary anti-cancer drug PAXENE(R) (paclitaxel injection), which is
therapeutically equivalent to the Bristol-Myers Squibb product Taxol(R), the
largest selling anti-cancer drug in the world. In September 2000, the FDA
approved our Abbreviated New Drug Application (ANDA) for paclitaxel, which is
marketed in the U.S. as Onxol(TM).
2
We also have substantial expertise in the development, manufacture and
marketing of respiratory drugs, primarily for asthma, in metered-dose inhaler
formulations. Our subsidiary in the United Kingdom is the third largest
respiratory company in that market. At the core of our respiratory franchise are
advanced delivery systems, which include a patented metered-dose inhaler called
Easi-Breathe(R), and a unique new dry powder inhaler, as well as conventional
metered-dose inhalers.
Brand-Equivalent Products
In the United States, we manufacture and market approximately 56
brand-equivalent prescription drugs in capsule or tablet forms in an aggregate
of 123 dosage strengths. We also distribute in the United States approximately
282 additional brand-equivalent prescription and over-the-counter drugs and
vitamin supplements, in various dosage forms, dosage strengths and package
sizes. We are also a leading provider of brand-equivalent pharmaceuticals in the
United Kingdom. We market approximately 110 brand-equivalent prescription and
over-the-counter drugs, about half of which we manufacture, in various dosage
forms and dosage strengths, constituting an aggregate of approximately 229
products. In addition, we manufacture and market various "blow-fill-seal"
pharmaceutical products, such as solutions for injection or irrigation, and
unit-dose vials for nebulization to treat respiratory disorders.
OTHER BUSINESSES
Nutraceuticals. We provide contract manufacturing services for the
nutritional supplement industry from our encapsulating facility in Miami,
Florida. Utilizing herbal extracts manufactured by our Czech Republic
subsidiary, we also manufacture a line of high quality herbal nutraceutical
products in soft gelatin capsules.
Veterinary Products. We formulate, package and distribute to
veterinarians various products for companion animals under the "DVM
Pharmaceuticals" trade name. Capitalizing on our proprietary research for human
pharmaceuticals, DVM Pharmaceuticals is developing proprietary products in the
therapeutic areas of asthma, gastrointestinal disorders and skin conditions in
horses and companion animals.
Diagnostics. We own approximately 70% of the equity of IVAX
Diagnostics, Inc., a publicly traded company whose stock is listed on the
American Stock Exchange under the symbol "IVD." IVAX Diagnostics, Inc. develops,
manufactures and markets proprietary diagnostic reagents, instrumentation and
software through its subsidiaries located in the United States and Italy. Its
products include Mago(R) instruments and related diagnostic kits, as well as
autoimmune reagents and other in vitro diagnostic products for use in research,
clinical and hospital laboratories.
RECENT DEVELOPMENTS
On July 5, 2001, we acquired, through tender offers, 99.6% of the
outstanding shares of Laboratorio Chile S.A., a Chilean pharmaceutical company
with operations in Chile, Argentina and Peru. On September 17, 2001, we
completed our tender offers for the remaining outstanding shares. As a result of
the two offers, we acquired 99.9% of the outstanding shares of Laboratorio
Chile, for an aggregate consideration of approximately US$395 million.
Laboratorio Chile is the largest Chilean pharmaceutical company in revenue terms
and is also among the major pharmaceutical companies in Argentina and Peru.
Laboratorio Chile manufactures and/or markets a broad line of more than 900
branded and brand-equivalent products in Chile, Argentina and Peru and reported
revenues of over US$173 million in 2000. Laboratorio Chile's main products are
to treat respiratory and infectious diseases, but it also has strong franchises
with cardiovascular, neurological and gynecologic products. We believe that
Laboratorio Chile, as well as our current operations in Argentina, Mexico, Peru,
Uruguay and Venezuela, create an
3
excellent platform from which to launch our proprietary and brand-equivalent
pharmaceutical products, as well as products from other companies which may not
be so well represented in Latin America.
On October 16, 2001, we announced the completion of our acquisition of
the intranasal steroid brand products, Nasarel(R) and Nasalide(R), from Elan
Corporation, plc. These products are for the treatment of allergic rhinitis
which affects more than 25% of the U.S. population. We will immediately begin
marketing these products in the U.S. through our subsidiary, IVAX Laboratories,
Inc. (f/k/a Wakefield Pharmaceuticals).
On October 25, 2001, we announced our financial results for the third
quarter ended September 30, 2001. Net income for the third quarter of 2001 was
$61.5 million, or $.30 per diluted share, representing an increase of 99% over
net income of $30.9 million, or $.15 per diluted share, reported in the third
quarter of 2000. Our net income also includes nearly $7.1 million in gains on
the early retirement of debt. Net revenues for the third quarter of 2001
increased by 76% to $322.0 million as compared to net revenues of $182.6 million
in the third quarter of 2000.
PRINCIPAL EXECUTIVE OFFICES
Our principal executive offices are located at 4400 Biscayne Boulevard,
Miami, Florida 33137, and our telephone number is (305) 575-6000.
4
RISK FACTORS
You should carefully consider the following risks before making an
investment decision. These and other risks could materially and adversely affect
our business, operating results or financial condition. You should also refer to
the other information contained or incorporated by reference in this prospectus,
before making an investment decision.
Risks Relating to Our Company
OUR RESEARCH AND DEVELOPMENT EXPENDITURES MAY NOT RESULT IN COMMERCIALLY
SUCCESSFUL PRODUCTS.
We spent approximately $65.3 million during 2000 and $38.9 million
during the first six months of 2001 on our research and development efforts.
This amount represents a significant increase in the amounts we allocated to
research and development in prior periods. We may in the future increase the
amounts we expend for research and development. As a result, our research and
development expenditures may have an adverse impact on our earnings in the short
term. Further, we cannot be sure that our research and development expenditures
will, in the long term, result in the discovery or development of products which
prove to be commercially successful.
OUR POTENTIAL ACQUISITIONS MAY REDUCE OUR EARNINGS, BE DIFFICULT FOR US TO
COMBINE INTO OUR OPERATIONS OR REQUIRE US TO OBTAIN ADDITIONAL FINANCING.
We search for and evaluate acquisitions which will provide new product
and market opportunities, benefit from and maximize our existing assets and add
critical mass. Acquisitions may expose us to additional risks and may have a
material adverse effect on our results of operations. Any acquisitions we make
may:
- fail to accomplish our strategic objectives;
- not be successfully combined with our operations;
- not perform as expected; and
- expose us to cross border risks.
In addition, based on current acquisition prices in the pharmaceutical
industry, our acquisitions could initially reduce our per share earnings and add
significant intangible assets and related goodwill amortization charges. Our
acquisition strategy may require us to obtain additional debt or equity
financing, resulting in additional leverage, or increased debt obligations as
compared to equity, and dilution of ownership. We may not be able to finance
acquisitions on terms satisfactory to us.
WE DEPEND ON OUR DEVELOPMENT, MANUFACTURE AND MARKETING OF NEW PRODUCTS FOR OUR
FUTURE SUCCESS.
Our future success is largely dependent upon our ability to develop,
manufacture and market commercially successful new pharmaceutical products and
brand-equivalent versions of pharmaceutical products that are no longer subject
to patents. Generally, the commercial marketing of pharmaceutical products
depends upon:
- continually developing and testing products;
- proving that new products are safe and effective in clinical
trials;
5
- proving that there is no significant difference in the rate
and extent to which the active ingredient in the
brand-equivalent product becomes available at the site of drug
action as compared to the brand name version; and
- receiving requisite regulatory approval for all new products.
Delays in the development, manufacture and marketing of new products
will impact our results of operations. Each of the steps in the development,
manufacture and marketing of our products, as well as the process taken as a
whole, involves significant periods of time and expense. We cannot be sure that:
- any of our products presently under development, if and when
fully developed and tested, will perform as we expect;
- we will obtain necessary regulatory approvals in a timely
manner, if at all; or
- we can successfully and profitably produce and market any of
our products.
WE DEPEND ON OUR PATENTS AND PROPRIETARY RIGHTS AND CANNOT BE CERTAIN OF THEIR
CONFIDENTIALITY AND PROTECTION.
Our success with our proprietary products depends, in large part, on
our ability to protect our current and future technologies and products and to
defend our intellectual property rights. If we fail to adequately protect our
intellectual property, competitors may manufacture and market products similar
to ours. We have numerous patents covering our technologies. We have filed, and
expect to continue to file, patent applications seeking to protect newly
developed technologies and products in various countries, including the United
States. The United States Patent and Trademark Office does not publish patent
applications or make information about pending applications available to the
public until it issues the patent. Since publication of discoveries in the
scientific or patent literature tends to follow actual discovery by several
months, we cannot be certain that we were the first to file patent applications
on our discoveries. We cannot be sure that we will receive patents for any of
our patent applications or that any existing or future patents that we receive
or license will provide competitive advantages for our products. We also cannot
be sure that competitors will not challenge, invalidate or avoid the application
of any existing or future patents that we receive or license. In addition,
patent rights may not prevent our competitors from developing, using or selling
products that are similar or functionally equivalent to our products.
We also rely on trade secrets, unpatented proprietary know-how and
continuing technological innovation. We use confidentiality agreements with
licensees, suppliers, employees and consultants to protect our trade secrets,
unpatented proprietary know-how and continuing technological innovation. We
cannot assure you that these parties will not breach their agreements with us.
We also cannot be certain that we will have adequate remedies for any breach.
Disputes may arise concerning the ownership of intellectual property or the
applicability of confidentiality agreements. Furthermore, we cannot be sure that
our trade secrets and proprietary technology will not otherwise become known or
that our competitors will not independently develop our trade secrets and
proprietary technology. We also cannot be sure, if we do not receive patents for
products arising from research, that we will be able to maintain the
confidentiality of information relating to our products.
THIRD PARTIES MAY CLAIM THAT WE INFRINGE THEIR PROPRIETARY RIGHTS AND MAY
PREVENT US FROM MANUFACTURING AND SELLING SOME OF OUR PRODUCTS.
The manufacture, use and sale of new products that are the subject of
conflicting patent rights have been the subject of substantial litigation in the
pharmaceutical industry. These lawsuits relate to the validity and infringement
of patents or proprietary rights of third parties. We may have to defend against
6
charges that we violated patents or proprietary rights of third parties. This is
especially true for the sale of the brand-equivalent version of products on
which the patent covering the branded product is expiring, an area where
infringement litigation is prevalent. Our defense against charges that we
infringed third party patents or proprietary rights could require us to incur
substantial expense and to divert significant effort of our technical and
management personnel. If we infringe on the rights of others, we could lose our
right to develop or make some products or could be required to pay monetary
damages or royalties to license proprietary rights from third parties.
Although the parties to patent and intellectual property disputes in
the pharmaceutical industry have often settled their disputes through licensing
or similar arrangements, the costs associated with these arrangements may be
substantial and could include ongoing royalties. Furthermore, we cannot be
certain that the necessary licenses would be available to us on terms we believe
to be acceptable. As a result, an adverse determination in a judicial or
administrative proceeding or failure to obtain necessary licenses could prevent
us from manufacturing and selling a number of our products.
REDUCTIONS IN THE SALES VOLUME OR MARGINS OF OUR PACLITAXEL PRODUCT COULD IMPACT
OUR REVENUES AND MARGINS.
Sales of our paclitaxel product represented a significant component of
our net revenues during the first nine months of 2001. In addition, an important
component of our 2001 and 2002 revenue and gross margin estimates depends on our
sales of paclitaxel. Recently, two competitors have received FDA approval for
the sale of their paclitaxel products and others may receive similar approvals.
Competitive pressures during the third quarter of 2001 have resulted in lower
prices and reduced revenues for our paclitaxel product. Our competitors and any
future competitors may continue to lower the price of such products and could
gain market share. Additionally, we currently rely on third parties to supply
raw materials for, and to manufacture, our paclitaxel products; in the future
these parties may not produce for us a continuing and reliable supply of
paclitaxel or the cost of such supply may significantly increase. The reduction
of the market price of paclitaxel, our loss of market share or our inability to
obtain a cost-effective supply of paclitaxel may result in a continued decrease
of net sales and gross margin from our paclitaxel product.
FUTURE INABILITY TO OBTAIN RAW MATERIALS OR PRODUCTS COULD SERIOUSLY AFFECT OUR
OPERATIONS.
In many instances, we obtain raw materials and other products from
single domestic or foreign suppliers. Political disruptions have and may
continue to impact our ability to transport raw materials from foreign suppliers
and to ship finished goods worldwide. Additionally, many of the raw materials
utilized in our pharmaceutical products are rare or difficult to obtain.
Interruptions in supply or scarcity of raw materials would require us to seek to
obtain substitute materials or products, which, even if available, would require
additional regulatory approvals. Further, we cannot assure you that our third
party suppliers will continue to supply us. In addition, changes in our raw
material suppliers could result in delays in production, higher raw material
costs and loss of sales and customers because regulatory authorities must
generally approve raw material sources for pharmaceutical products. Any
significant interruption of supply could have a material adverse effect on our
operations.
MARKETING PRACTICES SUCH AS RETURNS, ALLOWANCES AND CHARGE-BACKS AND MARKETING
PROGRAMS ADOPTED BY WHOLESALERS MAY REDUCE SALES REVENUES IN SUBSEQUENT PERIODS.
Based on industry practice, brand-equivalent manufacturers, including
us, have liberal return policies and have been willing to give customers
post-sale inventory allowances. Under these arrangements, the manufacturers give
customers credits on the manufacturer's brand-equivalent products which the
customers hold in inventory after decreases in the market prices of the
brand-equivalent
7
products. Therefore, if new competitors enter the marketplace and significantly
lower the prices of any of our products, we would have to provide significant
credits that could reduce sales and gross margin. Like our competitors, we also
give credits for charge-backs to wholesale customers that have contracts with us
for their sales to hospitals, group purchasing organizations, pharmacies or
other retail customers. A charge-back is the difference between the price the
wholesale customer pays and the price that the wholesale customer's end-customer
pays for a product. Although we establish reserves based on our prior experience
and our best estimates of the impact that these policies may have in subsequent
periods, we cannot ensure that our reserves are adequate or that actual product
returns, inventory allowances and charge-backs will not exceed our estimates. In
the second quarter of 1996, based upon price declines at a time of significant
inventory levels, these credits were approximately $44 million higher than the
average levels that we experienced in prior quarters. Following our announcement
of the expected credits prior to the end of the second quarter, the market price
of our common stock immediately fell approximately 36%, and a number of persons
subsequently filed class action litigation against us based on the decline. That
class action litigation was resolved in our favor when the court dismissed it on
the merits.
THE CONCENTRATION OF OWNERSHIP AMONG OUR EXECUTIVE OFFICERS AND DIRECTORS MAY
PERMIT THOSE PERSONS TO INFLUENCE CORPORATE MATTERS AND POLICIES.
As of September 30, 2001, our executive officers and directors
currently have or share voting control over approximately 21.72% of our issued
and outstanding common stock. As a result, these persons may have the ability to
significantly influence the election of the members of our board of directors
and other corporate decisions.
A NUMBER OF INTERNAL AND EXTERNAL FACTORS HAVE CAUSED AND MAY CONTINUE TO CAUSE
THE MARKET PRICE OF OUR STOCK TO BE VOLATILE.
The market prices for securities of companies engaged in pharmaceutical
development, including us, have been volatile. Many factors, including many over
which we have no control, may have a significant impact on the market price of
our common stock, including without limitation:
- our or our competitors' announcement of technological
innovations or new commercial products;
- changes in governmental regulation;
- our or our competitors' receipt of regulatory approvals;
- our or our competitors' developments relating to patents or
proprietary rights;
- publicity regarding actual or potential medical results for
products that we or our competitors have under development;
and
- period-to-period changes in financial results.
POLITICAL AND ECONOMIC INSTABILITY AND FOREIGN CURRENCY FLUCTUATIONS MAY
ADVERSELY AFFECT THE REVENUES OUR FOREIGN OPERATIONS GENERATE.
Our foreign operations may be affected by the following factors, among others:
- political instability in some countries in which we currently
do business or may do business in the future through
acquisitions or otherwise;
- uncertainty as to the enforceability of, and government
control over, commercial rights;
- expropriation by foreign governmental entities; and
- currency exchange fluctuations and currency restrictions.
8
We sell products in many countries that are susceptible to significant
foreign currency risk. We sell many of these products for United States dollars,
which eliminates our direct currency risk but increases our credit risk if the
local currency devalues significantly and it becomes more difficult for
customers to purchase the United States dollars required to pay us. We sell a
growing number of products, particularly in Latin America, for local currency,
which results in a direct currency risk to us if the local currency devalues
significantly. Additional foreign acquisitions may increase our foreign currency
risk and the other risks identified above.
On June 20, 2000, we announced our acquisition of Laboratorios Elmor
S.A., a pharmaceutical company based in Venezuela. Venezuela was considered to
have a highly inflationary economy, but it is no longer considered highly
inflationary. In the third quarter of 2001, we acquired 99.9% of Laboratorio
Chile S.A., a Chilean pharmaceutical company with operations in Chile, Argentina
and Peru. Although neither Chile nor Argentina have been classified as having
highly inflationary economies, each of these economies has experienced strong
inflation rates and devaluation of their respective currencies.
INCREASED INDEBTEDNESS MAY IMPACT OUR FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
On June 30, 2001, we had approximately $1,003.6 million of consolidated
indebtedness. We may incur additional indebtedness in the future. Our level of
indebtedness will have several important effects on our future operations,
including, without limitation:
- we will be required to use a portion of our cash flow from
operations for the payment of any principal or interest due on
our outstanding indebtedness;
- our outstanding indebtedness and leverage will increase the
impact of negative changes in general economic and industry
conditions, as well as competitive pressures; and
- the level of our outstanding debt may affect our ability to
obtain additional financing for working capital, capital
expenditures or general corporate purposes.
General economic conditions, industry cycles and financial, business
and other factors affecting our operations, many of which are beyond our
control, may affect our future performance. As a result, these and other factors
may affect our ability to make principal and interest payments on our
indebtedness. We anticipate that approximately $52 million of cash flow from
operations will be required each year to discharge our annual obligations on our
currently outstanding indebtedness. Our business might not continue to generate
cash flow at or above current levels. If we cannot generate sufficient cash flow
from operations in the future to service our debt, we may, among other things:
- seek additional financing in the debt or equity markets;
- refinance or restructure all or a portion of our indebtedness;
- sell selected assets; or
- reduce or delay planned capital expenditures.
These measures might not be sufficient to enable us to service our
debt. In addition, any financing, refinancing or sale of assets might not be
available on economically favorable terms.
9
COMPLIANCE WITH GOVERNMENTAL REGULATION IS CRITICAL TO OUR BUSINESS.
Our pharmaceutical and diagnostic operations are subject to extensive
regulation by governmental authorities in the United States and other countries
with respect to the testing, approval, manufacture, labeling, marketing and sale
of pharmaceutical and diagnostic products. We devote significant time, effort
and expense to addressing the extensive government regulations applicable to our
business. In general, the trend is toward more stringent regulation.
On an ongoing basis, the FDA reviews the safety and efficacy of
marketed pharmaceutical products and products considered medical devices and
monitors labeling, advertising and other matters related to the promotion of
such products. The FDA also regulates the facilities and procedures used to
manufacture pharmaceutical and diagnostic products in the United States or for
sale in the United States. Such facilities must be registered with the FDA and
all products made in such facilities must be manufactured in accordance with
"good manufacturing practices" established by the FDA. Compliance with good
manufacturing practices guidelines requires the dedication of substantial
resources and requires significant costs. The FDA periodically inspects our
manufacturing facilities and procedures to assure compliance. The FDA may cause
a recall or withdraw product approvals if regulatory standards are not
maintained. The FDA approval to manufacture a drug is site-specific. In the
event an approved manufacturing facility for a particular drug becomes
inoperable, obtaining the required FDA approval to manufacture such drug at a
different manufacturing site could result in production delays, which could
adversely affect our business and results of operations.
In connection with our activities outside the United States, we are
also subject to regulatory requirements governing the testing, approval,
manufacture, labeling, marketing and sale of pharmaceutical and diagnostic
products, which requirements vary from country to country. Whether or not FDA
approval has been obtained for a product, approval of the product by comparable
regulatory authorities of foreign countries must be obtained prior to marketing
the product in those countries. The approval process may be more or less
rigorous from country to country, and the time required for approval may be
longer or shorter than that required in the United States. Our inability or
delay in receiving or the loss of any approval could have a material adverse
effect on our results of operations.
WE HAVE ENACTED A SHAREHOLDER RIGHTS PLAN AND CHARTER PROVISIONS THAT MAY HAVE
ANTI-TAKEOVER EFFECTS.
We have in place a shareholder rights plan under which we issued common
stock purchase rights. As a result of the plan, each share of our common stock
carries with it one common stock purchase right. Each common stock purchase
right entitles the registered holder to purchase from us .9375 of a share of our
common stock at a price of $12.00 per .9375 of a share, subject to adjustment.
The common stock purchase rights are intended to cause substantial dilution to a
person or group who attempts to acquire us on terms that our board of directors
has not approved. The existence of the common stock purchase rights could make
it more difficult for a third party to acquire a majority of our common stock.
Other provisions of our articles of incorporation and bylaws may also have the
effect of discouraging, delaying or preventing a merger, tender offer or proxy
contest, which could have an adverse effect on the market price of our common
stock.
10
Risks Relating to Our Industry
OUR REVENUES AND PROFITS FROM BRAND-EQUIVALENT PHARMACEUTICALS WILL DECLINE AS
WE OR OUR COMPETITORS INTRODUCE ADDITIONAL BRAND-EQUIVALENTS OF THOSE PRODUCTS.
Revenues and gross profit derived from brand-equivalent pharmaceutical
products tend to follow a pattern based on regulatory and competitive factors
unique to the brand-equivalent pharmaceutical industry. As patents for brand
name products and the related exclusivity periods established by regulation
expire, the first brand-equivalent manufacturer to apply for regulatory approval
for a brand-equivalent of a brand name product may be entitled to a 180-day
period of marketing exclusivity under the Hatch-Waxman Act. During this
exclusivity period, the United States Food and Drug Administration, or FDA,
cannot approve any other brand-equivalent. If we are not the first
brand-equivalent applicant, our brand-equivalent product will be kept off the
market for an additional 180 days after the brand name drug's patents expire.
Whether due to the 180-day period of marketing exclusivity or other factors that
delay the approval of other brand-equivalent competitors, the first
brand-equivalent on the market is usually able to initially achieve relatively
high revenues and gross profit. As other brand-equivalent manufacturers receive
regulatory approvals on competing products, prices and revenues typically
decline. The timing of these declines is unpredictable and can result in a
significantly curtailed period of profitability for a brand-equivalent product.
The level of revenues and gross profit attributable to brand-equivalent products
that we develop and manufacture is dependent, in part, on:
- our ability to develop and introduce new brand-equivalent
products;
- the timing of regulatory approval of brand-equivalent
products;
- the number and timing of regulatory approvals of competing
products;
- strategies brand name companies adopt to maintain their market
share; and
- our cost of manufacturing.
Brand-equivalent products (but not including branded brand-equivalent
products) represented 49%, 56% and 51% of our revenues for the years ended
December 31, 2000, 1999 and 1998, respectively.
LEGISLATIVE PROPOSALS, REIMBURSEMENT POLICIES OF THIRD PARTIES, COST CONTAINMENT
MEASURES AND HEALTH CARE REFORM COULD AFFECT THE MARKETING, PRICING AND DEMAND
FOR OUR PRODUCTS.
Various legislative proposals, including proposals relating to
prescription drug benefits, could materially impact the pricing and sale of our
products. Further, reimbursement policies of third parties may affect the
marketing of our products. Our ability to market our products will depend in
part on reimbursement levels for the cost of the products and related treatment
established by health care providers, including government authorities, private
health insurers and other organizations, such as health maintenance
organizations, or HMOs, and managed care organizations, or MCOs. Insurance
companies, HMOs, MCOs, Medicaid and Medicare administrators and others are
increasingly challenging the pricing of pharmaceutical products and reviewing
their reimbursement practices. In addition, the following factors could
significantly influence the purchase of pharmaceutical products, which would
result in lower prices and a reduced demand for our products:
- the trend toward managed health care in the United States;
- the growth of organizations such as HMOs and MCOs;
- legislative proposals to reform health care and government
insurance programs; and
- price controls and non-reimbursement of new and highly priced
medicines for which the economic therapeutic rationales are
not established.
11
THESE COST CONTAINMENT MEASURES AND HEALTH CARE REFORM PROPOSALS COULD AFFECT
OUR ABILITY TO SELL OUR PRODUCTS.
The reimbursement status of a newly approved pharmaceutical product may
be uncertain. Reimbursement policies may not include some of our products. Even
if reimbursement policies of third parties grant reimbursement status for a
product, we cannot be sure that these reimbursement policies will remain in
effect. Limits on reimbursement could reduce the demand for our products. The
unavailability or inadequacy of third party reimbursement for our products would
reduce or possibly eliminate demand for our products. We are unable to predict
whether governmental authorities will enact additional legislation or regulation
which will affect third party coverage and reimbursement that reduces demand for
our products.
OUR INDUSTRY IS HIGHLY COMPETITIVE WHICH AFFECTS OUR PRODUCT SELECTION, PRICING,
GROSS PROFIT AND MARKET SHARE.
The pharmaceutical industry is intensely competitive. Most or all of
the products that we sell or license will face competition from different
chemical or other agents intended to treat the same diseases. Our current and
future products will also face competition from traditional forms of drug
delivery and from advanced delivery systems others are developing. Our
competitors vary depending upon geographic regions, product categories, and
within each product category, upon dosage strengths and drug delivery systems.
Some of our major competitors are:
- 3M
- Astra Zeneca
- Barr Laboratories
- Boehringer Ingelheim
- Bristol-Myers Squibb
- Geneva Pharmaceuticals
- Glaxo Wellcome
- Eli Lilly
- Mylan Pharmaceuticals
- Novartis Pharmaceuticals
- Schering-Plough
- Teva Pharmaceuticals
Our competitors may be able to develop products and processes competitive with
or superior to our own for many reasons, including that they may have:
- significantly greater financial resources;
- larger research and development and marketing staffs; or
- larger production facilities or extensive experience in
preclinical testing and human clinical trials.
12
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by reference into this
prospectus contain "forward-looking statements" within the meaning of Section
27A of the Securities Act and Section 21E of the Exchange Act. These statements
relate to expectations, beliefs, projections, future plans and strategies,
anticipated events or trends and similar expressions concerning matters that are
not historical facts. Specifically, this prospectus and the documents
incorporated into this prospectus by reference contain forward-looking
statements regarding:
- our intention to generate growth through the introduction of
new proprietary drugs, the expanded sale and distribution of
our current products, the acquisition of new businesses and
products and strategic collaborations;
- the ability of our research programs to develop improved forms
of drugs, novel compounds and new delivery systems, including
the development of improved formulations of paclitaxel and
complementary products;
- our ability to integrate operations and exploit opportunities
among our subsidiaries;
- our capacity to become a worldwide leader in the asthma
market;
- our ability to capitalize on current relationships in the
oncology market to market new brand-equivalent biotech drugs
and our commercialization of Paxoral(TM) and other oncology
products;
- our capability to identify, acquire and successfully integrate
new acquisitions of companies and products;
- anticipated benefits stemming from the acquisition of
Laboratorio Chile;
- the ability of our new patented oral administration system to
provide patients effective doses of paclitaxel with more
convenience and reduced side-effects and the applicability of
this system to other chemotherapeutic agents;
- our ability to develop Easi-Breathe(R) for use with various
compounds;
- our ability to further develop CFC-free inhalation aerosol
products;
- our ability to develop a corticosteroid with minimal side
effects to treat asthma and inflammatory diseases of the large
intestine;
- our ability to develop new formulations and obtain marketing
authorizations which will enable us to be the first, or among
the first, to launch brand-equivalent products;
- our ability to further develop and market talampanel,
cladribine, human growth hormone, interferon or products to
treat cystic fibrosis;
- our ability to develop or license proprietary products for
indications having large patient populations, or for which
limited or inadequate treatments exist;
- our capacity to accelerate product development and
commercialization by in-licensing products and by developing
new dosage forms or new therapeutic indications for existing
products;
- anticipated trends in the pharmaceutical industry and the
effect of technological advances on competition;
- our estimates regarding the capacity of our facilities;
- our intention to fund capital expenditures from existing cash
and internally generated funds; and
- our ability to use Laboratorio Chile and our other foreign
subsidiaries to launch our proprietary and brand-equivalent
pharmaceutical products in Latin American markets.
13
These forward-looking statements reflect our current views about future
events and are subject to risks, uncertainties and assumptions. We wish to
caution readers that certain important factors may have affected and could in
the future affect our actual results and could cause actual results to differ
significantly from those expressed in any forward-looking statement. The most
important factors that could prevent us from achieving our goals, and cause the
assumptions underlying forward-looking statements and the actual results to
differ materially from those expressed in or implied by those forward-looking
statements include, but are not limited to, the following:
- difficulties we may experience in product development;
- efficacy or safety concerns with respect to marketed products,
whether or not scientifically justified, leading to recalls,
withdrawals or declining sales;
- our ability to obtain new materials or products;
- our ability to identify potential acquisitions and to
successfully acquire and integrate such operations or
products;
- our failure to realize the anticipated benefits of the
acquisition of Laboratorio Chile;
- risks that arise from the operation of Laboratorio Chile;
- our ability to obtain approval from the FDA to market new
pharmaceutical products;
- the acceptance of new products by the medical community as
effective as alternative forms of treatment for indicated
conditions;
- the outcome of any pending or future litigation; and
- the impact of new regulations or court decisions regarding the
protection of patents and the exclusivity period for the
marketing of branded drugs.
You should read carefully the section of this prospectus under the heading "Risk
Factors" beginning on page 5. We assume no responsibility for updating
forward-looking statements contained in this prospectus, any supplements to this
prospectus, and in any documents that we incorporate by reference into this
prospectus.
USE OF PROCEEDS
Unless otherwise set forth in the applicable prospectus supplement, we
anticipate that we will use the net proceeds of our offerings for general
corporate purposes, which may include, but are not limited to:
- working capital;
- capital expenditures;
- acquisitions; and
- the repayment or refinancing of our indebtedness.
14
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our consolidated ratio of earnings to fixed
charges for the years ended December 31, 1996, 1997, 1998, 1999 and 2000 and for
the six months ended June 30, 2001.
Year Ended December 31,
----------------------------------------------- Six Months Ended
1996 1997 1998 1999 2000 June 30, 2001
---- ---- ---- ---- ---- ----------------
Ratio of earnings to fixed charges. . . . . (10.5)x(1) (9.7)x(1) 5.9x 15.3x 11.1x 11.2x
---------
(1) The dollar amounts of the coverage deficiency for the years ended
December 31, 1996 and 1997 were $189.4 million and $160.5 million,
respectively.
The ratio of earnings to fixed charges was calculated by dividing
earnings by total fixed charges. Earnings consist of pretax income plus fixed
charges. Fixed charges consist of interest expense on all indebtedness
(including amortization of deferred debt issuance costs) and a portion of rent
expense (5-8%) estimated by management to be the interest component of such
rentals.
15
DESCRIPTION OF DEBT SECURITIES
This prospectus describes the general terms and provisions of the debt
securities that we may offer by this prospectus. When we offer to sell a
particular series of debt securities, we will describe the specific terms of
that series in a supplement to this prospectus. We will also indicate in the
prospectus supplement whether the general terms and provisions that we describe
in this prospectus apply to that particular series of debt securities. For a
complete description of the material terms of a particular issue of debt
securities, you must refer to both the prospectus supplement relating to that
series and to the following description.
If issued, we will issue the debt securities under an indenture between
us and U.S. Bank Trust National Association, as trustee. The indenture is
subject to, and governed by, the Trust Indenture Act of 1939. We have filed a
copy of the indenture as an exhibit to the registration statement of which this
prospectus forms a part. We have summarized the material portions of the
indenture below, but you should read the indenture for other provisions that may
be important to you. We qualify the following summary in its entirety by
reference to the provisions of the indenture.
GENERAL
We will establish the terms of each series of debt securities that we
will issue under the indenture by a resolution of our board of directors. We
will detail the terms of the debt securities that we will offer in an officers'
certificate under the indenture or by a supplemental indenture. We will describe
the particular terms of each series of debt securities that we issue in a
prospectus supplement relating to that series.
Under the indenture, we can issue an unlimited amount of debt
securities, including debt securities that are convertible into or exchangeable
for our other securities, including our common stock. We may issue the debt
securities:
- in one or more series;
- with the same or various maturities;
- at par;
- at a premium; or
- at a discount.
For each series of debt securities that we offer, we will distribute a
prospectus supplement that will disclose:
- the initial offering price;
- the aggregate principal amount of that series of debt
securities;
- the title of the debt securities;
- any limit on the aggregate principal amount of the debt
securities;
- the date or dates on which we will pay the principal on the
debt securities;
- the annual rate or rates (which may be fixed or variable) or
the method used to determine the rate or rates (including any
commodity, commodity index, stock exchange index or financial
index) at which the debt securities will bear interest;
- the date or dates from which interest will accrue;
- the date or dates on which interest will commence and be
payable;
- any regular record date for the interest payable on any
interest payment date;
- the place or places where we will pay the principal, premium,
and interest with respect to the
16
debt securities;
- whether the debt securities will be convertible into other
securities and the terms and conditions upon which the holder
of debt securities may convert the debt securities;
- the terms and conditions upon which we may redeem the debt
securities;
- any obligation we have to redeem or purchase the debt
securities under any sinking fund or similar provisions or at
the option of a holder of debt securities;
- the dates on which and the price or prices at which we will
repurchase the debt securities at the option of the holders of
debt securities and other detailed terms and provisions of
these repurchase obligations;
- the denominations in which we will issue the debt securities
will be issued, if we issue them other than denominations of
$1,000 and any integral multiple thereof;
- whether we will issue the debt securities in the form of
certificated debt securities or global securities, or the
portion of principal amount of the debt securities that we
must pay if the maturity date of the debt security
accumulates, if different than the principal amount;
- the currency of denomination of the debt securities;
- the designation of the currency, currencies or currency unit
in which we must pay the principal, premium and interest with
respect to the debt securities;
- if we must pay the principal, premium or interest on the debt
securities in one or more currencies or currency units other
than that or those in which the debt securities are
denominated, the manner in which we will determine the
exchange rate for these payments;
- the manner in which we will determine the amounts of the
principal, premium or interest we must pay on the debt
securities, if we will determine these amounts by reference to
an index based on a currency or currencies other than that in
which the debt securities are denominated or designated to be
payable or by reference to a commodity, commodity index, stock
exchange index or financial index;
- any provisions relating to any security that we will provide
for the debt securities;
- any addition to or change in the events of default that we
describe in this prospectus or in the indenture;
- any change in the acceleration provisions that we describe in
this prospectus or in the indenture;
- any addition to or change in the covenants described in this
prospectus or in the indenture with respect to the debt
securities;
- any other terms of the debt securities, which may modify or
delete any provision of the indenture as it applies to that
series; and
- any depositaries, interest rate calculation agents, exchange
rate calculation agents or other agents with respect to the
debt securities.
We may issue debt securities that provide that we must only pay an
amount less than their stated principal amount if their maturity date
accelerates. In the prospectus supplement, we will also provide you with
information on the federal income tax considerations and other special
considerations which apply to any of the particular debt securities.
If we denominate the purchase price of any of the debt securities in a
foreign currency or currencies or a foreign currency unit or units, or if we
must pay the principal, premium and interest with respect to any series of debt
securities in a foreign currency or currencies or a foreign currency unit or
units, we will provide you with information on the restrictions, elections,
general tax considerations, specific terms and other information with respect to
that issue of debt securities and the applicable foreign currency or currencies
or foreign currency unit or units in the applicable prospectus supplement.
17
PAYMENT OF INTEREST AND EXCHANGE
Each debt security will be represented by either:
- one or more global securities registered in the name of The
Depository Trust Company, or DTC, as depositary, or a nominee
of DTC, (a "book-entry debt security"); or
- a certificate issued in definitive registered form (a
"certificated debt security").
We will describe whether the particular series of debt securities will
be a book-entry debt security or a certificated debt security in the applicable
prospectus supplement. Except as we describe under "Global Debt Securities and
Book-Entry System" below, we will not issue book-entry debt securities in
certificated form.
Certificated Debt Securities. You may transfer or exchange
"certificated debt securities," debt securities evidenced by a certificate, at
the trustee's office or at paying agencies as we provide for in the indenture.
We will not charge you any service charge for any transfer or exchange of
certificated debt securities, but we may require you to pay of a sum sufficient
to cover any tax or other governmental charge that may be required in connection
with your transfer or exchange.
You may transfer certificated debt securities and the right to receive
the principal, premium and interest on certificated debt securities only by
surrendering the certificate representing your certificated debt securities.
After you surrender your certificated debt securities. We or the trustee will
reissue your certificate to the new holder or we or the trustee will issue a new
certificate to the new holder.
Global Debt Securities and Book-Entry System. A global debt security is
a debt security that represents, and is denominated in an amount equal to the
aggregate principal amount of, all outstanding debt securities of a series, or
any portion thereof, in either case having the same terms, including the same:
- original issue date;
- date or dates on which we must pay principal and interest; and
- interest rate or method of determining interest.
We will deposit each global debt security representing book-entry debt
securities with, or on behalf of, the depositary. We will also register the
global debt security in the name of the depositary or its nominee. The
depositary has indicated it intends to follow the following procedures with
respect to book-entry debt securities.
Only persons who have accounts with the depositary for the related
global debt security, or participants, or a person that holds an interest
through a participant may own beneficial interests in book-entry debt
securities. When we issue a global debt security, the depositary will credit, on
its book-entry registration and transfer system, the participants' accounts with
the appropriate principal amounts of the book-entry debt securities that the
participant owns. Any dealers, underwriters or agents participating in the
distribution of the book-entry debt securities will designate the accounts that
the depositary will credit. Ownership of book-entry debt securities will be
shown on, and the transfer of the ownership interests in book-entry debt
securities will be effected only through, records that the depositary maintains
for the related global debt security (for interests of participants) and records
that the participants maintain (for interests of persons holding through
participants). The laws of some states may require that some purchasers of
securities take physical delivery of their securities in definitive form. These
laws may impair the ability to own, transfer or pledge beneficial interests in
book-entry debt securities, since we
18
will not issue book-entry debt securities in certificated form, except under the
special circumstances that we describe below.
So long as the depositary, or its nominee, is the registered owner of a
global debt security, we will consider the depositary or its nominee as the sole
owner or holder of the book-entry debt securities represented by the associated
global debt security for all purposes under the indenture. Except as we describe
in this prospectus or the applicable prospectus supplement, beneficial owners of
book-entry debt securities will not be entitled to have securities registered in
their names and will not receive or be entitled to receive physical delivery of
a certificate in definitive form representing their securities. We will not
consider beneficial owners of book-entry debt securities the owners or holders
of those securities under the indenture. As a result, to exercise any rights of
a holder under the indenture, each person beneficially owning book-entry debt
securities must rely on the depositary's procedures for the related global debt
security and, if that person is not a participant, on the procedures of the
participant through which that person owns its interest.
We understand, however, that under existing industry practice, the
depositary will authorize the persons on whose behalf it holds a global debt
security to exercise some rights of holders of debt securities, and the
indenture provides that we, the trustee and our respective agents will treat as
the holder of a debt security the persons specified in a written statement of
the depositary with respect to that global debt security for purposes of
obtaining any consents or directions required to be given by holders of the debt
securities under to the indenture.
We will make payments of the principal, premium and interest on the
book-entry debt securities to the depositary or its nominee, as the case may be,
as the registered holder of the related global debt security. We, the trustee
and any other agent of ours or agent of the trustee will not have any
responsibility or liability for:
- any aspect of the records relating to or payments made on
account of beneficial ownership interests in a global debt
security; or
- maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
We expect that the depositary, upon receipt of any payment of the
principal, premium or interest with respect to a global debt security, will
immediately credit the participants' accounts with payments in amounts
proportionate to the amounts of book-entry debt securities they each hold, as
shown on the records of the depositary. We also expect that payments by
participants to owners of beneficial interests in book-entry debt securities
held through those participants will be governed by standing customer
instructions and customary practices, as is now the case with the securities
held for the accounts of customers in bearer form or registered in "street
name," and will be the responsibility of those participants.
We will issue certificated debt securities in exchange for each global
debt security if the depositary is at any time unwilling or unable to continue
as depositary or ceases to be a clearing agency registered under the Securities
Exchange Act of 1934, or the Exchange Act, and we do not appoint a successor
depositary registered as a clearing agency under the Exchange Act within 90
days. In addition, we may at any time and in our sole discretion determine not
to have any of the book-entry debt securities of any series represented by one
or more global debt securities and, in that event, we will issue certificated
debt securities in exchange for the global debt securities of that series.
Holders of global debt securities may exchange their global debt securities for
certificated debt securities if an event of default under the book-entry debt
securities represented by those global debt securities has occurred and is
continuing. We will register any certificated debt securities that we issue in
exchange for a global debt
19
security in the name or names as the depositary shall instruct the trustee. We
expect that such instructions will be based upon directions received by the
depositary from participants with respect to ownership of book-entry debt
securities relating to such global debt security.
We have obtained the previous information in this section concerning
the depositary and the depositary's book-entry registration and transfer system
from sources we believe to be reliable, but we take no responsibility for the
accuracy of this information.
CONSOLIDATION, MERGER AND SALE OF ASSETS
Under the indenture we may not consolidate with or merge into, or
convey, transfer or lease all or substantially all of our properties and assets
to, any person, and we may not permit any person to merge into, or convey,
transfer or lease its properties and assets substantially as an entirety to us,
unless:
- the successor person is a corporation, partnership, trust or
other entity organized and validly existing under the laws of
any U.S. domestic jurisdiction and expressly assumes our
obligations on the debt securities and under the indenture;
- immediately after giving effect to the transaction, no event
of default, and no event which, after notice or lapse of time,
or both, would become an event of default, shall have occurred
and be continuing under the indenture; and
- we satisfy other conditions specified in the indenture.
COVENANTS
Unless we state otherwise in:
- the applicable prospectus supplement and in a supplement to
the indenture;
- a resolution of our board of directors; or
- an officers' certificate delivered under the indenture
the debt securities will not contain any restrictive covenants, including
covenants restricting us or any of our subsidiaries from incurring, issuing,
assuming or guarantying any indebtedness secured by a lien on any of our or our
subsidiaries' property or capital stock, or restricting us or any of our
subsidiaries from entering into any sale and leaseback transactions.
EVENTS OF DEFAULT
Under the indenture, an "event of default" means, with respect to any
series of debt securities, any of the following:
- our default in the payment of any interest on any debt
security of that series when it becomes due and payable, and
the continuance of that default for a period of 30 days
(unless we deposit the entire amount of the payment with the
trustee or with a paying agent prior to the expiration of the
30-day period);
- our default in the payment of principal or premium on any debt
security of that series when due and payable;
- our default in the deposit of any sinking fund payment, when
and as due on any debt security of that series;
- our default in the performance or breach of any of our other
covenants or warranties in the indenture (other than a
covenant or warranty that has been included in the indenture
solely for
20
the benefit of a series of debt securities other than that
series), which default continues uncured for a period of 60
days after we receive written notice from the trustee or we
and the trustee receive written notice from the holders of at
least 25% in principal amount of the outstanding debt
securities of that series as provided in the indenture;
- some events of bankruptcy, insolvency or reorganization; and
- any other event of default provided with respect to debt
securities of that series that is described in the applicable
supplement to this prospectus.
No event of default for a particular series of debt securities, except
for the events of default relating to events of bankruptcy, insolvency or
reorganization, will necessarily constitute an event of default for any other
series of debt securities.
If an event of default under debt securities of any series occurs and
is continuing, then the trustee or the holders of not less than 25% in principal
amount of the outstanding debt securities of that series may, declare to be due
and payable immediately the principal (or, if the debt securities of that series
are discount securities, that portion of the principal amount as may be
specified in the terms of that series) and premium of all debt securities of
that series. In the case of an event of default resulting from events of
bankruptcy, insolvency or reorganization, the principal (or such specified
amount) and premium of all outstanding debt securities will become and be
immediately due and payable without any declaration or other act by the trustee
or any holder of outstanding debt securities. At any time after a declaration of
acceleration with respect to debt securities of any series, but before the
trustee has obtained a judgment or decree for payment of the money due, the
holders of a majority in principal amount of the outstanding debt securities of
that series may, subject to our having paid or deposited with the trustee a sum
sufficient to pay overdue interest and principal which has become due other than
by acceleration and certain other conditions, rescind and annul such
acceleration if all events of default, other than the non-payment of accelerated
principal and premium with respect to debt securities of that series, have been
cured or waived as provided in the indenture. For information as to waiver of
defaults see the discussion under "Modification and Waiver" below. We refer you
to the prospectus supplement relating to any series of debt securities that are
discount securities for the particular provisions relating to acceleration of a
portion of the principal amount of the discount securities upon the occurrence
of an event of default and the continuation of an event of default.
The indenture provides that the trustee will be under no obligation to
exercise any of its rights or powers under the indenture at the request of any
holder of outstanding debt securities, unless the trustee receives indemnity
satisfactory to it against any loss, liability or expense. Subject to some
rights of the trustee, the holders of a majority in principal amount of the
outstanding debt securities of any series shall have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the trustee or exercising any trust or power conferred on the trustee with
respect to the debt securities of that series.
No holder of any debt security of any series will have any right to
institute any proceeding, judicial or otherwise, with respect to the indenture
or for the appointment of a receiver or trustee, or for any remedy under the
indenture, unless:
- that holder has previously given to the trustee written notice
of a continuing event of default under the debt securities of
that series; and
- the holders of at least 25% in principal amount of the
outstanding debt securities of that series have made written
request, and offered reasonable indemnity, to the trustee to
institute such proceeding as trustee, and the trustee shall
not have received from the holders of a majority in principal
amount of the outstanding debt securities of that series a
direction inconsistent with
21
that request and has failed to institute the proceeding within
60 days.
Notwithstanding the foregoing, the holder of any debt security will
have an absolute and unconditional right to receive payment of the principal,
premium and any interest with respect to that debt security on or after the due
dates expressed in that debt security and to institute suit for the enforcement
of payment.
The indenture requires us, within 90 days after the end of our fiscal
year, to furnish to the trustee a statement of our compliance with the
indenture. The indenture provides that the trustee may withhold notice to the
holders of debt securities of any series of any default or event or default
(except in payment on any debt securities of that series) with respect to debt
securities of that series if it in good faith determines that withholding notice
is in the interest of the holders of those debt securities.
MODIFICATION AND WAIVER
We and the trustee may modify and amend the indenture with the consent
of the holders of at least a majority in principal amount of the outstanding
debt securities of each series affected by the modifications or amendments. We
and the trustee may not make any modification or amendment without the consent
of the holder of each affected debt security then outstanding if that amendment
will:
- change the amount of debt securities whose holders must
consent to an amendment or waiver;
- reduce the rate of or extend the time for payment of interest
(including default interest) on any debt security;
- reduce the principal of or premium on or change the fixed
maturity of any debt security or reduce the amount of, or
postpone the date fixed for, the deposit of any sinking fund
payment or analogous obligation with respect to any series of
debt securities;
- reduce the principal amount of discount securities payable
upon acceleration of maturity;
- waive a default in the payment of the principal, premium or
interest with respect to any debt security (except a
rescission of acceleration of the debt securities of any
series by the holders of at least a majority in aggregate
principal amount of the then outstanding debt securities of
that series and a waiver of the payment default that resulted
from that acceleration);
- make the principal, premium or interest with respect to any
debt security payable in currency other than that stated in
the debt security;
- make any change to certain provisions of the indenture
relating to, among other things, the right of holders of debt
securities to receive payment of the principal, premium and
interest with respect to those debt securities and to
institute suit for the enforcement of any payment and to
waivers or amendments; or
- waive a redemption payment with respect to any debt security
or change any of the provisions with respect to the redemption
of any debt securities.
Except for some specified provisions of the indenture, the holders of
at least a majority in principal amount of the outstanding debt securities of
any series may on behalf of the holders of all debt securities of that series
waive our compliance with provisions of the indenture. The holders of a majority
in principal amount of the outstanding debt securities of any series may on
behalf of the holders of all the debt securities of that series waive any past
default under the indenture with respect to that series and its consequences,
except a default in the payment of the principal, premium or any interest with
respect to any debt security of that series; provided, however, that the holders
of a majority in principal amount of the outstanding debt securities of any
series may rescind an acceleration and its consequences, including any related
payment default that resulted from the acceleration.
22
Defeasance of Debt Securities and Certain Covenants in Certain
Circumstances Legal Defeasance. The indenture provides that, unless the terms of
the applicable series of debt securities provide otherwise, we may be discharged
from any and all obligations under the debt securities of any series (except for
some obligations to register the transfer or exchange of debt securities of the
series, to replace stolen, lost or mutilated debt securities of the series, and
to maintain paying agencies and certain provisions relating to the treatment of
funds held by paying agents). We will be discharged when we deposit with the
trustee, in trust, money and/or U.S. government obligations or, in the case of
debt securities denominated in a single currency other than U.S. dollars,
foreign government obligations, that, through the payment of interest and
principal in accordance with their terms, will provide money in an amount
sufficient in the opinion of a nationally recognized firm of independent public
accountants to pay and discharge each installment of principal, premium and
interest, and any mandatory sinking fund payments for the debt securities of
that series on the stated maturity in accordance with the terms of the indenture
and those debt securities.
We will be discharged only if, among other things, we have delivered to
the trustee an officers' certificate and an opinion of counsel stating that we
have received from the United States Internal Revenue Service, or that the
United States Internal Revenue Service has published, a ruling or, since the
date of execution of the indenture, there has been a change in the applicable
United States federal income tax law, in either case to the effect that, holders
of the debt securities of the series from which we wish to be discharged will:
- not recognize income, gain or loss for United States federal
income tax purposes as a result of the deposit, defeasance and
discharge; and
- will be subject to United States federal income tax on the
same amount and in the same manner and at the same times as
would have been the case if the deposit, defeasance and
discharge had not occurred.
Defeasance of Covenants. The indenture provides that, unless otherwise
provided by the terms of the applicable series of debt securities, upon
compliance with specified conditions we may omit to comply with the restrictive
covenants contained in Sections 4.2, 4.3, 4.4, 4.5, 4.6 and 5.1 of the
indenture, as well as any additional covenants contained in a supplement to the
indenture, a resolution of the Board of Directors or an officers' certificate
delivered pursuant to the indenture.
The conditions include:
- our depositing with the trustee money and/or U.S. government
obligations or, in the case of debt securities denominated in
a single currency other than U.S. dollars, foreign government
obligations, that, through the payment of interest and
principal in accordance with their terms, will provide money
in an amount sufficient in the opinion of a nationally
recognized firm of independent public accountants to pay
principal, premium and interest, and any mandatory sinking
fund payments or the debt securities of that series on the
stated maturity in accordance with the terms of the indenture
and those debt securities; and
- our delivering to the trustee an opinion of counsel to the
effect that the holders of the debt securities of that series
will not recognize income, gain or loss for United States
federal income tax purposes as a result of the deposit and
related covenant defeasance and will be subject to United
States federal income tax in the same amount and in the same
manner and at the same times as would have been the case if
the deposit and related covenant defeasance had not occurred.
23
Covenant Defeasance and Events of Default. In the event we exercise our
option not to comply with some covenants of the indenture with respect to any
series of debt securities and the debt securities of that series are declared
due and payable because of the occurrence of any event of default, the amount of
money and/or U.S. government obligations or foreign government obligations we
have deposited with the trustee will be sufficient to pay amounts due on the
debt securities of that series at the time of their stated maturity but may not
be sufficient to pay amounts due on the debt securities of that series at the
time of the acceleration resulting from the event of default. However, we will
remain liable for those payments.
"Foreign government obligations" means for the debt securities of any
series that are denominated in a currency other than U.S. dollars:
- direct obligations of the government that issued or caused to
be issued the currency in question for the payment of which
obligations its full faith and credit is pledged, which are
not callable or redeemable at the option of the issuer
thereof; or
- obligations of a person controlled or supervised by or acting
as an agency or instrumentality of that government the timely
payment of which is unconditionally guaranteed as a full faith
and credit obligation by that government, which are not
callable or redeemable at the option of the issuer thereof.
GOVERNING LAW
The indenture and the debt securities will be governed by, and
construed under the internal laws of the State of Florida.
24
DESCRIPTION OF CAPITAL STOCK
DESCRIPTION OF COMMON STOCK
We have the authority to issue 437,500,000 shares of common stock, par
value $0.10 per share. The holders of common stock are entitled to one vote per
share on all matters submitted to a vote of the shareholders. The holders of
common stock have equal, ratable rights to dividends from funds legally
available therefor, when, as and if declared by the Board of Directors, and are
entitled to share ratably in all of the assets available for distribution to
holders of common stock upon the liquidation, dissolution or winding-up of our
affairs. Holders of common stock do not have preemptive, subscription or
conversion rights. There are no redemption or sinking fund provisions in our
Articles of Incorporation. The outstanding shares of common stock are fully paid
and nonassessable. Our Articles of Incorporation do not provide for cumulative
voting by shareholders. Our Common Stock is listed on the American Stock
Exchange under the trading symbol "IVX" and on the London Stock Exchange under
the symbol "IVX.L."
DESCRIPTION OF COMMON STOCK PURCHASE RIGHTS
On December 19, 1997, our Board of Directors declared a dividend of one
common stock Purchase Right (the "Right(s)") for each outstanding share of
common stock. The dividend was payable as of December 29, 1997 to shareholders
of record on that date. Each Right entitles the registered holder to purchase
from us .9375 of a share of common stock at a price of $12.00 per .9375 of a
share (the "Exercise Price"), subject to certain adjustments. The description
and terms of the Rights are set forth in that certain Rights Agreement (the
"Rights Agreement") between us and the rights agent named therein. The Rights
are not exercisable and are not certificated until the Distribution Date (as
defined below). Until that time the Rights will automatically trade with the
common stock. The Rights will expire at the close of business on December 18,
2007, unless earlier redeemed by us. The number of shares of common stock
issuable upon exercise of the Rights is subject to certain adjustments from time
to time in the event of a stock dividend on, or a subdivision or combination of,
the common stock. The Exercise Price for the Rights is subject to adjustment in
the event of extraordinary distributions of cash or other property to holders of
common stock. Until a Right is exercised, the holder of a Right will have no
rights as a shareholder, including, without limitation, the right to vote or to
receive dividends.
Distribution Date
Unless earlier redeemed by our Board of Directors, the Rights become
exercisable upon the close of business on the Distribution Date which is the
earlier of (1) the tenth day following a public announcement that a person or
group of affiliated or associated persons, with certain exceptions, has acquired
beneficial ownership of 15% or more of our outstanding voting stock (an
"Acquiring Person") and (2) the tenth business day (or such later date as may be
determined by our Board of Directors) after the date of the commencement or
announcement of a person's or group's intention to commence a tender or exchange
offer the consummation of which would result in the ownership of 15% or more of
our outstanding voting stock.
Effect of Triggering Event
Unless the Rights are earlier redeemed, in the event that, after the
time that a person becomes an Acquiring Person, we were to be acquired in a
merger or other business combination (in which any shares of common stock are
changed into or exchanged for other securities or assets) or more than 50% of
our subsidiaries' (taken as a whole) assets or earning power were to be sold or
transferred in one or a series of related transactions, the Rights Agreement
provides that proper provision will be made so that each holder of record of a
Right will from and after such date have the right to receive, upon payment of
the Exercise Price, that number of shares of common stock of the acquiring
company having a market value at the time of such transaction equal to two times
the Exercise Price. In addition, unless the Rights are earlier redeemed, if a
person or group (with certain exceptions) becomes the beneficial owner of 15% or
more of our voting stock, the Rights Agreement provides that proper provision
will be made so that each holder
25
of record of a Right, other than the Acquiring Person (whose Rights will
thereupon become null and void), will thereafter have the right to receive, upon
payment of the Exercise Price, that number of shares of common stock having a
market value at the time of the transaction equal to two times the Exercise
Price. The Rights Agreement also grants our Board of Directors the option, after
any person or group acquires beneficial ownership of 15% or more of the voting
stock but before there has been a 50% acquisition, to exchange one share of
common stock for each then valid Right (which would exclude Rights held by the
Acquiring Person that have become void).
Redemption
At any time on or prior to the close of business on the tenth day after
the time that a person has become an Acquiring Person (or such later date as a
majority of our Board of Directors may determine), we may redeem the Rights in
whole, but not in part, at a price of $.01 per Right (the "Redemption Price").
Immediately upon the effective time of the action of our Board of Directors
authorizing redemption of the Rights, the right to exercise the Rights will
terminate and the only right of the holders of the Rights will be to receive the
Redemption Price.
Amendment
For as long as the Rights are then redeemable, we may, except with
respect to the Redemption Price or date of expiration of the Rights, amend the
Rights in any manner, including an amendment to extend the time period in which
the Rights may be redeemed. At any time when the Rights are not then redeemable,
we may amend the Rights in any manner that does not materially adversely affect
the interests of holders of the Rights as such.
Certain Effects of the Rights
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group who attempts to acquire us on terms
not approved by our Board of Directors. The Rights should not interfere with any
merger or other business combination approved by our Board of Directors because
we may redeem them at $.01 per Right at any time until the close of business on
the tenth day (or such later date as described above) after a person or group
has obtained beneficial ownership of 15% or more of our voting stock.
26
MATERIAL ARTICLE, BY-LAW AND FLORIDA LAW PROVISIONS
We are subject to several anti-takeover provisions under Florida law.
We are subject to the "affiliated transactions" and "control-share acquisition"
provisions of the Florida Business Corporation Act. These provisions require,
subject to limited exceptions, that before we may consummate any "affiliated
transaction," we must obtain the approval of:
- the holders of two-thirds of our voting shares other than
those beneficially owned by an "interested shareholder;" or
- a majority of our disinterested directors.
Additionally, under Florida law voting rights are generally conferred
on "control shares" acquired in specified control share acquisitions only as
permitted by a resolution that our shareholders approve, excluding holders of
shares defined as "interested shares."
Florida law presently limits the personal liability of a corporate
director for monetary damages, except where the director:
- breaches his or her fiduciary duties; and
- the breach constitutes or includes certain unlawful
distributions or certain other reckless, wanton or willful
acts or misconduct.
Our bylaws include an advance notice provision under which any
shareholder wishing to make nominations for election to our board of directors
at a meeting of the shareholders or to bring business before an annual meeting
of our shareholders must give written notice to our corporate secretary, subject
to some exceptions, not less than 60 days and not more than 90 days prior to the
date of the meeting.
27
PLAN OF DISTRIBUTION
We may sell the securities subject to this prospectus in or outside the
United States through underwriters or dealers, directly to one or more
purchasers, or through agents. The prospectus supplement with respect to the
securities we are offering will describe the specific terms of our offering,
including:
- the name or names of any underwriters, dealers, or agents;
- the purchase price of the securities;
- the proceeds to us from the offering;
- any delayed delivery arrangements;
- any underwriting discounts and other items constituting
underwriters' compensation;
- the initial public offering price;
- any discounts or concessions that dealers may allow or reallow
or pay; and
- any securities exchanges on which we may have listed the
securities we are offering.
If we use underwriters in the sale, then the underwriters will acquire
the securities for their own account and may resell them from time to time in
one or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices the underwriters determine at the time of
sale. We may offer the securities to the public either through underwriting
syndicates represented by one or more managing underwriters or directly by one
or more firms acting as underwriters. We will name the underwriter or
underwriters for a particular underwritten offering of securities in the
prospectus supplement relating to that offering. If we use an underwriting
syndicate, then we will name the managing underwriter or underwriters on the
cover of the prospectus supplement. Unless we state otherwise in the prospectus
supplement, the obligations of the underwriters or agents to purchase the
offered securities will be subject to conditions precedent and the underwriters
will be obligated to purchase all the securities if they purchase any of them.
We may change the initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers from time to time.
If we or the underwriters use dealers in the sale of the securities for
which we are delivering this prospectus, then we will sell those securities to
the dealers as principals. The dealers may then resell the securities to the
public at varying prices that the dealers will determine at the time of their
resale. We will disclose the names of the dealers and the terms of the
transaction in the prospectus supplement.
We may sell the securities directly or through agents from time to time
at fixed prices that we may change or at varying prices that we will determine
at the time of sale. We will name any agent involved in the offer or sale of the
securities for which we are delivering this prospectus. We will also disclose
any commissions that we will pay to our agents in the prospectus supplement.
Unless we indicate otherwise in the prospectus supplement, our agents will be
acting on a best efforts basis for the period of its appointment.
We may issue the securities in settlement of derivative securities,
including put options that we issue from time to time to various institutional
investors. Generally, under the terms of the agreements relating to the put
options, if the institutional investor exercises the put option we may elect to
settle the put option by issuing to the institutional investor shares of our
common stock with an aggregate value equal to the difference between (1) the
market price (as defined in the put option) of our common stock and (2) the
exercise price of the put option multiplied by the number of shares covered by
such put option (the "settlement value"). If the shares received by the
institutional investor are sold within 10 business days and the net proceeds are
less than the settlement value, we are obligated to pay the difference in either
cash or additional common shares which will be sold pursuant to this
registration statement; conversely, if the net proceeds are more than the
settlement value, we will
28
receive the difference in a cash refund. We will describe in a prospectus
supplement the terms of any derivative security, including put options that we
have issued, the amount of shares issued in settlement of any such derivative
security, the name of the institutional investors and other terms of the
transaction.
In connection with the sale of the securities, we or the purchasers of
the securities may pay underwriters, dealers or agents compensation in the form
of discounts, concessions or commissions. Underwriters, agents and dealers
participating in the distribution of the securities may be underwriters, and any
discounts or commissions that they receive from us and any profit they realize
on their resale of the securities may be underwriting discounts or commissions
under the Securities Act.
We may sell the securities directly to institutional investors or
others, who may be underwriters within the meaning of the Securities Act with
respect to any resale of those securities. We will describe the terms of those
sales in the prospectus supplement.
If we indicate in the prospectus supplement, we will authorize our
agents, underwriters or the dealers to solicit offers from institutions to
purchase the securities at the public offering price that we will disclose in
the prospectus supplement under delayed delivery contracts. A delayed delivery
contract provides for the investor's payment and our delivery of the purchased
securities on a specified date in the future. We expect that these contracts
will be subject only to the conditions that we describe in the prospectus
supplement. The prospectus supplement will describe the commission that we pay
our agents to solicit those contracts.
Our agreements with our agents, dealers and underwriters may require us
to indemnify them against a number of civil liabilities, including liabilities
under the Securities Act, or to grant them contribution for payments that they
may be required to make as a result of those liabilities. Our agents, dealers
and underwriters and their affiliates may be customers of, engage in
transactions with, or perform services for us in the ordinary course of their
business.
Some or all of the securities that we may issue may be new issues of
securities with no established trading market. Any underwriters to whom we sell
securities for a public offering may make a market in those securities, but we
can not obligate them to do so and even if they do they may discontinue any
market making at any time without notice. We can not assure you that a trading
market will develop for any of the securities that we may offer or if any market
does develop how liquid that market will be.
In order to facilitate the offering of our securities, any underwriters
or agents, as the case may be, involved in the offering of our securities may
engage in transactions that stabilize, maintain or otherwise affect the price of
our securities or any other securities the prices of which we may use to
determine payments on our securities. Specifically, the underwriters or agents,
as the case may be, may over allot in connection with the offering, creating a
short position in the securities for their own account. In addition, to cover
over allotments or to stabilize the price of our securities or any other
securities, the underwriters or agents, as the case may be, may bid for, and
purchase, our securities or any other securities in the open market. Finally, in
any offering of our securities through a syndicate of underwriters, the
underwriting syndicate may reclaim selling concessions allowed to an underwriter
or a dealer for distributing the securities in the offering if the syndicate
repurchases previously distributed securities in transactions to cover syndicate
short positions, in stabilization transactions or otherwise. Any of these
activities may stabilize or maintain the market price of the securities above
independent market levels. The underwriters or agents, as the case may be, are
not required to engage in these activities, and may end any of these activities
at any time.
29
LEGAL MATTERS
Akerman, Senterfitt & Eidson P.A., of Miami, Florida, will issue an
opinion about certain legal matters with respect to the securities for us.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Our consolidated balance sheets as of December 31, 1999 and 2000 and
the related consolidated statements of operations, stockholders' equity and cash
flows for each of the three years in the period ended December 31, 2000
incorporated by reference in this prospectus have been audited by Arthur
Andersen LLP, independent certified public accountants, as stated in their
report which is also incorporated by reference in this prospectus. Reference is
made to said report, which includes an explanatory paragraph with respect to the
change in method of accounting for up-front licensing fees to comply with the
Securities and Exchange Commission Staff Accounting Bulletin No. 101, Revenue
Recognition in Financial Statements.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and
other information with the SEC. You can inspect, read and copy these reports,
proxy statements and other information at the public reference facilities the
SEC maintains at:
- Room 1024, 450 Fifth Street, N.W., Judiciary Plaza,
Washington, D.C. 20549; and
- Suite 1400, 500 West Madison Street, Chicago, Illinois
60661-2511.
You can also obtain copies of these materials from the public reference
facilities of the SEC at prescribed rates. You can obtain information on the
operation of the public reference facilities by calling the SEC at
1-800-SEC-0330. The SEC also maintains a web site (http://www.sec.gov) that
makes available reports, proxy statements and other information regarding
issuers that file electronically with it. In addition, you can inspect the
reports, proxy statements and other information we file at the offices of the
American Stock Exchange, Inc., 86 Trinity Place, New York, New York 10006.
INCORPORATION BY REFERENCE
The Commission allows us to provide information about our business and
other important information to you by "incorporating by reference" the
information we file with the Commission, which means that we can disclose the
information to you by referring in this prospectus to the documents we file with
the Commission. Under the Commission's regulations, any statement contained in a
document incorporated by reference in this prospectus is automatically updated
and superseded by any information contained in this prospectus, or in any
subsequently filed document of the types described below.
30
We incorporate into this prospectus by reference the following
documents filed by us with the Commission, each of which should be considered an
important part of this prospectus:
SEC FILING (FILE NO. 001-09623) PERIOD COVERED OR DATE OF FILING
------------------------------- --------------------------------
Annual Report on Form 10-K ...................................... Year ended December 31, 2000
Quarterly Reports on Form 10-Q................................... Quarters ended March 31, 2001 and
June 30, 2001
Current Reports on Form 8-K...................................... February 23, 2001, April 30, 2001,
May 25, 2001, July 20, 2001, as
amended by the Form 8-K/As filed on
August 1, 2001 and October 26, 2001,
July 31, 2001 and August 16, 2001
Description of our common stock contained in Registration
Statement on Form 8-B and any amendment or report filed for the
purpose of updating such description............................. July 28, 1993
Description of our common stock purchase rights contained in a
Current Report on Form 8-K....................................... December 31, 1997
All subsequent documents filed by us under Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act of 1934.......................... After the date of this prospectus
You may request a copy of each of our filings at no cost, by writing or
telephoning us at the following address or telephone number:
IVAX Corporation
4400 Biscayne Boulevard
Miami, Florida 33137
Attention: Corporate Secretary
Phone: (305) 575-6000
Exhibits to a document will not be provided unless they are
specifically incorporated by reference in that document.
You should rely only on the information contained in this prospectus or
any supplement. We have not authorized any other person to provide you with
different information. If anyone provides you with different or inconsistent
information, you should not rely on it. We are not making an offer to sell these
securities in any jurisdiction where the offer or sale is not permitted. You
should not assume that the information in this prospectus or any supplement is
accurate as of any date other than the date on the front of those documents. Our
business, financial condition, results of operations and prospects may have
changed since that date.
The information in this prospectus or any supplement may not contain
all of the information that may be important to you. You should read the entire
prospectus or any supplement, as well as the documents incorporated by reference
in the prospectus or any supplement, before making an investment decision.
31
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the various expenses of IVAX Corporation
(the "Registrant") in connection with the sale and distribution of the
securities being registered, other than underwriting discounts and commissions.
All amounts shown are estimated except for the Securities and Exchange
Commission registration fee.
SEC Registration Fee................................... $105,600
AMEX Listing Fee....................................... 17,500
Legal Fees and Expenses................................ 75,000
Accounting Fees and Expenses........................... 20,000
Printing Expenses...................................... 100,000
Miscellaneous.......................................... 8,900
--------
Total.................................................. $327,000
========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 607.0831 of the Florida Business Corporation Act (the "Florida
Act") provides that a director is not personally liable for monetary damages to
the corporation or any person for any statement, vote, decision or failure to
act regarding corporate management or policy, by a director, unless: (a) the
director breached or failed to perform his duties as a director; and (b) the
director's breach of, or failure to perform, those duties constitutes: (1) a
violation of criminal law unless the director had reasonable cause to believe
his conduct was lawful or had no reasonable cause to believe his conduct was
unlawful; (2) a transaction from which the director derived an improper personal
benefit, either directly or indirectly; (3) a circumstance under which the
director is liable for an improper distribution; (4) in a proceeding by, or in
the right of the corporation to procure a judgment in its favor or by or in the
right of a shareholder, conscious disregard for the best interest of the
corporation, or willful misconduct or (5) in a proceeding by or in the right of
someone other than the corporation or a shareholder, recklessness or an act or
omission which was committed in bad faith or with malicious purpose or in a
manner exhibiting wanton or willful disregard of human rights, safety or
property.
Section 607.0850 of the Florida Act provides that a corporation shall
have the power to indemnify any person who was or is a party to any proceeding
(other than an action by, or in the right of, the corporation), by reason of the
fact that he is or was a director, officer or employee or agent of the
corporation, against liability incurred in connection with such proceeding if he
acted in good faith and in a manner he reasonably believed to be in, or not
opposed to, the best interest of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. Section 607.0850 also provides that a corporation shall have the
power to indemnify any person, who was or is a party to any proceeding by, or in
the right of, the corporation to procure a judgment in its favor by reason of
the fact that he is or was a director, officer, employee or agent of the
corporation, against expenses and amounts paid in settlement not exceeding, in
the judgment of the board of directors, the estimated expense of litigating the
proceeding to conclusion, actually and reasonably incurred in connection with
the defense or settlement of such proceeding, including any appeal thereof.
II-1
Section 607.0850 further provides that such indemnification shall be
authorized 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,
except that no indemnification shall be made under this provision in respect of
any claim, issue, or matter as to which such person shall have been adjudged to
be liable unless, and only to the extent that, the court in which such
proceeding was brought, or any other court of competent jurisdiction, shall
determine upon application that, despite the adjudication of liability, but in
view of all circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which court shall deem proper. Section
607.0850 further provides that to the extent that a director, officer, employee
or agent has been successful on the merits or otherwise in defense of any of the
foregoing proceedings, or in defense of any claim, issue or matter therein, he
shall be indemnified against expenses actually and reasonably incurred by him in
connection therewith. Under Section 607.0850, any indemnification under the
foregoing provisions, unless pursuant to a determination by a court, shall be
made by the corporation only as authorized in the specific case upon a
determination that the indemnification of the director, officer, employee or
agent is proper under the circumstances because he has met the applicable
standard of conduct. Notwithstanding the failure of a corporation to provide
such indemnification, and despite any contrary determination by the corporation
in a specific case, a director, officer, employee or agent of the corporation
who is or was a party to a proceeding may apply for indemnification to the
appropriate court and such court may order indemnification if it determines that
such person is entitled to indemnification under the applicable standard.
Section 607.0850 also provides that a corporation shall have the power
to purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the corporation 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 have the power to
indemnify him against such liability under the provisions of Section 607.0850.
The Registrant's bylaws provide that it shall indemnify its officers
and directors and former officers and directors to the full extent permitted by
law.
The Registrant has entered into indemnification agreements with each of
its officers and directors. The indemnification agreements generally provide
that the Registrant will pay certain amounts incurred by an officer or director
in connection with any civil or criminal action or proceeding and specifically
including actions by or in the name of the Registrant (derivative suits) where
the individual's involvement is by reason of the fact that he was or is an
officer or director. Under the indemnification agreements, an officer or
director will not receive indemnification if such person is found not to have
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Registrant. The agreements provide a number
of procedures and presumptions used to determined the officer's or director's
right to indemnification and include a requirement that in order to receive an
advance of expenses, the officer or director must submit an undertaking to repay
any expenses advanced on his behalf that are later determined he was not
entitled to receive.
The Registrant's directors and officers are covered by insurance
policies indemnifying them against certain liabilities, including liabilities
under the federal securities laws (other than liability under Section 16(b) of
the Exchange Act), which might be incurred by them in such capacities.
II-2
ITEM 16. EXHIBITS
Exhibit
Number Description
------- ------------
1.1 Form of equity underwriting agreement.**
1.2 Form of debt underwriting agreement.**
4.1 Form of indenture.*
4.2 Form of debt security.**
4.6 Rights Agreement dated December 19, 1997, between the Registrant and
ChaseMellon Shareholder Services, L.L.C. with respect to the IVAX
Corporation Shareholder Rights Plan (incorporated by reference to
exhibit 4.3 to IVAX Corporation's Annual Report on Form 10-K for the
year ended December 31, 1999 filed on March 30, 2000).*
5.1 Opinion of Akerman, Senterfitt & Eidson P.A.**
12.2 Statement regarding Computation of Ratio of Earnings to Fixed Charges.(1)
23.1 Consent of Arthur Andersen LLP.(1)
23.2 Consent of Arthur Andersen - Langton Clarke.(1)
23.3 Consent of Akerman, Senterfitt & Eidson P.A. (included in Exhibit 5.1) .
24 Power of Attorney.*
25 The Statement of Eligibility on Form T-1 under the Trust Indenture Act of
1939, as amended, of the Trustee under the Indenture.*
99.1 Annual Report on Form 20-F for the year ended December 31, 2000 for
Laboratorio Chile S.A.(2)
-------------
* Previously filed.
** To be filed with a Current Report on Form 8-K or a Post-Effective
Amendment to the registration statement.
(1) Filed herewith.
(2) Incorporated by reference to the Annual Report on Form 20-F for the
year ended December 31, 2000 filed by Laboratorio Chile S.A. with the
Commission on June 22, 2001.
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration
statement:
(i) To include any Prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the Prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
II-3
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 Securities and Exchange
Commission 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;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
the registration statement or any material change to
such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(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 with or furnished to the Securities and
Exchange Commission by the registrant pursuant to Section 13
or Section 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing
of the Registrant's annual report pursuant to section 13(a) or section
15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to
section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of
expenses incurred or paid by a director, officer or controlling person
of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public
policy as expressed in the Securities Act of 1933 and will be governed
by the final adjudication of such issue.
II-4
(d) The undersigned Registrant hereby undertakes to file an application for
the purpose of determining the eligibility of the Trustee to act under
subsection (a) of 310 of the Trust Indenture Act in accordance with the
rules and regulations prescribed by the Commission under Section
305(b)(2) of the Trust Indenture Act.
II-5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Post
Effective Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Miami,
State of Florida on October 30, 2001.
IVAX CORPORATION
By: /s/ Phillip Frost, M.D.
-------------------------------------------------
Phillip Frost, M.D.
Chairman of the Board and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Post Effective Amendment No. 1 to the Registration Statement has been
signed by the following persons in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Phillip Frost, M.D. Director, Chairman of the Board and October 30, 2001
------------------------ Chief Executive Officer
Phillip Frost, M.D. (Principal Executive Officer)
/s/ Neil Flanzraich Director, Vice Chairman and President October 30, 2001
------------------------
Neil Flanzraich
* Director, Vice Chairman - Technical Affairs and October 30, 2001
------------------------ Chief Technical Officer
Jane Hsiao, Ph.D.
* Director and Deputy Chief Executive Officer October 30, 2001
------------------------
Isaac Kaye
/s/ Thomas E. Beier Senior Vice President - Finance and October 30, 2001
------------------------ Chief Financial Officer
Thomas E. Beier (Principal Financial Officer)
/s/ Thomas E. McClary Vice President - Accounting October 30, 2001
------------------------ (Principal Accounting Officer)
Thomas E. McClary
* Director October 30, 2001
------------------------
Mark Andrews
* Director October 30, 2001
------------------------
Ernst Biekert, Ph.D.
* Director October 30, 2001
------------------------
Charles M. Fernandez
* Director October 30, 2001
------------------------
Jack Fishman, Ph.D.
* /s/ Thomas E. Beier
------------------------
Thomas E. Beier
Attorney-in-fact
EXHIBIT INDEX
Exhibit
Number Description
------- ------------
12.2 Statement regarding Computation of Ratio of Earnings to Fixed Charges.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Arthur Andersen - Langton Clarke.