AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 11, 2001
REGISTRATION NO. 333-___________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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TRIANGLE PHARMACEUTICALS, INC.
(Exact name of Registrant as Specified in Its Charter)
Delaware 56-1930728
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
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4 University Place,
4611 University Drive,
Durham, North Carolina, 27707
(919) 493-5980
(Address, Including Zip Code, And Telephone Number, Including Area Code, Of
Registrant's Principal Executive Offices)
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David W. Barry, M.D.
Chairman and Chief Executive Officer
TRIANGLE PHARMACEUTICALS, INC.
4 University Place,
4611 University Drive,
Durham, North Carolina 27707
(919) 493-5980
(Name, Address, Including Zip Code, and Telephone Number, Including Area
Code, of Agent For Service)
----------
COPIES TO:
Luci Staller Altman, Esq. Rachel Mandell, Esq.
Brobeck, Phleger & Harrison LLP Senior Corporate Counsel
1633 Broadway, 47th Floor TRIANGLE PHARMACEUTICALS, INC.
New York, New York 10019 4 University Place,
(212) 581-1600 4611 University Drive,
Durham, North Carolina 27707
(919) 493-5980
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Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: |_|
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: |X|
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering: |_|
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: |_|
CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED
TITLE OF EACH CLASS MAXIMUM MAXIMUM
OF SECURITIES TO AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
BE REGISTERED REGISTERED PER SHARE (1) OFFERING PRICE REGISTRATION FEE
=======================================================================================
Common Stock, 2,000,000 $4.75 $9,500,000 $ 2,375
$0.001 par value
per share
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(1) The price of $4.75, the average of the high and low prices of Triangle's
common stock on the Nasdaq Stock Market's National Market on June 7,
2001, is set forth solely for the purpose of computing the registration
fee in accordance with Rule 457(c) under the Securities Act of 1933, as
amended.
(2) This Registration Statement shall also cover any additional shares of
common stock which become issuable in connection with the shares of common
stock which become issuable in connection with the shares registered for
sale hereby as a result of any stock dividend, stock split,
recapitalization or other similar transaction effected without the receipt
of consideration which results in an increase in the number of the
Registrant's outstanding shares of common stock.
--------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SEC, ACTING PURSUANT TO SAID SECTION
8(a), MAY DETERMINE.
================================================================================
SUBJECT TO COMPLETION, DATED JUNE 11, 2001
The information in this prospectus is not complete and may be changed. The
selling stockholders may not sell the common stock covered by this prospectus
until the registration statement filed with the Securities and Exchange
Commission is effective. This prospectus is not an offer to sell the common
stock and it is not soliciting an offer to buy the common stock in any state
where the offer or sale is not permitted.
PRELIMINARY PROSPECTUS
2,000,000 SHARES
TRIANGLE PHARMACEUTICALS, INC.
COMMON STOCK
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This prospectus relates to the resales of common stock held by the selling
stockholders identified in this prospectus. We will not receive any of the
proceeds from the sale of the shares by the selling stockholders. All of the
shares were acquired by the selling stockholders on May 18, 2001 on conversion
of the Series B preferred stock of Triangle. We issued and sold all of the
shares of Series B preferred stock to the selling stockholders in a private
placement completed on March 9, 2001. We have agreed to pay the expenses in
connection with the registration of the shares covered by this prospectus and to
indemnify the selling stockholders against certain liabilities. The selling
stockholders will pay all underwriting discounts and selling commissions, if
any, in connection with the sale of these shares.
Our common stock is traded on the Nasdaq National Market under the symbol
"VIRS." On June 7, 2001, the average of the high and low prices for the common
stock was $4.75 per share.
THE COMMON STOCK OFFERED INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" COMMENCING ON PAGE 4 FOR A DISCUSSION OF SOME IMPORTANT RISKS YOU
SHOULD CONSIDER BEFORE BUYING ANY SHARES OF COMMON STOCK.
---------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES, OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
---------------
The date of this prospectus is June , 2001
TABLE OF CONTENTS
PAGE
I. WHERE YOU CAN FIND MORE INFORMATION....................................3
II. INFORMATION INCORPORATED BY REFERENCE..................................3
III. OUR BUSINESS...........................................................4
IV. RISK FACTORS...........................................................4
V. FORWARD-LOOKING STATEMENTS............................................22
VI. USE OF PROCEEDS.......................................................22
VII. SELLING STOCKHOLDERS..................................................22
VIII. PLAN OF DISTRIBUTION..................................................23
IX. LEGAL MATTERS.........................................................25
X. EXPERTS...............................................................25
You should rely only on the information contained in this document or to
which we have referred you. We have not authorized anyone to provide you with
information that is different. This document may only be used where it is legal
to sell these securities. The information contained in this document may only be
accurate on the date of this document. This prospectus does not constitute an
offer to sell, or a solicitation of an offer to buy, in any state where the
offer or sale is prohibited. Neither the delivery of this prospectus, nor any
sale made under this prospectus shall, under any circumstances, imply that the
information in this prospectus is correct as of any date after the date of this
prospectus.
I. WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements and other information with the SEC. You
may read and copy any document we file at the SEC's public reference rooms in
Washington, D.C., New York, New York and Chicago, Illinois. Please call the SEC
at 1-800-SEC-0330 for further information on the public reference rooms. Our SEC
filings are also available to the public on the SEC's website at
http://www.sec.gov.
II. INFORMATION INCORPORATED BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and later information filed with the
SEC will update and supersede this information. We incorporate by reference the
documents listed below and any future filings we make with the SEC under Section
13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 until our
offering is completed.
1. Our Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 2001 (file no. 000-21589);
2. Our Annual Report on Form 10-K for the fiscal year ended December
31, 2000 (file no. 000-21589), including certain information in
our Definitive Proxy Statement in connection with our 2001 Annual
Meeting of Stockholders; and
3. The description of our common stock contained in our Registration
Statements on Form 8-A filed October 18, 1996, February 10, 1999,
and June 18, 1999 (file no. 000-21589).
The reports and other documents that we file after the date of this
prospectus will update and supersede the information in this prospectus.
We will provide a copy of these filings, at no cost, if you so request by
writing or telephoning us at:
Triangle Pharmaceuticals, Inc.
4611 University Drive
P.O. Box 50530
Durham, North Carolina, 27717
(919) 493-5980
Attn: General Counsel.
We have received U.S. trademark registrations for our corporate name and
logo, Coactinon(R) and Coviracil(R). This prospectus also includes names and
trademarks of other companies.
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III. OUR BUSINESS
We develop new drug candidates primarily in the antiviral area, with a
particular focus on therapies for HIV, including AIDS, and the hepatitis B
virus. We have an existing portfolio of six licensed drug candidates in clinical
trials and several drug candidates that are in a pre-clinical stage or for which
we have an option to acquire a license. Members of our senior management team,
prior to joining Triangle, played instrumental roles in developing and
commercializing several leading antiviral therapies. Our goal is to capitalize
on our management team's expertise, as well as on advances in virology and
immunology, to identify, develop and commercialize new drug candidates that can
be used alone or in combination to treat serious diseases.
Triangle was incorporated in Delaware in July 1995. Our principal
executive offices are located at 4 University Place, 4611 University Drive,
Durham, North Carolina 27707, and our telephone number is (919) 493-5980.
IV. RISK FACTORS
IN ADDITION TO THE OTHER INFORMATION IN THIS PROSPECTUS, YOU SHOULD
CAREFULLY CONSIDER THE FOLLOWING RISKS AND UNCERTAINTIES BEFORE MAKING AN
INVESTMENT DECISION. THE RISKS DESCRIBED BELOW ARE NOT THE ONLY RISKS WE FACE.
ADDITIONAL RISKS THAT WE DO NOT YET KNOW OF OR THAT WE CURRENTLY THINK ARE
IMMATERIAL MAY ALSO IMPAIR OUR BUSINESS OPERATIONS. IF ANY OF THE EVENTS OR
CIRCUMSTANCES DESCRIBED IN THE FOLLOWING RISKS ACTUALLY OCCURS, OUR BUSINESS,
FINANCIAL CONDITION, OR RESULTS OF OPERATIONS COULD BE MATERIALLY ADVERSELY
AFFECTED. IN SUCH CASE, THE TRADING PRICE OF OUR COMMON STOCK COULD DECLINE, AND
YOU MAY LOSE ALL OR PART OF YOUR INVESTMENT.
ALL OF OUR PRODUCT CANDIDATES ARE IN DEVELOPMENT AND MAY NEVER BE SUCCESSFULLY
COMMERCIALIZED WHICH WOULD HAVE AN ADVERSE IMPACT ON YOUR INVESTMENT AND OUR
BUSINESS.
Some of our drug candidates are at an early stage of development and all
of our drug candidates will require expensive and lengthy testing and regulatory
clearances. None of our drug candidates has been approved by regulatory
authorities. We do not expect any of our drug candidates to be commercially
available until at least the year 2002. There are many reasons that we may fail
in our efforts to develop our drug candidates, including that:
- our drug candidates may be ineffective, toxic or may not receive
regulatory clearances,
- our drug candidates may be too expensive to manufacture or market or
may not achieve broad market acceptance,
- third parties may hold proprietary rights that preclude us from
developing or marketing our drug candidates, or
- third parties may market equivalent or superior products.
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The success of our business depends upon our ability to successfully
develop and market our drug candidates.
WE HAVE INCURRED LOSSES SINCE INCEPTION AND MAY NEVER ACHIEVE PROFITABILITY.
We formed Triangle in July 1995 and we have only a limited operating
history for you to review in evaluating our business. We have incurred losses
since our inception. At March 31, 2001, our accumulated deficit was $353.8
million. Our historical costs relate primarily to the acquisition and
development of our drug candidates and selling, general and administrative
costs. We have not generated any revenue from the sale of our drug candidates to
date, and do not expect to do so until at least the year 2002. In addition, we
expect annual losses to continue over the next several years as a result of our
drug development and commercialization efforts. To become profitable, we must
successfully develop and obtain regulatory approval for our drug candidates and
effectively manufacture, market and sell any products we develop. We may never
generate significant revenue or achieve profitable operations.
IF WE NEED ADDITIONAL FUNDS AND ARE UNABLE TO RAISE THEM, WE WILL HAVE TO
CURTAIL OR CEASE OPERATIONS.
Our drug development programs and potential commercialization of our drug
candidates require substantial working capital, including expenses for
preclinical testing, chemical synthetic scale-up, manufacture of drug substance
for clinical trials, toxicology studies, clinical trials of drug candidates,
sales and marketing expenses, payments to our licensors and potential commercial
launch of our drug candidates. Our future working capital needs will depend on
many factors, including:
- the progress and magnitude of our drug development programs,
- the scope and results of preclinical testing and clinical trials,
- the cost, timing and outcome of regulatory reviews,
- the costs under current and future license and option agreements for
our drug candidates, including the costs of obtaining patent
protection for our drug candidates,
- the costs of acquiring any additional drug candidates,
- the rate of technological advances,
- the commercial potential of our drug candidates,
- the magnitude of our administrative and legal expenses,
- the costs of establishing sales and marketing functions, and
- the costs of establishing third party arrangements for
manufacturing.
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We have incurred negative cash flow from operations since we
incorporated Triangle and do not expect to generate positive cash flow from
our operations for at least the next several years. We will need additional
future financings to fund our operations. We cannot assure you that available
sources of funds will be sufficient to meet our future needs. In addition, we
cannot assure you that we will receive the contingent development milestone
payments under our strategic alliance with Abbott Laboratories, the Abbott
Alliance. We may not be able to obtain adequate financing to fund our
operations, and any additional financing we obtain may be on terms that are
not favorable to us. In addition, any future financings could substantially
dilute our stockholders. If adequate funds are not available, we will be
required to delay, reduce or eliminate one or more of our drug development
programs, to enter into new collaborative arrangements or to modify the
Abbott Alliance on terms that are not favorable to us. These collaborative
arrangements or modifications could result in the transfer to third parties
of rights that we consider valuable. In addition, we may acquire technologies
and drug candidates that would increase our working capital requirements.
To facilitate our ability to raise additional equity capital, on November
1, 2000, we entered into a firm underwritten equity facility, the Facility, with
Ramius Securities, LLC, Ramius, and Ramius Capital Group, LLC, Ramius Capital,
under which we may be able to issue and sell up to $100.0 million of our common
stock over a three-year period. We have filed a registration statement with the
Securities and Exchange Commission for the sale of up to $24.0 million of our
common stock under this Facility. There are conditions and limitations on
Ramius' obligation to sell shares under the underwriting agreement and Ramius
Capital's obligation to purchase shares under the purchase agreement. In
particular, Ramius' and Ramius Capital's obligations are subject to share price
and trading volume limitations which could reduce the number of shares of common
stock they are obligated to sell or purchase, as the case may be, regardless of
the number of shares of common stock we request to be sold. In some
circumstances, such as an average trading price of less than $4.00 per share,
they will have no obligation to sell or purchase our common stock, even if we
request them to do so. In addition, we may elect not to sell shares of common
stock if we believe that market conditions are unfavorable.
BECAUSE OUR PRODUCT CANDIDATES MAY NOT SUCCESSFULLY COMPLETE CLINICAL TRIALS
REQUIRED FOR COMMERCIALIZATION, OUR BUSINESS MAY NEVER ACHIEVE PROFITABILITY.
To obtain regulatory approvals needed for the sale of our drug candidates,
we must demonstrate through preclinical testing and clinical trials that each
drug candidate is safe and effective. The clinical trial process is complex and
uncertain and the regulatory environment varies widely from country to country.
Positive results from preclinical testing and early clinical trials do not
ensure positive results in pivotal clinical trials. Many companies in our
industry have suffered significant setbacks in pivotal clinical trials, even
after promising results in earlier trials. Any of our drug candidates may
produce undesirable side effects in humans. These side effects could cause us or
regulatory authorities to interrupt, delay or halt clinical trials of a drug
candidate, as occurred with mozenavir dimesylate, or could result in regulatory
authorities refusing to approve the drug candidate for any and all targeted
indications. In April 2000, the South African Medicines Control Council, MCC,
terminated the enrollment in one of our phase
6
III clinical studies for our drug candidate Coviracil, FTC-302, and the Food and
Drug Administration, FDA, issued a clinical hold on the study. Study FTC-302 was
being conducted under a U.S. Investigational New Drug Application at sites in
South Africa. The FDA indicated that study FTC-302 may not be adequate to
provide pivotal data in support of a New Drug Application, an NDA. In February
2001, the FDA notified us that the study would remain on clinical hold even
though the study had been completed. Discussions with the MCC and FDA are
continuing; however, the planned submission of an U.S. NDA for Coviracil may be
significantly delayed. We, the FDA, or foreign regulatory authorities may
suspend or terminate clinical trials at any time if we or they believe the trial
participants face unacceptable health risks. Clinical trials may not demonstrate
that our drug candidates are safe or effective.
Clinical trials are lengthy and expensive. They require adequate supplies
of drug substance and sufficient patient enrollment. Patient enrollment is a
function of many factors, including:
- the size of the patient population,
- the nature of the protocol,
- the proximity of patients to clinical sites, and
- the eligibility criteria for the clinical trial.
Delays in patient enrollment can result in increased costs and longer
development times. Even if we successfully complete clinical trials, we may not
be able to file any required regulatory submissions in a timely manner and we
may not receive regulatory approval for the drug candidate. In addition, if the
FDA or foreign regulatory authorities require additional clinical trials we
could face increased costs and significant development delays, as occurred with
Coactinon and which may occur with Coviracil. In December 1999, we were advised
by the FDA that additional phase III studies would be required to support an NDA
submission for Coactinon. In July 2000, we presented data to the FDA from a
completed phase II study, MKC-202, showing that a lower dose of 500 mg
twice-a-day, compared to the previous dose of 750 mg twice-a-day, provided
similar antiviral activity and an enhanced tolerability profile in patients
taking Coactinon. Based on the new data, in July 2000, the FDA advised that
enrolling an additional 280 patients into an ongoing phase III study, MKC-401,
at the lower dose of 500 mg twice-a-day would generate sufficient data for
filing of an NDA should the results be positive. In August 2000, we announced
our decision to continue the development of Coactinon. The enrollment of the
additional 280 patients into study MKC-401 was completed in April 2001.
Changes in regulatory policy or additional regulations adopted during
product development and regulatory review of information we submit could also
result in delays or rejections. The FDA has notified us that three of our drug
candidates for the treatment of HIV, Coviracil, Coactinon and amdoxovir, qualify
for designation as "fast track" products under provisions of the Food and Drug
Administration Modernization Act of 1997. The fast track provisions are designed
to expedite the review of new drugs intended to treat serious or
life-threatening conditions and essentially codified the criteria previously
established by the FDA for
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accelerated approval. These drug candidates may not, however, continue to
qualify for expedited review and our other drug candidates may fail to qualify
for fast track development or expedited review. Even though some of our drug
candidates have qualified for expedited review, the FDA may not approve them at
all or any sooner than other drug candidates that do not qualify for expedited
review.
IF WE OR OUR LICENSORS ARE NOT ABLE TO OBTAIN AND MAINTAIN ADEQUATE PATENT
PROTECTION FOR OUR PRODUCT CANDIDATES, WE MAY BE UNABLE TO COMMERCIALIZE OUR
PRODUCT CANDIDATES OR TO PREVENT OTHER COMPANIES FROM USING OUR TECHNOLOGY IN
COMPETITIVE PRODUCTS.
Our success will depend on our ability and the ability of our licensors to
obtain and maintain patents and proprietary rights for our drug candidates and
to avoid infringing the proprietary rights of others, both in the United States
and in foreign countries. We have no patents in our own name and we have a small
number of patent applications of our own pending. One of our patent applications
is a joint application with co-inventors from another institution. We have,
however, licensed or we have an option to license patents, patent applications
and other proprietary rights from third parties for each of our drug candidates.
If we breach our licenses, we may lose rights to important technology and drug
candidates.
Our patent position on some of our drug candidates, like that of many
pharmaceutical companies, is uncertain and involves complex legal and factual
questions for which important legal principles are unresolved. We may not
develop or obtain rights to products or processes that are patentable. Even if
we do obtain patents, they may not adequately protect the technology we own or
have in-licensed. In addition, others may challenge, seek to invalidate,
infringe or circumvent any patents we own or in-license, and rights we receive
under those patents may not provide competitive advantages to us. Further, the
manufacture, use or sale of our products or processes may infringe the patent
rights of others.
Several pharmaceutical and biotechnology companies, universities and
research institutions have filed patent applications or received patents that
cover our technologies or technologies similar to ours. Others have filed patent
applications and received patents that conflict with patents or patent
applications we own or have in-licensed, either by claiming the same methods or
compounds or by claiming methods or compounds that could dominate those owned by
or licensed to us. In addition, we may not be aware of all patents or patent
applications that may impact our ability to make, use or sell any of our drug
candidates. For example, United States patent applications are confidential
while pending in the Patent and Trademark Office, PTO, and patent applications
filed in foreign countries are often first published six months or more after
filing. Any conflicts resulting from third party patent applications and patents
could significantly reduce the coverage of our patents and limit our ability to
obtain meaningful patent protection. If other companies obtain patents with
conflicting claims, we may be required to obtain licenses to these patents or to
develop or obtain alternative technology. We may not be able to obtain any such
license on acceptable terms or at all. Any failure to obtain such licenses could
delay or prevent us from pursuing the development or commercialization of our
drug candidates, which would adversely affect our business.
8
There are significant risks regarding the patent rights of two of our
in-licensed drug candidates. We may not be able to commercialize Coviracil or
amdoxovir due to patent rights held by third parties other than our licensors.
Third parties have filed numerous patent applications and have received numerous
issued patents in the United States and many foreign countries that relate to
these drug candidates and their use alone or in combination to treat HIV and
hepatitis B. As a result, our patent position regarding the use of Coviracil and
amdoxovir to treat HIV and/or hepatitis B is highly uncertain and involves
numerous complex legal and factual questions that are unknown or unresolved. If
any of these questions is resolved in a manner that is not favorable to us, we
would not have the right to commercialize Coviracil and/or amdoxovir in the
absence of a license from one or more third parties, which may not be available
on acceptable terms or at all. In addition, even if any of these questions is
favorably resolved, we may still attempt to obtain licenses from one or more
third parties to reduce or eliminate the risks relating to some or all of these
matters. Such licenses may not be available on acceptable terms or at all. Our
inability to commercialize either of these drug candidates could adversely
affect our business.
COVIRACIL (EMTRICITABINE)
Coviracil, a purified form of FTC, belongs to the same general class of
nucleosides as lamivudine. In the United States, the FDA has approved lamivudine
for the treatment of hepatitis B and for use in combination with zidovudine,
also known as AZT, for the treatment of HIV. Regulatory authorities have
approved lamivudine for the treatment of hepatitis B and for use in combination
with other nucleoside analogues for the treatment of HIV in a number of other
countries. GlaxoSmithKline plc, Glaxo, currently sells lamivudine for the
treatment of HIV and hepatitis B under a license agreement with BioChem Pharma
Inc., BioChem Pharma. We obtained rights to Coviracil under a license from Emory
University, Emory. In 1990 and 1991, Emory filed in the United States and
thereafter in numerous foreign countries patent applications with claims to
compositions of matter and methods to treat HIV and hepatitis B with Coviracil.
In 1991, Yale University, Yale, filed in the United States patent applications
on FTC, including emtricitabine and its use to treat hepatitis B, and
subsequently licensed its rights under those patent applications to Emory. Our
license arrangement with Emory includes all rights to Coviracil and its uses
claimed in the Yale patent applications.
HIV. Emory received a United States patent in 1993 covering a method to
treat HIV with Coviracil. Emory has also received United States and European
patents containing composition of matter claims that cover Coviracil. BioChem
Pharma filed a patent application in the United States in 1989 and received a
patent in 1991 covering a group of nucleosides in the same general class as
Coviracil, but which did not include Coviracil. BioChem Pharma filed foreign
patent applications in 1990, which expanded upon its 1989 United States patent
application to include FTC among a large class of nucleosides. The foreign
patent applications are pending in many countries and have issued in a number of
countries with claims directed to FTC that may cover Coviracil and its use to
treat HIV. In addition, BioChem Pharma filed a United States patent application
in 1991 specifically directed to Coviracil. BioChem Pharma has received two
patents in the United States based on this patent application, one directed to
Coviracil and the other directed to a method for treating viral diseases with
Coviracil. The PTO has determined that there are conflicts between both BioChem
Pharma patents and patent applications filed by
9
Emory because they have overlapping claims to the same technology. The PTO is
conducting two adversarial proceedings, interferences, to determine whether
BioChem Pharma or Emory is entitled to the patent claims in dispute regarding
BioChem Pharma's two issued patents. Emory may not prevail in the adversarial
proceedings, and the proceedings may also delay the decision of the PTO
regarding Emory's patent application. BioChem Pharma also filed patent
applications in many foreign countries based upon its 1991 United States patent
application and has received patents in certain countries. BioChem Pharma may
have additional patent applications pending in the United States.
In the United States, the first to invent a technology is entitled to
patent protection on that technology. For patent applications filed prior to
January 1, 1996, United States patent law provides that a party who invented a
technology outside the United States is deemed to have invented the technology
on the earlier of the date it introduced the invention in the United States or
the date it filed its patent application. In a filing with the Securities and
Exchange Commission, BioChem Pharma stated that prior to January 1, 1996, it
conducted substantially all of its research activities outside the United
States. BioChem Pharma also stated that it considered this to be a disadvantage
in obtaining United States patents based on patent applications filed before
January 1, 1996 as compared to companies that mainly conducted research in the
United States. We do not know whether Emory or BioChem Pharma was the first to
invent the technology claimed in their respective United States patent
applications or patents. We also do not know whether BioChem Pharma invented the
technology disclosed in its patent applications in the United States or
introduced that technology in the United States before the date of its patent
applications.
In foreign countries, the first party to file a patent application on a
technology, not the first to invent the technology, is entitled to patent
protection on that technology. We believe that Emory filed patent applications
disclosing Coviracil as a useful anti-HIV agent in many foreign countries before
BioChem Pharma filed its foreign patent applications on that technology.
However, BioChem Pharma has received patents in several foreign countries. In
addition, BioChem Pharma has filed patent applications on Coviracil and its uses
in certain countries in which Emory did not file patent applications. Emory has
opposed or otherwise challenged patent claims on Coviracil granted to BioChem
Pharma in Australia and Europe. Emory may not initiate patent opposition
proceedings in any other countries or be successful in any foreign proceeding
attempting to prevent the issuance of, revoke or limit the scope of patents
issued to BioChem Pharma. BioChem Pharma has opposed patent claims on Coviracil
granted to Emory in Europe, Japan, Australia and South Korea. BioChem Pharma may
make additional challenges to Emory patents or patent applications, which Emory
may not succeed in defending. Our sales, if any, of Coviracil for the treatment
of HIV may be held to infringe United States and foreign patent rights of
BioChem Pharma. Under the patent laws of most countries, a product can be found
to infringe a third party patent either if the third party patent expressly
covers the product or method of treatment using the product, or if the third
party patent covers subject matter that is substantially equivalent in nature to
the product or method, even if the patent does not expressly cover the product
or method. If it is determined that the sale of Coviracil for the treatment of
HIV infringes a BioChem Pharma patent, we would not have the right to make, use
or sell Coviracil for the treatment of HIV in one or more countries in the
absence of a license from
10
BioChem Pharma. We may be unable to obtain such a license from BioChem Pharma on
acceptable terms or at all.
HEPATITIS B. Burroughs Wellcome Co., Burroughs Wellcome, filed patent
applications in March 1991 and May 1991 in Great Britain on a method to treat
hepatitis B with FTC and purified forms of FTC, that include emtricitabine.
Burroughs Wellcome filed similar patent applications in other countries,
including the United States. Glaxo subsequently acquired Burroughs Wellcome's
rights under those patent applications. Those patent applications were filed in
foreign countries prior to the date Emory filed its patent application on the
use of emtricitabine to treat hepatitis B. Burroughs Wellcome's foreign patent
applications, therefore, have priority over those filed by Emory. In July 1996,
Emory instituted litigation against Glaxo in the United States District Court to
obtain ownership of the patent applications filed by Burroughs Wellcome,
alleging that Burroughs Wellcome converted and misappropriated Emory's invention
and property and that an Emory employee is the inventor or a co-inventor of the
subject matter covered by the Burroughs Wellcome patent applications. In May
1999, Emory and Glaxo settled the litigation, and we became the exclusive
licensee of the United States and all foreign patent applications and patents
filed by Burroughs Wellcome on the use of emtricitabine to treat hepatitis B.
Under the license and settlement agreements, Emory and we were also given access
to development and clinical data and drug substance held by Glaxo relating to
emtricitabine.
BioChem Pharma filed a patent application in May 1991 in Great Britain
also directed to a method to treat hepatitis B with FTC. BioChem Pharma filed
similar patent applications in other countries. In January 1996, BioChem Pharma
received a patent in the United States, which included a claim to treat
hepatitis B with emtricitabine. The PTO has determined that there is a conflict
between the BioChem Pharma patent and patent applications filed by Yale and
Emory. The PTO is conducting an adversarial proceeding, an interference, to
determine which party is entitled to the patent claims in dispute. Yale licensed
all of its rights relating to FTC, including emtricitabine, and its uses claimed
in this patent application to Emory, which subsequently licensed these rights to
us. Neither Emory nor Yale may prevail in the adversarial proceeding, and the
proceeding may delay the decision of the PTO regarding Yale's and Emory's patent
applications. In addition, the PTO has recently added the U.S. patent
application filed by Burroughs Wellcome to this interference. Emory may not
pursue or succeed in any such proceedings. We will not be able to sell
emtricitabine for the treatment of hepatitis B in the United States unless a
United States court or administrative body determines that the BioChem Pharma
patent is invalid or unless we obtain a license from BioChem Pharma. We may be
unable to obtain such a license on acceptable terms or at all. In July 1991,
BioChem Pharma received a United States patent on the use of lamivudine to treat
hepatitis B and has corresponding patent applications pending or issued in
foreign countries. If it is determined that the use of emtricitabine to treat
hepatitis B is not substantially different from the use of lamivudine to treat
hepatitis B, a court could hold that the use of emtricitabine to treat hepatitis
B infringes these BioChem Pharma lamivudine patents.
In addition, BioChem Pharma has filed in the United States and foreign
countries several patent applications on manufacturing methods relating to a
class of nucleosides that includes emtricitabine, from which BioChem Pharma has
received several patents in the United States and many foreign countries. If we
use a manufacturing method that is covered by patents issued on
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any of these applications, we will not be able to manufacture emtricitabine
without a license from BioChem Pharma. We may not be able to obtain a license on
acceptable terms or at all.
AMDOXOVIR (FORMERLY KNOWN AS DAPD)
We obtained our rights to amdoxovir under a license from Emory and the
University of Georgia Research Foundation, Inc., University of Georgia. Our
rights to amdoxovir include a number of issued United States patents that cover
composition of matter, a method for the synthesis of amdoxovir, methods for the
use of amdoxovir alone or in combination with certain other agents for the
treatment of hepatitis B, and a method to treat HIV with amdoxovir. We also have
rights to several foreign patents and patent applications that cover methods for
the use of amdoxovir alone or in combination with certain other anti-hepatitis B
agents for the treatment of hepatitis B. Additional foreign patent applications
are pending which contain claims for the use of amdoxovir to treat HIV. Emory
and the University of Georgia filed patent applications claiming these
inventions in the United States in 1990 and 1992. BioChem Pharma filed a patent
application in the United States in 1988 on a group of nucleosides in the same
general class as amdoxovir and their use to treat HIV, and has filed
corresponding patent applications in foreign countries. The PTO issued a patent
to BioChem Pharma in 1993 covering a class of nucleosides that includes
amdoxovir and its use to treat HIV. Corresponding patents have been issued to
BioChem Pharma in many foreign countries. Emory has filed an opposition to
patent claims granted to BioChem Pharma by the European Patent Office based, in
part, upon Emory's assertion that BioChem Pharma's patent does not disclose how
to make amdoxovir. In a patent opposition hearing held at the European Patent
Office on March 4, 1999, the Opposition Division ruled that the BioChem Pharma
European patent covering amdoxovir is valid. Emory has appealed this decision to
the European Patent Office Technical Board of Appeal. If the Technical Board of
Appeal affirms the decision of the Opposition Division, or if Emory or Triangle
does not pursue the appeal, we would not be able to sell amdoxovir in Europe
without a license from BioChem Pharma, which may not be available on acceptable
terms or at all. Patent claims granted to Emory on both amdoxovir (the
administered drug) and DXG (the parent drug into which amdoxovir is converted in
the body) have also been opposed by BioChem Pharma in the Australian Patent
Office.
In a decision dated November 8, 2000, the Australian Patent Office held
that Emory's patent claims directed to amdoxovir are not patentable over an
earlier BioChem Pharma patent. Emory has appealed this decision of the
Australian Patent Office to the Australian Federal Court. If Emory, the
University of Georgia or Triangle is unsuccessful in the appeal, then we will
not be able to sell amdoxovir in Australia without a license from BioChem
Pharma, which may not be available on reasonable terms or at all. BioChem
Pharma's opposition to Emory's patent claims on DXG in Australia is ongoing. If
Emory, the University of Georgia and we do not challenge, or are not successful
in any challenge to, BioChem Pharma's issued patents, pending patent
applications, or patents that may issue from such applications, we will not be
able to manufacture, use or sell amdoxovir in the United States and any foreign
countries in which BioChem Pharma receives a patent without a license from
BioChem Pharma. We may not be able to obtain such a license from BioChem Pharma
on acceptable terms or at all.
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IMMUNOSTIMULATORY SEQUENCE PRODUCT CANDIDATES
In March 2000, we entered into a licensing and collaborative agreement
with Dynavax Technologies Corporation, Dynavax, to develop immunostimulatory
polynucleotide sequence product candidates for the prevention and/or treatment
of serious viral diseases, which became effective in April 2000.
Immunostimulatory sequences are polynucleotides which stimulate the immune
system, and could potentially be used in combination with our small molecule
product candidates to increase the body's ability to defend against viral
infection. Immunostimulatory sequences can be stabilized for use through
internal linkages that do not occur in nature, including phosphorothioate
linkages.
There are a number of companies which have patent applications and issued
patents, both in the United States and in other countries, that cover
immunostimulatory sequences and their uses. Coley Pharmaceuticals, Inc. has
filed several patent applications in this area and has in addition exclusively
licensed a number of patent applications on this subject from the University of
Iowa and Isis Pharmaceuticals, Inc. A number of these patent applications have
been issued. A number of companies have also filed patent applications and have
or are expected to receive patents on certain polynucleotides and methods for
their use and manufacture. We could be prevented from making, using or selling
any immunostimulatory sequence that is covered by a patent issued to a third
party company, unless we obtain a license from that company, which may not be
available on reasonable terms or at all.
With respect to any of our drug candidates, litigation, patent opposition
and adversarial proceedings, including the currently pending proceedings, could
result in substantial costs to us. The costs of the currently pending
proceedings may increase significantly during the next several years. We
anticipate that additional litigation and/or proceedings will be necessary or
may be initiated to enforce any patents we own or in-license, or to determine
the scope, validity and enforceability of other parties' proprietary rights and
the priority of an invention. Any of these activities could result in
substantial costs and/or delays to us. The outcome of any of these proceedings
may significantly affect our rights to develop and commercialize drug candidates
and technology. United States patents carry a presumption of validity and
generally can be invalidated only through clear and convincing evidence. As
indicated above, the PTO is conducting three adversarial proceedings in
connection with the emtricitabine technology. We cannot assure you that a court
or administrative body would hold our in-licensed patents valid or would find an
alleged infringer to be infringing. Further, the license and option agreements
with Emory, the University of Georgia, The Regents of the University of
California, The DuPont Pharmaceuticals Company, Mitsubishi Tokyo
Pharmaceuticals, Inc. (formerly, Mitsubishi Chemical Corporation) and Dynavax
provide that each of these licensors is primarily responsible for any patent
prosecution activities, such as litigation, patent conflict proceeding, patent
opposition or other actions, for the technology licensed to us. These agreements
also provide that in general we are required to reimburse these licensors for
the costs they incur in performing these activities. Similarly, Yale and the
University of Georgia, the licensors of clevudine to Bukwang Pharm. Ind. Co.,
Ltd., are primarily responsible for patent prosecution activities with respect
to clevudine at our expense. As a result, we generally do not have the ability
to institute or determine the conduct of any patent proceedings unless our
licensors elect not to institute or to abandon the proceedings. If our licensors
elect to institute and prosecute patent proceedings, our
13
rights will depend in part upon the manner in which these licensors conduct the
proceedings. In any proceedings they elect to initiate and maintain, these
licensors may not vigorously pursue or defend or may decide to settle such
proceedings on terms that are unfavorable to us. An adverse outcome of these
proceedings could subject us to significant liabilities to third parties,
require disputed rights to be licensed from third parties or require us to cease
using such technology, any of which could adversely affect our business.
Moreover, the mere uncertainty resulting from the initiation and continuation of
any technology related litigation or adversarial proceeding could adversely
affect our business pending resolution of the disputed matters.
We also rely on unpatented trade secrets and know-how to maintain our
competitive position, which we seek to protect, in part, by confidentiality
agreements with employees, consultants and others. These parties may breach or
terminate these agreements, and we may not have adequate remedies for any
breach. Our trade secrets may also be independently discovered by competitors.
We rely on technologies to which we do not have exclusive rights or which may
not be patentable or proprietary and thus may be available to competitors. We
have filed applications for, but have not obtained, trademark registrations for
various marks in the United States and other jurisdictions. We have received
U.S. trademark registrations for our corporate name and logo, Coactinon(R) and
Coviracil(R). We have received a Canadian trademark registration for the mark
Coviracil(R). We have also received registrations in the European Union for the
mark Coactinon(R) and our corporate logo. Our pending application in the
European Union for the mark Coviracil(TM) has been opposed by Orsem, based upon
registrations for the mark Coversyl in various countries, and Les Laboratories
Serveir, based on a French registration for the mark Coversyl. We do not believe
that the marks Coviracil and Coversyl are confusingly similar, but, in the event
they are found to be confusingly similar, we may need to adopt a different
product name for emtricitabine in the applicable jurisdictions. Several other
companies use trade names that are similar to our name for their businesses. If
we are unable to obtain any licenses that may be necessary for the use of our
corporate name, we may be required to change our name. Our management personnel
were previously employed by other pharmaceutical companies. The prior employers
of these individuals may allege violations of trade secrets and other similar
claims relating to their drug development activities for us.
WE ARE SUBJECT TO EXTENSIVE GOVERNMENT REGULATION AND MAY FAIL TO RECEIVE
REGULATORY APPROVAL WHICH COULD PREVENT OR DELAY THE COMMERCIALIZATION OF OUR
PRODUCTS.
In addition to preclinical testing, clinical trials and other approval
procedures for human pharmaceutical products, we are subject to numerous other
regulations covering the development of pharmaceutical products. These
regulations include, for example, domestic and international regulations
relating to the manufacturing, safety, labeling, storage, record keeping,
reporting, marketing and promotion of pharmaceutical products. We are also
regulated with respect to non-clinical and clinical laboratory practices, safe
working conditions, and the use and disposal of hazardous substances, including
radioactive compounds and infectious disease agents used in connection with our
development work. The requirements vary widely from country to country and some
requirements may vary from state to state in the United States. We expect the
process of obtaining these approvals and complying with appropriate government
regulations to be time consuming and expensive. Even if our drug candidates
receive regulatory approval, we may still face difficulties in marketing and
manufacturing those drug candidates. Further, any approval may be contingent on
postmarketing studies or other conditions. The approval of any of our
14
drug candidates may limit the indicated uses of the drug candidate. A marketed
product, its manufacturer and the manufacturer's facilities are subject to
continual review and periodic inspections. The discovery of previously unknown
problems with a product, manufacturer or facility may result in restrictions on
the product or manufacturer, including withdrawal of the product from the
market. The failure to comply with applicable regulatory requirements can, among
other things, result in:
- fines,
- suspended regulatory approvals,
- refusal to approve pending applications,
- refusal to permit exports from the United States,
- product recalls,
- seizure of products,
- injunctions,
- operating restrictions, and
- criminal prosecutions.
In addition, adverse clinical results by others could negatively impact
the development and approval of our drug candidates. Some of our drug candidates
are intended for use as combination therapy with one or more other drugs, and
adverse safety, effectiveness or regulatory developments in connection with such
other drugs will also have an adverse effect on our business.
INTENSE COMPETITION MAY RENDER OUR DRUG CANDIDATES NONCOMPETITIVE OR OBSOLETE.
We are engaged in segments of the drug industry that are highly
competitive and rapidly changing. Any of our current drug candidates that we
successfully develop will compete with numerous existing therapies. In addition,
many companies are pursuing novel drugs that target the same diseases we are
targeting. We believe that a significant number of drugs are currently under
development and will become available in the future for the treatment of HIV and
hepatitis B. We anticipate that we will face intense and increasing competition
as new products enter the market and advanced technologies become available. Our
competitors' products may be more effective, or more effectively marketed and
sold, than any of our products. Competitive products may render our products
obsolete or noncompetitive before we can recover the expenses of developing and
commercializing our drug candidates. Furthermore, the development of a cure or
new treatment methods for the diseases we are targeting could render our drug
candidates noncompetitive, obsolete or uneconomical. Many of our competitors:
15
- have significantly greater financial, technical and human resources
than we have and may be better equipped to develop, manufacture and
market products,
- have extensive experience in preclinical testing and clinical
trials, obtaining regulatory approvals and manufacturing and
marketing pharmaceutical products, and
- have products that have been approved or are in late stage
development and operate large, well-funded research and development
programs.
Smaller companies may also prove to be significant competitors,
particularly through collaborative arrangements with large pharmaceutical and
biotechnology companies. Academic institutions, governmental agencies and other
public and private research organizations are also becoming increasingly aware
of the commercial value of their inventions and are more actively seeking to
commercialize the technology they have developed.
If we successfully develop and obtain approval for our drug candidates, we
will face competition based on the safety and effectiveness of our products, the
timing and scope of regulatory approvals, the availability of supply, marketing
and sales capability, reimbursement coverage, price, patent position and other
factors. Our competitors may develop or commercialize more effective or more
affordable products, or obtain more effective patent protection, than we do.
Accordingly, our competitors may commercialize products more rapidly or
effectively than we do, which could hurt our competitive position.
BECAUSE WE FACE RISKS RELATED TO OUR LICENSE AND OPTION AGREEMENTS, WE COULD
LOSE OUR RIGHTS TO OUR DRUG CANDIDATES.
We have in-licensed or obtained an option to in-license our drug
candidates under agreements with our licensors. These agreements permit our
licensors to terminate the agreements under certain circumstances, such as our
failure to achieve certain development milestones or the occurrence of an
uncured material breach by us. The termination of any of these agreements could
result in the loss of our rights to a drug candidate. On the termination of most
of our license agreements, we are required to return the licensed technology to
our licensors. In addition, most of these agreements provide that our licensors
are primarily responsible for any patent prosecution activities, such as
litigation, patent conflict, patent opposition or other actions, for the
technology licensed to us. These agreements also provide that in general we are
required to reimburse our licensors for the costs they incur in performing these
activities. We believe that these costs as well as other costs under our license
and option agreements will be substantial and may increase significantly during
the next several years. Our inability or failure to pay any of these costs with
respect to any drug candidate could result in the termination of the license or
option agreement for the drug candidate.
BECAUSE WE MAY BE UNABLE TO SUCCESSFULLY MANUFACTURE OUR DRUG CANDIDATES, OUR
BUSINESS MAY NEVER ACHIEVE PROFITABILITY.
We do not have any internal manufacturing capacity and we rely on third
party manufacturers for the manufacture of all of our clinical trial material.
We plan to expand our
16
existing relationships or to establish relationships with additional third party
manufacturers for products that we successfully develop. The terms of the Abbott
Alliance provide that Abbott Laboratories, Abbott, will manufacture all or a
portion of our product requirements for those products that are or become
covered by the Abbott Alliance. We may be unable to maintain our relationship
with Abbott or to establish or maintain relationships with other third party
manufacturers on acceptable terms, and third party manufacturers may be unable
to manufacture products in commercial quantities on a cost effective basis. Our
dependence upon third parties for the manufacture of our products may adversely
affect our profit margins and our ability to develop and commercialize products
on a timely and competitive basis. Further, third party manufacturers may
encounter manufacturing or quality control problems in connection with the
manufacture of our products and may be unable to maintain the necessary
governmental licenses and approvals to continue manufacturing our products.
WE MAY BE UNABLE TO SUCCESSFULLY MARKET, SELL OR DISTRIBUTE OUR DRUG CANDIDATES.
In the United States, we currently intend to market the drug candidates
covered by the Abbott Alliance in collaboration with Abbott and to market other
drug candidates that we successfully develop, that do not become part of the
Abbott Alliance, through a direct sales force. Outside of the United States, we
expect Abbott to market drug candidates covered by the Abbott Alliance and, for
any other drug candidates that we successfully develop that do not become part
of the Abbott Alliance, we intend to market and sell through arrangements or
collaborations with third parties. In addition, we expect Abbott to handle the
distribution and sale of drug candidates covered by the Abbott Alliance both
inside and outside the United States. With respect to the United States, our
ability to market the drug candidates that we successfully develop may be
contingent upon recruitment, training and deployment of a sales and marketing
force as well as the performance of Abbott under the Abbott Alliance. We may be
unable to establish marketing or sales capabilities or to maintain arrangements
or enter into new arrangements with third parties to perform those activities on
favorable terms. In addition, third parties may have significant control or
influence over important aspects of the commercialization of our drug
candidates, including market identification, marketing methods, pricing,
composition of sales force and promotional activities. We may have limited
control over the amount and timing of resources that a third party devotes to
our drug candidates. Our business may never achieve profitability if we fail to
establish or maintain a sales force and marketing, sales and distribution
capabilities.
BECAUSE WE DEPEND ON THIRD PARTIES FOR THE DEVELOPMENT AND ACQUISITION OF DRUG
CANDIDATES, WE MAY NOT SUCCESSFULLY ACQUIRE ADDITIONAL DRUG CANDIDATES OR
COMMERCIALIZE OR DEVELOP OUR CURRENT DRUG CANDIDATES.
We have engaged and intend to continue to engage third party contract
research organizations and other third parties to help us develop our drug
candidates. Although we have designed the clinical trials for our drug
candidates, the contract research organizations have conducted many of the
clinical trials. As a result, many important aspects of our drug development
programs have been and will continue to be outside of our direct control. In
addition, the contract research organizations may not perform all of their
obligations under arrangements with us. If the contract research organizations
do not perform clinical trials in a
17
satisfactory manner or breach their obligations to us, the development and
commercialization of any drug candidate may be delayed or precluded. We do not
currently intend to engage in drug discovery. Our strategy for obtaining
additional drug candidates is to utilize the relationships of our management
team and scientific consultants to identify drug candidates for in-licensing
from companies, universities, research institutions and other organizations. We
may not succeed in acquiring additional drug candidates on acceptable terms or
at all.
BECAUSE WE MAY NOT BE ABLE TO ATTRACT AND RETAIN KEY PERSONNEL AND ADVISORS, WE
MAY NOT SUCCESSFULLY DEVELOP OUR PRODUCTS OR ACHIEVE OUR OTHER BUSINESS
OBJECTIVES.
We are highly dependent on our senior management and scientific staff,
including Dr. David Barry, our Chairman and Chief Executive Officer. We have
entered into employment agreements with each officer of Triangle. Dr. Barry's
employment agreement contains non-competition provisions. In addition, the
employment agreements for each officer provide for severance payments that are
contingent upon each officer's refraining from competition with Triangle. The
loss of the services of any member of our senior management or scientific staff
may significantly delay or prevent the achievement of product development and
other business objectives. Our ability to attract and retain qualified
personnel, consultants and advisors is critical to our success. In order to
pursue our drug development programs and marketing plans, we will need to hire
additional qualified scientific and management personnel. Competition for
qualified individuals is intense and we face competition from numerous
pharmaceutical and biotechnology companies, universities and other research
institutions. We may be unable to attract and retain these individuals, and our
failure to do so would have an adverse effect on our business.
HEALTH CARE REFORM MEASURES AND THIRD PARTY REIMBURSEMENT PRACTICES ARE
UNCERTAIN AND MAY ADVERSELY IMPACT THE COMMERCIALIZATION OF OUR PRODUCTS.
The efforts of governments and third party payors to contain or reduce the
cost of health care will continue to affect the business and financial condition
of drug companies. A number of legislative and regulatory proposals to change
the health care system have been proposed in recent years. In addition, an
increasing emphasis on managed care in the United States has and will continue
to increase pressure on drug pricing. While we cannot predict whether
legislative or regulatory proposals will be adopted or what effect those
proposals or managed care efforts may have on our business, the announcement
and/or adoption of proposals could have an adverse effect on our profit margins
and financial condition. Sales of prescription drugs depend significantly on the
availability of reimbursement to the consumer from third party payors, such as
government and private insurance plans. These third party payors frequently
require that drug companies give them predetermined discounts from list prices,
and they are increasingly challenging the prices charged for medical products
and services. Present combination treatment regimens for the treatment of HIV
are expensive and may increase as new combinations are developed. These costs
have resulted in limitations in the reimbursement available from third party
payors for the treatment of HIV infection, and we expect that reimbursement
pressures will continue in the future. If we succeed in bringing one or more
products to the market, these products may not be considered cost effective and
reimbursement to the consumer may not be available or sufficient to allow us to
sell our products on a competitive basis.
18
IF OUR DRUG CANDIDATES DO NOT ACHIEVE MARKET ACCEPTANCE, OUR BUSINESS MAY NEVER
ACHIEVE PROFITABILITY.
Our success will depend on the market acceptance of any products we
develop. The degree of market acceptance will depend upon a number of factors,
including the receipt and scope of regulatory approvals, the establishment and
demonstration in the medical community of the safety and effectiveness of our
products and their potential advantages over existing treatment methods, and
reimbursement policies of government and third party payors. Physicians,
patients, payors or the medical community in general may not accept or utilize
any product that we may develop.
WE MAY NOT HAVE ADEQUATE INSURANCE PROTECTION AGAINST PRODUCT LIABILITY.
Our business exposes us to potential product liability risks that are
inherent in the testing of drug candidates and the manufacturing and marketing
of drug products and we may face product liability claims in the future. We
currently have only limited product liability insurance. We may be unable to
maintain our existing insurance and/or obtain additional insurance in the future
at a reasonable cost or in sufficient amounts to protect against potential
losses. A successful product liability claim or series of claims brought against
us could require us to pay substantial amounts that would decrease our
profitability, if any.
WE MAY INCUR SUBSTANTIAL COSTS RELATED TO OUR USE OF HAZARDOUS MATERIALS.
We use hazardous materials, chemicals, viruses and various radioactive
compounds in our drug development programs. Although we believe that our
handling and disposing of these materials comply with state and federal
regulations, the risk of accidental contamination or injury still exists. In the
event of such an accident, we could be held liable for any damages or fines that
result and any such liability could exceed our resources.
OUR CONTROLLING STOCKHOLDERS MAY MAKE DECISIONS YOU DO NOT CONSIDER TO BE IN
YOUR BEST INTEREST.
As of May 31, 2001, our directors, executive officers and their
affiliates, excluding Abbott, owned approximately 15.6% of our outstanding
common stock and Abbott owned approximately 16.4% of our outstanding common
stock. Pursuant to the terms of the Abbott Alliance, Abbott has the right to
purchase additional amounts of our common stock up to a maximum aggregate
percentage of 21% of our outstanding common stock and has rights to purchase
shares directly from us in order to maintain its existing level of ownership,
also known as antidilution protection. Abbott has the right to designate one
person to serve as a member of our Board of Directors. As a result, our
controlling stockholders are able to significantly influence all matters
requiring stockholder approval, including the election of directors and the
approval of significant corporate transactions. This concentration of ownership
could also delay or prevent a change in control of Triangle that may be favored
by other stockholders.
19
THE MARKET PRICE OF OUR STOCK MAY BE ADVERSELY AFFECTED BY MARKET VOLATILITY AND
OTHER FACTORS.
The market price of our common stock is likely to be volatile and could
fluctuate widely in response to many factors, including:
- announcements of the results of clinical trials by us or our
competitors,
- developments with respect to patents or proprietary rights,
- announcements of technological innovations by us or our competitors,
- announcements of new products or new contracts by us or our
competitors,
- actual or anticipated variations in our operating results due to the
level of development expenses and other factors,
- changes in financial estimates by securities analysts and whether
our earnings meet or exceed such estimates,
- conditions and trends in the pharmaceutical and other industries,
- new accounting standards,
- general economic, political and market conditions and other factors,
and
- the occurrence of any of the risks described in these "Risk
Factors."
In the past, following periods of volatility in the market price of the
securities of companies in our industry, securities class action litigation has
often been instituted against those companies. If we face such litigation in the
future, it would result in substantial costs and a diversion of management
attention and resources, which would negatively impact our business. In
addition, if our stockholders sell a substantial number of shares of our common
stock in the public market, the market price of our common stock could be
reduced. As of May 31, 2001, there were 48,363,918 shares of common stock
outstanding, of which approximately 27,700,000 were immediately eligible for
resale in the public market without restriction. Holders of approximately
14,100,000 shares, including the shares offered by this prospectus, have rights
to cause us to register their shares for sale to the public. We have filed
registration statements to register the sale of approximately 10,850,000 of
these shares, including the shares offered by this prospectus. In addition,
Abbott will have the right on or after June 30, 2002 to cause us to register for
resale in the public market the 6,571,428 shares of common stock purchased at
the closing of the Abbott Alliance. Any sales in the public market may make it
more difficult for us to raise needed working capital through an offering of our
equity or convertible debt securities and may reduce the market price of our
common stock.
Declines in our stock price might harm our ability to issue equity or
secure other types of financing arrangements. The price at which we issue shares
is generally based on the market price of our common stock and a decline in our
stock price would result in our needing to issue a greater number of shares to
raise a given amount of funds or acquire a given amount of goods or services.
For this reason, a decline in our stock price might also result in increased
ownership dilution to our stockholders. A low stock price might impair our
ability to raise capital under our Facility because Ramius is not obligated to
sell our common stock under the Facility on a given
20
day if our average stock price during such day is less than $4.00 per share (or
less than any higher floor price specified by us).
OUR STOCK PRICE COULD DECLINE AND OUR STOCKHOLDERS COULD EXPERIENCE SIGNIFICANT
OWNERSHIP DILUTION DUE TO OUR ABILITY TO ISSUE SHARES UNDER THE FIRM
UNDERWRITTEN EQUITY FACILITY.
Under our Facility we may sell, subject to various restrictions, up to
$100.0 million of common stock over a three-year period. The aggregate number of
shares that may be issued under the Facility depends on a number of factors,
including the market price and trading volume of our common stock during each
15-trading day selling period. Because the price of any shares we choose to sell
under the Facility is based on the market price of the common stock on the date
of sale, both the number of shares we would have to sell in order to raise any
given amount of funding and the associated ownership dilution experienced by our
stockholders will be greater if the price of our common stock declines. The
lowest price at which common stock may be sold under the Facility is $4.00 per
share.
The perceived risk associated with the possible sale of a large number of
shares under the Facility could cause some of our stockholders to sell their
stock, thus causing the price of our stock to decline. In addition, actual or
anticipated downward pressure on our stock price could cause some institutions
or individuals to engage in short sales of our common stock, which may itself
cause the price of our stock to decline.
ANTITAKEOVER PROVISIONS IN OUR CHARTER DOCUMENTS AND DELAWARE LAW COULD DELAY,
DEFER OR PREVENT A TENDER OFFER OR TAKEOVER ATTEMPT THAT YOU CONSIDER TO BE IN
YOUR BEST INTEREST.
We have adopted a number of provisions that could have antitakeover
effects. We have adopted a preferred stock purchase rights plan, commonly
referred to as a "poison pill." The rights plan is intended to deter an attempt
to acquire Triangle in a manner or on terms not approved by the Board of
Directors, the Board. The rights plan will not prevent an acquisition of
Triangle which is approved by the Board. Our charter authorizes the Board to
determine the terms of any shares of undesignated preferred stock and issue them
without stockholder approval. The issuance of preferred stock may make it more
difficult for a third party to acquire, or may discourage a third party from
acquiring, voting control of Triangle. Our bylaws divide the Board into three
classes of directors with each class serving a three year term. These and other
provisions of our charter and our bylaws, as well as provisions of Delaware law,
could delay or impede the removal of incumbent directors and could make more
difficult a merger, tender offer or proxy contest involving Triangle, even if
the events could be beneficial to our stockholders. These provisions could also
limit the price that investors might be willing to pay for our common stock.
WE HAVE NOT DECLARED OR PAID ANY DIVIDENDS ON OUR COMMON STOCK.
We have never declared or paid any cash dividends on our common stock, and
we currently do not intend to pay any cash dividends on our common stock in the
foreseeable future. We intend to retain our earnings, if any, for the operation
of our business.
21
V. FORWARD-LOOKING STATEMENTS
This prospectus contains "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended. All statements, other
than statements of historical facts, included in, or incorporated by reference
into this prospectus, are forward-looking statements. In addition, when used in
this document, the words "anticipate", "estimate", "project", and similar
expressions are intended to identify forward-looking statements. These
forward-looking statements are subject to various risks or uncertainties and
assumptions. Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may vary
materially from those anticipated, estimated or projected. Although we believe
that the expectations reflected in these forward-looking statements are
reasonable, no assurance can be given that such expectations will prove to have
been correct. These statements are only predictions and involve known and
unknown risks, uncertainties and other factors, including the risks outlined
under "Risk Factors," that may cause our or our industry's actual results,
levels of activity, performance or achievements to be materially different from
future results, levels of activity, performance or achievements expressed or
implied by these forward-looking statements.
Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements. Moreover, neither we nor any other person
assumes responsibility for the accuracy and completeness of these statements. We
are under no duty to update any of the forward-looking statements after the date
of this prospectus or to conform these statements to actual results unless
required by law.
VI. USE OF PROCEEDS
We will not receive any of the proceeds from the sale of the shares by the
selling stockholders.
VII. SELLING STOCKHOLDERS
We are registering all 2,000,000 shares of common stock covered by this
prospectus on behalf of the selling stockholders named in the table below. We
issued all of the shares to the selling stockholders on May 18, 2001 on the
conversion of all outstanding Series B preferred stock. We issued the Series B
preferred stock to the selling stockholders in a private placement completed on
March 9, 2001. We have registered the shares of common stock to permit the
selling stockholders and their pledgees, donees, transferees or other
successors-in-interest that receive their shares from a selling stockholder as a
gift, partnership distribution or other non-sale related transfer after the date
of this prospectus to resell the shares when they deem appropriate.
We have agreed to file any amendments and supplements to the registration
statement that are necessary to keep the registration statement effective until
the earlier of the date on which all of the shares are sold or two years from
the effective date of the registration statement.
The following table sets forth the name of each of the selling
stockholders, the number of shares owned by each of the selling stockholders as
of May 31, 2001, the number of shares that may be offered under this prospectus,
and the number of shares of our common stock owned by
22
each of the selling stockholders after this offering is completed. Except as
shown in the table below, none of the selling stockholders has had a material
relationship with us within the past three years other than as a result of the
ownership of the shares or other securities of Triangle. The number of shares in
the column "Number of Shares Being Offered" represent all of the shares that
each selling stockholder may offer under this prospectus. We do not know how
long the selling stockholders will hold the shares before selling them or if
they will sell them and we currently have no agreements, arrangements or
understandings with any of the selling stockholders regarding the sale of any of
the shares.
Unless otherwise indicated, each person has sole investment and voting
power with respect to the shares listed in the table, subject to community
property laws, where applicable. For purposes of this table, a person or group
of persons is deemed to have "beneficial ownership" of any shares which such
person has the right to acquire within 60 days. Percentage ownership is based on
48,363,918 shares of common stock of Triangle outstanding on May 31, 2001. For
purposes of computing the percentage of outstanding shares held by each person
or group of persons named below, any security which a person or group of persons
has the right to acquire within 60 days is deemed to be outstanding for the
purpose of computing the percentage ownership for that person or persons, but is
not deemed to be outstanding for the purpose of computing the percentage
ownership for other persons. This registration statement will also cover any
additional shares of common stock which become issuable in connection with the
shares offered hereby as a result of any stock dividend, stock split,
recapitalization or other similar transaction effected without the receipt of
consideration which results in an increase in the number of Triangle's
outstanding shares of common stock.
SHARES SHARES
BENEFICIALLY OWNED BENEFICIALLY OWNED
PRIOR TO OFFERING NUMBER OF AFTER OFFERING (1)
----------------------------- SHARES BEING -------------------
NAME OF SELLING STOCKHOLDER NUMBER PERCENT OFFERED NUMBER PERCENT
---------------------------------------------- --------------- ------------ ------------ ------------ ---------
Alta BioPharma Partners, L.P. 1,045,920 2.2% 424,330 621,590 1.3%
Forward Ventures IV, L.P.(2) 1,207,040 2.5 1,207,040 0 *
Forward Ventures IV B, L.P.(2) 126,290 * 126,290 0 *
Triangle Pharmaceuticals Chase
Partners (Alta Bio), LLC 597,330 1.2 242,340 354,990 *
---------- ----- ---------- --------
TOTAL 2,976,580 2,000,000 976,580
========== ========== ========
----------
* Represents beneficial ownership of less than one percent.
(1) Assumes the sale of all shares offered hereby and no other purchases or
sales of Triangle's common stock.
(2) The general partner of each of Forward Ventures IV, L.P. and Forward
Ventures IV B, L.P. is Forward IV Associates, LLC. The Managing Member of
Forward IV Associates, LLC, Standish Fleming, is a member of the Board of
Directors of Triangle.
VIII. PLAN OF DISTRIBUTION
The sale or distribution of the shares may be effected directly to
purchasers by the selling stockholders or by donees or pledgees of any such
selling stockholders as principals or through one or more underwriters, brokers,
dealers or agents from time to time in one or more transactions, which may
involve crosses or block transactions, or (i) on any exchange or in the
over-the-counter market, (ii) in transactions otherwise than in the over-the
counter market, (iii)
23
through the writing of put or call options, whether such options are listed on
an options exchange or otherwise, (iv) through the distribution of the shares by
any selling stockholder to its partners, members or shareholders or (v) through
a combination of any of the above. Any of these transactions may be effected at
market prices prevailing at the time of sale, at prices related to prevailing
market prices, at varying prices determined at the time of sale or at negotiated
or fixed prices, in each case as determined by the selling stockholder or by
agreement between the selling stockholder and underwriters, brokers, dealers,
agents or purchasers. If the selling stockholders effect transactions by selling
shares to or through underwriters, brokers, dealers or agents, the underwriters,
brokers, dealers or agents may receive compensation in the form of discounts,
concessions or commissions from the selling stockholders or commissions from
purchasers of shares for whom they may act as agent, which discounts,
concessions or commissions as to particular underwriters, brokers, dealers or
agents may be in excess of those customary in the types of transactions
involved. Brokers, dealers or agents and any other participating brokers,
dealers or the selling stockholders may be deemed to be "underwriters" within
the meaning of Section 2(11) of the Securities Act, in connection with sales of
the shares. Accordingly, any commission, discount or concession received by them
and any profit on the resale of the shares purchased by them may be deemed to be
underwriting discounts or commissions under the Securities Act. Because selling
stockholders may be deemed to be "underwriters" within the meaning of Section
2(11) of the Securities Act, the selling stockholders will be subject to the
prospectus delivery requirements of the Securities Act.
The selling stockholders may enter into hedging transactions with
broker-dealers or other financial institutions. In connection with such
transactions, broker-dealers or other financial institutions may engage in short
sales of Triangle's common stock in the course of hedging the positions they
assume with selling stockholders. The selling stockholders may also enter into
options or other transactions with broker-dealers or other financial
institutions which require the delivery to the broker-dealer or other financial
institution of shares offered hereby. The broker-dealer or other financial
institution may then resell those shares pursuant to this prospectus, as
supplemented or amended to reflect the transaction.
Under the securities laws of some states, the shares may be sold in those
states only through registered or licensed brokers or dealers. In addition, in
some states the shares may not be sold unless the shares have been registered or
qualified for sale in the state or an exemption from registration or
qualification is available and is complied with.
Selling stockholders may also resell all or a portion of the shares in
open market transactions in reliance upon Rule 144 under the Securities Act,
rather than under this prospectus, provided they meet the criteria and conform
to the requirements of Rule 144.
Under applicable rules and regulations under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), any person engaged in the distribution
of the shares may not simultaneously engage in market making activities with
respect to our common stock for a period of two business days prior to the
commencement of such distribution. In addition, each selling stockholder will be
subject to applicable provisions of the Exchange Act and the associated rules
and regulations under the Exchange Act, including Regulation M, which provisions
may limit the timing of purchases and sales of shares of our common stock by the
selling stockholders. We will make copies of this prospectus available to the
selling
24
stockholders and have informed them of the need to deliver copies of this
prospectus to purchasers at or prior to the time of any sale of the shares.
We will pay all of the expenses incident to the registration, offering and
sale of the shares to the public hereunder other than commissions, fees and
discounts of underwriters, brokers, dealers and agents. We have agreed to
indemnify the selling stockholders against certain liabilities, including
liabilities under the Securities Act. We will not receive any of the proceeds
from the sale of any of the shares by the selling stockholders.
We have agreed to keep the Registration Statement of which this prospectus
constitutes a part effective until the earlier of the date upon which all of the
shares are sold or two years from the effective date of the Registration
Statement.
IX. LEGAL MATTERS
For purposes of this offering, Brobeck, Phleger & Harrison LLP, New York,
New York, is giving its opinion as to the validity of the shares.
X. EXPERTS
The financial statements incorporated in this prospectus by reference to
the Annual Report on Form 10-K of Triangle for the year ended December 31, 2000,
have been incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of that firm as experts in
auditing and accounting.
25
WE HAVE NOT AUTHORIZED ANY PERSON TO MAKE A STATEMENT THAT DIFFERS FROM WHAT IS
IN THIS PROSPECTUS. IF ANY PERSON DOES MAKE A STATEMENT THAT DIFFERS FROM WHAT
IS IN THIS PROSPECTUS, YOU SHOULD NOT RELY ON IT. THIS PROSPECTUS IS NOT AN
OFFER TO SELL, NOR IS IT AN OFFER TO BUY, THESE SECURITIES IN ANY STATE IN WHICH
THE OFFER OR SALE IS NOT PERMITTED. THE INFORMATION IN THIS PROSPECTUS IS
COMPLETE AND ACCURATE AS OF ITS DATE, BUT THE INFORMATION MAY CHANGE AFTER THAT
DATE.
2,000,000 Shares
TRIANGLE
PHARMACEUTICALS, INC.
COMMON STOCK
-----------------------------
PROSPECTUS
-----------------------------
JUNE , 2001
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth all expenses, other than underwriting
discounts and commissions, payable by the Registrant in connection with the sale
of the common stock being registered. All the amounts shown are estimates,
except for the registration fee.
Registration Fee...................... $ 2,375
Printing and engraving expenses....... 10,000
Legal fees and expenses............... 5,000
Accounting fees and expenses.......... 5,000
Transfer Agent and Registrar Fees..... 10,000
Miscellaneous Expenses................ 7,625
---------
TOTAL........................... $ 40,000
=========
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Section 145 of the Delaware General Corporation Law permits
indemnification of officers and directors of Triangle under certain conditions
and subject to certain limitations. Section 145 of the Delaware General
Corporation Law also provides that a corporation has the power to purchase and
maintain insurance on behalf of its officers and directors against any liability
asserted against such person and incurred by him or her in such capacity, or
arising out of his or her status as such, whether or not the corporation would
have the power to indemnify him or her against such liability under the
provisions of Section 145 of the Delaware General Corporation Law.
Article VII, Section (i) of the Restated Bylaws of Triangle provides that
Triangle shall indemnify its directors and executive officers to the fullest
extent not prohibited by the Delaware General Corporation Law. The rights to
indemnity thereunder continue as to a person who has ceased to be a director,
officer, employee or agent and inure to the benefit of the heirs, executors and
administrators of the person. In addition, expenses incurred by a director or
officer in defending any civil, criminal, administrative or investigative
action, suit or proceeding by reason of the fact that he or she is or was a
director or officer of Triangle (or was serving at Triangle's request as a
director or officer of another corporation) shall be paid by Triangle in advance
of the final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such amount if
it shall ultimately be determined that he or she is not entitled to be
indemnified by Triangle as authorized by the relevant section of the Delaware
General Corporation Law.
As permitted by Section 102(b)(7) of the Delaware General Corporation Law,
Article 5, Section (a) of Triangle's Second Restated Certificate of
Incorporation provides that a director of Triangle shall not be personally
liable for monetary damages for breach of fiduciary duty as a director, except
for liability (i) for any breach of the director's duty of loyalty to Triangle
or its stockholders, (ii) for acts or omissions not in good faith or acts or
omissions that involve intentional misconduct or a knowing violation of law,
(iii) under Section 174 of the Delaware
II-1
General Corporation Law or (iv) for any transaction from which the director
derived any improper personal benefit.
Triangle has entered into indemnification agreements with its directors
and executive officers. Generally, the indemnification agreements attempt to
provide the maximum protection permitted by Delaware law as it may be amended
from time to time. Under such additional indemnification provisions, however, an
individual will not receive indemnification for judgments, settlements or
expenses if he or she is found liable to Triangle (except to the extent the
court determines he or she is fairly and reasonably entitled to indemnity for
expenses), for settlements not approved by Triangle or for settlements and
expenses if the settlement is not approved by the court. The indemnification
agreements provide for Triangle to advance to the individual any and all
reasonable expenses (including legal fees and expenses) incurred in
investigating or defending any such action, suit or proceeding. In order to
receive an advance of expenses, the individual must submit to Triangle copies of
invoices presented to him or her for such expenses. Also, the individual must
repay such advances upon a final judicial decision that he or she is not
entitled to indemnification.
The Registrant has an insurance policy covering the directors and officers
of the Registrant with respect to certain liabilities, including liabilities
arising under the Securities Act or otherwise.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) EXHIBITS.
EXHIBIT NO. DESCRIPTION
----------- -----------
4.1 Instruments defining the rights of stockholders.
Reference is made to the Registration Statement on
Form 8-A, filed October 18, 1996 (file no. 000-21589),
and the Registration Statement on Form 8-A, filed
February 10, 1999 (file no. 000-21589), as amended on
June 18, 1999 (file no. 000-21589).
4.2 Form of Purchase Agreement made as of January 30, 2001,
between the Company and each of the investors with whom
the stock was placed. Reference is made to Exhibit
10.1 to the Current Report on Form 8-K filed March 21,
2001.
5.1 Opinion of Brobeck, Phleger & Harrison LLP
23.1 Consent of PricewaterhouseCoopers LLP, Independent
Accountants.
23.2 Consent of Brobeck, Phleger & Harrison LLP. Reference
is made to Exhibit 5.1.
24.1 Power of Attorney. Reference is made to pages II-4 and
II-5 of this Registration Statement.
II-2
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement to include any
material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act, 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; and
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
The undersigned Registrant hereby undertakes to deliver or cause to be
delivered with the Prospectus, to each person to whom the Prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the Prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X are not set forth in the Prospectus, to deliver, or
cause to be delivered to each person to whom the Prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the Prospectus to provide such interim financial information.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of Triangle
pursuant to the foregoing provisions, Delaware Corporation law, the Purchase
Agreements or otherwise, the Registrant has been advised that in the opinion of
the SEC such indemnification is against public policy as expressed in the
Securities Act and is, therefor, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer, or controlling
person of the Registrant in the successful defense of any action, suit, or
proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered hereunder, the Registrant will,
unless in the opinion of its counsel the question has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question of whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Durham, State of North Carolina, on the 11th day of
June, 2001.
TRIANGLE PHARMACEUTICALS, INC.
By: /s/ David W. Barry
--------------------------------------
David W. Barry
Chairman and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints, jointly and severally, David W.
Barry and Chris A. Rallis, and each of them acting individually, as his
attorney-in-fact, each with full power of substitution and resubstitution, for
him or her in any and all capacities, to sign any and all amendments to this
Registration Statement (including post-effective amendments), and to file the
same, with exhibits thereto and other documents in connection therewith, with
the Securities and Exchange Commission, granting unto said attorneys-in-fact
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith as fully to all
intents and purpose as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact, or their substitute and substitutes,
may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated:
SIGNATURE TITLE
--------- -----
/s/ David W. Barry Chairman of the Board and Chief June 11,
--------------------------- Executive Officer (Principal 2001
David W. Barry Executive Officer)
/s/ Chris A. Rallis Director, President and Chief June 11,
--------------------------- Operating Officer 2001
Chris A. Rallis
/s/ Robert F. Amundsen, Jr. Executive Vice President and Chief June 11,
--------------------------- Financial Officer (Principal 2001
Robert F. Amundsen, Jr. Financial and Accounting Officer)
/s/ Anthony B. Evnin Director June 11,
--------------------------- 2001
Anthony B. Evnin
/s/ Standish M. Fleming Director June 11,
--------------------------- 2001
Standish M. Fleming
/s/ Dennis B. Gillings Director June 11,
--------------------------- 2001
Dennis B. Gillings
II-4
/s/ Henry G. Grabowski Director June 11,
--------------------------- 2001
Henry G. Grabowski
/s/ George McFadden Director June 11,
--------------------------- 2001
George McFadden
II-5
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
----------- -----------
4.1 Instruments defining the rights of stockholders.
Reference is made to the Registration Statement on Form
8-A, filed October 18, 1996 (file no. 000-21589), and the
Registration Statement on Form 8-A, filed February 10,
1999 (file no. 000-21589), as amended on June 18, 1999
(file no. 000-21589).
4.2 Form of Purchase Agreement made as of January 30, 2001, between
the Company and each of the investors with whom the stock was
placed. Reference is made to Exhibit 10.1 to the Current Report
on Form 8-K filed March 21, 2001.
5.1 Opinion of Brobeck, Phleger & Harrison LLP.
23.1 Consent of PricewaterhouseCoopers LLP, Independent
Accountants.
23.2 Consent of Brobeck, Phleger & Harrison LLP. Reference is
made to Exhibit 5.1.
24.1 Power of Attorney. Reference is made to pages II-4 and
II-5 of this Registration Statement.
II-6