As filed with the Securities and Exchange Commission on April 25, 2002
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
BioMarin Pharmaceutical Inc.
(Exact name of registrant as specified in its charter)
Delaware 68-0397820
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
371 Bel Marin Keys Boulevard, Suite 210
Novato, California 94949
(415) 884-6700
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
Fredric D. Price
Chief Executive Officer
BioMarin Pharmaceutical Inc.
371 Bel Marin Keys Boulevard, Suite 210
Novato, California 94949
(415) 884-6700
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
Copy to:
Siobhan McBreen Burke
Paul, Hastings, Janofsky & Walker LLP
555 South Flower Street, 23rd Floor
Los Angeles, California 90071-2371
(213) 683-6000
Approximate date of commencement of proposed sale to the public: From
time to time after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. |X|
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434
under the Securities Act, please check the following box. |_|
===================================================================================================================================
CALCULATION OF REGISTRATION FEE
===================================================================================================================================
Title of Each Class of Amount to be Proposed Maximum Proposed Maximum
Securities to be Registered Offering Price Per Aggregate Amount of
Registered Share (1) Offering Price (1) Registration Fee
---------------------------------- --------------- --------------------- ------------------------- --------------------------------
---------------------------------- --------------- --------------------- ------------------------- --------------------------------
Common Stock 300,000 $ 6.96 $ 2,088,000.00 $ 192.10
---------------------------------- --------------- --------------------- ------------------------- --------------------------------
(1) Estimated solely for the purpose of computing the registration fee
required pursuant to Section 6(b) of the Securities Act and computed pursuant to
Rule 457(c) of the Securities Act, based on the average of the high and low
prices of the Common Stock on April 24, 2002 as reported on the Nasdaq National
Market.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
================================================================================
PRELIMINARY PROSPECTUS
SUBJECT TO COMPLETION
BIOMARIN
PHARMACEUTICAL
LOGO
300,000 Shares of Common Stock
par value $.001
BioMarin Pharmaceutical Inc.
This prospectus relates to an aggregate of 300,000 shares of common stock of
BioMarin Pharmaceutical Inc. that may be offered for sale by a selling
stockholder who acquired such shares in a private transaction. We have
registered the aggregate number of shares under the Securities Act of 1933 on
behalf of this stockholder so that he can sell them in a public offering or
other distribution. We will not directly receive any of the proceeds from the
offer and sale of the shares. However, the selling stockholder will use a
majority of the proceeds from the sale of the shares to repay an obligation the
selling stockholder owes to us.
Our common stock currently trades on the Nasdaq National Market and the Swiss
SWX New Market under the symbol "BMRN."
See "Risk Factors" beginning on page 3 to read about risks that you should
consider before buying shares of our common stock.
Neither the Securities and Exchange Commission nor any other regulatory body has
approved or disapproved these securities or passed upon the adequacy or accuracy
of this prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is ______ , 2002
TABLE OF CONTENTS
SUMMARY .................................................... 1
FORWARD LOOKING STATEMENTS.................................. 3
RISK FACTORS................................................ 3
USE OF PROCEEDS............................................. 14
SELLING STOCKHOLDER......................................... 14
PLAN OF DISTRIBUTION........................................ 15
LEGAL MATTERS............................................... 17
EXPERTS..................................................... 17
WHERE YOU CAN FIND MORE INFORMATION......................... 17
"BioMarin," "Aryplase," "Neutralase" and "Vibrilase" are trademarks of
BioMarin(TM). All other trademarks or tradenames referred to in this
prospectus are the property of their respective owners.
As used in this prospectus, the terms "we," "us," "our," the "Company"
and "BioMarin" mean BioMarin Pharmaceutical Inc. and its subsidiaries
(unless the context indicates a different meaning), and the term
"common stock" means our common stock, $.001 par value per share.
SUMMARY
This prospectus contains forward looking statements which involve risks and
uncertainties. Our actual results could differ materially from those anticipated
in these forward looking statements as a result of certain factors appearing
under "Risk Factors" and elsewhere in this prospectus.
The following summary does not contain all the information that may be important
to you. You should read the entire prospectus, including the financial
statements and other information incorporated by reference in this prospectus,
before making an investment decision.
We develop enzyme therapies to treat serious, life-threatening diseases and
conditions. We leverage our expertise in enzyme biology to develop product
candidates for the treatment of genetic diseases, including MPS I, MPS VI and
PKU, as well as other care situations such as cardiovascular surgery and serious
burns. Our product candidates address markets for which no products are
currently available or where current products have been associated with major
deficiencies. We focus on conditions with well-defined patient populations,
including genetic diseases, which require chronic therapy.
Our lead product candidate, Aldurazyme(TM), which recently completed a Phase 3
trial, is being developed for the treatment of Mucopolysaccharidosis I (MPS I)
disease. MPS I is a debilitating and life-threatening genetic disease caused by
the deficiency of (alpha)-L-iduronidase, an enzyme responsible for breaking down
certain carbohydrates. MPS I is a progressive disease that afflicts patients
from birth and frequently leads to severe disability and early death. There are
currently no drugs on the market for the treatment of MPS I. Aldurazyme has
received both fast track designation from the United States Food and Drug
Administration (FDA) and orphan drug designation for the treatment of MPS I in
the United States and in the European Union. We are developing Aldurazyme
through a joint venture with Genzyme Corporation. In collaboration with Genzyme,
we completed a double-blinded, placebo-controlled Phase 3 clinical trial of
Aldurazyme in August 2001. On November 2, 2001, we announced positive results
from this trial.
Our joint venture submitted a Marketing Authorization Application (MAA) to the
European Medicines Evaluation Agency (or EMEA) on March 1, 2002. The EMEA has
accepted our MAA and validated that it is complete and ready for scientific
review. Accordingly, the EMEA's Committee for Proprietary Medicinal Products
(CPMP) will now evaluate the application to determine whether to approve
Aldurazyme for the treatment of MPS I in all 15 member states of the European
Union. Norway and Iceland also participate in the CPMP but have a separate
approval process.
On April 15, 2002, Genzyme and we announced that the joint venture filed the
first portion of a "rolling" Biologics License Application (BLA) with the FDA
for approval to market Aldurazyme in the United States. We plan to complete the
BLA filing in the third quarter of this year. The BLA will include six months of
data from the ongoing open-label Phase 3 extension study in addition to the
six-month data from the placebo-controlled portion of the Phase 3 trial.
Patients from both the treatment and placebo arms of the Phase 3 trial had
received at least six months of weekly Aldurazyme infusions in the open-label
extension study as of February 8, 2002. Genzyme and we anticipate a response
from the FDA regarding the application to market Aldurazyme in the United States
during the first half of 2003.
We are developing our second product candidate, Neutralase(TM), for reversal of
anticoagulation by heparin in patients undergoing Coronary Artery Bypass Graft,
or CABG, surgery and angioplasty. We acquired rights to Neutralase through our
acquisition of the pharmaceutical assets of IBEX Technologies Inc. in the fourth
quarter of 2001. Heparin is a carbohydrate drug commonly used to prevent
coagulation, or blood clotting, during certain types of major surgery.
Neutralase is a carbohydrate-modifying enzyme that cleaves heparin, allowing
coagulation of blood and aiding patient recovery following CABG surgery and
angioplasty. Based on data from previous trials, we plan to initiate a Phase 3
trial in CABG surgery in 2002.
In addition to Aldurazyme and Neutralase, we are developing other enzyme-based
therapeutics for the treatment of a variety of diseases and conditions. In 2001,
we announced results from a Phase 1 trial of Aryplase(TM) (formerly referred to
as rhASB) for the treatment of MPS VI, another seriously debilitating genetic
disease. Based on data from this previous trial, we initiated a Phase 2 trial of
Aryplase in March of 2002. The primary objective of this open-label,
multi-national Phase 2 clinical trial will be to evaluate the efficacy, safety
and pharmacokinetics of weekly intravenous infusions of Aryplase in 10 MPS VI
patients.
1
We are also developing Vibrilase(TM) (formerly referred to as Vibriolysin
Topical), a topical enzyme product for use in removing burned skin tissue in
preparation for skin grafting or other therapy. We initiated a Phase 1 clinical
trial of Vibrilase in the United Kingdom in the fourth quarter of 2001, and
expect to begin a Phase 2 clinical trial in either the United States or the
United Kingdom following the completion of this Phase 1 trial. In addition, we
are pursuing preclinical development of other enzyme product candidates for
genetic and other diseases.
Recent Developments
On March 21, 2002, we acquired Synapse Technologies Inc. Synapse owns the rights
to certain patented and proprietary technology which, based on the results of
preclinical trials, has the potential to deliver therapeutic enzymes and other
drugs across the blood-brain barrier by means of traditional intravenous
injections. Under the terms of the agreement, we purchased 100% of the
outstanding shares of Synapse for approximately $10.2 million payable in 885,242
shares of our common stock. We also may make future contingent payments of up to
approximately $6 million. These payments are payable in cash or stock, at our
option.
On February 25, 2002, we decided to close the analytics product catalog business
of our wholly-owned subsidiary, Glyko, Inc. The majority of the Glyko, Inc.
employees will be incorporated into our pharmaceutical business and such
employees will continue to provide necessary analytic and diagnostic support to
our therapeutic products. Certain operating assets of Glyko, Inc. may be offered
for sale.
On February 7, 2002, we announced that we had reached a definitive agreement to
acquire all of the outstanding capital stock of Glyko Biomedical Ltd. (GBL).
GBL's principal asset is its 21.3% ownership interest in our common stock. GBL
owns approximately 11.4 million shares of our common stock. Under the terms of
the acquisition agreement, GBL's common shareholders will receive approximately
11.4 million shares of our common stock in exchange for all of GBL's outstanding
common shares. There will be no net effect on the number of shares of our common
stock outstanding, as we plan to retire the existing shares of our common stock
currently held by GBL upon closing.
Our principal executive offices are located at 371 Bel Marin Keys Boulevard,
Suite 210, Novato, CA 94949 and our telephone number is (415) 884-6700.
Information contained in our website, www.biomarinpharm.com, is not part of this
prospectus.
2
FORWARD LOOKING STATEMENTS
This prospectus contains forward looking statements. These statements relate to
future events or our future financial performance. We have identified forward
looking statements in this prospectus using words such as "anticipates",
"believes," "could," "estimates," "expects," "intends," "may," "plans,"
"potential," "predicts," "should," or "will" or the negative of such terms or
other comparable terminology. These statements are based on our beliefs as well
as assumptions we made using information currently available to us. Because
these statements reflect our current views concerning future events, these
statements involve risks, uncertainties, and assumptions. These risks,
uncertainties, assumptions 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 actual activity, performance or achievements expressed or
implied by such 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 such statements. We
are under no duty to update any of the forward looking statements after the date
of this prospectus to conform such statements to actual results, unless required
by law.
RISK FACTORS
An investment in our common stock involves a high degree of risk. We operate in
a dynamic and rapidly changing industry that involves numerous risks and
uncertainties. Before purchasing these securities, you should carefully consider
the following risk factors, as well as other information contained in this
prospectus or incorporated by reference into this prospectus, to evaluate an
investment in the securities offered by this prospectus. The risks and
uncertainties described below are not the only ones we face. Other risks and
uncertainties, including those that we do not currently consider material, may
impair our business. If any of the risks discussed below actually occur, our
business, financial condition, operating results or cash flows could be
materially adversely affected. This could cause the trading price of our common
stock to decline, and you may lose all or part of your investment.
If we continue to incur operating losses for a period longer than anticipated,
we may be unable to continue our operations at planned levels and be forced to
reduce or discontinue operations.
We are in an early stage of development and have operated at a net loss since we
were formed. Since we began operations in March 1997, we have been engaged
primarily in research and development. We have no sales revenues from any of our
product candidates. As of December 31, 2001, we had an accumulated deficit of
approximately $148.1 million. We expect to continue to operate at a net loss for
the foreseeable future. Our future profitability depends on our receiving
regulatory approval of our product candidates and our ability to successfully
manufacture and market any approved drugs, either by ourselves or jointly with
others. The extent of our future losses and the timing of profitability are
highly uncertain. If we fail to become profitable or are unable to sustain
profitability on a continuing basis, then we may be unable to continue our
operations.
If we fail to obtain the capital necessary to fund our operations, we will be
unable to complete our product development programs.
In the future, we may need to raise substantial additional capital to fund
operations. We cannot be certain that any financing will be available when
needed. If we fail to raise additional financing as we need it, we will have to
delay or terminate some or all of our product development programs.
We expect to continue to spend substantial amounts of capital for our operations
for the foreseeable future. The amount of capital we will need depends on many
factors, including:
o the progress, timing and scope of our preclinical studies and clinical
trials;
o the time and cost necessary to obtain regulatory approvals;
3
o the time and cost necessary to develop commercial manufacturing
processes, including quality systems and to build or acquire
manufacturing capabilities;
o the time and cost necessary to respond to technological and market
developments; and
o any changes made or new developments in our existing collaborative,
licensing and other commercial relationships or any new collaborative,
licensing and other commercial relationships that we may establish.
Moreover, our fixed expenses such as rent, license payments and other
contractual commitments are substantial and will increase in the future. These
fixed expenses will increase because we may enter into:
o additional leases for new facilities and capital equipment;
o additional licenses and collaborative agreements;
o additional contracts for consulting, maintenance and administrative
services; and
o additional contracts for product manufacturing.
We believe that our cash, cash equivalents and short term investment securities
balances at December 31, 2001 will be sufficient to meet our operating and
capital requirements through 2003. These estimates are based on assumptions and
estimates, which may prove to be wrong. As a result, we may need or choose to
obtain additional financing during that time.
If we fail to obtain regulatory approval to commercially manufacture or sell any
of our future drug products, or if approval is delayed, we will be unable to
generate revenue from the sale of our products and our operating results will be
adversely affected.
We must obtain regulatory approval before marketing or selling our drug products
in the U.S. and in foreign jurisdictions. In the U.S., we must obtain FDA
approval for each drug that we intend to commercialize. The FDA approval process
is typically lengthy and expensive, and approval is never certain. Products
distributed abroad are also subject to foreign government regulation. None of
our drug products has received regulatory approval to be commercially marketed
and sold. If we fail to obtain regulatory approval, we will be unable to market
and sell our drug products. Because of the risks and uncertainties in
biopharmaceutical development, our drug products could take a significantly
longer time to gain regulatory approval than we expect or may never gain
approval. If regulatory approval is delayed, our management's credibility, the
value of our company and our operating results will be adversely affected.
To obtain regulatory approval to market our products, preclinical studies and
costly and lengthy clinical trials will be required, and the results of the
studies and trials are highly uncertain.
As part of the regulatory approval process, we must conduct, at our own
expense, preclinical studies in the laboratory on animals and clinical trials on
humans for each drug product. We expect the number of preclinical studies and
clinical trials that the regulatory authorities will require will vary depending
on the drug product, the disease or condition the drug is being developed to
address and regulations applicable to the particular drug. We may need to
perform multiple preclinical studies using various doses and formulations before
we can begin clinical trials, which could result in delays in our ability to
market any of our drug products. Furthermore, even if we obtain favorable
results in preclinical studies on animals, the results in humans may be
significantly different.
After we have conducted preclinical studies in animals, we must demonstrate that
our drug products are safe and efficacious for use on the target human patients
in order to receive regulatory approval for commercial sale. Adverse or
inconclusive clinical results would stop us from filing for regulatory approval
of our drug products. Additional factors that can cause delay or termination of
our clinical trials include:
o slow or insufficient patient enrollment;
o slow recruitment of, and completion of necessary institutional
approvals at clinical sites;
4
o longer treatment time required to demonstrate efficacy;
o lack of sufficient supplies of the product candidate;
o adverse medical events or side effects in treated patients;
o lack of effectiveness of the product candidate being tested; and
o regulatory requests for additional clinical trials.
Typically, if a drug product is intended to treat a chronic disease, as is the
case with some of the product candidates we are developing, safety and efficacy
data must be gathered over an extended period of time, which can range from six
months to three years or more.
In May 2001, we completed a 24-month patient evaluation for the initial clinical
trial of our lead drug product, Aldurazyme, for the treatment of MPS I. Two of
the original ten patients enrolled in this trial died in 2000. One of these
patients received 103 weeks of Aldurazyme treatment and the other received 137
weeks of treatment. One of the original forty-five patients who completed the
Phase 3 clinical trial died after 16 weeks of the Phase 3 extension study. One
patient treated under a single-patient use protocol died after 31 weeks of
Aldurazyme treatment. Based on medical data collected from clinical
investigative sites, none of these cases directly implicated treatment with
Aldurazyme as the cause of death. If cases of patient complications or death are
ultimately attributed to Aldurazyme, our chances of commercializing this drug
would be seriously compromised.
The fast track designation for our product candidates may not actually lead to a
faster review process.
Although Aldurazyme and Aryplase have obtained fast track designations, we
cannot guarantee a faster review process or faster approval compared to the
normal FDA procedures.
We will not be able to sell our products if we fail to comply with manufacturing
regulations.
Before we can begin commercial manufacture of our products, we must obtain
regulatory approval of our manufacturing facility and process. In addition,
manufacture of our drug products must comply with the FDA's current Good
Manufacturing Practices regulations, commonly known as cGMP. The cGMP
regulations govern quality control and documentation policies and procedures.
Our manufacturing facilities are continuously subject to inspection by the FDA,
the State of California and foreign regulatory authorities, before and after
product approval. Our Galli Drive and our Bel Marin Keys Boulevard manufacturing
facilities have been inspected and licensed by the State of California for
clinical pharmaceutical manufacture. We cannot guarantee that these facilities
will pass federal or international regulatory inspection. We cannot guarantee
that we, or any potential third party manufacturer of our drug products, will be
able to comply with cGMP regulations.
We must pass Federal, state and European regulatory inspections, and we must
manufacture process qualification batches to final specifications under cGMP
controls for each of our drug products before the marketing applications can be
approved. Although we have completed process qualification batches for
Aldurazyme, these batches may be rejected by the regulatory authorities, and we
may be unable to manufacture the process qualification batches for our other
products or pass the inspections in a timely manner, if at all.
If we fail to obtain orphan drug exclusivity for some of our products, our
competitors may sell products to treat the same conditions and our revenues will
be reduced.
As part of our business strategy, we intend to develop some drugs that may be
eligible for FDA and European Community orphan drug designation. Under the
Orphan Drug Act, the FDA may designate a product as an orphan drug if it is a
drug intended to treat a rare disease or condition, defined as a patient
population of less than 200,000 in the United States. The company that first
obtains FDA approval for a designated orphan drug for a given rare disease
receives marketing exclusivity for use of that drug for the stated condition for
a period of seven years. However, different drugs can be approved for the same
condition. Similar regulations are available in the European Community with a
ten-year period of market exclusivity.
5
Because the extent and scope of patent protection for our drug products is
limited, orphan drug designation is particularly important for our products that
are eligible for orphan drug designation. We plan to rely on the exclusivity
period under the orphan drug designation to maintain a competitive position. If
we do not obtain orphan drug exclusivity for our drug products, which do not
have patent protection, our competitors may then sell the same drug to treat the
same condition.
Even though we have obtained orphan drug designation for certain of our product
candidates and even if we obtain orphan drug designation for other products we
develop, we cannot guarantee that we will be the first to obtain marketing
approval for any orphan indication or, if we do, that exclusivity would
effectively protect the product from competition. Orphan drug designation
neither shortens the development time or regulatory review time of a drug nor
gives the drug any advantage in the regulatory review or approval process.
Because the target patient populations for some of our products are small, we
must achieve significant market share and obtain high per patient prices for our
products to achieve profitability.
Two of our lead drug candidates, Aldurazyme and Aryplase, target diseases with
small patient populations. As a result, our per-patient prices must be
relatively high in order to recover our development costs and achieve
profitability. Aldurazyme targets patients with MPS I and Aryplase targets
patients with MPS VI. We estimate that there are approximately 3,400 patients
with MPS I and 1,100 patients with MPS VI in the developed world. We believe
that we will need to market worldwide to achieve significant market share. In
addition, we are developing other drug candidates to treat conditions, such as
other genetic diseases and serious burn wounds, with small patient populations.
We cannot be certain that we will be able to obtain sufficient market share for
our drug products at a price high enough to justify our product development
efforts.
If we fail to obtain an adequate level of reimbursement for our drug products by
third-party payers, there would be no commercially viable markets for our
products.
The course of treatment for patients with MPS I using Aldurazyme and for
patients with MPS VI using Aryplase is expected to be expensive. We expect
patients to need treatment throughout their lifetimes. We expect that most
families of patients will not be capable of paying for this treatment
themselves. There will be no commercially viable market for Aldurazyme or
Aryplase without reimbursement from third-party payers.
Third-party payers, such as government or private health care insurers,
carefully review and increasingly challenge the prices charged for drugs.
Reimbursement rates from private companies vary depending on the third-party
payer, the insurance plan and other factors. Reimbursement systems in
international markets vary significantly by country and by region, and
reimbursement approvals must be obtained on a country-by-country basis. We
cannot be certain that third-party payers will pay for the costs of our drugs.
Even if we are able to obtain reimbursement from third-party payers, we cannot
be certain that reimbursement rates will be enough to allow us to profit from
sales of our drugs or to justify our product development expenses.
We currently have no expertise obtaining reimbursement. We expect to rely on the
expertise of our joint venture partner Genzyme to obtain reimbursement for the
costs of Aldurazyme. We cannot predict what the reimbursement rates will be. In
addition, we will need to develop our own reimbursement expertise for future
drug candidates unless we enter into collaborations with other companies with
the necessary expertise.
We expect that, in the future, reimbursement will be increasingly restricted
both in the United States and internationally. The escalating cost of health
care has led to increased pressure on the health care industry to reduce costs.
Governmental and private third-party payers have proposed health care reforms
and cost reductions. A number of federal and state proposals to control the cost
of health care, including the cost of drug treatments have been made in the
United States. In some foreign markets, the government controls the pricing
which would affect the profitability of drugs. Current government regulations
and possible future legislation regarding health care may affect our future
revenues from sales of our drugs and may adversely affect our business and
prospects.
If we are unable to protect our proprietary technology, we may not be able to
compete as effectively.
6
Where appropriate, we seek patent protection for certain aspects of our
technology. Patent protection may not be available for some of the enzymes we
are developing. If we must spend significant time and money protecting our
patents, designing around patents held by others or licensing, for large fees,
patents or other proprietary rights held by others, our business and financial
prospects may be harmed.
The patent positions of biotechnology products are complex and uncertain. The
scope and extent of patent protection for some of our products are particularly
uncertain because key information on some of the enzymes we are developing has
existed in the public domain for many years. Other parties have published the
structure of the enzymes, the methods for purifying or producing the enzymes or
the methods of treatment. The composition and genetic sequences of animal and/or
human versions of many of our enzymes have been published and are believed to be
in the public domain. The composition and genetic sequences of other MPS enzymes
that we intend to develop as products have also been published. Publication of
this information may prevent us from obtaining composition-of-matter patents,
which are generally believed to offer the strongest patent protection. For
enzymes with no prospect of broad composition-of-matter patents, other forms of
patent protection or orphan drug status may provide us with a competitive
advantage. As a result of these uncertainties, investors should not rely on
patents as a means of protecting our product candidates, including Aldurazyme.
We own or license patents and patent applications to certain of our product
candidates. However, these patents and patent applications do not ensure the
protection of our intellectual property for a number of other reasons, including
the following:
o We do not know whether our patent applications will result in issued
patents. For example, we may not have developed a method for treating a
disease before others developed similar methods.
o Competitors may interfere with our patent process in a variety of ways.
Competitors may claim that they invented the claimed invention prior to
us. Competitors may also claim that we are infringing on their patents
and therefore cannot practice our technology as claimed under our
patent. Competitors may also contest our patents by showing the patent
examiner that the invention was not original, was not novel or was
obvious. In litigation, a competitor could claim that our issued
patents are not valid for a number of reasons. If a court agrees, we
would lose that patent. As a company, we have no meaningful experience
with competitors interfering with our patents or patent applications.
o Enforcing patents is expensive and may absorb significant time of our
management. Management would spend less time and resources on
developing products, which could increase our research and development
expense and delay product programs.
o Receipt of a patent may not provide much practical protection. If we
receive a patent with a narrow scope, then it will be easier for
competitors to design products that do not infringe on our patent.
In addition, competitors also seek patent protection for their technology. There
are many patents in our field of technology, and we cannot guarantee that we do
not infringe on those patents or that we will not infringe on patents granted in
the future. If a patent holder believes our product infringes on their patent,
the patent holder may sue us even if we have received patent protection for our
technology. If someone else claims we infringe on their technology, we would
face a number of issues, including the following:
o Defending a lawsuit takes significant time and can be very expensive.
o If the court decides that our product infringes on the competitor's
patent, we may have to pay substantial damages for past infringement.
o The court may prohibit us from selling or licensing the product unless
the patent holder licenses the patent to us. The patent holder is not
required to grant us a license. If a license is available, we may have
to pay substantial royalties or grant crosslicenses to our patents.
o Redesigning our product so it does not infringe may not be possible or
could require substantial funds and time.
7
It is also unclear whether our trade secrets will provide useful protection.
While we use reasonable efforts to protect our trade secrets, our employees or
consultants may unintentionally or willfully disclose our information to
competitors. Enforcing a claim that someone else illegally obtained and is using
our trade secrets, like patent litigation, is expensive and time consuming, and
the outcome is unpredictable. In addition, courts outside the United States are
sometimes less willing to protect trade secrets. Our competitors may
independently develop equivalent knowledge, methods and know-how.
We may also support and collaborate in research conducted by government
organizations or by universities. We cannot guarantee that we will be able to
acquire any exclusive rights to technology or products derived from these
collaborations. If we do not obtain required licenses or rights, we could
encounter delays in product development while we attempt to design around other
patents or even be prohibited from developing, manufacturing or selling products
requiring these licenses. There is also a risk that disputes may arise as to the
rights to technology or products developed in collaboration with other parties.
The United States Patent and Trademark Office recently issued two patents that
relate to (alpha)-L-iduronidase. If we are not able to successfully challenge
these patents, we may be prevented from producing Aldurazyme unless and until we
obtain a license.
The United States Patent and Trademark Office recently issued two patents that
include composition of matter and method of use claims for recombinant
(alpha)-L-iduronidase. Our lead drug product, Aldurazyme, is based on
recombinant (alpha)-L-iduronidase. We believe that these patents are invalid on
a number of grounds. A corresponding patent application was filed in the
European Patent Office claiming composition of matter for recombinant
(alpha)-L-iduronidase, and it was rejected over prior art and withdrawn and
cannot be re-filed. Nonetheless, under U.S. law, issued patents are entitled to
a presumption of validity, and our challenges to the U.S. patents may be
unsuccessful. Even if we are successful, challenging the U.S. patents may be
expensive, require our management to devote significant time to this effort and
may delay commercialization of Aldurazyme in the United States.
The patent holder has granted an exclusive license for products relating to
these patents to one of our competitors. If we are unable to successfully
challenge the patents, we may be unable to produce Aldurazyme in the United
States unless we can obtain a sublicense from the current licensee. The current
licensee is not required to grant us a license and even if a license is
available, we may have to pay substantial license fees, which could adversely
affect our business and operating results.
If our joint venture with Genzyme were terminated, we could be barred from
commercializing Aldurazyme or our ability to commercialize Aldurazyme would be
delayed or diminished.
We are relying on Genzyme to apply the expertise it has developed through the
launch and sale of other enzyme-based products to the marketing of our initial
drug product, Aldurazyme. We have no experience selling, marketing or obtaining
reimbursement for pharmaceutical products. In addition, without Genzyme we would
be required to pursue foreign regulatory approvals. We have no experience in
seeking foreign regulatory approvals.
We cannot guarantee that Genzyme will devote the resources necessary to
successfully market Aldurazyme. In addition, either party may terminate the
joint venture for specified reasons, including if the other party is in material
breach of the agreement or has experienced a change of control or has declared
bankruptcy and also is in breach of the agreement. Either party may also
terminate the agreement upon one-year prior written notice for any reason.
Furthermore, we may terminate the joint venture if Genzyme fails to fulfill its
contractual obligation to pay us $12.1 million in cash upon the approval of the
BLA for Aldurazyme.
If the joint venture is terminated for breach, the non-breaching party would be
granted, exclusively, all of the rights to Aldurazyme and any related
intellectual property and regulatory approvals and would be obligated to buy out
the breaching party's interest in the joint venture. If we are the breaching
party, we would lose our rights to Aldurazyme and the related intellectual
property and regulatory approvals. If the joint venture is terminated without
cause, the non-terminating party would have the option, exercisable for one
year, to buy out the terminating party's interest in the joint venture and
obtain all rights to Aldurazyme exclusively. In the event of termination of the
buy out option without exercise by the non-terminating party as described above,
all right and title to Aldurazyme is to be sold to the highest bidder, with the
proceeds to be split equally between Genzyme and us.
8
If the joint venture is terminated by either party because the other declared
bankruptcy and is also in breach of the agreement, the terminating party would
be obligated to buy out the other and would obtain all rights to Aldurazyme
exclusively. If the joint venture is terminated by a party because the other
party experienced a change of control, the terminating party shall notify the
other party, the offeree, of its intent to buy out the offeree's interest in the
joint venture for a stated amount set by the terminating party at its
discretion. The offeree must then either accept this offer or agree to buy the
terminating party's interest in the joint venture on those same terms. The party
who buys out the other would then have exclusive rights to Aldurazyme.
If we were obligated, or given the option, to buy out Genzyme's interest in the
joint venture, and gain exclusive rights to Aldurazyme, we may not have
sufficient funds to do so and we may not be able to obtain the financing to do
so. If we fail to buy out Genzyme's interest we may be held in breach of the
agreement and may lose any claim to the rights to Aldurazyme and the related
intellectual property and regulatory approvals. We would then effectively be
prohibited from developing and commercializing the product.
Termination of the joint venture in which we retain the rights to Aldurazyme
could cause us significant delays in product launch in the United States,
difficulties in obtaining third-party reimbursement and delays or failure to
obtain foreign regulatory approval, any of which could hurt our business and
results of operations. Since Genzyme funds 50% of the joint venture's operating
expenses, the termination of the joint venture would double our financial burden
and reduce the funds available to us for other product programs.
If we are unable to manufacture our drug products in sufficient quantities and
at acceptable cost, we may be unable to meet demand for our products and lose
potential revenues or have reduced margins.
Although we have successfully manufactured Aldurazyme at commercial scale within
our cost parameters, we cannot guarantee that we will be able to manufacture any
other drug product successfully with a commercially viable process or at a scale
large enough to support their respective commercial markets or at acceptable
margins.
Our manufacturing processes may not meet initial expectations and we may
encounter problems with any of the following measurements of performance if we
attempt to increase the scale or size or improve the commercial viability of our
manufacturing processes:
o design, construction and qualification of manufacturing facilities that
meet regulatory requirements;
o schedule;
o reproducibility;
o production yields;
o purity;
o costs;
o quality control and assurance systems;
o shortages of qualified personnel; and
o compliance with regulatory requirements.
Improvements in manufacturing processes typically are very difficult to achieve
and are often very expensive. We cannot know with certainty how long it might
take to make improvements if it becomes necessary to do so. If we contract for
manufacturing services with an unproven process, our contractor is subject to
the same uncertainties, high standards and regulatory controls.
The availability of suitable contract manufacturing at scheduled or optimum
times is not certain. The cost of contract manufacturing is greater than
internal manufacturing and therefore our manufacturing processes must be of
higher productivity to yield equivalent margins.
9
The manufacture of Neutralase involves the fermentation of a bacterial species.
We have never used a bacterial production process for the production of any
commercial product. IBEX Technologies Inc., from which we acquired Neutralase,
had contracted with a third party for the manufacture of the Neutralase used in
prior clinical trials.
We have built-out approximately 51,800 square feet at our Novato facilities for
manufacturing capability for Aldurazyme and Aryplase including related quality
control laboratories, materials capabilities, and support areas. We expect to
add additional capabilities in stages over time, which could create additional
operational complexity and challenges. We expect that the manufacturing process
of all of our new drug products, including Aryplase and Neutralase, will require
significant time and resources before we can begin to manufacture them (or have
them manufactured by third parties) in commercial quantity at acceptable cost.
Even if we can establish the necessary capacity, we cannot be certain that
manufacturing costs will be commercially reasonable, especially if contract
manufacturing is employed or if third-party reimbursement is substantially lower
than expected.
In order to achieve our product cost targets, we must develop efficient
manufacturing processes either by:
o improving the product yield from our current cell lines, colonies of
cells which have a common genetic makeup;
o improving the manufacturing processes licensed from others; or
o developing more efficient, lower cost recombinant cell lines and
production processes.
A recombinant cell line is a cell line with foreign DNA inserted that is used to
produce an enzyme or other protein that it would not have otherwise produced.
The development of a stable, high production cell line for any given enzyme is
difficult, expensive and unpredictable and may not result in adequate yields. In
addition, the development of protein purification processes is difficult and may
not produce the high purity required with acceptable yield and costs or may not
result in adequate shelf-lives of the final products. If we are not able to
develop efficient manufacturing processes, the investment in manufacturing
capacity sufficient to satisfy market demand will be much greater and will place
heavy financial demands upon us. If we do not achieve our manufacturing cost
targets, we will have lower margins and reduced profitability in commercial
production and larger losses in manufacturing start-up phases.
If we are unable to create marketing and distribution capabilities or to enter
into agreements with third parties to do so, our ability to generate revenues
will be diminished.
If we cannot increase capabilities either by developing our own sales and
marketing organization or by entering into agreements with others, we may be
unable to successfully sell our products. If we are unable to effectively sell
our drug products, our ability to generate revenues will be diminished.
Under our joint venture with Genzyme, Genzyme is responsible for marketing and
distributing Aldurazyme. We cannot guarantee that we will be able to establish
sales and distribution capabilities or that the joint venture, any future
collaborators or we will successfully sell any of our drug products.
With our acquisition of Neutralase from IBEX Technologies Inc., we have an
enzyme product that has a significantly larger potential patient population than
Aldurazyme and Aryplase and will be marketed and sold to different target
audiences with different therapeutic and financial requirements and needs. As a
result, we will be competing with other pharmaceutical companies with
experienced and well-funded sales and marketing operations targeting these
specific physician and institutional audiences. We may not be able to create our
own sales and marketing force or of a size that would allow us to compete with
these other companies. If we elect to enter into third-party marketing and
distribution agreements in order to sell into these markets, we may not be able
to enter into these agreements on acceptable terms, if at all. If we cannot
compete effectively in these specific physician and institutional markets, it
would adversely affect sales of Neutralase.
If we fail to compete successfully, our revenues and operating results will be
adversely affected.
10
Our competitors may develop, manufacture and market products that are more
effective or less expensive than ours. They may also obtain regulatory approvals
for their products faster than we can obtain them, including those products with
orphan drug designation, or commercialize their products before we do. If our
competitors successfully commercialize a product that treats a given rare
genetic disease before we do, we will effectively be precluded from developing a
product to treat that disease because the patient populations of the rare
genetic diseases are so small. If our competitor gets orphan drug exclusivity,
we could be precluded from marketing our version for seven years in the U.S. and
ten years in the European Union. However, different drugs can be approved for
the same condition. These companies also compete with us to attract qualified
personnel and organizations for acquisitions, joint ventures or other
collaborations. They also compete with us to attract academic research
institutions as partners and to license these institutions' proprietary
technology. If our competitors successfully enter into partnering arrangements
or license agreements with academic research institutions, we will then be
precluded from pursuing those specific opportunities. Since each of these
opportunities is unique, we may not be able to find a substitute. Several
pharmaceutical and biotechnology companies have already established themselves
in the field of enzyme therapeutics, including Genzyme, our joint venture
partner. These companies have already begun many drug development programs, some
of which may target diseases that we are also targeting, and have already
entered into partnering and licensing arrangements with academic research
institutions, reducing the pool of available opportunities.
Universities and public and private research institutions are also competitors.
While these organizations primarily have educational or basic research
objectives, they may develop proprietary technology and acquire patents that we
may need for the development of our drug products. We will attempt to license
this proprietary technology, if available. These licenses may not be available
to us on acceptable terms, if at all. We also directly compete with a number of
these organizations to recruit personnel, especially scientists and technicians.
If we do not achieve milestones as expected, our stock price may decline.
For planning purposes, we estimate the timing of the accomplishment of various
scientific, clinical, regulatory and other milestones, such as the commencement
or completion of scientific studies and clinical trials and the submission of
regulatory filings. These estimates, some of which are included in this
prospectus, are based on a variety of assumptions. The actual timing of these
milestones can vary dramatically compared to our estimates, in many cases for
reasons beyond our control.
If we fail to manage our growth or fail to recruit and retain personnel, our
product development programs may be delayed.
Our rapid growth has strained our managerial, operational, financial and other
resources. We expect this growth to continue. We have entered into a joint
venture with Genzyme. If we receive FDA and/or foreign government approval to
market Aldurazyme, the joint venture will be required to devote additional
resources to support the commercialization of Aldurazyme.
To manage expansion effectively, we need to continue to develop and improve our
research and development capabilities, manufacturing and quality capacities,
sales and marketing capabilities and financial and administrative systems. We
cannot guarantee that our staff, financial resources, systems, procedures or
controls will be adequate to support our operations or that our management will
be able to manage successfully future market opportunities or our relationships
with customers and other third parties.
Our future growth and success depend on our ability to recruit, retain, manage
and motivate our employees. The loss of key scientific, technical and managerial
personnel may delay or otherwise harm our product development programs. Any harm
to our research and development programs would harm our business and prospects.
Because of the specialized scientific and managerial nature of our business, we
rely heavily on our ability to attract and retain qualified scientific,
technical and managerial personnel. In particular, the loss of Fredric D. Price,
our Chairman and Chief Executive Officer, or Emil D. Kakkis, M.D., Ph.D., our
Senior Vice President of Scientific Affairs or Christopher M. Starr, Ph.D., our
Senior Vice President for Research and Development, could be detrimental to us
if we cannot recruit suitable replacements in a timely manner. While Mr. Price,
Dr. Kakkis and Dr. Starr are parties to employment agreements with us, we cannot
guarantee that they will remain employed with us in the future. In addition,
these agreements do not restrict their ability to compete with us after their
employment is terminated. The competition for qualified personnel in the
biopharmaceutical field is intense. We cannot be certain that we will continue
to attract and retain qualified personnel necessary for the development of our
business.
11
If we fail to effectively integrate the recently acquired Neutralase and
Phenylase programs and those acquired from Synapse Technologies, Inc. into our
current operations, the efficient execution of these product programs could be
delayed and our operating and research and development expenditures could
increase beyond anticipated levels.
Our recent acquisition of assets from IBEX Technologies Inc., including the
Neutralase and Phenylase product programs, and from Synapse Technologies, Inc.,
will need to be integrated with our current operations. This will include
several technical and administrative challenges, including managing the
information transfer, integrating certain of our former technical staff members
at IBEX and Synapse into our research and development structure and managing
multiple operations in different countries. If we do not accomplish this
integration effectively, our programs could be delayed and our operating and
research and development expenditures could increase beyond anticipated levels.
Additionally, the integration could require a significant time commitment from
our senior management.
Changes in methods of treatment of disease could reduce demand for our products.
Even if our drug products are approved, doctors must use treatments that require
using those products. If doctors elect a different course of treatment from that
which includes our drug products, this decision would reduce demand for our drug
products.
Examples include the potential use in the future of effective gene therapy for
the treatment of genetic diseases. The use of gene therapy could theoretically
reduce or eliminate the use of enzyme replacement therapy in MPS diseases.
Sometimes, this change in treatment method can be caused by the introduction of
other companies' products or the development of new technologies or surgical
procedures which may not directly compete with ours, but which have the effect
of changing how doctors decide to treat a disease. For example, Neutralase is
being developed for heparin reversal in CABG surgery. It is possible that
alternative non-surgical methods of treating heart disease could be developed.
If so, then the demand for Neutralase would likely decrease.
If product liability lawsuits are successfully brought against us, we may incur
substantial liabilities.
We are exposed to the potential product liability risks inherent in the testing,
manufacturing and marketing of human pharmaceuticals. The BioMarin/Genzyme LLC
maintains product liability insurance for our clinical trials of Aldurazyme. We
have obtained insurance against product liability lawsuits for the clinical
trials for Aryplase and Vibrilase. We may be subject to claims in connection
with our current clinical trials for Aldurazyme, Aryplase and Vibrilase for
which the joint venture's or our insurance coverages are not adequate. We cannot
be certain that if Aldurazyme, Aryplase or Vibrilase receives FDA approval, the
product liability insurance the joint venture or we will need to obtain in
connection with the commercial sales of Aldurazyme, Aryplase or Vibrilase will
be available in meaningful amounts or at a reasonable cost. In addition, we
cannot be certain that we can successfully defend any product liability lawsuit
brought against us. If we are the subject of a successful product liability
claim which exceeds the limits of any insurance coverage we may obtain, we may
incur substantial liabilities which would adversely affect our earnings and
financial condition.
Our stock price may be volatile, and an investment in our stock could suffer a
decline in value.
Our valuation and stock price since the beginning of trading after our initial
public offering have had no meaningful relationship to current or historical
earnings, asset values, book value or many other criteria based on conventional
measures of stock value. The market price of our common stock will fluctuate due
to factors including:
o progress of Aldurazyme, Neutralase, Aryplase and our other lead drug
products through the regulatory process, especially regulatory actions
in the United States related to Aldurazyme;
o results of clinical trials, announcements of technological innovations
or new products by us or our competitors;
12
o government regulatory action affecting our drug products or our
competitors' drug products in both the United States and foreign
countries;
o developments or disputes concerning patent or proprietary rights;
o general market conditions and fluctuations for the emerging growth and
biopharmaceutical market sectors;
o economic conditions in the United States or abroad;
o actual or anticipated fluctuations in our operating results;
o broad market fluctuations in the United States or in Europe, which may
cause the market price of our common stock to fluctuate; and
o changes in company assessments or financial estimates by securities
analysts.
In addition, the value of our common stock may fluctuate because it is listed on
both the Nasdaq National Market and the Swiss Exchange's SWX New Market. Listing
on both exchanges may increase stock price volatility due to:
o trading in different time zones;
o different ability to buy or sell our stock;
o different market conditions in different capital markets; and
o different trading volume.
In the past, following periods of large price declines in the public market
price of a company's securities, securities class action litigation has often
been initiated against that company. Litigation of this type could result in
substantial costs and diversion of management's attention and resources, which
would hurt our business. Any adverse determination in litigation could also
subject us to significant liabilities.
If our officers, directors and largest stockholder elect to act together, they
may be able to control our management and operations, acting in their best
interests and not necessarily those of other stockholders.
Our directors and officers control approximately 28% of the outstanding shares
of our common stock. Glyko Biomedical Ltd. owns approximately 22% of the
outstanding shares of our capital stock. The president and chief executive
officer of Glyko Biomedical and a significant shareholder of Glyko Biomedical
serve as two of our directors. As a result, due to their concentration of stock
ownership, directors and officers, if they act together, may be able to control
our management and operations, and may be able to prevail on all matters
requiring a stockholder vote including:
o The election of all directors;
o The amendment of charter documents or the approval of a merger, sale of
assets or other major corporate transactions; and
o The defeat of any non-negotiated takeover attempt that might otherwise
benefit the public stockholders.
Anti-takeover provisions in our charter documents and under Delaware law may
make an acquisition of us, which may be beneficial to our stockholders, more
difficult.
We are incorporated in Delaware. Certain anti-takeover provisions of Delaware
law and our charter documents as currently in effect may make a change in
control of our company more difficult, even if a change in control would be
beneficial to the stockholders. Our anti-takeover provisions include provisions
in the certificate of incorporation providing that stockholders' meetings may
only be called by the board of directors and a provision in the bylaws providing
that the stockholders may not take action by written consent. Additionally, our
board of directors has the authority to issue 1,000,000 shares of preferred
stock and to determine the terms of those shares of stock without any further
action by the stockholders. The rights of holders of our common stock are
subject to the rights of the holders of any preferred stock that may be issued.
The issuance of preferred stock could make it more difficult for a third party
to acquire a majority of our outstanding voting stock. Delaware law also
prohibits corporations from engaging in a business combination with any holders
of 15% or more of their capital stock until the holder has held the stock for
three years unless, among other possibilities, the board of directors approves
the transaction. Our board of directors may use these provisions to prevent
changes in the management and control of our company. Also, under applicable
Delaware law, our board of directors may adopt additional anti-takeover measures
in the future.
13
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of the shares offered and
sold for the account of the selling stockholder. However, the shares were
originally purchased by the stockholder with proceeds of a loan from us.
Pursuant to the terms of a security agreement securing the stockholder's
obligations under this loan, a majority of the proceeds from the sale of these
shares will be used to repay this loan.
The selling stockholder will not pay any of the expenses that are incurred in
connection with the registration of the shares, but he will pay all commissions,
discounts and any other compensation to any securities broker dealers through
whom he sells any of the shares.
SELLING STOCKHOLDER
The following table sets forth the name of the selling stockholder, the
aggregate number of shares of common stock beneficially owned by him as of April
15, 2002, and the aggregate number of shares of common stock that he may offer
and sell pursuant to this prospectus. Because the selling stockholder may offer
all or a portion of the shares of common stock offered by this prospectus at any
time and from time to time after the date hereof, no estimate can be made of the
number of shares that he may retain upon completion of this offering. However,
assuming the selling stockholder sells all of the shares offered by this
prospectus, after completion of this offering, the selling stockholder will own
approximately 2.0% of the shares of our common stock outstanding.
The shares to be sold in this offering represent a portion of the shares issued
to the selling stockholder at the time we were formed. At that time, we loaned
the selling stockholder the money to purchase the shares. The selling
stockholder was our chairman and chief executive officer from our inception
until October of 2000. He continues to serve as a member of our board of
directors. The majority of the proceeds from the sale of these shares will be
used to repay this loan.
In the following table, we have calculated shares of common stock beneficially
owned based upon 53,369,774 shares of our common stock outstanding on April 15,
2002, together with options, warrants or other convertible securities that are
exercisable, or other rights to acquire common stock, within 60 days of April
15, 2002 by the selling stockholder. Under the rules of the Securities and
Exchange Commission, beneficial ownership includes shares over which the named
stockholder exercises voting and/or investment power. We believe that the
selling stockholder has sole voting and investment power with respect to all
shares he beneficially owns, subject to applicable community property laws. The
information with respect to beneficial ownership of common stock held by the
selling stockholder is based upon information as supplied or confirmed by the
selling stockholder.
Number of Shares
Beneficially Owned Prior Number of Shares
to Offering Offered Hereby
Name
Grant W. Denison, Jr......... 1,372,781 300,000
14
PLAN OF DISTRIBUTION
We are registering the shares of common stock offered for sale by this
prospectus on behalf of the selling stockholder. As used in this section,
"selling stockholder" includes donees, pledgees, distributees, transferees or
other successors-in-interest, including, without limitation, their respective
affiliates, members and limited or general partners, all of which are referred
to as a group below as transferees, or certain counterparties to derivative
transactions with the selling stockholder or transferees. The selling
stockholder will act independently of us in making decisions with respect to the
timing, manner and size of each sale. We will pay all costs, expenses and fees
in connection with the registration of the shares. The selling stockholder will
pay all brokerage commissions, underwriting discounts, commissions, transfer
taxes and other similar selling expenses, if any, associated with the sale of
the shares of common stock by him.
Shares of common stock may be sold by the selling stockholder from time to time
in one or more types of transactions (which may include block transactions) on
the Nasdaq National Market or on any other market on which our common stock may
from time to time be trading, in the over-the-counter market, in privately
negotiated transactions, through put or call options transactions relating to
the shares, through short sales of such shares, or a combination of such methods
of sale, at market prices prevailing at the time of sale, fixed prices, varying
prices determined at the time of sale or at negotiated prices. The selling
stockholder will have the sole discretion not to accept any purchase offer or
make any sale of shares if he deems the purchase price to be unsatisfactory at
any particular time. Such transactions may or may not involve brokers or
dealers. To the best of our knowledge, the selling stockholder has not entered
into any agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of his securities, nor is there an underwriter
or coordinating broker acting in connection with the proposed sale of shares of
common stock offered by this prospectus; however, the selling stockholder may
enter into agreements, understandings or arrangements with an underwriter or
broker-dealer regarding the sale of his shares in the future.
The selling stockholder may effect such transactions by selling shares of common
stock directly to purchasers or to or through broker-dealers, which may act as
agents or principals, or other agents. Such broker-dealers or other agents may
receive compensation in the form of discounts, concessions, or commissions from
the selling stockholders and/or the purchasers of shares of common stock for
whom such broker-dealers or other agents may act as agents or to whom they sell
as principal, or both (which compensation as to a particular broker-dealer or
other agent might be in excess of customary commissions). Market makers and
block purchasers purchasing the shares will do so for their own account and at
their own risk. It is possible that the selling stockholder will attempt to sell
shares of common stock in block transactions to market makers or other
purchasers at a price per share which may be below the then market price.
The selling stockholder and any brokers, dealers or agents that participate in
connection with the sale of shares of common stock might be deemed to be
"underwriters" within the meaning of the Securities Act of 1933 (the "Securities
Act"), and any commissions received by such brokers, dealers or agents and any
profit on the resale of the shares sold by them while acting as principals might
be deemed to be underwriting discounts or commissions under the Securities Act.
We have agreed to indemnify the selling stockholder against certain liabilities,
including liabilities arising under the Securities Act. The selling stockholder
may agree to indemnify any agent, dealer, broker-dealer or underwriter that
participates in transactions involving sales of the shares of common stock
offered pursuant to this prospectus against certain liabilities, including
liabilities arising under the Securities Act.
Because the selling stockholder may be deemed to be an "underwriter" within the
meaning of the Securities Act, the selling stockholder will be subject to the
prospectus delivery requirements of the Securities Act and the rules promulgated
thereunder and they may be subject to certain statutory liabilities under the
Securities Act, including, but not limited to, Sections 11, 12 and 17 of the
Securities Act and Rule 10b-5 under the Securities Exchange Act of 1934 (the
"Securities Exchange Act"). In addition, the selling stockholder and any other
person participating in the offering will be subject to applicable provisions of
the Securities Exchange Act and the rules and regulations thereunder, including
Regulation M under the Securities Exchange Act, which may limit the timing of
purchases and sales. These restrictions may affect the marketability of the
common stock and the ability of any person to engage in market-making activities
with respect to the common stock.
15
To comply with the securities laws of certain jurisdictions, the shares of
common stock offered by this prospectus may need to be offered or sold only
through registered or licensed brokers or dealers. In addition, in certain
jurisdictions, the shares of common stock may not be offered or sold unless they
have been registered or qualified for sale or an exemption is available and
complied with.
If the selling stockholder notifies us that any material arrangement has been
entered into with a broker-dealer for the sale of shares of common stock through
a block trade, special offering, exchange distribution or secondary distribution
or a purchase by a broker, dealer or underwriter, we will file a supplement to
this prospectus, if required, pursuant to Rule 424(b) under the Securities Act.
In addition, to the extent required, we will amend or supplement this prospectus
to disclose other material arrangements regarding the plan of distribution.
16
LEGAL MATTERS
For the purpose of this offering, Paul, Hastings, Janofsky & Walker LLP, Los
Angeles, California is giving an opinion of the validity of the issuance of the
securities offered in this prospectus.
EXPERTS
The financial statements for the year ended December 31, 2001, included in our
Annual Report on Form 10-K incorporated by reference in this prospectus and
elsewhere in the registration statement have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their report with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in giving said reports.
WHERE YOU CAN FIND MORE INFORMATION
We are a reporting company and file annual, quarterly and current reports, proxy
statements and other information with the SEC. You may read and copy these
reports, proxy statements and other information at the SEC's public reference
rooms in Washington, D.C. You can request copies of these documents by writing
to the SEC and paying a fee for the copying cost. Please call the SEC at
1-800-SEC-0330 for more information about the operation of the public reference
rooms. Our SEC filings are also available at the SEC's Web site at
"http://www.sec.gov." In addition, you can read and copy our SEC filings at the
office of the National Association of Securities Dealers, Inc. at 1735 K Street,
Washington, D.C. 20006.
The SEC allows us to "incorporate by reference" information that 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 an
important part of this prospectus, and information that we file later with the
SEC will automatically update and supersede this information. Further, all
filings we make under the Securities Exchange Act of 1934 after the date of the
initial registration statement and prior to effectiveness of the registration
statement shall be deemed to be incorporated by reference into this prospectus.
We incorporate by reference the documents listed below and any future filings we
will make with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934:
1 Our Annual Report on Form 10-K for the year ended December 31, 2001;
2. Our Definitive Proxy Statement dated April 3, 2001 filed in connection
with our 2001 Annual Meeting of Stockholders;
3. Our Current Report of Form 8-K/A filed on January 14, 2002 and our
Current Reports on Form 8-K, as filed on January 7, 2002, January 15,
2002; February 7, 2002; February 26, 2002; March 21, 2002; April 16,
2002; and April 24, 2002; and
4. The description of our common stock set forth in our Form 8A, filed
with the SEC on July 15, 1999.
We will provide to you at no cost a copy of any and all of the information
incorporated by reference into the registration statement of which this
prospectus is a part. You may make a request for copies of this information in
writing or by telephone. Requests should be directed to:
BioMarin Pharmaceutical Inc.
Attention: Jeremy Price
371 Bel Marin Keys Boulevard, Suite 210
Novato, CA 94949
(415) 884-6777
Any statement contained in a document incorporated or deemed to be incorporated
by reference in this prospectus shall be deemed modified, superceded or replaced
for purposes of this prospectus to the extent that a statement contained in this
prospectus, or in any subsequently filed document that also is deemed to be
incorporated by reference in this prospectus, modifies, supercedes or replaces
such statement. Any statement so modified, superceded or replaced shall not be
deemed, except as so modified, superceded or replaced, to constitute part of
this prospectus.
17
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses to be paid by the
registrant in connection with the sale of the common stock being registered:
Securities and Exchange Commission registration fee......... $ 192
Legal fees and expenses..................................... 10,000
Accountants' fees and expenses.............................. 2,000
Miscellaneous............................................... 1,000
Total ...................................................... $13,192
========
The foregoing items, except for the Securities and Exchange Commission
registration fee, are estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Reference is made to the Amended and Restated Certificate of Incorporation with
the Registrant; the Bylaws of the Registrant; Section 145 of the Delaware
General Corporation Law; which, among other things, and subject to certain
conditions, authorize the Registrant to indemnify, or indemnify by their terms,
as the case may be, the directors and officers of the Registrant against certain
liabilities and expenses incurred by such persons in connection with claims made
by reason of their being such a director or officer. Pursuant to this authority,
the Registrant has entered into an indemnification agreement with each director
and executive officer, whereby the Registrant has agreed to cover the
indemnification obligations.
The Registrant maintains directors' and officers' insurance providing
indemnification against certain liabilities for certain of the Registrant's
directors, officers, affiliates, partners or employees.
The indemnification provisions in the Registrant's Bylaws, and the
indemnification agreements entered into between the Registrant and its directors
and executive officers, may be sufficiently broad to permit indemnification of
the Registrant's officers and directors for liabilities arising under the Act.
Reference is made to the following documents incorporated by reference into this
Registration Statement regarding relevant indemnification provisions described
above and elsewhere herein: (1) the Amended and Restated Certificate of
Incorporation, filed as Exhibit 3.1B to Registrant's Amendment No. 2 to
Registration Statement on Form S-1 filed with the Securities and Exchange
Commission on July 6, 1999; (2) the Registrant's Bylaws filed as Exhibit 3.1 to
Registrant's Annual Report on Form 10-K for the year ended December 31, 2001,
and (3) the form of Indemnification Agreement entered into by the Registrant
with each of its directors and executive officers filed as Exhibit 10.1 to
Registrant's Registration Statement on Form S-1 filed with the Securities and
Exchange Commission on May 4, 1999, each incorporated by reference into this
Registration Statement.
II-1
ITEM 16. EXHIBITS
Exhibit
Number Description of Document
5.1 Opinion of Paul, Hastings, Janofsky & Walker LLP.
10.1 Amended and Restated Founder's Stock Purchase Agreement
with Grant W. Denison, Jr. dated as of October 1, 1997
with exhibits. (1)
10.2 Form of Amended and Restated Registration Rights Agreement
by and among the Company and the investors named therein.
(1)
23.1 Consent of Paul, Hastings, Janofsky & Walker LLP (included
with Exhibit 5.1).
23.2 Consent of Arthur Andersen LLP.
24.1 Power of Attorney (included with signatures).
------------------------------------------------------------------------------
(1) Incorporated by reference from the Company's Registration Statement
on Form S-1 (Registration No. 333-77701) filed on May 4, 1999.
ITEM 17. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities Act of
1933, may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the provisions described in Item 15 or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Act, and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer, or controlling
person of the Registrant in the successful defense of any action suit, or
proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-2
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made pursuant
to this registration statement: (i) to include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933; (ii) to reflect in the
prospectus any facts or events arising after the effective date of the
registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental
change in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would
not exceed that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be reflected in the
form of prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than a 20
percent change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement; (iii) to include any material information with respect to the
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
(2) That, for the purpose of determining any liability under the Securities Act
of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof; 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 of 1933, each filing of the Registrant's
annual report pursuant to section 13(a) or section 15(d) of the Securities
Exchange Act of 1934 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 undertakes that: (1) for purpose of determining any
liability under the Securities Act of 1933, the information omitted from the
form of prospectus filed as part of the registration statement in reliance upon
Rule 430A and contained in a form of prospectus filed by the Registrant pursuant
to Rule 424(b) (1) or (4) or 497(h) under the Securities Act shall be deemed to
be part of the registration statement as of the time it was declared effective;
and (2) for the purpose of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus 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.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Novato, State of California, this 24th day of April,
2002.
BIOMARIN PHARMACEUTICAL INC.
By: /s/ Fredric D. Price
----------------------
Fredric D. Price
Chairman, Chief Executive Officer and
Director (Principal Executive Officer)
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Fredric D. Price and Kim Tsuchimoto as
such persons' true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for such person and in such person's name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission and any other regulatory
authority, granting unto said attorneys-in-fact and agents, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in connection therewith, as fully to all intents and purposes as such
person might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents, or such persons' substitute or substitutes,
may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement on Form S-3 has been signed by the following persons in the capacities
and on the dates indicated:
Signature Title Date
--------- ----- ----
/s/ Fredric D. Price Chairman, Chief Executive Officer and Director April 24, 2002
---------------------------
Fredric D. Price (Principal Executive Officer)
/s/ Kim Tsuchimoto Vice President, Controller (Principal Financial April 24, 2002
---------------------------
Kim Tsuchimoto and Accounting Officer)
/s/ Grant W. Denison, Jr. Director April 24, 2002
---------------------------
Grant W. Denison, Jr.
/s/ Phyllis I. Gardner Director April 24, 2002
---------------------------
Phyllis I. Gardner, M.D.
Erich Sager Director April 24, 2002
---------------------------
Erich Sager
/s/ Gwynn R. Williams Director April 24, 2002
---------------------------
Gwynn R. Williams
II-4
Exhibit Index
Exhibit
Number Description of Document
5.1 Opinion of Paul, Hastings, Janofsky & Walker LLP.
10.1 Amended and Restated Founder's Stock Purchase Agreement with
Grant W. Denison, Jr. dated as of October 1, 1997 with
exhibits. (1)
10.2 Form of Amended and Restated Registration Rights Agreement by
and among the Company and the investors named therein. (1)
23.1 Consent of Paul, Hastings, Janofsky & Walker LLP (included
with Exhibit 5.1).
23.2 Consent of Arthur Andersen LLP.
24.1 Power of Attorney (included with signatures).
--------------------
(1) Incorporated by reference from the Company's Registration Statement
on Form S-1 (Registration No. 333-77701) filed on May 4, 1999.
II-5