FILED PURSUANT TO RULE 424(b)(5)
REGISTRATION NOS. 333-55634 AND
333-74702
PROSPECTUS SUPPLEMENT
(To Prospectus dated June 5, 2001)
565,000 SHARES
[ATRIX LABORATORIES, INC. LOGO]
ATRIX LABORATORIES, INC.
COMMON STOCK
------------------------------
We are offering 565,000 shares of our common stock. All of the shares of
common stock offered under this prospectus supplement are being offered by us.
------------------------------
Our common stock is traded on the Nasdaq National Market under the symbol
"ATRX". The last reported sale price of our common stock on the Nasdaq National
Market on December 6, 2001 was $25.25 per share.
------------------------------
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE S-1 OF THIS PROSPECTUS SUPPLEMENT.
------------------------------
PER SHARE TOTAL
--------- -----
Offering Price........................................ $23.000 $12,995,000
Discounts and Commissions to the Underwriter.......... $ 1.495 $ 844,675
Offering Proceeds to Atrix............................ $21.505 $12,150,325
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus supplement or the related prospectus is truthful or completed. Any
representation to the contrary is a criminal offense.
We have granted the underwriter the right to purchase up to an additional
84,750 shares of common stock to cover any over-allotments. The underwriter can
exercise this right at any time within thirty days after the offering. The
underwriter expects to deliver the shares of common stock to investors on or
about December 12, 2001.
BANC OF AMERICA SECURITIES LLC
------------------------------
December 7, 2001
TABLE OF CONTENTS
PAGE
----
PROSPECTUS SUPPLEMENT
Risk Factors................................................ S-1
Use of Proceeds............................................. S-7
Underwriting................................................ S-8
Legal Matters............................................... S-9
Experts..................................................... S-9
Where You Can Find More Information......................... S-10
Incorporation of Certain Information by Reference........... S-10
PROSPECTUS
About this Prospectus....................................... 1
Where You Can Find More Information......................... 1
Atrix Laboratories, Inc. ................................... 2
Recent Developments......................................... 2
Risk Factors................................................ 2
Use of Proceeds............................................. 3
Description of Capital Stock................................ 3
Plan of Distribution........................................ 9
Legal Matters............................................... 10
Experts..................................................... 10
You should rely only on the information contained or incorporated by
reference in this prospectus supplement and the accompanying prospectus. We have
not, and the underwriter has not, authorized anyone to provide you with
different information. We are not making an offer of these securities in any
state where the offer is not permitted. You should not assume that the
information contained or incorporated by reference in this prospectus supplement
and the accompanying prospectus are accurate as of any date other than the date
on the front of this prospectus supplement.
The prospectus (including the documents incorporated by reference in the
prospectus) that accompanies this prospectus supplement contains important
information regarding this offering, and we urge you to read both the prospectus
and this prospectus supplement in full to obtain material information concerning
the shares and an investment in the shares.
Information contained in our web site does not constitute part of this
prospectus supplement or the accompanying prospectus.
Atridox--Registered Trademark--, Atrigel--Registered Trademark--,
Atrisone--Registered Trademark--, Leuprogel(TM), BEMA(TM), SMP(TM), MCA(TM) and
BCP(TM) are our trademarks. This prospectus supplement also includes trademarks
of other companies.
i
FORWARD-LOOKING STATEMENTS
This prospectus supplement and documents incorporated by reference in this
prospectus supplement contain "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934 that address, among other things, our strategy, the
anticipated development of our products, our anticipated use of proceeds, our
projected capital expenditures and liquidity, our development of additional
revenue sources, our development and expansion in international markets, and
market acceptance of our products. We intend for these forward-looking
statements to be covered by the safe harbor provisions for forward-looking
statements contained in the Private Securities Litigation Reform Act of 1995,
and we are including this statement for purposes of complying with these safe
harbor provisions. We have based these forward-looking statements on our current
expectations and projections about future events. These statements are not
guarantees of future performance and are subject to certain risks, uncertainties
and other factors, some of which are beyond our control, are difficult to
predict and could cause actual results to differ materially from those expressed
or forecasted in the forward-looking statements. These risks and uncertainties
include those described in "Risk Factors" and elsewhere in this prospectus
supplement.
We use words such as "believe," "expect," "anticipate," "intend," "plan,"
"estimate," "should," "likely," "potential," "seek" and variations of these
words and similar expressions to identify forward-looking statements. You should
not place undue reliance on these forward-looking statements, which reflect our
management's view only as of the date of this prospectus supplement. Except as
required by law, we do not undertake any obligation to update these statements
or publicly release the result of any revision to the forward-looking statements
that we may make to reflect events or circumstances after the date of this
prospectus supplement or to reflect the occurrence of unanticipated events.
MARKET DATA
Market data and forecasts used in this prospectus supplement, including,
for example, estimates of growth in the biotechnology and pharmaceutical
industries, have been obtained from independent industry sources. We have not
independently verified the data obtained from these sources, and we cannot
assure you of the accuracy or completeness of the data. Forecasts and other
forward-looking information obtained from these sources are subject to the same
qualifications and additional uncertainties accompanying any estimates of future
market size.
ii
RISK FACTORS
You should carefully consider the following risk factors and the other
information contained or incorporated by reference in this prospectus supplement
and the accompanying prospectus before purchasing shares of our common stock.
Investing in our common stock involves a high degree of risk. If any of the
events described in the following risk factors occur, our business and financial
condition could be seriously harmed. In addition, the trading price of our
common stock could decline due to the occurrence of any of such events, and you
may lose all or part of your investment.
WE HAVE A HISTORY OF OPERATING LOSSES AND ANTICIPATE FUTURE LOSSES.
Since our inception, our focus has been to invest significant time and
money into research and development of new and innovative products. Because of
our time and financial commitments to these new products, we have operated at a
loss for four of the previous five years. Furthermore, our research and
development activities may result in additional operating losses for the
foreseeable future. We cannot assure you that any particular product will ever
be approved or achieve market penetration.
To support our research and development of certain product candidates, we
may rely on agreements with collaborators, licensors or others that provide
financial and clinical support. If any of these agreements were terminated or
substantially modified, we may incur additional losses. In addition, our ability
to achieve profitability will depend on our ability to obtain regulatory
approval and successful commercialization of our products. We cannot assure you
that we will be able to achieve revenue growth or profitability.
WE MUST OBTAIN DOMESTIC AND FOREIGN REGULATORY APPROVAL OF OUR PRODUCT
CANDIDATES, WHICH REQUIRES A SIGNIFICANT AMOUNT OF TIME AND MONEY.
We must obtain approval from the United States Food and Drug
Administration, or FDA, to manufacture and market pharmaceutical products in the
United States. Other countries have similar requirements. The process that
pharmaceutical products must undergo to get this approval includes preclinical
testing and clinical trials to demonstrate safety and efficacy, and the process
is expensive and time consuming.
FDA approval can be delayed, limited or denied for many reasons, including:
- a product candidate may be found to be unsafe or ineffective,
- the FDA may interpret data from preclinical testing and clinical trials
differently and less favorably than the way we interpret it,
- the FDA might not approve our manufacturing processes or facilities,
- the FDA may change its approval policies or adopt new regulations that
may negatively affect or delay our ability to bring a product to market,
and
- a product candidate may not be approved for all the indications we
requested and thus our markets may be limited.
In addition, the process of obtaining approvals in foreign countries is
also subject to delay and failure for similar reasons. Any delay in, or failure
to receive, approval will have a material adverse effect on our business and
financial condition.
We are also required to comply with the FDA's current Good Manufacturing
Practice, or GMP, regulations. GMP regulations include requirements relating to
quality control, quality assurance and maintenance of records and documentation.
Manufacturing facilities are subject to inspection by the FDA and must be
approved before we can use them in the commercial manufacturing of our products.
If we or our contract manufacturers are unable to comply with the applicable GMP
requirements and other FDA regulatory requirements, our business may be harmed.
S-1
CLINICAL TRIALS ARE EXPENSIVE AND THEIR OUTCOME IS UNCERTAIN.
Before obtaining regulatory approvals for the commercial sale of any
products, we or our partners must demonstrate through preclinical testing and
clinical trials that our product candidates are safe and effective for use in
humans. Some of our product candidates are in the early stage of development. We
spend and will continue to spend a significant amount of financial resources
conducting preclinical testing and clinical trials.
Completion of clinical trials may take several years or more and the length
of time can vary substantially. Our initiation and rate of completion of
clinical trials may be delayed by many factors, including:
- our inability to recruit patients at a sufficient rate,
- the failure of clinical trials to demonstrate a product candidate's
efficacy,
- our inability to follow patients adequately after treatment,
- our inability to predict unforeseen safety issues,
- our inability to manufacture sufficient quantities of materials for
clinical trials,
- the potential for unforeseen governmental or regulatory delays,
- lack of sufficient financial resources, and
- inability to satisfy FDA requirements which may result in the clinical
trials being repeated.
In addition, the results from preclinical testing and early clinical trials
do not always predict results of later clinical trials. A number of new drugs
have shown encouraging results in early clinical trials, but subsequently failed
to establish sufficient safety and efficacy data to obtain necessary regulatory
approvals. If a product candidate fails to demonstrate safety and efficacy in
clinical trials, this failure may delay development of other product candidates
and hinder our ability to conduct related preclinical testing and clinical
trials. As a result of these failures, we may also be unable to find additional
collaborators or to obtain additional financing. Our business and financial
condition may be materially adversely affected by any delays in, or termination
of, our clinical trials.
Furthermore, to market our products outside the United States, our products
are subject to additional clinical trials and approvals even though the products
have been approved in the United States. To meet any additional requirements
that might be imposed by foreign governments, we may incur additional costs that
will inhibit our profitability. If the approvals are not obtained or will be too
expensive to obtain, foreign distribution may not be feasible, which could harm
our business.
OUR FUTURE PROFITABILITY DEPENDS ON THE DEVELOPMENT OF NEW PRODUCTS.
We currently have a variety of new products in various stages of research
and development and are working on possible improvements, extensions or
reformulations of some existing products. These research and development
activities, as well as the clinical testing and regulatory approval process,
which must be completed before commercial quantities of these products can be
sold, will require significant commitments of personnel and financial resources.
Delays in the research, development, testing and approval processes will cause a
corresponding delay in revenue generation from those products. Regardless of
whether they are ever released to the market, the expense of such processes will
have already been incurred.
We reevaluate our research and development efforts regularly to assess
whether our efforts to develop a particular product or technology are
progressing at the rate that justifies our continued expenditures. On the basis
of these reevaluations, we have abandoned in the past, and may abandon in the
future, our efforts on a particular product or technology. We cannot assure you
that any product we are researching or developing will ever be successfully
released to the market. If we fail to take a product or technology from the
development stage to market on a timely basis, we may incur significant expenses
without a near-term financial return.
S-2
WE RELY HEAVILY ON OUR RELATIONSHIPS WITH OUR COLLABORATORS, AND IF WE FAIL TO
MAINTAIN SUCH RELATIONSHIPS, IF THE COLLABORATORS DO NOT PERFORM SATISFACTORILY
OR IF DISPUTES ARISE BETWEEN US AND A COLLABORATOR, OUR BUSINESS COULD BE
HARMED.
We form strategic relationships with collaborators to help us develop,
commercialize and market many of our products. Our arrangements with
collaborators are critical to commercializing our products. Although some of our
revenues are obtained from strategic partners' research and development payments
and upon achievement of certain milestones and sales from certain of our
products that we market directly, we expect that most of our future revenues
will be obtained from royalty payments from sales or a percentage of profits of
products licensed to our collaborators. We cannot assure you that these
relationships will continue or that our collaborators will perform
satisfactorily. Failure to make or maintain these arrangements or form new
arrangements or a delay in a collaborator's performance could adversely affect
our business and financial condition.
Disputes may arise between us and a collaborator. Such a dispute could
delay the program on which we are working with the collaborator. It could also
result in expensive arbitration or litigation, which may not be resolved in our
favor. In addition, our collaborators could merge with or be acquired by another
company or experience financial or other setbacks unrelated to our collaboration
that could, nevertheless, adversely affect us.
WE HAVE LIMITED EXPERIENCE IN SELLING AND MARKETING OUR PRODUCTS.
We have limited experience in marketing and selling our products. To
achieve commercial success for any products, we must either develop a marketing
and sales force or contract with another party, including collaborators, to
perform these services for us. In either case, we will be competing with
companies that have experienced and well-funded marketing and sales operations.
To the extent we undertake to market or co-market our own products, we will
require additional expenditures and management resources. We cannot assure you
that we will be successful in developing a marketing and sales force or in
contracting with a third party on acceptable terms to sell our products.
IF THERE IS NO MARKET ACCEPTANCE OF OUR PRODUCTS, OUR REVENUES WILL BE REDUCED.
Our products may not gain market acceptance among physicians, patients,
third-party payors and the medical community. The degree of market acceptance of
any of our products or product candidates will depend on a number of factors,
including:
- demonstration of their clinical efficacy and safety,
- their cost-effectiveness,
- their potential advantage over alternative existing and newly developed
treatment methods,
- the marketing and distribution support they receive, and
- reimbursement policies of government and third-party payors.
Our products and product candidates, if successfully developed, will
compete with a number of drugs and therapies currently manufactured and marketed
by major pharmaceutical and other biotechnology companies. Our products may also
compete with new products currently under development by others or with products
which may cost less than our products. Physicians, patients, third-party payors
and the medical community may not accept or utilize our products. If our
products do not achieve significant market acceptance, our business and
financial condition will be materially adversely affected.
S-3
WE CONDUCT OPERATIONS IN FOREIGN COUNTRIES WHICH ARE SUBJECT TO RISKS AND OUR
PLANS FOR INTERNATIONAL EXPANSION MAY NOT SUCCEED, WHICH WOULD HARM OUR REVENUES
AND PROFITABILITY.
We conduct operations in foreign countries which are subject to certain
risks. In addition, one of our strategies for increasing our revenues depends on
expansion into international markets. Our international operations may not
succeed for a number of reasons, including:
- difficulties in managing foreign operations,
- fluctuations in currency exchange rates or imposition of currency
exchange controls,
- competition from local and foreign-based companies,
- issues relating to uncertainties of laws and enforcement relating to the
protection of intellectual property,
- unexpected changes in trading policies and regulatory requirements,
- duties and taxation issues,
- language and cultural differences,
- general political and economic trends, and
- expropriation of assets, including bank accounts, intellectual property
and physical assets by foreign governments.
Accordingly, we may not be able to successfully execute our business plan
in foreign markets. If we are unable to achieve anticipated levels of revenues
from our international operations, our revenues and profitability will decline.
OUR INABILITY TO PROTECT OUR INTELLECTUAL PROPERTY AND DEFEND OURSELVES FROM
INTELLECTUAL PROPERTY SUITS COULD HARM OUR COMPETITIVE POSITION AND OUR
FINANCIAL PERFORMANCE.
We rely heavily on our proprietary information in developing and
manufacturing our products. We attempt to protect our intellectual property
rights through patents, trade secrets and other measures. Despite our efforts to
protect our proprietary rights from unauthorized use or disclosure, parties,
including former employees or consultants of ours, may attempt to disclose,
obtain or use our proprietary information or technologies. The steps we have
taken may not prevent misappropriation of our proprietary information and
technologies, particularly in foreign countries where laws or law enforcement
practices may not protect our proprietary rights as fully as in the United
States. Unauthorized disclosure of our proprietary information could harm our
competitive position.
Intellectual property claims brought against us, regardless of their merit,
could result in costly litigation and the diversion of our financial resources
and technical and management personnel. Further, if such claims are proven
valid, through litigation or otherwise, we may be required to change our
trademarks and pay financial damages, which could harm our profitability and
financial performance.
IF WE ENGAGE IN ACQUISITIONS, WE WILL INCUR A VARIETY OF EXPENSES, AND WE MAY
NOT BE ABLE TO REALIZE THE ANTICIPATED BENEFITS.
From time to time, we engage in preliminary discussions with third parties
concerning potential acquisitions of products, technologies and businesses.
Although there are currently no commitments or agreements with respect to any
acquisitions, in the future, we may pursue acquisitions of additional products,
technologies or businesses. Acquisitions involve a number of risks, including:
- difficulties in and costs associated with the assimilation of the
operations, technologies, personnel and products of the acquired
companies,
- assumption of known or unknown liabilities or other unanticipated events
or circumstances,
S-4
- risks of entering markets in which we have limited or no experience, and
- potential loss of key employees.
Any of these risks could harm our ability to achieve levels of
profitability of acquired operations or to realize other anticipated benefits of
an acquisition.
WE MAY SEEK TO RAISE ADDITIONAL FUNDS, AND ADDITIONAL FUNDING MAY BE DILUTIVE TO
STOCKHOLDERS OR IMPOSE OPERATIONAL RESTRICTIONS.
Any additional equity financing may be dilutive to our stockholders and
debt financing, if available, may involve restrictive covenants, which may limit
our operating flexibility with respect to certain business matters. If
additional funds are raised through the issuance of equity securities, the
percentage ownership of our stockholders will be reduced. These stockholders may
experience additional dilution in net book value per share and any additional
equity securities may have rights, preferences and privileges senior to those of
the holders or our common stock.
OUR FUTURE PERFORMANCE DEPENDS ON OUR ABILITY TO ATTRACT AND RETAIN KEY
PERSONNEL.
Our success depends in part on our ability to attract and retain highly
qualified management and scientific personnel. Competition for personnel in our
industry is intense. The loss of key employees or the inability to attract key
employees could limit our ability to develop new products and result in lost
sales and diversion of management.
WE ARE SUBJECT TO ENVIRONMENTAL COMPLIANCE RISKS.
Our research, development and manufacturing involves the controlled use of
hazardous biological, chemical and radioactive materials. We are also subject to
federal, state and local government regulation in the conduct of our business,
including regulations on employee safety and our handling and disposal of
hazardous and radioactive materials. Any new regulation or change to an existing
regulation could require us to implement costly capital or operating
improvements for which we have not budgeted. We cannot assure you that these
regulations will remain the same or that we will be able to maintain compliance
with these regulations.
OUR INDUSTRY IS CHARACTERIZED BY INTENSE COMPETITION AND RAPID TECHNOLOGICAL
CHANGE, WHICH MAY LIMIT OUR COMMERCIAL OPPORTUNITIES, RENDER OUR PRODUCTS
OBSOLETE AND REDUCE OUR REVENUES.
The pharmaceutical and biotechnology industries are highly competitive. We
face intense competition from academic institutions, government agencies,
research institutions and other biotechnology and pharmaceutical companies,
including other drug delivery companies. Some of these competitors are also our
collaborators. These competitors are working to develop and market other drug
delivery systems, vaccines, antibody therapies and other methods of preventing
or reducing disease, and new small-molecule and other classes of drugs that can
be used without a drug delivery system.
Many of our competitors have much greater capital resources, manufacturing
and marketing experience, research and development resources and production
facilities than we do. Many of them also have much more experience than we do in
preclinical testing and clinical trials of new drugs and in obtaining FDA and
foreign approvals. In addition, they may succeed in obtaining patents that would
make it difficult or impossible for us to compete with their products.
Because major technological changes can happen quickly in the biotechnology
and pharmaceutical industries, the development by competitors of technologically
improved or different products may make our product candidates obsolete or
noncompetitive.
S-5
IF THIRD-PARTY PAYORS WILL NOT PROVIDE COVERAGE OR REIMBURSE PATIENTS FOR THE
USE OF OUR PRODUCTS, OUR REVENUES AND PROFITABILITY WILL SUFFER.
The commercial success of our products is substantially dependent on
whether third-party reimbursement is available for the use of our products by
the medical profession. Medicare, Medicaid, health maintenance organizations and
other third-party payors may not authorize or otherwise budget for the
reimbursement of our products. In addition, they may not view our products as
cost-effective and reimbursement may not be available to consumers or may not be
sufficient to allow our products to be marketed on a competitive basis.
Likewise, legislative proposals to reform health care or reduce government
programs could result in lower prices for or rejection of our products. Changes
in reimbursement policies or health care cost containment initiatives that limit
or restrict reimbursement for our products may cause our revenues to decline.
IF PRODUCT LIABILITY LAWSUITS ARE BROUGHT AGAINST US, WE MAY INCUR SUBSTANTIAL
COSTS.
Our industry faces an inherent risk of product liability claims from
allegations that our products resulted in adverse effects to the patient and
others. These risks exist even with respect to those products that are approved
for commercial sale by the FDA and manufactured in facilities licensed and
regulated by the FDA. Our insurance may not provide adequate coverage against
potential product liability claims or losses. In addition, we cannot assure you
that our current coverage will continue to be available in the future on
reasonable terms, if at all. Even if we are ultimately successful in product
liability litigation, the litigation would consume substantial amounts of our
financial and managerial resources and may create adverse publicity, all of
which would impair our ability to generate sales. If we were found liable for
any product liability claims in excess of our insurance coverage or outside our
coverage, the cost and expense of such liability could severely damage our
business and profitability.
A VARIETY OF FACTORS MAY CAUSE THE PRICE OF OUR STOCK TO BE VOLATILE.
Our stock price may fluctuate due to a variety of factors, including:
- announcements of developments related to our business or our competitors'
businesses,
- fluctuations in our operating results,
- sales of our common stock in the marketplace,
- failure to meet or changes in analysts' expectations,
- general conditions in the biotechnology and pharmaceutical industries or
the worldwide economy,
- announcements of innovations, new products or product enhancements by us
or by our competitors,
- developments in patents or other intellectual property rights or any
litigation relating to these rights, and
- developments in our relationships with our customers, suppliers and
collaborators.
In recent years, our stock, the stock of other pharmaceutical and
biotechnology companies and the stock market in general have experienced extreme
price fluctuations, which have been unrelated to the operating performance of
the affected companies. We cannot assure you that the market price of our common
stock will not continue to experience significant fluctuations in the future,
including fluctuations that are unrelated to our performance.
WE WILL RETAIN BROAD DISCRETION IN THE USE OF PROCEEDS FROM THIS OFFERING AND
MAY NOT OBTAIN A SIGNIFICANT RETURN ON THE USE OF THESE PROCEEDS.
We currently have no specific plans for a significant portion of our net
proceeds from this offering. Consequently, our management has discretion as to
how to spend the proceeds from this offering and may spend these proceeds in
ways with which our stockholders may not agree. Management's allocation of the
S-6
proceeds of this offering may not benefit our business and the investment of the
proceeds may not yield a favorable return.
ANTI-TAKEOVER PROVISIONS AND OUR RIGHT TO ISSUE PREFERRED STOCK COULD MAKE A
THIRD-PARTY ACQUISITION DIFFICULT.
Our certificate of incorporation and bylaws and anti-takeover provisions of
Delaware law could make it difficult for a third party to acquire control of us,
even if a change in control would be beneficial to stockholders. Our certificate
of incorporation provides that our board of directors may issue, without
stockholder approval, preferred stock having such voting rights, preferences and
special rights as the board of directors may determine. Our certificate of
incorporation and bylaws also provide for a classified board, with board members
serving staggered three-year terms. In addition, we have a stockholder rights
plan, which entitles existing stockholders to rights, including the right to
purchase shares of preferred stock, in the event of an acquisition of 15% or
more of our outstanding common stock, or an unsolicited tender offer for such
shares. These provisions of Delaware law, our certificate of incorporation and
bylaws, and our stockholders rights plan may make it difficult for a third party
to acquire us.
USE OF PROCEEDS
We estimate that our net proceeds from the sale of the 565,000 shares of
common stock we are offering will be approximately $12.0 million, or
approximately $13.8 million if the underwriter exercises its over-allotment
option in full, based on the public offering price of $23.00 per share and after
deducting underwriting discounts and commissions and our estimated offering
expenses.
We expect to use these net proceeds to broaden our technologies, supplement
our product pipeline, and otherwise further our current product development
efforts. We will also use funds for working capital and general corporate
purposes. In addition, we may use a portion of the net proceeds to acquire
complementary assets, technologies and businesses. We currently have no
commitments or agreements with respect to any acquisitions. Pending use of the
net proceeds, we plan to invest the net proceeds in short-term investment grade
securities. We will have broad discretion as to the allocation and use of the
net proceeds that we will receive.
S-7
UNDERWRITING
We are offering the shares of common stock described in this prospectus
supplement through Banc of America Securities LLC. We have entered into an
underwriting agreement with Banc of America Securities LLC as the underwriter.
Subject to the terms and conditions of the underwriting agreement, we have
agreed to sell all of the shares of common stock offered hereby to the
underwriter.
The underwriter initially will offer the shares to the public at the price
specified on the cover page of the prospectus supplement. If all the shares are
not sold at the public offering price, the underwriter may change the public
offering price and the other selling terms. The common stock is offered subject
to a number of conditions, including:
- receipt and acceptance of the common stock by the underwriter, and
- the right to reject orders in whole or in part.
We have granted the underwriter an option to buy up to 84,750 additional
shares of common stock. These additional shares would cover sales of shares by
the underwriter that exceed 565,000 shares. The underwriter may exercise this
option at any time within 30 days after the date of the prospectus supplement.
The following table shows the per share and total underwriting discounts
and commissions to be paid by Atrix to the underwriter. These amounts are shown
assuming no exercise and full exercise of the underwriter's option to purchase
additional shares:
PAID BY ATRIX
---------------------------
NO EXERCISE FULL EXERCISE
----------- -------------
Per share underwriting discounts and commissions..... $ 1.495 $ 1.495
Total underwriting discounts and commissions......... $844,675 $971,376
The expenses of the offering, not including the underwriting discounts and
commissions, are estimated to be approximately $125,000 and will be paid by us.
Expenses of the offering, exclusive of the underwriting discounts and
commissions, include printing expenses, transfer agent fees and other
miscellaneous fees.
We, our executive officers and our directors have entered into lock-up
agreements with the underwriter. Under these agreements, subject to exceptions,
we may not issue any new shares of common stock, and our executive officers and
directors may not offer, sell, contract to sell or otherwise dispose of or hedge
any common stock or securities convertible into or exchangeable for shares of
common stock. These restrictions will be in effect for a period of 90 days after
the date of the prospectus supplement. At any time and without notice, Banc of
America Securities LLC may, in its sole discretion, release all or some of the
securities from these lock-up agreements. Elan International Services, Ltd.,
MediGene AG, Pfizer Inc. and Sanofi-Synthelabo Inc. are subject to lock-up
restrictions pursuant to their respective stock purchase agreements with us.
Under these agreements, they may not offer, sell, contract to sell or otherwise
dispose of or hedge any common stock or securities convertible into or
exchangeable for shares of our common stock for the periods set forth in the
agreements. These restrictions will be in effect for at least 90 days after the
date of the prospectus supplement.
We will indemnify the underwriter against some liabilities, including some
liabilities under the Securities Act. If we are unable to provide this
indemnification, we will contribute to payments the underwriter may be required
to make in respect of those liabilities.
In connection with the offering, the underwriter may purchase and sell
common stock in the open market. These transactions may include:
- short sales,
- stabilizing transactions, and
- purchases to cover positions created by short sales.
S-8
Short sales involve the sale by the underwriter of a greater number of
shares than it is required to purchase in the offering. Stabilizing transactions
consist of bids or purchases made for the purpose of preventing or retarding a
decline in the market price of the common stock while the offering is in
progress.
The underwriter may also impose a penalty bid. This means that if the
underwriter purchases shares in the open market in stabilizing transactions or
to cover short sales, the underwriter can require the dealer that sold those
shares as part of the offering to repay the commissions received by them.
The underwriter may engage in activities that stabilize, maintain or
otherwise affect the price of the common stock, including:
- over-allotment,
- stabilization,
- syndicate covering transactions, and
- imposition of penalty bids.
As a result of these activities, the price of the common stock may be
higher than the price that otherwise might exist in the open market. If the
underwriter commences these activities, it may discontinue them at any time. The
underwriter may carry out these transactions on the Nasdaq National Market, in
the over-the-counter market or otherwise.
In connection with the offering, the underwriter and any selling group
members who are qualified market makers on the Nasdaq National Market may engage
in passive market making transactions in the common stock on the Nasdaq National
Market in accordance with Rule 103 of Regulation M during the business day
before the pricing of the offering, before the commencement of offers or sales
of the common stock. Passive market makers must comply with applicable volume
and price limitations and must be identified as a passive market maker. In
general, a passive market maker must display its bid at a price not in excess of
the highest independent bid for the security. If all independent bids are
lowered below the passive market maker's bid, however, the bid must then be
lowered when purchase limits are exceeded.
The underwriter may facilitate the marketing of this offering online
directly or through one of its affiliates. In that case, prospective investors
may view offering terms and a prospectus online and may place orders online or
through their financial advisors.
The underwriter or its affiliates have in the past engaged, and may in the
future engage, in transactions with and perform services for us, including
commercial banking, financial advisory and investment banking services, in the
ordinary course of business.
LEGAL MATTERS
The validity of the shares of common stock offered by us hereby will be
passed upon for us by Morrison & Foerster LLP, Denver, Colorado. Certain legal
matters will be passed upon for the underwriter by Cahill Gordon & Reindel, New
York, New York. As of the date of this prospectus supplement, members of
Morrison & Foerster LLP beneficially owned 2,657 shares of our common stock and
held options to acquire an additional 28,700 shares of our common stock. Warren
L. Troupe, one of our directors, is a partner at Morrison & Foerster LLP.
EXPERTS
The consolidated financial statements as of December 31, 2000 and 1999, and
for each of the three years ended December 31, 2000, incorporated by reference
in this prospectus supplement have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their reports, incorporated by reference
herein (which reports express an unqualified opinion and includes an explanatory
paragraph referring to a change in accounting principle), and have been so
incorporated by reference herein in reliance upon the reports of such firm given
upon their authority as experts in accounting and auditing.
S-9
The financial statements of Transmucosal Technologies, Ltd. incorporated by
reference in this prospectus supplement from our Amendment No. 1 on Form 10-K/A
to our Annual Report on Form 10-K for the year ended December 31, 2000, have
been audited by KPMG, independent auditors, as stated in their report, which is
incorporated herein by reference, and have been so incorporated in reliance upon
the report of such firm given upon their authority as experts in accounting and
auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission. We have also filed with
the SEC a registration statement on Form S-3 to register the shares of common
stock being offered in the prospectus supplement and the accompanying
prospectus. This prospectus supplement does not contain all of the information
included in the registration statement. For further information about us and the
shares of common stock offered by this prospectus supplement and the
accompanying prospectus, you should refer to the registration statement and its
exhibits and our other SEC filings. You can read and copy the registration
statement as well as reports, proxy statements and other information we have
filed with the SEC at the public reference rooms maintained by the SEC in
Washington, D.C., New York, New York, and Chicago, Illinois. You can obtain
copies from the public reference rooms of the SEC upon payment of various fees.
You can call the SEC at 1-800-SEC-0330 for further information about the public
reference rooms. We are also required to file electronic versions of these
documents with the SEC, which may be accessed through the SEC's website at
http://www.sec.gov. Our common stock is quoted on the Nasdaq National Market
System under the symbol "ATRX."
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The SEC allows us to "incorporate by reference" certain of our publicly
filed documents into this prospectus supplement and the accompanying prospectus,
which means that information included in these documents is considered part of
this prospectus supplement and the accompanying prospectus. The information
incorporated by reference is considered to be part of the prospectus supplement
and the accompanying prospectus, and information that we subsequently file with
the SEC will automatically update and supersede this information. This
prospectus supplement and the accompany prospectus do not include all the
information in the registration statement and documents incorporated by
reference. You should refer to the documents and to the exhibits to the
registration statement for a more complete understanding of the matter involved.
We hereby incorporate by reference the documents listed below and any future
filings made with the SEC prior to the termination of the offering under
sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934.
The following documents filed with the SEC are incorporated by reference in
this prospectus:
1. Our Annual Report on Form 10-K for the year ended December 31,
2000, and Amendment No. 1 on Form 10-K/A to our Annual Report on Form 10-K
for the year ended December 31, 2000 (File No. 0-18231).
2. Our Quarterly Reports on Form 10-Q for the quarters ended March 31,
2001, June 30, 2001 and September 30, 2001 (File No. 0-18231).
3. Our Current Report on Form 8-K dated November 16, 2001, filed with
the SEC on November 27, 2001 (File No. 0-18231).
4. Our Current Report on Form 8-K dated October 15, 2001, filed with
the SEC on October 17, 2001 (File No. 0-18231).
5. Our Current Report on Form 8-K dated August 24, 2001, filed with
the SEC on August 27, 2001 (File No. 0-18231).
6. Our Current Report on Form 8-K dated August 8, 2001, filed with the
SEC on August 10, 2001 (File No. 0-18231).
S-10
7. Our Current Report on Form 8-K dated April 4, 2001, filed with the
SEC on June 20, 2001 (File No. 0-18231).
8. Our Current Report on Form 8-K dated April 20, 2001, filed with the
SEC on April 24, 2001 (File No. 0-18231).
9. Our Current Report on Form 8-K dated December 29, 2000, filed with
the SEC on February 23, 2001 (File No. 0-18231).
10. Our Current Report on Form 8-K dated December 29, 2000, filed with
the SEC on January 9, 2001 (File No. 0-18231).
11. Our Proxy Statement dated April 4, 2001, filed in connection with
our May 7, 2001 Annual Meeting of Stockholders.
12. The description of our common stock contained in our Registration
Statement on Form 8-A, filed with the SEC on January 12, 1990, including
any amendments or reports filed with the SEC for the purpose of updating
such description.
13. The description of our Series A Preferred Stock Purchase Rights
contained in our Registration Statement on Form 8-A, filed with the SEC on
October 1, 1998, as amended by Amendment No. 1 thereto on Form 8-A/A, filed
with the SEC on November 27, 2001, and any amendments or reports filed with
the SEC for the purpose of updating such description.
We will furnish you without charge, on written or oral request, a copy of
any or all of the documents incorporated by reference. You should direct any
requests for documents to our Corporate Secretary, Atrix Laboratories, Inc.,
2579 Midpoint Drive, Fort Collins, Colorado 80524, telephone number (970)
482-5868.
You should rely only on the information contained or incorporated by
reference in this prospectus supplement or the accompanying prospectus. We have
not authorized any other person to provide you with different information. If
anyone provides you with different or inconsistent information, you should not
rely on it. We will sell the offered securities only in states where the offer
or sale is permitted. You should assume that the information appearing in this
prospectus supplement or the accompanying prospectus or incorporated by
reference is accurate only as of the date on the front of these documents. Our
business and financial condition may have changed since that date.
S-11
Prospectus
4,000,000 SHARES
[ATRIX LABORATORIES, INC. LOGO]
ATRIX LABORATORIES, INC.
COMMON STOCK
------------------------------
We may from time to time offer and sell up to 4,000,000 shares of our
common stock, par value $0.001 per share. We may offer these shares in one or
more offerings in amounts, at prices and on terms determined at the time of the
offering. The specific terms will be contained in one or more supplements to
this prospectus. Read this prospectus and any prospectus supplement carefully
before you invest.
Our common stock is quoted on the Nasdaq National Market under the symbol
"ATRX."
------------------------------
INVESTING IN OUR SECURITIES INVOLVES RISKS. BEFORE BUYING OUR SECURITIES,
YOU SHOULD REFER TO THE RISK FACTORS INCLUDED IN OUR PERIODIC REPORTS, IN
PROSPECTUS SUPPLEMENTS RELATING TO SPECIFIC OFFERINGS AND IN OTHER INFORMATION
THAT WE FILE WITH THE SECURITIES AND EXCHANGE COMMISSION. SEE "RISK FACTORS" ON
PAGE 2.
------------------------------
Neither the Securities and Exchange Commission nor any State Securities
Commission has approved or disapproved of these securities or determined if this
Prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
June 5, 2001
TABLE OF CONTENTS
About This Prospectus....................................... 1
Where You Can Find More Information......................... 1
Atrix Laboratories, Inc. ................................... 2
Recent Developments......................................... 2
Risk Factors................................................ 2
Use of Proceeds............................................. 3
Description of Capital Stock................................ 3
Plan of Distribution........................................ 9
Legal Matters............................................... 10
Experts..................................................... 10
---------------------
You should only rely on the information contained or incorporated by
reference in this prospectus and in the prospectus supplement. We have not
authorized anyone to provide you with different information. If anyone provides
you with different or inconsistent information, you should not rely on it. We
will not make an offer to sell these securities in any jurisdiction where the
offer and sale is not permitted. You should assume that the information
appearing in this prospectus, as well as information we previously filed with
the SEC and incorporated by reference, is accurate as of the date on the front
cover of this prospectus only. Our business, financial condition, results of
operations and prospects may have changed since that date.
i
ABOUT THIS PROSPECTUS
This prospectus is part of a "shelf" registration statement that we filed
with the Securities and Exchange Commission. By using a shelf registration
statement, we may sell up to 4,000,000 shares of our common stock from time to
time in one or more offerings. This prospectus only provides you with a general
description of the common stock we may offer. Each time we sell securities, we
will provide a supplement to this prospectus that contains specific information
about the terms of the securities offered, including the amount, the price and
the terms determined at the time of the offering. The prospectus supplement will
also contain, with respect to the offering, the name of any underwriters,
dealers or agents, the compensation to any underwriters and the net proceeds to
us. The prospectus supplement may also add to, update or change information
contained in this prospectus. Before purchasing any securities, you should
carefully read both this prospectus and any supplement, together with additional
information described under the heading "Where You Can Find More Information."
We will not use this prospectus to offer and sell securities unless it is
accompanied by a prospectus supplement that more fully describes the terms of
the offering.
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements and other information with the SEC. Our
filings with the SEC are available to the public on the Internet at the SEC's
web site at http://www.sec.gov. You may also read and copy any document we file
with the SEC at the SEC's public reference rooms at the following addresses:
450 Fifth Street, N.W. Seven World Trade Center 500 West Madison Street
Room 1024 13th Floor Suite 1400
Washington, DC 20549 New York, New York 10048 Chicago, Illinois 60661
Please call the SEC at 1-800-SEC-0330 for more information about their
public reference rooms and their copy charges. Our SEC filings and other
information concerning us are also available at The National Association of
Securities Dealers, Inc. at 1735 K Street, N.W., Washington, D.C. 20006.
The SEC allows us to "incorporate by reference" the information we file
with the SEC, which means that we can disclose important information to you by
referring you to those documents. Any information that we refer to in this
manner is considered part of this prospectus. Any information that we file with
the SEC after the date of this prospectus will automatically update and
supersede the information contained in this prospectus.
We are incorporating by reference the following documents that we have
previously filed with the SEC:
1. Our Annual Report on Form 10-K for the year ended December 31,
2000, filed with the SEC on March 14, 2001, and Amendment No. 1 on Form
10-K/A to the Annual Report on Form 10-K for the year ended December 31,
2000, filed with the SEC on May 31, 2001,
2. Our Quarterly Report on Form 10-Q for the quarter ended March 31,
2001, filed with the SEC on April 26, 2001,
3. Our Current Report on Form 8-K dated December 29, 2000, filed with
the SEC on January 9, 2001,
4. Our Current Report on Form 8-K dated December 29, 2000, filed with
the SEC on February 23, 2001,
5. Our Current Report on Form 8-K dated April 20, 2001, filed with the
SEC on April 24, 2001,
1
6. The description of our common stock contained in our Registration
Statement on Form 8-A, filed with the SEC on January 12, 1990, including
any amendments or reports filed with the SEC for the purpose of updating
such description, and
7. The description of our Series A Preferred Stock Purchase Rights
contained in our Registration Statement on Form 8-A, filed with the SEC on
October 1, 1998, including any amendments or reports filed with the SEC for
the purpose of updating such description.
We are also incorporating by reference any future filings that we make with
the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act
of 1934 after the date of this prospectus. In no event, however, will any of the
information that we disclose under Item 9 of any Current Report on Form 8-K that
we may from time to time file with the SEC be incorporated by reference into, or
otherwise be included in, this prospectus.
You may obtain a copy of any of the documents referred to above, including
exhibits specifically incorporated by reference in those documents, without
charge by written or oral request directed to Atrix Laboratories, Inc.,
Attention: Corporate Secretary, 2579 Midpoint Drive, Fort Collins, Colorado
80525, telephone number (970) 482-5868 and facsimile number (970) 482-1152. We
maintain a web site at www.atrixlabs.com. The reference to our web site does not
constitute incorporation by reference of the information contained at the site.
ATRIX LABORATORIES, INC.
We were formed in August 1986 as a Delaware corporation. In November 1998,
we acquired ViroTex Corporation through the merger of our wholly owned
subsidiary, Atrix Acquisition Corporation, with and into ViroTex. In June 1999,
we organized our wholly owned registered subsidiary Atrix Laboratories Limited,
which is based in London, England. In February 2000, we organized our wholly
owned registered subsidiary Atrix Laboratories GmbH, which is based in
Frankfurt, Germany, to conduct our European operations. In June 2000, we entered
into a research joint venture, Transmucosal Technologies Ltd. with Elan
International Services, Ltd., a wholly owned subsidiary of Elan Corporation,
plc.
We are an emerging specialty pharmaceutical company focused on advanced
drug delivery. With five patented drug delivery technologies, we are currently
developing a diverse portfolio of products, including proprietary oncology, pain
management and dermatology products. We also partner with large pharmaceutical
and biotechnology companies to apply our proprietary technologies to new
chemical entities or to extend the patent life of existing products.
Unless the context indicates otherwise, the terms "we," "our," "us" and
"Atrix" are used in this prospectus for purposes of convenience and are intended
to refer to Atrix Laboratories, Inc. and its subsidiaries. Our principal
executive offices are located at 2579 Midpoint Drive, Fort Collins, Colorado,
our telephone number is (970) 482-5868, and our facsimile number is (970)
482-1152.
RECENT DEVELOPMENTS
Please see the applicable prospectus supplement and our recent public
filings for recent developments.
RISK FACTORS
You should carefully consider the risks involved before you invest in our
securities. These risks include, but are not limited to, any risks that may be
described in other filings we make with the SEC and in the prospectus
supplements relating to specific offerings of securities.
2
USE OF PROCEEDS
Unless the applicable prospectus supplement states otherwise, the net
proceeds we receive from the sale of the common stock offered by this prospectus
will be used for general corporate purposes, which may include:
- funding the development and growth of our product offerings and business,
- repaying indebtedness that we may incur from time to time,
- financing potential acquisitions of complementary businesses, assets and
technologies that we may consider from time to time, and
- general working capital.
Pending these uses, we may temporarily use the net proceeds to make
short-term investments or reduce short-term borrowings.
DESCRIPTION OF CAPITAL STOCK
The following is a general description of our capital stock. The terms of
our certificate of incorporation and bylaws are more detailed than the general
information provided below. Therefore, you should carefully consider the actual
provisions of these documents.
AUTHORIZED CAPITAL STOCK
As of the date of this prospectus, we are authorized to issue a total of
50,000,000 shares of our capital stock. Each share has a par value of $.001 per
share. Of the authorized amount, 45,000,000 of the shares are common stock and
5,000,000 are shares of preferred stock.
Our Board of Directors may, without further action by our stockholders,
issue a series of preferred stock and fix the rights and preferences of those
shares, including the dividend rights, dividend rates, conversion rights,
exchange rights, voting rights, terms of redemption, redemption price or prices,
liquidation preferences and the number of shares constituting any series or the
designation of such series. The rights of the holders of common stock will be
subject to, and may be adversely affected by, the rights of the holders of any
preferred stock issued by us. Of the 5,000,000 authorized shares of preferred
stock, 200,000 shares have been designated as Series A Preferred Stock, and
20,000 shares have been designated as Series A Convertible Exchangeable
Preferred Stock.
As of May 31, 2001, there were 15,165,839 shares of common stock issued and
outstanding. As of such date, no shares of Series A Preferred were issued or
outstanding, and 12,015 shares of Series A Convertible Exchangeable Preferred
were issued and outstanding.
COMMON STOCK
General. Each share of our common stock has identical rights and
privileges in every respect. Holders of our common stock do not have any
preferences or any preemptive, conversion or exchange rights. All of our
outstanding shares of common stock are fully paid and nonassessable. Our common
stock is listed on the Nasdaq National Market under the symbol "ATRX."
Voting Rights. The holders of our common stock are entitled to vote upon
all matters submitted to a vote of our stockholders and are entitled to one vote
for each share of common stock held. Our certificate of incorporation provides
for cumulative voting for the election of directors on or after the date on
which we become aware that any stockholder has become the beneficial owner,
directly or indirectly, of 30% or more of our outstanding shares of capital
stock entitled to vote generally in the election of directors. Our certificate
of incorporation also provides that our Board of Directors consists of three
classes. The members of each class serve three-year staggered terms with one
class elected at each annual meeting of stockholders.
3
Dividends. Subject to the prior rights and preferences, if any, applicable
to shares of preferred stock or any series of preferred stock, or the
restrictions set forth in any applicable indentures, the holders of common stock
are entitled to participate equally in dividends, payable in cash, stock or
otherwise, as may be declared by our Board of Directors out of any funds legally
available for the payment of dividends.
Liquidation and Distribution. If we voluntarily or involuntarily
liquidate, dissolve or wind-up, the holders of our common stock will be entitled
to receive after distribution in full of the preferential amounts, if any, to be
distributed to the holders of preferred stock or any series of preferred stock,
all of the remaining assets available for distribution ratably in proportion to
the number of shares of common stock held by them.
Transfer Agent and Registrar. The principal transfer agent and registrar
for our common stock is American Stock Transfer & Trust Company.
SERIES A CONVERTIBLE EXCHANGEABLE PREFERRED STOCK
Dividends. Each share of Series A Convertible Exchangeable Preferred Stock
is entitled to receive a mandatory dividend equal to 7% per year of the original
issue price of $1,000 per share. This dividend is payable semi-annually on each
succeeding six-month anniversary of the first issuance of Series A Convertible
Exchangeable Preferred solely by the issuance of additional shares of Series A
Convertible Exchangeable Preferred, at a price per share equal to $1,000, and
not in cash, compounding to commence six months after the original issuance of
Series A Convertible Exchangeable Preferred. Such dividend may include the
issuance of fractional shares of Series A Convertible Exchangeable Preferred. In
addition, when and if our Board of Directors declares a dividend or distribution
payable with respect to our outstanding shares of common stock, the holders of
the Series A Convertible Exchangeable Preferred will be entitled to the amount
of dividends per share in the same form as such common stock dividends that
would be payable on the largest number of whole shares of common stock into
which a holder's aggregate shares of Series A Convertible Exchangeable Preferred
could then be converted.
Seniority; Liquidation Preference. We may not issue any additional classes
or series of preferred stock with a liquidation preference, dividend or other
rights senior to or pari passu to the Series A Convertible Exchangeable
Preferred, except with the prior approval of the holders of at least a majority
of the then-outstanding shares of Series A Convertible Exchangeable Preferred
voting separately as a series. In the event of any liquidation, dissolution or
winding-up of the affairs of Atrix before any payment of cash or distribution of
other property is made to the holders of our common stock or any other class or
series of stock subordinate in liquidation preference to the Series A
Convertible Exchangeable Preferred, the holders of the Series A Convertible
Exchangeable Preferred will be entitled to receive out of the assets of Atrix
legally available for distribution to our stockholders, the original issue price
per share of $1,000 (as appropriately adjusted for any combinations or divisions
or similar recapitalizations affecting the Series A Convertible Exchangeable
Preferred after issuance) and accrued and unpaid dividends thereon.
If, upon any liquidation, dissolution or winding up, our assets available
for distribution to our stockholders are insufficient to pay the holders of the
Series A Convertible Exchangeable Preferred the full amounts to which they are
entitled, the holders of the Series A Convertible Exchangeable Preferred will
share ratably in any distribution of assets in proportion to the respective
amounts which would be payable to them in respect of the shares held by them if
all amounts payable to them in respect of such were paid in full as described in
the preceding paragraph. After the distributions described in the preceding
sentence have been paid, subject to the rights of other series of preferred
stock that may from time to time be issued, our remaining assets available for
distribution to our stockholders will be distributed among the holders of our
common stock pro rata based on the number of shares of common stock held by each
holder.
Conversion. Each share of Series A Convertible Exchangeable Preferred is
convertible, at the option of the holder, at any time after the date that is two
years after the issuance thereof and before the date that is six years after the
first issuance thereof, into such number of fully paid and non-assessable shares
of common stock (or successor securities) as is determined by dividing (x) the
sum of the original issue price of such share of Series A Convertible
Exchangeable Preferred and any accrued but unpaid dividends thereon by (y) the
Series A Conversion Price, which is initially $18.00 and is subject to
adjustment as described below.
4
Notwithstanding the above, in the case of a merger or consolidation of Atrix
with or into another entity as a consequence of which Elan International
Services, Ltd., or EIS, will own 50% or less of the equity of the survivor of
such merger or consolidation than EIS did of Atrix prior thereto or the sale of
our common stock in a firm commitment underwritten public offering, then at our
option, the outstanding shares of the Series A Convertible Exchangeable
Preferred then held by the original holder of the Series A Convertible
Exchangeable Preferred or any of its affiliates will, immediately prior to the
consummation thereof be converted into the same number of shares of common stock
into which such shares are then convertible. No fractional shares of common
stock will be issued upon conversion of the Series A Convertible Exchangeable
Preferred.
If the Series A Convertible Exchangeable Preferred is converted into common
stock pursuant to the preceding sentence, the common stock delivered upon such
conversion will have the benefit of the exchange right identical to that with
respect to the Series A Convertible Exchangeable Preferred so converted, as
described below. In all other circumstances of conversion, such exchange right
will automatically terminate. If EIS's ownership of common stock will exceed
19.9% of the issued and outstanding shares of our common stock on a fully
diluted basis upon conversion of the Series A Convertible Exchangeable
Preferred, EIS will to the extent of such excess be entitled to receive
non-voting securities of Atrix.
Anti-Dilution Protection. If we issue any additional shares of common
stock (excluding shares issued (1) in connection with a stock split or
subdivision, (2) upon conversion of our preferred stock, (3) to employees,
consultants or directors in accordance with plans approved by our Board of
Directors, (4) under our Employee Stock Purchase Plan and (5) upon conversion of
our 7% Convertible Subordinated Notes due 2004) without consideration or for a
consideration per share less than the fair market value (as defined in our
certificate of incorporation) per share on such date, the conversion price in
effect immediately prior to each such issuance will be adjusted on a weighted
average basis, as further described in our certificate of incorporation. The
number of shares into which the Series A Convertible Exchangeable Preferred are
convertible at any time will be proportionately adjusted for any stock splits,
subdivisions or combinations, stock or certain other dividends or distributions
and recapitalizations.
Exchange Right. At any time prior to the sixth anniversary of the first
issuance of the Series A Convertible Exchangeable Preferred, the original
purchaser (or any of its affiliates) of the Series A Convertible Exchangeable
Preferred may exchange all of the shares of Series A Convertible Exchangeable
Preferred but not any accrued and unpaid dividends thereon for 3,612 convertible
preferred shares (as adjusted for any combinations or divisions or similar
recapitalizations) of Transmucosal Technologies Ltd., a Bermuda exempted limited
liability company, held by Atrix convertible into 30.1% of Transmucosal
Technologies' common shares on a fully diluted basis (or, if we have converted
the Transmucosal Technologies convertible preferred shares pursuant to the terms
thereof, the common shares of Transmucosal Technologies issued upon such
conversion). If the original purchaser exercises the exchange right during the
first two years after the issuance of the Series A Convertible Exchangeable
Preferred, the Transmucosal Technologies convertible preferred shares that the
original purchaser will receive from us will be shares of non-voting convertible
preferred stock of Transmucosal Technologies. Upon exercise of the exchange
right, all shares of Series A Convertible Exchangeable Preferred originally
purchased from us, excluding accrued and unpaid dividends thereon, will be
canceled and will no longer be entitled to any rights in Atrix.
Mandatory Redemption. On the date that is six years after the date of the
first issuance of shares of Series A Convertible Exchangeable Preferred, we
will, at our option, either (1) redeem the shares of Series A Convertible
Exchangeable Preferred in cash in an amount equal to the then-applicable
liquidation preference or (2) redeem the shares of Series A Convertible
Exchangeable Preferred in shares of common stock having a then fair market value
equal to the liquidation preference.
Voting Rights; Protective Provisions. Holders of Series A Convertible
Exchangeable Preferred will not be entitled to vote together with the holders of
the common stock, including with respect to the election of our directors, other
than as described in the following sentence. Subject to the rights of any series
of preferred stock that may from time to time come into existence, without first
obtaining the approval (by vote
5
or written consent, as provided by law) of the holders of at least a majority of
the then-outstanding shares of Series A Convertible Exchangeable Preferred,
voting separately as a series, we may not:
- amend our certificate of incorporation to alter or change the voting
powers, preferences, or other special rights or privileges, or
restrictions of the Series A Convertible Exchangeable Preferred so as to
affect adversely such shares,
- change the rights of the holders of the Series A Convertible Exchangeable
Preferred in any other respect, or
- amend our certificate of incorporation so as to create any additional
classes or series of preferred stock with a liquidation preference,
dividend or other rights senior to the Series A Convertible Exchangeable
Preferred.
Status of Converted Stock. If any shares of Series A Convertible
Exchangeable Preferred are converted or exchanged as described above, the shares
so converted or exchanged will be canceled and will not be reissuable by Atrix.
Our certificate of incorporation will be appropriately amended to effect the
corresponding reduction in our authorized capital stock.
RIGHTS AGREEMENT
The following summary highlights certain provisions of a Rights Agreement
between American Stock Transfer & Trust Company, as rights agent, and us, dated
as of September 25, 1998, as amended from time to time, and our certificate of
incorporation. Because the terms of these documents are more detailed than the
general information provided below, you should carefully consider the actual
provisions of these documents.
Rights. On September 25, 1998 our Board of Directors declared a dividend
distribution of one right for each outstanding share of our common stock to
stockholders of record at the close of business on September 25, 1998, and
authorized the issuance of one right with each share of common stock issued
(including shares distributed from treasury) by us thereafter and before the
Distribution Date defined below. Each right entitles the registered holder to
purchase from us one one-hundredth of a share, or a Unit, of Series A Preferred,
at a purchase price of $67.50 per Unit, subject to adjustment.
Initially, the rights attach to all certificates representing shares of
outstanding common stock, and no separate rights certificates will be
distributed. The rights will separate from the common stock, and the
"Distribution Date" will occur upon the earlier of (1) ten business days
following a public announcement that a person or group of affiliated or
associated persons, or an acquiring person, has acquired or otherwise obtained
beneficial ownership of 15% or more of the then outstanding shares of our common
stock, and (2) ten business days (or such later date as may be determined by
action of our Board of Directors prior to such time as any person becomes an
acquiring person) following the commencement of a tender offer or exchange offer
that would result in a person or group beneficially owning 15% or more of the
then outstanding shares of our common stock.
Until the Distribution Date, (1) the rights will be evidenced by common
stock certificates and will be transferred with and only with such common stock
certificates, (2) common stock certificates issued after September 25, 1998
(also including shares distributed from treasury) will contain a notation
incorporating the Rights Agreement by reference, and (3) the surrender for
transfer of any certificates representing outstanding common stock will also
constitute the transfer of the rights associated with the common stock
represented by such certificates.
The rights are not exercisable until the Distribution Date and will expire
at the close of business on September 25, 2008 unless earlier redeemed or
exchanged by us as described below. Under certain circumstances the
exercisability of the rights may be suspended. In no event, however, will the
rights be exercisable prior to the expiration of the period in which the rights
may be redeemed.
6
As soon as practicable after the Distribution Date, rights certificates
will be mailed to holders of record of our common stock as of the close of
business on the Distribution Date and, thereafter, the separate rights
certificates alone will represent the rights.
If a person becomes an acquiring person, each holder of a right will
thereafter have the right to receive, upon exercise, shares of common stock (or,
in certain circumstances, cash, property or other securities of ours) having a
value equal to two times the exercise price of the right. The exercise price is
the purchase price multiplied by the number of Units of Series A Preferred
issuable upon exercise of a right prior to any person's becoming an acquiring
person. Following the occurrence of any person's becoming an acquiring person,
all rights that are, or under certain circumstances specified in the Rights
Agreement were, beneficially owned by any acquiring person will be null and
void.
If at any time following the date that any person becomes an acquiring
person, (1) we are acquired in a merger or other business combination
transaction and we are not the surviving corporation, (2) any person merges with
us and all or part of our common stock is converted or exchanged for securities,
cash or property of Atrix or any other person or (3) 50% or more of our assets
or earning power is sold or transferred, each holder of a right (except rights
which have been voided) will have the right to receive, upon exercise, common
stock of the acquiring person having a value equal to two times the exercise
price of the right.
The purchase price payable, and the number of Units of Series A Preferred
issuable, upon exercise of the rights are subject to adjustment from time to
time to prevent dilution (1) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Series A Preferred, (2) if
holders of the Series A Preferred are granted certain rights or warrants to
subscribe for Series A Preferred or convertible securities at less than the
current market price of the Series A Preferred, or (3) upon the distribution to
the holders of the Series A Preferred of evidences of indebtedness, cash or
assets (excluding regular quarterly cash dividends) or of subscription rights or
warrants (other than those referred to above).
With certain exceptions, no adjustment in the purchase price will be
required until cumulative adjustments amount to at least 1% of the purchase
price. We are not required to issue fractional shares of Series A Preferred
(other than fractions which are integral multiples of one one-hundredth of a
share of Series A Preferred which may be evidenced by depositary receipts). In
lieu thereof, an adjustment in cash may be made based on the current market
price of a share of Series A Preferred on the day of exercise.
At any time until ten business days following the public announcement of a
person becoming an acquiring person, a majority of our Board of Directors
(including, following the date on which there is an acquiring person, the
majority of our independent directors) may redeem the rights in whole, but not
in part, at a price of $.01 per right (subject to adjustment in certain events)
payable, at the election of the majority of our Board of Directors, including a
majority of our independent directors, in cash or shares of our common stock.
Immediately upon the action of a majority of our Board of Directors (including,
following the date on which there is an acquiring person, a majority of our
independent directors) ordering the redemption of the rights, the rights will
terminate and the only right of the holders of rights will be to receive the
redemption price.
At any time after there is an acquiring person, by action of a majority of
our Board of Directors, including a majority of our independent directors, we
may exchange all or part of the then outstanding and exercisable rights (other
than rights that have become null and void) for shares of our common stock
pursuant to a one-for-one exchange ratio, as may be adjusted.
Until a right is exercised, the holder thereof, as such, will have no
rights as a stockholder of Atrix, including, without limitation, the right to
vote or to receive dividends. While the distribution of the rights will not be
taxable to our stockholders or to us, stockholders may, depending upon the
circumstances, recognize taxable income if the rights become exercisable for
Units of Series A Preferred or other consideration.
Any of the provisions of the Rights Agreement may be amended without the
approval of the holders of our common stock at any time prior to the
Distribution Date, including an amendment to lower certain thresholds described
above to not less than the greater of (1) the sum of .001% and the largest
percentage of
7
our outstanding shares of common stock then known to us to be beneficially owned
by any person or group of affiliated or associated persons, and (2) 10%. After
the Distribution Date, the provisions of the Rights Agreement may be amended to
cure any ambiguity, defect or inconsistency, to make changes which do not
adversely affect the interests of holders of rights (excluding the interests of
any acquiring person), or to shorten or lengthen any time period under the
Rights Agreement; provided, however, that no amendment to adjust (1) the time
period governing redemption shall be made at such time as the rights are not
redeemable or (2) any other time period unless such lengthening is for the
purpose of protecting, enhancing or clarifying the rights of and/or benefiting
the holders of rights. In addition, after a person becomes an acquiring person,
no amendment or supplement may be made without the approval of a majority of our
Board of Directors, including a majority of our independent directors.
Series A Preferred. The Units of Series A Preferred that may be acquired
upon exercise of the rights will be non-redeemable and are subordinate to our
shares of Series A Convertible Exchangeable Preferred and any other shares of
preferred stock that may be issued by us in the future.
Each Unit of Series A Preferred will have a minimum preferential quarterly
dividend of $.01 per Unit or any higher per share dividend declared on our
common stock. In the event of liquidation, the holder of a Unit of Series A
Preferred will receive a preferred liquidation payment equal to the greater of
$.01 per Unit and the per share amount paid in respect of a share of our common
stock.
Each Unit of Series A Preferred will have one vote, voting together with
our common stock. In the event of any merger, consolidation or other transaction
in which shares of our common stock are exchanged, each Unit of Series A
Preferred will be entitled to receive the per share amount paid in respect of
each share of our common stock.
The rights of holders of the Series A Preferred with respect to dividends,
liquidation and voting, and in the event of mergers and consolidations, are
protected by customary anti-dilution provisions.
Because of the nature of the Series A Preferred's dividend, liquidation and
voting rights, the economic value of one Unit of Series A Preferred that may be
acquired upon the exercise of each right should approximate the economic value
of one share of our common stock.
Potential Anti-Takeover Effect. The rights may have anti-takeover effects.
The rights will cause substantial dilution to a person or group that attempts to
acquire us on terms not approved by our Board of Directors unless the offer is
conditioned on that person or group acquiring a substantial number of rights.
The rights are intended to encourage persons who may seek to acquire control of
us to initiate an acquisition through negotiations with our Board of Directors.
However, the effect of the rights may be to discourage a third party from making
a partial tender offer or otherwise attempting to obtain a substantial equity
position in our equity securities or seeking to obtain control of us, even when
some of our stockholders may find the transaction attractive. To the extent that
any potential acquirors are deterred by the rights, the rights may have the
effect of keeping our existing management in office.
PREEMPTIVE RIGHTS
No holder of any shares of our stock has any preemptive or preferential
right to acquire or subscribe for any unissued shares of any class of stock or
any authorized securities convertible into or carrying any right, option or
warrant to subscribe for or acquire shares of any class of stock.
PROVISIONS WHICH MAY DELAY A CHANGE OF CONTROL OF ATRIX
Our certificate of incorporation contains certain provisions that may delay
or discourage a change of control of Atrix, including provisions:
- establishing a classified board of directors,
- permitting cumulative voting in certain circumstances,
8
- allowing our Board of Directors to issue and determine the rights, powers
and preferences of preferred stock without any vote or further action by
our stockholders,
- establishing a process to enlarge and fill vacancies on our Board of
Directors, and
- deterring certain self-dealing transactions.
Certain of these provisions are designed to increase the likelihood that
our Board of Directors, if presented with a proposal for a business combination
or other major transaction from a third party that has acquired a block of our
stock, will have sufficient time to review the proposal and possible
alternatives to the proposal and to act in what it believes to be in the best
interests of our stockholders. These provisions may discourage certain types of
non-negotiated transactions which would result in a change of control of us and
are expected to encourage persons seeking to acquire control of us to consult
first with our Board of Directors to negotiate the terms of any proposed
business combination or offer.
PLAN OF DISTRIBUTION
We may offer and sell shares of our common stock described in this
prospectus directly to purchasers or to or through underwriters, dealers or
designated agents. We will name any underwriter or agent involved in the offer
and sale of the shares of common stock in the applicable supplement to this
prospectus. We may sell the common stock from time to time in one or more
transactions:
- at a fixed price or prices, which may be changed,
- at market prices prevailing at the time of sale,
- at prices related to prevailing market prices, or
- at negotiated prices.
We also may authorize underwriters acting as our agents to offer and sell
the securities upon terms and conditions that will be described in the
applicable prospectus supplement.
If we use underwriters to assist us in the offer and sale of our common
stock, the underwriters may act as our agents, and we may pay the underwriters
in the form of discounts, concessions or commissions. These underwriters may
sell the securities to or through dealers, and the dealers may receive
compensation in the form of discounts, concessions or commissions from the
underwriters and/or commissions from the purchasers for whom they may act as
agents. Any persons whom we use to assist us in the offer and sale of our common
stock may be deemed to be underwriters, and any discounts or commissions that
they receive from us or from their resale of the common stock may be deemed to
be underwriting discounts and commissions under the securities laws.
Each time we use this prospectus to sell shares of our common stock, we
will also provide a prospectus supplement that contains the specific terms about
those shares and about the offering. We will identify in the applicable
prospectus supplement any underwriter or agent that we use, as well as any
compensation that these underwriters or agents will receive from us or
otherwise. The prospectus supplement will also include information regarding the
terms or our relationship with any underwriters or agents, their obligations
with respect to that offering, and information regarding the proceeds that we
will receive and our expected use of those proceeds.
We may grant to underwriters that we use options to purchase additional
shares of common stock to cover over-allotments, if any, at the public offering
price, with additional underwriting commissions or discounts, as may be set
forth in a related prospectus supplement. The terms of any over-allotment option
will be set forth in the applicable prospectus supplement.
If we use dealers to assist us in the offer and sale of the shares of our
common stock, we will likely sell the securities to those dealers as principals.
The dealers may then resell the securities to the public at varying
9
prices to be determined by the dealers at the time of resale. We will include
the names of the dealers and the terms of any transactions involving the dealers
in the applicable prospectus supplement.
We may authorize agents or underwriters to solicit offers by some types of
institutions to purchase shares of our common stock from us at the public
offering price set forth in the prospectus supplement pursuant to delayed
delivery contracts. These contracts will provide for payment and delivery on a
specified date in the future. The conditions to these contracts and the
commissions payable for solicitation of these contracts will be described in the
applicable prospectus supplement.
We may enter into agreements with underwriters, dealers and agents who
agree to assist us in the offer and sale of shares of our common stock. Under
these agreements, we may agree to indemnify the underwriters and their
controlling persons, dealers and agents against certain liabilities, including
liabilities under the securities laws. We may also agree to contribution
relating to any payments that the underwriters and their controlling persons,
dealers or agents may be required to make under the securities or other laws.
Unless otherwise indicated in the applicable prospectus supplement, any agent
will be acting on a best efforts basis for the period of its appointment.
Certain persons participating in an offering of our common stock may engage
in transactions that stabilize, maintain or otherwise affect the price of the
common stock, including over-allotment, stabilizing and short-covering
transactions in such securities, and the imposition of a penalty bid, in
connection with the offering.
Any underwriters, dealers or agents that assist us in the offer and sale of
our common stock may engage in transactions with or perform services for us in
the ordinary course of business.
LEGAL MATTERS
The validity of the common stock offered by this prospectus will be passed
upon for us by Morrison & Foerster LLP. As of the date of this prospectus,
Morrison & Foerster LLP held options to acquire 5,000 shares of our common
stock. Any underwriters will be advised about other issues relating to any
offering by their own legal counsel named in the applicable prospectus
supplement.
EXPERTS
The consolidated financial statements of Atrix Laboratories, Inc.
incorporated in this prospectus by reference from our Annual Report on Form 10-K
for the year ended December 31, 2000, have been audited by Deloitte & Touche
LLP, independent auditors, as stated in their reports, which are incorporated
herein by reference, and have been so incorporated in reliance upon the reports
of such firm given upon their authority as experts in accounting and auditing.
The financial statements of Transmucosal Technologies Ltd. incorporated in
this prospectus by reference from our Amendment No. 1 on Form 10-K/A to our
Annual Report on Form 10-K for the year ended December 31, 2000, have been
audited by KPMG, independent auditors, as stated in their report, which is
incorporated herein by reference, and have been so incorporated in reliance upon
the report of such firm given upon their authority as experts in accounting and
auditing.
10
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
565,000 SHARES
[ATRIX LABORATORIES, INC. LOGO]
ATRIX LABORATORIES, INC.
COMMON STOCK
------------------------------
PROSPECTUS SUPPLEMENT
DECEMBER 7, 2001
------------------------------
BANC OF AMERICA SECURITIES LLC
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------