As Filed with the Securities and Exchange Commission on July 11, 2001
Registration No.____________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
ACCESS PHARMACEUTICALS, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 3841
- --------------------------------- ----------------------------
(State or Other Jurisdiction (Primary Standard Industrial
of Incorporation or Organization) Classification Code Number)
83-0221517
-------------------
(I.R.S. Employer
Identification No.)
2600 Stemmons Freeway, Suite 176
Dallas, Texas 75207 (214) 905-5100
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
Kerry P. Gray
President and Chief Executive Officer
Access Pharmaceuticals, Inc.
2600 Stemmons Freeway, Suite 176
Dallas, Texas 75207
(214) 905-5100
------------------------------------------------------------
(Name, address, including zip code, and
telephone number, including area code, of agent for service)
with copies to:
John J. Concannon III
Bingham Dana LLP
150 Federal Street
Boston, MA 02110
(617) 951-8000
Approximate date of commencement of proposed sale to the public: As
soon as practicable after this Registration Statement is declared effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. / /
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933, other than securities offered only in connection with dividend
or interest reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, 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, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
CALCULATION OF REGISTRATION FEE
Title of Securities Proposed Maximum
to be Registered Amount to be Registered Offering Price Per Share(1)
- ------------------- ----------------------- ---------------------------
Common Stock $.01 467,857 share (2) $3.46
par value per share
Proposed Maximum Aggregate
Offering Price (1) Amount of Registration Fee
- -------------------------- --------------------------
$ 1,618,785.22 $ 404.20
(1) Estimated solely for the purpose of determining the registration fee.
Calculated in accordance with Rule 457(c) under the Securities Act of
1933 based on the average of the high and low prices as reported by the
American Stock Exchange on July 9, 2000.
(2) Includes 135,000 shares issuable to certain selling stockholders upon
exercise of warrants for the purchase of shares of the Registrant's
Common Stock (see "Selling Stockholders").
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective, on such date as the Commission, acting
pursuant to Section 8(a), may determine.
PROSPECTUS
Access Pharmaceuticals, Inc.
Information contained in this prospectus is subject to completion or
amendment. A registration statement relating to these securities has been
filed with the Securities and Exchange Commission. These securities may
not be sold until the registration statement becomes effective. This
prospectus is not an offer to sell and is not a solicitation of an offer to buy
these securities in any state in which an offer, solicitation or sale is not
permitted.
Subject to completion, July 11, 2001.
467,857 Shares of
Common Stock, $.01 par value
This prospectus relates to the sale of up to 467,857 shares of our common
stock, or the Shares, $.01 par value per share, by certain stockholders of
ours, the Selling Stockholders, for their respective accounts.
We will not receive any proceeds from the sale of the Shares by the
Selling Stockholders. None of the Shares have been registered prior to the
filing of the Registration Statement of which this Prospectus is a part.
On July 10, 2001, the last sale price of our Common Stock was $3.51 per
share, as reported by the American Stock Exchange, or AMEX, under the
symbol AKC.
Investing in the common stock involves risks. For a discussion of certain
factors you should consider, see "Risk Factors" beginning 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.
The date of this Prospectus is ________, 2001
Table of Contents
Page
------
Risk Factors 2
Forward Looking Statements 7
Access Pharmaceuticals, Inc. 8
Recent Developments 8
Use of Proceeds 8
Selling Stockholders 8
Plan of Distribution 10
Legal Matters 10
Experts 11
Where You Can Get More Information 11
Certain Information We Are Incorporating By Reference 11
1
RISK FACTORS
This offering involves a high degree of risk. You should carefully
consider the risks described below and the other information in this
prospectus before purchasing our common stock.
We have experienced a history of losses and we expect to incur future
losses.
We have recorded minimal revenue to date and we have incurred a
cumulative operating loss of approximately $33.1 million through March
31, 2001. Our losses have resulted principally from costs incurred in
research and development activities related to our efforts to develop
clinical candidates and from the associated administrative costs. We expect
to incur significant additional operating losses over the next several years.
We also expect cumulative losses to increase due to expanded research and
development efforts and preclinical and clinical trials.
We do not have significant operating revenue and we may never attain
profitability.
Our ability to achieve significant revenue or profitability depends upon our
ability to successfully complete the development of drug candidates, to
develop and obtain patent protection and regulatory approvals for our drug
candidates and to manufacture and commercialize the resulting drugs. We
have not received significant royalties for sales of our amlexanox products
to date and we may not receive significant revenues or profits from the
sale of these products in the future. Furthermore, we may not be able to
ever successfully identify, develop, commercialize, patent, manufacture,
market and obtain required regulatory approvals for any additional
products. Moreover, even if we do identify, develop, commercialize,
patent, manufacture, market and obtain required regulatory approvals for
additional products, we may not receive revenues or royalties from
commercial sales of these products for a significant number of years, if
at all. Therefore, our proposed operations are subject to all the risks
inherent in the establishment of a new business enterprise. In the next
few years, our revenues may be limited to any amounts that we receive
under strategic partnerships and research or drug development
collaborations that we may establish and we cannot assure you that we
will be able to establish any such relationships on terms acceptable to us.
We cannot assure you that we will achieve or maintain profitability in the
future and our failure to receive significant revenues or to achieve
profitable operations would impair our ability to sustain operations.
We may not successfully commercialize our drug candidates.
Our drug candidates are subject to the risks of failure inherent in the
development of pharmaceutical products based on new technologies. These
risks include the possibilities that some or all of our drug candidates will
be found to be unsafe or ineffective or otherwise fail to meet applicable
regulatory standards or receive necessary regulatory clearances; that these
drug candidates, if safe and effective will be difficult to develop into
commercially viable drugs or to manufacture on a large scale or will be
uneconomical to market; that proprietary rights of third parties will
preclude us from marketing such drugs; or that third parties will market
superior or equivalent drugs. Our failure to develop safe, commercially
viable drugs would have a material adverse effect on our business,
operating results and financial condition.
The success of our research and development activities, upon which we
primarily focus, is uncertain.
Our primary focus is on our research and development activities and the
commercialization of compounds covered by proprietary biopharmaceutical
patents. Research and development activities, by their nature, preclude
definitive statements as to the time required and costs involved in reaching
certain objectives. Actual research and development costs, therefore, could
exceed budgeted amounts and estimated time frames may require
extension. Cost overruns, unanticipated regulatory delays or demands,
unexpected adverse side effects or insufficient therapeutic efficacy will
prevent or substantially slow our research and development effort and our
business could ultimately suffer. We anticipate that we will remain
principally engaged in research and development activities for an
indeterminate, but substantial, period of time.
2
We may be unable to obtain necessary additional capital to fund operations
in the future.
We require substantial capital for our development programs and operating
expenses, to pursue regulatory clearances and to prosecute and defend our
intellectual property rights. Although we believe that our existing capital
resources, interest income and revenue from possible licensing agreements
and collaborative agreements will be sufficient to fund our currently
expected operating expenses and capital requirements for approximately
three years, we may need to raise substantial additional capital during that
period because our actual cash requirements may vary materially from
those now planned and will depend upon numerous factors, including :
* the results of our research and development programs,
* the timing and results of preclinical and clinical trials,
* our ability to maintain existing and establish new collaborative
agreements with other companies to provide funding to us,
* technological advances, and
* activities of competitors and other factors.
If we do raise additional funds by issuing equity securities, further dilution
to existing stockholders may result and future investors may be granted
rights superior to those of existing stockholders. If adequate funds are not
available to us through additional equity offerings, we may be required to
delay, reduce the scope of or eliminate one or more of our research and
development programs or to obtain funds by entering into arrangements
with collaborative partners or others that require us to issue additional
equity securities or to relinquish rights to certain technologies or drug
candidates that we would not otherwise issue or relinquish in order to
continue independent operations.
The success of our business may depend, in part, upon relationships with
other companies.
Our strategy for the research, development and commercialization of our
potential pharmaceutical products may require us to enter into various
arrangements with corporate and academic collaborators, licensors,
licensees and others, in addition to our existing relationships with other
parties. Specifically, if we successfully develop any commercially
marketable pharmaceutical products, we may seek to enter joint venture,
sublicense or other marketing arrangements with parties that have an
established marketing capability or we may choose to pursue the
commercialization of such products on our own. We may, however, be
unable to establish additional collaborative arrangements or license
agreements as we may deem necessary to develop and commercialize our
potential pharmaceutical products on acceptable terms. Furthermore, if we
maintain and establish arrangements or relationships with third parties, our
business may depend upon the successful performance by these third
parties of their responsibilities under those arrangements and relationships.
We may depend upon contract manufacturers to assist us with the
commercialization of any new products that we may develop.
We have no experience in the manufacture of pharmaceutical products in
clinical quantities or for commercial purposes and we may not be able to
manufacture any new pharmaceutical products that we may develop, so we
intend to establish arrangements with contract manufacturers to supply
sufficient quantities of products to conduct clinical trials and for the
manufacture, packaging, labeling and distribution of finished
pharmaceutical products if any of our potential products are approved for
commercialization. If we are unable to contract for a sufficient supply of
our potential pharmaceutical products on acceptable terms, our preclinical
and human clinical testing schedule may be delayed, resulting in the delay
of our submission of products for regulatory approval and initiation of
new development programs, which could cause our business to suffer.
Delays or difficulties in establishing relationships with manufacturers to
produce, package, label and distribute our finished pharmaceutical or other
medical products, if any, market introduction and subsequent sales of such
products could cause our business to suffer. Moreover, contract
manufacturers that we may use must adhere to current Good Manufacturing
3
Practices, as required by the FDA. In this regard, the FDA
will not issue a pre-market approval or product and establishment licenses,
where applicable, to a manufacturing facility for the products until after
the manufacturing facility passes a pre-approval plant inspection. If we are
unable to obtain or retain third party manufacturing on commercially
acceptable terms, we may not be able to commercialize our products as
planned. Our potential dependence upon third parties for the manufacture
of our products may adversely affect our profit margins and our ability to
develop and deliver such products on a timely and competitive basis.
We are subject to extensive governmental regulation which increases our
cost of doing business and may affect our ability to commercialize any
new products that we may develop.
The FDA and comparable agencies in foreign countries impose substantial
requirements upon the introduction of pharmaceutical products through
lengthy and detailed laboratory, preclinical and clinical testing procedures
and other costly and time-consuming procedures to establish their safety
and efficacy. All of our drug candidates will require governmental
approvals for commercialization, none of which have been obtained.
Preclinical and clinical trials and manufacturing of our drug candidates
will be subject to the rigorous testing and approval processes of the FDA
and corresponding foreign regulatory authorities. Satisfaction of these
requirements typically takes a significant number of years and can vary
substantially based upon the type, complexity and novelty of the product.
We cannot assure you when we, independently or with our collaborative
partners, might submit a New Drug Application, or NDA, for FDA or
other regulatory review. Government regulation also affects the
manufacturing and marketing of pharmaceutical products.
Government regulations may delay marketing of our potential drugs for
a considerable or indefinite period of time, impose costly procedural
requirements upon our activities and furnish a competitive advantage to
larger companies or companies more experienced in regulatory affairs.
Delays in obtaining governmental regulatory approval could adversely
affect our marketing as well as our ability to generate significant revenues
from commercial sales. We cannot assure you that the FDA or other
regulatory approvals for any drug candidates will be granted on a timely
basis or at all. Moreover, if regulatory approval of a drug candidate is
granted, such approval may impose limitations on the indicated use for
which such drug may be marketed. Even if we obtain initial regulatory
approvals for our drug candidates, we, or our drugs and our
manufacturing facilities would be subject to continual review and periodic
inspection, and later discovery of previously unknown problems with a
drug, manufacturer or facility may result in restrictions on the marketing
or manufacture of such drug, including withdrawal of the drug from the
market. The FDA and other regulatory authorities stringently apply
regulatory standards and failure to comply with regulatory standards can,
among other things, result in fines, denial or withdrawal of regulatory
approvals, product recalls or seizures, operating restrictions and criminal
prosecution.
The uncertainty associated with preclinical and clinical testing may affect
our ability to successfully commercialize new products.
Before we can obtain regulatory approvals for the commercial sale of any
of our potential drugs, the drug candidates will be subject to extensive
preclinical and clinical trials to demonstrate their safety and efficacy in
humans. We cannot assure you that preclinical or clinical trials of any
future drug candidates will demonstrate the safety and efficacy of such
drug candidates at all or to the extent necessary to obtain regulatory
approvals. In this regard, for example, adverse side effects can occur
during the clinical testing of a new drug on humans or animals which may
delay ultimate FDA approval or even lead us to terminate our efforts to
develop the drug for commercial use. Companies in the biotechnology
industry have suffered significant setbacks in advanced clinical trials, even
after demonstrating promising results in earlier trials. The failure to
adequately demonstrate the safety and efficacy of a drug candidate under
development could delay or prevent regulatory approval of the drug
candidate and could cause our business, operating results and financial
condition to suffer.
4
We may incur substantial product liability expenses due to the use or
misuse of our products for which we may be unable to obtain complete
insurance coverage.
Our business exposes us to potential liability risks that are inherent in the
testing, manufacturing and marketing of pharmaceutical products. These
risks will expand with respect to our drug candidates, if any, that receive
regulatory approval for commercial sale and we may face substantial
liability for damages in the event of adverse side effects or product defects
identified with any of our products that are used in clinical tests or
marketed to the public. We have product liability insurance for drug
candidates that are undergoing human clinical trials. Product liability
insurance for the biotechnology industry is generally expensive, however,
if available at all, and we cannot assure you that in the future we will be
able to obtain insurance coverage at acceptable costs or in a sufficient
amount, if at all. We may be unable to satisfy any claims for which we
may be held liable as a result of the use or misuse of products which we
have developed, manufactured or sold and any such product liability claim
could adversely affect our business, operating results or financial
condition.
We may incur significant liabilities if we fail to comply with stringent
environmental regulations or if we did not comply with these regulations
in the past.
Our research and development processes involve the controlled use of
hazardous materials. We are subject to a variety of federal, state and local
governmental laws and regulations related to the use, manufacture,
storage, handling and disposal of such material and certain waste products.
Although we believe that our activities and our safety procedures for
storing, using, handling and disposing of such materials comply with the
standards prescribed by such laws and regulations, the risk of accidental
contamination or injury from these materials cannot be completely
eliminated. In the event of such accident, we could be held liable for any
damages that result and any such liability could exceed our resources.
Intense competition may limit our ability to successfully develop and
market commercial products.
The biotechnology and pharmaceutical industries are intensely competitive
and subject to rapid and significant technological change. Our competitors
in the United States and elsewhere are numerous and include, among
others, major multinational pharmaceutical and chemical companies,
specialized biotechnology firms and universities and other research
institutions. Many of these competitors have and employ greater financial
and other resources, including larger research and development staffs and
more effective marketing and manufacturing organizations, than us or our
collaborative partners. We cannot assure you that our competitors will not
succeed in developing technologies and drugs that are more effective or
less costly than any that we are developing or which would render our
technology and future products obsolete and noncompetitive.
In addition, some of our competitors have greater experience than we do
in conducting preclinical and clinical trials and obtaining FDA and other
regulatory approvals. Accordingly, our competitors may succeed in
obtaining FDA or other regulatory approvals for drug candidates more
rapidly than we do. Companies that complete clinical trials, obtain
required regulatory agency approvals and commence commercial sale of
their drugs before their competitors may achieve a significant competitive
advantage. We cannot assure you that drugs resulting from our research
and development efforts or from our joint efforts with collaborative
partners will be able to compete successfully with our competitors'
existing products or products under development.
Our ability to successfully develop and commercialize our drug candidates
will substantially depend upon the availability of reimbursement funds for
the costs of the resulting drugs and related treatments.
The successful commercialization of, and the interest of potential
collaborative partners to invest in, the development of our drug candidates
will depend substantially upon reimbursement of the costs of the resulting
drugs and related treatments at acceptable levels from government
authorities, private health insurers and other organizations, including
health maintenance organizations, or HMOs. We cannot assure
5
you that reimbursement in the United States or elsewhere will be available for
any drugs that we may develop or, if available, will not be decreased in the
future, or that reimbursement amounts will not reduce the demand for, or
the price of, our drugs, thereby adversely affecting our business. If
reimbursement is not available or is available only to limited levels, we
cannot assure you that we will be able to obtain collaborative partners to
commercialize our drugs, or be able to obtain a sufficient financial return
on our own manufacture and commercialization of any future drugs.
The market may not accept any pharmaceutical products that we
successfully develop.
The drugs that we are attempting to develop may compete with a number
of well-established drugs manufactured and marketed by major
pharmaceutical companies. The degree of market acceptance of any drugs
developed by us will depend on a number of factors, including the
establishment and demonstration of the clinical efficacy and safety of our
drug candidates, the potential advantage of our drug candidates over
existing therapies and the reimbursement policies of government and third-
party payers. Physicians, patients or the medical community in general
may not accept or use any drugs that we may develop independently or
with our collaborative partners and if they do not, our business could
suffer.
Trends toward managed health care and downward price pressures on
medical products and services may limit our ability to profitably sell any
drugs that we may develop.
Lower prices for pharmaceutical products may result from:
* third-party payers' increasing challenges to the prices charged for
medical products and services;
* the trend toward managed health care in the United States and the
concurrent growth of HMOs and similar organizations that can control or
significantly influence the purchase of healthcare services and products;
and
* legislative proposals to reform healthcare or reduce government
insurance programs.
The cost containment measures that healthcare providers are instituting,
including practice protocols and guidelines and clinical pathways, and the
effect of any health care reform, could limit our ability to profitably sell
any drugs that we may successfully develop. Moreover, any future
legislation or regulation, if any, relating to the healthcare industry or
third-party coverage and reimbursement, may cause our business to suffer.
We may not be successful in protecting our intellectual property and
proprietary rights.
Our success depends, in part, on our ability to obtain U.S. and foreign
patent protection for our drug candidates and processes, preserve our trade
secrets and operate our business without infringing the proprietary rights
of third parties. Although Access is either the owner or licensee of
technology to 13 U.S. patents and to 3 U.S. patent applications now
pending, and 5 European and 7 European patent applications we cannot
assure you that any additional patents will issue from any of the patent
applications owned by, or licensed to, us. Furthermore, we cannot assure
you that any rights we may have under issued patents will provide us with
significant protection against competitive products or otherwise be
commercially viable. Legal standards relating to the validity of patents
covering pharmaceutical and biotechnological inventions and the scope of
claims made under such patents are still developing and there is no
consistent policy regarding the breadth of claims allowed in biotechnology
patents. The patent position of a biotechnology firm is highly uncertain
and involves complex legal and factual questions. We cannot assure you
that any existing or future patents issued to, or licensed by, us will not
subsequently be challenged, infringed upon, invalidated or circumvented
by others. In addition, patents may have been granted to third parties or
may be granted covering products or processes that are necessary or
useful to the development of our drug candidates. If our drug candidates
or processes are found to infringe upon the patents or otherwise
impermissibly utilize the intellectual property of others, our development,
manufacture and sale of such drug candidates could be severely restricted
or prohibited. In such event, we may be required to obtain licenses from
third parties to utilize the patents or proprietary rights of others. We
cannot assure you that
6
we will be able to obtain such licenses on
acceptable terms, if at all. If we become involved in litigation regarding
our intellectual property rights or the intellectual property rights of others,
the potential cost of such litigation, regardless of the strength of our legal
position, and the potential damages that we could be required to pay could
be substantial.
Our business could suffer if we lose the services of, or fail to attract, key
personnel.
We are highly dependent upon the efforts of our senior management and
scientific team, including our President and Chief Executive Officer. The
loss of the services of one or more of these individuals could seriously
impede our success. We do not maintain any "key-man" insurance
policies on any of our key employees and we do not intend to obtain such
insurance. In addition, due to the specialized scientific nature of our
business, we are highly dependent upon our ability to attract and retain
qualified scientific and technical personnel. In view of the stage of our
development and our research and development programs, we have
restricted our hiring to research scientists and a small administrative staff
and we have made no investment in manufacturing, production,
marketing, product sales or regulatory compliance resources. If we
develop pharmaceutical products that we will commercialize ourselves,
however, we will need to hire additional personnel skilled in the clinical
testing and regulatory compliance process and in marketing and product
sales. There is intense competition among major pharmaceutical and
chemical companies, specialized biotechnology firms and universities and
other research institutions for qualified personnel in the areas of our
activities, however, and we may be unsuccessful in attracting and
retaining these personnel.
Ownership of our shares is concentrated, to some extent, in the hands of
a few individual investors.
Larry N. Feinberg (Oracle Partners LP, Oracle Institutional Partners LP
and Oracle Investment Management Inc.), Richard B. Stone and Howard
P. Milstein currently beneficially own approximately 8.1%, 6.2% and
5.8% respectively, of our issued and outstanding common stock.
Provisions of our charter documents could discourage an acquisition of
our company that would benefit our stockholders.
Provisions of our Certificate of Incorporation and By-laws may make it
more difficult for a third party to acquire control of our company, even
if a change of in control would benefit our stockholders. In particular,
shares of our preferred stock may be issued in the future without further
stockholder approval and upon such terms and conditions, and having such
rights, privileges and preferences, as our Board of Directors may
determine, including, for example, rights to convert into our common
stock. The rights of the holders of our common stock will be subject to,
and may be adversely affected by, the rights of the holders of any of our
preferred stock that may be issued in the future. The issuance of our
preferred stock, while providing desirable flexibility in connection with
possible acquisitions and other corporate purposes, could have the effect
of making it more difficult for a third party to acquire control of us. This
could limit the price that certain investors might be willing to pay in the
future for shares of our common stock and discourage these investors
from acquiring a majority of our common stock.
Substantial sales of our common stock could lower our stock price.
The market price for our common stock could drop as a result of sales of
a large number of our presently outstanding shares. Currently, most of the
outstanding shares of our common stock are unrestricted and freely
tradable or tradable under Rule 144 or pursuant to a resale registration
statement.
FORWARD LOOKING STATEMENTS
This prospectus contains forward-looking statements that involve risks and
uncertainties. These statements relate to future events or our future
financial performance. In some cases, you can identify forward-looking
statements by terminology such as "may," "will," "should," "expects,"
"plans," "could", "anticipates," "believes," "estimates," "predicts,"
"potential" or "continue" or the negative of such terms or
7
other comparable terminology. These statements are only predictions and
involve known and unknown risks, uncertainties and other factors,
including the risks outlined under "Risk Factors," that may cause our or
our industry's actual results, levels of activity, performance or
achievements to be materially different from any future results, levels or
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. 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.
ACCESS PHARMACEUTICALS, INC.
Access Pharmaceuticals is a Delaware corporation in the development
stage. We are an emerging pharmaceutical company focused on
developing both novel low development risk product candidates and
technologies with longer-term major product opportunities. We have
proprietary patents or rights to five technology platforms: synthetic
polymers, bioerodible hydrogels, Residerm TM, carbohydrate targeting
technology, and agents for the prevention and treatment of viral disease,
including HIV. In addition, our partner, GlaxoSmithKline (formerly
Block Drug Company), is marketing in the United States Aphthasol R, a
drug jointly developed, the first U.S. FDA-approved product for the
treatment of canker sores. We are developing new formulations and
delivery forms to evaluate this product in additional clinical indications.
We have licensed the rights to amlexanox for the treatment of canker
sores from GlaxoSmithKline for certain countries excluding the U.S. and
the worldwide rights for certain additional indications including mucositis
and oral diseases in certain territories.
Access was founded in 1974 as Chemex Corporation, a Wyoming
corporation, and in 1983 changed its name to Chemex Pharmaceuticals,
Inc. Chemex changed its state of incorporation from Wyoming to
Delaware on June 30, 1989. In connection with the merger of Access
Pharmaceuticals, Inc., a Texas corporation, with and into Chemex on
January 25, 1996, we changed our name to Access Pharmaceuticals, Inc.
Our principal executive office is at 2600 Stemmons Freeway, Suite 176,
Dallas, Texas 75207; our telephone number is (214) 905-5100.
USE OF PROCEEDS
We will not receive any proceeds from the sale of shares by the Selling
Stockholders.
SELLING STOCKHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of our common stock as of July 9, 2001 and as adjusted to
reflect the sale of our common stock offered hereby, by each of the
Selling Stockholders.
Except as indicated below, none of the Selling Stockholders has had any
position, office or other material relationship within the past three years
with us or our affiliates. In addition, except as provided herein, we
believe, based on information provided to us by the Selling Stockholders,
that each Selling Stockholder has sole voting and investment power with
respect to the shares beneficially owned. For more information regarding
the shares offered, see "Plan of Distribution" below.
8
Shares Shares to be
Beneficially Beneficially
Owned Prior Shares Owned After
Name of Selling Stockholder to Offering Offered Offering
- ------------------------------- ------------- ----------- ------------
Adam Atherton 162 (2) 162 (2) -
A Paul Boni 406 (2) 406 (2) -
Bridge Technology Group LLC 15,000 (2) 15,000 (2) -
Erik Colberg 4,562 (2) 4,562 (2) -
John J. Concannon, III (5) 14,800 10,000 4,800
Conifer Securities, LLC 1,250 (2) 1,250 (2) -
Diversified Financial
Management Corp 1,690 (2) 1,690 (2) -
Wole Fayemi 810 (2) 810 (2) -
Kerry P. Gray (3) 611,457 (1) 100,000 511,457 (1)
Mathew Holsher 810 (2) 810 (2) -
Stephen B. Howell (4) 126,500 (1) 75,000 (2) 51,500 (1)
JB Capital Management 744 (2) 744 (2) -
Atul Khandwala 7,500 (2) 7,500 (2) -
Jeffrey Lehman 6,454 (2) 6,454 (2) -
Oded Levy 1,488 (2) 1,488 (2) -
Mipharm SpA 142,857 142,857 -
Harvey Morgan 2,956 (2) 2,956 (2) -
David P. Nowotnik (3) 122,917 (1) 50,000 72,917 (1)
Mark Scarmato 810 (2) 810 (2) -
Gail Seneca 892 (2) 892 (2) -
Patricia Stapleton 2,028 (2) 2,028 (2) -
Phil Stapleton 2,028 (2) 2,028 (2) -
SZRL Investments 2,434 (2) 2,434 (2) -
Stephen B. Thompson (3) 71,606 (1) 30,000 41,606 (1)
Greg Tuerk 810 (2) 810 (2) -
Will K. Weinstein
Revocable Trust 6,760 (2) 6,760 (2) -
Barbara Yamanaka 406 (2) 406 (2) -
(1) These share amounts include shares issuable upon exercise of
warrants or options.
(2) These share amounts represent shares issuable upon exercise of
warrants.
(3) Messrs. Gray, Nowotnik and Thompson are our officers.
(4) Dr. Howell is one of our directors and a scientific consultant.
(5) Mr. Concannon is our corporate secretary and a partner at Bingham
Dana LLP. The validity of our common stock to be sold in this offering
is being passed on for us by Bingham Dana LLP.
9
PLAN OF DISTRIBUTION
The Selling Stockholders may sell or distribute the Shares directly to
purchasers as principals or through one or more underwriters, brokers,
dealers or agents as follows:
* from time to time in one or more transactions, which may involve
block transactions;
* on any exchange or in the over-the-counter market;
* in transactions otherwise than in the over-the-counter market; or
* through the writing of options, whether such options are listed on an
options exchange otherwise, on or settlement of short sales of, the Shares.
Any of these transactions may be effected at market prices at the time of
sale, at prices related to such prevailing market prices, at varying prices
determined at the time of sale or at negotiated or fixed price in each case
as determined by the Selling Stockholder or by agreement between the
Selling Stockholder and underwriters, brokers, dealers or agents, or
purchasers. If the Selling Stockholder effect such transactions by selling
Shares to or through underwriters, brokers, dealers or agents, the Selling
Stockholders may compensate these underwriters, brokers, dealers or
agents in the form of discounts, concessions or commissions from the
Selling Stockholders or commissions from purchasers of securities for
whom they may act as agent. These compensatory discounts, concessions
or commissions may be in excess of those customary in the types of
transactions involved as to particular underwriters, brokers, dealers or
agents. The Selling Stockholders and any brokers, dealers or agents that
participate in the distribution of the Shares may be deemed to be
underwriters, and any profit on the sale of Shares by them and any
discounts, concessions or commissions received by any of these
underwriters, brokers, dealers or agents may constitute underwriting
discounts and commissions under the Securities Act of 1933.
Under the securities laws of certain states, the Shares may be sold in such
states only through registered or licensed brokers or dealers. In addition,
in certain states the Shares may not be sold unless the Shares have been
registered or qualified for sale in such state or an exemption from
registration or qualification is available and is complied with.
We will pay all of the expenses incident to the registration, offering and
sale of the Shares to the public hereunder, estimated at $17,000, other
than commissions, fees and discounts of underwriters, brokers, dealers
and agents. Those commissions, fees and discounts, if any, will be borne
by the Selling Stockholder. We have agreed to indemnify the Selling
Stockholders and any underwriters against certain liabilities under the
Securities Act. We will not receive any of the proceeds from the sale of
any of the Shares by the Selling Stockholders.
Certain of the underwriters, dealers, brokers or agents may have other
business relationships with us and our affiliates in the ordinary course.
LEGAL MATTERS
The validity of our common stock to be sold in this offering is being
passed upon for us by Bingham Dana LLP 150 Federal Street, Boston,
Massachusetts 02110. Justin P. Morreale, David L. Engel and John J.
Concannon III, partners of Bingham Dana LLP, beneficially own an
aggregate of 181,499 shares of our common stock and warrants to
purchase 834 shares of our common stock. Mr. Concannon is the
corporate Secretary.
10
EXPERTS
Our consolidated financial statements incorporated in this Prospectus by
reference to our Annual Report on Form 10-K for the three year period
ended December 31, 2000 have been so incorporated in reliance on the
report of Grant Thornton LLP, independent certified public accountants,
given on the authority of said firm as experts in accounting and auditing.
WHERE YOU CAN GET MORE INFORMATION
This prospectus constitutes a part of a registration statement on Form S-3
filed by us with the Securities and Exchange Commission, or SEC, under
the Securities Act of 1933. This prospectus does not contain all of the
information set forth in the Registration Statement, since we have omitted
some parts in accordance with the SEC's rules and regulations. The SEC
permits us to "incorporate by reference" the information we file with it,
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 with the SEC will automatically update and supersede this
information. Access has filed a Registration Statement on Form S-3 under
the Securities Act of 1933 with the SEC with respect to common stock
being offered pursuant to this prospectus. This prospectus omits certain
information contained in the Registration Statement on Form S-3, as
permitted by the SEC. Refer to the Registration Statement on Form S-3,
including the exhibits, for further information about Access and the
common stock being offered pursuant to this prospectus. Statements in this
prospectus regarding provisions of certain documents filed with, or
incorporated by reference in, the Registration Statement are not
necessarily complete and each statement is qualified in all respects by that
reference. Copies of all or any part of the Registration Statement,
including the documents incorporated by reference or the exhibits, may be
obtained without charge at the offices of the SEC listed below.
We are subject to the reporting requirements of the Securities Exchange
Act of 1934 and we therefore file annual, quarterly and special reports,
proxy statements and other information with the SEC. You may read and
copy any document we file at the public reference facilities of the SEC
located at 450 Fifth Street N.W., Washington D.C. 20549. You may
obtain information on the operation of the SEC's public reference facilities
by calling the SEC at 1-800-SEC-0330. You can also access copies of
such material electronically on the SEC's home page on the World Wide
Web at http://www.sec.gov.
If you request a copy of any or all of the documents incorporated by
reference, then we will send to you the copies you requested at no charge.
However, we will not send exhibits to such documents, unless such
exhibits are specifically incorporated by reference in such documents. We
will also provide to each person to whom a copy of this prospectus has
been delivered, upon specific request and without charge, a copy of all
documents filed from time to time by us with the SEC pursuant to the
Securities Exchange Act of 1934. You should direct a request for such
copies to Access Pharmaceuticals, Inc., 2600 Stemmons Frwy, Suite 176,
Dallas, Texas 75207, attention Chief Financial Officer. You may direct
telephone requests to the Chief Financial Officer at (214) 905-5100.
CERTAIN INFORMATION WE ARE INCORPORATING BY REFERENCE
We incorporate by reference the documents listed below and any future
filings we make with the SEC under Section 13(a), 13(c), 14 or 15(d) of
the Securities and Exchange Act of 1934:
* Annual Report on Form 10-K for the fiscal year ended December 31, 2000;
* Quarterly Report on Form 10-Q for the quarter ended March 31, 2001;
* Our Definitive Proxy Statement filed on April 16, 2001; and
11
* The description of the common stock contained in our Registration
Statement (No. 333-95413) filed with the SEC under Section 12(d) of the
Securities Exchange Act including any amendment or report filed for the
purpose of updating such description.
You may request a copy of these filings at no cost, by writing,
telephoning or e-mailing us at the following address:
Access Pharmaceuticals, Inc.
2600 Stemmons Freeway, Suite 176
Dallas, Texas 75207
Attention: Chief Financial Officer
(214) 905-5100
email: akc@accesspharma.com
This prospectus is part of a Registration Statement we filed with the SEC.
You should rely only on the information incorporated by reference or
provided in this prospectus. No one else is authorized 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 in this prospectus is accurate as of any date other than the
date on the front of this document.
12
We have not authorized any dealer, salesperson or other person to give
any information or to make any representations not contained in this
Prospectus or any Prospectus Supplement. You must not rely on any
unauthorized information. Neither this Prospectus nor any Prospectus
Supplement is an offer to sell or a solicitation of an offer to buy any of
these securities in any jurisdiction where an offer or solicitation is not
permitted. No sale made pursuant to this Prospectus shall, under any
circumstances, create any implication that there has not been any change
in the affairs of Access since the date of this Prospectus.
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TABLE OF CONTENTS
Page
------
Risk Factors 2
Forward Looking Statements 7
Access Pharmaceuticals, Inc. 8
Recent Developments 8
Use of Proceeds 8
Selling Stockholders 8
Plan of Distribution 10
Legal Matters 10
Experts 11
Where You Can Get More Information 11
Certain Information We Are Incorporating
By Reference 11
----------------------------------------------
467,857 SHARES
[ LOGO ]
Access Pharmaceuticals, Inc.
COMMON STOCK
PROSPECTUS
____________, 2001
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Estimated expenses (other than underwriting discounts and commissions)
payable in connection with the sale of our common stock offer hereby are
as follows:
SEC registration fee $ 405
Printing and engraving expenses 0
Legal fees and expenses 10,000
Accounting fees and expenses 5,000
Blue Sky fees and expenses (including legal fees) 0
Transfer agent and registrar fees and expenses 0
Miscellaneous 1,595
---------
Total $ 17,000
=========
Item 15. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law (the "DGCL")
empowers a Delaware corporation to indemnify any person who was or
is, or is threatened to be made, a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of
such corporation) by reason of the fact that such person is or was a
director, officer, employee or agent of such corporation, or is or was
serving at the request of such corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, provided that such person acted in good faith and in a manner
that such person reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, such person had no reasonable cause to believe his conduct
was unlawful. The indemnity may include expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit
or proceeding. A Delaware corporation may also indemnify such persons
against expenses (including attorneys' fees) in actions brought by or in the
right of the corporation to procure a judgment in its favor, subject to the
same conditions set forth in the immediately preceding sentences, except
that no indemnification is permitted in respect of any claim, issue or
matter as to which such person shall have been adjudged to be liable to
the corporation unless and to the extent the Court of Chancery of the State
of Delaware or the court in which such action or suit was brought shall
determine upon application that, in view of all the circumstances of the
case, such person is fairly and reasonably entitled to indemnity for such
expenses as the Court of Chancery or other such court shall deem proper.
To the extent such person has been successful on the merits or otherwise
in defense of any action to above, or in defense of any claim, issue or
matter therein, the corporation must indemnify such person against
expenses (including attorneys' fees) actually and reasonably incurred by
such person in connection therewith. The indemnification and
advancement of expenses provided for in, or granted pursuant to, Section
145 is not exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under any by-
law, agreement, vote of stockholders or disinterested directors or
otherwise.
Section 145 of the DGCL also provides that a corporation may maintain
insurance against liabilities for which indemnification is not expressly
provided by the statute. The Registrant is insured against liabilities which
it may incur by reason of its indemnification obligations under its
Certificate of Incorporation, Bylaws and indemnification agreements.
Article X of the Registrant's Certificate of Incorporation provides that the
Registrant will indemnify, defend and hold harmless directors, officers,
employees and agents or the Registrant to the fullest extent currently
permitted under the DGCL.
II-2
In addition, Article X of the Registrant's Certificate of Incorporation,
provides that neither the Registrant nor its stockholders may recover
monetary damages from the Registrant's directors for a breach of their
fiduciary duty in the performance of their duties as directors of the
Registrant, unless such breach relates to (i) the director's duty of loyalty,
(ii) acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) unlawful payments of
dividends or unlawful stock repurchases or redemptions as provided in
Section 174 of the DGCL or (iv) any transactions for which the director
derived an improper personal benefit. The By-Laws of the Registrant
provide for indemnification of the Registrant's directors, officers,
employees and agents on the terms permitted under Section 145 of the
DGCL described above.
The Registrant has entered into indemnification agreements with certain
of its directors and executive officers. These agreements provide rights
of indemnification to the full extent allowed and provided for by Section
145 of the DGCL and the Certificate of Incorporation and Bylaws of
Access.
Item 16. Exhibits
Exhibit Number
- --------------
2.1 Amended and Restated Agreement of Merger and Plan of
Reorganization between Access Pharmaceuticals, Inc. and Chemex
Pharmaceuticals, Inc., dated as of October 31, 1995 (Incorporated by
reference to Exhibit A of the our Registration Statement on Form S-4
dated December 21, 1995, Commission File No. 33-64031)
2.2 Agreement of Merger and Plan of Reorganization, dated May 23,
1997 among us, Access Holdings, Inc and Tacora Corporation
(Incorporated by reference to Exhibit 10.11 of the Company's Form 10-K
for the year ended December 31, 1997)
2.3 Agreement of Merger and Plan of Reorganization, dated as of
February 23, 1999 among us, Access Holdings, Inc. and Virologix
Corporation (Incorporated by reference to Exhibit 2.2 of the Company's
Form 8-K filed on August 3, 1999)
3.0 Articles of incorporation and bylaws:
3.1 Certificate of Incorporation (Incorporated by Reference to Exhibit
3(a) of our Form 8-B dated July 12, 1989, Commission File Number 9-
9134)
3.2 Certificate of Amendment of Certificate of Incorporation filed
August 21, 1992
3.3 Certificate of Merger filed January 25, 1996. (Incorporated by
reference to Exhibit E of our Registration Statement on Form S-4 dated
December 21, 1995, Commission File No. 33-64031)
3.4 Certificate of Amendment of Certificate of Incorporation filed
January 25, 1996. (Incorporated by reference to Exhibit E of our
Registration Statement on Form S-4 dated December 21, 1995,
Commission File No. 33-64031)
3.5 Amended and Restated Bylaws (Incorporated by reference to Exhibit
3.1 of our Form 10-Q for the quarter ended June 30, 1996)
3.6 Certificate of Amendment of Certificate of Incorporation filed July
18, 1996. (Incorporated by reference to Exhibit 3.8 of our Form 10-K for
the year ended December 31, 1996)
3. Certificate of Amendment of Certificate of Incorporation filed June
18, 1998. (Incorporated by reference to Exhibit 3.8 of our Form 10-Q for
the quarter ended June 30, 1998)
3.8 Certificate of Amendment of Certificate of Incorporation filed July
31, 2000. (Incorporated by reference to Exhibit 3.8 of our Form 10-Q for
the quarter ended March 31, 2001)
5.1 Opinion of Bingham Dana, LLP
23.0 Consent of Experts and Counsel
23.1 Consent of Bingham Dana, LLP (included in Exhibit 5.1)
23.2 Consent of Grant Thornton LLP
26 Power of Attorney (for information, see II-4)
II-2
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made
pursuant to this Registration Statement, a post-effective amendment to this
Registration Statement to include any material information with respect to
the plan of distribution not previously disclosed in this Registration
Statement or any material change to such information in this Registration
Statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
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 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions described in Item 15
above, or otherwise, the Registrant has been advised that in the opinion
of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Dallas, Texas,
on this 10th day of July, 2001.
ACCESS PHARMACEUTICALS, INC.
By /s/ Kerry P. Gray
-------------------
Kerry P. Gray
President and Chief Executive Officer, Director
POWER OF ATTORNEY AND SIGNATURES
Each person whose signature appears below hereby constitutes and
appoints Kerry P. Gray, as his attorney-in-fact and agent, with full power
of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, (i) to sign any and all amendments
(including post-effective amendments) to this Registration Statement, (ii)
to sign any registration statement to be filed pursuant to Rule 462(b) under
the Securities Act of 1933 for the purpose of registering additional shares
of Common Stock for the same offering covered by this Registration
Statement, and (iii) to file any of the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of
them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any
of them, or their or his substitute or substitutes, may lawfully do or cause
to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, the
Registration Statement has been signed by the following person in the
capacities and on the dates indicated.
Signature Title Date
- -------------------------- ----------------------------- --------------
/s/ Kerry P. Gray
- ------------------------
Kerry P. Gray President and Chief Executive July 10, 2001
Officer, Director
/s/ Herbert H. McDade, Jr.
- --------------------------
Herbert H. McDade, Jr. Director July 10, 2001
/s/ J. Michael Flinn
- ----------------------
J. Michael Flinn Director July 10, 2001
/s/ Stephen B. Howell
- -----------------------
Stephen B. Howell Director July 10, 2001
/s/ Max Link
- -------------
Max Link Director July 10, 2001
/s/ John J. Meakem, Jr.
- -----------------------
John J. Meakem, Jr. Director July 10, 2001
/s/ Stephen B. Thompson
- ------------------------
Stephen B. Thompson Vice President, Chief Financial July 10, 2991
Officer, Treasurer
II-4