SC 13D: Schedule filed to report acquisition of beneficial ownership of 5% or more of a class of equity securities
Published on November 14, 2002
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D*
Under the Securities Exchange Act of 1934
Access Pharmaceuticals, Inc.
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(Name of Issuer)
Common Stock, $0.01 par value
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(Title of Class of Securities)
00431M209
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(CUSIP Number of Class of Securities)
Larry N. Feinberg
c/o Oracle Partners, L.P.
200 Greenwich Avenue, 3rd Floor
Greenwich, CT 06830
(203) 862-7900
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
Copies to:
Daniel Schloendorn, Esq.
Willkie Farr & Gallagher
787 Seventh Avenue
New York, NY 10019-6099
(212) 728-8000
November 13, 2002
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(Date of Event which Requires
Filing of this Schedule)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of ss.ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box:
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 240.13d-7 for other
parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
SCHEDULE 13D
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CUSIP No. 00431M209 Page 2 of 12 Pages
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1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Oracle Partners, L.P.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7 SOLE VOTING POWER
0
-----------------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 1,164,500
OWNED BY -----------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH 0
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,164,500
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
1,164,500
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.4%
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14 TYPE OF REPORTING PERSON*
PN
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2
SCHEDULE 13D
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CUSIP No. 00431M209 Page 3 of 12 Pages
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1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Oracle Associates, LLC
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
AF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7 SOLE VOTING POWER
0
-----------------------------------------------------------------
8 SHARED VOTING POWER
1,486,400
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,486,400
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
1,486,400
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
10.7%
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14 TYPE OF REPORTING PERSON*
OO
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3
SCHEDULE 13D
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CUSIP No. 00431M209 Page 4 of 12 Pages
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1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Larry N. Feinberg
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
AF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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7 SOLE VOTING POWER
18,300
-----------------------------------------------------------------
8 SHARED VOTING POWER
1,954,200
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
18,300
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,954,200
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
1,972,500
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.2%
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14 TYPE OF REPORTING PERSON*
IN
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4
This statement on Schedule 13D (this "Schedule 13D") is being filed to
report the beneficial ownership of shares of common stock, $0.01 par value
("Common Stock"), of Access Pharmaceuticals, Inc. (the "Company"), and that such
beneficial ownership may no longer be deemed to be passive in nature so as to
allow filing on a Schedule 13G. This Schedule 13D supercedes the Amendment No. 2
to Schedule 13G filed on August 10, 2001.
Item 1. Security and Issuer.
The Company's principal executive office is located at 2600 Stemmons
Freeway, Suite 176, Dallas, Texas 75207.
Item 2. Identity and Background.
(a) This Schedule 13D is being filed by:
(i) Oracle Partners, L.P., a Delaware limited partnership ("Oracle
Partners"), with respect to shares of Common Stock directly owned by it;
(ii) Oracle Associates, LLC, a Delaware limited liability company
("Oracle Associates"), which serves as the general partner of Oracle
Partners, and Oracle Institutional Partners, L.P., a Delaware limited
partnership ("Oracle Institutional" and together with Oracle Partners, the
"Partnerships"), with respect to shares of Common Stock directly owned by
Oracle Partners and Oracle Institutional Partners;
(iii) Mr. Larry N. Feinberg ("Mr. Feinberg"), who serves as the senior
managing member of Oracle Associates, is the trustee of The Feinberg Family
Foundation (the "Foundation") and is the sole shareholder and president of
Oracle Investment Management, Inc., a Delaware corporation (the "Investment
Manager"), which serves as investment manager to and has investment
discretion over the securities held by (A) SAM Oracle Investments Inc., a
British Virgin Islands corporation ("SAM Oracle"), (B) Oracle Offshore
Limited, a Cayman Islands corporation (together with SAM Oracle, the
"Foreign Funds") and (C) Oracle Management, Inc. Employees Retirement Plan
(together with the Foreign Funds, the "Managed Funds"), with respect to the
shares of Common Stock directly owned by the Foundation and the shares of
Common Stock directly owned by the Partnerships and the Managed Funds,
which he may be deemed to beneficially own by virtue of the foregoing
relationships.
5
Oracle Partners, Oracle Associates and Mr. Feinberg are hereinafter
sometimes collectively referred to as the "Reporting Persons." Any disclosures
herein with respect to persons other than the Reporting Persons are made on
information and belief after making inquiry to the appropriate party.
(b) The business address of each of the Reporting Persons is 200 Greenwich
Avenue, Greenwich, Connecticut, 06830.
(c) The principal business of Oracle Partners is to invest in securities.
The principal business of Oracle Associates is to serve as general partner to
and exercise investment discretion over securities held by the Partnerships. The
principal business of Mr. Feinberg is to invest in securities through Oracle
Associates, the Investment Manager and certain other entities.
(d) None of the Reporting Persons, nor, to the best of their knowledge, any
of their directors, executive officers, general partners or members, has, during
the last five years, been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors).
(e) None of the Reporting Persons, nor, to the best of their knowledge, any
of their directors, executive officers, general partners or members has, during
the last five years, been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
(f) Oracle Partners is organized under the laws of the State of Delaware.
Oracle Associates is organized under the laws of the State of Delaware. Mr.
Feinberg is a citizen of the United States of America.
Item 3. Source and Amount of Funds or Other Consideration.
As of the date hereof, Mr. Feinberg may be deemed to beneficially own
1,972,500 shares of the Company's Common Stock (the "Shares"). The Shares are
held by the Partnerships, the Managed Funds and the Foundation. Mr. Feinberg has
investment discretion over the activities of the Partnerships and the Managed
Funds through Oracle Associates and the Investment Manager, respectively, and
over the activities of the Foundation as trustee. The Shares were purchased for
an aggregate purchase price of $7,552,673.67.
6
The funds for the purchase of those Shares held in the Partnerships came from
capital contributions to the Partnerships by their general and limited partners.
The funds for the purchase of those Shares held by the Managed Funds came from
capital contributions to the Managed Funds by the investors in such funds. The
funds for the purchase of those Shares held by the Foundation came from the
Foundation's capital. The Shares were purchased through margin accounts
maintained with Morgan Stanley which may extend margin credit to the Reporting
Persons or persons under their investment discretion as and when required to
open or carry positions in these margin accounts, subject to applicable Federal
margin regulations, stock exchange rules and the firm's credit policies. In such
instances, the positions held in the margin accounts are pledged as collateral
security for the repayment of debit balances in the accounts.
Item 4. Purpose of Transaction.
The primary interest of the Reporting Persons is to maximize the value of
the investment in the Company by the Partnerships, the Managed Funds and the
Foundation. In connection therewith, the Reporting Persons are seeking
representation on the Board of Directors of the Company (the "Board"). The
Reporting Persons have contacted the current members of the Board to request
that they appoint Mr. Feinberg or a designee of the Reporting Persons to fill a
vacant seat on the Board. Mr. Feinberg may, in the future, seek to continue such
Board membership through the stockholder election process.
In addition, as further detailed in a letter, dated November 13, 2002, from
Mr. Feinberg to the Board of Directors, a copy of which is attached hereto as
Exhibit 3, the Reporting Persons believe that the Company's Common Stock remains
significantly undervalued. For the reasons set forth therein, the Reporting
Persons are urging the Board of Directors to manage the Company's operations in
a manner to maximize the value of the Common Stock.
Furthermore, the Reporting Persons intend to continually review the
Company's business affairs, financial position, and future prospects, as well as
conditions in the securities markets and general economic and industry
conditions. Based on such evaluation, review, and other factors, the Reporting
Persons will continue to consider various alternative courses of action and will
in the future take such actions with respect to the investments in the Company
by the Partnerships, the Managed Funds and the Foundation as they deem
appropriate. Such actions may include, but are not limited to, the following:
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1. Seeking other changes to the Board of Directors and/or management of the
Company;
2. Seeking changes to the Company's charter and bylaws;
3. Making recommendations to management concerning various business
strategies, including mergers, acquisitions, dispositions, recapitalizations,
sales or transfers of assets, reorganization, liquidation or other extraordinary
transaction; and
4. Recommending hiring an investment banker to evaluate strategies to
enhance shareholder value.
Such actions may involve the purchase of additional shares of Common Stock
and, alternatively, may involve the sale of all or a portion of the Shares in
the open market or in privately negotiated transactions to one or more financial
or strategic purchasers. As a result of the foregoing, the Reporting Persons'
position with respect to the Company may not be considered solely that of
passive investors. There can be no assurance, however, that the Reporting
Persons will take any of the actions set forth above.
Item 5. Interest in Securities of the Issuer.
(a) & (b) Ownership and power over disposition:
------------------------------------
A. Oracle Partners
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(a) Amount beneficially owned: 1,164,500
(b) Percent of class: 8.4% The percentages used herein and in the rest of
this Schedule 13D are calculated based upon a total of 13,890,043 outstanding
shares of Common Stock, equal to the sum of (i) 13,160,043 shares of Common
Stock outstanding as of August 14, 2002, as reported on the Company's Quarterly
Report on Form 10-Q for the quarterly period ended June 30, 2002 and (ii)
730,000 shares of common Stock which would be received upon conversion of 7%
Convertible Subordinated Notes, held by Oracle Partners (459,000 shares), Oracle
Institutional (127,000 shares), and the Managed Funds (144,000 shares), eligible
for conversion on or after September 13, 2001, with a maturity date of September
13, 2005.
(c) Number of shares as to which such person has:
(i) Sole power to vote or direct the vote: -0-
(ii) Shared power to vote or direct the vote: 1,164,500
(iii) Sole power to dispose or direct the disposition: -0-
(iv) Shared power to dispose or direct the disposition: 1,164,500
8
B. Oracle Associates
-----------------
(a) Amount beneficially owned: 1,486,400
(b) Percent of class: 10.7%
(c) Number of shares as to which such person has:
(i) Sole power to vote or direct the vote: -0-
(ii) Shared power to vote or direct the vote: 1,486,400
(iii) Sole power to dispose or direct the disposition: -0-
(iv) Shared power to dispose or direct the disposition: 1,486,400
C. Mr. Feinberg
------------
(a) Amount beneficially owned: 1,972,500
(b) Percent of class: 14.2%
(c) Number of shares as to which such person has:
(i) Sole power to vote or direct the vote: 18,300
(ii) Shared power to vote or direct the vote: 1,954,200
(iii) Sole power to dispose or direct the disposition: 18,300
(iv) Shared power to dispose or direct the disposition: 1,954,200
(c) The transactions in the shares of the Common Stock that may be deemed
to be beneficially owned by a Reporting Person during the past 60 days are set
forth on Exhibit 1 attached hereto. All such transactions were effected in open
market purchases.
(d) If the Reporting Persons were to be deemed a group, each Reporting
Person may be deemed to have beneficial ownership over the entire number of
shares of Common Stock directly owned by the Partnerships, the Managed Funds and
the Foundation. Each of the Reporting Persons expressly disclaims beneficial
ownership of such shares of Common Stock except to the extent otherwise reported
herein. Other than as set forth herein, no other person is known to have the
right to receive or the power to direct the receipt of dividends from, and
proceeds from the sale of, securities reported in this Schedule 13D which
constitute more than five percent of the total outstanding Common Stock.
(e) Not applicable.
9
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the Issuer.
Except as otherwise set forth herein, the Reporting Persons do not have any
contract, arrangement, understanding or relationship with any person with
respect to securities of the Company.
Item 7. Material to be Filed as Exhibits.
Attached hereto as Exhibit 1 is a description of the transactions in the
shares of Common Stock that may be deemed to be beneficially owned by Mr.
Feinberg which were effected during the past 60 days.
Attached hereto as Exhibit 2 is a Joint Filing Agreement by and among the
Reporting Persons, dated as of November 13, 2002.
Attached hereto as Exhibit 3 is a letter from Mr. Larry Feinberg to the
Board of Directors of the Company, dated November 13, 2002.
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SIGNATURES
After reasonable inquiry and to the best of his knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Dated: November 13, 2002
ORACLE PARTNERS, L.P.
By: ORACLE ASSOCIATES, LLC,
general partner
By: /s/ Larry N. Feinberg
-------------------------
Name: Larry N. Feinberg
Title: Managing Member
ORACLE ASSOCIATES, LLC
By: /s/ Larry N. Feinberg
-------------------------
Name: Larry N. Feinberg
Title: Managing Member
/s/ Larry N. Feinberg
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Larry N. Feinberg
[SIGNATURE PAGE TO SCHEDULE 13D WITH RESPECT TO
ACCESS PHARMACEUTICALS, INC.]