S-1 1 b65464acsv1.htm ARCHEMIX CORP sv1
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As filed with the Securities and Exchange Commission on July 24, 2007
Registration No. 333-          
 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
 
 
 
 
Form S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
 
ARCHEMIX CORP.
(Exact name of registrant as specified in its charter)
 
 
 
 
         
Delaware   2834   04-3511153
(State or other jurisdiction of
incorporation or organization) 		  (Primary Standard Industrial
Classification Code Number) 		  (IRS Employer
Identification No.)
 
300 Third Street
Cambridge, Massachusetts 02142
(617) 621-7700
(Address, including zip code, and telephone number, including
area code, of registrant’s principal executive offices)
 
Errol B. De Souza, Ph.D.
President and Chief Executive Officer
Archemix Corp.
300 Third Street
Cambridge, Massachusetts 02142
(617) 621-7700
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
 
 
 
 
With copies to:
 
     
Jeffrey M. Wiesen, Esq.
Megan N. Gates, Esq.
Scott A. Samuels, Esq.
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
One Financial Center
Boston, Massachusetts 02111
(617) 542-6000 		  David E. Redlick, Esq.
Stuart R. Nayman, Esq.
Wilmer Cutler Pickering Hale and Dorr LLP
399 Park Avenue
New York, New York 10022
(212) 230-8800
 
 
 
 
Approximate date of commencement of proposed sale to the public:  As soon as practicable after this Registration Statement becomes effective.
 
If any of the securities being registered on this Form are being offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, as amended, check the following box.  o
 
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o
 
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier registration statement for the same offering.  o
 
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier registration statement for the same offering.  o
 
 
 
 
CALCULATION OF REGISTRATION FEE
 
             
Title of Each Class of
 		    Proposed Maximum
 		    Amount of
Securities to be Registered     Aggregate Offering Price(1)     Registration Fee(2)
Common Stock, $0.001 par value per share
    $69,000,000     $2,118.30
             
(1) Estimated solely for the purpose of calculating the amount of registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended.
 
(2) Calculated pursuant to Rule 457(o) based on an estimate of the proposed maximum aggregate offering price.
 
 
 
 
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to Section 8(a), may determine.
 

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The information in this preliminary prospectus is not complete and may change. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
 
 
Subject to Completion, Dated July 24, 2007
 
Preliminary Prospectus
 
           Shares
 
(ARCHEMIX LOGO)
Common Stock
 
 
 
 
This is the initial public offering of Archemix Corp. No public market currently exists for our common stock. We are offering           shares of common stock.
 
 
We currently anticipate the initial public offering price will be between $      and $      per share. We have applied to have our common stock listed on The NASDAQ Global Market under the symbol “ARCH.”
 
 
Investing in our common stock involves a high degree of risk. See “Risk Factors” beginning on page 9.
 
 
                 
    Per Share     Total  
Public offering price
  $                $             
Underwriting discounts and commissions
  $       $    
Offering proceeds to Archemix, before expenses
  $       $  
 
 
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
 
 
We have granted to the underwriters a 30-day option to purchase up to           additional shares of our common stock on the same terms and conditions as set forth above if the underwriters sell more than           shares of common stock in this offering.
 
 
Delivery of the shares is expected to be made on or about          , 2007.
 
 
 
 
Banc of America Securities LLC Bear, Stearns & Co. Inc.
 
 
Cowen and Company
 
The date of this prospectus is          , 2007.

 

 
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  F-1
 EX-3.1 Amended and Restated Certificate of Incorporation
 EX-3.3 Amended and Restated By-laws
 EX-4.2 Third Amended and Restated Registration Rights Agreement
 EX-4.3 Form of Registration Rights Agreement
 EX-4.5 Warrant to Purchase Series A Convertible Preferred Stock, dated October 3, 2001
 EX-4.6 Warrant to Purchase Series A Convertible Preferred Stock, dated December 18, 2002
 EX-4.7 Form of Common Stock Warrant
 EX-10.1 Employment Agreement Errol De Souza, dated March 7, 2003
 EX-10.2 Employment Agreement Duncan Higgons, dated December 15, 2005
 EX-10.3 Offer Letter James Gilbert, dated September 8, 2006
 EX-10.4 Offer Letter Gregg Beloff, dated November 14, 2003
 EX-10.5 Offer Letter Page Bouchard, dated August 24, 2004
 EX-10.6 Lease, dated April 11, 2005 as amended
 EX-10.19 Loan and Security Agreement, dated as of April 11, 2005, as amended
 EX-10.21 Amended and Restated 2001 Employee, Director and Consultant Stock Plan
 EX-10.22 Form of Non-Qualified Stock Option Agreement for Directors
 EX-10.23 Form of Incentive Stock Option Agreement for Senior Executive
 EX-10.24 Form of Non-Qualified Stock Option Agreement for Senior Executive
 EX-23.1 Consent of Ernst & Young LLP
 
 
You should rely only on the information contained in this prospectus or in any free writing prospectus that we may authorize to be delivered to you. We have not, and the underwriters have not, authorized anyone to provide you with information different from, or in addition to, that contained in this prospectus or in any free writing prospectus. We are not making an offer to sell, and seeking offers to buy, any shares of common stock in any jurisdiction where the offer or sale is not permitted. You should assume that the information contained in this prospectus or any related free writing prospectus is accurate only as of its date, regardless of the time of its delivery, or of any sale of common stock. Our business, financial condition, results of operations and prospects may have changed since that date.
 
 
Through and including          , 2007 (25 days after the date of this prospectus) all dealers that buy, sell or trade the common stock may be required to deliver a prospectus, regardless of whether they are participating in this offering. This delivery requirement is in addition to the obligation of dealers to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.
 
 
Unless otherwise stated, all references to “Archemix,” “we,” “us,” “our,” the “Company” and similar designations refer to Archemix Corp. Archemix® is our registered trademark. Other trademarks and service marks appearing in this prospectus are the property of their respective holders.
 

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PROSPECTUS SUMMARY
 
This summary highlights information contained elsewhere in this prospectus which we consider important to investors. This summary is not complete and does not contain all of the information that you should consider before investing in our common stock. You should read the entire prospectus carefully, including “Risk Factors” and our financial statements and the related notes included in this prospectus, before making an investment in our common stock.
 
ARCHEMIX CORP.
 
Overview
 
We are a biotechnology company focused on discovering, developing and commercializing aptamer therapeutics. Aptamers are synthetically-derived oligonucleotides, or short nucleic acid sequences. Aptamers represent an emerging class of potential therapeutic agents that we believe may have broad application to treat a variety of human diseases. Using our proprietary process for discovering aptamers, called Systematic Evolution of Ligands by EXponential expression, or SELEX, and our proprietary post-SELEX modification processes, which are protected by our broad patent portfolio, we are developing aptamer product candidates for cardiovascular and hematological diseases and cancer.
 
We have completed a Phase 1 clinical trial for ARC1779, our lead aptamer product candidate and, subject to regulatory review of our proposed protocol, we expect to commence a Phase 2a clinical trial of ARC1779 in the fourth quarter of 2007 in acute coronary syndrome, or ACS. Subject to the submission and regulatory review of our protocol, we also expect to commence a Phase 1b clinical trial of ARC1779 in the fourth quarter of 2007 in patients suffering from a rare blood disorder known as thrombotic thrombocytopenic purpura, or TTP. We believe that pursuing two distinct, commercially attractive indications with the same aptamer product candidate mitigates some of the risks associated with drug development.
 
In addition, our intellectual property position in the field of aptamers has given us the ability to enter into licensing arrangements with other drug development companies to develop their own aptamer product candidates, providing us with equity investments, upfront payments, research funding, payments upon the achievement of specified milestones and royalties from any product sales. Some of these agreements also provide us with co-development rights, co-promotion rights, rights of first refusal or profit sharing rights. We expect two of these aptamer product candidates being developed by third parties to enter Phase 2 clinical trials in the second half of 2007.
 
We believe that aptamer therapeutics combine many of the beneficial characteristics of biologics, small molecules and other classes of oligonucleotides, such as antisense and small interfering RNA, or siRNA, without exhibiting many of their disadvantages. Aptamers have the ability to disrupt interactions between proteins, bind with high affinity and specificity to their targets and can be designed to have a specified duration of action. Aptamers are discovered using chemical processes, which permit rapid discovery and ease of manufacturing. Finally, we have not observed the generation of antibodies, or immunogenicity, against our aptamer product candidates.
 
The Potential for Aptamer Therapeutics
 
Aptamers represent an emerging class of potential therapeutic agents to treat human disease. We believe that aptamer therapeutics have the potential to offer the following benefits:
 
  •  Attractive drug-like properties.
 
  —  Ability to disrupt interactions between proteins. The large surface area of interaction between aptamers and their protein targets makes aptamers well-suited to block interactions between proteins. Because abnormal interactions between proteins are involved in many disease processes, the use of aptamers to inhibit these interactions may have meaningful clinical significance. Furthermore, since aptamers interact with proteins found on the surface of and outside cells, aptamers do not have to cross the cell membrane, which may make it easier to deliver an effective quantity of aptamer to the target.


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  —  High affinity binding and specificity. Aptamers have well-defined, three-dimensional shapes, which allow them to interact with a folded, three-dimensional protein target, like a key in a lock. The complementary structure of an aptamer and its protein target allows aptamers to bind to their targets with high affinity and specificity.
 
  —  Rationally designed duration of action. Aptamers can be rationally designed with an optimized duration of action necessary to achieve a desired effect. We use proprietary chemical stabilization and conjugation techniques to prevent or reduce the metabolism of the aptamer and its elimination from the body, which we believe may permit aptamers to be used in treating both acute and chronic diseases.
 
  —  No observed immunogenicity. Because nucleic acids are not typically recognized by the human immune system as foreign agents, aptamers do not generally trigger an antibody response to the aptamer.
 
  •  Rapid in vitro discovery and chemical synthesis. Discovery of aptamers is an entirely in vitro process that does not rely on biological organisms. This allows for rapid and reproducible discovery compared to biologic drug products. Using our proprietary SELEX discovery process, we can identify aptamers that bind to a selected target in vitro with high affinity and specificity in approximately one month. Then, using our proprietary post-SELEX modification processes, we engineer desired characteristics and functionality into each aptamer such that it is ready for preclinical animal testing in approximately 12 to 15 months.
 
  •  Ease of manufacturing. Because aptamers are chemically synthesized, they can be produced in a rapid, scalable and reproducible manner.
 
  •  Intellectual property. Because aptamers have only recently been recognized as potential therapeutic agents, the use of aptamers for the treatment of disease is often not blocked by existing intellectual property covering other classes of drugs. As of the date of this prospectus, we own or have licensed exclusive rights for aptamer therapeutic applications to over 200 issued patents, including 159 issued United States patents and nine European patents and approximately 250 pending patent applications worldwide, including 56 pending United States patent applications, pertaining to the discovery and development of aptamers and their role in treating disease.
 
Our Aptamer Discovery Process
 
To realize the potential of aptamers as a broad emerging class of therapeutics and to expand our aptamer product candidate pipeline, we utilize a proprietary discovery process. The first stage of our proprietary process, SELEX, isolates aptamers that exhibit affinity and specificity for the selected target. Using this iterative process, we can reduce a starting library of an estimated one hundred trillion, or 1014, random oligonucleotides to approximately 100 or fewer sequences of interest in just one month. We then use our proprietary post-SELEX modification processes to stabilize and optimize the aptamers of interest to create aptamer product candidates for clinical development. Through this combination of SELEX and post-SELEX modification processes, we are able to design and confirm the desired properties of an aptamer that we believe will address the proposed therapeutic indication. We believe that these proprietary discovery capabilities will allow us to develop many aptamer product candidates across a variety of therapeutic areas.


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Our Proprietary Aptamer Product Candidate: ARC1779
 
The protein known as von Willebrand Factor, or vWF, is, when activated, responsible for the adhesion, activation and aggregation of platelets, which are involved in the formation of blood clots. Our lead aptamer product candidate, ARC1779, is designed to inhibit the function of activated vWF. Activated vWF binds to and captures platelets from the flowing bloodstream, activating these platelets and causing them to adhere to and aggregate on the blood vessel wall, forming the beginning of a blood clot. These clots form in the larger, primary vessels of the heart and also lodge in the smaller, distal vessels of the heart, known as the microvasculature. We believe that currently approved anti-platelet agents do not improve blood flow in the microvasculature in heart attack patients undergoing angioplasty, or PCI. We also believe that currently approved anti-platelet agents create an increased risk of significant bleeding in the systemic circulation and require an inconvenient dosing regimen.
 
In our Phase 1 clinical trial of ARC1779 in healthy volunteers, we observed that vWF activity and platelet function were maximally inhibited to the limits of assay detection in a manner that correlated to the dose and concentration of ARC1779. We believe that these data demonstrate the mechanism of action of ARC1779. We are developing ARC1779 for use in the following indications in which the selective inhibition of activated vWF could have therapeutic benefit:
 
  •  Acute coronary syndrome.  We believe that ARC1779 can be used to treat patients suffering from acute coronary syndrome, or ACS, which is the medical diagnostic category that includes heart attack. Because none of the existing anti-thrombotic drugs target vWF, we believe that replacing currently approved intravenous anti-platelet drugs with ARC1779 can improve outcomes and reduce bleeding risks in heart attack patients undergoing PCI. Subject to regulatory review of our proposed protocol, in the fourth quarter of 2007 we expect to commence a Phase 2a clinical trial of ARC1779 in ACS patients undergoing PCI, and assuming timely enrollment of patients in this trial, we expect to complete the trial in the fourth quarter of 2008.
 
  •  Thrombotic thrombocytopenic purpura.  We also believe that ARC1779 can be used to treat patients suffering from a rare blood disorder known as thrombotic thrombocytopenic purpura, or TTP. In TTP, excessive levels of activated vWF cause platelet aggregation and widespread blood clotting, which can lead to life-threatening events such as heart attack and stroke. Because ARC1779 targets activated vWF, we believe that ARC1779 can reduce or eliminate the formation of blood clots that cause the morbidity and mortality associated with TTP. There is currently no approved drug therapy for TTP. Subject to the submission and regulatory review of our protocol, in the fourth quarter of 2007 we expect to commence a Phase 1b clinical trial of ARC1779 in patients suffering from TTP. Once the proposed protocol is finalized, and assuming timely enrollment of patients, we expect to complete our Phase 1b trial in TTP as soon as the third quarter of 2008. We believe that ARC1779 for treatment of TTP meets the criteria for orphan drug designation in the United States and the European Union.


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The Aptamer Development Pipeline
 
We believe that aptamers can be used to treat acute and chronic diseases. We have elected to focus our internal drug discovery and development efforts primarily on acute indications and to collaborate with third parties for chronic indications. The table below summarizes the aptamer product candidates we are developing on our own, the aptamer product candidates we have the option to co-develop with others, and the aptamer product candidates being developed under licenses we have granted to others.
 
                 
    Aptamer Product
 		           
Development
 		  Candidate
 		      Stage of
 		  Collaborator/
Rights
 
(Molecular Target)
 
Target Indication
 
Development
 
Licensee
 
Being developed by us:
  ARC1779
(von Willebrand Factor) 		  Acute Coronary Syndrome   Phase 2a expected to
commence in 4Q2007 		  None
    ARC1779
(von Willebrand Factor) 		  Thrombotic Thrombocytopenic Purpura   Phase 1b expected to commence in 4Q2007   None
                 
Being developed by others with specified   Anti-Cancer Aptamers   Multiple Cancers   Preclinical   Merck Serono
co-development rights:   Anti-IL-23 Aptamers
(IL-23) 		  Multiple Sclerosis, Rheumatoid Arthritis, Psoriasis, Inflammatory Bowel Disease   Preclinical   Elan Pharma
                 
Being developed by others under license:   AS1411 (Nucleolin)   Acute Myeloid Leukemia   Phase 2 expected to
commence in 3Q2007 		  Antisoma
    AS1411 (Nucleolin)   Renal Cell Carcinoma   Phase 2 expected to
commence by the end of 2007 		  Antisoma
    REG1 (Factor IXa)   Coronary Artery Bypass Graft Surgery (CABG), Percutaneous Coronary Intervention (PCI)   Phase 2 expected to commence in 4Q2007   Regado
Biosciences
    NU172 (Thrombin)   CABG, PCI   Phase 1 expected to commence in 4Q2007 or 1Q2008   Nuvelo
 
To date, we have licensed our intellectual property to discover or develop aptamer product candidates to nine biotechnology and pharmaceutical companies, including Pfizer, Merck Serono, Takeda Pharmaceuticals and Elan Pharma. These agreements provide us with a source of cash flow in the form of equity investments, upfront payments, research funding, payments upon the achievement of specified milestones and royalties from any product sales. In some cases, we also retain co-development rights, co-promotion rights, rights of first refusal or profit sharing rights.
 
As we expand our capabilities and resources, we expect to take on progressively more responsibility for the development and commercialization of aptamer product candidates that we discover and retain a potentially greater share of the revenues that these aptamer product candidates may generate. From our inception through June 30, 2007, we have received approximately $55.2 million in upfront payments and equity investments and an aggregate of approximately $9.4 million in research funding and milestone payments from our collaborators.


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Our Business Strategy
 
Our goal is to be the leader in the discovery and development of aptamer therapeutics. We intend to achieve our goal by using our proprietary technology and expertise with aptamers to develop a portfolio of aptamer product candidates and to license our technology to others to discover and develop their own aptamer product candidates. Consistent with our goal, we are pursuing the following strategies:
 
  •  Rapidly advance ARC1779 through clinical development. If our early stage clinical trials of ARC1779 are successful, we intend to advance this aptamer product candidate into additional trials, including pivotal clinical trials, as rapidly as possible.
 
  •  Generate additional aptamer product candidates for acute care using our proprietary discovery platform. We plan to discover and develop a portfolio of aptamer product candidates for acute intervention, including cardiovascular and hematological diseases. We intend to advance aptamer product candidates in these core therapeutic areas to later stages of clinical development and, if approved, to commercialize them either on our own or through strategic alliances.
 
  •  Enter alliances to build capabilities in therapeutic areas of strategic interest. In some disease areas, such as cancer, we intend to enter into strategic alliances in which our collaborators will share the costs and risks of developing and commercializing aptamer therapeutics. Under some of our collaborations, we have the option to co-develop and co-promote aptamer product candidates in order to expand our development and marketing expertise. Consistent with this strategy, we plan to discover aptamers to treat cancer as part of our research and development collaboration with Merck Serono, which we entered into in June 2007.
 
  •  Identify strategic opportunities to license our technologies to others. We intend to continue to license our intellectual property to third parties to develop their own aptamer product candidates, primarily for chronic indications. To date, we have entered into aptamer product candidate development agreements with nine biotechnology and pharmaceutical companies, including Pfizer, Merck Serono, Takeda Pharmaceuticals and Elan Pharma.
 
  •  Maintain and expand our proprietary technology and intellectual property position. We own or exclusively license a portfolio of issued patents and pending patent applications for the discovery and development of aptamers and their role in treating disease. We intend to expand our intellectual property position by filing additional patent applications covering fundamental aspects of aptamers and through in-licensing agreements that provide us with access to technologies useful in the development of aptamer therapeutics.
 
Risks Associated with Our Business
 
Our business is subject to numerous risks, as more fully described in the section entitled “Risk Factors” immediately following this prospectus summary. We have a limited operating history, have incurred substantial net losses and had an accumulated deficit of $117.2 million as of March 31, 2007. We expect to continue to incur substantial losses for the foreseeable future, and we expect these losses to increase substantially as we conduct larger scale trials for our aptamer product candidates. All of our aptamer product candidates are undergoing clinical trials or are in early stages of development and failure can occur at any stage of development. Our lead aptamer product candidate ARC1779, has completed a Phase 1 clinical trial and, subject to regulatory review of our proposed protocol, in the fourth quarter of 2007 we expect to commence a Phase 2a trial of ARC1779 in ACS patients undergoing PCI and a Phase 1b clinical trial in patients suffering from TTP. Our ability to generate product revenue in the future will depend heavily on the successful development and commercialization of our aptamer product candidates. Even if we succeed in obtaining regulatory approval of one or more of our aptamer product candidates, we have no experience in commercializing drug products. Accordingly, we may never generate sufficient revenue to achieve and then sustain profitability.


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Private Placement of Common Stock to Nuvelo
 
In connection with our collaboration with Nuvelo, Inc., Nuvelo will purchase from us in a private placement concurrent with the closing of this offering, the number of shares of our common stock equal to the lesser of $10 million or 15% of the aggregate gross proceeds to us from this offering, at a price per share equal to the initial public offering price. Assuming we sell an aggregate of           shares in this offering at an assumed initial public offering price of $      per share, which is the midpoint of the price range listed on the cover page of this prospectus, we expect Nuvelo to purchase           shares of our common stock.
 
Company Information
 
We were incorporated in Delaware on April 5, 2000. Our principal office is located at 300 Third Street, Cambridge, Massachusetts 02142. Our telephone number is (617) 621-7700. Our website address is www.archemix.com. Information contained on our website is not incorporated by reference into this prospectus and should not be considered a part of this prospectus. We have included our website address as an inactive textual reference only.


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THE OFFERING
 
Common stock offered by Archemix            shares
 
Common stock to be outstanding after this offering            shares
 
Underwriters’ option to purchase additional shares            shares
 
Use of proceeds We expect to use the net proceeds from this offering to fund preclinical and clinical development of our existing aptamer product candidates and the discovery and development of additional aptamer product candidates, to expand our research and preclinical capabilities and programs and for working capital, capital expenditures, expansion and protection of our intellectual property and other general corporate purposes. Please read “Use of Proceeds” for more detailed information.
 
Proposed NASDAQ Global Market symbol ARCH
 
In connection with our collaboration with Nuvelo, Inc., or Nuvelo, Nuvelo will purchase from us in a private placement concurrent with this offering the number of shares of our common stock equal to the lesser of $10 million or 15% of the aggregate gross proceeds of this offering, at a price per share equal to the public offering price.
 
The number of shares of common stock to be outstanding after this offering is based on the number of shares outstanding as of March 31, 2007, and excludes:
 
  •  14,791,511 shares of common stock issuable upon the exercise of stock options outstanding as of March 31, 2007, at a weighted average exercise price of $0.11 per share;
 
  •  129,419 shares of common stock issuable upon the exercise of outstanding warrants for shares of common stock and shares of Series A redeemable convertible preferred stock, on an as-converted basis, outstanding as of March 31, 2007, at a weighted average exercise price of $0.86 per share; and
 
  •  an aggregate of 2,893,477 shares of common stock available for future issuances under our Amended and Restated 2001 Employee, Director and Consultant Stock Plan, as amended, as of March 31, 2007.
 
Except as otherwise noted, all information in this prospectus:
 
  •  gives effect to the automatic conversion of all of our outstanding shares of redeemable convertible preferred stock into 105,624,995 shares of common stock upon the completion of this offering;
 
  •  reflects the issuance to Nuvelo of           shares of our common stock at a price per share equal to an assumed initial public offering price of $     per share, which is the midpoint of the price range listed on the cover page of this prospectus, in a private placement concurrent with this offering;
 
  •  assumes no exercise by the underwriters of their option to purchase           additional shares of common stock in this offering; and
 
  •  assumes the filing of our restated certificate of incorporation and the adoption of our amended and restated bylaws upon the completion of the offering.


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SUMMARY FINANCIAL DATA
 
You should read the following summary financial data together with “Selected Financial Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and related notes, all included elsewhere in this prospectus.
 
The pro forma unaudited balance sheet data as of March 31, 2007 gives effect to the conversion of all then outstanding shares of our redeemable convertible preferred stock into 105,624,995 shares of common stock, which will occur automatically upon the closing of this offering. The pro forma as adjusted unaudited balance sheet data as of March 31, 2007 further reflects the receipt of the net proceeds from our sale of           shares of common stock at an assumed initial public offering price of $      per share in this offering, which is the midpoint of the price range listed on the cover page of this prospectus, after deducting the estimated underwriting discounts and commissions and offering expenses payable by us, and our receipt of proceeds from the sale of           shares of common stock to Nuvelo at a price per share equal to an assumed initial public offering price of $      per share, which is the midpoint of the price range listed on the cover page of this prospectus. Pro forma basic and diluted net loss per common share is calculated assuming the conversion of all outstanding shares of redeemable convertible preferred stock into shares of common stock.
 
                                                         
    Year Ended December 31,     Three Months Ended March 31,  
    2002     2003     2004     2005     2006     2006     2007  
    (in thousands, except share and per share data)  
 
Statement of Operations Data:
                                                       
Revenue
  $ 1,170     $ 152     $ 1,911     $ 2,398     $ 6,408     $ 428     $ 3,289  
Operating expenses:
                                                       
Research and development
    6,180       9,226       9,531       17,061       16,965       3,568       6,145  
General and administrative
    1,984       3,158       5,133       6,213       7,634       2,105       2,152  
                                                         
Loss from operations
    (6,994 )     (12,232 )     (12,753 )     (20,876 )     (18,191 )     (5,245 )     (5,008 )
Interest income (expense), net
    (303 )     (36 )     403       909       1,807       430       499  
                                                         
Net loss
  $ (7,297 )   $ (12,268 )   $ (12,350 )   $ (19,967 )   $ (16,384 )   $ (4,815 )   $ (4,509 )
                                                         
Net loss per common share:
                                                       
Basic and diluted
  $ (1.61 )   $ (2.69 )   $ (2.48 )   $ (3.62 )   $ (2.98 )   $ (0.92 )   $ (0.68 )
                                                         
Weighted average basic and diluted common shares outstanding
    5,534,267       5,795,603       7,236,512       7,429,601       8,351,785       7,556,841       9,759,643  
                                                         
Pro forma basic and diluted net loss per common share
                                  $ (0.14 )           $ (0.04 )