Prospectus
Supplement
(To
Prospectus Dated July 12, 2006)
8,965,600 Ordinary
Shares
We
are
offering 8,965,600 of our ordinary shares to selected investors pursuant to
this prospectus supplement and the accompanying prospectus. The ordinary shares
will be purchased at the negotiated price of $2.09 per share.
In
connection with this offering, we will pay fees to our placement agent, Banc
of
America Securities LLC. See “Plan of Distribution” on page S-8 of this
prospectus supplement for more information regarding these
arrangements.
Our
American Depositary Shares (“ADSs”), each representing one ordinary share,
evidenced by American Depositary Receipts (“ADRs”), are traded on the Nasdaq
Capital Market, the principal trading market for our securities, under the
symbol “AMRN”.
SEE
“RISK FACTORS” ON PAGE S-4 OF THIS PROSPECTUS SUPPLEMENT, IN THE
REGISTRATION STATEMENT ON FORM F-3 (NO. 333-135718) AND THE DOCUMENTS
INCORPORATED BY REFERENCE THEREIN AND HEREIN, TO READ ABOUT FACTORS
YOU SHOULD CONSIDER BEFORE BUYING THE SECURITIES.
|
Per
Share
|
Total
(1)
|
|
|
Offering
price
|
$2.09
|
18,738,104
|
|
Offering
expenses (2)
|
$0.16
|
1,478,578
|
|
Proceeds,
after expenses, to us
|
$1.93
|
17,259,526
|
|
(1)
|
Assumes
that all 8,965,600 ordinary shares offered by this prospectus supplement
are sold in this offering. There is no requirement that any minimum
number
of ordinary shares or dollar amount of ordinary shares be sold in
this
offering and there can be no assurance that we will sell all or any
of the
shares being offered.
|
|
(2)
|
We
will pay the placement agent a selling commission fee of 6% of the
gross
proceeds on sales made under this prospectus supplement to purchasers
in
the United States other than certain investors specified by the Company,
plus 5% of gross proceeds on sales to such specified investors. We
have
also agreed to reimburse the placement agent for reasonable costs
and
expenses (subject to an agreed maxium) incurred by it in connection
with
this offering. We
will also pay J&E Davy a cash finder fee in an amount equal to 5% of
the gross proceeds on sales made under this prospectus supplement
to
certain purchasers outside the United States identified by J&E Davy.
No fees shall be payable to the placement agent with respect to proceeds
of or from any investors outside the United States introduced by
J&E
Davy.
|
We
have
engaged Banc of America Securities LLC as our placement agent to use best
efforts to solicit offers to purchase our ordinary shares in this offering
in
the United States. The placement agent is not purchasing or selling any of
our
ordinary shares or ADSs pursuant to this prospectus supplement or the
accompanying core prospectus, nor are we requiring any minimum purchase or
sale
of any specific number of ordinary shares or ADSs. We expect the total offering
expenses, excluding placement agent fees, to be approximately $1,478,578 for
all
sales pursuant to the prospectus as supplemented by this prospectus supplement.
We expect that delivery of the ordinary shares being offered pursuant to this
prospectus supplement will be made to investors on or about October 23,
2006. The ordinary shares will be delivered in the form of ADSs in book-entry
form through The Depository Trust Company, New York, New York.
NEITHER
THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION
HAS
APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS
SUPPLEMENT OR THE ACCOMPANYING CORE PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Placement
Agent
Banc
of America Securities LLC
The
date
of this prospectus supplement is October 18, 2006.
TABLE
OF CONTENTS
PROSPECTUS
SUPPLEMENT
PAGE
|
ABOUT
THIS PROSPECTUS SUPPLEMENT
|
S-1
|
|
NOTE
REGARDING FORWARD LOOKING STATEMENTS
|
S-2
|
|
THE
OFFERING
|
S-3
|
|
RISK
FACTORS
|
S-4
|
|
USE
OF PROCEEDS
|
S-5
|
|
CAPITALIZATION
AND INDEBTEDNESS
|
S-6
|
|
DILUTION
|
S-7
|
|
PLAN
OF DISTRIBUTION
|
S-8
|
|
LEGAL
MATTERS
|
S-10
|
|
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
|
S-10
|
|
WHERE
YOU CAN FIND MORE INFORMATION
|
S-10
|
|
CORE
PROSPECTUS
|
PAGE
|
|
ABOUT
THIS PROSPECTUS
|
1
|
|
AMARIN
CORPORATION PLC
|
2
|
|
AMARIN
FINANCE LTD.
|
2
|
|
RISK
FACTORS
|
3
|
|
FORWARD-LOOKING
STATEMENTS
|
16
|
|
PRESENTATION
OF FINANCIAL INFORMATION
|
18
|
|
INCORPORATION
BY REFERENCE
|
19
|
|
WHERE
YOU CAN FIND MORE INFORMATION
|
20
|
|
ENFORCEABILITY
OF CIVIL LIABILITIES
|
20
|
|
USE
OF PROCEEDS
|
20
|
|
RATIO
OF EARNINGS TO FIXED CHARGES AND RATIO OF EARNINGS TO
|
|
|
COMBINED
FIXED CHARGES AND PREFERENCE SHARE DIVIDENDS
|
21
|
|
CAPITALIZATION
AND INDEBTEDNESS
|
21
|
|
PRICE
HISTORY
|
23
|
|
DESCRIPTION
OF DEBT SECURITIES AND GUARANTEES
|
24
|
|
DESCRIPTION
OF ORDINARY SHARES
|
33
|
|
DESCRIPTION
OF PREFERENCE SHARES
|
35
|
|
DESCRIPTION
OF AMERICAN DEPOSITARY SHARES
|
37
|
|
CERTAIN
PROVISIONS OF ENGLISH LAW AND OF THE COMPANY’S
|
|
|
MEMORANDUM
AND ARTICLES OF ASSOCIATION
|
44
|
|
DESCRIPTION
OF WARRANTS
|
45
|
|
DESCRIPTION
OF PURCHASE CONTRACTS
|
46
|
|
DESCRIPTION
OF UNITS
|
47
|
|
TAXATION
|
47
|
|
PLAN
OF DISTRIBUTION
|
47
|
|
EXPERTS
|
49
|
|
LEGAL
MATTERS
|
50
|
|
DISCLOSURE
OF COMMISSION POSITION ON INDEMNIFICATION FOR
|
|
|
SECURITIES
ACT LIABILITIES
|
50
|
-i-
This
prospectus is in two parts. The first part is this prospectus supplement, which
describes the terms of this offering of our ordinary shares, and also adds
to
and updates information contained in or incorporated by reference into the
accompanying core prospectus. The second part is the accompanying core
prospectus, which gives more information about us and the ordinary shares we
may
offer from time to time under our shelf registration statement. To the extent
there is a conflict between the information contained, or referred to, in this
prospectus supplement, on the one hand, and the information contained, or
referred to, in the accompanying core prospectus or any document incorporated
by
reference therein, on the other hand, the information in this prospectus
supplement shall control.
We
have
not authorized any broker, dealer, salesperson or other person to give any
information or to make any representation other than those contained or
incorporated by reference in this prospectus supplement and the accompanying
core prospectus. You must not rely upon any information or representation not
contained or incorporated by reference in this prospectus supplement or the
accompanying core prospectus. This prospectus supplement and the accompanying
core prospectus do not constitute an offer to sell or the solicitation of an
offer to buy ordinary shares in any jurisdiction nor do this prospectus
supplement and the accompanying core prospectus constitute an offer to sell
or
the solicitation of an offer to buy ordinary shares in any jurisdiction to
any
person to whom it is unlawful to make such offer or solicitation in such
jurisdiction. You should not assume that the information contained in this
prospectus supplement and the accompanying core prospectus is accurate on any
date subsequent to the date set forth on the front of the document or that
any
information we have incorporated by reference is correct on any date subsequent
to the date of the document incorporated by reference, even though this
prospectus supplement and any accompanying core prospectus is delivered or
ordinary shares are sold on a later date.
It
is
important for you to read and consider all information contained in this
prospectus supplement and the accompanying core prospectus, including the
documents we have referenced in the section entitled “Incorporation of Certain
Information by Reference” in this prospectus supplement.
In
this
prospectus supplement and the accompanying core prospectus, “Amarin,” “Company,”
“we,” “us” and “our” refer to Amarin Corporation plc and its consolidated
subsidiaries. References to “U.S. dollars,” “USD” or “$” are to the lawful
currency of the United States and references to “pounds sterling,” “GBP£” or “£”
are to the lawful currency of the United Kingdom.
S-1
NOTE
REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus supplement and the accompanying core prospectus include
forward-looking statements. These forward-looking statements relate, among
other
things, to our future capital needs, our ability to acquire or develop
additional marketable products, acceptance of our products by prescribers and
end-users, competitive factors, and our marketing and sales plans. In addition,
we may make forward-looking statements in future filings with the Securities
and
Exchange Commission (the “SEC”) and in written material, press releases and oral
statements issued by or on behalf of us. Forward-looking statements include
statements regarding our intent, belief or current expectations or those of
our
management regarding various matters, including statements that include
forward-looking terminology such as “may,” “will,” “should,” “believes,”
“expects,” “anticipates,” “estimates,” “continues,” or similar
expressions.
Forward-looking
statements are subject to risks and uncertainties, certain of which are beyond
our control. Actual results could differ materially from those anticipated
in
these forward-looking statements as a result of various factors, including
the
factors described in the Risk Factors section beginning on page 3 of the
accompanying core prospectus, the Risk Factors section of this prospectus
supplement and the Risk Factor section of our Annual Report on Form 20-F
for the year ended December 31, 2005, as amended on October 13, 2006 (which
is incorporated by reference in the accompanying core prospectus). Some, but
not
all, of these factors are the timing of our future capital needs and our ability
to raise additional capital when needed, our ability to obtain regulatory
approval for our products, uncertainty of market acceptance of our products,
our
ability to compete with other pharmaceutical companies, our ability to develop
or acquire new products, problems with important third-party manufacturers
on
whom we rely, our ability to attract and retain key personnel, and
implementation and enforcement of government regulations. This list of factors
is not exclusive and other risks and uncertainties may cause actual results
to
differ materially from those in forward-looking statements.
All
forward-looking statements in this prospectus supplement and core prospectus
are
based on information available to us on the date hereof. We may not be required
to publicly update or revise any forward-looking statements that may be made
by
us or on our behalf, in this prospectus supplement and core prospectus or
otherwise, whether as a result of new information, future events or other
reasons. Because of these risks and uncertainties, the forward-looking events
and circumstances discussed in this prospectus supplement and core prospectus
might not transpire.
S-2
|
Ordinary
shares of 5p offered by us
|
8,965,600
shares
|
|
Ordinary
shares to be outstanding after
this
Offering
|
90,632,064
shares
|
|
Use
of proceeds
|
We
estimate that the net proceeds from this offering will be approximately
$17.3 million after deducting the placement agent’s fees, and estimated
offering expenses. For
purposes of calculating the placement agent’s fees, we have assumed that
all of the ordinary shares offered by this prospectus supplement
are sold
in this offering and that the aggregate fees and commissions paid
by the
Company will be in an amount equal to 6% of all proceeds from this
offering. The actual aggregate fees and commissions payable by the
Company
may be different depending on the actual number of shares sold and
the
applicable fees payable with respect to such sales. See “Plan of
Distribution.” on page S-8. We
currently anticipate using the net proceeds of this offering primarily
for
general working capital, clinical trials, research and development
expenses, selling and administrative expenses and for potential
acquisitions of, or investments in, complementary businesses, products
and
technologies. See “Use of Proceeds” on page S-5.
|
|
Nasdaq
Capital Market Symbol
|
AMRN
|
The
information above and elsewhere in this prospectus supplement regarding our
outstanding ordinary shares, other than on the tables appearing in
“Capitalization and Indebtedness” on page S-6 and “Dilution” on page S-7, is
based on 81,666,464 shares outstanding as of September
30, 2006.
S-3
RISK
FACTORS
The
funds
generated from this equity offering may
not
end our need to find additional capital resources.
Prior
to
the completion of this offering, we have forcasted that we have sufficient
cash
to fund our group operating activities into the fourth quarter of 2007. In
addition, we intend to seek additional funding through earning license fees
from
partnering our drug development pipeline and/or completing further equity-based
financings such as this offering. There is no assurance, however, that this
offering will eliminate the uncertainty as to whether we will be able to fund
our operations on an ongoing basis. We will also require further capital
investment in the future to implement our long-term growth strategy of acquiring
additional development stage and/or marketable products, recruiting clinical,
regulatory and sales and marketing personnel, and growing our business. Our
ability to execute our business strategy and sustain our infrastructure at
our
current level will continue to be impacted by our ability to raise additional
capital and/or obtain additional funding. Depending on market conditions in
the
future and our ability to maintain financial stability, we may not have access
to additional capital on reasonable terms or at all. Any inability to obtain
additional financing when needed would have a material adverse effect on our
business and on our ability to operate our business on an ongoing
basis.
S-4
USE
OF PROCEEDS
We
estimate that the net proceeds from this offering will be approximately $17.3
million after deducting the placement agent’s fees and estimated offering
expenses. For
purposes of calculating the placement agent’s fees, we have assumed that all of
the ordinary shares offered by this prospectus supplement are sold in this
offering and that the aggregate fees and commissions paid by us will be in
an
amount equal to 6% of all proceeds from this offering. The actual aggregate
fees
and commissions payable by us may be different depending on the actual number
of
shares sold and the applicable fees payable with respect to such sales. See
“Plan of Distribution” on page S-8.
We
will
retain broad discretion over the use of the net proceeds from the sale of our
ordinary shares offered hereby. We currently anticipate using the net proceeds
of this offering for:
| · |
general
working capital;
|
| · |
clinical
trials, research and development
expenses;
|
| · |
selling,
general and administrative expenses;
and
|
| · |
potential
acquisitions of, or investments in, complementary businesses, products
and
technologies.
|
Pending
the use of the net proceeds of this offering, we intend to invest the proceeds
in short-term, interest-bearing, money market deposit accounts.
S-5
CAPITALIZATION
AND INDEBTEDNESS
The
following table sets forth, on a UK GAAP basis, our capitalization and
indebtedness, as of June 30, 2006:
| · |
on
an actual basis; and
|
| · |
on
an as-adjusted basis to give effect to the sale of 8,965,600 ordinary
shares in this offering after deducting the fees and commissions,
as
described in “Plan of Distribution” on page S-8, and estimated offering
expenses payable by us. For purposes of calculating the aggregate
fees and
commissions, we have assumed that the aggregate fees and commissions
will
be as identified on the cover page of this prospectus supplement.
The
actual aggregate fees and commissions payable by us may be different
depending on the actual number of shares sold and the applicable
fees
payable with respect to such sales.
See “Plan of Distribution” on page
S-8.
|
This
table
should be read in conjunction with our consolidated financial statements for
the
three years ended December 31, 2005 set forth in our Annual Report on
Form 20-F for the year ended December 31, 2005, as amended October 13,
2006, together with our quarterly earnings releases and interim financial
statements filed under Form 6-K as incorporated in the accompanying core
prospectus.
As
at
June 30, 2006 Amarin Corporation plc held $28.8 million of cash
balances.
|
Actual
$’000
|
As
Adjusted
$'000 |
||||||
|
Shareholders’
equity:
|
|||||||
|
Called
up share capital
|
7,121
|
7,954
|
|||||
|
Treasury
shares
|
(217
|
)
|
(217
|
)
|
|||
|
Capital
redemption reserve
|
27,633
|
27,633
|
|||||
|
Share
premium account
|
130,654
|
147,081
|
|||||
|
Profit
and loss account — (deficit)
|
(131,711
|
)
|
(131,711
|
)
|
|||
|
Total
shareholders’ equity
|
33,480
|
50,740
|
|||||
|
Total
capitalization
|
33,480
|
50,740
|
|||||
The
above
table does not reflect the following:
| · |
In
July 2006, we issued 121,288 ordinary shares due to the exercise
of
warrants of nominal value $11,000 in aggregate for the total consideration
of $173,000. These warrants were issued as part of the financing
completed
in December 2005.
|
| · |
In
August 2006, we issued 85,000 ordinary shares due to the exercise
of
warrants of nominal value $8,000 in aggregate for the total consideration
of $122,000. These warrants were issued as part of the financing
completed
in December 2005.
|
| · |
Between
July and September 2006, we issued 6,980 ordinary shares due to the
exercise of share options of nominal $1,000 in aggregate for a total
consideration of $10,000.
|
S-6
Under
UK
GAAP, the net tangible book value of our ordinary shares on June 30, 2006
was $24.2 million, or approximately $0.30 per ordinary share, based on
81,453,190 ordinary shares outstanding. Net tangible book value per ordinary
share represents the amount of our total tangible assets excluding intangible
assets, less our total liabilities, divided by the total number of our ordinary
shares outstanding. Dilution in net tangible book value per ordinary share
to
new investors represents the difference between the amount per ordinary share
paid by investors in this offering and the net tangible book value per ordinary
share immediately afterwards. Without taking into account any other changes
in
net tangible book value after June 30, 2006, other than to give effect to
our receipt of the estimated net proceeds from the sale of the ordinary shares
issuable in this offering at an offering price of $2.09 per ordinary share,
less
estimated offering expenses, our net tangible book value as of June 30,
2006 after giving effect to the proceeds described above would have been
approximately $41.5 million or $0.46 per ordinary share. This represents an
immediate increase in net tangible book value of $0.16 per ordinary share to
existing stockholders and an immediate dilution in net tangible book value
of
$1.63 per ordinary share to new investors.
The
following table illustrates this per ordinary share dilution:
|
Offering
price per ordinary share
|
$2.09
|
|
|
Net
tangible book value per ordinary share as of June 30,
2006
|
$0.30
|
|
|
Increase
per ordinary share attributable to new investors
|
$0.16
|
|
|
As
adjusted net tangible book value per ordinary share after the
offering
|
$0.46
|
|
|
Dilution
in net tangible book value per ordinary share to new
investors
|
$1.63
|
S-7
PLAN
OF DISTRIBUTION
We
have
engaged Banc of America Securities LLC as our placement agent pursuant to a
placement agency agreement dated October 17, 2006, pursuant to which the
placement agent has agreed to use best efforts to solicit offers from investors
to purchase our ordinary shares in this offering. The placement agent is not
obligated to, and has advised us that it will not, purchase any of our ordinary
shares or ADSs for its own account or otherwise participate in any direct
purchases of ordinary shares or ADSs with us. We have entered into purchase
agreements directly with purchasers in connection with this offering, and we
will only sell to purchasers who have entered into purchase
agreements.
The
ordinary shares will be sold at a negotiated price of $2.09 per ordinary
share.
Our
obligation to issue and sell ordinary shares to purchasers is subject to the
conditions set forth in the purchase agreements, which may be waived by us
in
our discretion. A purchaser’s obligation to purchase ordinary shares is subject
to conditions set forth in the purchase agreements, which may be waived by
the
purchaser.
We
will
deliver the ordinary shares being issued to the investors to National City
Nominees Limited of Citigroup Centre, Canada Square, Canary Wharf, London E14
5LB, being the nominee of Citibank, N.A., and Citibank, N.A. London Branch,
the
custodian of our depositary, Citibank N.A., will then cause ADSs to be issued
to
purchasers in book entry form (unless instructed otherwise) upon our receipt
of
purchaser funds for the purchase of the ordinary shares offered pursuant to
this
prospectus and upon delivery of such ordinary shares to Citibank’s custodian. We
expect to deliver the ordinary shares being offered pursuant to this prospectus
on or about October 23, 2006.
We
will
pay the placement agent a selling commission fee of 6% of the gross proceeds
on
sales made under this prospectus supplement to purchasers in the United States
other than certain investors specified by us, plus 5% of gross proceeds on
sales
to such specified investors. We have also agreed to reimburse the placement
agent for reasonable costs and expenses (subject to an agreed maximum) incurred
by it in connection with this offering. We
will
also pay J&E Davy a cash finder fee in an amount equal to 5% of the gross
proceeds on sales made under this prospectus supplement to certain purchasers
outside the United States identified by J&E Davy. No fees shall be payable
to the placement agent with respect to proceeds of or from any investors outside
the United States introduced by J&E Davy.
The maximum
commission or discount to be received by any NASD member or independent
broker/dealer will not be greater than 8.0% for the sale of any securities
pursuant to this registration statement.
The
following table shows the per ordinary share and total fees and commissions
we
will pay to the placement agent in connection with the sale of the ordinary
shares offered by this prospectus supplement and the accompanying prospectus,
assuming the purchase of all of the ordinary shares offered hereby.
|
Per
Ordinary
Share
|
Total
Offering
|
|
|
Banc
of America Securities LLC
|
$0.11
|
$947,806
|
|
J&E
Davy
|
$0.02
|
$162,700
|
Because
there is no minimum offering amount required as a condition to closing in this
offering, the actual total offering fees, if any, are not presently determinable
and may be substantially less than the maximum amount set forth
above.
The
placement agent has informed us that it will not engage in over-allotment or
stabilizing transactions in connection with this offering. The
placement agent may be deemed to be an “underwriter” within the meaning of the
Securities Act. We have agreed to indemnify the placement agent against certain
civil liabilities, including liabilities under the Securities Act, and to
contribute to payments that the placement agent may be required to make in
respect of those liabilities.
The
placement agent does not expect sales of ordinary shares offered by this
prospectus supplement and the accompanying core prospectus to any accounts
over
which it exercises discretionary authority to exceed five percent of the
ordinary shares offered and will not in any event sell to such accounts without
the express consent of the
S-8
beneficial
owner. Pursuant to rules governing our ordinary shares traded on AIM, upon
sales
to an account over which the placement agent exercises discretionary authority
which results in such account holding in excess of 3% of our total ordinary
shares, the placement agent will notify us and we will notify AIM.
The
placement agency agreement with Banc of America Securities LLC will be included
as an exhibit to a Report on Form 6-K that we will furnish to the SEC and
that will be incorporated by reference into this prospectus.
All
proceeds of this offering will be held in a separate account to be administered
by us. The proceeds will be held by us until the closing of this offering is
confirmed by us and the placement agent. If the closing does not occur, the
funds will be returned to purchasers without interest or deduction.
The
placement agent or its affiliates may in the future provide investment banking,
commercial banking and/or other services to us from time to time, for which
it
may in the future receive customary fees and expenses.
S-9
Certain
legal matters with respect to English law with respect to the validity of the
ordinary shares offered hereby will be passed upon for us by
Kirkpatrick & Lockhart Nicholson Graham LLP. Heller Ehrman LLP will
pass upon certain legal matters in connection with this offering for the
placement agent. Cahill Gordon & Reindell LLP
will pass
upon certain U.S. federal legal matters with respect to the offering for
us.
The
SEC
allows us to incorporate by reference documents we file with the SEC, which
means that we can disclose information to you by referring you to those
documents. The information incorporated by reference is considered to be part
of
this prospectus, and certain later information that we file with the SEC will
automatically update and supersede this information. Our Annual Report on
Form 20-F for the fiscal year ended December 31, 2005, as amended on
October 13, 2006, and with our quarterly earnings releases and interim financial
statements filed under Form 6-K, are incorporated by reference in the
accompanying core prospectus.
All
annual
reports on Form 20-F that we file with the SEC pursuant to the Securities
Exchange Act of 1934 after the date of this prospectus supplement and prior
to
the termination of the offering shall be deemed to be incorporated by reference
into this prospectus and to be part hereof from the date of filing of such
documents. We may incorporate by reference any Form 6-K subsequently
submitted to the SEC by identifying in such Form that it is being incorporated
by reference into this prospectus.
We
shall
undertake to provide without charge to each person to whom a copy of this
prospectus has been delivered, upon the written or oral request of any such
person to us, a copy of any or all of the documents referred to above that
have
been or may be incorporated into this prospectus by reference, including
exhibits to such documents, unless such exhibits are specifically incorporated
by reference to such documents. Requests for such copies should be directed
to
Amarin Corporation plc, 50 Pembroke Road, Dublin 4, Ireland, Attention: Company
Secretary, telephone +353-1-6699020.
You
should
rely only on the information incorporated by reference or provided in this
prospectus supplement and the accompanying core prospectus. We have not
authorized anyone else to provide you with different information. This
prospectus is an offer to sell or to buy only the securities referred to in
this
prospectus, and only under circumstances and in jurisdictions where it is lawful
to do so. The information contained in this prospectus supplement and the core
prospectus is current only as of the date on the front page of those documents.
Also, you should not assume that there has been no change in our affairs since
the date of this prospectus supplement.
We
file
reports, including annual reports on Form 20-F, and other information with
the SEC pursuant to the rules and regulations of the SEC that apply to foreign
private issuers. You may read and copy any materials filed with the SEC at
its
Public Reference Room at 100 F Street, N.E., Washington, D.C. 20459. You may
obtain information on the operation of the Public Reference Room by calling
the
SEC at 1-800-SEC-0330. The registration
S-10
statement
of which this prospectus is a part, and other public filings with the SEC,
are
also available on the website maintained by the SEC at http://www.sec.gov.
We
provide
Citibank N.A., as depositary under the deposit agreement between us, the
depositary and registered holders of the ADRs evidencing ADSs, with annual
reports, including a directors report, and annual audited consolidated financial
statements prepared in conformity with generally accepted accounting principles
in the United Kingdom, or UK GAAP, together with a reconciliation of net income
and total stockholders equity to generally accepted accounting principles in
the
United States, or US GAAP. Upon receipt of these reports, the depositary is
obligated to promptly mail them to all record holders of ADSs. We also furnish
to the depositary all notices of meetings of holders of ordinary shares and
other reports and communications that are made generally available to holders
of
ordinary shares. The depositary has undertaken in the deposit agreement to
mail
to all holders of ADSs a notice containing the information contained in any
notice of a shareholders’ meeting received by the depositary, or a summary of
such information. The depositary has also undertaken in the deposit agreement
to
make available to all holders of ADSs such notices and all other reports and
communications received by the depositary in the same manner as we make them
available to holders of ordinary shares.
S-11
$100,000,000
AMARIN
CORPORATION PLC
Ordinary
Shares
Ordinary
Shares, in the form of American Depositary Shares
Preference
Shares
Preference
Shares, in the form of American Depositary Shares
Debt
Securities
Warrants
Purchase
Contracts
Units
and
Guarantees of Debt Securities
AMARIN
FINANCE LTD.
Debt
Securities
We
may
offer and sell from time to time:
| · |
ordinary
shares, each of which may be represented by one American Depositary
Share;
|
| · |
preference
shares, each of which may be represented by one American Depositary
Share;
|
| · |
warrants
to purchase any other securities that may be sold under this prospectus,
securities of third parties or other
rights;
|
| · |
purchase
contracts to purchase ordinary shares or other securities that may
be sold
under this prospectus;
|
| · |
any
combination of these securities, individually or as units;
and
|
| · |
senior
or subordinated debt securities.
|
Amarin
Finance may offer and sell from time to time senior or subordinated debt
securities which we will guarantee.
We
will
provide the specific terms and initial public offering prices of these
securities in supplements to this prospectus. You should read this prospectus
and the accompanying prospectus supplement carefully before you
invest.
We
may
offer securities through underwriting syndicates managed or co-managed by one
or
more underwriters or dealers, through agents or directly to purchasers. The
prospectus supplement for each offering of securities will describe in detail
the plan of distribution for that offering. For general information about the
distribution of securities offered, please see “Plan of Distribution” in this
prospectus.
Our
American Depositary Shares representing ordinary shares, evidenced by American
Depositary Receipts, are traded on the Nasdaq Capital Market, the principal
trading market for our securities, under the symbol
“AMRN.”
Our ordinary shares have also recently been admitted to listing on the AIM
market of the London Stock Exchange and the IEX market of the Irish Stock
Exchange. If we decide to list any of these other securities on a national
securities exchange upon issuance, the applicable prospectus supplement to
this
prospectus will identify the exchange and the date when we expect trading to
begin.
SEE
“RISK FACTORS” REFERRED TO ON PAGE 3 TO READ ABOUT FACTORS YOU SHOULD CONSIDER
BEFORE BUYING THE SECURITIES.
NEITHER
THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION
HAS
APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS
OR
THE ACCOMPANYING PROSPECTUS SUPPLEMENT IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Neither
the Bermuda Monetary Authority nor the Registrar of Companies in Bermuda accepts
any responsibility for the financial soundness of Amarin Finance or the
correctness of any of the statements made or opinions expressed in this
prospectus.
This
prospectus may not be used to consummate sales of securities unless accompanied
by the applicable prospectus supplement.
The
date
of this prospectus is July 12, 2006
TABLE
OF CONTENTS
|
1
|
|
|
Amarin
Corporation plc
|
2
|
|
Amarin
Finance Ltd.
|
2
|
|
Risk
Factors
|
3
|
|
Forward-Looking
Statements
|
16
|
|
Presentation
of Financial Information
|
18
|
|
Incorporation
by Reference
|
19
|
|
Where
You Can Find More Information
|
20
|
|
Enforceability
of Civil Liabilities
|
20
|
|
Use
of Proceeds
|
20
|
|
Ratio
of Earnings to Fixed Charges and Ratio of Earnings to Combined Fixed
Charges and Preference Share Dividends
|
21
|
|
Capitalization
and Indebtedness
|
21
|
|
Price
History
|
23
|
|
Description
of Debt Securities and Guarantees
|
24
|
|
Description
of Ordinary Shares
|
33
|
|
Description
of Preference Shares
|
35
|
|
Description
of American Depositary Shares
|
37
|
|
Certain
Provisions of English Law and of the Company’s Memorandum and Articles of
Association
|
44
|
|
Description
of Warrants
|
45
|
|
Description
of Purchase Contracts
|
46
|
|
Description
of Units
|
47
|
|
Taxation
|
47
|
|
Plan
of Distribution
|
47
|
|
Experts
|
49
|
|
Legal
Matters
|
50
|
|
Disclosure
of Commission Position on Indemnification for Securities Act
Liabilities
|
50
|
-i-
ABOUT
THIS PROSPECTUS
This
prospectus is part of a registration statement on Form F-3 that Amarin and
the other registrants filed with the Securities and Exchange Commission (or
the
SEC) using a “shelf” registration process. Under this process, we may, from time
to time, sell the securities described in this prospectus in one or more
offerings up to a total dollar amount of $100 million or the equivalent
denominated in foreign currencies.
This
prospectus provides you with a general description of the securities that we
may
offer and the related guarantees, if any, of those securities. Each time we
sell
securities, we will provide a prospectus supplement that will contain specific
information about the terms of the offering. This prospectus will be filed
with
the Registrar of Companies in Bermuda in accordance with Bermuda law. The
prospectus supplement may also add, update or change information contained
in
this prospectus, and may also contain information about any material federal
income tax considerations relating to the securities covered by the prospectus
supplement. You should read both this prospectus and any prospectus supplement,
together with additional information described below under the heading “Where
You Can Find More Information,” before purchasing any of our securities. This
prospectus does not contain all of the information included in the registration
statement. For a more complete understanding of the offering of the securities,
you should refer to the registration statement, including the
exhibits.
You
should
rely only on the information contained in or incorporated by reference in this
prospectus and any prospectus supplement. We have not authorized anyone to
provide you with different information. We are not making offers to sell the
securities in any jurisdiction in which an offer or solicitation is not
authorized or in which the person making such offer or solicitation is not
qualified to do so or to anyone to whom it is unlawful to make an offer or
solicitation.
The
information in this prospectus is accurate as of the date on the front cover.
You should not assume that the information contained in this prospectus is
accurate as of any other date.
Unless
the
context otherwise requires, in this prospectus, “Amarin,” “Company,” “we,” “us”
and “our” refer to Amarin Corporation plc and its consolidated subsidiaries.
References to “Amarin Finance” refer to Amarin Finance Ltd. and references to
“Amarin Neuroscience” refer to Amarin Neuroscience Limited. References to “U.S.
dollars,” “USD” or “$” are to the lawful currency of the United States,
references to “euros” or “€” are to the lawful currency of the member states of
the European Economic and Monetary Union and references to “pounds sterling,”
“GBP” or “£” are to the lawful currency of the United Kingdom.
1
Amarin
is
a neuroscience company focused on the research, development and
commercialization of novel drugs for the treatment of central nervous system
disorders. Our goal is to capitalize on our reputation in neurology and to
become a leader in the development and commercialization of novel drugs which
address unmet medical needs.
Amarin
was
incorporated in England as a private limited company on March 1, 1989 under
the
Companies Act of 1985, a statute governing companies in Great Britain, and
re-registered in England as a public limited company on March 19, 1993. Our
registered office and our principal executive offices are located at 7 Curzon
Street, Mayfair, London W1J 5HG, England, and our telephone number is
+44-20-7499-9009. Our website address is www.amarincorp.com.
Information contained in our website is not a part of this
prospectus.
AMARIN
FINANCE LTD.
Amarin
has
organized Amarin Finance for the purpose of issuing debt securities pursuant
to
this prospectus. There are no separate financial statements of Amarin Finance
in
this prospectus because it is a subsidiary of Amarin for financial reporting
purposes. We do not believe the financial statements would be helpful to the
holders of the securities of Amarin Finance because:
| · |
Amarin
is a reporting company under the Securities Exchange Act of 1934,
as
amended (referred to in this prospectus as the “Exchange Act”) and owns,
directly or indirectly, all of the voting interests of Amarin
Finance;
|
| · |
Amarin
Finance does not have any independent operations and does not propose
to
engage in any activities other than issuing securities and investing
the
proceeds in Amarin or its affiliates;
and
|
| · |
Amarin
Finance’s obligations under the securities will be fully and
unconditionally guaranteed by
Amarin.
|
Amarin
Finance is exempt from the information reporting requirements of the Exchange
Act.
Amarin
Finance is a Bermuda exempted company limited by shares that was formed under
the Bermuda Companies Act 1981 on June 23, 2006. Its registered office is at
Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda, and its telephone
number is +441-295-1422.
2
RISK
FACTORS
Investing
in our securities involves risks. You should carefully consider the risk factors
described below and the other information included or incorporated by reference
in this prospectus and the accompanying prospectus supplement before making
an
investment decision. The risks and uncertainties described in the risk factors
are not the only ones that we face. Additional risks and uncertainties not
presently known to us or that we currently believe to be immaterial may also
adversely affect our business. If any of the risks and uncertainties mentioned
in the risk factors develop into actual events, our business, financial
condition and results of operations could be materially and adversely affected.
In such an instance, the trading price of our securities could decline, and
you
might lose all or part of your investment. Additional risk factors may be
included in a prospectus supplement relating to a particular series or offering
of securities.
We
have a history of losses, and we may not be able to attain profitability in
the
foreseeable future.
We
have
not been profitable in four of the last five fiscal years. For the fiscal years
ended December 31, 2001, 2002, 2003, 2004, and 2005 we reported (losses)/profits
of approximately $(5.3) million, $(37.0) million, $(19.2) million, $4.0 million
and ($18.7) million, respectively, under UK GAAP. For the quarter ended March
31, 2006, we reported losses of approximately $(6.4) million under UK GAAP.
Unless and until marketing approval is obtained from either the U.S. Food and
Drug Administration, which we refer to as the FDA, or European Medicines
Evaluation Agency, which we refer to as the EMEA, for our principal product,
MiraxionTM,
or we
are otherwise able to acquire rights to products that have received regulatory
approval or are at an advanced stage of development and can be readily
commercialized, we may not be able to generate revenues in future periods and
we
may not be able to attain profitability.
By
February 2004, we had divested a majority of our assets. Although we
subsequently acquired Amarin Neuroscience (formerly Laxdale Limited) and its
leased facility in Stirling, Scotland on October 8, 2004, we continue to have
limited operations, assets and financial resources. As a result, we currently
have no marketable products or other source of revenues. All of our current
products, including Miraxion, our principal product, are in the development
stage. The development of pharmaceutical products is a capital intensive
business. Therefore, we expect to incur expenses without corresponding revenues
at least until we are able to obtain regulatory approval and sell our future
products in significant quantities. This may result in net operating losses,
which will increase continuously until we can generate an acceptable level
of
revenues, which we may not be able to attain. Further, even if we do achieve
operating revenues, there can be no assurance that such revenues will be
sufficient to fund continuing operations. Therefore, we cannot predict with
certainty whether we will ever be able to achieve profitability.
In
addition to advancing our existing development pipeline, we also intend to
acquire rights to additional products. However, we may not be successful in
doing so. We may need to raise additional capital before we can acquire any
products. There is also a risk that Miraxion or any other development stage
products we may acquire will not be approved by the FDA or regulatory
authorities in other countries on a timely basis or at all. The inability to
obtain such approvals would adversely affect our ability to generate
revenues.
The
likelihood of success of our business plan must be considered in light of the
problems, expenses, difficulties, complications and delays frequently
encountered in connection with developing and expanding early stage businesses
and the regulatory and competitive environment in which we operate.
Our
historical financial results do not form an accurate basis for assessing our
current business.
As
a
consequence of the divestiture of a majority of our business and assets during
2003 and early 2004 and our acquisition of Amarin Neuroscience in October 2004,
our historical financial results do not form an accurate basis upon which
investors should base an assessment of our business and prospects. Prior to
such
divestiture, our business was primarily the sale of marketable products in
the
United States, the out-licensing of our proprietary technologies, and research
and development activities. Following the acquisition of Amarin Neuroscience,
we
are now focused on the research, development and commercialization of novel
drugs for the central nervous system, which we refer to as the CNS. Accordingly,
our historical financial results reflect a substantially different business
from
that currently being conducted.
3
We
may have to issue additional equity leading to shareholder
dilution.
We
are
committed to issue equity to the former shareholders of Amarin Neuroscience
upon
the successful achievement of specified milestones for the Miraxion development
program (subject to such shareholders’ right to choose cash payment in lieu of
equity). Pursuant to the Amarin Neuroscience share purchase agreement, further
success-related milestones will be payable as follows:
On
receipt
of marketing approval in the United States and Europe for the first indication
of any product containing Amarin Neuroscience intellectual property, we must
make an aggregate stock or cash payment (at the sole option of each of the
sellers) of GBP£7.5 million for each of the two potential market approvals
(i.e., GBP£15.0 million maximum).
In
addition, on receipt of a marketing approval in the United States and Europe
for
any other product using Amarin Neuroscience intellectual property or for a
different indication of a previously approved product, we must make an aggregate
stock or cash payment (at the sole option of each of the sellers) of GBP£5
million for each of the two potential market approvals (i.e., GBP£10 million
maximum).
In
connection with the completion of our December 2005 private placement of
Ordinary Shares, which raised gross proceeds of $26.4 million, investors in
the
offering were issued 5-year warrants to purchase 9,135,034 ordinary shares
at an
exercise price of $1.43 per share. In addition, in connection with an additional
private placement of ordinary shares which raised gross proceeds of $2.1
million, the investor in the offering was issued 5-year warrants to purchase
280,000 ordinary shares at an exercise price of $3.06 per share.
We
also
have outstanding warrants to purchase 500,000 ordinary shares at an exercise
price of $1.90 per share, which were originally acquired by Elan Corporation,
plc as part of a debt renegotiation and were subsequently sold by Elan to Amarin
Investment Holding Limited, an entity controlled by Mr. Thomas G. Lynch, our
Chairman. We also have outstanding warrants to purchase 313,234 ordinary shares
at an exercise price of $3.48 per share. As at May 31, 2006, we also had
outstanding employee options to purchase 5,286,963 ordinary shares at an average
price of $3.00 per share. Additionally, in pursuing our growth strategy we
will
either need to issue new equity as consideration for the acquisition of
products, or to otherwise raise additional capital, in which case equity,
convertible equity or debt instruments may be issued. The creation of new shares
would lead to dilution of the value of the shares held by our current
shareholder base.
If
we cannot find additional capital resources, we will have difficulty in
operating as a going concern and growing our business.
The
Company forecasts having sufficient cash to fund our group operating activities
into the fourth quarter of 2007. In addition, we intend to obtain additional
funding through earning license fees from partnering our drug development
pipeline and/or completing further financings. There is no assurance, however,
that our efforts to obtain additional funding from these sources will be
successful. If efforts are unsuccessful, there is substantial uncertainty as
to
whether we will be able to fund our operations on an ongoing basis. We may
also
require further funds in the future to implement our long-term growth strategy
of acquiring additional development stage and/or marketable products, recruiting
clinical, regulatory and sales and marketing personnel, and growing our
business. Our ability to execute our business strategy and sustain our
infrastructure at our current level will be impacted by whether or not we have
sufficient funds. Depending on market conditions and our ability to maintain
financial stability, we may not have access to additional funds on reasonable
terms or at all. Any inability to obtain additional funds when needed would
have
a material adverse effect on our business and on our ability to operate on
a
ongoing basis.
We
may be dependent upon the success of a limited range of
products.
At
present, we are substantially reliant upon the success of our principal product,
Miraxion. If development efforts for this product are not successful in either
Huntington’s disease, which we refer to as HD, depression, or any other
indication or if approved by the FDA, if adequate demand for this product is
not
generated, our business will
4
be
materially and adversely affected. Although we intend to bring additional
products forward from our research and development efforts, including our novel
oral formulation of apomorphine for the treatment of “off” episodes in patients
with advanced Parkinson’s disease, and to acquire additional products, even if
we are successful in doing so, the range of products we will be able to
commercialize may be limited. This could restrict our ability to respond to
adverse business conditions. If we are not successful in developing Miraxion
for
HD, depression, or any other indication, our formulation of apomorphine for
treatment of Parkinson’s disease, or any future product, or if there is not
adequate demand for any such product or the market for such product develops
less rapidly than we anticipate, we may not have the ability to shift our
resources to the development of alternative products. As a result, the limited
range of products we intend to develop could constrain our ability to generate
revenues and achieve profitability.
Our
ability to generate revenues depends on obtaining regulatory approvals for
Miraxion.
Miraxion,
which is in phase III clinical development for HD, phase II clinical development
for depressive disorders, and preclinical development for Parkinson’s disease is
currently our only product in late-stage development. In order to successfully
commercialize Miraxion, we will be required to conduct all tests and clinical
trials needed in order to meet regulatory requirements, to obtain applicable
regulatory approvals, and to prosecute patent applications. The costs of
developing and obtaining regulatory approvals for pharmaceutical products can
be
substantial. We are conducting two phase III clinical studies to support a
possible new drug application, which we refer to as an NDA, for Miraxion for
the
treatment of HD. Statistical significance was not achieved in the entire study
patient population in the first phase III study; however, a trend to
significance was observed in the group that adhered to the protocol and
significant results were observed in the sub-group of patients that had a
genetic CAG number of less than 45. Our ability to commercialize Miraxion for
this indication is dependent upon the success of these development efforts.
If
such clinical trials fail to produce satisfactory results, or if we are unable
to maintain the financial and operational capability to complete these
development efforts, we may be unable to generate revenues from Miraxion. Even
if we obtain regulatory approvals, the timing or scope of any approvals may
prohibit or reduce our ability to commercialize Miraxion successfully. For
example, if the approval process takes too long we may miss market opportunities
and give other companies the ability to develop competing products.
Additionally, the terms of any approvals may not have the scope or breadth
needed for us to commercialize Miraxion successfully.
We
may not be successful in developing or marketing future products if we cannot
meet extensive regulatory requirements of the FDA and other regulatory agencies
for quality, safety and efficacy.
Our
long-term strategy involves the development of products we may acquire from
third parties. The success of these efforts is dependent in part upon the
ability of the Company, its contractors, and its products to meet and to
continue to meet regulatory requirements in the jurisdictions where we
ultimately intend to sell such products. The development, manufacture and
marketing of pharmaceutical products are subject to extensive regulation by
governmental authorities in the United States, the European Union, Japan and
elsewhere. In the United States, the FDA generally requires pre-clinical testing
and clinical trials of each drug to establish its safety and efficacy and
extensive pharmaceutical development to ensure its quality before its
introduction into the market. Regulatory authorities in other jurisdictions
impose similar requirements. The process of obtaining regulatory approvals
is
lengthy and expensive and the issuance of such approvals is uncertain. The
commencement and rate of completion of clinical trials may be delayed by many
factors, including:
| · |
the
inability to manufacture sufficient quantities of qualified materials
under current good manufacturing practices for use in clinical
trials;
|
| · |
slower
than expected rates of patient
recruitment;
|
| · |
the
inability to observe patients adequately after
treatment;
|
| · |
changes
in regulatory requirements for clinical
trials;
|
| · |
the
lack of effectiveness during clinical
trials;
|
| · |
unforeseen
safety issues;
|
5
| · |
delay,
suspension, or termination of a trial by the institutional review
board
responsible for overseeing the study at a particular study site;
and
|
| · |
government
or regulatory delays or “clinical holds” requiring suspension or
termination of a trial.
|
Even
if we
obtain positive results from early stage pre-clinical or clinical trials, we
may
not achieve the same success in future trials. Clinical trials that we conduct
may not provide sufficient safety and effectiveness data to obtain the requisite
regulatory approvals for product candidates. The failure of clinical trials
to
demonstrate safety and effectiveness for our desired indications could harm
the
development of that product candidate as well as other product candidates,
and
our business and results of operations would suffer.
Any
approvals that are obtained may be limited in scope, or may be accompanied
by
burdensome post-approval study or other requirements. This could adversely
affect our ability to earn revenues from the sale of such products. Even in
circumstances where products are approved by a regulatory body for sale, the
regulatory or legal requirements may change over time, or new safety or efficacy
information may be identified concerning a product, which may lead to the
withdrawal of a product from the market. Additionally, even after approval,
a
marketed drug and its manufacturer are subject to continual review. The
discovery of previously unknown problems with a product or manufacturer may
result in restrictions on such product or manufacturer, including withdrawal
of
the product from the market, which would have a negative impact on our potential
revenue stream.
After
approval, our products will be subject to extensive government
regulation.
Once
a
product is approved, numerous post-approval requirements apply. Among other
things, the holder of an approved NDA or other license is subject to periodic
and other monitoring and reporting obligations enforced by the FDA and other
regulatory bodies, including obligations to monitor and report adverse events
and instances of the failure of a product to meet the specifications in the
approved application. Application holders must also submit advertising and
other
promotional material to regulatory authorities and report on ongoing clinical
trials.
Advertising
and promotional materials must comply with FDA rules in addition to other
potentially applicable federal and local laws in the United States and in other
countries. In the United States, the distribution of product samples to
physicians must comply with the requirements of the U.S. Prescription Drug
Marketing Act. Manufacturing facilities remain subject to FDA inspection and
must continue to adhere to the FDA’s current good manufacturing practice
requirements. Application holders must obtain FDA approval for product and
manufacturing changes, depending on the nature of the change. Sales, marketing,
and scientific/educational grant programs must also comply with the U.S.
Medicare-Medicaid Anti-Fraud and Abuse Act, as amended, the U.S. False Claims
Act, as amended and similar state laws. Pricing and rebate programs must comply
with the U.S. Medicaid rebate requirements of the Omnibus Budget Reconciliation
Act of 1990, as amended. If products are made available to authorized users
of
the U.S. Federal Supply Schedule of the General Services Administration,
additional laws and requirements apply. All of these activities are also
potentially subject to U.S. federal and state consumer protection and unfair
competition laws. Similar requirements exist in all of these areas in other
countries.
Depending
on the circumstances, failure to meet these post-approval requirements can
result in criminal prosecution, fines or other penalties, injunctions, recall
or
seizure of products, total or partial suspension of production, denial or
withdrawal of pre-marketing product approvals, or refusal to allow us to enter
into supply contracts, including government contracts. In addition, even if
we
comply with FDA and other requirements, new information regarding the safety
or
effectiveness of a product could lead the FDA to modify or withdraw a product
approval. Adverse regulatory action, whether pre- or post-approval, can
potentially lead to product liability claims and increase our product liability
exposure. We must also compete against other products in qualifying for
reimbursement under applicable third party payment and insurance
programs.
Our
future products may not be able to compete effectively against those of our
competitors.
Competition
in the pharmaceutical industry is intense and is expected to increase. If we
are
successful in completing the development of Miraxion, we may face competition
to
the extent other pharmaceutical companies are able to develop products for
the
treatment of HD, depression or Parkinson’s disease. Potential competitors in
6
this
market may include companies with greater resources and name recognition than
us. Furthermore, to the extent we are able to acquire or develop additional
marketable products in the future such products will compete with a variety
of
other products within the United States or elsewhere, possibly including
established drugs and major brand names. Competitive factors, including generic
competition, could force us to lower prices or could result in reduced sales.
In
addition, new products developed by others could emerge as competitors to our
future products. Products based on new technologies or new drugs could render
our products obsolete or uneconomical.
Our
potential competitors both in the United States and Europe may include large,
well-established pharmaceutical companies, specialty pharmaceutical sales and
marketing companies, and specialized neurology companies. In addition, we may
compete with universities and other institutions involved in the development
of
technologies and products that may be competitive with ours. Many of our
competitors will likely have greater resources than us, including financial,
product development, marketing, personnel and other resources. Should a
competitive product obtain marketing approval prior to Miraxion, this would
significantly erode the projected revenue streams for such product.
The
success of our future products will also depend in large part on the willingness
of physicians to prescribe these products to their patients. Our future products
may compete against products that have achieved broad recognition and acceptance
among medical professionals. In order to achieve an acceptable level of
subscriptions for our future products, we must be able to meet the needs of
both
the medical community and end users with respect to cost, efficacy and other
factors.
Our
supply of future products could be dependent upon relationships with
manufacturers and key suppliers.
We
have no
in-house manufacturing capacity and, to the extent we are successful in
completing the development of Miraxion and/or acquiring or developing other
marketable products in the future, we will be obliged to rely upon contract
manufacturers to produce our products. We may not be able to enter into
manufacturing arrangements on terms that are favorable to us. Moreover, if
any
future manufacturers should cease doing business with us or experience delays,
shortages of supply or excessive demands on their capacity, we may not be able
to obtain adequate quantities of product in a timely manner, or at all.
Manufacturers are required to comply with current NDA commitments and Good
Manufacturing Practices requirements enforced by the FDA, and similar
requirements of other countries. The failure by a future manufacturer to comply
with these requirements could affect its ability to provide us with product.
Any
manufacturing problem or the loss of a contract manufacturer could be disruptive
to our operations and result in lost sales.
Additionally,
we will be reliant on third parties to supply the raw materials needed to
manufacture Miraxion and other potential products. Any reliance on suppliers
may
involve several risks, including a potential inability to obtain critical
materials and reduced control over production costs, delivery schedules,
reliability and quality. Any unanticipated disruption to future contract
manufacture caused by problems at suppliers could delay shipment of products,
increase our cost of goods sold and result in lost sales.
We
may not be able to grow our business unless we can acquire and market or
in-license new products.
We
are
pursuing a strategy of product acquisitions and in-licensing in order to
supplement our own research and development activity. For example, in May 2006,
we acquired the global rights to a novel formulation of apomorphine for the
treatment of “off” episodes in patients with advanced Parkinson’s disease. Our
success in this regard will be dependent on our ability to identify other
companies that are willing to sell or license product lines to us. We will
be
competing for these products with other parties, many of whom have substantially
greater financial, marketing and sales resources. Even if suitable products
are
available, depending on competitive conditions we may not be able to acquire
rights to additional products on acceptable terms, or at all. Our inability
to
acquire additional products or successfully introduce new products could have
a
material adverse effect on our business.
7
In
order to commercialize our future products, we will need to establish a sales
and marketing capability.
At
present, we do not have any sales or marketing capability since all of our
products are currently in the development stage. However, if we are successful
in obtaining regulatory approval for Miraxion, we intend to directly
commercialize this product for HD in the U.S. market. Similarly, to the extent
we execute our long-term strategy of expanding our portfolio by developing
or
acquiring additional marketable products, we intend to directly sell our
neurology products in the United States. In order to market Miraxion and any
other new products, we will need to add marketing and sales personnel who have
expertise in the pharmaceuticals business. We must also develop the necessary
supporting distribution channels. Although we believe we can build the required
infrastructure, we may not be successful in doing so if we cannot attract
personnel or generate sufficient capital to fund these efforts. Failure to
establish a sales force and distribution network in the United States would
have
a material adverse effect on our ability to grow our business.
The
planned expansion of our business may strain our
resources.
Our
strategy for growth includes potential acquisitions of new products for
development and the introduction of these products to the market. Since we
currently operate with limited resources, the addition of such new products
could require a significant expansion of our operations, including the
recruitment, hiring and training of additional personnel, particularly those
with a clinical or regulatory background. Any failure to recruit necessary
personnel could have a material adverse effect on our business. Additionally,
the expansion of our operations and work force could create a strain on our
financial and management resources and it may require us to add management
personnel.
We
may incur potential liabilities relating to discontinued operations or
products.
In
October
2003, we sold Gacell Holdings AB, the Swedish holding company of Amarin
Development AB, which we refer to as ADAB, our Swedish drug development
subsidiary, to Watson Pharmaceuticals, Inc. In February 2004, we sold our U.S.
subsidiary, Amarin Pharmaceuticals Inc., and certain assets, to Valeant. In
connection with these transactions, we provided a number of representations
and
warranties to Valeant and Watson regarding the respective businesses sold to
them, and other matters, and we undertook to indemnify Valeant and Watson under
certain circumstances for breaches of such representations and warranties.
We
are not aware of any circumstances which could reasonably be expected to give
rise to an indemnification obligation under our agreements with either Valeant
or Watson. However, we cannot predict whether matters may arise in the future
which were not known to us and which, under the terms of the relevant
agreements, could give rise to a claim against us.
We
will be dependent on patents, proprietary rights and
confidentiality.
Because
of
the significant time and expense involved in developing new products and
obtaining regulatory approvals, it is very important to obtain patent and trade
secret protection for new technologies, products and processes. Our ability
to
successfully implement our business plan will depend in large part on our
ability to:
| · |
acquire
patented or patentable products and
technologies;
|
| · |
obtain
and maintain patent protection for our current and acquired
products;
|
| · |
preserve
any trade secrets relating to our current and future products;
and
|
| · |
operate
without infringing the proprietary rights of third
parties.
|
Although
we intend to make reasonable efforts to protect our current and future
intellectual property rights and to ensure that any proprietary technology
we
acquire does not infringe the rights of other parties, we may not be able to
ascertain the existence of all potentially conflicting claims. Therefore, there
is a risk that third parties may make claims of infringement against our current
or future products or technologies. In addition, third parties may be
8
able
to
obtain patents that prevent the sale of our current or future products or
require us to obtain a license and pay significant fees or royalties in order
to
continue selling such products.
We
may in
the future discover the existence of products that infringe upon patents that
we
own or that have been licensed to us. Although we intend to protect our trade
secrets and proprietary know-how through confidentiality agreements with our
manufacturers, employees and consultants, we may not be able to prevent our
competitors from breaching these agreements or third parties from independently
developing or learning of our trade secrets.
We
anticipate that competitors may from time to time oppose our efforts to obtain
patent protection for new technologies or to submit patented technologies for
regulatory approvals. Competitors may seek to challenge patent applications
or
existing patents to delay the approval process, even if the challenge has little
or no merit. Patent challenges are generally highly technical, time consuming
and expensive to pursue. Were we to be subject to one or more patent challenges,
that effort could consume substantial time and resources, with no assurances
of
success, even when holding an issued patent.
The
loss of any key management or qualified personnel could disrupt our
business.
We
are
highly dependent upon the efforts of our senior management. The loss of the
services of one or more members of senior management could have a material
adverse effect on us. As a small company with a streamlined management
structure, the departure of any key person could have a significant impact
and
would be potentially disruptive to our business until such time as a suitable
replacement is hired. Furthermore, because of the specialized nature of our
business, as our business plan progresses we will be highly dependent upon
our
ability to attract and retain qualified scientific, technical and key management
personnel. There is intense competition for qualified personnel in the areas
of
our activities. In this environment we may not be able to attract and retain
the
personnel necessary for the development of our business, particularly if we
do
not achieve profitability. The failure to recruit key scientific and technical
personnel would be detrimental to our ability to implement our business
plan.
We
have
entered into an employment agreement with our chief executive officer, Richard
A. B. Stewart. The term of this agreement continues in full force and effect,
subject to either party’s right to terminate upon twelve months’ notice. Our
officers and key employees, other than Mr. Stewart, are not employed for any
specified period and are not restricted from seeking employment elsewhere,
subject only to giving appropriate notice to us.
We
are subject to continuing potential product liability
and do not carry product liability insurance to cover this
risk.
Although
we disposed of the majority of our former products during 2003 and 2004, we
remain subject to the potential risk of product liability claims relating to
the
manufacturing and marketing of our former products during the period prior
to
their divestiture. Any person who is injured as a result of using one of our
former products during our period of ownership may have a product liability
claim against us without having to prove that we were at fault. The potential
for liability exists despite the fact that our former subsidiary, Amarin
Pharmaceuticals Inc. conducted all sales and marketing activities with respect
to such product. Although we have not retained any liabilities of Amarin
Pharmaceuticals Inc. in this regard, as the prior holder of ownership rights
to
such former products, third parties could seek to assert potential claims
against us. Since we distributed and sold our products to a wide number of
end
users, the risk of such claims could be material. Product liability claims
could
also be brought by persons who took part in clinical trials involving our
current or former development stage products. A successful claim brought against
us could have a material adverse effect on our business.
We
do not
at present carry product liability insurance to cover any such risks. If we
were
to seek insurance coverage, we may not be able to maintain product liability
coverage on acceptable terms if our claims experience results in high rates,
or
if product liability insurance otherwise becomes costlier or unavailable because
of general economic, market or industry conditions. If we add significant
products to our portfolio, we will require product liability coverage and may
not be able to secure such coverage at reasonable rates or at all.
Amarin
was
responsible for the sales and marketing of Permax from May 2001 until February
2004. On May 17, 2001, Amarin acquired the U.S. sales and marketing rights
to Permax from Elan. An affiliate of Elan had
9
previously
obtained the licensing rights to Permax from Eli Lilly and Company in 1993.
Eli
Lilly originally obtained approval for Permax on December 30, 1988 and has
been
responsible for the manufacture and supply of Permax since that date. On
February 25, 2004 Amarin sold its U.S. subsidiary, Amarin Pharmaceuticals,
Inc.,
including the rights to Permax, to Valeant Pharmaceuticals
International.
In
late
2002, Eli Lilly, as the holder of the NDA for Permax, received a recommendation
from the FDA to consider making a change to the package insert for Permax based
upon the very rare observation of cardiac valvulopathy in patients taking
Permax. While Permax has not been definitely proven as the cause of this
condition, similar reports have been notified in patients taking other
ergot-derived pharmaceutical products, of which Permax is an example. In early
2003, Eli Lilly amended the package insert for Permax to reflect the risk of
cardiac valvulopathy in patients taking Permax and also sent a letter to a
number of doctors in the United States describing this potential risk. Causation
is not established, but is thought to be consistent with other fibrotic side
effects observed in Permax.
During
2005, five lawsuits alleging claims related to cardiac valvulopathy and Permax
were pending in the United States. Eli Lilly, Elan, Valeant, and/or Amarin
were
defendants in these lawsuits. As of the present date, each of these cases has
settled. Most of the details of these settlements are confidential.
One
other
lawsuit, which alleges claims related to compulsive gambling and Permax, remains
pending in the United States. Amarin, Eli Lilly, Elan, and Valeant are
defendants in this lawsuit, and are defending against the claims and
allegations. This case is currently in the early stages of discovery. A similar
lawsuit related to compulsive gambling and Permax is being threatened against
Eli Lilly, Elan, and/or Valeant, and could possibly implicate
Amarin.
The
Company has reviewed the position and having taken external legal advice
considers the potential risk of significant liability arising for Amarin from
these legal actions to be remote. No provision is booked in the accounts at
December 2005.
The
price of our ADSs may be volatile.
The
stock
market has from time to time experienced significant price and volume
fluctuations that may be unrelated to the operating performance of particular
companies. In addition, the market prices of the securities of many
pharmaceutical and medical technology companies have been especially volatile
in
the past, and this trend is expected to continue in the future. Our ADSs may
also be subject to volatility as a result of their limited trading market.
We
currently have approximately 81,461,774 ADSs
representing ordinary shares outstanding. There is a risk that there may not
be
sufficient liquidity in the market to accommodate significant increases in
selling activity or the sale of a large block of securities. Our ADSs have
historically had limited trading volume, which may also result in volatility.
During the twelve-month period ending June 30, 2006, the average daily trading
volume for our ADSs was 181,810 shares.
If
our
public float and the level of trading remain at limited levels over the long
term, this could result in volatility and increase the risk that the market
price of our ADSs may be affected by factors such as:
| · |
the
announcement of new products or
technologies;
|
| · |
innovation
by us or our future competitors;
|
| · |
developments
or disputes concerning any future patent or proprietary
rights;
|
| · |
actual
or potential medical results relating to our products or our competitors’
products;
|
| · |
interim
failures or setbacks in product
development;
|
| · |
regulatory
developments in the United States, the European Union or other
countries;
|
10
| · |
currency
exchange rate fluctuations; and
|
| · |
period-to-period
variations in our results of
operations.
|
The
rights of our shareholders may differ from the rights typically afforded to
shareholders of a U.S.
corporation.
We
are
incorporated under English law and our ordinary shares have recently been
admitted to trading on the AIM market of the London Stock Exchange and the
IEX
market of the Irish Stock Exchange. The rights of holders of ordinary shares
and, therefore, certain of the rights of holders of ADSs, are governed by
English law, including the Companies Act 1985 (as amended), and by our
memorandum and articles of association and the Company is subject to the rules
of AIM and IEX. These rights differ in certain respects from the rights of
shareholders in typical U.S. corporations. The principal differences include
the
following:
| · |
Under
English law, each shareholder present at a meeting has only one vote
unless a valid demand is made for a vote on a poll, in which each
holder
gets one vote per share owned. Under U.S. law, each shareholder typically
is entitled to one vote per share at all meetings. Under English
law, it
is only on a poll that the number of shares determines the number
of votes
a holder may cast. You should be aware, however, that the voting
rights of
ADSs are also governed by the provisions of a deposit agreement with
our
depositary bank.
|
| · |
Under
English law, each shareholder generally has pre-emptive rights to
subscribe on a proportionate basis to any issuance of shares. Under
U.S.
law, shareholders generally do not have pre-emptive rights unless
specifically granted in the certificate of incorporation or
otherwise.
|
| · |
Under
English law, certain matters require the approval of 75% of the
shareholders, including amendments to the memorandum and articles
of
association. This may make it more difficult for us to complete corporate
transactions deemed advisable by our board of directors. Under U.S.
law,
generally only majority shareholder approval is required to amend
the
certificate of incorporation or to approve other significant transactions.
Under the rules of AIM and IEX, certain transactions require the
approval
of 50% of the shareholders, including disposals resulting in a fundamental
change of business and reverse takeovers. In addition, certain
transactions with a party related to the Company for the purposes
of the
AIM rules requires that the Company consult with its nominated adviser
as
to whether the transaction is fair and reasonable as far as shareholders
are concerned.
|
| · |
Under
English law, shareholders may be required to disclose information
regarding their equity interests upon our request, and the failure
to
provide the required information could result in the loss or restriction
of rights attaching to the shares, including prohibitions on the
transfer
of the shares, as well as restrictions on dividends and other payments.
Comparable provisions generally do not exist under U.S.
law.
|
| · |
The
quorum requirements for a shareholders’ meeting is a minimum of two
persons present in person or by proxy. Under U.S. law, a majority
of the
shares eligible to vote must generally be present (in person or by
proxy)
at a shareholders’ meeting in order to constitute a quorum. The minimum
number of shares required for a quorum can be reduced pursuant to
a
provision in a company’s certificate of incorporation or bylaws, but
typically not below one-third of the shares entitled to vote at the
meeting.
|
U.S.
shareholders
may not be able to enforce civil liabilities against us.
A
number
of our directors and executive officers are non-residents of the United States,
and all or a substantial portion of the assets of such persons are located
outside the United States. As a result, it may not be possible for investors
to
effect service of process within the United States upon such persons or to
enforce against them judgments obtained in U.S. courts predicated upon the
civil
liability provisions of the federal securities laws of the United States. We
have been advised by our English solicitors that there is doubt as to the
enforceability in England
11
in
original actions, or in actions for enforcement of judgments of U.S. courts,
of
civil liabilities to the extent predicated upon the federal securities laws
of
the United States.
In
addition, Amarin Finance is an exempted company limited by shares organized
under the laws of Bermuda. A number of Amarin Finance’s directors and executive
officers are non-residents of the United States, and all or a substantial
portion of the assets of such persons are located outside the United States.
As
a result, it may not be possible for investors to effect service of process
within the United States upon such persons or to enforce against them in U.S.
courts judgments obtained in U.S. courts predicated upon the civil liability
provisions of the federal securities laws of the United States. We
have
been advised by our Bermuda attorneys that uncertainty exists as to whether
courts in Bermuda will enforce judgments obtained in other jurisdictions
(including the United States) against us or our directors or officers under
the
securities laws of those jurisdictions or entertain actions in Bermuda against
us or our directors or officers under the securities laws of other
jurisdictions.
Foreign
currency fluctuations may affect our future financial results or cause us to
incur losses.
We
record
our transactions and prepare our financial statements in U.S. dollars. Since
our
strategy involves the development of products for the U.S. market, a significant
part of our clinical trial expenditures are denominated in U.S. dollars and
we
anticipate that the majority of our future revenues will be denominated in
U.S.
dollars. However, a significant portion of our costs are denominated in pounds
sterling and euro as a result of our being engaged in activities in the United
Kingdom and the European Union. As a consequence, the results reported in our
financial statements are potentially subject to the impact of currency
fluctuations between the U.S. dollar on the one hand, and pounds sterling and
euro on the other hand. We are focused on development activities and do not
anticipate generating on-going revenues in the short-term. Accordingly, we
do
not engage in significant currency hedging activities in order to restrict
the
risk of exchange rate fluctuations. However, if we should commence
commercializing any products in the United States, changes in the relation
of
the U.S. dollar to the pound sterling and/or the euro may affect our revenues
and operating margins. In general, we could incur losses if the U.S. dollar
should become devalued relative to the pound sterling and/or the
euro.
U.S.
Holders of our ordinary shares or ADSs could be subject to material adverse
tax
consequences if we are considered a PFIC for U.S. federal income tax
purposes.
There
is a
risk that we will be classified as a passive foreign investment company, or
“PFIC”, for U.S. federal income tax purposes. Our status as a PFIC could result
in a reduction in the after-tax return to U.S. Holders of our Ordinary Shares
or
ADSs and may cause a reduction in the value of such shares. We will be
classified as a PFIC for any taxable year in which (i) 75% or more of our gross
income is passive income or (ii) at least 50% of the average value of all our
assets produce or are held for the production of passive income. For this
purpose, passive income includes interest, gains from the sale of stock, and
royalties that are not derived in the active conduct of a trade or business.
Because we receive interest and may recognize gains from the sale of appreciated
stock, there is a risk that we will be considered a PFIC under the income test
described above. In addition, because of our cash position, there is a risk
that
we will be considered a PFIC under the asset test described above. While we
believe that the PFIC rules were not intended to apply to companies such as
us
that focus on research, development and commercialization of drugs, no assurance
can be given that the U.S. Internal Revenue Service or a U.S. court would
determine that, based on the composition of our income and assets, we are not
a
PFIC currently or in the future. If we were classified as a PFIC, U.S. Holders
of our ordinary shares or ADSs could be subject to greater U.S. income tax
liability than might otherwise apply, imposition of U.S. income tax in advance
of when tax would otherwise apply, and detailed tax filing requirements that
would not otherwise apply. The PFIC rules are complex and you are urged to
consult your own tax advisors regarding the possible application of the PFIC
rules to you in your particular circumstances.
If
we fail to comply with the terms of our licensing agreement with Scarista
Limited, our licensor may terminate certain licenses to patent rights, causing
us to lose valuable intellectual property assets.
Under
the
terms of a licensing agreement between Scarista Limited and Amarin Neuroscience,
our exclusive license to certain valuable patent rights covering certain of
our
technologies may be terminated if we fail to
12
meet
various obligations to Scarista. Under the terms of this agreement we are
obligated to meet certain performance obligations in respect of the clinical
development and commercialization of Miraxion, payment of royalties, and filing,
maintenance and prosecution of the covered patent rights. In particular, we
are
obligated to use our reasonable commercial efforts to pursue the completion
of
the Miraxion trials with a view to applying for an FDA approval for the
indication of Huntington’s disease in the U.S. Under the terms of this agreement
Scarista is entitled to terminate this agreement forthwith by notice in writing
to the other if we commit a material breach of this Agreement and fail to remedy
the same within 90 days after receipt of a written notice of the breach
requiring remedy of the same. The performance of our obligations to Scarista
will require increasing expenditures as the development of Miraxion continues.
We cannot guarantee that we will be capable of raising the funds necessary
to
meet our obligations under this agreement to fulfill these licensing
obligations.
We
do not currently have the capability to undertake manufacturing of any potential
products.
We
have
not invested in manufacturing and have no manufacturing experience. We cannot
assure you that we will successfully manufacture any product we may develop,
either independently or under manufacturing arrangements, if any, with third
party manufacturers. To the extent that we enter into contractual relationships
with other companies to manufacture our products, if any, the success of those
products may depend on the success of securing and maintaining contractual
relationships with third party manufacturers (and any sub-contractors they
engage).
We
have
secured supply of Miraxion through the expected launch period of the product.
Our ability to meet commercial demand for Miraxion beyond this quantity would
depend on our successfully obtaining a commitment for such supplies. We are
currently in discussion with the existing and other manufacturers to meet this
requirement. We cannot guarantee that we will be able to obtain a commitment
from the existing contract manufacturer and/or to negotiate a second supply
agreement with an alternate contract manufacturer to manufacture additional
commercial supplies of Miraxion. If we were unable to do so, we would be unable
to successfully commercialize Miraxion and our results of operations and
prospects would be materially adversely affected.
We
do not currently have the capability to undertake marketing, or sales of any
potential products.
We
have
not invested in marketing or product sales resources. We cannot assure you
that
we will be able to acquire such resources. We cannot assure you that we will
successfully market any product we may develop, either independently or under
marketing arrangements, if any, with other companies. To the extent that we
enter into contractual relationships with other companies to market our
products, if any, the success of such products may depend on the success of
securing and maintaining such contractual relationships the efforts of those
other companies (and any sub-contractors they engage).
We
have limited personnel to oversee out-sourced clinical testing and the
regulatory approval process.
It
is
likely that we will also need to hire additional personnel skilled in the
clinical testing and regulatory compliance process if we develop additional
product candidates with commercial potential. We do not currently have the
capability to conduct clinical testing in-house and do not currently have plans
to develop such a capability. We out-source our clinical testing to contract
research organizations. We currently have a limited number of employees and
certain other outside consultants who oversee the contract research
organizations involved in clinical testing of our compounds.
We
cannot assure you that our limited oversight of the contract research
organizations will suffice to avoid significant problems with the protocols
and
conduct of the clinical trials.
We
depend
on contract research organizations to conduct our pre-clinical and our clinical
testing. We have engaged and intend to continue to engage third party contract
research organizations and other third parties to help us develop our drug
candidates. Although we have designed the clinical trials for drug candidates,
the contract research organizations will be conducting all of our clinical
trials. As a result, many important aspects of our drug development programs
have been and will continue to be outside of our direct control. In addition,
the contract re-
13
search
organizations may not perform all of their obligations under arrangements with
us. If the contract research organizations do not perform clinical trials in
a
satisfactory manner or breach their obligations to us, the development and
commercialization of any drug candidate may be delayed or precluded. We cannot
control the amount and timing of resources these contract research organizations
devote to our programs or product candidates. The failure of any of these
contract research organizations to comply with any governmental regulations
would substantially harm our development and marketing efforts and delay or
prevent regulatory approval of our drug candidates. If we are unable to rely
on
clinical data collected by others, we could be required to repeat, extend the
duration of, or increase the size of our clinical trials and this could
significantly delay commercialization and require significantly greater
expenditures.
Despite
the use of confidentiality agreements and/or proprietary rights agreements,
which themselves may be of limited effectiveness, it may be difficult for us
to
protect our trade secrets.
We
rely on
trade secrets to protect technology in cases when we believe patent protection
is not appropriate or obtainable. However, trade secrets are difficult to
protect. While we require certain of our academic collaborators, contractors
and
consultants to enter into confidentiality agreements, we may not be able to
adequately protect our trade secrets or other proprietary
information.
Potential
technological changes in our field of business create considerable
uncertainty.
We
are
engaged in the biopharmaceutical field, which is characterized by extensive
research efforts and rapid technological progress. New developments in research
are expected to continue at a rapid pace in both industry and academia. We
cannot assure you that research and discoveries by others will not render some
or all of our programs or product candidates uncompetitive or
obsolete.
Our
business strategy is based in part upon new and unproven technologies to the
development of biopharmaceutical products for the treatment of Huntington’s
disease and other neurological disorders. We cannot assure you that unforeseen
problems will not develop with these technologies or applications or that
commercially feasible products will ultimately be developed by us.
Third-Party
Reimbursement and Health Care Cost Containment Initiatives and Treatment
Guidelines May Constrain Our Future Revenues.
Our
ability to market successfully our existing and future new products will depend
in part on the level of reimbursement that government health administration
authorities, private health coverage insurers and other organizations provide
for the cost of our products and related treatments. Countries in which our
products are sold through reimbursement schemes under national health insurance
programs frequently require that manufacturers and sellers of pharmaceutical
products obtain governmental approval of initial prices and any subsequent
price
increases. In certain countries, including the United States, government-funded
and private medical care plans can exert significant indirect pressure on
prices. We may not be able to sell our products profitably if adequate prices
are not approved or reimbursement is unavailable or limited in scope.
Increasingly, third-party payers attempt to contain health care costs in ways
that are likely to impact our development of products including:
| · |
failing
to approve or challenging the prices charged for health care
products;
|
| · |
introducing
reimportation schemes from lower priced
jurisdictions;
|
| · |
limiting
both coverage and the amount of reimbursement for new therapeutic
products;
|
| · |
denying
or limiting coverage for products that are approved by the regulatory
agencies but are considered to be experimental or investigational
by
third-party payers;
|
| · |
refusing
to provide coverage when an approved product is used in a way that
has not
received regulatory marketing approval;
and
|
14
| · |
refusing
to provide coverage when an approved product is not appraised favorably
by
the National Institute for Clinical Excellence in the UK, or similar
agencies in other countries.
|
We
are undergoing significant organizational
change. Failure to manage disruption to the business or the loss of key
personnel could have an adverse effect on our business.
We
are
making significant changes to both our management structure and the locations
from which we operate. As a result of this, in the short term, morale may be
lowered and key employees may decide to leave, or may be distracted from their
usual role. This could result in delays in development projects, failure to
achieve managerial targets or other disruption to the business. The benefits
of
the reorganization are expected to be a significant improvement in operating
effectiveness and substantial cost savings.
15
FORWARD-LOOKING
STATEMENTS
This
prospectus includes forward-looking statements. These forward-looking statements
relate, among other things, to our ability to develop and obtain regulatory
approvals for our products under development, our future capital needs, our
ability to further acquire or develop additional marketable products, acceptance
of our products by prescribers and end-users, our ability to retain and maintain
our relationships with third-party manufacturers on which we rely, competitive
factors, and our marketing and sales plans. In addition, we may make
forward-looking statements in future filings with the Securities and Exchange
Commission, or the SEC, and in written material, press releases and oral
statements issued by or on behalf of us. Forward-looking statements include
statements regarding our intent, belief or current expectations or those of
our
management regarding various matters, including statements that include
forward-looking terminology such as “may,” “will,” “should,” “believes,”
“expects,” “anticipates,” “estimates,” “continues,” or similar
expressions.
Forward-looking
statements are subject to risks and uncertainties, certain of which are beyond
our control. Among the factors that could cause actual results to differ
materially from those described or projected herein are the factors identified
in the Risk Factors section of this prospectus and any prospectus supplement
and
the following:
| · |
the
success of our research and development activities, including the
phase
III trials with Miraxion in Huntington’s disease and our efforts with
apomorphine in Parkinson’s desease;
|
| · |
decisions
by regulatory authorities regarding whether and when to approve our
drug
applications, as well as their decisions regarding labeling and other
matters that could affect the commercial potential of our products;
|
| · |
the
speed with which regulatory authorizations, pricing approvals and
product
launches may be achieved;
|
| · |
the
success with which developed products may be commercialized;
|
| · |
competitive
developments affecting our products under development;
|
| · |
the
effect of possible domestic and foreign legislation or regulatory
action
affecting, among other things, pharmaceutical pricing and reimbursement,
including under Medicaid and Medicare in the United States, and
involuntary approval of prescription medicines for over-the-counter
use;
|
| · |
our
ability to protect our patents and other intellectual property;
|
| · |
claims
and concerns that may arise regarding the safety or efficacy of our
product candidates;
|
| · |
governmental
laws and regulations affecting our operations, including those affecting
taxation;
|
| · |
our
ability to maintain sufficient cash and other liquid resources to
meet our
operating requirements;
|
| · |
general
changes in U.K. and U.S. generally accepted accounting principles;
|
| · |
growth
in costs and expenses; and
|
| · |
the
impact of acquisitions, divestitures and other unusual items, including
our ability to integrate our acquisition of Amarin
Neuroscience.
|
This
list
of factors is not exclusive and other risks and uncertainties may cause actual
results to differ materially from those in forward-looking
statements.
All
forward-looking statements in this prospectus are based on information available
to us on the date hereof. We may not be required to publicly update or revise
any forward-looking statements that may be made by
16
us
or on
our behalf, in this prospectus or otherwise, whether as a result of new
information, future events or other reasons. Because of these risks and
uncertainties, the forward-looking events and circumstances discussed in this
prospectus might not transpire.
17
PRESENTATION
OF FINANCIAL INFORMATION
We
changed
our functional currency on January 1, 2003 to U.S. dollars to reflect the
fact that the majority of our transactions, assets and liabilities were, after
that date, to be denominated in that currency. Consequently, certain historical
pound sterling amounts in this prospectus and in the material incorporated
by
reference herein have been translated into U.S. dollars. Unless otherwise stated
herein, translations of pounds sterling into and from U.S. dollars have been
made at an exchange rate of £1 to $1.6099, being the mid point rate on
December 31, 2002. The Noon Buying Rate in New York City for cable
transfers in pounds sterling as certified for customs purposes by the Federal
Reserve Bank of New York at December 31, 2002 was £1.00 to $1.6095. We do
not believe this difference to be material. On July 11, 2006, the Noon Buying
Rate was £1.00 to $1.8431.
18
INCORPORATION
BY REFERENCE
The
SEC
allows us to incorporate by reference documents we file with the SEC, which
means that we can disclose information to you by referring you to those
documents. The information incorporated by reference is considered to be part
of
this prospectus, and certain later information that we file with
the SEC
will automatically update and supersede this information. We incorporate by
reference the following documents:
(i)our
Annual
Report on Form 20-F for the fiscal year ended December 31, 2005 filed
on March 30, 2006 and any amendments thereto; and
(ii)our
reports on Form 6-K dated April 5, 2006, April 7, 2006, May 8, 2006,
May 9, 2006, May 11, 2006, May 12, 2006, May 17, 2006, May 18, 2006, June 9,
2006, June 29, 2006, July 5, 2006 and July 11, 2006.
All
annual
reports on Form 20-F that we file with the SEC pursuant to the Exchange Act
after the date of this prospectus and prior to the termination of the offering
shall be deemed to be incorporated by reference into this prospectus and to
be
part hereof from the date of filing of such documents. We may incorporate by
reference any Form 6-K subsequently submitted to the SEC by identifying in
such Form that it is being incorporated by reference into this
prospectus.
We
shall
undertake to provide without charge to each person to whom a copy of this
prospectus has been delivered, upon the written or oral request of any such
person to us, a copy of any or all of the documents referred to above that
have
been or may be incorporated into this prospectus by reference, including
exhibits to such documents, unless such exhibits are specifically incorporated
by reference to such documents. Requests for such copies should be directed
to
Amarin Corporation plc, 50 Pembroke Road, Ballsbridge, Dublin 4, Ireland,
Attention: Company Secretary, telephone +353 (0) 1 669 9023.
You
should
rely only on the information incorporated by reference or provided in this
prospectus or any prospectus supplement. We have not authorized anyone else
to
provide you with different information. This prospectus is an offer to sell
or
to buy only the securities referred to in this prospectus, and only under
circumstances and in jurisdictions where it is lawful to do so. The information
contained in this prospectus or any prospectus supplement is current only as
of
the date on the front page of those documents. Also, you should not assume
that
there has been no change in our affairs since the date of this prospectus or
any
applicable prospectus supplement.
19
WHERE
YOU CAN FIND MORE INFORMATION
We
file
reports, including annual reports on Form 20-F, and other information with
the SEC pursuant to the rules and regulations of the SEC that apply to foreign
private issuers. You may read and copy any materials filed with the SEC at
its
Public Reference Room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549.
You may obtain information on the operation of the Public Reference Room by
calling the SEC at 1-800-SEC-0330. The registration statement of which this
prospectus is a part, and other public filings with the SEC, are also available
on the website maintained by the SEC at http://www.sec.gov.
We
provide
Citibank N.A., as depositary under the deposit agreement between us, the
depositary and registered holders of the American Depositary Receipts evidencing
ADSs, with annual reports, including a review of operations, and annual audited
consolidated financial statements prepared in conformity with generally accepted
accounting principles in the United Kingdom, or UK GAAP, together with a
reconciliation of net income and total stockholders equity to generally accepted
accounting principles in the United States, or US GAAP. Upon receipt of these
reports, the depositary is obligated to promptly mail them to all record holders
of ADSs. We also furnish to the depositary all notices of meetings of holders
of
our ordinary shares and other reports and communications that are made generally
available to holders of our ordinary shares. The depositary has undertaken
in
the deposit agreement to mail to all holders of ADSs a notice containing the
information contained in any notice of a shareholders’ meeting received by the
depositary, or a summary of such information. The depositary has also undertaken
in the deposit agreement to make available to all holders of ADSs such notices
and all other reports and communications received by the depositary in the
same
manner as we make them available to holders of ordinary shares.
ENFORCEABILITY
OF CIVIL LIABILITIES
Amarin
Corporation plc
We
are a
public limited company incorporated under the laws of England and Wales. A
number of our directors and executive officers are non-residents of the United
States, and all or a substantial portion of the assets of such persons are
located outside the United States. As a result, it may not be possible for
investors to effect service of process within the United States upon such
persons or to enforce against them in U.S. courts judgments obtained in U.S.
courts predicated upon the civil liability provisions of the federal securities
laws of the United States. We have been advised by our English solicitors that
there is doubt as to the enforceability in England, in original actions or
in
actions for enforcement of judgments of U.S. courts, of civil liabilities to
the
extent predicated upon the federal securities laws of the United
States.
Amarin
Finance Ltd.
Amarin
Finance is an exempted company limited by shares company organized under the
laws of Bermuda. A number of Amarin Finance’s directors and executive officers
are non-residents of the United States, and all or a substantial portion of
the
assets of such persons are located outside the United States. As a result,
it
may not be possible for investors to effect service of process within the United
States upon such persons or to enforce against them in U.S. courts judgments
obtained in U.S. courts predicated upon the civil liability provisions of the
federal securities laws of the United States. We have been advised by our
Bermuda lawyers that there is doubt as to the enforceability in Bermuda, in
original actions or in actions for enforcement of judgments of U.S. courts,
of
civil liabilities to the extent predicated upon the federal securities laws
of
the United States.
Unless
otherwise indicated in an accompanying prospectus supplement, we intend to
use
the net proceeds from the sale of securities for general corporate purposes,
which may include funding future acquisitions.
Proceeds
may also be used for other purposes specified in the applicable prospectus
supplement.
20
RATIO
OF EARNINGS TO FIXED CHARGES AND RATIO OF EARNINGS TO COMBINED FIXED
CHARGES AND PREFERENCE SHARE DIVIDENDS
CHARGES AND PREFERENCE SHARE DIVIDENDS
Amarin’s
ratio of earnings to fixed charges and ratio of earnings to combined fixed
charges and preference share dividends for the periods presented are as
follows:
|
Year
Ended December 31,
|
|||||
|
2005
|
2004
|
2003
|
2002
|
2001
|
|
|
Ratio
of earnings to fixed charges - UK GAAP*
|
-
|
-
|
-
|
-
|
-
|
|
Ratio
of earnings to fixed charges - US GAAP*
|
-
|
-
|
-
|
-
|
-
|
|
Ratio
of earnings to combined fixed charges - UK GAAP
|
-
|
-
|
-
|
-
|
-
|
|
Ratio
of earnings to combined fixed charges - US GAAP
|
-
|
-
|
-
|
-
|
-
|
*
The
company reported an operating loss on ordinary activities for each of the five
years 2001 - 2005.
| · |
Under
UK GAAP, the deficiency of earnings to cover fixed charges for the
fiscal
year ended December 31, 2001 was $5,046,000, for the fiscal year
ended
December 31, 2002 was $9,033,000, for the fiscal year ended December
31,
2003 was $7,520,000 for the fiscal year ended December 31, 2004 was
$10,594,000 and for the fiscal year ended December 31, 2005 was
$19,285,000.
|
| · |
Under
UK GAAP, the deficiency of earnings to cover combined fixed charges
and
preferred stock dividends for the fiscal year ended December 31,
2001 was
$5,246,000, for the fiscal year ended December 31, 2002 was $9,155,000
and
for the fiscal year ended December 31, 2003 was
$7,544,000.
|
| · |
Under
US GAAP, the deficiency of earnings to cover fixed charges for the
fiscal
year ended December 31, 2001 was $5,736,000, for the fiscal year
ended
December 31, 2002 was $6,453,000, for the fiscal year ended December
31,
2003 was $6,994,000 for the fiscal year ended December 31, 2004 was
$57,860,000 and for the fiscal year ended December 31, 2005 was
$20,282,000.
|
| · |
Under
US GAAP, the deficiency of earnings to cover combined fixed charges
and
preferred stock dividends for the fiscal year ended December 31,
2001 was
$5,936,000, for the fiscal year ended December 31, 2002 was $6,575,000
and
for the fiscal year ended December 31, 2003 was
$7,018,000.
|
Earnings
consist of income before taxes plus fixed charges. Fixed charges consist of
interest expense and the portion of rent expense that is representative of
interest expense.
CAPITALIZATION
AND INDEBTEDNESS1
The
following table sets forth, on a UK GAAP basis, our capitalization as of March
31, 2006. Adjustments up to May 30, 2006 are described below. This table should
be read in conjunction with our consolidated financial statements as of and
for
the three years ended December 31, 2005 set forth in our Annual Report on
Form 20-F (incorporated by reference herein), for the year ended
December 31, 2005.
In
April
2006, the Company issued 20,066 shares due to the exercise of share options
of
nominal values $2,000 in aggregate for a total consideration of $61,000. In
May
2006, the Company issued 120,096 shares due to the exercise of shares options
of
nominal value $11,000 in aggregate for a total consideration of
$345,000.
1 We
have no indebtedness outstanding on the date of this prospectus and had no
indebtedness outstanding as of March 31, 2006.
21
As
of
March 31, 2006, Amarin Corporation plc held approximately $35.3 million of
cash
and receivables balances.
|
$’000
|
|
|
Shareholders’
equity:
|
|
|
Ordinary
share capital
|
7,108
|
|
Treasury
shares
|
(217)
|
|
Capital
redemption reserve
|
27,633
|
|
Share
premium account
|
130,818
|
|
Profit
and loss account — (deficit)
|
(126,065)
|
|
Total
shareholders’ equity
|
39,277
|
|
Total
capitalization
|
39,277
|
22
The
following table sets forth the range of high and low closing sale prices for
our
ADSs for the periods indicated, as reported by the Nasdaq Capital Market. These
prices do not include retail mark-ups, markdowns, or commissions but give effect
to a change in the number of ordinary shares represented by each ADS,
implemented in both October 1998 and July 2002. Historical data in the
table has been restated to take into account these changes.
|
USD
High
|
USD
Low
|
|
|
Fiscal
Year Ended
|
||
|
December
31, 2001
|
27.97
|
5.00
|
|
December
31, 2002
|
21.00
|
2.76
|
|
December
31, 2003
|
4.81
|
1.39
|
|
December 31,
2004
|
3.99
|
0.53
|
|
December 31,
2005
|
3.40
|
1.06
|
|
Fiscal
Year Ended December 31, 2004
|
||
|
First
Quarter
|
3.50
|
1.35
|
|
Second
Quarter
|
1.46
|
0.86
|
|
Third
Quarter
|
0.97
|
0.53
|
|
Fourth
Quarter
|
3.99
|
1.00
|
|
Fiscal
Year Ended December 31, 2005
|
||
|
First
Quarter
|
3.40
|
2.14
|
|
Second
Quarter
|
2.36
|
1.06
|
|
Third
Quarter
|
1.67
|
1.32
|
|
Fourth
Quarter
|
1.45
|
1.07
|
|
Fiscal
Year Ending December 31, 2006
|
||
|
First
Quarter
|
3.74
|
1.27
|
|
Second
Quarter
|
3.10
|
1.93
|
|
January
2006
|
3.43
|
1.27
|
|
February
2006
|
3.74
|
2.96
|
|
March
2006
|
3.60
|
3.17
|
|
April,
2006
|
3.10
|
2.79
|
|
May,
2006
|
3.01
|
1.93
|
|
June,
2006
|
2.47
|
2.14
|
On
July 11, 2006, the closing price of our ADSs as reported on the Nasdaq
Capital Market was $2.41 per ADS.
23
DESCRIPTION
OF DEBT SECURITIES AND GUARANTEES
We
or
Amarin Finance may elect to offer debt securities. The following description
of
debt securities sets forth the material terms and provisions of the debt
securities to which any prospectus supplement may relate. Amarin’s senior debt
securities would be issued under a senior indenture to be entered into among
Amarin and a trustee to be named. Amarin’s subordinated debt securities would be
issued under a subordinated indenture to be entered into among Amarin and a
trustee to be named. The senior or subordinated indenture, a form of each of
which is included as an exhibit to the registration statement of which this
prospectus is a part, will be executed at the time we issue any debt securities.
Any supplemental indentures will be filed with the SEC on a Form 6-K or by
a
post-effective amendment to the registration statement of which this prospectus
is a part.
The
senior
debt securities of Amarin Finance would be issued under a senior indenture
to be
entered into among that entity, Amarin, as guarantor, and a trustee to be named.
The subordinated debt securities of Amarin Finance would be issued under a
subordinated indenture to be entered into among that entity, Amarin, as
guarantor, and a trustee to be named. The senior or subordinated indenture,
a
form of each of which is included as an exhibit to the registration statement
of
which this prospectus is a part, will be executed at the time we issue any
debt
securities. Any supplemental indentures will be filed with the SEC on a Form
6-K
or by a post-effective amendment to the registration statement of which this
prospectus is a part.
All
of the
indentures are sometimes referred to in this prospectus collectively as the
“indentures” and each, individually, as an “indenture.” All senior indentures
are sometimes referred to in this prospectus collectively as the “senior
indentures” and each, individually, as a “senior indenture.” All subordinated
indentures are sometimes referred to in this prospectus collectively as the
“subordinated indentures” and each, individually, as a “subordinated indenture.”
The particular terms of the debt securities offered by any prospectus
supplement, and the extent to which the general provisions described below
may
apply to the offered debt securities, will be described in the applicable
prospectus supplement. The indentures will be qualified under the Trust
Indenture Act of 1939, as amended (the “Trust Indenture Act”). The terms of the
debt securities will include those stated in the indentures and those made
part
of the indentures by reference to the Trust Indenture Act.
Because
the following summaries of the material terms and provisions of the indentures
and the related debt securities are not complete, you should refer to the forms
of the indentures and the debt securities for complete information on some
of
the terms and provisions of the indentures, including definitions of some of
the
terms used below, and the debt securities. The senior indentures and
subordinated indentures are substantially identical to one another, except
for
specific provisions relating to subordination contained in the subordinated
indentures.
General
The
provisions of the indentures do not limit the aggregate principal amount of
debt
securities which may be issued thereunder. Unless otherwise provided in a
prospectus supplement, the senior debt securities will be the issuer’s direct,
unsecured and unsubordinated general obligations and will have the same rank
as
all of the issuer’s other unsecured and unsubordinated debt. The subordinated
debt securities will be unsecured obligations of the issuer, subordinated in
right of payment to the prior payment in full of all senior indebtedness of
the
issuer with respect to such series, as described below under “Subordination of
the Subordinated Debt Securities” and in the applicable prospectus
supplement.
Payments
The
issuer
may issue debt securities from time to time in one or more series. The
provisions of the indentures allow the issuer to “reopen” a previous issue of a
series of debt securities and issue additional debt securities of that series.
The debt securities may be denominated and payable in U.S. dollars or foreign
currencies. The issuer may also issue debt securities from time to time with
the
principal amount or interest payable on any relevant payment date to be
determined by reference to one or more currency exchange rates, securities
or
baskets of securities, commodity prices or indices. Holders of these types
of
debt securities will receive payments of principal or interest that depend
upon
the value of the applicable currency, security or basket of securities,
commodity or index on the relevant payment dates.
24
Debt
securities may bear interest at a fixed rate, which may be zero, a floating
rate, or a rate which varies during the lifetime of the debt security. Debt
securities bearing no interest or interest at a rate that at the time of
issuance is below the prevailing market rate may be sold at a discount below
their stated principal amount.
Terms
Specified in the Applicable Prospectus Supplement
The
applicable prospectus supplement will contain, where applicable, the following
terms of and other information relating to any offered debt
securities:
| · |
the
specific designation;
|
| · |
the
aggregate principal amount of the debt
securities;
|
| · |
the
indenture under which the debt securities are
issued;
|
| · |
applicable
subordination provisions, if any;
|
| · |
percentage
or percentages of principal amount at which the debt securities will
be
issued;
|
| · |
the
currency in which the debt securities are denominated and/or in which
principal, premium, if any, and/or interest, if any, are
payable;
|
| · |
the
date of maturity;
|
| · |
the
interest rate or rates or the method by which the calculation agent
will
determine the interest rate or rates, if
any;
|
| · |
the
dates on which interest will accrue or the method for determining
dates on
which interest will accrue and dates on which interest will be
payable;
|
| · |
the
place or places for payment of the principal of and any premium and/or
interest on the debt securities;
|
| · |
any
repayment, redemption, prepayment or sinking fund provisions, including
any redemption notice provisions;
|
| · |
whether
we will issue the debt securities in registered form or bearer form
or
both and, if we are offering debt securities in bearer form, any
restrictions applicable to the exchange of one form for another and
to the
offer, sale and delivery of those debt securities in bearer
form;
|
| · |
whether
the securities will be issued in whole or in part in the form of
one or
more global securities;
|
| · |
the
identity of the global depositary;
|
| · |
the
terms on which holders of the debt securities may convert or exchange
these securities into or for ordinary shares or other of our securities
or
of an entity unaffiliated with us, any specific terms relating to
the
adjustment of the conversion or exchange feature and the period during
which the holders may make the conversion or
exchange;
|
| · |
information
as to the methods for determining the amount of principal or interest
payable on any date and/or the currencies, securities or baskets
of
securities, commodities or indices to which the amount payable on
that
date is linked;
|
25
| · |
any
agents for the debt securities, including trustees, depositaries,
authenticating or paying agents, transfer agents or
registrars;
|
| · |
whether
and under what circumstances the issuer will pay additional amounts
on
debt securities for any tax, assessment or governmental charge withheld
or
deducted and, if so, whether we will have the option to redeem those
debt
securities rather than pay the additional
amounts;
|
| · |
any
material English, U.S. federal and, if applicable, Bermuda income
tax
consequences, including, but not limited
to:
|
| · |
tax
considerations applicable to any discounted debt securities or to
debt
securities issued at par that are treated as having been issued at
a
discount for United States federal income tax purposes;
and
|
| · |
tax
considerations applicable to any debt securities denominated and
payable
in foreign currencies;
|
| · |
whether
the debt securities will be
secured;
|
| · |
any
applicable selling restrictions;
|
| · |
whether
the securities issued will be entitled to the benefits of guarantees;
and
|
| · |
any
other specific terms of the debt securities, including any modifications
to or additional events of default, covenants or modified or eliminated
acceleration rights, and any terms required by or advisable under
applicable laws or regulations.
|
Some
of
the debt securities may be issued as original issue discount securities.
Original issue discount securities bear no interest or bear interest at
below-market rates and may be sold at a discount below their stated principal
amount. The applicable prospectus supplement will contain information relating
to income tax, accounting and other special considerations applicable to
original issue discount securities.
Registration
and Transfer of Debt Securities
Holders
may present debt securities for exchange, and holders of registered debt
securities may present these securities for transfer, in the manner, at the
places and subject to the restrictions stated in the debt securities and
described in the applicable prospectus supplement. The issuer will provide
these
services without charge except for any tax or other governmental charge payable
in connection with these services and subject to any limitations or requirements
provided in the applicable indenture or the supplemental indenture or issuer
order under which that series of debt securities is issued. Holders may transfer
debt securities in bearer form and/or the related coupons, if any, by delivery
to the transferee. If any of the securities are held in global form, the
procedures for transfer of interests in those securities will depend upon the
procedures of the depositary for those global securities.
Events
of Default
Each
indenture provides holders of debt securities with remedies if the issuer and/or
guarantors, as the case may be, fail to perform specific obligations, such
as
making payments on the debt securities, or if the issuer and/or guarantors,
as
the case may be, become bankrupt. Holders should review these provisions and
understand which actions trigger an event of default and which actions do not.
Each indenture permits the issuance of debt securities in one or more series,
and, in many cases, whether an event of default has occurred is determined
on a
series-by-series basis.
26
An
event
of default is defined under the indentures, with respect to any series of debt
securities issued under that indenture, as any one or more of the following
events, subject to modification in a supplemental indenture, each of which
we
refer to in this prospectus as an event of default, having occurred and
continuing:
| · |
default
is made in the payment of the principal or any premium in respect
of the
securities;
|
| · |
default
is made for more than 30 days in the payment of interest in respect
of the
securities;
|
| · |
the
issuer and/or guarantors, as the case may be, fail to perform or
observe
any of their other obligations under the securities and this failure
has
continued for the period of 60 days after we receive notice of default
stating we are in breach;
|
| · |
the
issuer’s and/or guarantors’, as the case may be, bankruptcy, insolvency or
reorganization under any applicable bankruptcy, insolvency or
insolvency-related reorganization
law;
|
| · |
an
order is made or an effective resolution is passed for the winding
up or
liquidation of the issuer and/or guarantors, as the case may be;
or
|
| · |
any
other event of default provided in the supplemental indenture or
issuer
order, if any, under which that series of debt securities is
issued.
|
Acceleration
of Debt Securities upon an Event of Default
Each
indenture provides that, unless otherwise set forth in a supplemental
indenture:
| · |
if
an event of default due to the default in payment of principal of,
or any
premium or interest on, any series of debt securities issued under
the
indenture, or due to the default in the performance or breach of
any other
covenant or warranty of the issuer and/or guarantor, as the case
may be,
applicable to that series of debt securities but not applicable to
all
outstanding debt securities issued under that indenture occurs and
is
continuing, either the trustee or the holders of not less than 25%
in
aggregate principal amount of the outstanding debt securities of
each
affected series, voting as one class, by notice in writing to the
issuer
and guarantor, as the case may be, may declare the principal of and
accrued interest on the debt securities of such affected series (but
not
any other debt securities issued under that indenture) to be due
and
payable immediately;
|
| · |
if
an event of default occurs due to specified events of bankruptcy,
insolvency or reorganization of the issuer and/or the guarantor,
as the
case may be, the principal of all debt securities and interest accrued
on
the debt securities shall be due and payable immediately;
and
|
| · |
if
an event of default due to a default in the performance of any other
of
the covenants or agreements in the indenture applicable to all outstanding
debt securities issued under the indenture occurs and is continuing,
either the trustee or the holders of not less than 25% in aggregate
principal amount of all outstanding debt securities issued under
the
indenture for which any applicable supplemental indenture does not
prevent
acceleration under the relevant circumstances, voting as one class,
by
notice in writing to the issuer and/or guarantor, as the case may
be, may
declare the principal of all debt securities and interest accrued
on the
debt securities to be due and payable
immediately.
|
Annulment
of Acceleration and Waiver of Defaults
In
some
circumstances, if any and all events of default under the indenture, other
than
the non-payment of the principal of the securities that has become due as a
result of an acceleration, have been cured, waived or otherwise remedied, then
the holders of a majority in aggregate principal amount of all series of
outstanding debt securities affected, voting as one class, may annul past
declarations of acceleration or waive past defaults of the debt
securities.
27
Indemnification
of Trustee for Actions Taken on Your Behalf
Each
indenture provides that the trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the
direction of the holders of debt securities issued under that indenture relating
to the time, method and place of conducting any proceeding for any remedy
available to the trustee, or exercising any trust or power conferred upon the
trustee. In addition, each indenture contains a provision entitling the trustee,
subject to the duty of the trustee to act with the required standard of care
during a default, to be indemnified by the holders of debt securities issued
under the indenture before proceeding to exercise any right or power at the
request of holders. Subject to these provisions and specified other limitations,
the holders of a majority in aggregate principal amount of each series of
outstanding debt securities of each affected series, voting as one class, may
direct the time, method and place of conducting any proceeding for any remedy
available to the trustee, or exercising any trust or power conferred on the
trustee.
Limitation
on Actions by You as an Individual Holder
Each
indenture provides that no individual holder of debt securities may institute
any action against us under that indenture, except actions for payment of
overdue principal and interest, unless the following actions have
occurred:
| · |
the
holder must have previously given written notice to the trustee of
the
continuing default;
|
| · |
the
holders of not less than 25% in aggregate principal amount of the
outstanding debt securities of each affected series, treated as one
class,
must have:
|
| · |
requested
the trustee to institute that action
and
|
| · |
offered
the trustee reasonable indemnity;
|
| · |
the
trustee must have failed to institute that action within 60 days
after
receipt of the request referred to above;
and
|
| · |
the
holders of a majority in principal amount of the outstanding debt
securities of each affected series, voting as one class, must not
have
given directions to the trustee inconsistent with those of the holders
referred to above.
|
Each
indenture contains a covenant that the issuer and guarantors, if applicable,
will file annually with the trustee a certificate of no default or a certificate
specifying any default that exists.
Discharge,
Defeasance and Covenant Defeasance
The
issuer
has the ability to eliminate most or all of its obligations on any series of
debt securities prior to maturity if it complies with the following
provisions:
Discharge
of Indenture.
The
issuer
may discharge all of its obligations, other than as to transfers and exchanges,
under the indenture after it has:
| · |
paid
or caused to be paid the principal of and interest on all of the
outstanding debt securities in accordance with their
terms;
|
| · |
delivered
to the applicable trustee for cancellation all of the outstanding
debt
securities; or
|
| · |
irrevocably
deposited with the applicable trustee cash or, in the case of a series
of
debt securities payable only in U.S. dollars, U.S. government obligations
in trust for the benefit of the holders of any series of debt securities
issued under the indenture that have either become due and payable,
or are
by
|
28
their
terms due and payable, or are scheduled for redemption, within one year, in
an
amount certified to be sufficient to pay on each date that they become due
and
payable, the principal of and interest on, and any mandatory sinking fund
payments for, those debt securities. However, the deposit of cash or U.S.
government obligations for the benefit of holders of a series of debt securities
that are due and payable, or are scheduled for redemption, within one year
will
discharge obligations under the applicable indenture relating only to that
series of debt securities.
Defeasance
of a Series of Securities at Any Time.
The
issuer
may also discharge all of its obligations, other than as to transfers and
exchanges, under any series of debt securities at any time, which we refer
to as
defeasance in this prospectus. The issuer may be released with respect to any
outstanding series of debt securities from the obligations imposed by the
covenants described above limiting consolidations, mergers, asset sales and
leases, and elect not to comply with those sections without creating an event
of
default. Discharge under those procedures is called covenant
defeasance.
Defeasance
or covenant defeasance may be effected only if, among other things:
| · |
the
issuer irrevocably deposits with the relevant trustee cash the
case of debt securities payable only in U.S. dollars, U.S. government
obligations, as trust funds in an amount certified to be sufficient
to pay
on each date that they become due and payable, the principal of and
interest on, and any mandatory sinking fund payments for, all outstanding
debt securities of the series being defeased;
|
| · |
the
issuer delivers to the relevant trustee an opinion of counsel to
the
effect that:
|
| · |
the
holders of the series of debt securities being defeased will not
recognize
income, gain or loss for United States federal income tax purposes
as a
result of the defeasance or covenant defeasance;
and
|
| · |
the
defeasance or covenant defeasance will not otherwise alter those
holders’
United States federal income tax treatment of principal and interest
payments on the series of debt securities being defeased;
and
|
| · |
in
the case of a defeasance, this opinion must be based on a ruling
of the
Internal Revenue Service or a change in United States federal income
tax
law occurring after the date of this prospectus, since that result
would
not occur under current tax law.
|
Modification
of the Indenture
Modification
Without Consent of Holders.
The
issuer
and the relevant trustee may enter into supplemental indentures without the
consent of the holders of debt securities issued under each indenture
to:
| · |
secure
any debt securities;
|
| · |
evidence
the assumption by a successor corporation of our
obligations;
|
| · |
add
covenants for the protection of the holders of debt
securities;
|
| · |
cure
any ambiguity or correct any
inconsistency;
|
| · |
establish
the forms or terms of debt securities of any series;
or
|
| · |
evidence
the acceptance of appointment by a successor
trustee.
|
Modification
with Consent of Holders.
Each
issuer and the trustee, with the consent of the holders of not less than a
majority in aggregate principal amount of each affected series of outstanding
debt securities, voting as
29
one
class,
may add any provisions to, or change in any manner or eliminate any of the
provisions of, the indenture or modify in any manner the rights of the holders
of those debt securities. However, the issuer and the trustee may not make
any
of the following changes to any outstanding debt security without the consent
of
each holder that would be affected by the change:
| · |
extend
the final maturity of the security;
|
| · |
reduce
the principal amount;
|
| · |
reduce
the rate or extend the time of payment of
interest;
|
| · |
reduce
any amount payable on redemption;
|
| · |
change
the currency in which the principal, including any amount of original
issue discount, premium or interest on the security is payable;
|
| · |
modify
or amend the provisions for conversion of any currency into another
currency;
|
| · |
reduce
the amount of any original issue discount security payable upon
acceleration or provable in
bankruptcy;
|
| · |
alter
the terms on which holders of the debt securities may convert or
exchange
debt securities for stock or other securities or for other property
or the
cash value of the property, other than in accordance with the antidilution
provisions or other similar adjustment provisions included in the
terms of
the debt securities;
|
| · |
impair
the right of any holder to institute suit for the enforcement of
any
payment on any debt security when due;
or
|
| · |
reduce
the percentage of debt securities the consent of whose holders is
required
for modification of the indenture.
|
Form
of Debt Security
Each
debt
security will be represented either by a certificate issued in definitive form
to a particular investor or by one or more global securities representing the
entire issuance of securities. Both certificated securities in definitive form
and global securities may be issued either:
| · |
in
registered form, where the issuer’s obligation runs to the holder of the
security named on the face of the security,
or
|
| · |
in
bearer form, where the issuer’s obligation runs to the bearer of the
security.
|
Definitive
securities name you or your nominee as the owner of the security, other than
definitive bearer securities, which name the bearer as owner, and in order
to
transfer or exchange these securities or to receive payments other than interest
or other interim payments, you or your nominee must physically deliver the
securities to the trustee, registrar, paying agent or other agent, as
applicable.
Global
securities name a depositary or its nominee as the owner of the debt securities
represented by these global securities, other than global bearer securities,
which name the bearer as owner. The depositary maintains a computerized system
that will reflect each investor’s beneficial ownership of the securities through
an account maintained by the investor with its broker/dealer, bank, trust
company or other representative, as we explain more fully below.
30
Global
Securities
Registered
Global Securities.
The
issuer
may issue the debt securities in the form of one or more fully registered global
securities that will be deposited with a depositary or its nominee identified
in
the applicable prospectus supplement and registered in the name of that
depositary or nominee. In those cases, one or more registered global securities
will be issued in a denomination or aggregate denominations equal to the portion
of the aggregate principal or face amount of the securities to be represented
by
registered global securities. Unless and until it is exchanged in whole for
securities in definitive registered form, a registered global security may
not
be transferred except as a whole by and among the depositary for the registered
global security, the nominees of the depositary or any successors of the
depositary or those nominees. If not described below, any specific terms of
the
depositary arrangement with respect to any securities to be represented by
a
registered global security will be described in the prospectus supplement
relating to those securities. We anticipate that the following provisions will
apply to all depositary arrangements:
Ownership
of beneficial interests in a registered global security will be limited to
persons, called participants, that have accounts with the depositary or persons
that may hold interests through participants. Upon the issuance of a registered
global security, the depositary will credit, on its book-entry registration
and
transfer system, the participants’ accounts with the respective principal or
face amounts of the securities beneficially owned by the participants. Any
dealers, underwriters or selling agents participating in the distribution of
the
securities will designate the accounts to be credited. Ownership of beneficial
interests in a registered global security will be shown on, and the transfer
of
ownership interests will be effected only through, records maintained by the
depositary, with respect to interests of participants, and on the records of
participants, with respect to interests of persons holding through participants.
The laws of some jurisdictions may require that some purchasers of securities
take physical delivery of these securities in definitive form. These laws may
impair your ability to own, transfer or pledge beneficial interests in
registered global securities. So long as the depositary, or its nominee, is
the
registered owner of a registered global security, that depositary or its
nominee, as the case may be, will be considered the sole owner or holder of
the
securities represented by the registered global security for all purposes under
the applicable indenture.
Except
as
described below, owners of beneficial interests in a registered global security
will not be entitled to have the securities represented by the registered global
security registered in their names, will not receive or be entitled to receive
physical delivery of the securities in definitive form and will not be
considered the owners or holders of the securities under the applicable
indenture. Accordingly, each person owning a beneficial interest in a registered
global security must rely on the procedures of the depositary for that
registered global security and, if that person is not a participant, on the
procedures of the participant through which the person owns its interest, to
exercise any rights of a holder under the applicable indenture. We understand
that under existing industry practices, if we request any action of holders
or
if an owner of a beneficial interest in a registered global security desires
to
give or take any action that a holder is entitled to give or take under the
applicable indenture, the depositary for the registered global security would
authorize the participants holding the relevant beneficial interests to give
or
take that action, and the participants would authorize beneficial owners owning
through them to give or take that action or would otherwise act upon the
instructions of beneficial owners holding through them.
Principal,
premium, if any, and interest payments on debt securities represented by a
registered global security registered in the name of a depositary or its nominee
will be made to the depositary or its nominee, as the case may be, as the
registered owner of the registered global security. None of the issuer, the
guarantor, if applicable, the trustee or any other agent of the issuer,
guarantor or agent of the trustee will have any responsibility or liability
for
any aspect of the records relating to payments made on account of beneficial
ownership interests in the registered global security or for maintaining,
supervising or reviewing any records relating to those beneficial ownership
interests. We expect that the depositary for any of the securities represented
by a registered global security, upon receipt of any payment of principal,
premium, interest or other distribution of underlying securities or other
property to holders on that registered global security, will immediately credit
participants’ accounts in amounts proportionate to their respective beneficial
interests in that registered global security as shown on the records of the
depositary. We also expect that payments by participants to owners of beneficial
interests in a registered global security held through participants will be
governed by standing customer instructions and customary practices, as is now
the case with the securities held for the accounts of customers in bearer form
or registered in “street name,” and will be the responsibility of those
participants.
31
If
the
depositary for any of these securities represented by a registered global
security is at any time unwilling or unable to continue as depositary or ceases
to be a clearing agency registered under the Exchange Act, and a successor
depositary registered as a clearing agency under the Exchange Act is not
appointed by the issuer within 90 days, the issuer will issue securities in
definitive form in exchange for the registered global security that had been
held by the depositary. In addition, the issuer may, at any time and in its
sole
discretion, decide not to have any of the securities represented by one or
more
registered global securities. If the issuer makes that decision, it will issue
securities in definitive form in exchange for all of the registered global
security or securities representing those securities. Any securities issued
in
definitive form in exchange for a registered global security will be registered
in the name or names that the depositary gives to the relevant trustee or other
relevant agent of ours or theirs. It is expected that the depositary’s
instructions will be based upon directions received by the depositary from
participants with respect to ownership of beneficial interests in the registered
global security that had been held by the depositary.
Bearer
Global Securities. The
securities may also be issued in the form of one or more bearer global
securities that will be deposited with a common depositary for the Euroclear
System and Clearstream Banking, societe anonyme or with a nominee for the
depositary identified in the prospectus supplement relating to those securities.
The specific terms and procedures, including the specific terms of the
depositary arrangement, with respect to any securities to be represented by
a
bearer global security will be described in the prospectus supplement relating
to those securities.
Guarantees
Amarin
will fully and unconditionally guarantee payment in full to the holders of
the
debt securities issued by Amarin Finance pursuant to this prospectus. The
guarantee will be set forth in, and form part of, the indentures under which
the
debt securities will be issued. If, for any reason, Amarin Finance does not
make
any required payment in respect of its debt securities when due, the Company
will cause the payment to be made to or to the order of the trustee. The
guarantee will be on a senior basis when the guaranteed debt security is issued
under a senior indenture, and on a subordinated basis to the extent the
guaranteed debt security is issued under a subordinated indenture. The extent
to
which the guarantee is subordinated to other indebtedness of the Company will
be
substantially the same as the extent to which the subordinated debt issued
by
the issuer is subordinated to the other indebtedness of the issuer as described
below under “—Subordination of the Subordinated Debt Securities.” The holder of
the guaranteed security may sue the guarantor to enforce its rights under the
guarantee without first suing any other person or entity.
Subordination
of the Subordinated Debt Securities
Subordinated
debt securities issued by an issuer will, to the extent set forth in the
applicable subordinated indenture, be subordinate in right of payment to the
prior payment in full of all senior indebtedness of the issuer, whether
outstanding at the date of the subordinated indenture or incurred after that
date. In the event of
| · |
any
insolvency or bankruptcy case or proceeding, or any receivership,
liquidation, reorganization or other similar case or proceeding in
connection therewith, relative to the issuer or to its creditors,
as such,
or to its assets;
|
| · |
any
voluntary or involuntary liquidation, dissolution or other winding
up of
the issuer, whether or not involving insolvency or bankruptcy;
or
|
| · |
any
assignment for the benefit of creditors or any other marshalling
of assets
and liabilities of the issuer,
|
then
the
holders of senior indebtedness of the issuer will be entitled to receive payment
in full of all amounts due or to become due on or in respect of all its senior
indebtedness, or provision will be made for the payment in cash, before the
holders of the subordinated debt securities of the issuer are entitled to
receive or retain any payment on account of principal of, or any premium or
interest on, or any additional amounts with respect to, the subordinated debt
securities. The holders of senior indebtedness of the issuer will be entitled
to
receive, for application to the payment
32
of
the
senior indebtedness, any payment or distribution of any kind or character,
whether in cash, property or securities, including any payment or distribution
which may be payable or deliverable by reason of the payment of any other
indebtedness of the issuer being subordinated to the payment of its subordinated
debt securities. This payment may be payable or deliverable in respect of its
subordinated debt securities in any case, proceeding, dissolution, liquidation
or other winding up event.
By
reason
of subordination, in the event of liquidation or insolvency of the issuer,
holders of senior indebtedness of the issuer and holders of other obligations
of
the issuer that are not subordinated to its senior indebtedness may recover
more
ratably than the holders of subordinated debt securities of the
issuer.
Subject
to
the payment in full of all senior indebtedness of the issuer, the rights of
the
holders of subordinated debt securities of the issuer will be subrogated to
the
rights of the holders of its senior indebtedness to receive payments or
distributions of cash, property or securities of the issuer applicable to its
senior indebtedness until the principal of, any premium and interest on, and
any
additional amounts with respect to, its subordinated debt securities have been
paid in full.
No
payment
of principal, including redemption and sinking fund payments, of, or any premium
or interest on, or any additional amounts with respect to, the subordinated
debt
securities of the issuer, or payments to acquire these securities, other than
pursuant to their conversion, may be made:
| · |
if
any senior indebtedness of the issuer is not paid when due and any
applicable grace period with respect to the default has ended and
the
default has not been cured or waived or ceased to exist,
or
|
| · |
if
the maturity of any senior indebtedness of the issuer has been accelerated
because of a default.
|
The
subordinated indentures do not limit or prohibit the issuer from incurring
additional senior indebtedness, which may include indebtedness that is senior
to
its subordinated debt securities, but subordinate to the issuer’s other
obligations.
The
subordinated indentures provide that these subordination provisions, insofar
as
they relate to any particular issue of subordinated debt securities by the
issuer, may be changed prior to the issuance. Any change would be described
in
the applicable prospectus supplement.
New
York Law to Govern
The
indentures and the debt securities will be governed by the laws of the State
of
New York.
Information
Concerning
the Trustee
The
trustee to be named under the indenture, will be appointed by us as paying
agent, conversion agent, registrar and custodian with regard to the debt
securities. The trustee or its affiliates may from time to time in the future
provide banking and other services to us in the ordinary course of their
business.
DESCRIPTION
OF ORDINARY SHARES
The
following description of our ordinary shares is only a summary. We encourage
you
to read our Articles of Association, which are incorporated by reference into
the registration statement of which this prospectus forms a part. As of the
date
of this prospectus, we are authorized to issue up to 1,559,144,066 ordinary
shares of 5p each and there are 81,574,478 shares currently outstanding. In
the
following summary, a “shareholder” is the person registered in our register of
members as the holder of the relevant securities. For those ordinary shares
that
have been deposited in our American Depositary Receipt facility pursuant to
our
deposit agreement with Citibank N.A., the depositary or its nominee is deemed
the shareholder.
33
Dividends
Holders
of
ordinary shares are entitled to receive such dividends as may be declared by
the
board of directors. All dividends are declared and paid according to the amounts
paid up on the shares in respect of which the dividend is paid. As of the date
of this prospectus, there have been no dividends paid to holders of ordinary
shares.
Any
dividend unclaimed after a period of twelve years from the date of declaration
of such dividend shall be forfeited and shall revert to us. In addition, the
payment by the board of directors of any unclaimed dividend, interest or other
sum payable on or in respect of an ordinary share or a preference share into
a
separate account shall not constitute us as a trustee in respect
thereof.
Rights
in a Liquidation
Holders
of
ordinary shares are entitled to participate in any distribution of assets upon
a
liquidation, subject to prior satisfaction of the claims of creditors and
preferential payments to holders of outstanding preference shares.
Voting
Rights
Voting
at
any general meeting of shareholders is by a show of hands, unless a poll is
demanded. A poll may be demanded by:
| · |
the
chairman of the meeting;
|
| · |
at
least two shareholders entitled to vote at the
meeting;
|
| · |
any
shareholder or shareholders representing in the aggregate not less
than
one-tenth of the total voting rights of all shareholders entitled
to vote
at the meeting; or
|
| · |
any
shareholder or shareholders holding shares conferring a right to
vote at
the meeting on which there have been paid up sums in the aggregate
equal
to not less than one-tenth of the total sum paid up on all the shares
conferring that right.
|
In
a vote
by a show of hands, every shareholder who is present in person at a general
meeting has one vote. In a vote on a poll, every shareholder who is present
in
person or by proxy shall have one vote for every share of which they are
registered as the holder. The quorum for a shareholders’ meeting is a minimum of
two persons, present in person or by proxy. To the extent the articles of
association provide for a vote by a show of hands in which each shareholder
has
one vote, this differs from U.S. law, under which each shareholder typically
is
entitled to one vote per share at all meetings.
Holders
of
ADSs are also entitled to vote by supplying their voting instructions to the
depositary who will vote the ordinary shares represented by their ADSs in
accordance with their instructions. The ability of Citibank to carry out voting
instructions may be limited by practical and legal limitations, the terms of
our
memorandum and articles of association, and the terms of the ordinary shares
on
deposit. We cannot assure the holders of our ADSs that they will receive voting
materials in time to enable them to return voting instructions to Citibank
in a
timely manner.
Unless
otherwise required by law or the articles of association, voting in a general
meeting is by ordinary resolution. An ordinary resolution is approved by a
majority vote of the shareholders present at a meeting at which there is a
quorum. Examples of matters that can be approved by an ordinary resolution
include:
| · |
the
election of directors;
|
| · |
the
approval of financial statements;
|
34
| · |
the
declaration of final dividends;
|
| · |
the
appointment of auditors;
|
| · |
the
increase of authorized share capital;
or
|
| · |
the
grant of authority to issue shares.
|
A
special
resolution or an extraordinary resolution requires the affirmative vote of
not
less than three-fourths of the eligible votes. Examples of matters that must
be
approved by a special resolution include modifications to the rights of any
class of shares, certain changes to the memorandum or articles of association,
or our winding-up.
DESCRIPTION
OF PREFERENCE SHARES
The
following description of our preference shares is only a summary of the general
terms of the preference shares of any series we may issue under this prospectus.
Each time we issue preference shares we will prepare a prospectus supplement,
which you should read carefully. The prospectus supplement relating to a series
of preference shares or to securities that are convertible into or exchangeable
for the preference shares will summarize the terms of the preference shares
of
the particular series. Those terms will be set out in the resolutions
establishing the series that our Board of Directors or an authorized committee
adopt, and may be different from those summarized below. If so, the applicable
prospectus supplement will state that, and the description of the preference
shares of that series contained in the prospectus supplement will apply. In
the
following summary, a “holder” is the person registered in our register of
members as the holder of the relevant securities. For those preference shares,
if any, that are deposited in an American Depositary Receipt facility pursuant
to a deposit agreement, to be entered into (for additional details see
“Description of American Depositary Shares”) with Citibank N.A., the depositary
or its nominee is deemed the shareholder.
This
summary does not purport to be complete and is subject to, and qualified by,
our
Articles of Association and the resolutions of our Board of Directors or an
authorized committee. You should read our Articles of Association which are
incorporated by reference into the registration statement of which this
prospectus is a part, as well as those resolutions, which we will file with
the
SEC as an exhibit to the registration statement, of which this prospectus is
a
part.
Currently
Amarin has 440,855,934 Preference Shares of 5p each forming part of its
authorized share capital but none of these preference shares are in issue.
Pursuant to an authority given by the shareholders at the 2005 Annual General
Meeting our board of directors has the authority, without further action by
shareholders, to issue up to 440,855,934 preference shares of 5p in one or
more
series and to fix the rights, preferences, privileges, qualifications and
restrictions granted to or imposed upon the preference shares, including
dividend rights, conversion rights, voting rights, rights and terms of
redemption, and liquidation preference, any or all of which may be greater
than
the rights of the ordinary shares. To date, our board of directors has not
issued any such preference shares.
Our
board
of directors will fix the rights, preferences, privileges, qualifications and
restrictions of the preference shares of each series that we sell under this
prospectus and applicable prospectus supplements in the resolutions relating
to
that series. We will incorporate by reference into the registration statement
of
which this prospectus is a part the form of any resolutions that describes
the
terms of the series of preference shares we are offering before the issuance
of
the related series of preference shares. This description will
include:
| · |
the
title and stated value;
|
| · |
the
number of shares we are offering;
|
| · |
the
liquidation preference per share;
|
35
| · |
the
purchase price per share;
|
| · |
the
dividend rate per share, dividend period and payment dates and method
of
calculation for dividends;
|
| · |
whether
dividends will be cumulative or non-cumulative and, if cumulative,
the
date from which dividends will
accumulate;
|
| · |
our
right, if any, to defer payment of dividends and the maximum length
of any
such deferral period;
|
| · |
the
procedures for any auction and remarketing, if
any;
|
| · |
the
provisions for a sinking fund, if
any;
|
| · |
the
provisions for redemption or repurchase, if applicable, and any
restrictions on our ability to exercise those redemption and repurchase
rights;
|
| · |
any
listing of the preference shares on any securities exchange or
market;
|
| · |
whether
the preference shares will be convertible into our ordinary shares
or
other securities of ours, including warrants, and, if applicable,
the
conversion period, the conversion price, or how it will be calculated,
and
under what circumstances if may be
adjusted;
|
| · |
whether
the preference shares will be exchangeable into debt securities,
and, if
applicable, the exchange period, the exchange price, or how it will
be
calculated, and under what circumstances it may be
adjusted;
|
| · |
voting
rights, if any, of the preference
shares;
|
| · |
preemption
rights, if any;
|
| · |
restrictions
on transfer, sale or other assignment, if
any;
|
| · |
a
discussion of any material or special U.S. federal income tax
considerations applicable to the preference
shares;
|
| · |
the
relative ranking and preferences of the preference shares as to dividend
rights and rights if we liquidate, dissolve or wind up our
affairs;
|
| · |
any
limitations on issuances of any class or series of preference shares
ranking senior to or on a parity with the series of preference shares
being issued as to dividend rights and rights if we liquidate, dissolve
or
wind up our affairs; and
|
| · |
any
other specific terms, rights, preferences, privileges, qualifications
or
restrictions of the preference
shares.
|
If
we
issue shares of preference shares under this prospectus, the shares will be
fully paid and non-assessable and will not have, or be subject to, any
pre-emptive or similar rights.
Our
articles of association and English law provide that the holders of preference
shares will have the right to vote separately as a class on any proposal
involving changes that would adversely affect the powers, preferences, or
special rights of holders of that series of preference shares.
36
DESCRIPTION
OF AMERICAN DEPOSITARY SHARES
Citibank,
N.A. acts as the depositary for our American Depositary Shares representing
our
ordinary shares and will act as the depositary for any American Depositary
Shares representing our preference shares. Citibank’s depositary offices are
located at 388 Greenwich Street, New York, New York 10013. American Depositary
Shares are frequently referred to as “ADSs” and represent ownership interests in
securities that are on deposit with the depositary. ADSs are represented by
certificates that are commonly known as “American Depositary Receipts,” or
“ADRs.” The depositary typically appoints a custodian to safekeep the securities
on deposit. In this case, the custodian is the London office of Citibank, N.A.,
located at Citigroup Centre, Canada Square, Canary Wharf, London E14 5LB,
England.
We
have
appointed Citibank as depositary for our ADSs representing ordinary shares
pursuant to a deposit agreement. A copy of the deposit agreement (including
any
amendments) is on file with the SEC under cover of a Registration Statement
on
Form F-6. You may obtain a copy of the deposit agreement from the SEC’s Public
Reference Room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Please
refer to Registration Number 333-123653 when retrieving such copy. We will
appoint Citibank as depositary pursuant to a new deposit agreement if we
determine to offer and sell preference shares represented by ADSs, which deposit
agreement will be filed with the SEC under cover of a Registration Statement
on
Form F-6.
We
are
providing you with a summary description of the material terms of the ADSs
representing ordinary shares and of the material rights of owners of ADSs
representing ordinary shares. We expect that the material terms of any ADSs
representing preference shares and the material rights of owners of any ADSs
representing preference shares will be similar to the material terms of the
ADSs
representing ordinary shares and the material rights of owners of ADSs
representing ordinary shares, as provided in the following summary. A summary
description of any differences in such material terms and material rights from
the description set forth below will be included in a prospectus supplement.
Please remember that summaries by their nature lack the precision of the
information summarized and that a holder’s rights and obligations as an owner of
ADSs will be determined by reference to the terms of the applicable deposit
agreement and not by this summary. If you intend to hold ADSs, we urge you
to
review the applicable deposit agreement (including any amendments) in its
entirety. Each ADS representing ordinary shares represents one ordinary share
on
deposit with the custodian and any ADS representing preference shares will
represent one preference share on deposit with the custodian. An ADS will also
represent any other property received by the depositary or the custodian on
behalf of the owner of the ADS but that has not been distributed to the owners
of ADSs because of legal restrictions or practical considerations.
If
you
become an owner of ADSs, you will become a party to the applicable deposit
agreement and therefore will be bound to its terms and to the terms of the
ADR
that represents your ADSs. The deposit agreement and the ADR specify our rights
and obligations as well as your rights and obligations as owner of ADSs and
those of the depositary. As an ADS holder you appoint the depositary to act
on
your behalf in certain circumstances. The deposit agreement and the ADRs are
governed by New York law. However, our obligations to the holders of ordinary
shares and to the holders of preference shares will continue to be governed
by
the laws of England and Wales, which may be different from the laws in the
United States.
As
an
owner of ADSs, you may hold your ADSs either by means of an ADR registered
in
your name or through a brokerage or safekeeping account. If you decide to hold
your ADSs through your brokerage or safekeeping account, you must rely on the
procedures of your broker or bank to assert your rights as ADS owner. Please
consult with your broker or bank to determine what those procedures are. This
summary description assumes you have opted to own the ADSs directly by means
of
an ADR registered in your name and, as such, we will refer to you as the holder.
When we refer to you, we assume the reader owns ADSs and will own ADSs at the
relevant time.
Dividends
and Distributions
As
a
holder, you generally have the right to receive the distributions we make on
the
securities deposited with the custodian. Your receipt of these distributions
may
be limited, however, by practical considerations and legal limitations. Holders
will receive such distributions under the terms of the deposit agreement in
proportion to the number of ADSs held as of a specified record
date.
37
Distributions
of Cash
Upon
receipt of a cash dividend or other cash distribution, the depositary will
arrange for the funds to be converted into U.S. dollars and for the distribution
of the U.S. dollars to the holders, subject to English laws and
regulations.
The
conversion into U.S. dollars will take place only if this can be done on a
reasonable basis, in the judgment of the depositary, and if the U.S. dollars
are
transferable to the United States. The amounts distributed to holders will
be
net of the fees, expenses, taxes and governmental charges payable by holders
under the terms of the deposit agreement. The depositary will apply the same
method for distributing the proceeds of the sale of any property, such as
undistributed rights, held by the custodian in respect of securities on
deposit.
Distributions
of Shares
Upon
receipt of a free distribution of ordinary shares or preference shares, the
depositary will either
distribute to holders new ADSs representing the ordinary shares or preference
shares deposited with the custodian or
modify
the ratio of ADSs to ordinary shares or preference shares, in which case each
ADS you hold will represent rights and interests in the additional ordinary
shares or preference shares so deposited. Only whole new ADSs will be
distributed. Fractional entitlements will be sold and the proceeds of such
sale
will be distributed as in the case of a cash distribution.
The
distribution of new ADSs or the modification of the ratio of ADSs to ordinary
shares or preference shares upon a distribution of ordinary shares or preference
shares will be made net of the fees, expenses, taxes and governmental charges
payable by holders under the terms of the deposit agreement. In order to pay
such taxes or governmental charges, the depositary may sell all or a portion
of
the new ordinary shares or preference shares so distributed.
No
such
distribution of new ADSs will be made if it would violate the U.S. securities
laws or other applicable law. If the depositary does not distribute new ADSs
or
change the ADS-to-ordinary share ratio as described above, it may sell the
ordinary shares received and distribute the proceeds of the sale as in the
case
of a distribution of cash.
Distributions
of Rights
In
the
event that we distribute rights to purchase additional ordinary shares or
preference shares, the depositary will determine whether it is lawful and
feasible to distribute rights to purchase additional ADSs to
holders.
The
depositary will establish procedures to distribute rights to purchase additional
ADSs to holders and to enable such holders to exercise such rights if it is
lawful and feasible to make the rights available to holders of ADSs. We may
be
required to provide certain documentation contemplated in the deposit agreement,
such as opinions to address the lawfulness of the transaction. You may have
to
pay fees, expenses, taxes and other governmental charges to subscribe for the
new ADSs upon the exercise of your rights.
The
depositary will not
distribute the rights to you if:
| · |
it
is not lawful or feasible to distribute the
rights;
|
| · |
we
fail to deliver satisfactory documents to the depositary;
or
|
| · |
it
appears that the rights are about to
lapse.
|
The
depositary will sell the rights that are not exercised or not distributed if
such sale is lawful and reasonably practicable. The proceeds of such sale will
be distributed to holders as in the case of a cash distribution. If the
depositary is unable to sell the rights, it will allow the rights to
lapse.
38
Other
Distributions
If
we
distribute property other than cash, ordinary shares, rights to purchase
additional ordinary shares, preference shares or rights to purchase additional
preference shares and if we provide all of the documentation contemplated in
the
applicable deposit agreement, the depositary will distribute the property to
the
holders in a manner it deems equitable and practicable.
The
distribution will be made net of fees, expenses, taxes and governmental charges
payable by holders under the terms of the deposit agreement. In order to pay
such taxes and governmental charges, the depositary may sell all or a portion
of
the property received.
If
in the
opinion of the depositary a distribution is not feasible, it will not
distribute the property to you and may sell the property with our reasonable
approval. The depositary may deem a distribution not to be feasible
if:
| · |
any
amounts are required to be withheld for taxes or governmental
charges;
|
| · |
any
obligations arise under applicable securities laws of exchange control
laws; or
|
| · |
there
is any requirement that distributable securities be registered under
the
Securities Act of 1933 or
otherwise.
|
The
proceeds of such a sale will be distributed to holders as in the case of a
cash
distribution.
Changes
Affecting Ordinary Shares
and Preference Shares
The
ordinary shares or preference shares held on deposit for your ADSs may change
from time to time. For example, there may be a change in nominal or par value,
a
split-up, cancellation, consolidation or reclassification of such ordinary
shares or preference shares or a recapitalization, reorganization, merger,
consolidation or sale of assets.
If
any
such change were to occur, your ADSs would represent the right to receive the
property received or exchanged in respect of the ordinary shares or preference
shares held on deposit. The depositary may in such circumstances deliver new
ADSs to you or call for the exchange of your existing ADSs for new ADSs. If
the
depositary may not lawfully distribute such property to you, the depositary
may
sell such property and distribute the net proceeds to you as in the case of
a
cash distribution.
Issuance
of ADSs upon Deposit of
Ordinary Shares or Preference Shares
The
depositary may create ADSs on your behalf if you or your broker deposits
ordinary shares or preferences shares with the custodian. The depositary will
deliver these ADSs to the person you indicate only after you pay any applicable
issuance fees and any charges and taxes payable for the transfer of the ordinary
shares or preference shares to the custodian. Your ability to deposit ordinary
shares or preference shares and receive ADSs may be limited by U.S. and UK
legal
considerations applicable at the time of deposit. Neither ordinary shares nor
preference shares will be accepted for deposit until the depositary receives
evidence that there has been compliance with English currency exchange
regulations. The depositary will only issue ADSs in whole numbers.
When
you
make a deposit of ordinary shares or preference shares, you will be responsible
for transferring good and valid title to the depositary. As such, you will
be
deemed to represent and warrant that:
| · |
the
ordinary shares or preference shares are validly issued, fully paid
and
non-assessable;
|
| · |
all
preemptive rights, if any, with respect to such ordinary shares or
preference shares have been validly waived or
exercised;
|
39
| · |
you
are duly authorized to deposit the ordinary shares or preference
shares,
as applicable; and
|
| · |
the
ordinary shares or preference shares presented for deposit have not
been
stripped of any rights or
entitlements.
|
In
addition, unless you are depositing ordinary shares or preference shares in
exchange for ADSs that are restricted ADSs, you will also be deemed to represent
that the ordinary shares or preference shares presented for deposit are not
restricted securities as defined in the deposit agreement.
Withdrawal
of Shares upon
Cancellation of ADSs
As
a
holder, you will be entitled to present your ADSs to the depositary for
cancellation and then receive the corresponding number of underlying ordinary
shares or preference shares at the custodian’s offices. Your ability to withdraw
the ordinary shares or preference shares, as applicable, may be limited by
U.S.
and UK legal considerations applicable at the time of withdrawal. In order
to
withdraw the ordinary shares or preference shares represented by your ADSs,
you
will be required to pay the depositary the fees for cancellation of ADSs and
any
charges and taxes payable in connection with the surrender and withdrawal.
You
assume the risk for delivery of all funds and securities upon withdrawal. Once
canceled, the ADSs will not have any rights under the deposit
agreement.
If
you
hold an ADR registered in your name, the depositary may ask you to provide
proof
of identity and genuineness of any signature and such other documents as the
depositary may deem appropriate before it will cancel your ADSs. The withdrawal
of the ordinary shares or preference shares represented by your ADSs may be
delayed until the depositary receives satisfactory evidence of compliance with
all applicable laws and regulations. Please keep in mind that the depositary
will only accept ADSs for cancellation that represent a whole number of
securities on deposit.
You
will
have the right to withdraw the securities represented by your ADSs at any time
except for:
| · |
temporary
delays that may arise because (i) the transfer books for the ordinary
shares or preference shares, as applicable, or ADSs are closed, or
(ii) ordinary shares or preference shares are immobilized on account
of a shareholders’ meeting or a payment of
dividends;
|
| · |
obligations
to pay fees, taxes and similar charges would arise as a result of
such
withdrawal; or
|
| · |
restrictions
may be imposed because of laws or regulations applicable to ADSs
or the
withdrawal of securities on
deposit.
|
The
deposit agreement may not be modified to impair your right to withdraw the
securities represented by your ADSs.
Restricted
ADSs
Each
holder depositing ordinary shares that constitute “restricted securities” (as
defined in the deposit agreement) with the depositary will receive restricted
ADRs evidencing restricted ADSs pursuant to and in accordance with the letter
agreement between the depositary and us dated as of March 29, 2006 (the
“Restricted ADR Letter Agreement”). We entered into the Restricted ADR Letter
Agreement to, inter
alia,
establish procedures for (i) the deposit of “restricted securities” with the
depositary, (ii) the issuance by the depositary of restricted ADRs representing
restricted ADSs related to such restricted securities and (iii) the transfer
or
exchange of interests in the restricted ADSs, including the certifications
and
other requirements that will be required to affect such transactions under
various circumstances.
Restricted
ADRs will be issued in certificated form with a restrictive legend and may
only
be transferred or exchanged in accordance with the Restricted ADR Letter
Agreement. Except as set forth in the Restricted ADR Letter Agreement and except
as required by applicable law, restricted ADRs will have the same rights and
obliga-
40
tions
and
will be treated as ADRs that are not “restricted ADRs” for all other purposes.
Restricted ADRs may not be transferred except pursuant to an effective
registration statement under the Securities Act of 1933 or an available
exemption from the registration requirements of the Securities Act of
1933.
Voting
Rights
As
a
holder of ADSs representing ordinary shares, you generally have the right under
the deposit agreement to instruct the depositary to exercise the voting rights
for the ordinary shares represented by your ADSs. The voting rights of holders
of ordinary shares are described in “Description of Ordinary Shares.” Holders of
ADSs representing preference shares will generally have the right to instruct
the depositary to exercise the voting rights for the preference shares
represented by their ADSs. Holders of any series of preference shares will
have
voting rights, if any, fixed by our Board of Directors and described in the
prospectus supplement relating to such series of preference shares. Our articles
of association and English law provide that the holders of any series of
preference shares will have the right to vote separately as a class on any
proposal involving changes that would adversely affect the powers, preferences,
or special rights of holders of such series of preference shares.
The
depositary will mail to you any notice of shareholders’ meetings received from
us, together with a statement that holders will be entitled to instruct the
depositary to exercise the voting rights of the securities represented by ADSs,
and information explaining how to give such instructions.
If
the
depositary timely receives voting instructions from a holder of ADSs, it will
endeavor to vote the securities represented by the holder’s ADSs in accordance
with such voting instructions.
If
no such
instructions are received, the depositary will deem the holders to have granted
a discretionary proxy to the person designated by us, unless we request
otherwise. However, no discretionary proxy will be deemed granted for any
proposition that:
| · |
involves
the solicitation of opposing proxies or other substantial opposition;
or
|
| · |
authorizes
a merger, consolidation or other matter that may materially affect
the
rights and privileges of holders.
|
The
depositary has agreed to appoint one or more representatives to vote at
shareholders’ meetings either on a show of hands or a poll. In general, proxies
may be voted only if a vote on a poll is duly demanded. See “Description of
Ordinary Shares—Voting Rights.” The depositary will not join in demanding a vote
on a poll unless instructed by at least two holders or holders owning at least
10% of the voting interests of all holders. If a poll is not demanded, the
depositary shall follow the instructions of a majority in interest of the
holders.
Please
note that the ability of the depositary to carry out voting instructions may
be
limited by practical and legal limitations, the terms of our memorandum and
articles of association, and the terms of the securities on deposit. We cannot
assure you that you will receive voting materials in time to enable you to
return voting instructions to the depositary in a timely manner. Securities
for
which no voting instructions have been received will not be voted.
Fees
and Charges
As
an ADS
holder, under the deposit agreement you will be required to pay the following
service fees to the depositary:
|
Service
|
Fees
|
|
|
Issuance
of ADSs
|
Up
to 5¢ per ADS issued (or portion thereof)
|
|
|
Cancellation/Surrender
of ADSs
|
Up
to 5¢ per ADS canceled (or portion
thereof)
|
41
However,
pursuant to a letter agreement we entered into with the depositary as of March
21, 2005, the depositary has agreed to (i) waive the fees indicated above
relating to the issuance of ADSs in lieu of an annual maintenance fee payable
by
us and (ii) reduce the cancellation/surrender fees indicated above to the
following fees depending upon the price of the ADSs then-quoted on
NASDAQ:
|
ADS
price on NASDAQ
|
Cancellation/Surrender
Fee per ADS
|
|
|
$0.00
- $5.00
|
1.5¢
|
|
|
$5.01
- $10.00
|
2.0¢
|
|
|
$10.01
and above
|
3.0¢
|
This
letter agreement and the fee waivers and reductions contained in the letter
agreement may be terminated under certain circumstances by the
depositary.
As
an ADS
holder you will also be responsible to pay certain fees and expenses incurred
by
the depositary and certain taxes and governmental charges such as:
| · |
fees
for the transfer and registration of ordinary shares or preference
shares
charged by the registrar and transfer agent for the ordinary shares
or
preference shares in England (i.e.,
upon deposit and withdrawal of ordinary shares or preference
shares);
|
| · |
expenses
incurred for converting foreign currency into U.S.
dollars;
|
| · |
expenses
for cable, telex and fax transmissions and for delivery of securities;
and
|
| · |
taxes
and duties upon the transfer of securities (i.e.,
when ordinary shares or preference shares are deposited or withdrawn
from
deposit).
|
We
have
agreed to pay certain other charges and expenses of the depositary. Note that
the fees and charges you may be required to pay may vary over time and, as
with
the letter agreement of March 31, 2005, may be changed by us and by the
depositary. You will receive prior notice of such changes.
Amendments
and Termination
We
may
agree with the depositary to modify the applicable deposit agreement at any
time
without your consent. We undertake to give holders three months’ prior notice of
any modifications that would prejudice any substantial rights of the holders
under the deposit agreement. We will not consider to be prejudicial to your
substantial rights any modifications or supplements that are reasonably
necessary for the ADSs to be registered under the Securities Act of 1933 or
to
be eligible for book-entry settlement, in each case without imposing or
increasing the fees and charges you are required to pay.
You
will
be bound by the modifications to the applicable deposit agreement if you
continue to hold your ADSs after the modifications to the deposit agreement
become effective. The applicable deposit agreement cannot be amended to prevent
you from withdrawing the ordinary shares or preference shares represented by
your ADSs.
We
have
the right to direct the depositary to terminate the deposit agreement.
Similarly, the depositary may in certain circumstances on its own initiative
terminate the deposit agreement. In either case, the depositary must give notice
to the holders at least 30 days before termination.
Upon
termination of the applicable deposit agreement, withdrawal of the ordinary
shares or preference shares and distributions to holders will occur as described
below.
| · |
For
a period of six months after termination, you will be able to request
the
cancellation of your ADSs and the withdrawal of the ordinary shares
or
preference shares represented by your ADSs and the delivery of all
other
property held by the depositary in respect of those ordinary shares
or
preference
|
42
shares
on
the same terms as prior to the termination. During such six-month period the
depositary will continue to collect all distributions received on the ordinary
shares or preference shares on deposit (i.e.,
dividends) but will not distribute any such property to you until you request
the cancellation of your ADSs.
| · |
After
the expiration of such six-month period, the depositary may sell
the
securities held on deposit. The depositary will hold the proceeds
from
such sale and any other funds then held for the holders of ADSs in
a
non-interest bearing account. At that point, the depositary will
have no
further obligations to holders other than to account for the funds
then
held for the holders of ADSs still
outstanding.
|
Books
of Depositary
The
depositary will maintain ADS holder records at its depositary office. You may
inspect such records at such office at reasonable times, but solely for the
purpose of communicating with other holders in the interest of business matters
of our company or relating to the ADSs or the deposit agreement.
The
depositary will maintain facilities in New York City to record and process
the
execution, delivery, registration, transfer and surrender of ADRs. These
facilities may be closed from time to time when deemed expedient by the
depositary, or at our request.
Limitations
on Obligations and Liabilities
The
deposit agreement limits our obligations and the depositary’s obligations to
you. Please note the following:
| · |
we
and the depositary are obligated only to use our best judgment and
good
faith in performing the duties specifically stated in the deposit
agreement without negligence or bad
faith;
|
| · |
the
depositary disclaims any liability for any failure to carry out voting
instructions, for any manner in which a vote is cast or for the effect
of
any vote, provided it acts in good
faith;
|
| · |
we
and the depositary will not be obligated to appear in, prosecute
or defend
any lawsuit or other proceeding unless satisfactory indemnity is
provided
against all expenses and liabilities;
and
|
| · |
we
and the depositary disclaim any liability for any action or inaction
in
reliance on the advice or information received from legal counsel,
accountants, any person presenting ordinary shares for deposit, any
holder
of ADRs, or any other person believed by either of us in good faith
to be
competent to give such advice or
information.
|
Pre-Release
Transactions
The
depositary may, in certain circumstances, issue ADSs before receiving a deposit
of ordinary shares or preference shares or release ordinary shares or preference
shares before receiving ADSs. These transactions are commonly referred to as
“pre-release transactions.” The deposit agreement limits the aggregate size of
pre-release transactions and imposes a number of conditions on such
transactions, including the need to receive collateral, the type of collateral
required, the representations required from brokers, etc. The depositary may
retain the compensation received from the pre-release transactions.
Taxes
You
will
be responsible for the taxes and other governmental charges payable on the
ADSs
and the securities represented by the ADSs. We, the depositary and the custodian
may deduct from any distribution the taxes and governmental charges payable
by
holders and may sell any and all property on deposit to pay the taxes and
govern-
43
mental
charges payable by holders. You will be liable for any deficiency if the sale
proceeds do not cover the taxes that are due.
The
depositary may refuse to issue ADSs, to deliver, transfer, split and combine
ADRs or to release securities on deposit until all taxes and charges are paid
by
the applicable holder. The depositary and the custodian may take reasonable
administrative actions to obtain tax refunds and reduced tax withholding for
any
distributions on your behalf. However, you may be required to provide to the
depositary and to the custodian proof of taxpayer status and residence and
such
other information as the depositary and the custodian may require to fulfill
legal obligations. You are required to indemnify us, the depositary and the
custodian for any claims with respect to taxes based on any tax benefit obtained
for you.
Foreign
Currency Conversion
The
depositary will arrange for the conversion of all foreign currency received
into
U.S. dollars if in its judgment conversion can be made on a reasonable basis.
The depositary will distribute the U.S. dollars in accordance with the terms
of
the deposit agreement. You may have to pay fees and expenses incurred in
converting foreign currency, such as fees and expenses incurred in complying
with currency exchange controls and other governmental
requirements.
If
the
depositary determines that the foreign currency is not convertible on a
reasonable basis, or if any required approvals are not obtainable or are not
obtained within a reasonable period, the depositary may take the following
actions in its discretion:
| · |
convert
the foreign currency to the extent practical and lawful and distribute
the
U.S. dollars to the holders for whom the conversion and distribution
is
lawful and practical;
|
| · |
distribute
the foreign currency to holders for whom the distribution is lawful
and
practical; and
|
| · |
hold
the foreign currency for the applicable holders without liability
for
interest.
|
CERTAIN
PROVISIONS OF ENGLISH LAW AND OF THE
COMPANY’S
MEMORANDUM AND ARTICLES OF ASSOCIATION
Capital
Calls
The
board
of directors has the authority to make calls upon the shareholders in respect
of
any money unpaid on their shares and each shareholder shall pay to us as
required by such notice the amount called on his shares. If a call remains
unpaid after it has become due and payable, and the fourteen days notice
provided by the board of directors has not been complied with, any share in
respect of which such notice was given may be forfeited by a resolution of
the
board.
Preemptive
Rights
English
law provides that shareholders have preemptive rights to subscribe to any
issuances of equity securities that are or will be paid wholly in cash. These
rights may be waived by a special resolution of the shareholders, either
generally or in specific instances, for a period not exceeding five years.
This
differs from U.S. law, under which shareholders generally do not have preemptive
rights unless specifically granted in the certificate of incorporation or
otherwise. Pursuant to resolutions passed at our annual general meeting on
July
25, 2005, our directors are duly authorized during the period ending on July
25,
2010 to exercise all of our powers to allot our securities and to make any
offer
or agreement which would or might require such securities to be allotted after
that date. The aggregate nominal amount of the relevant securities that may
be
allotted under the authority cannot exceed £75,384,762 (equivalent to
1,507,695,240 ordinary shares). Under these resolutions we are empowered to
allot such ordinary
44
shares
as
if English statutory preemption rights did not apply to such issuance and,
therefore, without first offering such ordinary shares to our existing
shareholders.
Redemption
Provisions
Subject
to
the Companies Act 1985 and with the sanction of a special resolution, shares
in
us may be issued with terms that provide for mandatory or optional redemption.
The terms and manner of redemption would be provided for by the alteration
of
our articles of association.
Subject
to
the Companies Act 1985, we may also purchase in any manner the board of
directors considers appropriate any of our own ordinary shares, Preference
Shares or any other shares of any class (including redeemable shares) at any
price.
Variation
of Rights
If
at any
time our share capital is divided into different classes of shares, the rights
of any class may be varied or abrogated with the written consent of the holders
of not less than 75% of the issued shares of the class, or pursuant to an
extraordinary resolution passed at a separate meeting of the holders of the
shares of that class. At any such separate meeting the quorum shall be a minimum
of two persons holding or representing by proxy one-third in nominal amount
of
the issued shares of the class, unless such separate meeting is adjourned,
in
which case the quorum at such adjourned meeting or any further adjourned meeting
shall be one person. Each holder of shares of that class has one vote per share
at such meetings.
Meetings
of Shareholders
The
board
of directors may call general meetings and general meetings may also be called
on the requisition of our shareholders representing at least one-tenth of the
voting rights in general meeting pursuant to section 368 of the Companies Act
1985. Annual general meetings are convened upon advance notice of 21 days.
Extraordinary general meetings are convened upon advance notice of 21 days
or 14
days depending on the nature of the business to be transacted.
Citibank
will mail to the holders of ADSs any notice of shareholders’ meeting received
from us, together with a statement that holders will be entitled to instruct
Citibank to exercise the voting rights of the ordinary shares represented by
ADSs and information explaining how to give such instructions.
Limitations
on Ownership
There
are
currently no UK foreign exchange controls on the payment of dividends on our
ordinary shares or the conduct of our operations. There are no restrictions
under our memorandum and articles of association or under English law that
limit
the right of non-resident or foreign owners to hold or vote our ordinary shares,
Preference Shares or ADSs.
DESCRIPTION
OF WARRANTS
Amarin
may
issue warrants to purchase any other securities that may be sold under this
prospectus or securities of third parties or other rights, including rights
to
receive payment in cash or securities based on the value, rate or price of
one
or more specified securities or indices, or any combination of the foregoing.
Warrants may be issued independently or together with any other securities
and
may be attached to, or separate from, such securities. Each series of warrants
will be issued under a separate warrant agreement to be entered into between
Amarin and potentially a warrant agent. The terms of any warrants to be issued
and a description of the material provisions of the applicable warrant agreement
will be set forth in the applicable prospectus supplement.
45
The
applicable prospectus supplement will describe the following terms of any
warrants in respect of which this prospectus is being delivered:
| · |
the
title of such warrants;
|
| · |
the
aggregate number of such warrants;
|
| · |
the
price or prices at which such warrants will be
issued;
|
| · |
the
currency or currencies in which the price of such warrants will be
payable;
|
| · |
the
securities or other rights, including rights to receive payment in
cash or
securities based on the value, rate or price of one or more specified
commodities, currencies, securities or indices, or any combination
of the
foregoing, purchasable upon such
warrants;
|
| · |
the
date on which the right to exercise such warrants shall commence
and the
date on which such right shall expire;
|
| · |
if
applicable, the minimum or maximum amount of such warrants which
may be
exercised at any one time;
|
| · |
if
applicable, the designation and terms of the securities with which
such
warrants are issued and the number of such warrants issued with each
such
security;
|
| · |
if
applicable, the date on and after which such warrants and the related
securities will be separately
transferable;
|
| · |
information
with respect to book-entry procedures, if
any;
|
| · |
any
material English, U.S. federal and, if applicable, Bermuda income
tax
consequences;
|
| · |
the
antidilution provisions of the warrants;
and
|
| · |
any
other terms of such warrants, including terms, procedures and limitations
relating to the exchange and exercise of such
warrants.
|
DESCRIPTION
OF PURCHASE CONTRACTS
Amarin
may
issue purchase contracts for the purchase or sale of debt or equity securities
issued by Amarin or securities of third parties, a basket of such securities,
an
index or indices of such securities or any combination of the above as specified
in the applicable prospectus supplement.
Each
purchase contract will entitle the holder thereof to purchase or sell, and
obligate us to sell or purchase, on specified dates, such securities, currencies
or commodities at a specified purchase price, which may be based on a formula,
all as set forth in the applicable prospectus supplement. Amarin may, however,
satisfy its obligations, if any, with respect to any purchase contract by
delivering the cash value of such purchase contract or the cash value of the
property otherwise deliverable or, in the case of purchase contracts on
underlying currencies, by delivering the underlying currencies, as set forth
in
the applicable prospectus supplement. The applicable prospectus supplement
will
also specify the methods by which the holders may purchase or sell such
securities, currencies or commodities and any acceleration, cancellation or
termination provisions or other provisions relating to the settlement of a
purchase contract.
The
purchase contracts may require Amarin to make periodic payments to the holders
thereof or vice versa, which payments may be deferred to the extent set forth
in
the applicable prospectus supplement, and those payments
46
may
be
unsecured or prefunded on the same basis. The purchase contracts may require
the
holders thereof to secure their obligations in a specific manner to be described
in the applicable prospectus supplement. Alternatively, purchase contracts
may
require holders to satisfy their obligations thereunder when the purchase
contracts are issued. Amarin’s obligation to settle such pre-paid purchase
contracts on the relevant settlement date may constitute indebtedness.
Accordingly, pre-paid purchase contracts will be issued under either the senior
indenture or the subordinated indenture.
DESCRIPTION
OF UNITS
As
specified in the applicable prospectus supplement, Amarin may issue units
consisting of one or more purchase contracts, warrants, debt securities,
ordinary shares, ADSs, preference shares and other equity securities or any
combination of such securities. The applicable prospectus supplement will
describe:
| · |
the
terms of the units and of the purchase contracts, warrants, debt
securities, ordinary shares, ADSs, preference shares and other equity
securities comprising the units, including whether and under what
circumstances the securities comprising the units may be traded
separately;
|
| · |
a
description of the terms of any unit agreement governing the units;
and
|
| · |
a
description of the provisions for the payment, settlement, transfer
or
exchange of the units.
|
TAXATION
The
material English, U.S. federal and, if applicable, Bermuda income tax
consequences relating to the purchase, ownership and disposition of any of
the
securities offered by this prospectus will be set forth in the prospectus
supplement offering those securities.
PLAN
OF DISTRIBUTION
| · |
to
or through underwriters;
|
| · |
to
or through dealers;
|
| · |
through
agents; or
|
| · |
directly
to purchasers, including our
affiliates.
|
The
prospectus supplement with respect to any offering of our securities will set
forth the terms of the offering, including:
| · |
the
name or names of any underwriters, dealers or
agents;
|
| · |
the
purchase price of the securities and the net proceeds to us from
the
sale;
|
| · |
any
underwriting discounts and commissions or agency fees and other items
constituting underwriters’ or agents’ compensation;
and
|
| · |
any
delayed delivery arrangements.
|
The
distribution of the securities may be effected from time to time in one or
more
transactions at a fixed price or prices, which may be changed, at market prices
prevailing at the time of sale, at prices related to the prevailing market
prices or at negotiated prices.
47
If
securities are sold by means of an underwritten offering, we will execute an
underwriting agreement with an underwriter or underwriters, and the names of
the
specific managing underwriter or underwriters, as well as any other
underwriters, and the terms of the transaction, including commissions, discounts
and any other compensation of the underwriters and dealers, if any, will be
set
forth in the prospectus supplement which will be used by the underwriters to
sell the securities. If underwriters are utilized in the sale of the securities,
the securities will be acquired by the underwriters for their own account and
may be resold from time to time in one or more transactions, including
negotiated transactions, at fixed public offering prices or at varying prices
determined by the underwriters at the time of sale.
Our
securities may be offered to the public either through underwriting syndicates
represented by managing underwriters or directly by the managing underwriters.
If any underwriter or underwriters are utilized in the sale of the securities,
unless otherwise indicated in the prospectus supplement, the underwriting
agreement will provide that the obligations of the underwriters are subject
to
conditions precedent and that the underwriters with respect to a sale of
securities will be obligated to purchase all of those securities if they
purchase any of those securities.
We
may
grant to the underwriters options to purchase additional securities to cover
over-allotments, if any, at the public offering price with additional
underwriting discounts or commissions. If we grant any over-allotment option,
the terms of any over-allotment option will be set forth in the prospectus
supplement relating to those securities.
If
a
dealer is utilized in the sales of securities in respect of which this
prospectus is delivered, we will sell those securities to the dealer as
principal. The dealer may then resell those securities to the public at varying
prices to be determined by the dealer at the time of resale. Any reselling
dealer may be deemed to be an underwriter, as the term is defined in the
Securities Act of 1933, as amended, of the securities so offered and sold.
The
name of the dealer and the terms of the transaction will be set forth in the
related prospectus supplement.
Offers
to
purchase securities may be solicited by agents designated by us from time to
time. Any agent involved in the offer or sale of the securities in respect
of
which this prospectus is delivered will be named, and any commissions payable
by
us to the agent will be set forth, in the applicable prospectus supplement.
Unless otherwise indicated in the prospectus supplement, any agent will be
acting on a reasonable best efforts basis for the period of its appointment.
Any
agent may be deemed to be an underwriter, as that term is defined in the
Securities Act of 1933, as amended, of the securities so offered and
sold.
Offers
to
purchase securities may be solicited directly by us and the sale of those
securities may be made by us directly to institutional investors or others,
who
may be deemed to be underwriters within the meaning of the Securities Act of
1933 as amended, with respect to any resale of those securities. The terms
of
any sales of this type will be described in the related prospectus
supplement.
Underwriters,
dealers, agents and remarketing firms may be entitled under relevant agreements
entered into with us to indemnification by us against certain civil liabilities,
including liabilities under the Securities Act of 1933, as amended, that may
arise from any untrue statement or alleged untrue statement of a material fact
or any omission or alleged omission to state a material fact in this prospectus,
any supplement or amendment hereto, or in the registration statement of which
this prospectus forms a part, or to contribution with respect to payments which
the agents, underwriters or dealers may be required to make.
If
so
indicated in the prospectus supplement, we will authorize underwriters or other
persons acting as our agents to solicit offers by institutions to purchase
securities from us pursuant to contracts providing for payments and delivery
on
a future date. Institutions with which contracts of this type may be made
include commercial and savings banks, insurance companies, pension funds,
investment companies, educational and charitable institutions and others, but
in
all cases those institutions must be approved by us. The obligations of any
purchaser under any contract of this type will be subject to the condition
that
the purchase of the securities shall not at the time of delivery be prohibited
under the laws of the jurisdiction to which the purchaser is subject. The
underwriters and other persons acting as our agents will not have any
responsibility in respect of the validity or performance of those
contracts.
48
One
or
more firms, referred to as “remarketing firms,” may also offer or sell the
securities, if the prospectus supplement so indicates, in connection with a
remarketing arrangement upon their purchase. Remarketing firms will act as
principals for their own accounts or as agents for Amarin. These remarketing
firms will offer or sell the securities in accordance with a redemption or
repayment pursuant to the terms of the securities. The prospectus supplement
will identify any remarketing firm and the terms of its agreement, if any,
with
Amarin or any of its subsidiaries and will describe the remarketing firm’s
compensation. Remarketing firms may be deemed to be underwriters in connection
with the securities they remarket. Remarketing firms may be entitled under
agreements that may be entered into with Amarin or any of its subsidiaries
to
indemnification by Amarin or any of its subsidiaries against certain civil
liabilities, including liabilities under the Securities Act, and may engage
in
transactions with or perform services for Amarin or any of its subsidiaries
in
the ordinary course of business.
Disclosure
in the prospectus supplement of our use of delayed delivery contracts will
include the commission that underwriters and agents soliciting purchases of
the
securities under delayed contracts will be entitled to receive in addition
to
the date when we will demand payment and delivery of the securities under the
delayed delivery contracts. These delayed delivery contracts will be subject
only to the conditions that we describe in the prospectus
supplement.
In
connection with the offering of securities, persons participating in the
offering, such as any underwriters, may purchase and sell securities in the
open
market. These transactions may include over-allotment and stabilizing
transactions and purchases to cover syndicate short positions created in
connection with the offering. Stabilizing transactions consist of bids or
purchases for the purpose of preventing or retarding a decline in the market
price of the securities, and syndicate short positions involve the sale by
underwriters of a greater number of securities than they are required to
purchase from any issuer in the offering. Underwriters also may impose a penalty
bid, whereby selling concessions allowed to syndicate members or other
broker-dealers in respect of the securities sold in the offering for their
account may be reclaimed by the syndicate if the securities are repurchased
by
the syndicate in stabilizing or covering transactions. These activities may
stabilize, maintain or otherwise affect the market price of the securities,
which may be higher than the price that might prevail in the open market, and
these activities, if commenced, may be discontinued at any time.
IN
THE
U.K. IN ADDITION TO THE COMPANIES ACT 1985, THE COMPANY IS SUBJECT TO THE
PROVISIONS OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 AND THE RULES OF
THE
FINANCIAL SERVICES AUTHORITY (INCLUDING THE RULES GOVERNING THE ISSUE OF
PROSPECTUSES). AS AIM IS NOT A ‘REGULATED MARKET’ FOR THE PURPOSES OF THE
EUROPEAN UNION PROSPECTUS DIRECTIVE 2003/71/EC, FOLLOWING ADMISSION TO AIM,
THERE WILL BE VARIOUS OFFER EXEMPTIONS WHICH WILL APPLY TO THE COMPANY, WHICH
WILL ALLOW IT TO ISSUE SHARES OF THE SAME CLASS ALREADY ADMITTED TO AIM, TO
CERTAIN EXEMPT PERSONS, SUCH AS QUALIFIED INVESTORS, OR TO FEWER THAN 100
PERSONS, WITHOUT THE NEED TO PRODUCE A PROSPECTUS APPROVED BY THE FINANCIAL
SERVICES AUTHORITY. IF THE COMPANY WISHES TO ISSUE SECURITIES TO THE PUBLIC
IN
THE U.K. OR ANY OTHER EU MEMBER STATE OUTSIDE ANY OF THE APPLICABLE EXEMPTIONS,
IT WILL BE REQUIRED TO ISSUE A PROSPECTUS APPROVED BY THE UK FINANCIAL SERVICES
AUTHORITY.
Amarin’s
consolidated financial statements as of and for the years ended December 31,
2005, December 31, 2004 and December 31, 2003 incorporated in this Form F-3
by
reference from our Annual Report on Form 20-F for the year ended December 31,
2005 have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP (“PwC”), independent registered public accounting
firm, included therein given on the authority of said firm as experts in
auditing and accounting, and in reliance on the report of Ernst & Young LLP,
independent registered public accounting firm, which audited the financial
statements of Laxdale Limited, a wholly owned subsidiary of Amarin, as of
December 31, 2004 and for the period October 9, 2004 to December 31, 2004.
PwC’s
audit opinion for the consolidated financial statements of Amarin as of and
for
the year ended December 31, 2004, insofar as it relates to the amounts included
for Laxdale Limited, is based solely on the report of Ernst & Young
LLP.
49
LEGAL
MATTERS
Certain
legal matters with respect to United States and New York law with respect to
the
validity of certain of the offered securities will be passed upon for the
issuers by Cahill Gordon & Reindel llp,
New
York, New York. Certain legal matters with respect to English law with respect
to the validity of certain of the offered securities will be passed upon for
the
issuers by Kirkpatrick & Lockhart Nicholson Graham LLP (registered in
England). Certain legal matters with respect to Bermuda law will be passed
upon
for the issuers by Conyers Dill & Pearman. Any underwriters will be advised
about other issues relating to any offering by their own legal counsel.
INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
As
described in the registration statement of which this prospectus forms a part,
our articles of association and certain provisions of English law contain
provisions relating to the ability of our officers and directors to be
indemnified by us for costs, charges, expenses, losses and other liabilities
which are sustained or incurred in the performance of the officer’s or
director’s duties for us. Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to our directors, officers and
controlling persons pursuant to the charter provision, by-law, contract,
arrangements, statute or otherwise, we acknowledge 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.
50