-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FeCTaMrvXb6E6CGU0AW3qvPGbmxTHcerMWOfOO5aWLVzKBRAlHgaot+KcWJXnNbY XMqbA3qJ9gmA1NiAvZj4iA== 0000936392-99-001328.txt : 19991117 0000936392-99-001328.hdr.sgml : 19991117 ACCESSION NUMBER: 0000936392-99-001328 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19990930 FILED AS OF DATE: 19991115 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LA JOLLA PHARMACEUTICAL CO CENTRAL INDEX KEY: 0000920465 STANDARD INDUSTRIAL CLASSIFICATION: BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836] IRS NUMBER: 330361285 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-24274 FILM NUMBER: 99752883 BUSINESS ADDRESS: STREET 1: 6455 NANCY RIDGE DR CITY: SAN DIEGO STATE: CA ZIP: 92121 BUSINESS PHONE: 6194526600 MAIL ADDRESS: STREET 1: 6455 NANCY RIDGE DR CITY: SAN DIEGO STATE: CA ZIP: 92121 10-Q 1 FORM 10-Q FOR PERIOD 9-30-1999 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q MARK ONE [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ______________ TO ______________ Commission File Number: 0-24274 LA JOLLA PHARMACEUTICAL COMPANY (Exact Name of Registrant as Specified in its Charter) DELAWARE 33-0361285 (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.) 6455 NANCY RIDGE DRIVE 92121 SAN DIEGO, CA (Zip Code) (Address of Principal Executive Offices) Registrant's Telephone Number, Including Area Code: (858) 452-6600 Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES [X] NO [ ] The number of shares of the Registrant's common stock, $.01 par value, outstanding at September 30, 1999 was 20,159,559. 2 LA JOLLA PHARMACEUTICAL COMPANY FORM 10-Q REPORT FOR THE QUARTER ENDED SEPTEMBER 30, 1999 INDEX COVER PAGE.................................................................................1 INDEX .....................................................................................2 PART I. FINANCIAL INFORMATION ITEM 1. Financial Statements Balance Sheets as of September 30, 1999 (Unaudited) and December 31, 1998............3 Statements of Operations (Unaudited) for the three months and nine months ended September 30, 1999 and 1998..........................................................4 Statements of Cash Flows (Unaudited) for the nine months ended September 30, 1999 and 1998.............................................................................5 Notes to Financial Statements (Unaudited)............................................6 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.......................................................7 ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.................11 PART II. OTHER INFORMATION ITEM 6. Exhibits and Reports on Form 8-K....................................... ...11 SIGNATURE......................................................................... .......12
2 3 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS LA JOLLA PHARMACEUTICAL COMPANY BALANCE SHEETS (in thousands)
September 30, December 31, 1999 1998 ------------- ------------ (Unaudited) (Note) ASSETS Current assets: Cash and cash equivalents $ 6,311 $ 11,176 Short-term investments 7,841 12,174 Other current assets 282 517 -------- -------- Total current assets 14,434 23,867 Property and equipment, net 734 659 Patent costs and other assets, net 1,508 1,289 -------- -------- Total assets $ 16,676 $ 25,815 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 51 $ 1,254 Accrued expenses 425 575 Accrued payroll and related expenses 682 355 Deferred revenue - related party -- 1,769 Current portion of obligations under capital leases 196 3 -------- -------- Total current liabilities 1,354 3,956 Noncurrent portion of obligations under capital leases 97 -- Commitments Stockholders' equity: Common stock 201 201 Additional paid-in capital 84,320 84,276 Accumulated deficit (69,296) (62,618) -------- -------- Total stockholders' equity 15,225 21,859 -------- -------- Total liabilities and stockholders' equity $ 16,676 $ 25,815 ======== ========
Note: The balance sheet at December 31, 1998 has been derived from audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. See accompanying notes. 3 4 LA JOLLA PHARMACEUTICAL COMPANY STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except per share amounts)
Three Months Ended Nine Months Ended September 30, September 30, --------------------- --------------------- 1999 1998 1999 1998 -------- -------- -------- -------- Revenue from collaborative agreement - related party $ 1,576 $ 1,839 $ 4,690 $ 6,005 Expenses: Research and development 3,170 3,344 9,577 10,589 General and administrative 717 711 2,420 2,363 -------- -------- -------- -------- Total expenses 3,887 4,055 11,997 12,952 -------- -------- -------- -------- Loss from operations (2,311) (2,216) (7,307) (6,947) Interest expense (3) (1) (16) (6) Interest income 197 292 645 943 -------- -------- -------- -------- Net loss and comprehensive net loss $ (2,117) $ (1,925) $ (6,678) $ (6,010) ======== ======== ======== ======== Basic and diluted net loss per share $ (.11) $ (.10) $ (.33) $ (.33) ======== ======== ======== ======== Shares used in computing basic and diluted net loss per share 20,160 18,523 20,127 18,290 ======== ======== ======== ========
See accompanying notes. 4 5 LA JOLLA PHARMACEUTICAL COMPANY STATEMENTS OF CASH FLOWS (Unaudited) (in thousands)
Nine Months Ended September 30, ----------------------- 1999 1998 -------- -------- OPERATING ACTIVITIES Net loss $ (6,678) $ (6,010) Adjustments to reconcile net loss to net cash used for operating activities: Depreciation and amortization 266 286 Loss on disposal of property and equipment 23 -- Deferred compensation amortization -- 22 Changes in operating assets and liabilities: Other current assets 235 206 Accounts payable and accrued expenses (1,353) (1,427) Accrued payroll and related expenses 327 44 Deferred revenue - related party (1,769) 993 -------- -------- Net cash used for operating activities (8,949) (5,886) INVESTING ACTIVITIES Proceeds from maturity of short-term investments 4,333 8,077 Proceeds from the sale of property and equipment 20 -- Deletions to property and equipment 55 86 Increase in patent costs and other assets (254) (186) -------- -------- Net cash provided by investing activities 4,154 7,977 FINANCING ACTIVITIES Net proceeds from issuance of common stock 44 130 Payments on obligations under capital leases (114) (121) -------- -------- Net cash (used for) provided by financing activities (70) 9 Net (decrease) increase in cash and cash equivalents (4,865) 2,100 Cash and cash equivalents at beginning of period 11,176 11,999 -------- -------- Cash and cash equivalents at end of period $ 6,311 $ 14,099 ======== ======== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Interest paid $ 16 $ 6 ======== ======== SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES: Capital lease obligations incurred for property and equipment $ 404 $ -- ======== ======== Adjustment to deferred compensation for terminations $ -- $ 8 ======== ========
See accompanying notes. 5 6 LA JOLLA PHARMACEUTICAL COMPANY NOTES TO FINANCIAL STATEMENTS (Unaudited) SEPTEMBER 30, 1999 1. BASIS OF PRESENTATION The accompanying unaudited financial statements of La Jolla Pharmaceutical Company (the "Company") have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 1999 are not necessarily indicative of the results that may be expected for other quarters or the year ended December 31, 1999. For more complete financial information, these financial statements, and the notes thereto, should be read in conjunction with the audited financial statements for the year ended December 31, 1998 included in the Company's Form 10-K filed with the Securities and Exchange Commission. 2. ACCOUNTING POLICIES USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and disclosures made in the accompanying notes to the financial statements. Actual results could differ from those estimates. 3. COLLABORATIVE AGREEMENTS In September 1999, Abbott Laboratories terminated its license and development agreement for the experimental lupus drug, LJP 394, and returned all rights to the compound to the Company. 4. RESTRUCTURE CHARGES As a result of the termination of the collaborative agreement with Abbott in September 1999, the Company restructured its operations in order to reduce expenses and to focus its resources to accelerate the development of an experimental drug for the treatment of antibody-mediated thrombosis and to partner its xenotransplantation drug candidate. The Company reduced its workforce from approximately 95 to 54 full-time employees and recorded restructuring charges of approximately $742,000, primarily composed of severance and benefit payments. 6 7 LA JOLLA PHARMACEUTICAL COMPANY PART I. FINANCIAL INFORMATION ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FORWARD-LOOKING STATEMENTS This report contains forward-looking statements, including without limitation, those dealing with the analysis of the data from the clinical trials, as well as the Company's drug candidates and drug development plans and other matters described in terms of the Company's plans and expectations. The forward-looking statements involve risks and uncertainties and a number of factors, both foreseen and unforeseen, could cause actual results to differ materially from those anticipated. The analysis of the data from the Company's Phase II/III clinical trial of LJP 394 may have negative or inconclusive results. If clinical trials of LJP 394 continue, they may have negative or inconclusive results. Further, delays in continued testing of LJP 394, the Company's lead product candidate, and/or termination of development would result in delays or an inability to market the compound. Tolerance, or the specific inactivation of pathogenic B cells, is a new technology that has not been proven, and the development of LJP 394 involves many risks and uncertainties, including, without limitation, whether LJP 394 can provide a meaningful clinical benefit. Any positive results observed to date may not be indicative of future results. The Company's other potential drug candidates, none of which has advanced to clinical testing, are at earlier stages of development and involve comparable risks. Additional risk factors include the uncertainty of obtaining required regulatory approvals, successfully marketing products, receiving future revenue from product sales or other sources such as collaborative relationships, future profitability, the need for additional financing, the Company's dependence on patents and other proprietary rights, the Company's limited manufacturing capabilities and the Company's lack of marketing experience. Readers are cautioned not to place undue reliance upon forward-looking statements, which speak only as of the date hereof, and the Company undertakes no obligation to update forward-looking statements to reflect events or circumstances occurring after the date hereof. Interested parties are urged to review the risks described below and in other reports and registration statements of the Company filed with the Securities and Exchange Commission from time to time. RECENT DEVELOPMENTS As announced on May 12, 1999, Abbott Laboratories ("Abbott") and the Company, in discussion with the Food and Drug Administration, elected to stop the enrollment and treatment of the more than 200 patients enrolled in the jointly conducted Phase II/III clinical trial of LJP 394, the Company's lupus drug candidate, until the data could be validated and analyzed. This announcement was made subsequent to a planned interim analysis of the Phase II/III clinical trial, wherein the independent Data Monitoring Committee reported efficacy as defined by the primary chosen endpoint, time to renal flare, was less than expected. No major safety concerns were observed, and patients receiving the experimental drug appeared to have a reduction in circulating antibodies to double-stranded DNA that are associated with lupus nephritis. The Company is continuing to analyze the results of this clinical program and is expecting to be completed with this analysis by the end of the first quarter of 2000. A Phase II dose-ranging study of LJP 394 involving 75 lupus patients was recently completed, and the data from this study is also currently being analyzed. The Company is committed to understanding the effects of LJP 394 on endpoints from these studies before deciding on how to proceed with any further development. 7 8 LA JOLLA PHARMACEUTICAL COMPANY In September 1999, Abbott terminated its license and development agreement for the experimental lupus drug, LJP 394, and returned all rights to the compound to the Company. Thus, while continuing to analyze the results of the clinical program, the Company has restructured its operations in order to reduce expenses and to focus its resources to accelerate the development of an experimental drug for the treatment of antibody-mediated thrombosis and to partner its xenotransplantation drug candidate. During September, the Company reduced its workforce from approximately 95 to 54 full-time employees and incurred expenses for these restructuring charges of approximately $742,000. While the Company believes its cost cutting measures are appropriate, there can be no assurance that such measures will be sufficient. During the third quarter 1999, the Company announced that treatment with a Toleragen(R) appeared to reduce the relative production of specific antibodies in a mouse model of antibody-mediated thrombosis. In this autoimmune disorder, certain antibodies exacerbate inappropriate clot formation, resulting in stroke, myocardial infarction, and deep vein thrombosis. Antibody-mediated thrombosis, also known as antiphospholipid syndrome, is a clotting disorder that afflicts more than 500,000 patients in the U.S. and Europe. On August 10, 1999, the closing bid price for the Company's common stock had been below $1.00 per share for 30 consecutive days. On this date, the Company received notice from The Nasdaq Stock Market, Inc. that its common stock will be delisted from the Nasdaq National Market unless the Company can comply with the Nasdaq requirement that its common stock maintain a minimum bid price greater than or equal to $1.00 per share. In response to this notice, the Company's Board proposed a reverse split of the Company's common stock and the Company announced that it expected to distribute proxy materials on approximately October 8, 1999. The Company has subsequently extended the date that it expects to distribute proxy materials pending a hearing before the Nasdaq Listing Qualification Panel, and while it continues to review any available alternative causes of action. RESULTS OF OPERATIONS The Company earned $1.6 and $4.7 million in revenue from its collaborative agreement with Abbott in the three and nine months ended September 30, 1999, respectively, and earned $1.8 million and $6.0 million in revenue for the same periods in 1998. Payments received in advance under the collaborative agreement with Abbott were recorded as deferred revenue until earned. Total cash payments of approximately $2.9 million were received in advance under the collaborative agreement with Abbott during the first six months of 1999. As of September 30, 1999, the Company earned all of the revenue received to date from Abbott. The receipt of payments and the recognition of revenue from the collaborative agreement with Abbott have historically varied significantly from quarter to quarter and from year to year depending on the level of research effort expended. In September 1999, Abbott terminated its license and development agreement for LJP 394, including any further development funding, and has returned all rights to the compound to La Jolla Pharmaceutical. There can be no assurance that the Company will realize any further revenue from any other collaborative arrangement. Research and development expenses decreased to $3.2 million for the third quarter of 1999 from $3.3 million for the same period in 1998. For the nine months ended September 30, 1999, research and development expense decreased to $9.6 million from $10.6 million for the same period in 1998. The decrease in the third quarter in 1999 from the third quarter in 1998 was primarily due to the decrease in expenses as a result of stopping the Company's Phase II/III clinical trial for LJP 394. Depending on the results of the data analysis from the clinical trial of LJP 394, the Company's research and development expenses may increase significantly in the future as efforts to develop additional drug candidates are intensified, products potentially progress into and through clinical trials, and manufacturing scale-up activities are possibly increased. 8 9 LA JOLLA PHARMACEUTICAL COMPANY General and administrative expenses of $717,000 for the third quarter of 1999 increased slightly from $711,000 for the same period in 1998. For the nine months ended September 30, 1999 and 1998, general and administrative expense was $2.4 million. The Company's general and administrative expenses may increase in the future in order to support increased research and development and, possibly, manufacturing scale-up activities. Interest income decreased to $197,000 for the third quarter of 1999 from $292,000 for the same period in 1998. For the nine months ended September 30, 1999, interest income decreased to $645,000 from $943,000 for the same period in 1998. The decrease was due to lower investment balances. For the third quarter of 1999, interest expense increased slightly to $3,000 from $1,000 for the same period in 1998. For the nine months ended September 30, 1999, interest expense increased to $16,000 from $6,000 for the same period in 1998. The increase was the result of increases in the Company's capital lease obligations as compared to the same period in 1998. LIQUIDITY AND CAPITAL RESOURCES As of September 30, 1999, the Company had incurred a cumulative net loss since inception of approximately $69.3 million, and had financed its operations through private and public offerings of its securities, payments under collaborative agreements, capital and operating lease transactions, and interest income on its invested cash balances. As of September 30, 1999, the Company had raised approximately $83.7 million in net proceeds since inception from sales of equity securities. At September 30, 1999, the Company had $14.2 million in cash, cash equivalents and short-term investments, as compared to $23.4 million at December 31, 1998. The Company's working capital at September 30, 1999 was $13.1 million, as compared to $19.9 million at December 31, 1998. The decrease in cash, cash equivalents and short-term investments resulted from the continued use of the Company's cash toward operating activities, restructuring charges, patent expenditures and the purchase of property and equipment. The decrease in working capital is primarily due to the use of cash for net operating expenses, restructuring charges and the addition of property and equipment under capital leases in the first nine months of 1999. The Company invests its cash in corporate and United States government-backed debt instruments. As of September 30, 1999, the Company had acquired an aggregate of $4.4 million in property and equipment, of which approximately $293,000 of total property and equipment costs remains financed under capital lease obligations. In addition, the Company leases its office and laboratory facilities and certain property and equipment under operating leases. The Company has no material commitments for the acquisition of property and equipment but anticipates increasing investment in property and equipment in connection with the enhancement of its research and development and manufacturing facilities and capabilities. The Company intends to use its financial resources to fund its research and development efforts, to fund its possible manufacturing scale-up activities and for working capital and other general corporate purposes. The amounts actually expended for each purpose may vary significantly depending upon numerous factors, including the results of clinical trials, the analysis of the Phase II/III clinical trial data, the timing of any regulatory applications and approvals, and technological developments. Expenditures will also depend upon the establishment and progression of collaborative arrangements and contract research as well as the availability of other financings. There can be no assurance that these funds will be available on acceptable terms, if at all. 9 10 LA JOLLA PHARMACEUTICAL COMPANY The Company anticipates that its existing capital and interest earned thereon will be sufficient to fund the Company's operations as currently planned through 2000. The Company's future capital requirements will depend on many factors, including continued scientific progress in its research and development programs, the size and complexity of these programs, the scope and results of clinical trials, the analysis of data from the Phase II/III clinical trial, the time and costs involved in applying for any regulatory approvals, the costs involved in preparing, filing, prosecuting, maintaining and enforcing patent claims, competing technological and market developments, the ability of the Company to establish and maintain collaborative relationships, and the cost of possible manufacturing scale-up and effective commercialization activities and arrangements. The Company expects to incur significant net operating losses each year for at least the next several years as it continues its research and development efforts and incurs general and administrative expenses to support its research and development programs. It is possible that the Company's cash requirements will exceed current projections and that the Company will therefore need additional financing sooner than currently expected. The Company has no current means of generating cash flow from operations. Unless the Company's lead drug candidate, LJP 394, has been proven safe and effective, has received regulatory approval and has been successfully commercialized, it will not generate revenues. This process, if completed, could likely take several years. The Company's other drug candidates are much less developed than LJP 394. There can be no assurance that the Company's product development efforts with respect to any drug candidate will be successfully completed, that required regulatory approvals will be obtained, or that any product, if introduced, will be successfully marketed or achieve commercial acceptance. Accordingly, the Company must continue to rely upon outside sources of financing to meet its capital needs for the foreseeable future. The Company anticipates increasing expenditures on the development of other drug candidates and, over time, the Company's consumption of cash will necessitate additional sources of financing. Furthermore, the Company has no internal sources of liquidity, and termination of the Abbott arrangement has had an adverse effect on the Company's ability to generate sufficient cash to meet its needs. The Company will continue to seek capital through any appropriate means, including issuance of its securities and establishment of additional collaborative arrangements. However, there can be no assurance that additional financing will be available on acceptable terms and the Company's negotiating position in its capital-raising efforts may worsen as it continues to use its existing resources. There is no assurance that the Company will be able to enter into further collaborative relationships. IMPACT OF YEAR 2000 The "Year 2000 Issue" is the result of computer programs written using two digits rather than four to define the applicable year. As a result, these computer programs may be unable to distinguish 21st century dates from 20th century dates. This problem may cause systems to fail or miscalculate, causing disruptions of operations, including a temporary inability to process transactions or engage in similar normal business activities. Based on recent assessments, the Company believes that it has an effective program in place to resolve the Year 2000 Issue in a timely manner and that its total internal Year 2000 Issue costs for information technology and non-information technology systems will be less than $100,000 of which approximately $85,000 has been incurred to date in 1999. The Company's year 2000 conversion requirements are expected to be achieved through routine upgrades to its hardware and software programs and these upgrades are expected to be completed in the fourth quarter of 1999. These costs and the expected completion date are based on management's best estimates; therefore, there can be no assurance that these estimates will be achieved and actual results could differ materially from those anticipated. 10 11 LA JOLLA PHARMACEUTICAL COMPANY The Company's plan to resolve the Year 2000 Issue involves the following four phases: assessment, remediation, testing and implementation. To date, the Company has completed the assessment phase for 100% of the systems that could be significantly affected by the Year 2000 Issue and has determined that the majority of the systems assessed do not require remediation to be year 2000 compliant. Approximately 90% of the systems requiring remediation are now year 2000 compliant. In addition, the Company has communicated with its significant suppliers and has found that most of these suppliers have indicated that their systems are year 2000 compliant. There can be no assurance that the systems of other companies on which the Company's systems rely will be timely converted and will not have an adverse effect on the Company's systems. The Company currently has a contingency plan in place in the event it does not complete all phases of the year 2000 program including back-up emergency generators for selected critical systems, back-up tapes of computer data and powering off all equipment, if applicable. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company invests its excess cash in interest-bearing investment-grade securities that it holds for the duration of the term of the respective instrument. The Company does not utilize derivative financial instruments, derivative commodity instruments or other market-risk-sensitive instruments, positions or transactions in any material fashion. Accordingly, the Company believes that, while the investment-grade securities it holds are subject to changes in the financial standing of the issuer of such securities, the Company is not subject to any material risks arising from changes in interest rates, foreign currency exchange rates, commodity prices or other market changes that affect market-risk-sensitive instruments. PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) EXHIBITS
================================================================================ Exhibit Number Description - -------------------------------------------------------------------------------- 3.1 Intentionally omitted 3.2 Amended and Restated Bylaws of the Company (1) 3.3 Amended and Restated Certificate of Incorporation of the Company (1) 27 Financial Data Schedule (1) ================================================================================
- ----------------------- (1) Filed herein. (b) REPORTS ON FORM 8-K During the quarter ended September 30, 1999, the Company filed a Current Report on Form 8-K dated September 14, 1999 reporting the following: that the Company had regained the rights to its experimental lupus drug, LJP 394, following termination by Abbott of a license and development agreement between the Company and Abbott; that it is restructuring operations while it is evaluating the results of a clinical trial of its experimental lupus drug, LJP 394, and that its Board of Directors had set a special meeting of stockholders, the primary purpose of which is to put forth to the stockholders a proposed one-for-five reverse split of the Company's Common Stock. 11 12 12 13 LA JOLLA PHARMACEUTICAL COMPANY SIGNATURE SEPTEMBER 30, 1999 Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. La Jolla Pharmaceutical Company Date: November 12, 1999 By: /s/ Steven B. Engle --------------------------------------- Steven B. Engle Chairman and Chief Executive Officer Signed on behalf of the Registrant By: /s/ Gail A. Sloan ---------------------------------------- Gail A. Sloan Signed as Principal Accounting Officer 12 14 LA JOLLA PHARMACEUTICAL COMPANY INDEX TO EXHIBITS
Exhibit Number Exhibit - ------- ------- 3.2 Amended and Restated Bylaws of the Company 3.3 Amended and Restated Certificate of Incorporation of the Company 27 Financial Data Schedule
13 EX-3.2 2 EXHIBIT 3.2 1 EXHIBIT 3.2 AMENDED AND RESTATED BYLAWS FOR THE REGULATION OF LA JOLLA PHARMACEUTICAL COMPANY, a Delaware Corporation ARTICLE I Principal Executive Office Section 1.01 Registered Office. The registered office of La Jolla Pharmaceutical Company (the "Corporation") in the State of Delaware shall be at 1013 Centre Road, in the City of Wilmington 19805, County of New Castle, and the name of the registered agent in charge thereof shall be United States Corporation Company. Section 1.02 Principal Office. The principal executive office of the Corporation shall be 6455 Nancy Ridge Drive, San Diego, California 92121. ARTICLE II Meeting of Stockholders Section 2.01 Annual Meetings The annual meeting of stockholders shall be held between 30 and 150 days following the end of the fiscal year of the Corporation at such time and on such date as the board of directors shall determine. At each annual meeting, directors shall be elected and any other proper business may be transacted. Section 2.02 Special Meetings. A special meeting of the stockholders for the transaction of any proper business may be called at any time only by the board of directors, the chairman of the board (if there is such an officer) or the president and may be held at such time and place and on such date as is determined by the person calling the meeting, within the limits fixed by law. Section 2.03 Place of Meetings. Each annual or special meeting of stockholders shall be held a such location as may be determined by the board of directors, or if no such determination is made, at such place as may be determined by the chief executive officer, or by any other officer authorized by the board of directors or the chief executive officer to make such determination. If no location is so determined, any annual or special meeting shall be held at the principal executive office of the Corporation. Section 2.04 Notice of Meetings. Notice of each annual or special meeting of stockholders shall contain such information, and shall be given to such persons at such time, and in such manner, as the board of directors shall determine, or if no such determination is made, as the chief executive officer, or any other officer so authorized by the board of directors or the chief executive officer, shall determine, subject to the requirements of applicable law. 2 Section 2.05 Conduct of Meetings Subject to the requirements of applicable law, all annual and special meetings of stockholders shall be conducted in accordance with such rules and procedures as the board of directors may determine and, as to matters not governed by such rules and procedures, as the chairman of such meeting shall determine. The chairman of any annual or special meeting of stockholders shall be designated by the board of directors and, in the absence of any such designation, shall be the chief executive officer of the Corporation. Section 2.06 Advance Notice of Stockholder Proposals and Stockholder Nominations. (a) At any meeting of the stockholders, only such business may be conducted, and only such proposals may be acted upon, as have been brought before the meeting (i) by or at the direction of the board of directors, or (ii) by any stockholder of the Corporation entitled to vote on such business who complies with the notice procedures set forth in this Section 2.06(a). For business to be properly brought before any meeting of the stockholders by a stockholder, the stockholder must have given notice thereof in writing which is received by the Secretary of the Corporation not less than ninety (90) days nor more than one hundred twenty (120) days in advance of such meeting, regardless of any postponements, deferrals or adjournments of that meeting to a later date; provided, however, that if less than ninety-five (95) days' notice or prior public disclosure of the date of the scheduled meeting is given or made, notice by the stockholder, to be timely, must be so delivered or received not later than the close of business on the seventh day following the earlier of the date of the first public announcement of the date of such meeting and the date on which such notice of the scheduled meeting was mailed. A stockholder's notice to the Secretary must set forth as to each matter the stockholder proposes to bring before the meeting (i) a brief description of the business desired to be brought before the meeting and the reasons for conducting such business at the meeting, (ii) the name and address, as they appear on the Corporation's books, of the stockholder proposing such business and any stockholders known by such stockholder to be supporting such proposal, (iii) the class and number of shares of the Corporation that are beneficially owned by the stockholder and by any other stockholder known by such stockholder to be supporting such matter on the date of such stockholder notice, and (iv) any material interest of the stockholder in such business. In addition, the stockholder making such proposal shall promptly provide any other information reasonably requested by the Corporation. Notwithstanding anything in these Bylaws to the contrary, no business may be conducted at any meeting of the stockholders except in accordance with the procedures set forth in this Section 2.06(a). The presiding officer of the meeting shall determine and declare at the meeting whether the stockholder proposal was made in accordance with the terms of this Section 2.06(a). If the presiding officer determines that a stockholder proposal was not made in accordance with the terms of this Section 2.06(a), he or she shall so declare at the meeting and any such proposal will not be acted upon at the meeting. This provision will not prevent the consideration and approval or disapproval at the meeting of reports of officers, directors and committees of the board of directors, but, in connection with such reports, no new business may be acted upon at such meeting unless stated, filed and received as herein provided. (b) Nominations for the election of directors may be made by the board of directors, any nominating committee or person appointed by the board of directors, or by any stockholder entitled to vote in the election of directors; provided, however, that, subject to the 2 3 rights, if any, of the holders of shares of Preferred Stock then outstanding, a stockholder may nominate a person for election as a director at a meeting only if written notice of such stockholder's intent to make such nomination has been received by the Secretary of the Corporation not less than ninety (90) days nor more than one hundred twenty (120) days in advance of such meeting regardless of any postponements, deferrals or adjournments of that meeting to a later date; provided, further, that if less than ninety-five (95) days' notice or prior public disclosure of the date of the scheduled meeting is given or made, notice by the stockholder, to be timely, must be so delivered or received not later than the close of business on the seventh day following the earlier of the date of the first public announcement of the date of such meeting and the date on which such notice of the scheduled meeting was mailed. Each such notice must set forth: (i) the name and address of the stockholder who intends to make the nomination and of the person or persons to be nominated; (ii) the class and number of shares of the Corporation's stock which are beneficially owned by the stockholder and a representation that such stockholder intends to appear in person or by proxy at the meeting and nominate the person or persons specified in the notice; (iii) a description of all arrangements or understandings between the stockholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the stockholder; (iv) such other information regarding each nominee proposed by such stockholder as would be required to be included in a proxy statement filed pursuant to the proxy rules of the Securities and Exchange Commission had the nominee been nominated, or intended to be nominated, by the board of directors; and (v) the consent of each nominee to serve as a director of the Corporation if so elected. In addition, the stockholder making such nomination shall promptly provide any other information reasonably requested by the Corporation. No person will be eligible for election as a director of the Corporation unless nominated in accordance with the procedures set forth in this Section 2.06(b). The presiding officer of the meeting shall determine and declare at the meeting whether the nomination was made in accordance with the terms of this Section 2.06(b). If the presiding officer determines that a nomination was not made in accordance with the terms of this Section 2.06(b), he or she shall so declare at the meeting and any such defective nomination will be disregarded. No stockholder may nominate any person for election as a director to any Class for which such stockholder is not entitled to vote. (c) Nothing herein is intended or will be construed to limit requirements imposed by applicable laws or regulations upon stockholder proposals, opposition thereto by the Corporation, or inclusion thereof in the Corporation's proxy materials. ARTICLE III Directors Section 3.01 Number of Directors and Term of Office. Unless otherwise provided in the Corporation's certificate of incorporation, the total number of directors of the Corporation shall be not less than five (5) nor more than nine (9), with the actual total number of directors set from time to time exclusively by resolution of the Board of Directors. The Board of Directors shall consist of six members until changed by such a resolution. There shall be three classes of directors (each, a "Class"), known as Class 1, Class 2 and Class 3. The initial Class 1, Class 2 3 4 and Class 3 directors shall serve in office as follows: Class 1 shall retire at the first annual meeting of stockholders following the filing of the Corporation's Amended and Restated Certificate of Incorporation (the "Effective Date"), Class 2 shall retire at the second annual meeting of stockholders following the Effective Date, and Class 3 shall retire at the third annual meeting of stockholders following the Effective Date. This annual sequence shall be repeated thereafter. Each director in a Class shall be eligible for re-election if nominated, and such director's seat shall be open for election of a director, at the annual meeting of stockholders of the Corporation at which such Class shall retire, to hold office for three years or until his successor is elected or appointed. Any additional directors elected or appointed shall be elected or appointed to such Class as will ensure that the number of directors in each Class remains as nearly equal as possible, and if all Classes have an equal number of directors or if one Class has one director more than the other two Classes, then any additional directors elected or appointed shall be elected or appointed to the Class that does not have more directors than any other Class and is subject to election at an ensuing annual meeting before any other such Class. Vacancies due to resignation, death, increases in the number of directors, or any other cause shall be filled only by the Board of Directors (unless there are no directors, in which case vacancies will be filled by the stockholders) in accordance with the rule that each Class of directors shall be as nearly equal in number of directors as possible. Notwithstanding such rule, in the event of any change in the authorized number of directors each director then continuing to serve as such will nevertheless continue as a director of the Class of which he or she is a member, until the expiration of his or her current term or his earlier death, resignation or removal. If any newly created directorship or vacancy on the Board of Directors, consistent with the rule that the three Classes shall be as nearly equal in number of directors as possible, may be allocated to one or two or more Classes, then the Board of Directors shall allocate it to that of the available Classes whose term of office is due to expire at the earliest date following such allocation. When the Board of Directors fills a vacancy, the director chosen to fill that vacancy shall be of the same Class as the director he or she succeeds and shall hold office until such director's successor shall have been elected and qualified or until such director shall resign or shall have been removed. No reduction of the authorized number of directors shall have the effect of removing any director prior to the expiration of such director's term of office. Section 3.02 Meetings of the Board. Each regular and special meeting of the board shall be held at a location determined as follows: The board of directors may designate any place, within or without the State of Delaware, for the holding of any meeting. If no such designation is made, (i) any meeting called by a majority of the directors shall be held at such location, within the county of the Corporation's principal executive office, as the directors calling the meeting shall designate; and (ii) any other meeting shall be held at such location, within the county of the Corporation's principal executive office, as the chief executive officer may designate, or in the absence of such designation, at the Corporation's principal executive office. Subject to the requirements of applicable law, all regular and special meetings of the board of directors shall be conducted in accordance with such rules and procedures as the board of directors may approve and, as to matters not governed by such rules and procedures, as the 4 5 chairman of such meeting shall determine. The chairman of any regular or special meeting shall be designated by the directors and, in the absence of any such designation, shall be the chief executive officer of the Corporation. Section 3.03 Qualifications of Directors. No person shall be qualified to be elected to, or appointed to fill a vacancy on, the board of the Corporation during the pendency of a Business Combination transaction, as defined herein, if such person is, or (in the case of a person described in clause (i), (ii) or (iii) below) was within the two years preceding the date of such election or appointment: (i) an officer, director, employee or affiliate (as defined in Rule 144 under the Securities Act of 1933, as amended) of a party to such transaction (an "Interested Party") or of any affiliate of an Interested Party; (ii) an agent subject to the direction of an Interested Party; (iii) a consultant or advisor to an Interested Party; (iv) a person having a material financial interest in the transaction (other than through the ownership of stock or securities of the Corporation); or (v) a person having any business, financial, or familial relationship with any person referred to in clauses (i)-(iv) above that would reasonably be expected to affect such person's judgment in a manner adverse to this Corporation. A person shall not be disqualified from election or appointment to the board by reason of this Section 3.03 solely because such person is a director or officer of this Corporation who receives normal and customary compensation as such and/or is a stockholder or affiliate of this Corporation. For the purpose of this Section 3.03, a Business Combination shall mean any of the following: (i) a merger or consolidation of this Corporation with another corporation, or a sale of all or substantially all of the business and assets of this Corporation; or (ii) an acquisition (including by tender offer or any other means) by any person (including any two or more persons comprising a group, within the meaning of Rule 13d-5 under the Securities Exchange Act of 1934, as amended (the "Exchange Act")), of beneficial ownership, within the meaning of Rule 13d-3 under the Exchange Act, of 15% or more of the outstanding common stock of this Corporation. A Business Combination shall be deemed pending for purposes of this Section 3.03 commencing on the date any offer or proposal for such transaction shall be made and until such time as the proposed transaction is abandoned or until such time as: (i) the party proposing such transaction shall have acquired beneficial ownership, as defined above, of 50% or more of this Corporation's outstanding voting stock; and (ii) 10 business days shall have elapsed thereafter. A business day shall mean any day other than a Saturday, a Sunday or a day on which banking institutions in the State of California are authorized or obligated by law or executive order to close. ARTICLE IV Indemnification Section 4.01 Action, Etc. Other Than by or in the Right of the Corporation. The Corporation shall indemnify any person who was or is a party or is threatened to be made a party 5 6 to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that such person is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the Corporation, and with respect to any criminal action or proceeding, had no reasonable cause to believe such person's conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, that the person had reasonable cause to believe that such person's conduct was unlawful. Section 4.02 Actions, Etc. by or in the Right of the Corporation. The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that such person is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if such person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the Corporation, except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper. Section 4.03 Determination of Right of Indemnification. Any indemnification under Section 4.01 or 4.02 (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because such person has met the applicable standard of conduct set forth in Section 4.01 and 4.02. Such determination shall be made (i) by the Board by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (ii) if such a quorum is not obtainable, or, even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (iii) by the stockholders. Section 4.04 Indemnification Against Expenses of Successful Party Notwithstanding the other provisions of this Article, to the extent that a director, officer, employee or agent of the 6 7 Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Section 4.01 or 4.02, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith. Section 4.05 Prepaid Expenses. Expenses incurred by an officer or director in defending a civil or criminal action, suit or proceeding may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of the director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the Corporation as authorized in this Article. Such expenses incurred by other employees and agents may be so paid upon such terms and conditions, if any, as the Board deems appropriate. Section 4.06 Other Rights and Remedies. The indemnification and advancement of expenses provided by, or granted pursuant to, the other subsections of this Article shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any Bylaws, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person's official capacity and as to action in another capacity while holding such office. Section 4.07 Continuation of Indemnification and Advancement of Expenses The indemnification and advancement of expenses provided by, or granted pursuant to, this Article shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person. Section 4.08 Insurance. Upon resolution passed by the Board, the Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person's status as such, whether or not the Corporation would have the power to indemnify such person against such liability under the provisions of this Article. Section 4.09 Constituent Corporations. For the purposes of this Article, references to "the Corporation" include all constituent corporations absorbed in a consolidation or merger as well as the resulting or surviving corporation, so that any person who is or was a director, officer, employee or agent of such a constituent corporation or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise shall stand in the same position under the provisions of this Article with respect to the resulting or surviving corporation as such person would if such person had served the resulting or surviving corporation in the same capacity. Section 4.10 Other Enterprises, Fines, and Serving at Corporation's Request. For purposes of this Article, references to "other enterprises" shall include employee benefit plans; 7 8 references to "fines" shall include any excise taxes assessed on a person with respect to any employee benefit plan; and references to "serving at the request of the Corporation" shall include any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by, such director, officer, employee, or agent with respect to an employee benefit plan, its participants, or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of the Corporation" as referred to in this Article. ARTICLE V Officers Section 5.01 Officers. The Corporation shall have a chairman of the board, a chief executive officer, a chief financial officer, a secretary, and such other officers as may be designated by the board. Officers shall have such powers and duties as may be specified by, or in accordance with, resolutions of the board of directors. In the absence of any contrary determination by the board of directors, the chief executive officer shall, subject to the power and authority of the board of directors, have general supervision, direction, and control of the officers, employees, business, and affairs of the Corporation. Section 5.02 Limited Authority of Officers. No officer of the Corporation shall have any power or authority outside the normal day-to-day business of the Corporation to bind the Corporation by any contract or engagement or to pledge its credit or to render it liable in connection with any transaction unless so authorized by the board of directors. ARTICLE VI Waiver of Annual Reports (a) In the event the Corporation becomes subject to the provisions of Section 1501 of the California Corporations Code ("Code") by reason of the applicability of Section 2115 of the Code, then so long as the Corporation has less than 100 holders of record of its shares (determined as provided in Section 605 of the Code), no annual report to stockholders shall be required, and the requirement to the contrary of Section 1501 of the Code is hereby expressly waived. (b) If the Corporation is not subject to Section 2115 of the Code, Section 8.05(a) above shall not require or be interpreted to require the Corporation to provide an annual report to stockholders under any circumstances, and the Corporation shall not be under any such obligation unless the same is required by any applicable provision of the General Corporation Law of Delaware or any applicable federal laws. 8 9 ARTICLE VII Amendments New bylaws may be adopted or these bylaws may be amended or repealed by the stockholders or, except for Section 3.01, by the directors. 9 EX-3.3 3 EXHIBIT 3.3 1 EXHIBIT 3.3 AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF LA JOLLA PHARMACEUTICAL COMPANY 1. The undersigned, Steven B. Engle, certifies that he is the Chief Executive Officer of la jolla pharmaceutical company, a Delaware corporation (the "CORPORATION"), and does further certify that: 2. The name of the Corporation is La Jolla Pharmaceutical Company, the name under which it was originally incorporated. 3. The original Certificate of Incorporation of the Corporation was filed in the Office of the Secretary of State of Delaware on May 2, 1989. 4. This Amended and Restated Certificate of Incorporation has been duly adopted in accordance with Sections 242 and 245 of the General Corporation Law of the State of Delaware. 5. The text of the Restated Certificate of Incorporation of the Corporation is hereby amended and restated in its entirety as follows: ARTICLE I NAME OF CORPORATION The name of the Corporation is La Jolla Pharmaceutical Company. ARTICLE II REGISTERED OFFICE The address of the registered office of the Corporation in the State of Delaware is 1013 Centre Road, in the City of Wilmington 19805, County of New Castle. The name of the registered agent of the Corporation at such address is United States Corporation Company. ARTICLE III PURPOSE The purpose of this Corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of Delaware other than the banking business, the trust company business or the practice of a profession permitted to be incorporated by the Delaware Corporations Code. 2 ARTICLE IV AUTHORIZED CAPITAL STOCK The Corporation is authorized to issue two classes of stock designated "Common Stock" and "Preferred Stock." The number of shares of Common Stock that the Corporation is authorized to issue is 100,000,000; the number of shares of Preferred Stock that the Corporation is authorized to issue is 8,000,000. The Board is hereby authorized to issue the shares of Preferred Stock in one or more series, to fix the number of shares of any such series of Preferred Stock, to determine the designation of any such series, and to fix the rights, preferences, and privileges and the qualifications, limitations or restrictions of the series of Preferred Stock to the full extent permitted under the Delaware General Corporation Law. The authority of the Board with respect to any series of Preferred Stock shall include, without limitation, the power to fix or alter the dividend rights, dividend rate, conversion rights, voting rights, rights and terms of redemption (including sinking fund provisions, if any), the redemption price or prices, and the liquidation preferences and the number of shares constituting any such additional series and the designation thereof, or any of them; and to increase or decrease the number of authorized shares of any series subsequent to the issue of that series, but not below the number of shares of such series then outstanding. In case the authorized number of shares of any series shall be so decreased, the shares constituting such decrease shall resume the status which they had prior to the adoption of the resolution originally fixing the number of shares of such series. All shares of the Common Stock and the Preferred Stock shall have a par value of $.01 per share. ARTICLE V LIMITATION OF DIRECTOR LIABILITY To the fullest extent permitted by the Delaware General Corporation Law, a director of this corporation shall not be liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. ARTICLE VI BOARD POWER REGARDING BYLAWS In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to make, repeal, alter, amend and rescind the Bylaws of this corporation; provided, however, that after the initial adoption of the Bylaws, the Board of Directors may not repeal, alter, amend, or rescind Section 3.01 thereof which shall establish the manner in which the number of directors is set. 2 3 ARTICLE VII ELECTION OF DIRECTORS Elections of directors need not be by written ballot unless the Bylaws of the Corporation shall so provide. ARTICLE VIII NUMBER OF DIRECTORS AND TERM OF OFFICE The total number of directors of the Corporation shall be not less than five (5) nor more than nine (9), with the actual total number of directors set from time to time exclusively by resolution of the Board of Directors. The Board of Directors shall initially consist of six members until changed by such a resolution. There shall be three classes of directors (each, a "Class"), known as Class 1, Class 2 and Class 3. The initial Class 1, Class 2 and Class 3 directors shall serve in office as follows: Class 1 shall retire at the first annual meeting of stockholders following the filing of the Corporation's Amended and Restated Certificate of Incorporation (the "Effective Date"), Class 2 shall retire at the second annual meeting of stockholders following the Effective Date, and Class 3 shall retire at the third annual meeting of stockholders following the Effective Date. This annual sequence shall be repeated thereafter. Each director in a Class shall be eligible for re-election if nominated, and such director's seat shall be open for election of a director, at the annual meeting of stockholders of the Corporation at which such Class shall retire, to hold office for three years or until his successor is elected or appointed. Any additional directors elected or appointed shall be elected or appointed to such Class as will ensure that the number of directors in each Class remains as nearly equal as possible, and if all Classes have an equal number of directors or if one Class has one director more than the other two Classes, then any additional directors elected or appointed shall be elected or appointed to the Class that does not have more directors than any other Class and is subject to election at an ensuing annual meeting before any other such Class. Vacancies due to resignation, death, increases in the number of directors, or any other cause shall be filled only by the Board of Directors (unless there are no directors, in which case vacancies will be filled by the stockholders) in accordance with the rule that each Class of directors shall be as nearly equal in number of directors as possible. Notwithstanding such rule, in the event of any change in the authorized number of directors each director then continuing to serve as such will nevertheless continue as a director of the Class of which he or she is a member, until the expiration of his or her current term or his earlier death, resignation or removal. If any newly created directorship or vacancy on the Board of Directors, consistent with the rule that the three Classes shall be as nearly equal in number of directors as possible, may be allocated to one or two or more Classes, then the Board of Directors shall allocate it to that of the available Classes whose term of office is due to expire at the earliest date following such allocation. When the Board of Directors fills a vacancy, the director chosen to fill that vacancy shall be of the same Class as the director he or she succeeds and shall hold office until such 3 4 director's successor shall have been elected and qualified or until such director shall resign or shall have been removed. No reduction of the authorized number of directors shall have the effect of removing any director prior to the expiration of such director's term of office. ARTICLE IX STOCKHOLDER ACTION BY WRITTEN CONSENT Any action required or permitted to be taken by the stockholders of the Corporation must be effected at a duly called annual or special meeting of such holders and may not be effected by a consent in writing by any such holders. ARTICLE X CORPORATE POWER The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Amended and Restated Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred on stockholders herein are granted subject to this reservation; provided, however, that any amendment of Article VIII or of this Article X will require an affirmative vote of the holders of seventy-five percent (75%) or more of the total voting power of all outstanding shares of voting stock of the Corporation. IN WITNESS WHEREOF, the undersigned Corporation has executed this Amended and Restated Certificate of Incorporation as of May 21, 1999. LA JOLLA PHARMACEUTICAL COMPANY By: /s/ Steven B. Engle ------------------------------------ Steven B. Engle, Chief Executive Officer 4 EX-27 4 FINANCIAL DATA SCHEDULE
5 9-MOS DEC-31-1999 JAN-01-1999 SEP-30-1999 6,311 7,841 0 0 0 282 4,382 (3,648) 16,676 1,354 97 0 0 201 15,024 16,676 0 4,690 0 0 11,997 0 16 (6,678) 0 (6,678) 0 0 0 (6,678) (.33) (.33)
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