As filed with the Securities and Exchange
Commission on September 18, 2012
Registration No. 333-___
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM F-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
Flamel
Technologies, S.A.
(Exact Name of Registrant as Specified in Its Charter)
N/A
(Translation of Registrant’s Name
Into English)
The Republic of France
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N/A
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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Parc Club du Moulin A Vent
33, Avenue du Docteur Georges Levy
69693 Venissieux Cedex
France
(33) 4 72 78 34 34
(Address and Telephone Number of Registrant’s
Principal Executive Offices)
Stephen H. Willard
Flamel Technologies
1220 L Street, NW
Suite 100-470
Washington, DC 20005-4018
(202)
862-8535
(Name, Address and Telephone Number of Agent for Service)
Copies to:
William I. Intner
G. Allen Hicks
Hogan Lovells US LLP
100 International Drive, Suite 2000
Baltimore, MD 21202
(410) 659-2700
Approximate date of commencement of proposed sale to the public:
As soon as practicable after this registration statement becomes effective.
If
the only securities being registered on this form are being offered pursuant to dividend or interest reinvestment plans, please
check the following box:
¨
If
any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415
under the Securities Act of 1933, please check the following box:
x
If
this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act registration statement number of the earlier effective registration statement
for the same offering.
¨
_______________
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective
registration statement for the same offering.
¨
_______________
If
this Form is a registration statement pursuant to General Instruction I.C or a post-effective amendment thereto that shall become
effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box.
¨
If this Form is a post-effective amendment to a registration
statement filed pursuant to General Instruction I.C filed to register additional securities pursuant to Rule 413(b) under the Securities
Act, check the following box.
£
CALCULATION OF REGISTRATION FEE
Title Of Each Class
Of Securities To Be Registered
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Amount To Be
Registered (1)(2)
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Proposed Maximum
Aggregate Offering
Price
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Amount Of
Registration Fee
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Ordinary Shares represented by American Depositary Shares, issuable upon the exercise of an outstanding warrant
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2,200,000 shares
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$
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16,368,000
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(3)
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$
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1,876
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Ordinary Shares represented by American Depositary Shares, issuable upon the exercise of an outstanding warrant
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1,100,000 shares
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$
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12,100,000
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(4)
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$
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1,387
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Total
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3,300,000 shares
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$
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28,468,000
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$
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3,263
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(1)
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Ordinary shares may be in the form of American Depositary Shares evidenced by American Depositary Receipts. American Depositary Shares (“ADSs”) evidenced by American Depositary Receipts issuable on deposit of the ordinary shares registered hereby have been registered under a separate Registration Statement on Form F-6EF, filed on September 30, 2003 (File No. 333-109281). Each ADS represents one ordinary share.
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(2)
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Pursuant to Rule 416 under the Securities Act, the ordinary shares being registered hereunder include such indeterminate number of ordinary shares as may be issuable with respect to the Ordinary Shares being registered hereunder as a result of stock splits, stock dividends or similar transactions.
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(3)
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Calculated pursuant to Rule 457(g) promulgated under the Securities Act of 1933, as amended. The calculation of the registration fee is based on an exercise price under the warrant of $7.44 per ADS.
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(4)
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Calculated pursuant to Rule 457(g) promulgated under
the Securities Act of 1933, as amended. The calculation of the registration fee is based on an exercise price under the warrant
of $11.00 per ADS.
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The registrant hereby amends this registration statement
on the date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which
specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant
to said Section 8(a), may determine.
The information in this prospectus
is not complete and may be changed. The selling shareholder may not sell these securities until the registration statement filed
with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting
offers to buy these securities in any state where the offer or sale is not permitted.
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Subject to Completion
Preliminary Prospectus, dated
September 18, 2012
PROSPECTUS
Up to
3,300,000 Ordinary Shares
FLAMEL
TECHNOLOGIES, S.A.
Ordinary Shares in the Form of American
Depositary Shares
___________________________
The selling shareholder identified in this prospectus may offer
and sell from time to time an aggregate of up to 3,300,000 ordinary shares of Flamel Technologies, S.A. represented by American
Depositary Shares, or ADSs, that are issuable upon the exercise of certain warrants, or the Warrants. Each ADS represents one
ordinary share or the right to receive one ordinary share. The Warrants were issued to the selling shareholder in connection with
our acquisition of Éclat Pharmaceuticals, LLC in March 2012.
We are not offering any ordinary shares for sale under this
prospectus and will not receive any of the proceeds of the sale or other disposition of the ordinary shares covered by this registration
statement. However, we will receive the exercise price of any Warrants exercised for cash. To the extent that we receive cash upon
the exercise of any Warrants, we expect to use that cash for working capital and general corporate purposes.
The selling shareholder identified in this prospectus, or its
permitted pledgees, donees, transferees, or other successors-in-interest may, from time to time, sell, transfer, or otherwise dispose
of any or all of their ordinary shares on any stock exchange, market, or trading facility on which the ordinary shares are traded
or in private transactions. These dispositions may be at fixed prices, at prevailing market prices at the time of sale, at prices
related to the prevailing market price, at varying prices determined at the time of sale, or at negotiated prices. See “Plan
of Distribution” for additional information.
Each ordinary share of Flamel, approximately € 0.122 nominal
value, referred to as ordinary shares, will be represented by one ADS. The ADSs are quoted under the symbol “FLML”
on the NASDAQ Global Market. On September 17, 2012, the last reported sale price for our ADSs on the NASDAQ Global Market was $4.48 per ADS.
We will pay the expenses related to the registration of the
ordinary shares covered by this prospectus. The selling shareholder will pay any commissions and selling expenses they may incur.
Investing in the ADSs involves risks that are described in
the “Risk Factors” section beginning on page 4 of this prospectus.
The date of this prospectus is , 2012
NEITHER THE SECURITIES AND EXCHANGE
COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
ABOUT THIS PROSPECTUS
In this prospectus, “Flamel,” “the Company,”
“we,” “us” and “our” refer to Flamel Technologies, S.A., “$”, “dollar”
and “US dollar” refer to the lawful currency of the United States, and “euro” or “€” refers
to the currency established for participating member states of the European Union as of the beginning of stage three of the European
Monetary Union.
You should rely only on the information contained or incorporated
by reference in this prospectus and any prospectus supplement. We have not authorized any other person to provide you with different
information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not making an
offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information
appearing in this prospectus, any prospectus supplement, and the documents incorporated by reference is accurate only as of its
respective date. Our business, financial condition, results of operations and prospects may have changed since those dates.
We may add, update, or change in a prospectus supplement any
of the information contained in this prospectus or in documents we have incorporated by reference into this prospectus. To
the extent that any statement that we make in a prospectus supplement is inconsistent with statements made in this prospectus,
the statements made in this prospectus will be deemed modified or superseded by those made in a prospectus supplement.
You should carefully read this prospectus and any prospectus
supplement, together with additional information referenced under the headings “Where You Can Find More Information,”
“Incorporation By Reference” and “Risk Factors” before you invest in our securities.
This prospectus and any prospectus supplement are not being
distributed in the context of a public offer in France within the meaning of Article L. 411-1 of the French Monetary
and Financial Code (
Code monétaire et financier
), and thus this prospectus and any prospectus supplement have not
been and will not be submitted to the
Autorité des Marchés Financiers
for approval in France.
The prospectus and any prospectus supplement are not to be further
distributed or reproduced (in whole or in part) in France by the recipients thereof, and this prospectus and any prospectus supplement
have been distributed on the understanding that such recipients will only participate in the issue or sale of the ADSs for their
own account and undertake not to transfer, directly or indirectly, the ADSs to the public in France, other than in compliance with
all applicable laws and regulations and in particular with Articles L. 411-1
et seq
. of the French Monetary and
Financial Code (
Code monétaire et financier
).
PROSPECTUS SUMMARY
This summary highlights information contained or incorporated
by reference in this prospectus. It may not include all the information that is important to you. You should read the entire prospectus,
any prospectus supplement delivered with the prospectus, and the documents incorporated by reference before making an investment
decision.
The Company
Flamel is a specialty pharmaceutical
company focused on blending internally developed products with our drug delivery capabilities, frequently licensed to other
pharmaceutical partners. Flamel’s business is principally based on our legacy platform, including our drug delivery
technologies and internal research and development, and a pipeline of niche specialty pharmaceutical products obtained
through the acquisition of
Éclat Pharmaceuticals, LLC, or Éclat, in March
2012
. Our
drug delivery platforms are focused on developing safer, more efficacious
formulations of drugs that address unmet medical needs. The drug delivery technology business is built primarily on two
technologies—the Medusa® and Micropump® proprietary platforms.
The Medusa® drug delivery platform
consists of proprietary hydrogels for the formulation and/or the extended release of a broad range of biologics (including
proteins, antibodies, peptides and vaccines) and of small molecules (injectable drugs).
Several
Medusa-based products are at various clinical stages of development, including lead internal product candidate IFN-alpha XL
(long-acting interferon alpha-2b) that is being evaluated in a Phase 2a trial in HCV patients.
The Micropump®
micro-encapsulation drug delivery platform (oral drugs) is designed to increase the absorption time of drugs, particularly
for drugs only absorbed in the small intestine.
We have developed approved products and
manufacture Micropump-based microparticles under FDA-audited GMP guidelines. In addition to continuing Flamel’s
historical development and licensing efforts, our business strategy is focused on opportunities to blend internally developed
products with these technologies.
Éclat
was focused on developing and commercializing niche brands and generic products and, at the time of the acquisition, had one FDA-approved
product on the market in the U.S.,
Hycet® (hydrocodone acetaminophen oral solution), as well as a portfolio of products
in various stages of development. Flamel currently expects to submit a New Drug Application, or NDA, with the FDA in 2012.
Our principal executive offices are located at 33 Avenue du
Docteur Georges Levy, 69693 Vénissieux Cedex, France, and our telephone number is 011 (33) 4 72 78 34 34.
The Securities the Selling Shareholder May Offer
This prospectus relates to the resale by the selling shareholder
of up to an aggregate of 3,300,000 of our ordinary shares, in the form of ADSs, issuable upon the exercise of Warrants issued to
the selling shareholder in connection with our acquisition of Éclat in March 2012. Each ADS represents one Ordinary Share
or the right to receive one Ordinary Share. The ADSs are issued under a Deposit Agreement, dated as of June 6, 1996, as amended
and restated as of August 10, 2001 (the “Deposit Agreement”), among Flamel, The Bank of New York Mellon, as depositary,
(the “Depositary”), and holders of ADSs issued thereunder from time to time.
One Warrant is exercisable for 2,200,000 ADSs at an exercise
price of $7.44 per ADS. The second Warrant is exercisable for 1,100,000 shares at an exercise price of $11.00 per ADS. The Warrants
were approved by our shareholders at our annual shareholders meeting held on June 22, 2012. For the purposes of issuing the Ordinary
Shares underlying the ADSs upon exercise of the Warrants, the Company’s shareholders decided to issue Éclat Holdings
3,300,000 ‘
bons de souscription d'actions
’ to be exercised immediately upon exercise of the Warrants. Both Warrants
expire at 5:00 p.m., New York City time on March 13, 2018. This description is supplemented and qualified by the description of
the Warrants in our Annual Report on Form 20-F for the year ended December 31, 2011, our Report of a Foreign Private Issuer on
Form 6-K filed March 21, 2012 and the text of the Warrants filed as exhibits therewith.
Listing
The ADSs are currently traded on the NASDAQ
Global Market under the symbol “FLML.”
RISK FACTORS
Investing in the ADSs involves a high degree of risk.
Before making an investment decision, you should carefully consider the risk factors set forth in this prospectus, together
with all of the other information contained or incorporated by reference into this prospectus as well as the risks,
uncertainties, and assumptions discussed under “Item 3. Risk Factors” in our Annual Report on Form 20-F for the
year ended December 31, 2011, which are incorporated herein by reference. These risk factors may be amended, supplemented, or
superseded from time to time by future reports that we file with the Securities and Exchange Commission, or SEC, which are
incorporated by reference into this prospectus. The risks and uncertainties we have described are not the only ones we face.
Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our
operations.
A large number of ordinary shares may be issued and subsequently
sold in the form of ADSs upon the exercise of the Warrants. The sale or availability for sale of these ADSs may depress the price
of the ADSs.
Up to 3,300,000 ordinary shares represented by ADSs are issuable
upon the exercise of the Warrants. To the extent that holders of our outstanding Warrants sell the ADSs issued upon the exercise
of the Warrants, the market price of our ADSs may decrease due to the additional selling pressure in the market. The risk of dilution
from issuances of ordinary shares underlying the Warrants may cause shareholders to sell their ADSs, which could further contribute
to any decline in the market price of our ADSs.
The sale of ADSs issued upon exercise of the Warrants
could encourage short sales by third parties, which could further depress the price of the ADSs.
Any downward pressure on the price of the ADSs caused by the
sale of ADSs issued upon the exercise of the Warrants could encourage short sales by third parties. In a short sale,
a prospective seller borrows shares from a shareholder or broker and sells the borrowed shares. The prospective seller
hopes that the share price will decline, at which time the seller can purchase shares at a lower price for delivery back to the
lender. The seller profits when the share price declines because it is purchasing shares at a price lower than the sale
price of the borrowed shares. Such sales could place downward pressure on the price of the ADSs by increasing the number
of ADSs being sold, which could further contribute to any decline in the market price of the ADSs.
In the event of certain registration failures, we may
have to pay liquidated damages to the Warrant holders, which would increase our expenses and reduce our cash resources.
Under the terms of the Warrants and the registration rights
agreement that we entered into with the selling shareholder, subject to certain limited exceptions, in the event of certain “Registration
Failures” identified in such agreements, we may be required to pay the Warrant holders, as liquidated damages and not as
a penalty, certain “Failure Payments” (as defined in the Warrants). The “Registration Failures” include,
without limitation, failure to file the registration statement with the SEC before certain filing deadlines, failure to use commercially
reasonable efforts to obtain effectiveness of the registration statement from the SEC within certain time periods and to maintain
effectiveness of the registration statement throughout the applicable registration period, failure to amend the registration statement
if required within certain time periods, or failure to respond to comments from the SEC within certain time periods. The Failure
Payments are payable, at the Company’s option either in cash or in ADSs, in each case equal to 18% per annum (or the maximum
rate permitted by applicable law, whichever is less), of the Black-Scholes value of the remaining unexercised portion of the Warrants
for the period during which such failure continues. There can be no assurance that such registration failures may not
occur. Any payment of liquidated damages would increase our expenses, reduce our cash resources and may limit or preclude
us from advancing our product candidates through clinical trials or otherwise growing our business.
FORWARD LOOKING STATEMENTS
This prospectus, any prospectus supplement, and the documents
incorporated herein by reference, contain forward-looking statements. We may make additional written or oral forward-looking statements
from time to time in filings with the SEC or otherwise. The words “will,” “may,” “believe,”
“expect,” “anticipate,” “estimate,” ”project,” and similar expressions identify
forward-looking statements, which speak only as of the date the statement is made. Such forward-looking statements are within the
meaning of that term in Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act. Although we believe
that our expectations are based on reasonable assumptions within the bounds of our knowledge of our business and operations, our
business is subject to significant risks that may be beyond our control, and there can be no assurance that actual results of our
development and manufacturing activities and our results of operations will not differ materially from our expectations.
Factors that could cause actual results
to differ from expectations include, among others, those identified in “Risk Factors” in this prospectus and those
in our Annual Report on Form 20-F for the year ended December 31, 2011, which are incorporated by reference into this prospectus,
as well as the information contained in our other public filings with the SEC. Some of these risks are highlighted below:
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we depend on a few customers for the majority
of our revenues, and the loss of any one of these customers could reduce our revenues significantly.
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our revenues from our drug delivery technology
business depend on pharmaceutical and biotechnology companies successfully developing products that incorporate our drug delivery
technologies.
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although products that incorporate our
drug delivery technologies and development products acquired from Éclat may appear promising at their early stages of development
and in clinical trials, none of these potential products may reach the commercial market for a number of reasons.
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we must invest substantial sums in research
and development in order to remain competitive, and we may not fully recover these investments.
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we must comply with various covenants
and obligations under the note agreement with Éclat Holdings, and our failure to do so could adversely affect our ability
to operate our business, develop our product portfolio or pursue certain opportunities.
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management transition to a new Chief Executive
Officer may be disruptive to our business and personnel.
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we depend upon a single site to manufacture
our drug delivery products, and any interruption of operations could have a material adverse effect on our business..
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we depend upon a limited number of suppliers
for certain raw materials used in our products, and any failure to deliver sufficient supplies could interrupt our production process
and could have a material adverse effect on our business.
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if our competitors develop and market
technologies or products that are more effective than ours, or obtain regulatory approval and market such technology or products
before we do, our commercial opportunity will be diminished or eliminated.
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if we cannot keep pace with the rapid
technological change in our industry, we may lose business, and our drug delivery systems could become obsolete or noncompetitive.
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if we cannot adequately protect our technology
and proprietary information, we may be unable to sustain a competitive advantage.
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even if we and our partners obtain necessary
regulatory approvals, our products and technologies may not gain market acceptance.
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our collaborative arrangements may give
rise to disputes over commercial terms, contract interpretation and ownership of our intellectual property and may adversely affect
the commercial success of our products.
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third parties have claimed, and may claim
in the future, that our technologies, or the products in which they are used, infringe on their rights and we may incur significant
costs resolving these claims.
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we can offer no assurance that any patents
issued to us will provide us with competitive advantages or will not be infringed, challenged, invalidated or circumvented by others,
or that the patents or proprietary rights of others will not have an adverse effect on our ability to do business.
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if our third party collaborative partners
face generic competition for their products, our revenues and royalties from such products may be adversely affected.
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healthcare reform and restrictions on
reimbursements may limit our financial returns.
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fluctuations in foreign currency exchange
rates and the impact of the European sovereign debt crisis may clause fluctuations in our financial results.
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products that incorporate our drug delivery
technologies and development products acquired from Éclat are subject to regulatory approval. If our pharmaceutical and
biotechnology company partners do not obtain such approvals, or if such approvals are delayed, our revenues may be adversely affected.
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we are subject to federal and state laws
prohibiting “kickbacks” and false claims that, if violated, could subject us to substantial penalties, and any challenges
to or investigation into our practices under these laws could cause adverse publicity and be costly to respond to, and thus could
harm our business.
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companies to which we have licensed our
technology are subject to extensive regulation by the FDA and other regulatory authorities. Their failure to meet strict regulatory
requirements could adversely affect our business.
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we may face product liability claims related
to participation in clinical trials or the use or misuse of our products or third party products that incorporate our technologies.
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if we use biological and hazardous materials
in a manner that causes injury, we may be liable for significant damages.
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we may fail to realize the anticipated
benefits expected from the acquisition of Éclat and its portfolio of pipeline products.
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if we choose to acquire new and complementary
businesses, products or technologies, we may be unable to complete these acquisitions or to successfully integrate them in a cost
effective and non-disruptive manner.
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our share price has been volatile and
may continue to be volatile.
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because we have had limited commercial
sales, investors in our shares may have difficulty evaluating our prospects.
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if we are not profitable in the future,
the value of our shares may fall.
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our operating results may fluctuate, which
may adversely affect our share price.
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we currently do not intend to pay dividends,
and cannot assure shareholders that we will make dividend payments in the future.
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our largest shareholders own a significant
percentage of the share capital and voting rights of the Company.
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Forward-looking statements are subject
to inherent risks and uncertainties, some of which cannot be predicted or quantified. Future events and actual results could differ
materially from those set forth in, contemplated by or underlying the forward-looking statements. We undertake no obligation to
update these forward-looking statements as a result of new information, future events or otherwise. You should not place undue
reliance on these forward-looking statements.
USE OF PROCEEDS
We will not receive any of the proceeds from the sale or other
disposition of the ordinary shares represented by ADSs offered hereby, but we will receive the exercise price of any Warrants exercised
for cash. To the extent that we receive cash upon the exercise of any of the Warrants, we intend to use that cash for general corporate
purposes, including working capital. Under the terms of the Warrants, the Warrant holder may elect a cashless exercise of the Warrants
in certain circumstances, including in the event of a Major Transaction (as defined in the Warrants) or in the event of a default
under the Note Agreement among us, Flamel US Holdings, Inc. and Éclat Holdings, LLC.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly, and special reports and other information
with the SEC under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). You may read and copy this
registration statement and any other document we file at the SEC’s Public Reference Room located at 100 F Street, N.E., Washington,
D.C. 20549. Information on the operation of the Public Reference Room can be obtained by calling the SEC at 1-800-SEC-0330. We
file information electronically with the SEC. Our SEC filings are available from the SEC’s Internet site at http://www.sec.gov,
which contains reports and other information regarding issuers that file electronically. Additional information about Flamel may
be obtained on our website at www.flamel.com. Flamel is not incorporating the contents of its or the SEC’s websites or the
website of any other person into this document.
You should rely only on the information that we provide or incorporate
by reference in this prospectus. We have not authorized anyone to provide you with different information, and you should
not assume that the information in this prospectus is accurate as of any date other than the date indicated in the relevant documents.
As a foreign private issuer, we and our shareholders are exempt
from some SEC reporting requirements, including proxy solicitation rules, short-swing insider profit disclosure rules of Section
16 of the Exchange Act with respect to our Ordinary Shares, and the rules regarding the furnishing of quarterly reports, among
others.
INCORPORATION BY REFERENCE
The SEC allows us to “incorporate by reference”
certain information filed with or furnished to the SEC, which means that we can disclose important information to you by referring
you to those documents. The information incorporated by reference is considered to be part of this prospectus, and information
in documents that we file later with the SEC will automatically update and supersede information in this prospectus. We incorporate
by reference the documents listed below:
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our Annual Report on Form 20-F for the fiscal year ended December 31,
2011;
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our Reports of Foreign Private Issuer on Form 6-K pursuant to
Rules 13a-16 and 15d-16 filed with the Commission on March 15, March 21, May 7, June 26, July 27 and September 13, 2012;
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all documents we subsequently file under Sections 13(a), 13(c)
or 15(d) of the Exchange Act after the date of this prospectus and before the termination of the offerings using this prospectus,
including Annual Reports on Form 20-F, provided, that with respect to any Report of Foreign Private Issuer on Form 6-K, we will
only incorporate these documents to the extent that any report is specifically designated as being incorporated by reference into
this prospectus; and
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the description of our Ordinary Shares, and the American Depositary
Shares representing the Ordinary Shares, contained in our Registration Statement on Form F-1 filed on April 19, 1996,
as amended, pursuant to the Securities Act.
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All information appearing in this prospectus is qualified in
its entirety by the information and financial statements, including the notes, contained in the documents that we incorporate by
reference into this prospectus.
We will provide a copy of the documents we incorporate by reference,
at no cost, to any person who receives this prospectus. To request a copy of any or all of these documents, you should write or
telephone us at: Flamel Technologies, S.A., 33 Avenue du Docteur, Georges Levy, 69693 Venissieux Cedex, France, (202) 862-8400.
CURRENCY AND EXCHANGE RATES
The following table sets forth the high,
low and average exchange rates for the Euro against the U.S. dollar in each of the last five years and in each of the previous
six months.
Year Ended December 31,
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Euro to U.S. Dollar:
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High
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Low
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Average Rate*
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2011
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1.4882
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1.2889
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1.3917
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2010
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1.4563
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1.1942
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1.3268
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2009
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1.512
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1.2555
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1.3933
|
|
2008
|
|
|
1.599
|
|
|
|
1.246
|
|
|
|
1.4706
|
|
2007
|
|
|
1.4874
|
|
|
|
1.2893
|
|
|
|
1.37064
|
|
Previous Six Months,
|
|
|
|
|
|
|
|
|
|
Euro to U.S. Dollar:
|
|
High
|
|
|
Low
|
|
|
Average Rate
*
|
|
August 2012
|
|
|
1.2611
|
|
|
|
1.2245
|
|
|
|
1.2400
|
|
July 2012
|
|
|
1.2593
|
|
|
|
1.2089
|
|
|
|
1.2288
|
|
June 2012
|
|
|
1.2704
|
|
|
|
1.2322
|
|
|
|
1.2526
|
|
May 2012
|
|
|
1.3132
|
|
|
|
1.2403
|
|
|
|
1.2789
|
|
April 2012
|
|
|
1.3319
|
|
|
|
1.3024
|
|
|
|
1.3162
|
|
March 2012
|
|
|
1.3356
|
|
|
|
1.3057
|
|
|
|
1.3201
|
|
*
Annual
totals represent the average of the noon buying rates for Euros of each business day during the relevant period, according to the
‘Banque de France’. Monthly totals represent the average of the noon buying rates for Euros for each business day during
the relevant month according to the ‘Banque de France’.
The exchange rate for the Euro against
the U.S. dollar as of September 7, 2012, was $1.2706 to € 1.00. The Company makes no representation that Euro amounts have
been, could have been or could be converted into U.S. dollars at any of the exchange rates referred to herein as of a given date.
CAPITALIZATION AND INDEBTEDNESS
The following table sets forth our unaudited consolidated indebtedness
and capitalization as of June 30, 2012 in accordance with U.S. GAAP:
|
|
June 30, 2012
|
|
|
|
$
|
|
|
|
Actual*
|
|
|
|
(in thousands,
|
|
|
|
Unaudited)
|
|
Total long-term liabilities (1)
|
|
|
92,110
|
|
|
|
|
|
|
Shareholders’ equity:
|
|
|
|
|
Ordinary Shares; 34,012,490 authorized; 25,157,250 issued and outstanding
|
|
|
3,673
|
|
Additional paid-in capital
|
|
|
207,602
|
|
Accumulated deficit
|
|
|
(195,298
|
)
|
Cumulative other comprehensive income (loss)
|
|
|
9,384
|
|
Total shareholders’ equity
|
|
|
25,361
|
|
|
|
|
|
|
Total Capitalization
|
|
|
117,471
|
|
|
|
|
|
|
(1) Long-term Liabilities:
|
|
|
|
|
Long-term debt, less current portion (2)
|
|
|
47,840
|
|
Capital Lease obligations, less current portion
|
|
|
208
|
|
Deferred Revenue, less current portion
|
|
|
1,052
|
|
Deferred Tax Liabilities
|
|
|
20,733
|
|
Other Long-term Liabilities (3)
|
|
|
22,277
|
|
Total Long-term Liabilities
|
|
|
92,110
|
|
|
|
|
|
|
(2) Long-term debt, less current portion
|
|
|
|
|
Fair Value of Acquisition Consideration
|
|
|
46,029
|
|
Government financing of R&D
|
|
|
1,811
|
|
Total long-term debt, less current portion
|
|
|
47,840
|
|
|
|
|
|
|
(3) Other Long-term Liabilities
|
|
|
|
|
Funding from partner GSK long-term
|
|
|
6,351
|
|
Provision for retirement indemnity
|
|
|
1,878
|
|
R&D tax credit financing long-term
|
|
|
12,081
|
|
Employee service award provision long-term
|
|
|
1,941
|
|
Other
|
|
|
26
|
|
Total Other Long-term Liabilities
|
|
|
22,277
|
|
|
*
|
This table does not reflect the issuance of the Ordinary Shares underlying the Warrants or the receipt of proceeds, if any,
upon the exercise thereof.
|
This table should be read in conjunction with the financial
statements in our Annual Report on Form 20-F for the year ended December 31, 2011 and our Report of a Foreign Private Issuer on
Form 6-K filed September 13, 2012, which are incorporated by reference into this prospectus.
THE OFFER AND LISTING
The following table shows the high and low closing sales prices
of the ADSs on the NASDAQ Global Market for the periods indicated.
|
|
Price Per ADS ($)
|
|
Quarter Ended
|
|
High
|
|
|
Low
|
|
1
st
Quarter, 2010
|
|
|
9.60
|
|
|
|
7.52
|
|
2
nd
Quarter, 2010
|
|
|
9.06
|
|
|
|
6.52
|
|
3
rd
Quarter, 2010
|
|
|
8.00
|
|
|
|
6.02
|
|
4
th
Quarter, 2010
|
|
|
7.90
|
|
|
|
6.64
|
|
1
st
Quarter, 2011
|
|
|
6.97
|
|
|
|
5.82
|
|
2
nd
Quarter, 2011
|
|
|
6.63
|
|
|
|
5.02
|
|
3
rd
Quarter, 2011
|
|
|
5.44
|
|
|
|
3.85
|
|
4
th
Quarter, 2011
|
|
|
5.26
|
|
|
|
4.08
|
|
1
st
Quarter, 2012
|
|
|
7.67
|
|
|
|
5.11
|
|
2
nd
Quarter, 2012
|
|
|
5.65
|
|
|
|
4.05
|
|
3
rd
Quarter 2012 through September 17, 2012
|
|
|
5.50
|
|
|
|
4.29
|
|
|
|
Price Per ADS ($)
|
|
Month Ended
|
|
High
|
|
|
Low
|
|
February 29, 2012
|
|
|
6.96
|
|
|
|
6.27
|
|
March 31, 2012
|
|
|
7.67
|
|
|
|
5.11
|
|
April 30, 2012
|
|
|
5.65
|
|
|
|
4.74
|
|
May 31, 2012
|
|
|
5.23
|
|
|
|
4.31
|
|
June 30, 2012
|
|
|
4.55
|
|
|
|
4.05
|
|
July 31, 2012
|
|
|
5.50
|
|
|
|
4.29
|
|
August 31, 2012
|
|
|
5.06
|
|
|
|
4.69
|
|
PLAN OF DISTRIBUTION
We are registering the ordinary shares offered in this prospectus
on behalf of the selling shareholder. A “selling shareholder”, which term as used herein includes pledgees, donees,
transferees or other successors-in-interest selling shares received from the selling shareholder as a gift, pledge, partnership
distribution or transfer after the date of this prospectus, may, from time to time, sell, transfer or otherwise dispose of any
or all of its ordinary shares or interests in ordinary shares on any stock exchange, market or trading facility on which the shares
are traded or in private transactions. The selling shareholder will pay any brokerage commissions and similar selling expenses
attributable to the sale of the shares. We will not receive any of the proceeds from the sale of the shares by the selling
shareholder. However, upon a cash exercise of the Warrants by the selling shareholder, we will receive the exercise price per ordinary
share exercised. If the Warrants are exercised in a cashless exercise, we will not receive any proceeds from the exercise of the
Warrants.
These dispositions may be at fixed prices,
at prevailing market prices at the time of sale, at prices related to the prevailing market price, at varying prices determined
at the time of sale, or at negotiated prices. To the extent the selling shareholder gifts, pledges or otherwise transfers the shares
offered hereby, such transferees may offer and sell the shares from time to time under this prospectus, provided that this prospectus
has been amended under Rule 424(b)(3) or other applicable provision of the Securities Act to include the name of such
transferee in the list of selling shareholder(s) under this prospectus.
The selling shareholder will act independently
of us in making decisions with respect to the timing, manner and size of each sale. The selling shareholder may use any one or
more of the following methods when disposing of shares or interests therein:
|
·
|
transactions on any national securities exchange or quotation service
on which the shares may be listed or quoted at the time of sale;
|
|
·
|
transactions on the over-the-counter market;
|
|
·
|
transactions otherwise than on these exchanges or systems or in the
over-the-counter market;
|
|
·
|
ordinary brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
|
|
·
|
block trades in which the broker-dealer will attempt to sell the shares
as agent but may position and resell a portion of the block as principal to facilitate the transaction;
|
|
·
|
purchases by a broker-dealer as principal and resale by the broker-dealer
for its account;
|
|
·
|
an exchange distribution in accordance with the rules of the applicable
exchange;
|
|
·
|
privately negotiated transactions;
|
|
·
|
through the writing or settlement of options or other hedging transactions,
whether through an options exchange or otherwise;
|
|
·
|
broker-dealers may agree with the selling shareholder to sell a specified
number of such shares at a stipulated price per share;
|
|
·
|
a combination of any such methods of sale; and
|
|
·
|
any other method permitted pursuant to applicable law.
|
The selling shareholder may, from time to
time, pledge or grant a security interest in some or all of the shares owned by it and, if it defaults in the performance of their
secured obligations, the pledgees or secured parties may offer and sell the shares, from time to time, under this prospectus, or
under an amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act amending
the list of selling shareholders to include the pledgee, transferee or other successors in interest as selling shareholder under
this prospectus.
In connection with the sale of our ordinary
shares or interests therein, the selling shareholder may enter into hedging transactions with broker-dealers or other financial
institutions, which may in turn engage in short sales of the ordinary shares in the course of hedging the positions they assume.
The selling shareholder may also sell ordinary shares short and deliver these securities to close out its short positions, or loan
or pledge the shares to broker-dealers that in turn may sell these securities. The selling shareholder may also enter into option
or other transactions with broker-dealers or other financial institutions or the creation of one or more derivative securities
which require the delivery to such broker-dealer or other financial institution of shares offered by this prospectus, which shares
such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect
such transaction).
The aggregate proceeds to the selling shareholder
from the sale of the ordinary shares offered by it will be the purchase price of the common stock less discounts or commissions,
if any. The selling shareholder reserves the right to accept and, together with its agents from time to time, to reject, in whole
or in part, any proposed purchase of ordinary shares to be made directly or through agents. We will not receive any of the proceeds
from this offering. Upon any exercise of the Warrants by payment of cash, however, we will receive the exercise price of the Warrants.
To the extent required, the ordinary shares
to be sold, the name(s) of the selling shareholder(s), the respective purchase prices and public offering prices, the names of
any agent, dealer or underwriter, any applicable commissions or discounts with respect to a particular offer will be set forth
in an accompanying prospectus supplement or, if appropriate, a post-effective amendment to the registration statement that includes
this prospectus.
In order to comply with the securities laws
of some states, if applicable, the ordinary shares may be sold in these jurisdictions only through registered or licensed brokers
or dealers. In addition, in some states the ordinary shares may not be sold unless they have been registered or qualified for sale
or an exemption from registration or qualification requirements is available and is complied with.
We have advised the selling shareholder
that the anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of shares in the market and
to the activities of the selling shareholder and its affiliates. In addition, we will make copies of this prospectus (as it may
be supplemented or amended from time to time) available to the selling shareholder for the purpose of satisfying the prospectus
delivery requirements of the Securities Act. The selling shareholder may indemnify any broker-dealer that participates in transactions
involving the sale of the shares against certain liabilities, including liabilities arising under the Securities Act.
We have agreed to indemnify the selling
shareholder against liabilities, including liabilities under the Securities Act, and state securities laws, relating to the registration
of the shares offered by this prospectus. We may be indemnified by the selling shareholder against civil liabilities, including
liabilities under the Securities Act, arising from any written information furnished to us by the selling shareholder specifically
for use in this prospectus, in accordance with the registration rights agreement, or we may be entitled to contribution.
We have agreed with the selling shareholder
to keep the registration statement that includes this prospectus current and effective until the earlier of (1) the date on
which all of the shares covered by this prospectus have been sold pursuant to and in accordance with the registration statement
that contains this prospectus and (2) the date on which the shares may be sold without registration or restriction under the
Securities Act.
The selling shareholder and any broker dealers
that act in connection with the sale of the shares might be deemed to be “underwriters” as the term is defined in Section
2(11) of the Securities Act. Consequently, any commissions received by these broker dealers and any profit on the resale of the
shares sold by them while acting as principals might be deemed to be underwriting discounts or commissions under the Securities
Act. Because the selling shareholder may be deemed to be an “underwriter” as defined in Section 2(11) of the Securities
Act, the selling shareholder may be subject to the prospectus delivery requirements of the Securities Act.
The selling shareholder also may resell
all or a portion of the shares in open market transactions in reliance upon Rule 144 under the Securities Act, provided
that it meets the criteria and conforms to the requirements of that Rule.
SELLING SHAREHOLDER
The table below identifies the selling shareholder,
Breaking Stick Holdings, LLC (“Breaking Stick”), with an address at c/o Deerfield Mgmt, L.P., 780 Third Avenue, 37th
Floor, New York, New York 10017, and other information regarding the beneficial ownership of our securities by the selling shareholder.
Prior to its acquisition by Flamel, Éclat Pharmaceuticals, LLC was owned by Éclat Holdings, LLC, (the former name
of Breaking Stick), an affiliate of Deerfield Mgmt L.P. (“Deerfield Mgmt”). The manager of Breaking Stick is Deerfield
Management Company, L.P. (“Deerfield Management”), an affiliate of Deerfield Mgmt. Deerfield Private Design Fund II,
L.P. and Deerfield Private Design International II, L.P., both affiliates of Deerfield Mgmt, are members of Breaking Stick. As
of September 5, 2012, entities controlled by Deerfield Mgmt owned 4,333,475 shares, representing 17.23% of the total outstanding
shares of the Company. Michael S. Anderson, Chief Executive Officer and a director of the Company, retains a minority interest
in Breaking Stick and does not have the ability to control Breaking Stick by virtue of his minority interest.
The second column of the chart
lists the number of our securities beneficially owned by the selling shareholder as of September 5, 2012, assuming full
exercise of the Warrants, without regard to limitations on exercise. The third column lists the maximum number of ordinary
shares that may be sold by the selling shareholder pursuant to this prospectus upon exercise of the Warrants. The fourth
column assumes the sale of all of the securities offered by the selling shareholder pursuant to this prospectus. Under the
terms of the Warrants, the selling shareholder may not exercise the Warrants to the extent that the exercise would result in
the selling shareholder, together with its affiliates, and any other persons or entities whose beneficial ownership of
Flamel’s ordinary shares would be aggregated with those of the selling shareholder for purposes of Section 13(d) of the
Securities Exchange Act of 1934, as amended, or the Exchange Act, and the applicable regulations of the SEC, beneficially owning
more than 19.985% (or 9.985% at any time that the Company does not qualify as a “foreign private issuer” as
defined under Rule 3b-4 under the Exchange Act of the total number of Flamel’s Ordinary Shares then issued and
outstanding. The selling shareholder may sell all, some or none of their ordinary shares registered pursuant to the
registration statement of which this prospectus forms a part. See “Plan of Distribution”.
If the selling shareholder identified below
transfers some or all of its securities to a pledgee, donee, transferee or other successor-in-interest, we may be required to file
a prospectus supplement or a post-effective amendment to the registration statement of which this prospectus is a part.
Name of Selling Shareholder
|
|
Number of
Ordinary Shares
Owned Prior to
Offering
|
|
|
Maximum Number of Ordinary
Shares to be Sold Pursuant to
this Prospectus Upon Exercise
of Warrants
|
|
|
Number of
Ordinary Shares
Owned After
Offering
|
|
Breaking Stick Holdings, LLC (1)
|
|
|
3,300,000
|
(2)(3)
|
|
|
3,300,000
|
|
|
|
—
|
(4)
|
|
(1)
|
Deerfield Management is the manager of the selling shareholder. James E. Flynn has the power to exercise Deerfield Management’s
voting and dispositive power over the shares held by the selling shareholder. Deerfield Private Design Fund II, L.P. and Deerfield
Private Design International II, L.P. are members of the selling shareholder. Deerfield Mgmt is the general partner of Deerfield
Private Design Fund II, L.P. and Deerfield Private Design International II, L.P.
|
|
(2)
|
Comprised of ordinary shares issuable upon exercise of the Warrants.
|
|
(3)
|
Under the terms of the Warrants held by the selling shareholder, the number of ordinary shares that may be acquired by the
selling shareholder upon any exercise of the Warrants is generally limited to the extent necessary to ensure that, following such
exercise, the total number of ordinary shares then owned by the selling shareholder, together with its affiliates and any others
persons or entities whose beneficial ownership of ordinary shares would be aggregated with those of the selling shareholder for
purposes of Section 13(d) of the Exchange Act and the applicable regulations of the SEC,
would not exceed 19.985% of the total number of ordinary shares then issued and outstanding. The 19.985% limitation is disregarded
for purposes of this table, and the numbers of ordinary shares beneficially owned do not reflect this limitation.
|
|
(4)
|
We do not know when or in what amounts the selling shareholder may offer shares for sale. The selling shareholder may choose
not to sell any of the shares offered by this prospectus. This table assumes the sale by the selling shareholder of all of the
shares available for resale under this prospectus.
|
DESCRIPTION OF SHARE CAPITAL
Set forth below is certain information concerning Flamel’s
share capital. Related summary information is provided in “Item 10 - Additional Information” of our Annual Report on
Form 20-F for the year ended December 31, 2011, which is incorporated by reference into this prospectus.
General
The share capital of Flamel consists of ordinary shares, nominal
value 0.122 euros per share. Flamel has authorized 34,012,490 ordinary shares, 25,157,250 of which were issued and outstanding
as of August 31, 2012. All of the shares, including the shares to be sold in this offering, are or will be fully paid.
Flamel does not hold any shares in its treasury.
Capital Authorized but Unissued
At the Combined Ordinary and Extraordinary Meeting of Shareholders
of Flamel held on June 22, 2012, our shareholders authorized the Board of Directors to increase the share capital of the Company
to, among other things, allocate stock options and free shares to employees and provide for sufficient share capital underlying
the Warrants issued to the selling shareholder.
The following table shows all the current authorizations
granted by the shareholders to the board of directors in respect of capital increases, and the usage made of these powers
through August 31, 2012:
Nature of Authorized Operation
|
|
Valid
Through
|
|
Maximum
Amount
of Capital
Increase
(par
value)
(in euros)
|
|
|
Use of
delegation
since
June 22,
2012
|
|
|
Balance
|
|
Authorization for the Issuance of 1,000,00 Stock Options
|
|
August 21, 2015
|
|
|
121,960
|
|
|
|
Yes
|
|
|
|
121,960
|
|
Authorization for the Issuance of 200,000 shares at no cost (‘free shares’)
|
|
August 21, 2015
|
|
|
24,392
|
|
|
|
No
|
|
|
|
24,392
|
|
Issuance of 2,200,000 stock warrants
|
|
March 13, 2018
|
|
|
268,312
|
|
|
|
No
|
|
|
|
268,312
|
|
Issuance of 1,100,000 stock warrants
|
|
March 13, 2018
|
|
|
134,156
|
|
|
|
No
|
|
|
|
134,156
|
|
Reconciliation of the Number of Shares Outstanding at the
Beginning and End of the Year
Number of Ordinary Shares as of the opening date of the fiscal year 2011
|
|
|
24,962,250
|
|
Issuance of Ordinary Shares on March 8, 2012
|
|
|
195,000
|
|
Number of Ordinary Shares as of August 31, 2012
|
|
|
25,157,250
|
|
Options Outstanding
Stock options outstanding at June 30, 2012, which expire from
2012 to 2021, had exercise prices ranging from € 3.28 to 25.39. The weighted average remaining contractual life of all options
is 4.86 years. As of June 30, 2012, there were 3,087,990 outstanding options at a weighted average exercise price of € 11.52,
of which 2,250,490 were exercisable at a weighted average price of €14.07.
History of the Share Capital
The table below shows the evolution of Flamel’s share
capital over the last three fiscal years through August 31, 2012:
Date
|
|
Operation
|
|
Number of
Shares
Issued/Warrants
Subscribed
|
|
|
Par Value
(0.122 euros
nominal value
per share
issued)
|
|
|
Premium
(in euros)
|
|
|
Value of
Share
Increase
Capital
(in euros)
|
|
|
Cumulative
number of
shares
outstanding
|
|
April 2009
|
|
Exercise of employee stock options
|
|
|
20,000
|
|
|
|
2,439
|
|
|
|
19,301
|
|
|
|
21,740
|
|
|
|
24,225,350
|
|
July 2009
|
|
Subscription for Warrants by Directors
|
|
|
250,000
|
|
|
|
-
|
|
|
|
185,000
|
|
|
|
185,000
|
|
|
|
24,225,350
|
|
December 2009
|
|
Definitive acquisition of Free Shares
|
|
|
117,250
|
|
|
|
14,300
|
|
|
|
|
|
|
|
|
|
|
|
24,342,600
|
|
April 2010
|
|
Exercise of employee stock options
|
|
|
40,000
|
|
|
|
4,878
|
|
|
|
298,442
|
|
|
|
303,320
|
|
|
|
24,382,600
|
|
April 2010
|
|
Definitive acquisition of Free Shares
|
|
|
40,000
|
|
|
|
4,878
|
|
|
|
-
|
|
|
|
-
|
|
|
|
24,422,600
|
|
June 2010
|
|
Subscription for Warrants by Directors
|
|
|
250,000
|
|
|
|
-
|
|
|
|
175,000
|
|
|
|
175,000
|
|
|
|
24,422,600
|
|
November 2010
|
|
Exercise of employee stock options
|
|
|
3,000
|
|
|
|
366
|
|
|
|
2,904
|
|
|
|
3,270
|
|
|
|
24,425,600
|
|
December 2010
|
|
Definitive acquisition of Free Shares
|
|
|
200,050
|
|
|
|
24,398
|
|
|
|
-
|
|
|
|
-
|
|
|
|
24,625,650
|
|
December 2010
|
|
Exercise of employee stock options
|
|
|
20,000
|
|
|
|
2,439
|
|
|
|
53,161
|
|
|
|
55,600
|
|
|
|
24,645,650
|
|
July 2011
|
|
Subscription for Warrants by Directors
|
|
|
300,000
|
|
|
|
-
|
|
|
|
141,000
|
|
|
|
141,000
|
|
|
|
24,645,650
|
|
September 2011
|
|
Exercise of employee stock options
|
|
|
30,000
|
|
|
|
3,659
|
|
|
|
28,951
|
|
|
|
32,610
|
|
|
|
24,675,650
|
|
December 2011
|
|
Definitive acquisition of Free Shares
|
|
|
272,400
|
|
|
|
33,222
|
|
|
|
-
|
|
|
|
-
|
|
|
|
24,948,050
|
|
December 2011
|
|
Exercise of employee stock options
|
|
|
14,200
|
|
|
|
1,732
|
|
|
|
37,673
|
|
|
|
39,405
|
|
|
|
24,962,250
|
|
March 2012
|
|
Exercise of employee stock options
|
|
|
195,000
|
|
|
|
23,782
|
|
|
|
430,568
|
|
|
|
454,350
|
|
|
|
25,157,250
|
|
Memorandum and Articles of Association
In this section, we summarize material provisions of applicable
French law and our
statuts
. This description is not complete and is qualified, in its entirety, by reference to our
statuts
,
an English translation of which was filed as an exhibit to our Annual Report on Form 20-F for the year ended December 31, 2011,
which is incorporated by reference into this prospectus. You may obtain copies of our
statuts
in French from the Registry
of Commerce and Companies in Lyons, France, under registration number 379001530.
Flamel’s corporate affairs are governed by our
statuts
and
applicable laws and regulations (in particular, Chapter V of Title II of the Second Book of the French Commercial Code).
Corporate Purposes
Article 3 of our
statuts
provides that the purposes of
the Company, in France and abroad, are:
|
·
|
design and realization of new materials for the chemical
industry as well as other industries, in the fields of pharmacy, health, automotive, aerospace, telecommunications, turbines,
and packing
and conditioning, among others;
|
|
·
|
research and development of polymer and ceramic materials corresponding
to identified needs;
|
|
·
|
filing,
study, acquisition, operation and concession of patents, licenses, processes, trademarks and specialized knowledge related to
the above mentioned technical fields;
|
|
·
|
production
and sale of designed materials;
|
|
·
|
design, development, fabrication, distribution, import, export of medicines, pharmaceutical products
and other health materials as well as the operation of pharmaceutical products, medicines and other health materials; and
|
|
·
|
more generally, any operations directly or indirectly
related to the above.
|
Board of Directors
Transactions in which Directors are Materially Interested
.
Under French law, any agreement entered into (directly or through an intermediary) between Flamel and any one of the members of
the Board of Directors that is not entered into (i) in the ordinary course of our business and (ii) under normal conditions
is subject to the prior authorization of the disinterested members of the Board of Directors. The same provision applies to agreements
between Flamel and another company if one of the members of the Board of Directors is the Chief Executive Officer (
directeur
général
), one of his delegates (
directeurs généraux délégués
), or
one of the members of the Board of Directors (
administrateurs
) of the Company is the owner, general partner (
associé
indéfiniment responsable
), manager (
gérant
), member of the Board of Directors, member of the Supervisory
Board (
membre du Conseil de surveillance
) or, more generally, manager (
dirigeant
) of the other company. The same
provision also applies to agreements in which one of the members of the Board of Directors has an indirect interest.
Compensation
. The aggregate amount of attendance fees
(
jetons de présence
) of the Board of Directors is determined by the shareholders at an ordinary general meeting.
The Board of Directors then divides this aggregate amount among its members by a simple majority vote. In addition, the Board of
Directors may grant exceptional compensation (
rémunérations exceptionnelles
) to individual directors on a
case-by-case basis for special assignments following the procedures described above at “— Transactions in which Directors
are Materially Interested.” The Board of Directors may also authorize the reimbursement of travel and accommodation expenses,
as well as other expenses incurred by Directors in the corporate interest.
Borrowing Power
. Under French corporate law, the CEO
("
directeur général
") has the power to represent the Company and execute any agreements on its behalf.
The articles of association or decisions of the Board may limit this power by, for example, requiring prior authorization of the
Board if borrowing exceeds a specified threshold. There are currently no limits imposed by the shareholders on the borrowing powers
exercisable by the CEO (“directeur
général
”). However, there are limits on the Company’s
borrowing power under the Note Agreement executed in connection with the acquisition of Éclat.
Age Limits and Share Ownership Requirements
. Flamel’s
statuts
provide that at no time may the number of Directors over the age of 70 exceed one-third of the total number of Directors
in office. The
statuts
also require that each member of the Board of Directors must own at least one share during the whole
term of his or her office as a Director.
Changes in Share Capital
Except as set forth below, the share capital of Flamel may
be increased only with the approval of the shareholders at an extraordinary general meeting. Increases in share capital may
be effected either by the issuance of additional shares, by an increase in the nominal value of existing shares or by the
creation of a new class of shares. Additional shares may be issued for cash, in satisfaction of indebtedness incurred by
Flamel by way of set-off, for assets contributed in kind, upon the conversion, exchange or redemption of debt securities
previously issued by Flamel, upon the exercise of stock options, warrants or other similar securities comprising rights to
subscribe for shares, or by capitalization of reserves. Share dividends may be distributed in lieu of payment of cash
dividends, as described under “ – Dividend and Liquidation Rights.”
French law requires that the net assets of a corporation as
calculated under French statutory accounting (
capitaux propres
) be equal to at least one-half of its issued nominal capital
(
capital social
). The board of directors of any such French corporation must, within four months from the approval by the
shareholders of the audited accounts showing such a deficiency in the net asset position, convene an extraordinary meeting of
shareholders in order to decide whether the corporation ought to be dissolved before its statutory term or whether to continue
the business activity of the corporation. If the dissolution is not declared, the net asset position must then be restored at
the latest at the end of the second fiscal year following the fiscal year during which the insufficient net asset position was
legally established by the shareholders.
Preemptive Subscription Rights
Unless previously waived or cancelled, holders of shares have
preemptive rights to subscribe for additional shares issued by Flamel on a pro rata basis. Shareholders may individually
waive such preemptive subscription rights or cancel all of them at an extraordinary general meeting under certain circumstances.
Preemptive subscription rights, if not previously cancelled by an extraordinary general meeting or individually waived by each
shareholder, are transferable during the subscription period relating to a particular offering of shares, unless otherwise decided
by the extraordinary general meeting.
Attendance and Voting at Shareholders’ Meetings
In accordance with French law, there are two types of shareholders’
general meetings, ordinary and extraordinary. Ordinary general meetings of shareholders are required for matters such as the election
of directors, the appointment of statutory auditors, the approval of the annual report prepared by the Board of Directors and the
annual accounts and the declaration of dividends.
Extraordinary general meetings of shareholders
are required for approval of matters such as amendments to Flamel’s
statuts
, modification of
shareholders’ rights, approval of mergers, increases or decreases in share capital, the creation of a new class of
capital stock and the authorization of the issuance of securities convertible or exchangeable into shares. In particular,
shareholder approval will be required for any and all mergers in which (i) the Company is not wholly owned by the
absorbing company or (ii) the Company does not wholly own the absorbed company.
The Board of Directors is required to convene an annual
ordinary general meeting of shareholders, which must be held within six months of the end of Flamel’s fiscal year,
which is December 31. Under the Company’s statuts, all directors stand for re-election at each annual ordinary
general meeting of shareholders. Other ordinary or extraordinary meetings may be convened at any time during the year.
Meetings of shareholders may be convened by the Board of Directors or, if the Board of Directors fails to call such a
meeting, by Flamel’s designated statutory auditors, currently PricewaterhouseCoopers Audit or by an agent appointed by
the court. The court may be requested to appoint such an agent either by shareholder(s) holding at least 5% of Flamel’s
share capital, a shareholder’s association meeting the requirements of Article L.225-120 of the French Commercial Code,
or in cases of urgency, by the works council or an interested party. Following a successful takeover bid or the acquisition
of control of the Company, the new majority shareholders may call a shareholders’ ordinary or extraordinary general
meeting, depending on matters to be considered in such meeting. The notice calling such meeting must state the matters to be
considered.
French law provides that, at least 15 days before the date
set for any general meeting on first notice, and at least six days before the date set for any general meeting on second notice,
notice of the meeting must be sent by mail to all holders of properly registered shares who have held such shares prior to the
date of the notice. A preliminary written notice (
avis de reunion)
must be sent to each shareholder who has requested to
be notified in writing before the date set for any ordinary or extraordinary general meeting. Shareholders holding a defined percentage
of the share capital of the Company, which varies depending on the absolute amount of the share capital, may propose resolutions
to be submitted for approval by the shareholders at the meeting. The defined percentage referred to in the preceding sentence will
never be higher than five percent. Holders of ADSs will receive notice of shareholders meetings and other reports and communications
that are made generally available to shareholders from the Depositary if we furnish sufficient copies of the documents and ask
the Depositary to mail them to ADR holders. See “Description of American Depositary Shares – Voting of the Underlying
Shares” for the contents and time periods for notices of shareholder meetings to be given to the holders of ADSs.
Attendance and exercise of voting rights at ordinary general
meetings and extraordinary general meetings of shareholders are subject to certain conditions. Pursuant to the Company’s
statuts,
holders of shares deciding to exercise their voting rights must have their Shares registered in their names in
the shareholder registry maintained by or on behalf of Flamel one day prior to the meeting at the latest. Certain procedures to
effect such requirements will apply to a holder of ADSs desiring to exercise the voting rights relating to the shares corresponding
to such ADSs. See “Description of American Depository Shares – Voting of the Underlying Shares.”
All shareholders who have properly registered their
shares have the right to participate in general meetings, either in person, by proxy, or by mail, and to vote according to
the number of shares they hold. Each share confers on the shareholder the right to one vote. Our
statuts
do not
provide for cumulative voting rights. Under French law, shares held by entities controlled directly or indirectly by Flamel
shall not be entitled to any voting rights. A proxy may be granted by a shareholder whose name is reflected on the
Company’s share registry to his or her spouse, to his or her partner under civil partnership (
pacte civil de
solidarité
), to another shareholder or to a legal representative, in the case of a legal entity, or by sending a
proxy in blank to the Company without nominating any representative. In the latter case, the chairman of the meeting of
shareholders will vote the Shares with respect to which such blank proxy has been given in favor of all resolutions proposed
by the Board of Directors and against all others.
The presence in person or by proxy of shareholders holding not
less than 20% (in the case of an ordinary meeting) or 25% (in the case of an extraordinary meeting) of the shares entitled to
vote is necessary for a quorum. If a quorum is not present at an initial meeting, then the meeting must be adjourned. An adjourned
meeting may be reconvened upon 10 days’ notice. Upon recommencement of an adjourned meeting, no quorum is required in the
case of an ordinary general meeting but, in the case of an extraordinary meeting, the presence in person or by proxy of shareholders
holding not less than 20% of the shares entitled to vote is required for a quorum.
At an ordinary meeting, a simple majority of the votes cast
is required to pass a resolution. At an extraordinary general meeting, a two-thirds majority of the votes cast is required. However,
a unanimous vote is required to increase liabilities of shareholders. Abstention by those present or represented by proxy is deemed
a vote against the resolution submitted to a vote.
In addition to rights to certain information regarding Flamel,
any shareholder may, during a period no more than 15 days preceding a shareholders’ meeting and no later than four business
days preceding a shareholders’ meeting, submit written questions to the Board of Directors relating to the agenda for the
meeting. The Board of Directors is required to respond to such questions during the meeting.
As set forth in the
statuts,
shareholders’ meetings
are held at the registered office of the Company or at any other location specified in the written notice.
Dividend and Liquidation Rights
If the financial results show the existence of a distributable
profit, Flamel’s
statuts
permit a general shareholders’ meeting to allocate such profits to one or several reserve
accounts, to carry the amount forward or to distribute it to shareholders. As provided under French law, net income in each fiscal
year (after deduction for legal reserve), as increased or reduced, as the case may be, by any net income or loss of any French
corporation carried forward from prior years, is available for distribution to the shareholders of such corporation as dividends,
all as determined in accordance with French statutory accounting. Dividends may also be distributed from available reserves of
any French corporation, subject to approval by the shareholders and certain limitations.
Under French law, a corporation is legally required to establish
and maintain a legal reserve by making a minimum transfer of 5% of its net income in each year to such legal reserve as may be
necessary to maintain it at a level equal to 10% of the aggregate nominal value of its share capital, as increased or reduced from
time to time. The legal reserve is distributable only upon liquidation. The payment of dividends, if any, is fixed by the ordinary
general meeting of shareholders at which the annual accounts are approved following recommendation of the Board of Directors. Dividends
are payable pro rata to holders of shares outstanding on the date of the shareholder meeting approving the distribution of dividends
or, in the case of interim dividends, on the date of the meeting of the Board of Directors approving the distribution of interim
dividends. The actual dividend payment date is determined by the shareholders at the ordinary general meeting approving the declaration
of the dividends or by the Board of Directors in the absence of such determination by the shareholders. The payment of the dividends
must occur within nine months of the end of a French company’s fiscal year. Dividends not claimed within five years of the
date of payment revert to the French state. The
statuts
of the Company authorize the shareholders, in an ordinary general
meeting, to authorize the grant to each shareholder of an option to receive all or part of any annual or interim dividends in either
cash or shares.
If net income (as shown on an interim income statement certified
by Flamel’s statutory auditors) is sufficient, the Board of Directors has the authority, subject to French law and regulations,
without the approval of shareholders, to distribute interim dividends.
In the event that Flamel is liquidated, the assets
of Flamel remaining after payment of its debts, liquidation expenses and all of its remaining obligations will be
distributed first to repay in full the capital of the shares, and the surplus, if any, will then be distributed pro rata
among the holders of shares in proportion to the nominal value of their shareholdings and subject to any special rights
granted to holders of priority or preference shares, if any. Shareholders are liable for corporate liabilities only up to the
par value of the shares they hold and are not liable to further capital calls of the Company.
Repurchase of Shares
Pursuant to French law, Flamel may not acquire its shares except
in certain limited circumstances not presently applicable to it.
Form and Holding of Shares
Form of Shares.
Flamel’s
statuts
provide
that shares may be held only in registered form.
Holding of Shares.
Shares are registered in the name
of the respective owners thereof in the registry maintained by or on behalf of Flamel. Stock certificates evidencing shares, in
a manner comparable to that in the United States, are not issued by French companies, but the Company may issue or cause to be
issued confirmations as to holdings of shares registered in such registry to the persons in whose name such shares are registered.
Such confirmations do not constitute documents of title and are not negotiable instruments.
DESCRIPTION OF AMERICAN DEPOSITARY SHARES
Our ordinary shares are traded on the NASDAQ Global Market in
the form of ADSs delivered by The Bank of New York Mellon pursuant to the Deposit Agreement dated as of June 6, 1996, as amended
and restated as of August 10, 2001, among Flamel, The Bank of New York Mellon, as depositary (the “Depositary”), and
all owners and holders from time to time of ADSs issued thereunder (the “Deposit Agreement”). The Depositary’s
principal executive office is located at One Wall Street, New York, New York 10286.
The following is a summary of the material provisions of the
Deposit Agreement, which is qualified in its entirety by reference to the Deposit Agreement filed as an exhibit to the Registration
Statement on Form F-6 filed on
September 30, 2003 (File No. 333-109281).
Copies of the Deposit Agreement are available for inspection at the Corporate Trust Office of the Depositary, which is presently
located at 101 Barclay Street, New York, New York 10286. Capitalized terms used but not defined herein shall have meanings assigned
to them in the Deposit Agreement.
American Depositary Receipts
Each American Depositary Receipt (“ADR”) is a certificate
evidencing a specific number of ADSs. The Depositary will execute and deliver the ADRs. Each ADS represents one Ordinary Share
(or a right to receive one Ordinary Share) deposited with the Depositary or the Paris office of CACEIS Bank, as custodian for the
Depositary (the “Custodian”), presently located at 1-3, Place Valhubert, 75206 Paris Cedex 13, FRANCE. Each ADS will
also represent any other securities, cash or other property that may be held by the Depositary. As used herein, the term “ADR
holder” shall mean a person in whose name an ADR is registered on the books of the Depositary maintained for such purpose.
You may hold ADSs either directly (by having an ADR registered
in your name) or indirectly through your broker or other financial institution. If you hold ADSs directly, you are an ADR holder.
This description assumes you hold your ADSs directly. If you hold the ADSs indirectly, you must rely on the procedures of your
broker or other financial institution to assert the rights of ADR holders described in this section. You should consult with your
broker or financial institution to find out what those procedures are.
As an ADR holder, we will not treat you as one of our shareholders,
and you will not have shareholder rights. French law governs shareholder rights. The Depositary will be the holder of the Ordinary
Shares underlying your ADSs. As a holder of ADRs, you will have ADR holder rights. The Deposit Agreement sets forth ADR holder
rights as well as the rights and obligations of the Depositary. New York law governs the Deposit Agreement and the ADRs.
We refer to the Ordinary Shares that are at any time deposited
or deemed deposited under the Deposit Agreement and any and all other securities, cash and property received by the Depositary
or the Custodian in respect thereof and at such time held under the Deposit Agreement as “Deposited Securities.”
Dividends and Other Distributions
The Depositary has agreed to pay to you the cash dividends or
other distributions it or the Custodian receives on the Ordinary Shares or other deposited securities, after deducting its fees
and expenses. You will receive these distributions in proportion to the number of shares your ADSs represent.
|
·
|
Cash.
The Depositary will convert any cash dividend
or other cash distribution we pay on the shares into U.S. dollars, if it can do so on a reasonable basis and can transfer
the U.S. dollars to the United States. If that is not possible or if any government approval is needed and cannot be obtained,
the Deposit Agreement allows the Depositary to distribute the foreign currency only to those ADR holders to whom such distribution
is possible. The Depositary will hold the foreign currency it cannot convert for the account of the ADR holders who have not been
paid but will not invest the foreign currency and will not be liable for any interest.
|
Before making a distribution, the Depositary will
deduct any withholding taxes that must be paid. The Depositary will distribute only whole U.S. dollars and cents and will
round fractional cents to the nearest whole cent.
If the exchange rates fluctuate during a time when the Depositary cannot convert
the foreign currency, you may lose some or all of the value of the distribution.
|
·
|
Shares.
The Depositary may distribute additional
ADRs representing any shares we distribute as a dividend or free distribution. The Depositary will only distribute whole ADRs and
will sell shares that would require it to deliver fractional ADRs and distribute the net proceeds in the same way that it does
with cash. If the Depositary does not distribute additional ADRs, the outstanding ADRs will also represent the new shares.
|
|
·
|
Rights to purchase additional shares.
If we
offer holders of our securities any rights to subscribe for additional shares or any other rights, the Depositary may make these
rights available to you. If the Depositary decides it is not legal and feasible to make the rights available but that it is feasible
to sell the rights, the Depositary will use reasonable efforts to sell the rights and distribute the proceeds in the same way as
it does with cash. The Depositary will allow rights that are not distributed or sold to lapse.
In that case, you will receive
no value for them.
|
If the Depositary makes rights available to you, it
will exercise the rights and purchase the shares on your behalf. The Depositary will then deposit the shares and deliver ADRs to
you. It will only exercise rights if you pay it the exercise price and any other charges the rights require you to pay.
U.S. securities laws may restrict transfers and
cancellation of the ADRs represented by shares purchased upon exercise of rights. For example, you may not be able to trade these
ADRs freely in the United States. In this case, the Depositary may deliver restricted ADRs that have the same terms as the ADRs
described in this section except for changes needed to put the necessary restrictions in place.
|
·
|
Other Distributions.
The Depositary will send
to you anything else we distribute on Deposited Securities by any means it believes are legal, fair and practical. If it cannot
make the distribution in such a manner, the Depositary has a choice. It may decide to sell what we distributed and distribute the
net proceeds, in the same way as it does with cash. Or it may decide to hold what we distributed, in which case ADSs will also
represent the newly distributed property. However, the Depositary is not required to distribute any securities (other than ADSs)
to you unless it receives satisfactory evidence from us that it is legal to make that distribution.
|
The Depositary is not responsible if it decides that it is unlawful
or impractical to make a distribution available to any ADR holder. We have no obligation to register ADSs, shares, rights or other
securities under the Securities Act. We also have no obligation to take any other action to permit the distribution of ADRs, ADSs,
shares, rights or anything else to ADR holders.
This means that you may not receive the distributions we make on our shares
or any value for them if it is illegal or impractical for us to make them available to you.
Deposit, Withdrawal and Cancellation
The Depositary will deliver ADRs if you or your broker deposits
shares or evidence of rights to receive shares with the Custodian or the Depository. Upon payment of its fees and expenses and
of any taxes or charges, such as stamp taxes or stock transfer taxes or fees, the Depositary will register the appropriate number
of ADSs in the names you request and will deliver the ADRs at its office to the persons you request.
You may turn in your ADRs at the Depositary’s office.
Upon payment of its fees and expenses and of any taxes or charges, such as stamp taxes or stock transfer taxes or fees, the Depositary
will transfer the shares and any other Deposited Securities underlying the ADR to you, or a person you designate, at the office
of the Custodian. Alternatively, at your request, risk and expense, the Depositary will deliver the Deposited Securities at its
office, if feasible.
Voting of the Underlying Shares
You may instruct the Depositary to vote the Ordinary Shares
underlying your ADRs, but only if we ask the Depositary to ask for your instructions.
Otherwise, you will not be able to exercise
your right to vote unless you withdraw the shares. However, you may not know about the meeting enough in advance to withdraw the
shares.
If we ask for your instructions, the Depositary will notify
you of the upcoming vote and arrange to deliver our voting materials to you. The materials will (1) describe the matters to
be voted on and (2) explain how you may instruct the Depositary to vote the Ordinary Shares or other deposited securities
underlying your ADSs as you direct. For instructions to be valid, the Depositary must receive them on or before the date specified.
The Depositary will try, as far as practical, subject to French law and the provisions of our
statuts,
to vote or to have
its agents vote the shares or other deposited securities as you instruct.
If the Depositary does not receive voting instructions from
you by the specified date, it will consider you to have authorized and directed it to vote the number of deposited securities represented
by your ADSs in accordance with the recommendations of our management. However, the Depositary will not vote under the preceding
sentence if we notify the Depositary that:
|
·
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we do not wish it to do so;
|
|
·
|
we think there is substantial shareholder opposition to the particular
question; or
|
|
·
|
we think the particular question would have an adverse impact on our
shareholders.
|
The Depositary will only vote, or attempt to vote, as you instruct,
or as described in this paragraph.
We cannot assure you that you will receive the voting materials
in time to ensure that you can instruct the Depositary to vote your Ordinary Shares. In addition, the Depositary and its agents
are not responsible for failing to carry out voting instructions or for the manner of carrying out voting instructions.
This
means that you may not be able to exercise your right to vote and there may be nothing you can do if your shares are not voted
as you requested.
Fees and Expenses
Persons depositing shares or ADR holders must pay:
|
|
For:
|
|
|
|
|
|
1.
|
$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)
|
|
·
|
Execution and delivery of ADRs, including issuances resulting from a distribution of shares or rights or other property
|
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|
|
·
|
Cancellation of ADRs for the purpose of withdrawal, including if the Deposit Agreement terminates
|
|
|
|
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2.
|
$0.02 (or less) per ADS
|
|
·
|
Any cash distribution to you
|
|
|
|
|
|
3.
|
A fee equivalent to the fee that would be payable if securities distributed to you had been shares and the shares had been deposited for issuance of ADSs
|
|
·
|
Distribution of securities distributed to holders of deposited securities which are distributed by the Depositary to ADR holders
|
4.
|
$1.50 or less per certificate
|
|
·
|
Registration of transfer of ADRs
|
|
|
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5.
|
Registration or transfer fees
|
|
·
|
Transfer and registration of shares on our share register to or from the name of the Depositary or its agent when you deposit or withdraw shares
|
|
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6.
|
Expenses of the Depositary
|
|
·
|
Cable, telex and facsimile transmissions (when expressly provided in the Deposit Agreement)
|
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|
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7.
|
Taxes and other governmental charges the Depositary or the custodian has to pay on any ADR or share underlying an ADR, for example, stock transfer taxes, stamp duty or withholding taxes
|
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|
|
|
|
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8.
|
Expenses of the Depositary in converting foreign currency to U.S. dollars
|
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The Depositary collects its fees for delivery and surrender
of ADSs directly from investors depositing shares or surrendering ADSs for the purpose of withdrawal or from intermediaries acting
for them. The Depositary collects fees for making distributions to investors by deducting those fees from the amounts distributed
or by selling a portion of distributable property to pay the fees. The Depositary may collect its annual fee for depositary services
by deduction from cash distributions or by directly billing investors or by charging the book-entry system accounts of participants
acting for them. The Depositary may generally refuse to provide fee-attracting services until its fees for those services are paid.
From time to time, the Depositary may make payments to us to
reimburse and/or share revenue from the fees collected from ADS holders, or waive fees and expenses for services provided, generally
relating to costs and expenses arising out of establishment and maintenance of the ADS program. In performing its duties under
the deposit agreement, the Depositary may use brokers, dealers or other service providers that are affiliates of the Depositary
and that may earn or share fees or commissions.
Payment of Taxes
The Depositary may deduct the amount of any taxes owed from
any payments to you and may also sell deposited securities, by public or private sale, to pay any taxes owed. You will remain liable
if the proceeds of the sale are not enough to pay the taxes. If the Depositary sells deposited securities, it will, if appropriate,
reduce the number of ADSs to reflect the sale and pay to you any proceeds, or send to you any property, remaining after it has
paid the taxes.
Reclassifications, Recapitalizations and Mergers
If we (i) change the nominal value of our shares; (ii) reclassify,
split up or consolidate any of the Deposited Securities; (iii) distribute securities on the shares that are not distributed
to you; or (iv) recapitalize, reorganize, merge, liquidate, sell all or substantially all of our assets, or take any similar
action, then:
|
·
|
the cash, shares or other securities received by the Depositary will
become Deposited Securities, and each ADS will automatically represent its equal share of the new Deposited Securities; and
|
|
·
|
the Depositary may, and upon our request will, distribute some or
all of the cash, shares or other securities it received. The Depositary may also deliver new ADRs or ask you to surrender your
outstanding ADRs in exchange for new ADRs identifying the new Deposited Securities.
|
Reports and Other Communications
The Depositary will make available for inspection by owners
of ADRs at its Corporate Trust Office any reports and communications, including proxy solicitation materials, received from us
which are both (a) received by the Depositary as the holder of the Deposited Securities and (b) made generally available by us
to the holders of such Deposited Securities. The Depositary will also send to the owners of ADRs copies of Company notices of shareholder
meetings or the adjournment thereof, actions related to any cash or other distributions and the offering of any rights and copies
of annual reports, quarterly reports, summaries of notices of shareholders’ meetings and other communications made generally
available to owners of Deposited Securities. If instructed in writing by Flamel, the Depositary will arrange for copies of such
reports and communications to be mailed to all owners of ADRs at Flamel’s expense. Any such reports and communications, including
any proxy solicitation materials, will be furnished to the Depositary in English.
Amendment and Termination
We may agree with the Depositary to amend the Deposit Agreement
and the ADRs without your consent for any reason. If an amendment adds or increases fees or charges, except for taxes and other
governmental charges or expenses of the Depositary for registration fees, facsimile costs, delivery charges or similar items, or
prejudices a substantial right of ADR holders, it will not become effective for outstanding ADRs until 60 days after the Depositary
notifies ADR holders of the amendment.
At the time an amendment becomes effective, you are considered, by continuing to hold
your ADR, to agree to the amendment and to be bound by the ADRs and the Deposit Agreement as amended.
The Depositary will terminate the Deposit Agreement if we ask
it to do so. The Depositary may also terminate the Deposit Agreement if the Depositary has told us that it would like to resign
and we have not appointed a successor Depositary within 90 days. In either case, the Depositary must notify you at least 90 days
before termination.
After termination, the Depositary and its agents will do the
following under the Deposit Agreement but nothing else: (1) advise you that the Deposit Agreement is terminated, (2) collect
distributions on the Deposited Securities, (3) sell rights and other property and (4) deliver shares and other Deposited
Securities upon cancellation of ADRs. One year after termination, the Depositary may sell any remaining Deposited Securities by
public or private sale. After that, the Depositary will hold the money it received on the sale, as well as any other cash it is
holding under the Deposit Agreement, for the pro rata benefit of the ADR holders that have not surrendered their ADRs. It will
not invest the money and has no liability for interest. The Depositary’s only obligations will be to account for the money
and other cash. After termination, our only obligations will be to indemnify the Depositary and to pay fees and expenses of the
Depositary that we have agreed to pay.
Limitations on Obligations and Liability
The Deposit Agreement expressly limits our obligations and the
obligations of the Depositary. It also limits our liability and the liability of the Depositary. The Depositary and we:
|
·
|
are only obligated to take the actions specifically set forth in the
Deposit Agreement without negligence or bad faith;
|
|
·
|
are not liable if either of us is prevented or delayed by law or circumstances
beyond our control from performing our obligations under the Deposit Agreement;
|
|
·
|
are not liable if either of us exercises discretion permitted under
the Deposit Agreement;
|
|
·
|
have no obligation to become involved in a lawsuit or other proceeding
related to the ADRs or the Deposit Agreement on your behalf or on behalf of any other party; and
|
|
·
|
may rely upon any documents we believe in good faith to be genuine
and to have been signed or presented by the proper party.
|
In the Deposit Agreement, we agree to indemnify the Depositary
for acting as Depositary, except for losses caused by the Depositary’s own negligence or bad faith.
Requirements for Depositary Actions
Before the Depositary will deliver or register a transfer of
an ADR, make a distribution on an ADR, or permit withdrawal of shares, the Depositary may require:
|
·
|
payment of stock transfer or other taxes or other governmental charges
and transfer or registration fees charged by third parties for the transfer of any shares or other deposited securities;
|
|
·
|
satisfactory proof of the identity and genuineness of any signature
or other information it deems necessary; and
|
|
·
|
compliance with regulations it may establish, from time to time, consistent
with the Deposit Agreement, including presentation of transfer documents.
|
The Depositary may refuse to deliver ADRs or register transfers
of ADRs generally when the transfer books of the Depositary or our transfer books are closed or at any time if the Depositary or
we think it advisable.
Your Right to Receive the Shares Underlying your ADRs
You have the right to cancel your ADRs and withdraw the underlying
shares at any time except:
|
·
|
when temporary delays arise because (i) the Depositary has closed
its transfer books or we have closed our transfer books, (ii) the transfer of shares is blocked to permit voting at a shareholders’
meeting or (iii) we are paying a dividend on our shares;
|
|
·
|
when you or other ADR holders seeking to withdraw shares owe money
to pay fees, taxes and similar charges; and
|
|
·
|
when it is necessary to prohibit withdrawals in order to comply with
any laws or governmental regulations that apply to ADRs or to the withdrawal of shares or other deposited securities.
|
This right of withdrawal may not be limited by any other provision
of the Deposit Agreement.
Pre-release of ADRs
The Deposit Agreement permits the Depositary to deliver ADRs
before deposit of the underlying shares. This is called a pre-release of ADRs. The Depositary may also deliver shares upon cancellation
of pre-released ADRs (even if the ADRs are canceled before the pre-release transaction has been closed out). A pre-release is closed
out as soon as the underlying shares are delivered to the Depositary. The Depositary may receive ADRs instead of shares to close
out a pre-release.
The Depositary may pre-release ADRs only under the following
conditions:
|
·
|
before or at the time of the pre-release, the person to whom the pre-release
is being made represents to the Depositary in writing that it or its customer owns the shares or ADRs to be deposited;
|
|
·
|
the pre-release is fully collateralized with cash or other collateral
that the Depositary considers appropriate; and
|
|
·
|
the Depositary must be able to close out the pre-release on not more
than five business days’ notice. In addition, the Depositary will limit the number of ADSs that may be outstanding at any
time as a result of pre-release to thirty percent (30%) of the Ordinary Shares deposited, although the Depositary may disregard
the limit from time to time, if it thinks it is appropriate.
|
Shareholder Communications: Inspection Rights
The Depositary will make available for your inspection at its
office all communications that it receives from us as a holder of Deposited Securities that we make generally available to holders
of Deposited Securities. The Depositary will send you copies of those communications if we ask it to. The Depositary will keep
books for the registration and transfer of ADRs, which will be open for inspection by the owners of ADRs and the Company at all
reasonable times, provided that such inspection shall be limited to business of the Company or a matter related to the Deposit
Agreement or the ADRs and not for the purpose of communicating with ADR owners for another business. At any time and from time
to time, the Depositary may close the transfer books in connection with the performance of its duties under the Deposit Agreement
or upon the Company’s request.
EXPENSES
We will incur the following expenses in connection with the
registration of the ordinary shares offered by the selling shareholder:
Legal Fees and Expenses
|
|
$
|
60,000
|
|
Accounting Fees and Expenses
|
|
$
|
35,000
|
|
ADR Conversion Fees
|
|
$
|
2,000
|
|
SEC Registration Fee
|
|
$
|
3,263
|
|
Printing Expenses
|
|
$
|
1,500
|
|
TOTAL
|
|
$
|
101,763
|
|
All amounts shown are estimates, except for the amount of the
SEC registration fee. Any selling commissions, brokerage fees, applicable transfer taxes, and fees and disbursements of counsel
for the selling shareholder are payable by the selling shareholder.
LEGAL MATTERS
Hogan Lovells (Paris) LLP, Paris, France, will provide the Company
with an opinion as to French legal matters and the validity of the ordinary shares.
EXPERTS
The financial statements and management’s assessment of
the effectiveness of internal control over financial reporting (which is included in Management’s Report on Internal Control
over Financial Reporting) incorporated in this Prospectus by reference to the Annual Report on Form 20-F for the year ended December
31, 2011 have been so incorporated in reliance on the report of PricewaterhouseCoopers Audit, an independent registered public
accounting firm, given on the authority of said firm as experts in auditing and accounting.
The financial statements of Eclat Holdings, LLC incorporated
in this prospectus by reference to Exhibit 99.2 have been so incorporated in reliance on the report of Swink, Fiehler & Company
P.C., an independent public accounting firm, given on the authority of said firm as experts in auditing and accounting.
ENFORCEABILITY OF CIVIL LIABILITIES
We are a limited liability company (
société
anonyme
) organized under the laws of France, and many of our directors and officers reside outside the United States. In addition,
a substantial portion of our assets are located in France. As a result, it may be difficult for investors to effect service of
process within the United States on such persons. It may also be difficult to enforce against them, either inside or outside the
United States, judgments obtained against them in U.S. courts, or to enforce in U.S. courts, judgments obtained against them in
courts in jurisdictions outside the United States, in any action based on civil liabilities under the U.S. federal securities laws.
There is doubt as to the enforceability against such persons in France, whether in original actions or in actions to enforce judgments
of U.S. courts, of liabilities based solely on the U.S. federal securities laws. Actions for enforcement of foreign judgments against
such persons would require such persons who are of French nationality to waive their right under Article 15 of the French Civil
Code to be sued only in France. We believe that no such French persons have waived such right with respect to actions predicated
solely upon U.S. federal securities laws. In addition, actions in the United States under the U.S. federal securities laws could
be affected under certain circumstances by the French law of July 26, 1968, as amended, which may preclude or restrict the obtaining
of evidence in France or from French persons in connection with such actions. Additionally, awards of punitive damages in actions
brought in the United States or elsewhere may be unenforceable in France.
DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Under French law, a company may purchase directors and officers’
insurance for all or part of the members of its management. A French corporation is responsible to third parties for the consequences
of the decisions of its board of directors. However, if those decisions qualify as mismanagement under Article L. 225-251 of the
French Commercial Code (
Code de commerce
), the relevant member of the board of directors may have to fully or partly indemnify
the company. The Registrant maintains liability insurance for its directors and principal executive officers, including insurance
against liabilities under the Securities Act.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or persons controlling the registrant pursuant to the foregoing
provisions, the registrant has been informed that in the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is therefore unenforceable.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 8. Indemnification of Directors and Officers
The Company maintains liability insurance for its directors
and principal executive officers, including insurance against liabilities under the Securities Act of 1933, as amended.
Item 9. Exhibits
Exhibit
|
|
|
Number
|
|
Description
|
|
|
|
4.1
|
|
Warrant to purchase 2,200,000 American Depositary Shares, each representing one Ordinary Share of Flamel Technologies S.A. (1)
|
4.2
|
|
Warrant to purchase 1,100,000 American Depositary Shares, each representing one Ordinary Share of Flamel Technologies S.A. (1)
|
5.1
|
|
Opinion of Hogan Lovells (Paris) LLP
|
23.1
|
|
Consent of PricewaterhouseCoopers Audit
|
23.2
|
|
Consent of Hogan Lovells (Paris) LLP (included in Exhibit 5.1)
|
23.3
|
|
Consent of Swink, Fiehler & Company P.C.
|
24.1
|
|
Powers of attorney (included in the signature pages herein)
|
99.1
|
|
Unaudited Condensed Combined Pro forma Statement of Operations of Flamel Technologies S.A. and Éclat Pharmaceuticals, LLC for the three months ended March 31, 2012.
|
99.2
|
|
Consolidated Financial Statements of Éclat Holdings, LLC and Subsidiary as of December 31, 2011 and 2010
|
(1) Incorporated by reference to the registrant’s Report
of a Foreign Private Issuer on Form 6-K furnished on March 21, 2012.
Item 10. Undertakings
|
(a)
|
The undersigned registrant hereby undertakes:
|
|
(1)
|
To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
|
|
(i)
|
To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
|
|
(ii)
|
To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information
set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant
to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum
aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement;
|
|
(iii)
|
To include any material information with respect to the plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement;
|
Provided, however, that paragraphs (a)(1)(i), (a)(1)(ii) and
(a)(1)(iii) of this section do not apply if the registration statement is on Form S-3 or Form F-3 and the information required
to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission
by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference
in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of this registration
statement.
|
(2)
|
That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial
bona fide
offering thereof.
|
|
(3)
|
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold
at the termination of the offering.
|
|
(4)
|
To file a post-effective amendment to the registration statement to include any financial statements required by Item
8.A. of Form 20-F at the start of any delayed offering or throughout a continuous offering. Financial statements and information
otherwise required by Section 10(a)(3) of the Securities Act of 1933 need not be furnished,
provided
, that the registrant
includes in the prospectus, by means of a post-effective amendment, financial statements required pursuant to this paragraph (a)(4)
and other information necessary to ensure that all other information in the prospectus is at least as current as the date of those
financial statements. Notwithstanding the foregoing, with respect to the registration statement on Form F-3, a post-effective amendment
need not be filed to include financial statements and information required by Section 10(a)(3) of the Securities Act of 1933
or Rule 3-19 of Regulation S-X if such financial statements and information are contained in periodic reports filed with or furnished
to the Commission by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference into the Form F-3.
|
|
(5)
|
That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
|
|
(i)
|
Each prospectus filed pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of
the date the filed prospectus was deemed part of and included in the registration statement; and
|
|
(ii)
|
Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance
on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information
required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement
as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale
of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer
and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement
relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities
at that time shall be deemed to be the initial
bona fide
offering thereof.
Provided, however
, that no
statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated
or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will,
as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made
in the registration statement or prospectus that was part of the registration statement or made in any such document immediately
prior to such effective date.
|
|
(6)
|
That for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial
distribution of securities:
|
The undersigned registrant undertakes that in a primary
offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method
used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following
communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities
to such purchaser:
|
(i)
|
Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant
to Rule 424;
|
|
(ii)
|
Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred
to by the undersigned registrant;
|
|
(iii)
|
The portion of any other free writing prospectus relating to the offering containing material information about the undersigned
registrant or its securities provided by or on behalf of the undersigned registrant; and
|
|
(iv)
|
Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
|
|
(b)
|
The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933,
each filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange
Act of 1934) that is incorporated by reference into the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial
bona fide
offering thereof.
|
|
(c)
|
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that
in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities
Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection
with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.
|
|
(d)
|
The undersigned registrant hereby undertakes that:
|
|
(1)
|
For purposes of determining liability under the Securities Act of 1933, the information omitted from the form of prospectus
filed as part of this registration statement in reliance upon Rule 430A and contained in the form of prospectus filed by the registrant
pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act of 1933 shall be deemed to be part of the registration statement
as of the time it was declared effective.
|
|
(2)
|
For purposes of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide
offering thereof.
|
SIGNATURES
Pursuant to requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all the requirements for filing on Form F-3 and has
duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of
Venissieux, France, on September 17, 2012.
|
FLAMEL TECHNOLOGIES, S.A.
|
|
|
September 17, 2012
|
By:
|
/s/ Michael S. Anderson
|
|
|
Michael S. Anderson
|
|
|
Chief Executive Officer
|
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints
Michael S. Anderson his or
her true and lawful attorney-in-fact and agent, for him or her and in his or her name, place and stead, in any and all capacities,
to sign any and all amendments (including post-effective amendments) to this Registration Statement and any Registration Statement
relating to this Registration Statement under Rule 462 under the Securities Act of 1933, and to file the same, with all exhibits
thereto, and all other documents in connection therewith, with the Securities and Exchange Commission or any state, granting unto
said attorney-in-fact and agent, and full power and authority to do and perform each and every act and thing requisite
and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933,
this registration statement has been signed by the following persons in the capacities and on the dates indicated.
September 17, 2012
|
By:
|
/s/ Michael S. Anderson
|
|
|
Michael S. Anderson
|
|
|
Chief Executive Officer and Director
|
|
|
(Principal Executive Officer)
|
|
|
|
September 17, 2012
|
By:
|
/s/ Siân Crouzet
|
|
|
Siân Crouzet
|
|
|
Principal Financial Officer
|
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
September 17, 2012
|
By:
|
/s/ Catherine Bréchignac
|
|
|
Catherine Bréchignac
|
|
|
Director
|
|
|
|
September 17, 2012
|
By:
|
/s/ Guillaume Cerutti
|
|
|
Guillaume Cerutti
|
|
|
Director
|
|
|
|
September 17, 2012
|
By:
|
/s/ Francis JT Fildes
|
|
|
Francis JT Fildes
|
|
|
Director
|
|
|
|
September 17, 2012
|
By:
|
/s/ Craig Stapleton
|
|
|
Craig Stapleton
|
|
|
Director
|
|
|
September 17, 2012
|
By:
|
/s/ Elie Vannier
|
|
|
Elie Vannier
|
|
|
Director
|
|
|
September 17, 2012
|
By:
|
/s/ Stephen H. Willard
|
|
|
Stephen H. Willard
|
|
|
Chairman and Director
|
SIGNATURE OF AUTHORIZED REPRESENTATIVE
OF THE REGISTRANT
Pursuant to the Securities Act, as amended, the undersigned,
being the duly authorized representative in the United States of Flamel Technologies, S.A., has signed this registration statement
or amendment thereto in Washington, D.C, on September 17, 2012.
|
By:
|
/s/ Stephen H. Willard
|
|
Name: Stephen H. Willard
|
|
Title: Chairman
|
EXHIBIT INDEX
Exhibit
|
|
|
Number
|
|
Description
|
|
|
|
4.1*
|
|
Warrant to purchase 2,200,000 American Depositary Shares, each representing one Ordinary Shares of Flamel Technologies S.A.
|
4.2*
|
|
Warrant to purchase 1,100,000 American Depositary Shares, each representing one Ordinary Shares of Flamel Technologies S.A.
|
5.1
|
|
Opinion of Hogan Lovells (Paris) LLP
|
23.1
|
|
Consent of PricewaterhouseCoopers Audit
|
23.2
|
|
Consent of Hogan Lovells (Paris) LLP (included in Exhibit 5.1)
|
23.3
|
|
Consent of Swink, Fiehler & Company P.C.
|
24.1
|
|
Powers of attorney (included in the signature pages herein)
|
99.1
|
|
Unaudited Condensed Combined Pro forma Statement of Operations of Flamel Technologies S.A.
|
|
|
and Éclat Pharmaceuticals, LLC for the three months ended March 31, 2012
|
99.2
|
|
Consolidated Financial Statements of Éclat Holdings, LLC and Subsidiary as of December 31, 2011 and 2010
|
* Incorporated by reference to the registrant’s Report
of a Foreign Private Issuer on Form 6-K furnished on March 21, 2012.
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