<PAGE>
Exhibit 1.1
3,112,945 SHARES
ARIAD PHARMACEUTICALS, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
October 19, 2006
CREDIT SUISSE SECURITIES (USA) LLC
Eleven Madison Avenue,
New York, N.Y. 10010-3629
Ladies and Gentlemen:
1. Introductory. ARIAD Pharmaceuticals, Inc., a Delaware
corporation
("COMPANY"), agrees with you ("UNDERWRITER") to issue and sell to
the
Underwriter 3,112,945 shares ("FIRM SECURITIES") of its common
stock, $0.001 par
value per share ("COMMON STOCK"), and also proposes to issue and
sell to the
Underwriter, at the option of the Underwriter, an aggregate of not
more than
466,942 additional shares ("OPTIONAL SECURITIES") of its Securities
as set forth
below. The Firm Securities and the Optional Securities are herein
collectively
called the "OFFERED SECURITIES".
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the Underwriter
that:
(a) Filing and Effectiveness of Registration Statements;
Certain Defined Terms. The Company has filed with the Commission
a
registration statement on Form S-3 (No. 333-122909), including
a
related prospectus or prospectuses, and a registration statement
on
Form S-3 (No. 333-111401), including a related prospectus or
prospectuses and registration statements on Form S-3 filed pursuant
to
Rule 462(b) of the Rules and Regulations, which together cover
the
registration of the Offered Securities under the Act. Each such
registration statement has become effective. "REGISTRATION
STATEMENTS"
at any particular time means such registration statements in the
form
then filed with the Commission, including any amendment thereto,
any
document
incorporated by reference therein and all 430B Information and
all 430C Information with respect to such registration statements,
that
in any case has not been superseded or modified. "REGISTRATION
STATEMENTS" without reference to a time means the Registration
Statements as of the Effective Date. For purposes of this
definition,
430B Information shall be considered to be included in the
Registration
Statements as of the time specified in Rule 430B.
For purposes of this Agreement:
1
<PAGE>
"430B INFORMATION" means information included in any prospectus
then
deemed to be a part of the Registration Statements pursuant to
Rule
430B(e) or retroactively deemed to be a part of the
Registration
Statements pursuant to Rule 430B(f).
"430C INFORMATION" means information included in any prospectus
then
deemed to be a part of the Registration Statements pursuant to
Rule
430C.
"ACT" means the Securities Act of 1933, as amended.
"APPLICABLE TIME" means 4:00 p.m. (Eastern time) on October 19,
2006.
"CLOSING DATE" has the meaning defined in Section 3 hereof.
"COMMISSION" means the Securities and Exchange Commission.
"EFFECTIVE DATE" of the Registration Statements relating to the
Offered
Securities means the time of the first contract of sale for the
Offered
Securities.
"EXCHANGE ACT" means the Securities Exchange Act of 1934.
"FINAL PROSPECTUSES" means the Statutory Prospectuses that disclose
the
public offering price, other 430B Information and other final terms
of
the Offered Securities and otherwise satisfies Section 10(a) of
the
Act.
"GENERAL USE ISSUER FREE WRITING PROSPECTUS" means any Issuer
Free
Writing Prospectus that is intended for general distribution to
prospective investors, as evidenced by its being so specified
in
Schedule A to this Agreement.
"ISSUER FREE WRITING PROSPECTUS" means any "issuer free writing
prospectus," as defined in Rule 433, relating to the Offered
Securities
in the form filed or required to be filed with the Commission or,
if
not required to be filed, in the form retained in the Company's
records
pursuant to Rule 433(g).
"LIMITED USE ISSUER FREE WRITING PROSPECTUS" means any Issuer
Free
Writing Prospectus that is not a General Use Issuer Free
Writing
Prospectus.
"RULES AND REGULATIONS" means the rules and regulations of the
Commission.
"SECURITIES LAWS" means, collectively, the Sarbanes-Oxley Act of
2002
("SARBANES-OXLEY"), the Act, the Exchange Act, the Rules and
Regulations, the auditing principles, rules, standards and
practices
applicable to auditors of "issuers" (as defined in
Sarbanes-Oxley)
promulgated or approved by the Public Company Accounting
Oversight
Board and, as applicable, the rules of the New York Stock Exchange
and
The NASDAQ Stock Market ("EXCHANGE RULES").
2
<PAGE>
"STATUTORY PROSPECTUSES" with reference to any particular time
means
the prospectus relating to the Offered Securities that is included
in
the Registration Statements immediately prior to that time,
including
all 430B Information and all 430C Information with respect to
the
Registration Statements. For purposes of the foregoing definition,
430B
Information shall be considered to be included in the Statutory
Prospectuses only as of the actual time that form of prospectus
(including a prospectus supplement) is filed with the
Commission
pursuant to Rule 424(b) and not retroactively.
Unless otherwise specified, a reference to a "rule" is to the
indicated
rule under the Act.
(b) Compliance with Securities Act Requirements. (i) (A) At
the time the Registration Statements initially became effective,
(B) at
the time of each amendment thereto for the purposes of complying
with
Section 10(a)(3) of the Act (whether by post-effective
amendment,
incorporated report or form of prospectus), (C) on the Effective
Date
relating to the Offered Securities and (D) on the Closing Date,
the
Registration Statements conformed and will conform in all
material
respects with the requirements of the Act and the Rules and
Regulations
and did not and will not include any untrue statement of a
material
fact or omit to state any material fact required to be stated
therein
or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading and (ii)
(A)
on its date, (B) at the time of filing the Final Prospectuses
pursuant
to Rule 424(b) and (C) on the Closing Date, the Final Prospectuses
will
conform in all material respects to the requirements of the Act and
the
Rules and Regulations, and will not include any untrue statement of
a
material fact or omit to state any material fact required to be
stated
therein or necessary in order to make the statements therein, in
light
of the circumstances under which they were made, not misleading.
The
preceding sentence does not apply to statements in or omissions
from
any such document based upon written information furnished to
the
Company by the Underwriter, if any, specifically for use therein,
it
being understood and agreed that the only such information is
that
described as such in Section 8(b) hereof.
(c) Shelf Registration Statements. The date of this Agreement
is not more than three years subsequent to the more recent of
the
initial effective dates of the Registration Statements or December
1,
2005. If, immediately prior to the third anniversary of the more
recent
of the initial effective dates of the Registration Statements
or
December 1, 2005, any of the Offered Securities remain unsold by
the
Underwriter, the Company will prior to that third anniversary file,
if
it has not already done so, a new shelf registration statement
relating
to the Offered Securities, in a form reasonably satisfactory to
the
Underwriter, and will use reasonable best efforts to cause such
registration statement to be declared effective within 180 days
after
that third anniversary, and will take all other action necessary
or
appropriate to permit the public offering and sale of the
Offered
Securities to continue as contemplated in the expired
registration
statement relating to the Offered Securities. References herein to
the
Registration Statements shall include such new shelf
registration
statement.
3
<PAGE>
(d) Ineligible Issuer Status. (i) At the earliest time after
the filing of the Registration Statements that the Company or
another
offering participant made a bona fide offer (within the meaning of
Rule
164(h)(2)) of the Offered Securities and (ii) at the date of
this
Agreement, the Company was not and is not an "ineligible issuer,"
as
defined in Rule 405, including (x) the Company or any other
subsidiary
in the preceding three years not having been convicted of a felony
or
misdemeanor or having been made the subject of a judicial or
administrative decree or order as described in Rule 405 and (y)
the
Company in the preceding three years not having been the subject of
a
bankruptcy petition or insolvency or similar proceeding, not having
had
a registration statement be the subject of a proceeding under
Section 8
of the Act and not being the subject of a proceeding under Section
8A
of the Act in connection with the offering of the Securities, all
as
described in Rule 405.
(e) General Disclosure Package. As of the Applicable Time,
neither (i) the General Use Issuer Free Writing Prospectus(es)
issued
at or prior to the Applicable Time, the preliminary prospectus
supplements, dated October 19, 2006, together with the
accompanying
prospectuses (which are the most recent Statutory Prospectuses
distributed to investors generally) and any other documents listed
or
disclosures stated in Schedule A to this Agreement to be included
in
the General Disclosure Package, all considered together
(collectively,
the "GENERAL DISCLOSURE PACKAGE"), nor (ii) any individual Limited
Use
Issuer Free Writing Prospectus, when considered together with
the
General Disclosure Package, included any untrue statement of a
material
fact or omitted to state any material fact necessary in order to
make
the statements therein, in the light of the circumstances under
which
they were made, not misleading. The preceding sentence does not
apply
to statements in or omissions from any Statutory Prospectus or
any
Issuer Free Writing Prospectus in reliance upon and in conformity
with
written information furnished to the Company by the Underwriter
specifically for use therein, it being understood and agreed that
the
only such information furnished by the Underwriter consists of
the
information described as such in Section 8(b) hereof.
(f) Issuer Free Writing Prospectuses. Each Issuer Free Writing
Prospectus, as of its issue date and at all subsequent times
through
the completion of the public offer and sale of the Offered
Securities
or until any earlier date that the Company notified or notifies
the
Underwriter as described in the next sentence, did not, does not
and
will not include any information that conflicted, conflicts or
will
conflict with the information then contained in the
Registration
Statements. If at any time following issuance of an Issuer Free
Writing
Prospectus there occurred or occurs an event or development as a
result
of which such Issuer Free Writing Prospectus conflicted or
would
conflict with the information then contained in the
Registration
Statements or as a result of which such Issuer Free Writing
Prospectus,
if republished immediately following such event or development,
would
include an untrue statement of a material fact or omitted or would
omit
to state a material fact necessary in order to make the
statements
therein, in the light of the circumstances under which they were
made,
not misleading, (i) the Company has promptly notified or will
promptly
notify the Underwriter and (ii) the Company has promptly amended
or
will promptly amend or supplement such Issuer Free Writing
Prospectus
to eliminate or
4
<PAGE>
correct such conflict, untrue statement or omission. The preceding
two
sentences do not apply to statements in or omissions from any
Statutory
Prospectus or any Issuer Free Writing Prospectus in reliance upon
and
in conformity with written information furnished to the Company by
the
Underwriter specifically for use therein, it being understood
and
agreed that the only such information furnished by the
Underwriter
consists of the information described as such in Section 8(b)
hereof.
(g) Good Standing of the Company. The Company has been duly
incorporated and is existing and in good standing under the laws of
the
State of Delaware, with corporate power and authority to own
its
properties and conduct its business as described in the General
Disclosure Package; and the Company is duly qualified to do
business as
a foreign corporation in good standing in all other jurisdictions
in
which its ownership or lease of property or the conduct of its
business
requires such qualification, except to the extent that the failure
to
be so qualified or be in good standing would not materially and
adversely affect the Company and its subsidiaries or their
businesses,
properties, business prospects, conditions (financial or other)
or
results of operations, taken as a whole (such effect is referred
to
herein as a "Material Adverse Effect").
(h) Subsidiaries. Each subsidiary of the Company has been duly
organized and is existing and in good standing under the laws of
the
jurisdiction of its incorporation, with requisite power and
authority
to own its properties and conduct its business as described in
the
General Disclosure Package; and each subsidiary of the Company is
duly
qualified to do business as a foreign corporation in good standing
in
all other jurisdictions in which its ownership or lease of property
or
the conduct of its business requires such qualification, except to
the
extent that the failure to be so qualified or be in good standing
would
not have a Material Adverse Effect; all of the issued and
outstanding
capital stock of each subsidiary of the Company has been duly
authorized and validly issued and is fully paid and nonassessable;
and
the capital stock of each subsidiary owned by the Company, directly
or
through subsidiaries, is owned free from liens, encumbrances
and
defects, except as described in the Security Agreement (All
Assets)
dated as of March 12, 2003 between the Company and Citizens Bank
of
Massachusetts (the "Bank"), the Security Agreement (All Assets)
dated
as of March 12, 2003 between AGTI and the Bank and the Security
Agreement (All Assets) dated as of March 12, 2003 between ARIAD
Corporation and the Bank.
(i) Capital Stock. The Offered Securities and all other
outstanding shares of capital stock of the Company have been
duly
authorized; all outstanding shares of capital stock of the Company
are,
and, when the Offered Securities have been delivered and paid for
in
accordance with this Agreement on the Closing Date, such
Offered
Securities will have been validly issued, fully paid and
nonassessable,
will conform to the information in the General Disclosure Package
and
to the description of such Offered Securities contained in the
Final
Prospectuses, the stockholders of the Company have no statutory
or
contractual preemptive rights with respect to its Common Stock;
none of
the outstanding shares of capital stock of the Company are or will
have
been
issued in violation of any statutory or
5
<PAGE>
contractual preemptive or similar rights of any security holder;
and
the authorized equity capitalization of the Company is as set forth
in
the General Disclosure Package.
(j) No Finder's Fee. There are no contracts, agreements or
understandings between the Company and any person that would give
rise
to a valid claim against the Company or any Underwriter for a
brokerage
commission, finder's fee or other like payment.
(k) Financial Statements. The financial statements and
schedules included or incorporated by reference in the
Registration
Statements and the General Disclosure Package present fairly in
all
material respects the financial condition of the Company and
its
consolidated subsidiaries as of the respective dates thereof and
the
results of operations and cash flows of the Company and its
consolidated subsidiaries for the respective periods covered
thereby,
all in conformity with generally accepted accounting principles
applied
on a consistent basis throughout the entire period involved, except
as
otherwise disclosed in the General Disclosure Package. No other
financial statements or schedules of the Company are required by
the
Act, the Exchange Act, or the Rules and Regulations to be included
in
the Registration Statements or the General Disclosure Package.
Deloitte
& Touche LLP ("ACCOUNTANTS"), who have reported on such
financial
statements and schedules, are independent accountants with respect
to
the Company as required by the Act and the Rules and Regulations
and
Rule 3600T of the Public Company Accounting Oversight Board
("PCAOB").
The summaries and selected consolidated financial and statistical
data
included in the Registration Statements present fairly the
information
shown therein and have been compiled on a basis consistent with
the
audited financial statements presented in the Registration
Statements.
(l) Absence of Changes. Subsequent to the respective dates as
of which information is given in the Registration Statements and
the
General Disclosure Package and prior to or on the Closing Date,
except
as set forth in or contemplated by the Registration Statements and
the
General Disclosure Package, (i) there has not been and will not
have
been any change in the capitalization of the Company (other than
in
connection with the grant or exercise of options to purchase the
Common
Stock granted pursuant to the Company's stock option plans from
the
shares reserved therefore, the conversion of convertible debt
outstanding on the date hereof into shares of Common Stock or
the
issuance of shares under the Company's existing employee stock
purchase
plan as described in the Registration Statements), or any
Material
Adverse Effect arising for any reason whatsoever, (ii) the Company
has
not incurred and will not incur, except in the ordinary course
of
business as described in the General Disclosure Package, any
material
liabilities or obligations, direct or contingent, the Company has
not
entered into and will not enter into, except in the ordinary course
of
business as described in the General Disclosure Package, any
material
transactions other than pursuant to this Agreement and the
transactions
referred to herein and (iii) the Company has not and will not have
paid
or declared any dividends or other distributions of any kind on
any
class of its capital stock.
6
<PAGE>
(m) Not An Investment Company. The Company is not, will not
become as a result of the transactions contemplated hereby, and
will
not conduct its business in a manner that would cause it to become,
an
"investment company" or an "affiliated person" of, or "promoter"
or
"principal underwriter" for, an "investment company," as such terms
are
defined in the Investment Company Act of 1940, as amended.
(n) Litigation. Except as disclosed in the General Disclosure
Package, there are no actions, suits or proceedings pending or, to
the
knowledge of the Company, threatened against or affecting the
Company
or any of its officers in their capacity as such, before or by
any
federal or state court, commission, regulatory body,
administrative
agency or other governmental body, domestic or foreign, wherein
an
unfavorable ruling, decision or finding would reasonably be
expected to
have a Material Adverse Effect.
(o) Absence of Existing Defaults and Conflicts. Neither the
Company nor any subsidiary is (i) in violation of any provision of
its
certificate of incorporation or bylaws, (ii) in default in any
respect,
and no event has occurred which, with notice or lapse of time or
both,
would constitute such a default, in the due performance or
observance
of any term, covenant, or condition of any indenture, contract,
lease,
mortgage, deed of trust, note agreement, loan agreement or
other
agreement, obligation, condition, covenant or instrument to which
it is
a party or by which it is bound or to which any of its property
or
assets is subject, or (iii) in violation in any respect of any
statute,
law, rule, regulation, ordinance, judgment, order or decree of
any
court, regulatory body, administrative agency, governmental
body,
arbitrator or other authority having jurisdiction over the Company,
any
subsidiary or any of their properties, as applicable, except,
with
respect to clauses (ii) and (iii), any violations or defaults
which,
individually or in the aggregate, would not reasonably be expected
to
have a Material Adverse Effect.
(p) Absence of Further Requirements. No consent, approval,
authorization or order of, or any filing or declaration with, any
court
or governmental agency or body is required for the consummation by
the
Company of the transactions on its part contemplated herein,
except
such as have been obtained under the Act or the Rules and
Regulations
and such as may be required under state securities or Blue Sky laws
or
the bylaws and rules of the National Association of Securities
Dealers,
Inc. ("NASD") or the NASDAQ Stock Market in connection with the
offering of the Offered Securities.
(q) Authorization; Absence of Defaults and Conflicts Resulting
from Transaction. The Company has full corporate power and
authority to
enter into this Agreement. This Agreement has been duly
authorized,
executed and delivered by the Company. The execution, delivery
and
performance of this Agreement and the consummation of the
transactions
contemplated hereby will not (i) result in the creation or
imposition
of any lien, charge or encumbrance upon any of the assets of
the
Company or any subsidiary of the Company pursuant to the terms
or
provisions of, or result in a breach or violation of any of the
terms
or provisions of, or conflict with or constitute a default under,
or
give any party a right to terminate any of its obligations under,
or
result in the acceleration of
7
<PAGE>
any
obligation under, (A) the certificate of incorporation or bylaws
of
the Company or any subsidiary of the Company, or (B) any
indenture,
mortgage, deed of trust, voting trust agreement, loan agreement,
bond,
debenture, note agreement or other evidence of indebtedness,
lease,
contract or other agreement or instrument to which the Company is
a
party or by which the Company, any subsidiary of the Company or any
of
their properties is bound or affected, except, in the case of
clause
(i)(B), any lien, breach, violation, conflict, default or
acceleration
that, would not, individually or in the aggregate, reasonably
be
expected to have a Material Adverse Effect, or (ii) violate or
conflict
with any judgment, ruling, decree, order, statute, rule or
regulation
of any court or other governmental agency or body applicable to
the
business or properties of the Company or any subsidiary of the
Company.
(r) Title to Property. The Company and its subsidiaries have
good and marketable title to all properties and assets described in
the
General Disclosure Package as owned by them, free and clear of
all
liens, charges, encumbrances or restrictions, except such as
are
described in the General Disclosure Package or are not material to
the
business of the Company or its subsidiaries. The Company has
valid,
subsisting and enforceable leases for the properties described in
the
General Disclosure Package as leased by it. The Company and its
subsidiaries own or lease all such properties as are necessary to
their
operations as now conducted or as proposed to be conducted,
except
where the failure to so own or lease would not reasonably be
expected
to have a Material Adverse Effect.
(s) Off Balance Sheet Interests and Contracts. There is no
document, contract, permit or instrument, affiliate transaction
or
off-balance sheet transaction (including, without limitation,
any
"variable interests" in "variable interest entities," as such terms
are
defined in Financial Accounting Standards Board Interpretation No.
46)
of a character required to be described in the Registration
Statements
or the General Disclosure Package or to be filed as an exhibit to
the
Registration Statements that is not described or filed as required.
All
such contracts described in the immediately preceding sentence to
which
the Company is a party have been duly authorized, executed and
delivered by the Company, constitute valid and binding agreements
of
the Company and are enforceable against and by the Company in
accordance with the terms thereof.
(t) Accuracy of Statements. No statement, representation,
warranty or covenant made by the Company in this Agreement or made
in
any certificate or document required by Section 7 of this Agreement
to
be delivered to the Underwriter was or will be, when made,
inaccurate,
untrue or incorrect in any material respect.
(u) Offering Material; Stabilization. The Company has not
distributed, and will not distribute prior to the Closing Date,
any
offering material in connection with the offering and sale of
the
Shares other than any preliminary prospectuses, any Permitted
Free
Writing Prospectus (as defined in Section 6 below), the Final
Prospectuses, the Registration Statements and other materials, if
any,
permitted by the Act. Neither the Company nor any of its
directors,
officers or controlling persons has taken, directly or
8
<PAGE>
indirectly, any action designed, or that might reasonably be
expected,
to cause or result, under the Act or otherwise, in, or that has
constituted, stabilization or manipulation of the price of any
security
of the Company to facilitate the sale or resale of the Offered
Securities.
(v) Registration Rights. No holder of securities of the
Company has rights to the registration of any securities of the
Company
because of the filing of the Registration Statement, which rights
have
not been waived by the holder thereof as of the date hereof.
(w) Listing. The Common Stock is registered under Section
12(g) of the Exchange Act and the Offered Securities have been
approved
for listing on the NASDAQ Global Market ("NGM"), subject to filing
with
The NASDAQ Stock Market of a Notification Form: Listing of
Additional
Shares.
(x) Possession of Intellectual Property. Except as disclosed
in or specifically contemplated by the General Disclosure Package,
(i)
the Company and its subsidiaries own or have adequate rights to
use, or
can acquire on reasonable terms, all trademarks, trade names,
domain
names, patents, patent rights, copyrights, technology, know-how
(including trade secrets and other unpatented or unpatentable
proprietary or confidential information, systems or
procedures),
service marks, trade dress rights, and other intellectual
property
(collectively, "INTELLECTUAL PROPERTY") and have such other
licenses,
approvals and governmental authorizations, in each case sufficient
to
conduct their business as now conducted and, with respect to
our
product candidates, as now proposed to be conducted (as described
in
the General Disclosure Package), and to the Company's knowledge,
none
of the
foregoing Intellectual Property rights owned or licensed by the
Company and its subsidiaries is invalid or unenforceable, (ii)
the
Company has no knowledge of any infringement by it or any
subsidiary of
Intellectual Property rights of others, where such infringement
could
reasonably be expected to have a Material Adverse Effect, (iii)
the
Company is not aware of any infringement, misappropriation or
violation
by others of, or conflict by others with rights of the Company or
any
subsidiary with respect to, any Intellectual Property that
could
reasonably be expected to have a Material Adverse Effect, (iv)
there is
no claim being made against the Company or any subsidiary or, to
the
knowledge of the Company, any employee of the Company or any
subsidiary, regarding Intellectual Property or other infringement
that
could reasonably be expected to have a Material Adverse Effect, and
(v)
neither the Company nor any subsidiary has received any notice
of
infringement with respect to any patent or any notice challenging
the
validity, scope or enforceability of any Intellectual Property
owned by
or licensed to the Company or any subsidiary, in each case the loss
of
which patent or Intellectual Property (or loss of rights thereto)
would
have a Material Adverse Effect.
(y) Taxes. The Company has filed all federal, state, local and
foreign
income tax returns that have been required to be filed and has
paid all taxes and assessments
9
<PAGE>
received by it to the extent that such taxes or assessments have
become
due. Except as disclosed in the General Disclosure Package, the
Company
has no tax deficiency that has been or, to the best knowledge of
the
Company, might be asserted or threatened against it that could
reasonably be expected to have a Material Adverse Effect.
(z) Permits and Licenses. The Company and its subsidiaries own
or possess all authorizations, approvals, orders, licenses,
registrations, other certificates and permits of and from all
governmental regulatory officials and bodies, necessary to conduct
its
businesses as contemplated in the General Disclosure Package,
except
where the failure to own or possess all such authorizations,
approvals,
orders, licenses, registrations, other certificates and permits
would
not reasonably be expected to have a Material Adverse Effect. There
is
no proceeding pending or, to the knowledge of the Company,
threatened
(or any basis therefor known to the Company) that may cause any
such
authorization, approval, order, license, registration, certificate
or
permit to be revoked, withdrawn, cancelled, suspended or not
renewed;
and the Company and its subsidiaries are conducting their business
in
compliance with all laws, rules and regulations applicable
thereto,
except where such noncompliance would not reasonably be expected
to
have a Material Adverse Effect.
(aa) FCPA Compliance. The Company has not and, to the
Company's knowledge, none of its employees or agents or the
employees
or agents of any subsidiary at any time during the last five years
have
(i) made any unlawful contribution to any candidate for foreign
office,
or failed to disclose fully any contributio
