Exhibit 1.1
INCYTE CORPORATION
Common Stock ($.001 par value per
share)
Underwriting
Agreement
September 24, 2009
Goldman, Sachs &
Co.,
As representative of the several
Underwriters
named in Schedule I
hereto,
85 Broad Street,
New York, New York 10004.
Ladies and Gentlemen:
Incyte Corporation, a Delaware
corporation (the “Company”), proposes, subject to the
terms and conditions stated herein, to issue and sell to the
Underwriters named in Schedule I hereto (the
“Underwriters”) an aggregate of 18,000,000 shares (the
“Firm Securities”) and, at the election of the
Underwriters, up to 2,700,000 additional shares (the
“Optional Securities”) of Common Stock, $.001 par value
per share (“Stock”) of the Company (the Firm Securities
and the Optional Securities that the Underwriters elect to purchase
pursuant to Section 2 hereof being collectively called the
“Securities”).
1.
The Company
represents and warrants to, and agrees with, each of the
Underwriters that:
(a)
A registration
statement on Form S-3 (File No. 333-157751) in respect of
the Securities has been filed with the Securities and Exchange
Commission (the “Commission”) not earlier than three
years prior to the date hereof; such registration statement, and
any post-effective amendment thereto, each in the form heretofore
delivered to you and, excluding exhibits thereto, but including all
documents incorporated by reference in the prospectus included
therein, delivered to you for each of the other Underwriters have
been declared effective by the Commission in such form; other than
a registration statement, if any, increasing the size of the
offering (a “Rule 462(b) Registration
Statement”), filed pursuant to Rule 462(b) under
the Securities Act of 1933, as amended (the “Act”),
which became effective upon filing, no other document with respect
to such registration statement or document incorporated by
reference therein has heretofore been filed, or transmitted for
filing, with the Commission (other than prospectuses filed pursuant
to Rule 424(b) of the rules and regulations of the
Commission under the Act, each in the form heretofore delivered to
you); and no stop order suspending the effectiveness of such
registration statement, any post-effective amendment thereto or any
part thereof or the Rule 462(b) Registration Statement,
if any, has been issued and no proceeding for that purpose has
been
initiated or
threatened by the Commission (the base prospectus filed as part of
such registration statement, in the form in which it has most
recently been filed with the Commission on or prior to the date of
this Agreement, is hereinafter called the “Basic
Prospectus”; any preliminary prospectus (including any
preliminary prospectus supplement) relating to the Securities filed
with the Commission pursuant to Rule 424(b) under the Act
is hereinafter called a “Preliminary Prospectus”; the
various parts of such registration statement and the
Rule 462(b) Registration Statement, if any, including all
exhibits thereto and including any prospectus supplement relating
to the Securities that is filed with the Commission and deemed by
virtue of Rule 430B to be part of such registration statement,
each as amended at the time such part of the registration statement
or such part of the Rule 462(b) Registration Statement,
if any, became effective, are hereinafter collectively called the
“Registration Statement”; the Basic Prospectus, as
amended and supplemented immediately prior to the Applicable Time
(as defined in Section 1(c) hereof), is hereinafter
called the “Pricing Prospectus”; the form of the final
prospectus relating to the Securities filed with the Commission
pursuant to Rule 424(b) under the Act in accordance with
Section 5(a) hereof is hereinafter called the
“Prospectus”; any reference herein to the Basic
Prospectus, the Pricing Prospectus, any Preliminary Prospectus or
the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the Act, as of the date of such prospectus; any
reference to any amendment or supplement to the Basic Prospectus,
any Preliminary Prospectus or the Prospectus shall be deemed to
refer to and include any post-effective amendment to the
Registration Statement, any prospectus supplement relating to the
Securities filed with the Commission pursuant to
Rule 424(b) under the Act and any documents filed under
the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), and incorporated therein, in each case
after the date of the Basic Prospectus, such Preliminary
Prospectus, or the Prospectus, as the case may be; any reference to
any amendment to the Registration Statement shall be deemed to
refer to and include any annual report of the Company filed
pursuant to Section 13(a) or 15(d) of the Exchange
Act after the effective date of the Registration Statement that is
incorporated by reference in the Registration Statement; and any
“issuer free writing prospectus” as defined in
Rule 433 under the Act relating to the Securities is
hereinafter called an “Issuer Free Writing
Prospectus”);
(b)
No order
preventing or suspending the use of any Preliminary Prospectus or
any Issuer Free Writing Prospectus has been issued by the
Commission, and each Preliminary Prospectus, at the time of filing
thereof, conformed in all material respects to the requirements of
the Act and the rules and regulations of the Commission
thereunder, and did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to
any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by an
Underwriter through Goldman, Sachs & Co. expressly for use
therein;
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(c)
For the purposes
of this Agreement, the “Applicable Time” is
5:45 p.m. (Eastern time) on the date of this Agreement.
The Pricing Prospectus as supplemented by the Issuer Free Writing
Prospectus listed on Schedule II(a) hereto when taken together
with the price to the public and the number of Securities to be set
forth on the cover of the Prospectus, as of the Applicable
Time, did
not include any untrue statement of a material fact or omit 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; and each Issuer Free Writing Prospectus
listed on Schedule II(a) hereto does not conflict with
the information contained in the Registration Statement, the
Pricing Prospectus or the Prospectus and each such Issuer Free
Writing Prospectus, as supplemented by and taken together with the
Pricing Prospectus as of the Applicable Time, when taken together
with the price to the public and the number of Securities to be set
forth on the cover of the Prospectus did not include any untrue
statement of a material fact or omit 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;
provided, however, that this representation and warranty shall not
apply to statements or omissions made in an Issuer Free Writing
Prospectus in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter through
Goldman, Sachs & Co. expressly for use
therein;
(d)
The documents
incorporated by reference in the Pricing Prospectus and the
Prospectus, when they became effective or were filed with the
Commission, as the case may be, conformed in all material respects
to the requirements of the Act or the Exchange Act, as applicable,
and the rules and regulations of the Commission thereunder,
and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading; any further documents so filed and incorporated by
reference in the Prospectus or any further amendment or supplement
thereto, when such documents become effective or are filed with the
Commission, as the case may be, will conform in all material
respects to the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission
thereunder and will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by
an Underwriter through Goldman, Sachs & Co. expressly for
use therein; and no such documents were filed with the Commission
since the Commission’s close of business on the business day
immediately prior to the date of this Agreement and prior to the
execution of this Agreement, except as set forth on Schedule
II(b) hereto;
(e)
The Registration
Statement conforms, and the Prospectus and any further amendments
or supplements to the Registration Statement and the Prospectus
will conform, in all material respects to the requirements of the
Act and the rules and regulations of the Commission thereunder
and do not and will not, as of the applicable effective date as to
each part of the Registration Statement and as of the applicable
filing date as to the Prospectus and any
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amendment or
supplement thereto, contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided,
however, that this representation and warranty shall not apply to
any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by an
Underwriter through Goldman, Sachs & Co. expressly for use
therein;
(f)
Neither the
Company nor any of its subsidiaries has sustained since the date of
the latest audited financial statements included or incorporated by
reference in the Pricing Prospectus any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Pricing Prospectus; and,
since the respective dates as of which information is given in the
Registration Statement and the Pricing Prospectus, there has not
been any change in the capital stock (excluding stock option grants
in the ordinary course of business pursuant to the Company’s
stock option plans as in existence on the date hereof, the issuance
of Stock pursuant to the Company’s employee stock purchase
plan and the exercise of any stock options outstanding on the date
hereof) or long term debt of the Company or any of its subsidiaries
or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general
affairs, management, financial position, stockholders’ equity
or results of operations of the Company and its subsidiaries taken
as a whole (a “Material Adverse Effect”), otherwise
than as set forth or contemplated in the Pricing
Prospectus;
(g)
The Company and
its subsidiaries have good and marketable title to all personal
property owned by them, in each case free and clear of all liens,
encumbrances and defects except such as are described in the
Pricing Prospectus or such as do not materially affect the value of
such property and do not materially interfere with the use made and
proposed to be made of such property by the Company and its
subsidiaries; and any real property and buildings held under lease
by the Company and its subsidiaries, neither of which hold title to
any real property, are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do
not interfere with the use made and proposed to be made of such
property and buildings by the Company and its
subsidiaries;
(h)
The Company has
been duly incorporated and is validly existing as a corporation in
good standing under the laws of the State of Delaware, with power
and authority (corporate and other) to own its properties and
conduct its business as described in the Pricing Prospectus, and
has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of
each other jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification, or is
subject to no material liability or disability by reason of the
failure to be so qualified in any such jurisdiction; and each
subsidiary of the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation and none of the Company’s
subsidiaries are significant subsidiaries, as such term is defined
in Rule 1-02(w) of Regulation S-X;
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(i)
The Company will
have an authorized capitalization as set forth in the Pricing
Prospectus as of the First Time of Delivery and all of the issued
shares of capital stock of the Company have been duly and validly
authorized and issued and are fully paid and non-assessable and
conform to the description of the Stock contained in the Pricing
Prospectus and Prospectus; and all of the issued shares of capital
stock of each subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and
(except for directors’ qualifying shares and except as
otherwise set forth in the Pricing Prospectus) are owned directly
or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims;
(j)
The unissued
Securities have been duly and validly authorized and, when issued
and delivered against payment therefor as provided herein, will be
duly and validly issued and fully paid and non-assessable and will
conform to the description of the Securities contained in the
Pricing Prospectus and Prospectus;
(k)
The issue and
sale of the Securities and the compliance by the Company with this
Agreement and the consummation of the transactions herein
contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which the Company or any
of its subsidiaries is bound or to which any of the property or
assets of the Company or any of its subsidiaries is subject, other
than conflicts, breaches, violations or defaults that would not,
individually or in the aggregate, have a Material Adverse Effect,
nor will such action result in any violation of the provisions of
the Certificate of Incorporation or By-laws of the Company or any
statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or
any of its subsidiaries or any of their properties; and no consent,
approval, authorization, order, registration or qualification of or
with any such court or governmental agency or body is required for
the issue and sale of the Securities or the consummation by the
Company of the transactions contemplated by this Agreement except
such as have been obtained under the Act and such consents,
approvals, authorizations, registrations or qualifications as may
be required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Securities by the
Underwriters;
(l)
Neither the
Company nor any of its subsidiaries is in violation of its
Certificate of Incorporation or By-laws or in default in the
performance or observance of any obligation, covenant or condition
contained in any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which it is a
party or by which it or any of its properties may be bound, other
than any such defaults under such indentures, mortgages, deeds of
trusts, loan agreements, leases or other agreements or instruments
which would not, individually or in the aggregate, have a Material
Adverse Effect;
(m)
The statements
set forth in the Pricing Prospectus and Prospectus under the
caption “Description of Capital Stock”, insofar as they
purport to constitute a summary of the terms of the Stock,
and under the caption “Underwriting”, insofar as they
purport to summarize the terms of this Agreement
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and the Lock-Up
Agreements (as defined in Section 8(k) hereof), are
accurate, complete and fair;
(n)
Other than as set
forth in the Pricing Prospectus, there are no legal or governmental
proceedings pending to which the Company or any of its subsidiaries
is a party or of which any property of the Company or any of its
subsidiaries is the subject which, if determined adversely to the
Company or any of its subsidiaries, would individually or in the
aggregate have a Material Adverse Effect; and, to the best of the
Company’s knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by
others;
(o)
The Company is
not and, after giving effect to the offering and sale of the
Securities and the application of the proceeds thereof, will not be
an “investment company”, as such term is defined in the
Investment Company Act of 1940, as amended (the “Investment
Company Act”);
(p)
At the earliest
time after the filing of the Registration Statement that the
Company or another offering participant made a bona fide offer
(within the meaning of Rule 164(h)(2) under the Act) of
the Securities, the Company was not an “ineligible
issuer” as defined in Rule 405 under the
Act;
(q)
Ernst &
Young LLP, who have certified certain financial statements of the
Company and its subsidiaries, and have audited the Company’s
internal control over financial reporting, are independent public
accountants as required by the Act and the rules and
regulations of the Commission thereunder;
(r)
The Company
maintains a system of internal control over financial reporting (as
such term is defined in Rule 13a-15(f) under the Exchange
Act) that complies with the requirements of the Exchange Act and
has been designed by the Company’s principal executive
officer and principal financial officer, or under their
supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally
accepted accounting principles. The Company’s internal
control over financial reporting was effective as of
December 31, 2008 and the Company is not aware of any material
weaknesses or significant deficencies in its internal control over
financial reporting;
(s)
Since the date of
the latest audited financial statements included or incorporated by
reference in the Pricing Prospectus, there has been no change in
the Company’s internal control over financial reporting that
has materially affected, or is reasonably likely to materially
affect, the Company’s internal control over financial
reporting;
(t)
The Company
maintains disclosure controls and procedures (as such term is
defined in Rule 13a-15(e) under the Exchange Act) that
comply with the requirements of the Exchange Act; such disclosure
controls and procedures have been designed to ensure that material
information relating to the Company and its subsidiaries is made
known to the Company’s principal executive officer and
principal financial officer by others within those entities; such
disclosure controls and procedures were effective as of
June 30, 2009; and no facts or
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events have come
to the Company’s attention that would cause it to believe
that such disclosure controls and procedures were not effective as
of the date hereof;
(u)
Except as
described in the Pricing Prospectus, the Company and its
subsidiaries possess all certificates, authorizations and permits
issued by the appropriate federal, state or foreign regulatory
authorities necessary to conduct their respective businesses,
including without limitation all such certificates, authorizations
and permits required by the United States Food and Drug
Administration (the “FDA”), the United States Drug
Enforcement Agency or any other federal, state or foreign agencies
or bodies engaged in the regulation of pharmaceuticals or
biohazardous materials, except where the failure so to possess
would not, individually or in the aggregate, have a Material
Adverse Effect, and neither the Company nor any of its subsidiaries
has received any notice of proceedings relating to the revocation
or modification of any such certificate, authorization or
permit;
(v)
To the knowledge
of the Company, (i) the Company owns or has the right to use,
or believes it can acquire on reasonable terms, adequate rights to
the patents and patent applications, copyrights, trademarks,
service marks, trade names, service names and know-how (including
trade secrets and other unpatented and/or unpatentable proprietary
or confidential information, systems or procedures) necessary or
used in any material respect to conduct the business of the Company
in the manner described in the Pricing Prospectus (collectively,
the “Company Intellectual Property”) and (ii) all
such rights that the Company currently owns or has the right to use
are valid and enforceable. Except as described in the Pricing
Prospectus (i) the Company has not received any notice of
infringement or conflict with asserted rights of others with
respect to any Company Intellectual Property, (ii) the Company
is not obligated to pay a royalty, grant a license, or provide
other consideration to any third party in connection with the
Company Intellectual Property (iii) the discoveries,
inventions, products or processes of the Company referred to in the
Pricing Prospectus do not, to the knowledge of the Company,
infringe, interfere or conflict with any right or valid patent
claim of any third party, (iv) to the knowledge of the
Company, no third party has any ownership right in or to any
Company Intellectual Property that is owned by the Company, other
than any co-owner of any patent constituting Company Intellectual
Property who is listed on the records of the United States Patent
and Trademark Office (the “PTO”) and any co-owner of
any patent application constituting Company Intellectual Property
who is named in such patent application, (v) to the knowledge
of the Company, no third party has any ownership right in or to any
Company Intellectual Property that is licensed to the Company,
other than any licensor to the Company of such Company Intellectual
Property, and, (vi) to the knowledge of the Company, no
current employee of the Company is in or has ever been in violation
of any term of any employment contract, patent disclosure
agreement, invention assignment agreement, non-competition
agreement, non-solicitation agreement, nondisclosure agreement or
any restrictive covenant to or with a former employer where the
basis of such violation relates to such employee’s employment
with the Company, or actions undertaken by the employee while
employed with the Company, except as, in the case of each of
clauses (i) and (ii), would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect;
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(w)
All patent
applications owned by the Company and filed with the PTO or any
foreign or international patent authority that have resulted in
patents or currently pending applications that describe inventions
necessary to conduct the business of the Company in the manner
described in the Pricing Prospectus (the “Company Patent
Applications”) have been duly and properly filed; the Company
has complied with its duty of candor and disclosure to the PTO for
the Company Patent Applications; the Company is not aware of any
facts required to be disclosed to the PTO that were not disclosed
to the PTO and which would preclude the grant of a patent for the
Company Patent Applications; and the Company has no knowledge of
any facts which would preclude it from having clear title to the
Company Patent Applications that have been identified by the
Company as being exclusively owned by the Company;
(x)
The studies,
tests and preclinical and clinical trials conducted by or on behalf
of the Company, or in which the Company has participated, that are
described in the Pricing Prospectus were and, if still pending,
are, to the Company’s knowledge, being conducted in all
material respects in accordance with experimental protocols,
procedures and controls pursuant to, where applicable, accepted
professional and scientific standards and applicable laws,
including, without limitation, the Federal Food, Drug and Cosmetic
Act and the rules and regulations promulgated thereunder; the
descriptions of the results of such studies, tests and trials
contained in the Pricing Prospectus are accurate and complete in
all material respects and fairly present the data derived from such
studies, tests or trials in all material respects; the Company has
no knowledge of any studies, tests or trials not described in the
Pricing Prospectus the results of which reasonably call into
question in any material respect the results of the studies, tests
and trials described in the Pricing Prospectus; and the Company has
not received any notices or correspondence from the FDA or any
foreign, state or local governmental body exercising comparable
authority or any Institutional Review Board or comparable authority
requiring the termination, suspension or material modification of
any material studies, tests or preclinical or clinical trials
conducted by or on behalf of the Company;
(y)
To the knowledge
of the Company the operations of the Company and its subsidiaries
are and have been conducted at all times in compliance with
applicable Currency and Foreign Transactions Reporting Act of 1970,
as amended, applicable money laundering statutes and applicable
rules and regulations thereunder (collectively, the
“Money Laundering Laws”), and no action, suit or
proceeding by or before any court or governmental agency, authority
or body or any arbitrator involving the Company or any or its
subsidiaries with respect to the Money Laundering Laws is pending
or, to the Company’s knowledge, threatened;
(z)
To the knowledge
of the Company neither the Company nor any of its subsidiaries nor
any director, officer, agent, employee or affiliate of the Company
or any of its subsidiaries is aware of or has taken any action,
directly or indirectly, that would result in a violation by such
persons of the Foreign Corrupt Practices Act of 1977, as amended,
and the rules and regulations thereunder (the
“FCPA”), including, without limitation, making use of
the mails or any means or instrumentality of interstate commerce
corruptly in furtherance of an offer, payment, promise to pay or
authorization of the payment of any money, or other
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property, gift,
promise to give, or authorization of the giving of anything of
value to any “foreign official” (as such term is
defined in the FCPA) or any foreign political party or official
thereof or any candidate for foreign political office, in
contravention of the FCPA and the Company, its subsidiaries and its
affiliates have conducted their businesses in compliance with the
FCPA and have instituted and maintain policies and procedures
designed to ensure, and which are reasonably expected to continue
to ensure, continued compliance therewith; and
(aa)
To the knowledge
of the Company neither the Company nor any director, officer,
agent, employee or affiliate of the Company is currently subject to
any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Treasury Department (“OFAC”). The
Company will not directly or indirectly use the proceeds of the
offering, or lend, contribute or otherwise make available such
proceeds to any subsidiary, joint venture partner or other person
or entity, for the purpose of financing the activities of any
person currently subject to any U.S. sanctions administered by
OFAC, except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse
Effect.
2.
Subject to the
terms and conditions herein set forth, (a) the Company agrees
to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from
the Company, at a purchase price per share of $6.4125, the number
of Firm Securities set forth opposite
the name of such Underwriter in Schedule I hereto and (b) in
the event and to the extent that the Underwriters shall exercise
the election to purchase Optional Securities as provided below, the
Company agrees to issue and sell to each of the Underwriters, and
each of the Underwriters agrees, severally and not jointly, to
purchase from the Company, at the purchase price per share set
forth in clause (a) of this Section 2, that portion of
the number of Optional Securities as to which such election shall
have been exercised (to be adjusted by you so as to eliminate
fractional shares) determined by multiplying such number of
Optional Securities by a fraction, the numerator of which is the
maximum number of Optional Securities which such Underwriter is
entitled to purchase as set forth opposite the name of such
Underwriter in Schedule I hereto and the denominator of which is
the maximum number of Optional Securities that all of the
Underwriters are entitled to purchase hereunder.
The Company
hereby grants to the Underwriters the right to purchase at their
election up to 2,700,000 Optional Securities, at the purchase price
per share set forth in the paragraph above, for the sole purpose of
covering sales of shares in excess of the number of Firm
Securities, provided that the purchase price per Optional Share
shall be reduced by an amount per share equal to any dividends or
distributions declared by the Company and payable on the Firm
Securities but not payable on the Optional Securities. Any
such election to purchase Optional Securities may be exercised only
by written notice from you to the Company, given within a period of
30 calendar days after the date of this Agreement, setting forth
the aggregate number of Optional Securities to be purchased and the
date on which such Optional Se
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