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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
INHALE THERAPEUTIC SYSTEMS
------------------------------------------
(Name of Issuer)
Common Stock, No Par Value
--------------------------------
(Title of Class of Securities)
457191104
-------------------
(CUSIP Number)
Stephen M. Vine, Esq.
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
399 Park Avenue
New York, New York 10022
(212) 872-1000
-------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
February 7, 1997
----------------------------
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [_].
Check the following box if a fee is being paid with the statement [_].** (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7)
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d- 1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter disclosure
provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
Continued on following page(s)
Page 1 of 14 Pages
Exhibit Index: Page 11
- -----------------
** A filing fee is not being paid with this statement pursuant to SEC
Release No. 33-7331 whereby the filing fee has been eliminated for
Schedule 13D.
Page 2 of 14 Pages
SCHEDULE 13D
CUSIP No. 457191104
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Soros Fund Management LLC
2 Check the Appropriate Box If a Member of a Group*
a. [_]
b. [x]
3 SEC Use Only
4 Source of Funds*
AF
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) [_]
6 Citizenship or Place of Organization
Delaware
7 Sole Voting Power
Number of 750,000
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 750,000
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
750,000
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
[_]
13 Percent of Class Represented By Amount in Row (11)
5.50%
14 Type of Reporting Person*
OO; IA
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 3 of 14 Pages
SCHEDULE 13D
CUSIP No. 457191104
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
George Soros (in the capacity described herein)
2 Check the Appropriate Box If a Member of a Group*
a. [_]
b. [x]
3 SEC Use Only
4 Source of Funds*
AF
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) [_]
6 Citizenship or Place of Organization
United States
7 Sole Voting Power
Number of 0
Shares
Beneficially 8 Shared Voting Power
Owned By 750,000
Each
Reporting 9 Sole Dispositive Power
Person 0
With
10 Shared Dispositive Power
750,000
11 Aggregate Amount Beneficially Owned by Each Reporting Person
750,000
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
[_]
13 Percent of Class Represented By Amount in Row (11)
5.50%
14 Type of Reporting Person*
IA
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 4 of 14 Pages
SCHEDULE 13D
CUSIP No. 457191104
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Stanley F. Druckenmiller (in the capacity described herein)
2 Check the Appropriate Box If a Member of a Group*
a. [_]
b. [x]
3 SEC Use Only
4 Source of Funds*
AF
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) [_]
6 Citizenship or Place of Organization
United States
7 Sole Voting Power
Number of 0
Shares
Beneficially 8 Shared Voting Power
Owned By 750,000
Each
Reporting 9 Sole Dispositive Power
Person 0
With
10 Shared Dispositive Power
750,000
11 Aggregate Amount Beneficially Owned by Each Reporting Person
750,000
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
[_]
13 Percent of Class Represented By Amount in Row (11)
5.50%
14 Type of Reporting Person*
IA
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 5 of 14 Pages
This Statement on Schedule 13D relates to shares of Common Stock,
no par value (the "Shares"), of Inhale Therapeutic Systems (the "Issuer"). This
Statement is being filed by the Reporting Persons (as defined herein) to report
recent acquisitions of Shares of the Issuer as a result of which the Reporting
Persons may be deemed to be the beneficial owners of more than 5% of the
outstanding Shares.
Item 1. Security and Issuer.
This Statement relates to the Shares. The address of the
principal executive offices of the Issuer is 1001 East Meadow Circle, Palo Alto,
California 94303.
Item 2. Identity and Background.
This statement is being filed by Soros Fund Management LLC, a
Delaware limited liability Company ("SFM LLC"), Mr. George Soros ("Mr. Soros")
and Mr. Stanley F. Druckenmiller ("Mr. Druckenmiller", and together with SFM LLC
and Mr. Soros, the "Reporting Persons"). This statement relates to Shares held
for the account of Quantum Partners (as defined herein).
The business of SFM LLC is managed through a Management Committee
(the "Management Committee") comprised of Mr. Soros, Mr. Druckenmiller and Mr.
Gary Gladstein. SFM LLC, a Delaware limited liability company, has its principal
office at 888 Seventh Avenue, 33rd Floor, New York, New York 10106. Its
principal business is to serve, pursuant to contract, as the principal
investment manager to several foreign investment companies, including Quantum
Partners (the "SFM Clients"). SFM LLC has been granted investment discretion
over portfolio investments, including the Shares, held for the account of
Quantum Partners LDC, a Cayman Islands exempted limited duration company
("Quantum Partners") and Quantum Fund N.V., a Netherlands Antilles company
("Quantum Fund"). Quantum Partners is the principal operating subsidiary of
Quantum Fund. Each of Quantum Fund and Quantum Partners has its principal office
at Kaya Flamboyan 9, Willemstad, Curacao, Netherlands Antilles. SFM LLC's
contracts with the SFM Clients generally provide that SFM LLC is responsible for
designing and implementing the SFM Clients' overall investment strategies; for
conducting direct portfolio management strategies to the extent that SFM LLC
determines that it is appropriate to utilize its own portfolio management
capabilities; for selecting, evaluating and monitoring other investment advisors
who manage separate portfolios on behalf of the SFM Clients; and for allocating
and reallocating the SFM Clients' assets among the outside managers and itself.
Mr. Soros, as Chairman of SFM LLC, has the ability to direct the
investment decisions of SFM LLC and as such may be deemed to have investment
discretion over the Shares held for the accounts of the SFM Clients. Mr.
Druckenmiller, as Lead Portfolio Manager of SFM LLC, has the ability to direct
the investment decisions of SFM LLC and as such may be deemed to have investment
discretion over the Shares held for the accounts of the SFM Clients. Set forth
in Annex A hereto and incorporated by reference in response to this Item 2 and
elsewhere in this Schedule 13D as applicable is a list of the Managing Directors
of SFM LLC (the executive officers of SFM LLC).
The principal occupation of Mr. Soros, a United States citizen,
is his direction of the activities of SFM LLC, which is carried out in his
capacity as Chairman of SFM LLC at SFM LLC's principal office.
Page 6 of 14 Pages
The principal occupation of Mr. Druckenmiller, a United States
citizen, is his position as Lead Portfolio Manager and a Member of the
Management Committee of SFM LLC, which is carried out at SFM LLC's principal
office.
Pursuant to regulations promulgated under Section 13(d) of the
Act, SFM LLC, Mr. Soros, in his capacity as Chairman of SFM LLC, and Mr.
Druckenmiller, in his capacity as Lead Portfolio Manager of SFM LLC, each may be
deemed a beneficial owner of the Shares held for the account of Quantum Partners
as a result of the contractual authority of SFM LLC to exercise voting and
dispositive power with respect to such Shares.
During the past five years, none of the Reporting Persons,
Quantum Partners and, to the best of the Reporting Persons' knowledge, any other
person identified in response to this Item 2 has been (a) convicted in a
criminal proceeding, or (b) a party to any civil proceeding as a result of which
it or he has been subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws, or finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
Quantum Partners expended $13,500,000 of its working capital to
purchase the Shares reported herein as being acquired in the last 60 days.
The Shares reported herein were acquired pursuant to the terms of
Stock Purchase Agreement dated January 28, 1997 (the "Stock Purchase Agreement")
between the Issuer and Quantum Partners, a form of which is Exhibit D hereto and
incorporated herein by reference. The terms of the Stock Purchase Agreement
described below are qualified in their entirety by the specific provisions of
such agreement. Under the Stock Purchase Agreement, Quantum Partners' obligation
to purchase the Shares was conditioned upon a registration statement covering
the Shares becoming effective under the Securities Act of 1933, as amended (the
"Securities Act"). On February 7, 1997, the Issuer's registration statement on
Form S-3 covering such Shares was declared effective under the Securities Act,
and on the same date Quantum Partners paid the Issuer the purchase price for the
Shares. In the Stock Purchase Agreement, Quantum Partners made certain covenants
to the Issuer in which Quantum Partners agreed to certain provisions relating to
the transfer of the Shares, which provisions were intended to ensure that any
such transfer would be in compliance with the Securities Act.
The Shares held for the accounts of Quantum Partners and/or other
SFM Clients may be held through margin accounts maintained with brokers, which
extend margin credit as and when required to open or carry positions in their
margin accounts, subject to applicable federal margin regulations, stock
exchange rules and such firms' credit policies. The Shares which may be held in
the margin accounts are pledged as collateral security for the repayment of
debit balances in the respective accounts.
Item 4. Purpose of Transaction.
All of the Shares reported herein as having been acquired for or
disposed of from the account of Quantum Partners were acquired or disposed of
for investment purposes. Neither Quantum Partners, the Reporting Persons nor, to
the best of their knowledge, any of the other individuals identified in response
to Item 2, has any plans or proposals that relate to or would result in any of
the transactions described in subparagraphs (a) through (j) of Item 4 of
Schedule 13D.
Page 7 of 14 Pages
Mr. Soros, Mr. Druckenmiller and SFM LLC reserve the right to
acquire, or cause to be acquired, additional securities of the Issuer, to
dispose of, or cause to be disposed, such securities at any time or to formulate
other purposes, plans or proposals regarding the Issuer or any of its
securities, to the extent deemed advisable in light of general investment and
trading policies of the SFM Clients, market conditions or other factors.
Item 5. Interest in Securities of the Issuer.
(a) Each of SFM LLC, Mr. Druckenmiller and Mr. Soros may be
deemed the beneficial owner of the 750,000 Shares held for the account of
Quantum Partners (approximately 5.50% of the total number of Shares
outstanding).
(b) (i) Pursuant to the terms of the contract between Quantum
Fund and SFM LLC, SFM LLC may be deemed to have sole power to direct the voting
and disposition of the 750,000 Shares held for the account of Quantum Partners.
(ii) Pursuant to the terms of the contract between Quantum
Fund and SFM LLC and as a result of the positions held by Mr. Soros and Mr.
Druckenmiller with SFM LLC, each of Mr. Soros and Mr. Druckenmiller may be
deemed to have shared power to direct the voting and disposition of the 750,000
Shares held for the account of Quantum Partners.
(c) Except for the transactions described in Item 3 and Item 6
hereof, there have been no transactions with respect to the Shares since
December 20, 1996 (60 days prior to the date hereof) by any of the Reporting
Persons or Quantum Partners.
(d) The shareholders of Quantum Partners, including Quantum Fund,
have the right to participate in the receipt of dividends from, or proceeds from
the sale of, the Shares held for the account of Quantum Partners in accordance
with their ownership interests in Quantum Partners.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
As disclosed in Item 3 hereto, in connection with its acquisition
of the Shares reported herein, Quantum Partners entered into the Stock Purchase
Agreement attached hereto as Exhibit D and incorporated herein by reference.
From time to time each of the Reporting Persons, Quantum Partners
and/or other SFM Clients may lend portfolio securities to brokers, banks or
other financial institutions. These loans typically obligate the borrower to
return the securities, or an equal amount of securities of the same class, to
the lender and typically provide that the borrower is entitled to exercise
voting rights and to retain dividends during the term of the loan. From time to
time to the extent permitted by applicable law, each of such persons or entities
may borrow securities, including the Shares, for the purpose of effecting, and
may effect, short sale transactions, and may purchase securities for the purpose
of closing out short positions in such securities.
Page 8 of 14 Pages
Except as set forth herein, the Reporting Persons, Quantum
Partners and/or the other SFM Clients do not have any contracts, arrangements,
understandings or relationships with respect to any securities of the Issuer.
Item 7. Material to be Filed as Exhibits.
A. Power of Attorney dated as of January 1, 1997 granted by Mr. Soros
in favor of Mr. Sean C. Warren and Mr. Michael C. Neus.
B. Power of Attorney dated as of January 1, 1997 granted by Mr.
Druckenmiller in favor of Mr. Sean C. Warren and Mr. Michael C. Neus.
C. Joint Filing Agreement dated February 18, 1997 by and among SFM
LLC, Mr. Soros and Mr. Druckenmiller.
D. Form of Stock Purchase Agreement between the Issuer and Quantum
Partners dated January 28, 1997 (filed as Exhibit 4.10 to the Issuer's
Registration Statement on Form S-3 (Registration No. 333-20787) and incorporated
by reference).
Page 9 of 14 Pages
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
Date: February 18, 1997
SOROS FUND MANAGEMENT LLC
By: /S/ MICHAEL C. NEUS
----------------------------------
Michael C. Neus
Assistant General Counsel
GEORGE SOROS
By: /S/ MICHAEL C. NEUS
----------------------------------
Michael C. Neus
Attorney-in-Fact
STANLEY F. DRUCKENMILLER
By: /S/ MICHAEL C. NEUS
----------------------------------
Michael C. Neus
Attorney-in-Fact
Page 10 of 14 Pages
ANNEX A
The following is a list of all of the persons (other than Stanley
Druckenmiller) who serve as Managing Directors of SFM LLC:
Scott K. H. Bessent
Walter Burlock
Brian J. Corvese
Jeffrey L. Feinberg
Arminio Fraga
Gary Gladstein
Robert K. Jermain
David N. Kowitz
Alexander C. McAree
Paul McNulty
Gabriel S. Nechamkin
Steven Okin
Dale Precoda
Lief D. Rosenblatt
Mark D. Sonnino
Filiberto H. Verticelli
Sean C. Warren
Each of the above-listed persons is a United States citizen whose principal
occupation is serving as Managing Director of SFM LLC, and each has a business
address c/o Soros Fund Management LLC, 888 Seventh Avenue, 33rd Floor, New York,
New York 10106.
To the best of the Reporting Persons' knowledge:
(a) None of the above persons hold any Shares.
(b) None of the above persons has any contracts, arrangements,
understandings or relationships with respect to the Shares.
Page 11 of 14 Pages
EXHIBIT INDEX
Page No.
--------
A. Power of Attorney dated as of January 1, 1997 granted by Mr.
George Soros in favor of Mr. Sean C. Warren and Mr. Michael
C. Neus............................................................ 12
B. Power of Attorney dated as of January 1, 1997 granted by Mr.
Stanley F. Druckenmiller in favor of Mr. Sean C. Warren and
Mr. Michael C. Neus.................................................13
C. Joint Filing Agreement dated February 18, 1997 by and among
Soros Fund Management LLC, Mr. George Soros and Mr. Stanley
F. Druckenmiller....................................................14
Page 12 of 14 Pages
EXHIBIT A
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, GEORGE SOROS, hereby make, constitute
and appoint each of SEAN C. WARREN and MICHAEL C. NEUS, acting individually, as
my agent and attorney-in-fact for the purpose of executing in my name, (a) in my
personal capacity or (b) in my capacity as Chairman of, member of or in other
capacities with Soros Fund Management LLC, all documents, certificates,
instruments, statements, filings and agreements ("documents") to be filed with
or delivered to any foreign or domestic governmental or regulatory body or
required or requested by any other person or entity pursuant to any legal or
regulatory requirement relating to the acquisition, ownership, management or
disposition of securities or other investments, and any other documents relating
or ancillary thereto, including but not limited to, all documents relating to
filings with the United States Securities and Exchange Commission (the "SEC")
pursuant to the Securities Act of 1933 or the Securities Exchange Act of 1934
(the "Act") and the rules and regulations promulgated thereunder, including: (1)
all documents relating to the beneficial ownership of securities required to be
filed with the SEC pursuant to Section 13(d) or Section 16(a) of the Act
including, without limitation: (a) any acquisition statements on Schedule 13D or
Schedule 13G and any amendments thereto, (b) any joint filing agreements
pursuant to Rule 13d-1(f) and (c) any initial statements of, or statements of
changes in, beneficial ownership of securities on Form 3, Form 4 or Form 5 and
(2) any information statements on Form 13F required to be filed with the SEC
pursuant to Section 13(f) of the Act.
All past acts of the attorney-in-fact in furtherance of the foregoing are hereby
ratified and confirmed.
This power of attorney shall be valid from the date hereof until revoked by me.
IN WITNESS WHEREOF, I have executed this instrument as of the 1st day of
January, 1997.
/s/ George Soros
--------------------------------------------
GEORGE SOROS
Page 13 of 14 Pages
EXHIBIT B
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, STANLEY F. DRUCKENMILLER, hereby make,
constitute and appoint each of SEAN C. WARREN and MICHAEL C. NEUS, acting
individually, as my agent and attorney-in-fact for the purpose of executing in
my name, (a) in my personal capacity or (b) in my capacity as Lead Portfolio
Manager of, member of or in other capacities with Soros Fund Management LLC, all
documents, certificates, instruments, statements, filings and agreements
("documents") to be filed with or delivered to any foreign or domestic
governmental or regulatory body or required or requested by any other person or
entity pursuant to any legal or regulatory requirement relating to the
acquisition, ownership, management or disposition of securities or other
investments, and any other documents relating or ancillary thereto, including
but not limited to, all documents relating to filings with the United States
Securities and Exchange Commission (the "SEC") pursuant to the Securities Act of
1933 or the Securities Exchange Act of 1934 (the "Act") and the rules and
regulations promulgated thereunder, including: (1) all documents relating to the
beneficial ownership of securities required to be filed with the SEC pursuant to
Section 13(d) or Section 16(a) of the Act including, without limitation: (a) any
acquisition statements on Schedule 13D or Schedule 13G and any amendments
thereto, (b) any joint filing agreements pursuant to Rule 13d-1(f) and (c) any
initial statements of, or statements of changes in, beneficial ownership of
securities on Form 3, Form 4 or Form 5 and (2) any information statements on
Form 13F required to be filed with the SEC pursuant to Section 13(f) of the Act.
All past acts of the attorney-in-fact in furtherance of the foregoing are hereby
ratified and confirmed.
This power of attorney shall be valid from the date hereof until revoked by me.
IN WITNESS WHEREOF, I have executed this instrument as of the 1st day of
January, 1997.
/s/ Stanley F. Druckenmiller
--------------------------------------------
STANLEY F. DRUCKENMILLER
Page 14 of 14 Pages
EXHIBIT C
JOINT FILING AGREEMENT
The undersigned hereby agree that the statement on Schedule 13D
with respect to the Common Stock of Inhale Therapeutic Systems dated February
18, 1997 is, and any amendments thereto signed by each of the undersigned shall
be, filed on behalf of each of us pursuant to and in accordance with the
provisions of Rule 13d-1(f) under the Securities Exchange Act of 1934.
Date: February 18, 1997
SOROS FUND MANAGEMENT LLC
By: /S/ MICHAEL C. NEUS
----------------------------------
Michael C. Neus
Assistant General Counsel
GEORGE SOROS
By: /S/ MICHAEL C. NEUS
----------------------------------
Michael C. Neus
Attorney-in-Fact
STANLEY F. DRUCKENMILLER
By: /S/ MICHAEL C. NEUS
----------------------------------
Michael C. Neus
Attorney-in-Fact