-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TQe97dQgpTpUIlZMogy4vgqz9XKVdrFpEjWsJYuGUKZzQElAlEcrrSvhIjqx8Cpe iJwRdqGg/iwOiVY9YsBHnw== 0000912057-96-018599.txt : 19960823 0000912057-96-018599.hdr.sgml : 19960823 ACCESSION NUMBER: 0000912057-96-018599 CONFORMED SUBMISSION TYPE: 424B3 PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19960822 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALZA CORP CENTRAL INDEX KEY: 0000004310 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 770142070 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-10019 FILM NUMBER: 96619384 BUSINESS ADDRESS: STREET 1: 950 PAGE MILL RD STREET 2: PO BOX 10950 CITY: PALO ALTO STATE: CA ZIP: 94303-0802 BUSINESS PHONE: 4154945000 424B3 1 424B3 FILED PURSUANT TO RULE 424(b)(3) Reg. No. 333-10019 PROSPECTUS 1,000,000 SHARES ALZA CORPORATION ------------------ The 1,000,000 shares (the "Shares") of Common Stock, $.01 par value (the "Common Stock"), of ALZA Corporation ("ALZA") covered by this prospectus (the "Prospectus") are being offered by the holder of the Shares (the "Selling Stockholder") named in the Prospectus. The Shares offered by the Selling Stockholder were acquired by the Selling Stockholder upon exercise of warrants to purchase ALZA Common Stock (the "Warrants"). The Warrants were issued in 1991 and were purchased from the original holder of the Warrants by the Selling Stockholder on the open market. Some or all of the Shares covered by this Prospectus may be offered for sale from time to time by the Selling Stockholder at such prices and on such terms as may then be obtainable, in negotiated transactions or otherwise. This Prospectus may be used by the Selling Stockholder or by any broker-dealer who may participate in the sale of the Shares covered hereby. The Selling Stockholder will pay all commissions, transfer taxes and other expenses associated with the sale of the Shares by the Selling Stockholder and the expenses of the preparation of this Prospectus. ALZA has agreed to indemnify the Selling Stockholder against certain liabilities, including liabilities arising under the Securities Act of 1933, as amended (the "Securities Act"). Upon exercise of the Warrants, ALZA received proceeds totalling $25 million. ALZA will not receive any of the proceeds from the sale of the Shares by the Selling Stockholder. ALZA's Common Stock is listed on the New York Stock Exchange ("NYSE") under the symbol "AZA". On August 9, 1996, the closing price of the Common Stock as reported on the NYSE was $25.25 per share. SEE "RISK FACTORS" ON PAGE 5 FOR A DISCUSSION OF CERTAIN FACTORS WHICH SHOULD BE CAREFULLY CONSIDERED BY PROSPECTIVE PURCHASERS OF THE SHARES OFFERED HEREBY. ---------------- The date of this Prospectus is August 21, 1996. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. AVAILABLE INFORMATION ALZA is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). Such reports, proxy statements and other information may be inspected at the public reference facilities of the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, DC 20549. Copies of such material can be obtained at prescribed rates from the Commission at such address. Such reports, proxy statements and other information can also be inspected at the Commission's regional offices at 7 World Trade Center, 13th Floor, New York, New York 10019 and at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. In addition, such reports, proxy statements and other information concerning ALZA may be inspected at the offices of the New York Stock Exchange at 20 Broad Street, New York, New York 10005. ALZA has filed with the Commission a Registration Statement on Form S-3 under the Securities Act with respect to the Shares offered by this Prospectus. As permitted by the rules and regulations of the Commission, this Prospectus does not contain all of the information set forth in the Registration Statement and the exhibits and schedules thereto. For further information with respect to ALZA and the securities offered hereby, reference is made to the Registration Statement and the exhibits thereto, which may be examined without charge at the public reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, DC 20549, and copies of which may be obtained from the Commission upon payment of the prescribed fees. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents, which have been filed by ALZA with the Commission, are hereby incorporated by reference in this Prospectus: (a) ALZA's Annual Report on Form 10-K for the fiscal year ended December 31, 1995; (b) ALZA's Quarterly Reports on Form 10-Q for the quarters ended March 31, 1996 and June 30, 1996; and (c) The description of the Common Stock contained in ALZA's registration statement on Form 8-A filed May 14, 1992 under the Exchange Act, including any amendment or reports filed for the purpose of updating such description. All documents filed by ALZA pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to the termination of the offering of the securities offered hereby shall be deemed to be incorporated by reference into this Prospectus and to be a part hereof from the respective dates of filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein, or in any other subsequently filed document that also is or is deemed to be incorporated by reference herein, modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. Upon written or oral request directed to Corporate and Investor Relations, ALZA Corporation, 950 Page Mill Road, P.O. Box 10950, Palo Alto, California 94303-0802, telephone (415) 494-5222, ALZA will provide, without charge, to any person to whom this Prospectus is delivered, a copy of any document incorporated by reference in this Prospectus (not including exhibits to any such document except to the extent any such exhibits are specifically incorporated by reference in the information incorporated in this Prospectus). PROSPECTUS SUMMARY STATEMENTS MADE IN THIS PROSPECTUS RELATING TO PRODUCT DEVELOPMENT, MANUFACTURING AND MARKETING, OR THAT OTHERWISE RELATE TO FUTURE PERIODS, ARE FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT AND SECTION 21E OF THE EXCHANGE ACT. ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED IN THE FORWARD-LOOKING STATEMENTS AS A RESULT OF CERTAIN RISKS DESCRIBED IN THIS PROSPECTUS (INCLUDING ALZA'S ANNUAL REPORT ON FORM 10-K FOR 1995 AND OTHER DOCUMENTS INCORPORATED HEREIN BY REFERENCE). ALZA ALZA is a leader in the development and commercialization of innovative pharmaceutical products that incorporate drugs into advanced dosage forms designed to provide controlled, predetermined rates of drug release for extended time periods. By administering drugs in preset patterns and by alternative routes, ALZA's advanced dosage forms, called therapeutic systems, can add medical and economic value to drug therapies by minimizing their unpleasant or harmful side effects, optimizing their beneficial actions, simplifying drug therapy, and increasing patient compliance by decreasing the frequency with which medication must be administered. Historically, most of ALZA's product development activities have been undertaken pursuant to joint development and commercialization agreements with pharmaceutical companies. These agreements normally provide for the pharmaceutical company client to reimburse ALZA for costs incurred in product development and clinical evaluation of a specified product, including a portion of general and administrative expenses. The client receives marketing rights to the product and ALZA receives royalties on the client's sales of the product. Generally ALZA manufactures all or a portion of the client's requirements of the product. Among the ALZA-developed products commercialized to date by client companies are Procardia XL-Registered Trademark- (nifedipine) extended release tablets for the treatment of angina and hypertension, Duragesic-Registered Trademark- (fentanyl transdermal system) CII for the management of chronic pain in patients who require continuous opioid analgesia for pain that cannot be managed by lesser means, Transderm-Nitro-Registered Trademark- (nitroglycerin transdermal system), a once-daily product for the prevention of angina pectoris due to coronary artery disease, and Nicoderm-Registered Trademark- (nicotine transdermal system), an aid in smoking cessation for relief of nicotine withdrawal symptoms. The United States health care industry has changed dramatically in the last several years. Pharmaceutical companies have reduced sales forces, acquired pharmacy benefit companies, and built alliances in an effort to cut costs, secure market share, and improve research and development productivity. In this environment, every new pharmaceutical product must add value to the health care marketplace. These changes have created a unique opportunity for ALZA. Beginning in the early 1990s and accelerating over the past several years, ALZA has embarked on a three-part strategy to capitalize on the opportunities created by the new health care marketplace. First, ALZA has continued its traditional product development arrangements with client companies. Second, ALZA has expanded its commercialization capabilities and activities through its ALZA Pharmaceuticals division. In 1994, ALZA Pharmaceuticals introduced in the United States the Testoderm-Registered Trademark- (testosterone transdermal system) CIII for hormone replacement therapy in males for conditions associated with a deficiency or absence of endogenous testosterone. Also during 1994, ALZA's sales force began to co-promote in the United States two products developed by ALZA under agreements with client companies -- Duragesic-Registered Trademark- with Janssen Pharmaceutica, Inc. ("Janssen"), and Glucotrol XL-Registered Trademark- (glipizide) with Pfizer Inc. ("Pfizer"). In April 1996, ALZA Pharmaceuticals launched in the United States Ethyol-Registered Trademark- (amifostine), a unique agent developed by U.S. Bioscience, Inc. ("USB"), indicated for the reduction of cumulative renal toxicity associated with repeated administration of the chemotherapeutic drug cisplatin in patients with advanced ovarian cancer or advanced non-small cell lung cancer. ALZA has exclusive rights to market the product for five years, with an option to extend for one additional year; USB co-promotes the product with ALZA. In April 1996, ALZA also began promoting Mycelex-Registered Trademark- (clotrimazole ) Troche, an antifungal agent for the treatment of oral thrush, under a three year agreement with Bayer Corporation under which ALZA will receive payments based on net sales of the product above a specified base level. Beginning July 1, 1996, under an agreement with USB, ALZA began to co-promote with USB in the United States two USB products -- Hexalen-Registered Trademark- (altretamine), a product used in the treatment of advanced ovarian cancer, and NeuTrexin-Registered Trademark- (trimetrexate glucuronate), an alternate therapy for the treatment of moderate-to-severe PNEUMOCYSTIS CARINII pneumonia. Sales of Hexalen-Registered Trademark- and NeuTrexin-Registered Trademark- will be recorded by USB and ALZA will receive payments based on net sales of the products. The term of the 3 co-promotion is up to five years and ALZA will receive residual payments after that period. As part of its strategy to expand its commercialization activities, and in order to decrease ALZA's dependence on client companies, ALZA formed Therapeutic Discovery Corporation ("TDC") in 1993 to develop, with ALZA, a pipeline of products for commercialization by ALZA. ALZA and TDC currently are developing a range of products which are in various stages of development, including a number in Phase III clinical evaluation. There can be no assurance that any of these products will be successfully developed, or if successfully developed, that they can be successfully commercialized. Third, in order to extend ALZA's leadership in drug delivery technology, ALZA formed the ALZA Technology Institute ("ATI") in 1994. ATI is increasing ALZA's investment in the research and development of therapeutic systems, including systems for the delivery of biotechnology compounds and for use in gene therapy. In April 1996, ALZA completed a $500 million public offering of 5% convertible subordinated debentures due 2006 (the "Debentures"), which resulted in approximately $489 million of net proceeds to ALZA. Each Debenture is convertible, at the option of the holder, at any time prior to maturity, unless previously redeemed or repurchased, into shares of ALZA Common Stock at a conversion price of $38.19 per share, subject to certain anti-dilution adjustments. ALZA intends to use the proceeds of the Debentures offering for general corporate purposes, which may include expansion of ALZA's pharmaceutical business (including its sales and marketing activities), expansion of its research and development and manufacturing facilities, expenditures under existing or future joint ventures, partnerships or other similar agreements, the completion or continuation of the development of TDC products if ALZA exercises its right to license any or all of the TDC products or its purchase option with respect to TDC, the acquisition of assets, technologies, products and businesses to expand ALZA's operations, and working capital. ALZA's principal executive offices are located at 950 Page Mill Road, P.O. Box 10950, Palo Alto, California 94303-0802 and its telephone number is (415) 494-5000. 4 RISK FACTORS Statements made in this Prospectus relating to product development, manufacturing and marketing, or that otherwise relate to future periods, are forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Actual results could differ materially from those anticipated in the forward-looking statements as a result of certain risks described below or elsewhere in this Prospectus (including ALZA's Annual Report on Form 10-K for 1995 and other documents incorporated herein by reference). Such risks should be considered carefully in evaluating the Shares and ALZA before purchasing the Shares offered hereby. DEPENDENCE ON RELATIONSHIPS WITH CLIENT COMPANIES. ALZA's net income currently results primarily from royalties and fees paid by client companies. Royalties and fees are derived from sales by the clients of products incorporating ALZA technologies, and therefore vary from quarter to quarter as a result of changing levels of product sales by client companies. Because ALZA's clients make all marketing and other commercialization decisions with respect to such products (including, in many cases, taking responsibility for obtaining necessary regulatory approvals), most of the variables that affect ALZA's royalties and fees are not directly within ALZA's control. In addition, ALZA's royalties and fees could be adversely affected by competition and pressures for cost containment. For the year ended December 31, 1995, Procardia XL-Registered Trademark- (nifedipine), marketed by Pfizer, accounted for more than 40% of ALZA's royalties and fees. Sales of Procardia XL-Registered Trademark- have been declining since 1995 and decreased by 19% during the second quarter of 1996 compared to the same period in 1995, as reported by Pfizer. UNCERTAINTIES RELATING TO RECENT AND PLANNED EXPANSION OF MARKETING AND MANUFACTURING ACTIVITIES. ALZA has recently expanded its commercialization activities. ALZA began marketing the Testoderm-Registered Trademark- (testosterone transdermal system) CIII in 1994, and is co-promoting Duragesic-Registered Trademark- (fentanyl transdermal system) CII with Janssen and Glucotrol XL-Registered Trademark- (glipizide) with Pfizer. ALZA has also recently launched Ethyol-Registered Trademark- (amifostine), began promoting Mycelex-Registered Trademark- (clotrimazole) Troche and began co-promoting Hexalen-Registered Trademark- (altretamine) and NeuTrexin-Registered Trademark- (trimetrexate glucuronate). ALZA intends to expand its commercialization activities as a result of its arrangements with TDC, and under additional arrangements with third parties (which could include the acquisition or license of products and/or technologies). While the activities with TDC and other third parties are intended to result in a valuable pipeline of products for marketing by ALZA, there can be no assurance that this will be the case, nor can there be any assurance generally that ALZA's commercialization activities will be successful. ALZA also has expanded and is continuing to expand its manufacturing facilities in anticipation of future manufacturing needs. Utilization of these facilities in any quarter depends on many factors, including client orders, product approvals, product launches and sales levels, most of which are outside of ALZA's control. There can be no assurance that ALZA's manufacturing activities will be profitable. VOLATILITY OF SECURITIES PRICES. The market prices of ALZA's securities are subject to significant fluctuations in response to variations in quarterly operating results, announcements of new commercial products by ALZA or its competitors, developments or disputes concerning patent or proprietary rights, regulatory developments in both the U.S. and foreign countries, health care reform and regulation, and economic and other external factors. In addition, the pharmaceutical sector of the stock market has in recent years experienced significant price fluctuations. Such fluctuations, as well as economic conditions generally, may adversely affect the market price of ALZA's securities, including its Common Stock. UNCERTAINTIES CONCERNING EFFECTS OF CHANGES IN U.S. HEALTH CARE MARKET. The U.S. health care industry has continued to change rapidly as the public, government, medical practitioners and the pharmaceutical industry focus on ways to expand medical coverage while controlling the growth in health care costs. Legislative changes continue to be proposed, many of which, if enacted, could put significant pressures on the prices charged for pharmaceutical products. Similarly, prescription drug reimbursement practices and the growth of large managed care organizations, as well as generic and therapeutic substitution (substitution of a different product for the same indication), could significantly affect ALZA's business. ARRANGEMENTS POTENTIALLY INHIBITING A CHANGE IN CONTROL OF ALZA. Certain provisions of ALZA's Certificate of Incorporation, the Liquid Yield Option Notes due 2014 ("LYONs") and the Debentures may inhibit a change in control of ALZA. The provisions of ALZA's Certificate of Incorporation granting the Board of Directors the authority to issue shares of Preferred Stock with such terms as the Board of Directors may determine, classifying ALZA's Board of Directors, preventing stockholders from calling special meetings of ALZA's stockholders and requiring supermajority votes in the event of certain proposed business combinations may inhibit any change in control of ALZA. Provisions 5 in the Debentures and the outstanding LYONs grant the holders of these securities the right to require ALZA to repurchase all or any part of the Debentures and the LYONs in the event of a change in control, which may also inhibit any change in control of ALZA. 6 USE OF PROCEEDS ALZA will not receive any proceeds from the sale of the Shares by the Selling Stockholder. PLAN OF DISTRIBUTION All or a portion of the Shares of Common Stock offered hereby by the Selling Stockholder may be delivered and/or sold in transactions from time to time on the NYSE at prices and at terms prevailing at the time, at prices and at terms related to such prevailing prices or at negotiated prices and terms and/or may also be used in connection with hedging transactions with broker-dealers or to engage in short sales to cover any short positions previously established. The Shares may be sold by one or more of the following methods: (i) a block trade in which a broker-dealer so engaged will attempt to sell the Shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; (ii) purchases by a broker-dealer as principal and resale by such broker-dealer for its account pursuant to this Prospectus; (iii) an exchange distribution in accordance with the rules of such exchange; and (iv) ordinary brokerage transactions in which the broker solicits purchasers. The Selling Stockholder may also enter into option or other transactions with broker-dealers which require the delivery to the broker-dealer of the Shares registered hereunder, which the broker-dealer may resell or otherwise transfer pursuant to this Prospectus. The Selling Stockholder may also loan or pledge the Shares to a broker-dealer and the broker-dealer may sell Shares so loaned or upon default the broker-dealer may effect sales of the pledged Shares pursuant to this Prospectus. The Selling Stockholder may effect such transactions by selling to or through one or more broker-dealers, and such broker-dealers may receive compensation in the form of underwriting discounts, concessions or commissions from the Selling Stockholder. In effecting sales, broker-dealers engaged by the Selling Stockholder may arrange for other broker- dealers to participate in the resales. The Selling Stockholder and any broker- dealers that participate in the distribution may under certain circumstances be deemed to be "underwriters" within the meaning of the Securities Act, and any commissions received by such broker-dealers and any profits realized on the sale of Shares by them may be deemed to be underwriting discounts and commissions under the Securities Act. The Selling Stockholder may agree to indemnify such broker-dealers against certain liabilities, including liabilities under the Securities Act. In addition, ALZA has agreed to indemnify the Selling Stockholder with respect to the Shares offered hereby against certain liabilities, including, without limitation, certain liabilities under the Securities Act, or, if such indemnity is unavailable, to contribute toward amounts required to be paid in respect of such liabilities. Any broker-dealer participating in such transactions as agent may receive commissions from the Selling Stockholder (and, if they act as agent for the purchaser of such Shares, from such purchaser). Broker-dealers may agree with the Selling Stockholder to sell a specified number of Shares at a stipulated price per share, and, to the extent such a broker-dealer is unable to do so acting as agent for the Selling Stockholder, to purchase as principal any unsold Shares at the price required to fulfill the broker-dealer commitment to the Selling Stockholder. Broker-dealers who acquire Shares as principal may thereafter resell such Shares from time to time in transactions (which may involve crosses and block transactions and which may involve sales to and through other broker-dealers, including transactions of the nature described above) in the over-the-counter market, in negotiated transactions or otherwise at market prices prevailing at the time of sale or at negotiated prices, and in connection with such resales may pay to or receive from the purchasers of such Shares commissions computed as described above. To the extent required under the Securities Act, a supplemental prospectus will be filed, disclosing (a) the name of any such broker-dealers, (b) the number of Shares involved, (c) the price at which such Shares are to be sold, (d) the commissions paid or discounts or concessions allowed to such broker-dealers, where applicable, (e) that such broker-dealers did not conduct any investigation to verify the information set out or incorporated by reference in this Prospectus, as supplemented, and (f) other facts material to the transaction. In addition, any securities covered by this Prospectus which qualify for sale pursuant to Rule 144 may be sold under Rule 144 rather than pursuant to this Prospectus. The Shares offered hereby are being registered pursuant to contractual obligations of the Company. The Selling Stockholder will pay all commissions, transfer taxes, and other expenses associated with the sale of securities by the Selling Stockholder and the expenses of the preparation of this Prospectus. ALZA has not made any underwriting arrangements with respect to the sale of Shares offered hereby. 7 SELLING STOCKHOLDER The following table sets forth certain information regarding beneficial ownership of ALZA's Common Stock by Selling Stockholder as of June 30, 1996 and as adjusted to reflect the sale by the Selling Stockholder of Shares offered by this Prospectus. SHARES SHARES BENEFICIALLY OWNED BENEFICIALLY OWNED PRIOR TO OFFERING(1) SHARES AFTER OFFERING(1)(2) -------------------- TO BE -------------------- SELLING STOCKHOLDER NUMBER PERCENT SOLD NUMBER PERCENT - ------------------- ------ ------- ---- ------ ------- Goldman, Sachs & Co. 1,000,000 1.19% 1,000,000 0 0% - ------------------------- (1) Applicable percentage of ownership is based on 84,282,497 shares of Common Stock outstanding as of June 30, 1996. (2) Assumes the sale of all Shares of Common Stock covered by this Prospectus. LEGAL MATTERS The validity of the issuance of the Shares will be passed upon by Peter D. Staple, Vice President and General Counsel of ALZA. EXPERTS The consolidated financial statements and financial statement schedule of ALZA Corporation appearing or incorporated by reference in ALZA's Annual Report (Form 10-K) for the year ended December 31, 1995, have been audited by Ernst & Young LLP, independent auditors, as set forth in their reports thereon included or incorporated by reference therein and incorporated herein by reference. Such consolidated financial statements and financial statement schedule are incorporated herein by reference in reliance upon such reports given upon the authority of such firm as experts in accounting and auditing. 8 EX-5 2 EXHIBIT 5 Exhibit 5 August 9, 1996 ALZA Corporation 950 Page Mill Road P.O. Box 10950 Palo Alto, California 94303-0802 Registration Statement on Form S-3 ---------------------------------- Ladies and Gentlemen: I am delivering this opinion in my capacity as Vice President and General Counsel of ALZA Corporation, a Delaware corporation ("ALZA"), in connection with the Registration Statement on Form S-3 (the "Registration Statement") which ALZA proposes to file with the Securities and Exchange Commission on or about August 9, 1996, for the purpose of registering under the Securities Act of 1933, as amended, an aggregate of 1,000,000 shares of its Common Stock, par value $.01 (the "Shares"). The Shares were issued upon exercise of a warrant to purchase Common Stock (the "Warrant") held by the holder thereof (the "Selling Stockholder"). In connection with this opinion, I have assumed the authenticity of all records, documents and instruments submitted to me as originals, the genuineness of all signatures, the legal capacity of natural persons and the conformity to the originals of all records, documents and instruments submitted to me as copies. I have based my opinion upon my review of such records, documents and instruments as I have deemed appropriate to render this opinion. This opinion is limited to the General Corporation Law of the State of Delaware. I disclaim any opinion as to any other statute, rule, regulation, ordinance, order or other promulgation of any other jurisdiction or any regional or local governmental body. ALZA Corporation August 9, 1996 Page 2 Based upon the foregoing and my examination of such questions of law as I have deemed necessary or appropriate for the purpose of this opinion, and assuming that (i) the Registration Statement becomes and remains effective during the period when the Shares are offered and sold, (ii) the Shares to be sold by the Selling Stockholder were issued in accordance with the terms of the Warrant, (iii) the Shares to be sold by the Selling Stockholder were delivered by the Company and paid for by the Selling Stockholder, in each case in accordance with the terms of the Warrant, and (iv) all applicable securities laws are complied with, it is my opinion that the Shares covered by the Registration Statement were validly issued and are fully paid and nonassessable. I hereby consent to the filing of this opinion as an exhibit to the Registration Statement. Very truly yours, /s/ Peter D. Staple Peter D. Staple Vice President and General Counsel EX-23.1 3 EXHIBIT 23.1 Exhibit 23.1 CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS We consent to the reference to our firm under the caption "Experts" in the Registration Statement (Form S-3) and related Prospectus of ALZA Corporation for the registration of shares of common stock and to the incorporation by reference therein of our reports dated February 16, 1996, with respect to the consolidated financial statements of ALZA Corporation incorporated by reference in its Annual Report (Form 10-K) for the year ended December 31, 1995 and the related financial statement schedule included therein, filed with the Securities and Exchange Commission. /s/ Ernst & Young LLP Palo Alto, California August 12, 1996 -----END PRIVACY-ENHANCED MESSAGE-----