<PAGE> 1
As filed with the Securities and Exchange Commission on March 8, 2000
REGISTRATION NO. 333-____
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
--------------------
ILEX ONCOLOGY, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 74-2699185
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
11550 I.H. 10 WEST, SUITE 100
SAN ANTONIO, TEXAS 78230
(210) 949-8200
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
--------------------
GREGORY L. WEAVER
VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
ILEX ONCOLOGY, INC.
11550 I.H. 10 WEST, SUITE 100
SAN ANTONIO, TEXAS 78230
(210) 949-8200
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
--------------------
Copies of all communications, including all
communications sent to the agent for service, should be sent to:
PHILLIP M. RENFRO, ESQ.
FULBRIGHT & JAWORSKI L.L.P.
300 CONVENT STREET, SUITE 2200
SAN ANTONIO, TEXAS 78205
(210) 270-7172
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement.
--------------------
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, check the following box: [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: [x]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]______________
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]______________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [ ]
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CALCULATION OF REGISTRATION FEE
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TITLE OF EACH CLASS OF AMOUNT OF SHARES PROPOSED MAXIMUM OFFERING PROPOSED MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED TO BE REGISTERED PRICE PER SHARE(1) OFFERING PRICE(1) REGISTRATION FEE
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<S> <C> <C> <C> <C>
COMMON STOCK, $.01 PAR VALUE
PER SHARE.......................... 3,000,000(2) $50.75 $152,250,000 $ 40,194
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TOTAL.............................. 3,000,000(2) - $__________ $_________
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(1) Pursuant to Rule 457(c), the proposed maximum offering price per share
and proposed maximum aggregate offering price have been calculated on the
basis of the average of the bid and ask prices of the Common Stock as
reported on The Nasdaq National Market on March 6, 2000.
(2) Pursuant to Rule 416(a), this Registration Statement shall also cover any
additional shares of Common Stock which become issuable by reason of any
stock dividend, stock split, recapitalization or other similar
transactions effected without the receipt of consideration which results
in an increase in the number of the outstanding shares of Common Stock.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.
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P R O S P E C T U S
3,000,000 SHARES
ILEX ONCOLOGY, INC.
COMMON STOCK
-----------------------
This prospectus relates to the public offering, which is not being
underwritten, of up to 3,000,000 shares (the "Shares") of our common stock, par
value $.01 per share ("Common Stock"), which are held by certain of our
stockholders.
The prices at which such stockholder may sell the Shares will be
determined by the prevailing market price for the Shares or in negotiated
transactions. We will not receive any of the proceeds from the sale of the
Shares.
Our Common Stock is traded on The National Market System of Nasdaq under
the symbol "ILXO." On March 6, 2000, the last reported sale price for our Common
Stock on The Nasdaq National Market was $50.00 per share.
This prospectus is not an offer to sell these securities and is not
soliciting an offer to buy these securities in any state where the offer or sale
is not permitted.
-----------------------
INVESTING IN OUR COMMON STOCK INVOLVES RISKS.
YOU SHOULD READ THE "RISK FACTORS" BEGINNING ON PAGE 4.
-----------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus is March 7, 2000.
<PAGE> 3
AVAILABLE INFORMATION
We have filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 under the Securities Act of
1933, as amended (the "Securities Act"), related to the Shares. This prospectus
is part of that Registration Statement and does not contain all of the
information set forth in the Registration Statement and its exhibits. You may
obtain further information with respect to the Company and the Shares by
reviewing the Registration Statement and the attached exhibits, which you may
read and copy at the following locations of the Commission:
<TABLE>
<S> <C> <C>
Public Reference Room New York Regional Office Chicago Regional Office
Judiciary Plaza Seven World Trade Center Citicorp Center
450 Fifth Street, N.W., Rm. 1024 13th Floor 500 West Madison Street, Suite 1400
Washington, D.C. 20549 New York, New York 10048 Chicago, Illinois 60661-2511
</TABLE>
We are subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). Accordingly, we file
reports, proxy statements and other information with the Commission. Such
reports, proxy statements and other information can be inspected and copied at
the locations described above. Copies of such materials can be obtained from the
Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. The Commission maintains a Web site
that contains the Registration Statement, reports, proxy statements and other
information regarding the Company at http://www.sec.gov.
We furnish our stockholders with annual reports containing audited
financial statements with a report thereon by our independent public
accountants, Arthur Andersen LLP.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Commission allows us to "incorporate by reference" certain
information into this prospectus. This means that we can disclose important
information to you by referring you to another document we have filed separately
with the Commission. The information incorporated by reference is considered to
be a part of this prospectus, except for any information that is superseded by
other information that is set forth directly in this document.
The following documents that we have previously filed with the Commission
pursuant to the Exchange Act are hereby incorporated by reference into the
prospectus:
(a) Annual Report on Form 10-K for the year ended December 31, 1998;
(b) Quarterly Reports on Form 10-Q for the quarters ended March 31, 1999,
June 30, 1999 and September 30, 1999;
(c) Current Report on Form 8-K filed July 30, 1999;
(d) Current Report on Form 8-K/A filed September 21, 1999;
(e) Current Report on Form 8-K dated February 24, 2000;
(f) Current Report on Form 8-K dated March 7, 2000; and
(g) The description of our Common Stock contained in the Registration
Statement on Form 8-A dated February 14, 1997.
ILEX also incorporates by reference additional documents that may be
filed with the Commission between the date of this prospectus and the date of
completion of the offering of the Shares by the selling stockholders. These
include periodic reports, such as Annual Reports on Form 10-K, Quarterly Reports
on Form 10-Q and Current Reports on Form 8-K, as well as proxy statements.
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Documents incorporated by reference are available from us without charge,
excluding all exhibits; except that if we have specifically incorporated by
reference an exhibit in this prospectus, the exhibit also will be available
without charge. Stockholders may obtain documents incorporated by reference in
this prospectus by requesting them in writing or by telephone from ILEX at the
following address:
ILEX Oncology, Inc.
11550 I.H. 10 West, Suite 100
San Antonio, Texas 78230
Telephone: (210) 949-8200
Attention: Investor Relations
You should rely only on the information contained or incorporated by reference
in this prospectus. We have not authorized anyone to provide you with
information that is different from what is contained in this prospectus. This
prospectus is dated March 7, 2000. You should not assume that the information
contained in this prospectus is accurate as of any date other than that date. In
this prospectus, the "Company," "ILEX," "we" and "our" refer to ILEX Oncology,
Inc.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the documents we have filed with the Securities and
Exchange Commission which we have referenced under "Incorporation of Certain
Documents by Reference" on page 2 contain forward-looking statements made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements represent our management's
judgment regarding future events. Forward-looking statements typically are
identified by use of terms such as "may," "will," "should," "plan," "expect,"
"anticipate," "estimate" and similar words, although some forward-looking
statements are expressed differently. All forward-looking statements other than
statements of historical fact included in this prospectus regarding our
financial position, business strategy and plans or objectives for future
operations are forward-looking statements. We cannot guarantee the accuracy of
the forward-looking statements, and you should be aware that our actual results
could differ materially from those contained in the forward-looking statements
due to a number of factors, including:
o competitive factors;
o general economic conditions;
o relationships with pharmaceutical and biotechnology companies;
o the ability to develop safe and efficacious drugs;
o variability of royalty, license and other revenue;
o failure to satisfy performance obligations;
o ability to enter into future collaborative agreements;
o failure to achieve positive results in clinical trials;
o failure to complete current or secure new contracts with CRO customers;
o uncertainty regarding our patents and patent rights (including the risk
that we may be forced to engage in costly litigation to protect such
patent rights and the material harm to us if there were an unfavorable
outcome of any such litigation);
o governmental regulation and suspension;
o technological change;
o changes in industry practices; and
o one-time events.
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You should also consider carefully the statements under "Risk Factors"
and other sections of this prospectus and in the other documents filed with the
SEC, which address additional factors that could cause our results to differ
from those set forth in the forward-looking statements. All subsequent written
and oral forward-looking statements attributable to ILEX or persons acting on
our behalf are expressly qualified in their entirety by the applicable
cautionary statements. We have no plans to update these forward-looking
statements.
RISK FACTORS
You should carefully examine this entire prospectus and should give
particular attention to the risk factors set forth below in conjunction with the
other information contained or incorporated by reference in this prospectus in
evaluating an investment in the Shares.
WE HAVE ONLY A LIMITED OPERATING HISTORY AND WE EXPECT TO CONTINUE TO GENERATE
LOSSES.
We began operations in October 1994 and have only a limited operating
history upon which you can evaluate our business. We have incurred losses every
year since we began operations. As of September 30, 1999, our accumulated
deficit was approximately $74.6 million, including a net loss of approximately
$21.2 million for the year ended December 31, 1998 and a net loss of
approximately $43.3 million for the nine-month period ended September 30, 1999.
We have not generated any revenue from product sales to date, and it is possible
that significant revenues from product sales will never be achieved. Even if we
do achieve significant revenues from product sales or we increase revenues from
our CRO business, we expect to incur significant operating losses over the next
several years. It is possible that we will never achieve profitable operations.
IF WE ARE NOT ABLE TO DEMONSTRATE THE EFFICACY OF OUR DRUG CANDIDATES IN OUR
CLINICAL TRIALS OR OUR CLINICAL TRIALS ARE DELAYED, WE MAY NOT BE ABLE TO OBTAIN
REGULATORY CLEARANCE TO MARKET OUR DRUGS.
Many of our research and development programs are at an early stage.
Clinical testing is a long, expensive and uncertain process. The FDA has not
approved any of our product candidates and we cannot assure you that our data
collected from our clinical trials will be sufficient to support approval by the
FDA. We cannot assure you that the clinical trials will be completed on schedule
or that the FDA will ultimately approve our product candidates for commercial
sale. Furthermore, even if initially positive preclinical studies or clinical
trial results are achieved, it is possible that we will obtain different results
in the later stages of drug development. Drugs in late stages of clinical
development may fail to show the desired safety and efficacy traits despite
having progressed through initial clinical testing. For example, positive
results in early Phase I or Phase II trials may not be repeated in larger Phase
II or Phase III trials. All of our potential drug candidates are prone to the
risks of failure inherent in drug development, including the possibility that
none of our drug candidates will or can:
o be safe and effective;
o otherwise meet applicable regulatory standards;
o be manufactured or produced economically and on a large scale;
o be sold without third parties challenging us and enforcing their patent
or other rights;
o be successfully marketed, particularly if a third party introduces an
equivalent or superior product; or
o be reimbursed by government or private payors.
The clinical trials of any of our drug candidates could be unsuccessful,
which would prevent us from commercializing the drug. Our failure to develop
safe, commercially viable drugs would substantially impair our ability to
generate revenues to sustain operations and materially harm our business and
financial condition.
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IF L&I PARTNERS IS UNABLE TO COMMERCIALIZE OUR LEAD PRODUCT CANDIDATE,
CAMPATH(R), WE MAY NOT HAVE SUFFICIENT REVENUES TO CONTINUE OPERATIONS.
CAMPATH(R) is our lead product candidate. Our success will depend, to a
great degree, on the success of CAMPATH(R). In particular, L&I Partners must be
able to:
o establish the safety and efficacy of CAMPATH(R)in humans;
o obtain regulatory approvals for CAMPATH(R); and
o achieve market acceptance of CAMPATH(R).
If L&I Partners fails to successfully obtain regulatory approval for and
commercialize CAMPATH(R), our business and financial condition will be
materially harmed.
OUR DEPENDENCE ON COLLABORATIVE PARTNERS FOR DEVELOPMENT, MANUFACTURING AND
MARKETING MAY DELAY OR IMPAIR OUR ABILITY TO GENERATE SIGNIFICANT REVENUES OR
OTHERWISE ADVERSELY AFFECT OUR PROFITABILITY.
We rely on large pharmaceutical companies for development, manufacturing,
marketing and distribution of our drug products. Our reliance on pharmaceutical
companies and other collaborative partners poses the following risks:
o our contracts with collaborative partners may expire or be terminated and
we may not be able to replace them;
o a partner involved in the development of our products may not commit
enough capital or other resources to successfully develop our products;
o the terms of our contracts with collaborative partners may not be
favorable to us in the future;
o our partners may not pursue further development and commercialization of
compounds resulting from their collaboration with us;
o a partner with marketing and distribution rights to one or more of our
products may not commit enough resources to the marketing and
distribution of our products;
o disputes with our partners may arise, leading to delays in or termination
of the research, development or commercialization of product candidates
or resulting in significant litigation or arbitration;
o contracts with our partners may fail to provide significant protection or
may fail to be enforced if one of these partners fails to perform; and
o our collaborative partners could independently develop, or develop with
third parties, drugs which compete with our products.
There is a great deal of uncertainty regarding the success of our current
and future collaborative efforts. Failure of these efforts would materially harm
our business and financial condition.
THE SUCCESS OF CAMPATH(R) IS HIGHLY DEPENDENT ON COLLABORATIONS WITH LEUKOSITE
AND SCHERING AG.
As part of our joint venture with LeukoSite, a subsidiary of Millennium
Pharmaceuticals, Inc., for the development and commercialization of CAMPATH(R),
we share 50% of the development costs of CAMPATH(R) with Millennium. If we fail
for any reason to make a required capital contribution to the joint venture,
then LeukoSite may gain control of the management of the joint venture and
become entitled to a greater share of any profits derived from product sales of
CAMPATH(R). At the same time, if LeukoSite fails for any reason to make a
required capital contribution to the joint venture, then we may be required to
make additional capital contributions to the joint venture to maintain the
desired level of development activities by the joint venture. It is possible
that we may not have the resources to compensate for any failure by LeukoSite to
make any capital contributions in its stead and the joint venture may not be
able to continue operations with lesser funding. In addition, the joint venture
agreement with LeukoSite does not contain a provision to resolve a deadlock
between us and LeukoSite. As such, in the event of such a deadlock, either we or
LeukoSite could prevent the joint venture from taking action or proceeding with
business. This could result in failure to gain approval for CAMPATH(R), which
would materially harm our business and financial condition.
Schering. We intend to rely on Schering for the sales, marketing and
distribution of CAMPATH(R). If Schering does not devote adequate resources to
the marketing of CAMPATH(R) or if disputes between L&I Partners and Schering
otherwise arise in connection with the commercialization of CAMPATH(R), our
business and financial condition would be materially harmed.
WE MAY BE UNABLE TO OBTAIN THE ADDITIONAL CAPITAL NEEDED TO OPERATE AND GROW OUR
BUSINESS, THEREBY REQUIRING US TO CURTAIL OR CEASE OPERATIONS.
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We will require substantial funds in order to:
o continue our research and development programs;
o continue our clinical trials;
o manufacture and, where applicable, market our products; and
o expand our CRO operations.
We believe that our existing resources will fund our activities as
currently planned for at least two years. We may use these existing resources
before that time, however, because of changes in our research and development
and commercialization plans or other factors affecting our operating expenses or
capital expenditures, including potential acquisitions of other businesses,
assets or technologies.
We cannot be sure that we will be able to obtain any future funds that we
may require, either in the public or private equity markets or otherwise on
acceptable terms, or at all. In addition, under the terms of our agreement with
IMPATH Inc. we are prohibited from incurring any debt without its consent.
If adequate funds are not available, we may have to delay, scale back or
eliminate one or more of our development programs, or obtain funds by entering
into more arrangements with collaborative partners or others that may require us
to relinquish rights to certain of our products or technologies that we would
not otherwise relinquish. These consequences, in turn, could materially harm our
business.
OUR LACK OF OPERATING EXPERIENCE MAY CAUSE US DIFFICULTY IN MANAGING OUR GROWTH.
We have no experience in selling pharmaceutical products and only limited
experience in negotiating, establishing and maintaining strategic relationships,
manufacturing or procuring products in commercial quantities and conducting
other later-stage phases of the regulatory approval process. We have less than
three years experience operating our CRO business. Our ability to manage our
growth, if any, will require us to improve and expand our management and our
operational and financial systems and controls (particularly with respect to our
CRO business). If our management is unable to manage growth effectively, our
business and financial condition would be materially harmed. In addition, if
rapid growth occurs, it may strain our operational, managerial and financial
resources.
IF WE FAIL TO COMPLY WITH EXTENSIVE REGULATIONS ENFORCED BY DOMESTIC AND FOREIGN
REGULATORY AUTHORITIES, THE COMMERCIALIZATION OF CAMPATH(R) AND OUR OTHER
PRODUCTS WOULD BE PREVENTED OR DELAYED AND OUR ABILITY TO CONDUCT OUR CRO
BUSINESS COULD BE LIMITED.
Our products, including CAMPATH(R), are subject to extensive government
regulations related to development, clinical trials, manufacturing and
commercialization. The process of obtaining FDA and other regulatory approvals
is costly, time-consuming, uncertain and subject to unanticipated delays.
The FDA may refuse to approve an application if it believes that
applicable regulatory criteria are not satisfied. The FDA may also require
additional testing for safety and efficacy. Foreign regulatory authorities may
also refuse to grant any approval. Even after U.S. regulatory approval is
obtained for CAMPATH(R) or any of our other products, we will be subject to
continual review. Newly discovered or developed safety or efficacy data may
result in revocation of our marketing approval. Moreover, if and when such
approval is obtained, the marketing of CAMPATH(R) and any of our other product
candidates will be subject to extensive regulatory requirements administered by
the FDA and other regulatory bodies. Product manufacturing facilities are also
subject to continual review and periodic inspection and approval of
manufacturing modifications. Domestic manufacturing facilities are subject to
biennial inspections by the FDA and must comply with the FDA's current Good
Manufacturing Practices, or cGMP, and other regulations. In complying with these
regulations, manufacturers must spend funds, time and effort in the areas of
production, record keeping, personnel and quality control to ensure full
technical compliance. The FDA stringently applies regulatory standards for
manufacturing. Failure to comply with any of these post-approval requirements
can result in, among other things, warning letters, product seizures, recalls,
fines, injunctions, suspensions or revocations of marketing licenses, operating
restrictions and criminal prosecutions. Any such enforcement action could
materially harm our business. Unanticipated changes in existing regulatory
requirements or the adoption of new requirements could materially harm our
business and financial condition.
The European Union, Japan and other countries also extensively regulate
pharmaceuticals, including biological drug products. No assurance can be given
that we will be able to obtain or maintain other countries' approvals for
CAMPATH(R) or any of our other products.
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IF ANY OF OUR LICENSE AGREEMENTS FOR INTELLECTUAL PROPERTY UNDERLYING CAMPATH(R)
OR ANY OTHER PRODUCT IS TERMINATED, WE MAY LOSE OUR RIGHTS TO DEVELOP OR MARKET
THAT PRODUCT.
We have licensed intellectual property, including patents, patent
applications and know-how, from pharmaceutical companies, research institutions
and others, including the intellectual property underlying our most advanced
product candidates: CAMPATH(R), eflornithine and oxypurinol. Some of our product
development programs depend on our ability to maintain rights under these
licenses.
Each licensor has the power to terminate its agreement with us if we fail
to meet our obligations under that license. We may not be able to meet our
obligations under these license agreements.
If we default under any of these license agreements, we may lose our
right to market and sell any products based on the licensed technology. Losing
our marketing and sales rights would materially harm our business and financial
condition.
THERE ARE POTENTIAL LIMITATIONS ON THIRD-PARTY REIMBURSEMENT AND OTHER
PRICING-RELATED MATTERS THAT COULD REDUCE POTENTIAL SALES OF OUR PRODUCTS AND
MAY DELAY OR IMPAIR OUR ABILITY TO GENERATE SIGNIFICANT REVENUES.
The business and financial condition of pharmaceutical and biotechnology
companies will continue to be affected by the efforts of government and
third-party payors to reduce the cost of health care through various means. In
the U.S., there have been, and we expect that there will continue to be, a
number of federal and state proposals to implement government control regarding
pricing and profitability of prescription pharmaceuticals. An increasing
emphasis on managed care in the U.S. will also continue to exert downward
pressure on pharmaceutical pricing. In addition, sales of prescription
pharmaceuticals are dependent in part on the availability of reimbursement to
the consumer from third-party payors, such as government and private insurance
plans that often mandate rebates or predetermined discounts from list prices.
In certain foreign markets, pricing or profitability of prescription
pharmaceuticals is subject to government control. In particular, individual
pricing negotiations are often required in many countries of the European Union,
irrespective of separate government approval to market a drug.
If we succeed in bringing one or more products to the market, there can
be no assurance that these products will be considered cost effective or that
reimbursement to the consumer will be available or will be sufficient to allow
us to sell our products economically. The level of reimbursement available for
CAMPATH(R) will greatly impact the profitability of our joint venture with
LeukoSite and, in turn, ILEX. There can be no assurance that chemoprevention
drugs which we develop, if any, would be eligible for reimbursement.
FAILURE TO ATTRACT AND RETAIN KEY PERSONNEL AND CONSULTANTS COULD ADVERSELY
AFFECT OUR ABILITY TO OBTAIN FINANCING, CONDUCT PRECLINICAL STUDIES AND CLINICAL
TRIALS OR DEVELOP CAMPATH(R) AND OUR OTHER PRODUCT CANDIDATES.
Our success depends greatly on our ability to attract and retain
qualified scientific and technical personnel. Due to the technical expertise and
knowledge required in our identification and evaluation of potentially viable
oncology compounds or technology in-licensing or acquisition targets, we rely
particularly heavily upon Daniel Von Hoff, M.D., a founder of ILEX, member of
the Board of Directors and Co-Chairman of our Scientific Advisory Board. The
consulting agreement between us and Dr. Von Hoff does not obligate Dr. Von Hoff
to devote any specified level of time or resources to the development of
potential products for us. Dr. Von Hoff has other substantial professional time
commitments, including serving on the scientific advisory boards of other
companies, and it is possible that he will not provide us with any product
opportunities in the future.
We do not have an employment agreement with Mr. Richard Love, our
president and chief executive officer. Loss of the services of Dr. Von Hoff or
Mr. Love would be detrimental to:
o our product development and manufacturing programs;
o our ability to identify and obtain rights to commercially viable oncology
compounds; and
o our ability to raise additional funds should we need to do so.
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We are also highly dependent on the other principal members of our
scientific and management staff, and the loss of the services of such personnel
could materially harm our business and financial condition.
To expand our research and development programs, pursue our product
development plans and expand our CRO business, we will be required to hire
additional qualified scientific and technical personnel, as well as personnel
with expertise in clinical testing and government regulation. There is intense
competition for qualified staff, and there can be no assurance that we will be
able to attract and retain the necessary qualified staff for the development of
our business. The failure to attract and retain key scientific and technical
personnel would materially harm our business and financial condition.
WE MAY NOT BE ABLE TO OBTAIN EFFECTIVE PATENTS TO PROTECT OUR TECHNOLOGIES FROM
USE BY OTHER COMPANIES WITH COMPETITIVE PRODUCTS, AND PATENTS OF OTHER COMPANIES
COULD PREVENT US FROM DEVELOPING OR MARKETING CAMPATH(R) OR OUR OTHER PRODUCT
CANDIDATES.
Our success will depend to a significant degree on our ability to:
o obtain, maintain and enforce patents;
o license rights to patents from third parties;
o protect trade secrets; and
o operate without infringing on the proprietary rights of others.
To date, we have no patents issued in our name. It is possible that we
will not develop technologies, drugs or processes that result in obtaining a
patent. It is also possible that our patent position will not provide sufficient
protection against competitors or that patents issued to or licensed by us will
be infringed or will be challenged, invalidated or circumvented. Competitors may
have filed patent applications, may have been issued patents or may obtain
additional patents and proprietary rights relating to technologies, drugs and
processes that compete with our technologies, drugs and processes. If we fail to
adequately protect our technologies, drugs and processes covered by issued
patents or to obtain patents, our business and financial condition could be
materially harmed.
We have not conducted in-depth validity and infringement studies on the
patent applications that we have in-licensed. These patents and patent
applications which we have in-licensed are subject to potential challenge and
may not provide protection for our compounds. Oxypurinol and aminopterin do not
have patent protection.
If we infringe on the intellectual property rights of others, there can
be no assurance that we would be able to obtain licenses to use the technology
on commercially reasonable terms, or at all.
A third party biotechnology company has offered to license certain
technology to L&I Partners which the biotechnology company has indicated relates
to CAMPATH(R). L&I Partners is in the process of evaluating the necessity of
this license. We are informed that significant questions have been raised
concerning the validity of the patents relating to the third party's technology.
We have not, however, conducted an independent analysis of this technology.
There is no assurance a license regarding this technology will be available to
L&I Partners in the future on acceptable terms, if at all. In the event L&I
Partners does not license this technology and the third party asserts that
CAMPATH(R) or its method of manufacture is an infringement of the third party's
rights, the ability of L&I Partners to commercialize CAMPATH(R) could be
materially harmed.
We also rely on trade secret protection for our unpatented proprietary
technology. Trade secrets are difficult to protect. Other parties could
independently develop substantially equivalent proprietary information and
techniques or gain access to our trade secrets.
We have attempted to prevent the disclosure and use of our know-how and
trade secrets by entering into confidentiality agreements with our employees,
consultants and third parties. However, there are risks that:
o these parties will not honor our confidentiality agreements;
o others will independently develop equivalent or competing technology;
o disputes will arise concerning the ownership of intellectual property or
the applicability of confidentiality obligations; or
o disclosure of our trade secrets will occur regardless of these
contractual protections.
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We often work with consultants and research collaborators at universities
and other research organizations. If any of these consultants or research
collaborators use intellectual property owned by others as part of their work
with us, disputes may arise between us and these other parties as to which one
of us has the rights to intellectual property related to or resulting from the
work done.
Costly litigation might be necessary to protect our orphan drug
designations or patent position or to determine the scope and validity of
third-party proprietary rights, and it is possible that we will not have the
required resources to pursue such litigation or to protect our patent rights. An
adverse outcome in litigation with respect to the validity of any of our patents
could subject us to significant liabilities to third parties, require disputed
rights to be licensed from third parties or require us to cease using a product
or technology. Any of these results could materially harm our business and
financial condition.
WE FACE INTENSE COMPETITION AND RAPID TECHNOLOGICAL CHANGE WHICH COULD RESULT IN
PRODUCTS SUPERIOR TO THOSE WE ARE DEVELOPING.
The technological areas in which we work evolve at a rapid pace. Our
future success depends upon our ability to compete in the research, development
and commercialization of products and technologies in oncology, our area of
focus. Many of our competitors have substantially greater research and
development capabilities and experience and greater manufacturing, marketing,
financial and managerial resources than do we. These competitors may develop
products that are superior to those we are developing and render our products or
technologies non-competitive or obsolete. In addition, we may not be able to
keep pace with technological change.
Products currently exist in the market that will compete directly with
the products that we are seeking to develop. Any product candidate that we
develop and for which we gain regulatory approval must then compete for market
acceptance and market share. Product competition is particularly intense in
markets that we may target with CAMPATH(R) in the future, including
non-Hodgkin's lymphoma and multiple sclerosis.
Significant competitive factors determining whether we will be able to
compete successfully include:
o capabilities of our collaborators;
o efficacy and safety of our products;
o timing and scope of regulatory approval;
o product availability;
o marketing and sales capabilities;
o reimbursement coverage from insurance companies and others;
o degree of clinical benefits of our product candidates relative to their
costs;
o method of administering a product;
o price; and
o patent protection.
Competitive disadvantages in any of these factors could materially harm
our business and financial condition.
In addition, in our CRO business, we primarily compete against in-house
departments of pharmaceutical companies, other CROs and, to a lesser extent,
universities and teaching hospitals, many of which have substantially greater
capital, technical and other resources. We may not be able to compete
successfully in the CRO business in the future.
WE DEPEND ON A RELATIVELY LIMITED NUMBER OF CLIENTS AND INDUSTRIES FOR OUR CRO
REVENUES.
We have in the past derived, and in the future will derive, a significant
portion of our CRO revenue from a relatively limited number of major projects or
clients. For the year ended December 31, 1998, our top five CRO customers
accounted for 85% of our CRO revenue. Our top three clients represented 28%, 22%
and 20% of our 1998 CRO revenue. The loss of business from a significant client
could materially harm our business and financial condition.
Our revenues are highly dependent on research and development
expenditures by the pharmaceutical and biotechnology industries. Decreases in
these expenditures, including decreases resulting from an economic downturn in
these industries or from mergers or other consolidations, could have a material
adverse effect on us. Additionally, we have benefitted from the trend in these
industries to outsource an increasing percentage of clinical trial projects. A
reversal of this trend could materially harm our business and financial
condition.
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<PAGE> 11
IF WE ARE UNABLE TO MAINTAIN OUR RELATIONSHIPS WITH CTRC, US ONCOLOGY AND THEIR
RELATED ENTITIES, OUR ABILITY TO CONDUCT CLINICAL TRIALS AND OUR CRO BUSINESS
COULD BE MATERIALLY HARMED.
We have working relationships with CTRC and US Oncology, two of the most
active organizations conducting oncology clinical trials, to support our CRO
business. If we are unable to maintain these relationships, including the
elements providing us with access to patients of affiliated doctors,
investigators and to potential CRO clients, our business and financial condition
could be materially harmed.
THERE ARE RISKS ASSOCIATED WITH THE NATURE AND PRICING OF OUR CRO CONTRACTS.
Most of our CRO contracts can be terminated upon 60 to 90 days notice by
our customer. Customers terminate or delay service contracts for a variety of
reasons, including:
o the failure of a compound being tested to satisfy safety requirements;
o unexpected or undesired clinical results of the compound;
o the customer's decision to forgo a particular study;
o insufficient patient enrollment or investigator recruitment; or
o production problems resulting in shortages of the compound.
The loss or delay of a large contract or the loss or delay of multiple
contracts could materially harm our business and financial condition.
All of our CRO contracts for the provision of services are fixed-price or
fee-for-service with a cap. Our CRO revenues are earned under contracts which
generally range in duration from a few months to two years. For the nine-month
period ended September 30, 1999, fixed-price contracts accounted for 67% of our
CRO net revenues and fee-for-service accounted for 33% of our CRO net revenues.
We bear the risks of cost overruns in contracts structured as fixed-price
contracts or fee-for-service with a cap. Underpricing of contracts or
significant cost overruns could materially harm our business and financial
condition.
Competition in the CRO industry has resulted in significant price and
other competition. Further increases in such competition, and the resultant
price pressure, could materially harm our business and financial condition.
MANY CRO CUSTOMERS AND POTENTIAL CUSTOMERS MAY PERCEIVE A CONFLICT OF INTEREST
BETWEEN THEIR BUSINESS AND ILEX PRODUCTS, INC. WHICH MAY DETER THEM FROM
CONTRACTING WITH US FOR CRO SERVICES.
Many potential customers of our CRO business are other drug development
companies which may be, or may perceive themselves to be, competitors of ILEX in
the context of our product development business. These drug development
companies may thus be deterred from contracting with us for CRO services and
thereby limit revenue growth potential for our CRO business.
IF WE BECOME SUBJECT TO PRODUCT LIABILITY CLAIMS IN OUR CRO BUSINESS OR IN
CONNECTION WITH COMMERCIALIZATION OF OUR PRODUCTS, THEY MAY RESULT IN DAMAGES
EXCEEDING OUR INSURANCE LIMITATION OR REDUCE DEMAND FOR THE APPLICABLE PRODUCTS.
Clinical research involves the testing of new drugs on human volunteers,
and such testing involves a risk of liability for personal injury or death to
patients from possible unforeseen adverse side effects or improper
administration of the new drug. Many of these patients are already seriously ill
and at risk of further illness or death. Although we maintain our own product
liability and clinical trial insurance and generally obtain indemnification from
our clients, our business could be materially harmed if we were required to pay
damages or incur defense costs:
o in connection with a claim outside the scope of indemnity or insurance
coverage;
o if the indemnity, although applicable, were not performed in accordance
with the terms of the relevant contract; or
o if our liability exceeded the amount of applicable insurance coverage.
In addition, we cannot be sure such insurance will continue to be
available on terms acceptable to us, if at all, or that the insurance coverage,
if obtained, will be sufficient to cover any potential claims or liabilities.
Similar risks would exist for product liability upon the commercialization or
marketing of any products by us or our partners. In addition, regardless of
merit or eventual outcome, product liability claims may result in decreased
demand for the applicable product or our products in general and in injury to
our general reputation.
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<PAGE> 12
OUR LACK OF EXPERIENCE IN HANDLING HAZARDOUS MATERIALS AND IN OTHER
ENVIRONMENTAL MATTERS MAY CAUSE US TO INCUR SUBSTANTIAL COSTS.
We use hazardous materials, chemicals and various other toxic compounds
in our development and other programs. We are therefore subject to federal,
state and local laws and regulations governing the use, manufacture, storage,
handling and disposal of hazardous materials and certain waste products. We
cannot eliminate the risk of contamination or injury from these materials. In
such event, we could be held liable for any damages that result and any such
liability could exceed our resources. We may also incur substantial costs to
comply with environmental regulations if and when we develop commercial-scale
manufacturing capacity.
OUR ABILITY TO CONDUCT ANIMAL TESTING COULD BE LIMITED IN THE FUTURE.
Certain of our CRO business activities involve animal testing. Such
activities have been the subject of controversy and adverse publicity. Animal
rights groups and various other organizations and individuals have attempted to
stop animal testing activities by pressing for legislation and regulation in
these areas. To the extent the activities of these groups are successful, our
business could be materially harmed.
OUR STOCK PRICE MAY FLUCTUATE SIGNIFICANTLY, WHICH MAY MAKE IT DIFFICULT TO
RESELL YOUR SHARES WHEN YOU WANT TO AT PRICES YOU FIND ATTRACTIVE.
The market price of our common stock has been highly volatile. This
volatility may adversely affect the price of our common stock in the future. You
may not be able to resell your shares of common stock following periods of
volatility because of the market's adverse reaction to this volatility. We
anticipate that this volatility, which frequently affects the stock prices of
biotechnology and pharmaceutical companies, will continue. Factors that could
cause such volatility include:
o our quarterly operating results;
o deviations in our operating results from the estimates of securities
analysts;
o FDA and/or international regulatory actions;
o limited trading volumes;
o general economic conditions or economic conditions specific to the
biotechnology and pharmaceutical industries; and
o other developments affecting our competitors or us.
On occasion the equity markets, and in particular the markets for
biotechnology and pharmaceutical stocks, have experienced significant price and
volume fluctuations. These fluctuations have affected the market price for many
companies' securities even though the fluctuations are often unrelated to the
companies' operating performance.
WE ARE SUBJECT TO INFLUENCE FROM PRINCIPAL STOCKHOLDERS, EXECUTIVE OFFICERS AND
DIRECTORS; AND WE ARE SUBJECT TO VARIOUS PROVISIONS THAT COULD DISCOURAGE OR
PREVENT A CHANGE OF CONTROL OF THE COMPANY.
Our executive officers and directors (and their affiliates), in the
aggregate, beneficially own or control approximately 29% of our outstanding
common stock and therefore have the ability to exercise substantial influence
over the outcome of most stockholders' actions, including the election of the
members of the Board of Directors. This concentration of ownership could have an
adverse effect on the price of our common stock or have the effect of delaying
or preventing a change in control of the Company. In addition, certain
provisions of Delaware law and our Certificate of Incorporation could make it
more difficult for a third party to acquire, or discourage a third party from
attempting to acquire, control of ILEX. These provisions could limit the price
that certain investors might be willing to pay in the future for shares of our
common stock. These provisions of Delaware law and our Certificate of
Incorporation may also discourage or prevent certain types of transactions
involving an actual or threatened change in control of ILEX (including
unsolicited takeover attempts), even though such a transaction may offer our
stockholders the opportunity to sell their stock at a price above the prevailing
market price. Certain of these provisions allow us to issue preferred stock
without any vote or further action by the stockholders. These provisions may
make it more difficult for stockholders to take certain corporate actions and
could have the effect of delaying or preventing a change in control of ILEX. In
addition, certain of our corporate partners have the right to terminate their
respective agreements with us upon certain changes in control of ILEX, which may
discourage acquisitions or other changes in control (including those in which
our stockholders might otherwise receive a premium for their shares over
then-current market prices).
11
<PAGE> 13
THE COMPANY
OVERVIEW
We develop pharmaceuticals for treating and preventing cancer and provide
contract research services to other companies developing anticancer drugs. We
have a portfolio of seven anticancer products in clinical development and
several preclinical stage products. We built this portfolio by in-licensing and
acquiring product candidates developed by others and do not conduct early-stage
drug discovery research ourselves. We recently completed a pivotal clinical
trial in chronic lymphocytic leukemia, or CLL, for our most advanced product
candidate, CAMPATH(R). We are developing CAMPATH(R) in partnership with
LeukoSite, Inc., a subsidiary of Millennium Pharmaceuticals, Inc. In December
1999, the partnership completed the filing with the U.S. Food and Drug
Administration, or FDA, for marketing approval of CAMPATH(R). The FDA has
granted CAMPATH(R) fast-track status, requiring agency review to be completed
within six months from the date of the filing. In August 1999 this partnership
licensed worldwide marketing rights (except for Japan and East Asia) for
CAMPATH(R) to Schering AG.
We operate through two subsidiaries: ILEX Products, Inc., through which
we develop our own portfolio of anticancer compounds, and ILEX Oncology
Services, Inc., or ILEX Services, which is our full service contract research
organization, or CRO. ILEX Services manages the preclinical research and
clinical trials for our own product candidates as well as oncology products
being developed by other companies. In addition to building our expertise in
cancer drug development, our CRO business generates revenue, reduces our cost to
perform our own research and development, and gives us access to product
in-licensing opportunities.
OUR MARKET
Cancer encompasses a large number of discrete diseases that afflict many
different parts of the human body. The diversity of cancer diseases and their
overall prevalence create a large need for new and improved treatments. Cancer
is the second leading cause of death in the U.S. It is estimated that one in
three Americans will be diagnosed with cancer. The worldwide oncology drug
market was estimated at $16 billion in 1998, representing 15% growth from 1997.
This market is not saturated, with novel treatments often enjoying premium
pricing and rapid market acceptance.
Fundamentals of the oncology market that are particularly advantageous
for us include:
o accelerated approval procedures adopted by the FDA to shorten the
development process and review time for cancer drugs;
o in-licensing opportunities created by a trend among large pharmaceutical
companies to concentrate on products with larger market potential than
most anticancer drugs;
o favorable pricing and reimbursement for oncology drugs, with some novel
agents commanding $6,000 to $15,000 per course of therapy; and
o a highly concentrated population of oncologists and hematologists which
allows a small sales force to be effective.
OUR STRATEGY
Our objective is to be a leading oncology drug company. We intend to
market or co-market our own products in the future and become an
oncology-focused specialty pharmaceutical company. Our strategy consists of the
following elements:
o focus on the expanding cancer market;
o use our expertise to identify and in-license product candidates;
o reduce risk by developing a broad portfolio of products;
o form strategic collaborations to support development and
commercialization of our products;
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<PAGE> 14
o offer a full range of oncology CRO services; and
o use our CRO business to create in-licensing opportunities and lower our
own development costs.
ILEX PRODUCTS, INC.
We have seven drugs in clinical development and several product
candidates in late preclinical research. All of our product rights were either
acquired or in-licensed. We follow a disciplined approach to product acquisition
and development:
o we only in-license product candidates that have shown strong preclinical
or human efficacy results;
o we only develop drugs that are patent protected, have patents pending or
can qualify for orphan drug designation from the FDA;
o we do not perform early-stage research;
o we advance compounds into Phase II trials only if promising efficacy
results are seen in Phase I trials; and
o we seek partners when deemed appropriate to share the cost and risk of
developing and commercializing our products.
In addition to traditional chemotherapy drugs that kill cancer cells, we
are developing a number of chemoprevention agents, which are intended to be
well-tolerated oral therapies aimed at preventing the occurrence, progression or
recurrence of cancer. The market potential for chemoprevention agents is
increasing as more genetic and other diagnostic tests become available to
identify people at risk of developing cancer. As long-term therapies,
chemoprevention agents have the potential to address new markets substantially
larger than most acute care cancer products. Although long-term studies are
usually needed to prove that a drug can prevent cancer, our strategy is to seek
approval based upon effectively treating a pre-cancerous condition or preventing
the recurrence of cancer, thereby shortening the approval process.
CAMPATH(R)
Our most advanced product candidate, CAMPATH(R), is a humanized
monoclonal antibody in development for treating CLL in patients resistant to
currently available drug therapies. CLL is the most common form of adult
leukemia, with approximately 120,000 patients in the U.S. and Europe suffering
from the disease. Based on pilot human studies, CAMPATH(R) may also have utility
in treating patients with non-Hodgkin's lymphoma, multiple sclerosis and organ
transplants. We are developing CAMPATH(R) in a 50/50 joint venture with
LeukoSite known as L&I Partners, L.P. The partnership recently granted worldwide
marketing rights (excluding Japan and East Asia) for CAMPATH(R) to Schering AG
under an agreement that provides the partnership with up to $30 million of
up-front and milestone payments and approximately 67% of net profits from sales.
In June 1999 we presented data from the pivotal trial of CAMPATH(R),
which was conducted in 93 patients who had failed treatments with fludarabine
and an alkylating agent, the two standard therapies for treating CLL. Of the 93
patients enrolled, 31 (33%) had a complete or partial response. Based on these
results, the partnership completed the filing of its Biologics License
Application, or BLA, with the FDA in December 1999.
Eflornithine
Our second most advanced product candidate is eflornithine, a
chemoprevention agent. In April 1999 we initiated a Phase III trial of
eflornithine for preventing the recurrence of superficial bladder cancer. This
double-blind, placebo-controlled, 450-patient trial is being co-sponsored by the
National Cancer Institute, or NCI. More than 140,000 patients in the U.S. have
recurrent superficial bladder cancer. With the NCI, we are also investigating
eflornithine for use in other pre-malignant conditions. The compound is in a
Phase III trial in non-melanoma skin cancer, a Phase IIb trial in recurrent
colon polyps, and Phase II trials in Barrett's esophagus. These conditions are
precursors to skin, colon and esophageal cancer, respectively.
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<PAGE> 15
OXYPRIM(TM)
We are developing OXYPRIM(TM), or oxypurinol, for treatment of gout. The
only currently available treatment for the cause of gout is allopurinol.
However, 3 to 5% of patients receiving allopurinol develop an intolerance to it.
We are developing OXYPRIM(TM) as an alternative to allopurinol for these 50,000
to 90,000 patients. Based on results from our compassionate use program, we plan
to pursue marketing approval for OXYPRIM(TM) under the FDA's accelerated
approval guidelines by conducting a pivotal Phase II trial in 2000 and
submitting a New Drug Application, or NDA, shortly thereafter.
Other Clinical Candidates
Our other clinical stage products include:
o ILX-295501 -- in-licensed from Eli Lilly and initiated Phase II trials in
four cancers: ovarian, kidney, non-small cell lung and melanoma. Eli
Lilly has the right to repurchase our rights following Phase II trials,
with ILEX retaining a royalty interest;
o Aminopterin-- in Phase II trials for acute leukemia and refractory
endometrial cancer;
o Apomine(TM), or SR-45023A -- in Phase I trials for solid tumors, being
co-developed with Symphar SA, a Swiss biotechnology company; and
o ILX23-7553 -- a vitamin D(3) analog in Phase I trials for breast and
prostate cancers and other solid tumors.
Preclinical Anti-Angiogenesis Candidates
In July 1999 we acquired Convergence Pharmaceuticals, Inc. and its
portfolio of angiogenesis inhibitor product candidates. Angiogenesis inhibitors
help block the formation of new blood vessels that tumors require to grow larger
or to recover from chemotherapy or radiation. Our angiogenesis inhibitor
pipeline includes five proteins that would be given intravenously and a small
molecule inhibitor that would be taken orally.
We are also in preclinical development with THP-Dox, a
peptide-doxorubicin conjugate that binds to a receptor on tumor blood vessels.
Doxorubicin is a widely-used generic chemotherapy agent. We intend to develop
THP-Dox as an anti-angiogenic treatment for prostate, breast and lung cancers.
We expect to bring two of these product candidates into human trials in
2000.
ILEX ONCOLOGY SERVICES, INC.
We believe ILEX Services is the only full service provider of CRO
services focused predominantly on oncology. We offer a full range of specialized
preclinical research and clinical trial services, including chemistry and
toxicology services, small-scale manufacturing, design of clinical protocols,
organization and monitoring of clinical trials and preparation of regulatory
submissions. Based on our expertise, we aim to reduce the time normally required
to develop oncology products and increase the probability of obtaining
regulatory approval. In addition, ILEX Services provides CRO services on a
contract basis to ILEX Products and has been the source of three of the products
we now have in clinical development.
Our CRO revenues grew from $5.9 million in 1997 to $9.7 million in 1998
and were $9.5 million in the first nine months of 1999. Our CRO client list
includes more than 40 biotechnology and pharmaceutical companies, currently
conducting approximately 100 preclinical studies and clinical trials with us.
We work closely with prestigious cancer research institutions and groups
that give us access to top oncology clinical expertise. Our Board of Directors
includes Dr. Daniel Von Hoff, president of the American Association for Cancer
Research, and Dr. Joseph Bailes, president of the American Society of Clinical
Oncology. In addition, we have a strong relationship with CTRC Research
Foundation, or CTRC Research, our largest stockholder. CTRC Research has one of
the largest oncology Phase I trial organizations in the U.S. We also have strong
historical ties with US Oncology, Inc.,
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<PAGE> 16
the largest oncology physician practice management organization in the U.S.,
whose physicians see approximately 13% of the new cancer patients in the U.S.
annually. Our strong relationships with these groups give us access to a
significant number of patients for enrollment into clinical trials. We believe
that our oncology focus combined with these relationships make us an attractive
option for companies selecting a CRO to develop a cancer drug.
ILEX is a Delaware corporation. Our principal executive offices are
located at 11550 I.H. 10 West, Suite 100, San Antonio, Texas 78230, and our
telephone number is (210) 949-8200.
USE OF PROCEEDS
The Shares to be sold pursuant to the prospectus are owned by current
stockholders of the Company. The Company will not receive any of the proceeds
from the sale of the Shares. See "Selling Stockholders."
SELLING STOCKHOLDERS
We are registering the shares covered by this prospectus on behalf of the
Selling Stockholders listed below. We issued the shares to the Selling
Stockholders in a private placement transaction.
The table below presents the following information about the number of
shares of the Common Stock of the Company which is owned by each Selling
Stockholder: (i) the number of shares each Selling Stockholder beneficially owns
as of the date of this prospectus, (ii) the percentage of the Company's
outstanding shares of Common Stock that each Selling Stockholder beneficially
owns prior to the offering, (iii) the number of shares that each Selling
Stockholder is offering under this prospectus, (iv) the number of shares that
each Selling Stockholder will beneficially own after the completion of this
offering and (v) the percentage of the Company's outstanding shares of Common
Stock that each Selling Stockholder will beneficially own after the completion
of the offering.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP
BEFORE THE OFFERING AFTER THE OFFERING(1)
---------------------------- --------------------------
NUMBER PERCENTAGE SHARES TO NUMBER PERCENTAGE
NAME OF SHARES OF CLASS(2) BE SOLD OF SHARES OF CLASS
---- ------------ ------------ ----------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Janus Investment Fund 1,810,115 7.3% 500,000 1,310,115 5.3%
SMALLCAP World Fund, Inc. 885,000 3.6% 674,000 211,000 *
The Growth Fund of America, Inc. 800,000 3.2% 608,000 192,000 *
Franklin Biotechnology Discovery Fund 474,500 * 116,481 358,019 1.4%
IDS Life Sciences Fund, Inc. 300,000 * 199,681 100,319 *
BayStar Capital L.P. 210,010 * 139,777 70,233 *
Merlin Biomed Int'l Ltd. 206,300 * 107,405 98,895 *
Aries Master Fund 142,404 * 21,349 121,055 *
Merlin Biomed L.P. 98,700 * 35,700 63,000 *
United Capital Management, Inc. 80,000 * 53,248 26,752 *
Aries Domestic Fund, L.P. 68,653 * 10,292 58,361 *
American Variable Insurance Series
Global Small Capitalization Fund 65,000 * 49,208 15,792 *
BayStar International Ltd. 70,000 * 46,592 23,408 *
IBEW Pension Benefit Fund 55,355 * 43,020 12,335 *
Victor Equity Hub Fund Ltd. 47,040 * 23,540 23,500 *
Prism Partners I L.P. 42,001 * 27,956 14,045 *
Emory University 39,200 * 25,225 12,975 *
The Commonfund 31,700 * 21,200 10,500 *
Southern California Edison Retirement Plan 30,600 * 20,500 10,100 *
Veredus Partners L.P. 30,508 * 30,508 0 0
Ewing Marion Kauffman Foundation 25,200 * 16,900 8,300 *
Oklahoma Police Pension and Retirement
System 24,500 * 15,000 9,500 *
Highmark, Inc. 23,500 * 15,700 7,800 *
Phycor, Inc. Profit Sharing Plan 21,600 * 14,500 7,100 *
MCP Global Corp Ltd. 20,000 * 13,312 6,688 *
</TABLE>
15
<PAGE> 17
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP
BEFORE THE OFFERING AFTER THE OFFERING(1)
---------------------------- --------------------------
NUMBER PERCENTAGE SHARES TO NUMBER PERCENTAGE
NAME OF SHARES OF CLASS(2) BE SOLD OF SHARES OF CLASS
---- ------------ ------------ ----------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Johns Hopkins University 17,100 * 11,400 5,700 *
The Commonfund 16,100 * 9,624 6,476 *
Zeke, L.P. 15,000 * 9,984 5,016 *
Prism Partners II Offshore Fund 12,000 * 7,987 4,013 *
University of Nebraska Foundation 12,000 * 7,500 4,500 *
Children's Medical Center 11,800 * 7,900 3,900 *
The Hare Investment Fund, LP 11,000 * 7,322 3,678 *
Aries Domestic Fund II, L.P. 10,935 * 1,639 9,296 *
Whittier Ventures LLC 10,000 * 6,656 3,344 *
Ashton Partners, L.L.C. 10,000 * 6,656 3,344 *
Carl S. Goldfischer, M.D. 10,000 * 6,656 3,344 *
Oak Point Asset Management 10,000 * 6,656 3,344 *
Meriken Nominees 10,000 * 6,657 3,343 *
MRM Life Ltd. 7,494 * 4,988 2,506 *
James C. Kelly 7,494 * 4,988 2,506 *
Retirement Trust for Employees of
Harbison-Fischer 6,800 * 4,600 2,200 *
Metro Teachers Retirement Fund 6,600 * 4,400 2,200 *
Sue D. Cooley 6,300 * 4,200 2,100 *
Veredus Market Neutral Fund L.P. 6,100 * 6,100 0 0
Prism Partners Offshore Fund 5,999 * 3,993 2,006 *
Trust u/w dtd 12/12/96 Michael S. Currier 5,200 * 3,500 1,700 *
John D. Gray 5,000 * 3,000 2,000 *
Carroll M. Carpenter 4,500 * 3,000 1,500 *
Katharine du Pont Weymouth 4,400 * 2,900 1,500 *
Sierra Health Foundation 4,300 * 2,900 1,400 *
Elizabeth N. Gray 4,000 * 2,500 1,500 *
Emily Hall Tremaine Foundation 3,700 * 2,500 1,200 *
Gardner Lewis Growth Fund L.P. 3,500 * 2,300 1,200 *
CapitalWorks Investment Partners Small
Cap Fund 3,300 * 2,000 1,300 *
Lutheran Charities Foundation 2,900 * 1,900 1,000 *
Elan Polo Inc. - Profit Sharing Plan 2,800 * 1,900 900 *
Ashley du P. Gates 2,300 * 1,500 800 *
John D. Gates Jr. 2,300 * 1,500 800 *
Averitt Express, Inc. 2,200 * 1,500 700 *
James L. Clayton 1,900 * 1,300 600 *
University of Nebraska Foundation - Acct #2 1,600 * 1,000 600 *
</TABLE>
16
<PAGE> 18
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP
BEFORE THE OFFERING AFTER THE OFFERING(1)
---------------------------- --------------------------
NUMBER PERCENTAGE SHARES TO NUMBER PERCENTAGE
NAME OF SHARES OF CLASS(2) BE SOLD OF SHARES OF CLASS
---- ------------ ------------ ----------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Wayne G. Basler 1,100 * 700 400 *
Forney Trio Account 1,000 * 700 300 *
Twin Oaks Family Limited Partnership 1,000 * 700 300 *
Thayne D. Muller 700 * 500 200 *
J.W. Urquhart, Jr. IRA 600 * 400 200 *
Elizabeth W. Touchstone 600 * 400 200 *
F. du Pont Rust FBO Elizabeth Carpenter 400 * 300 100 *
Arrowhead Properties/Hap GL#1 400 * 300 100 *
F. du Pont Rust FBO Ashley Gates 400 * 300 100 *
Aurelia Bolton Peterson 300 * 200 100 *
Lindsey and Robert Rada 300 * 200 100 *
F. du Pont Rust FBO John D. Gates 200 * 100 100 *
TOTAL 6,168,095 24.9% 3,000,000 3,168,095 12.8%
</TABLE>
- -----------------
(1) Assumes all shares of Common Stock offered hereby are sold.
(2) Based on 24,733,508 shares of Common Stock outstanding as of January 31,
2000, after giving effect to the issuance of 3,000,000 shares in the
private placement.
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<PAGE> 19
PLAN OF DISTRIBUTION
All 3,000,000 shares of Common Stock being registered hereby are being
registered on behalf of the Selling Stockholders. ILEX will receive no proceeds
from this offering. As used herein, the term "Selling Stockholders" includes
donees, pledgees, transferees or other successors-in-interest selling Shares
received from a Selling Stockholder as a gift, pledge, partnership distribution
or other non-sale related transfer after the date of this prospectus. In
addition, upon the company being notified by a Selling Stockholder that a donee,
pledgee, transferee or other successor-in-interest intends to sell more than 500
shares, a supplement to this prospectus will be filed.
Each Selling Stockholder will act independently of ILEX in making
decisions with respect to the timing, manner and size of each sale. Each Selling
Stockholder may choose to sell the Shares from time to time at market prices
prevailing at the time of the sale, at prices related to the then prevailing
market prices or in negotiated transactions, including pursuant to an
underwritten offering or pursuant to one or more of the following methods:
o a block trade in which the broker or dealer so engaged will
attempt to sell the Shares as agent but may position and resell a
portion of the block as principal in order to facilitate the
transaction,
o purchases by a broker or dealer as principal and resale by such
broker or dealer for its account pursuant to this prospectus,
o an exchange distribution in accordance with the rules of an
exchange, and
o ordinary brokerage transactions and transactions in which the
broker solicits purchasers.
In connection with the sale of the Shares, the Selling Stockholders may
engage broker-dealers who in turn may arrange for other broker-dealers to
participate. Broker-dealers may receive commissions or discounts from a Selling
Stockholder in amounts to be negotiated immediately prior to the sale. In
addition, underwriters or agents may receive compensation from a Selling
Stockholder or from purchasers of the Shares for whom they may act as agents, in
the form of discounts, concessions or commissions. Underwriters may sell shares
to or through dealers, and such dealers may receive compensation in the form of
discounts, concessions or commissions from the underwriters or commissions from
the purchasers for whom they act as agents. Each Selling Stockholder,
underwriters, brokers, dealers and agents that participate in the distribution
of the Shares may be deemed to be underwriters, and any discounts or commissions
received by them from a Selling Stockholder and any profit on the resale of the
Shares by them may be deemed to be underwriting discounts and commissions under
the Securities Act.
At the time a particular offer of Shares is made, to the extent required,
a supplement to this prospectus will be distributed which will identify and set
forth the aggregate amount of Shares being offered and the terms of the
offering. Such supplement will also disclose the following information:
o the name or names of any underwriters, dealers or agents,
o the purchase price paid by any underwriter for Shares purchased
from a Selling Stockholder,
o any discounts, commissions and other items constituting
compensation from a Selling Stockholder and/or ILEX, and
o any discounts, commissions or concessions allowed or reallowed or
paid to dealers, including the proposed selling price to the
public.
We have agreed to indemnify the Selling Stockholders in certain
circumstances against certain liabilities, including liabilities under the
Securities Act. The Selling Stockholders have agreed to indemnify ILEX in
certain circumstances against certain liabilities, including liabilities under
the Securities Act.
The Selling Stockholders also may resell all or a portion of the Shares
in open market transactions in reliance upon Rule 144 under the Securities Act,
provided it meets the criteria and conforms to the requirements of such Rule.
18
<PAGE> 20
The Selling Stockholders and any other persons participating in the sale
or distribution of the Shares being registered hereby will be subject to the
provisions of the Exchange Act and the rules and regulations thereunder,
including Regulation M, to the extent applicable. The foregoing provisions may
limit the timing of purchases and sales of any of the Shares by the Selling
Stockholders or any other such person. This may affect the marketability of the
Shares. The Selling Stockholders also will comply with the applicable prospectus
delivery requirements under the Securities Act in connection with the sale or
distribution of the Shares hereunder.
In order to comply with certain states' securities laws, if applicable,
the Shares will be sold in such jurisdictions only through registered or
licensed brokers or dealers. In certain states, the Shares may not be sold
unless the Shares have been registered or qualified for sale in such state,
unless an exemption from registration or qualification is available and is
obtained.
ILEX will bear all out-of-pocket expenses incurred in connection with the
registration of the Shares, including, without limitation, all registration and
filing fees imposed by the Commission, The Nasdaq Stock Market, Inc. and blue
sky laws, printing expenses, transfer agents' and registrars' fees, and the fees
and disbursements of ILEX's outside counsel and independent public accountants.
The Selling Stockholders will bear all underwriting discounts and commissions
and transfer or other taxes.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Section 145 of the Delaware General Corporation Law (the "DGCL") provides
that a Delaware corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative (a
"proceeding") (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. A
Delaware corporation may indemnify any person under such Section in connection
with a proceeding by or in the right of the corporation to procure judgment in
its favor, as provided in the preceding sentence, against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection with the
defense or settlement of such action, except that no indemnification shall be
made in respect thereof unless, and then only to the extent that, a court of
competent jurisdiction shall determine upon application that such person is
fairly and reasonably entitled to indemnity for such expenses as the court shall
deem proper. A person is fairly and reasonably entitled to indemnity for such
expenses as the court shall deem proper. A Delaware corporation must indemnify
any person who was successful on the merits or otherwise in defense of any
action, suit or proceeding or in defense of any claim, issue or matter in any
proceeding, by reason of the fact that he is or was a director, officer,
employee or agent of the corporation or is or was serving at the request of the
corporation, against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith. A Delaware corporation may
pay for the expenses (including attorneys' fees) incurred by an officer or
director in defending a proceeding in advance of the final disposition upon
receipt of an undertaking by or on behalf of such officer or director to repay
such amount if it shall ultimately be determined that he is not entitled to be
indemnified by the corporation.
Section 102(b)(7) of the DGCL permits a corporation to provide in its
certificate of incorporation that a director shall not be personally liable to
the corporation or its stockholders for monetary damages for a breach of
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii) for any
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) in respect of certain unlawful dividend payments
or stock redemptions or repurchases, or (iv) for any transaction from which the
director derived an improper personal benefit. Article Tenth of the Company's
Certificate of Incorporation, as amended, eliminates the liability of directors
to the fullest extent permitted by Section 102(b)(7) of the DGCL. The DGCL
permits the purchase of insurance on behalf of directors and officers against
any liability asserted against
19
<PAGE> 21
directors and officers and incurred by such persons in such capacity, or arising
out of their status as such, whether or not the corporation would have the power
to indemnify directors and officers against such liability.
The Company also has a policy insuring its directors and officers against
certain liabilities, including liabilities under the Securities Act.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors and officers and controlling persons pursuant
to the foregoing provisions, the Company has been advised that, in the opinion
of the Commission, such indemnification is against public policy as expressed in
the Securities Act and is, therefore, unenforceable.
LEGAL MATTERS
The validity of the securities offered hereby will be passed upon by
Fulbright & Jaworski L.L.P.
EXPERTS
The consolidated financial statements included in the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1998 incorporated by
reference in this prospectus have been audited by Arthur Andersen LLP,
independent public accountants, to the extent and for the periods set forth in
their reports incorporated herein by reference, and are incorporated herein in
reliance on such reports given upon the authority of such firm as experts in
accounting and auditing.
20
<PAGE> 22
================================================================================
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION
OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN
OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
ITS DATE.
------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information ....................... 2
Incorporation of Certain Documents
by Reference .............................. 2
Special Note Regarding Forward-Looking
Statements ................................ 3
Risk Factors ................................ 4
The Company ................................. 12
Use of Proceeds ............................. 15
Selling Stockholder ......................... 15
Plan of Distribution ........................ 18
Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities ............................... 19
Legal Matters ............................... 20
Experts ..................................... 20
</TABLE>
================================================================================
3,000,000 SHARES
ILEX ONCOLOGY, INC.
COMMON STOCK
-------------
P R O S P E C T U S
MARCH 7, 2000
-------------
================================================================================
<PAGE> 23
PART II
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses in connection with this offering are:
<TABLE>
<S> <C>
Commission registration fee $40,194
Legal fees and expenses* 10,000
Miscellaneous* 2,000
------
Total $52,194
======
</TABLE>
--------------------
* Estimated
The Company has agreed to pay all the costs and expenses of this
offering.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the DGCL empowers the Registrant to, and the Bylaws of the
Registrant provide that it shall, indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding by reason of the fact that he is or was a director, officer,
employee or agent of the Registrant, or is or was serving at the request of the
Registrant as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses,
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interest of the Registrant, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful; except
that, in the case of an action or suit by or in the right of the Registrant, no
indemnification may be made in respect of any claim, issue or matter as to which
such person shall have been adjudged to be liable for negligence or misconduct
in the performance of his duty to the Registrant unless and only to the extent
that the Court of Chancery or the court in which such action or suit was brought
shall determine that such person is fairly and reasonably entitled to indemnity
for proper expenses.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling the Company
pursuant to the foregoing provisions, the Company has been informed that in the
opinion of the Commission, such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable.
The Registrant maintains directors' and officers' liability insurance
that covers the directors and officers of the Registrant.
ITEM 16. EXHIBITS.
Exhibit No. Exhibit
- ----------- -------
5.1 Opinion of Fulbright & Jaworski L.L.P. regarding legality
(filed herewith)
10.1 Form of Purchase Agreement between ILEX Oncology, Inc. and each
Purchaser (filed herewith).
23.1 Consent of Fulbright & Jaworski L.L.P. (contained in Exhibit 5.1)
23.2 Consent of Arthur Andersen L.L.P. (filed herewith)
24.1 Power of Attorney (included on signature page).
II-2
<PAGE> 24
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement to include
any material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement;
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) The undersigned Registrant hereby undertakes that, insofar as
indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Commission, such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II-3
<PAGE> 25
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all the requirements for filing on Form S-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of San Antonio and State of Texas the 7th day of
March, 2000.
ILEX ONCOLOGY, INC.
By: /s/ Gregory L. Weaver
-----------------------------------------------
Gregory L. Weaver
Vice President and Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Michael T. Dwyer and Ronald G. Tefteller,
or either of them, his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same
and all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting said attorney-in-fact and agent,
and each of them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the premises, as fully
to all intents and purposes as he might or could do in person, hereby ratifying
and confirming all that said attorney-in-fact and agent or either of them, or
their or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
/s/ Gary V. Woods Chairman of the Board March 7, 2000
- ------------------------------------
Gary V. Woods
/s/ Richard L. Love President, Chief Executive March 7, 2000
- ------------------------------------ Officer, and a Director
Richard L. Love (Principal Executive
Officer)
/s/ Gregory L. Weaver Vice President and Chief March 7, 2000
- ------------------------------------ Financial Officer
Gregory L. Weaver (Principal Financial and
Accounting Officer)
/s/ Daniel D. Von Hoff, M.D. Director March 7, 2000
- ------------------------------------
Daniel D. Von Hoff, M.D.
/s/ John L. Cassis Director March 7, 2000
- ------------------------------------
John L. Cassis
</TABLE>
II-4
<PAGE> 26
<TABLE>
<S> <C> <C>
/s/ A. Dana Callow, Jr. Director March 7, 2000
- ------------------------------------
A. Dana Callow, Jr.
/s/ Ruskin C. Norman, M.D. Director March 7, 2000
- ------------------------------------
Ruskin C. Norman, M.D.
/s/ Jason S. Fisherman, M.D. Director March 7, 2000
- ------------------------------------
Jason S. Fisherman, M.D.
/s/ Joseph S. Bailes, M.D. Director March 7, 2000
- ------------------------------------
Joseph S. Bailes, M.D.
/s/ Glenn C. Rice, Ph.D. Director March 7, 2000
- ------------------------------------
Glenn C. Rice, Ph.D.
</TABLE>
II-5
<PAGE> 27
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
5.1 Opinion of Fulbright & Jaworski L.L.P. regarding legality
(filed herewith)
10.1 Form of Purchase Agreement between ILEX Oncology, Inc. and each
Purchaser (filed herewith).
23.1 Consent of Fulbright & Jaworski L.L.P. (contained in Exhibit 5.1)
23.2 Consent of Arthur Andersen L.L.P. (filed herewith)
24.1 Power of Attorney (included on signature page).
</TABLE>
<PAGE> 1
EXHIBIT 5.1
[FULBRIGHT & JAWORSKI L.L.P. LETTERHEAD]
March 7, 2000
ILEX Oncology, Inc.
11550 I.H. 10 West, Suite 100
San Antonio, Texas 78230
Dear Sirs:
We refer to the Registration Statement on Form S-3 (the "Registration
Statement") to be filed on or about March 7, 2000, by ILEX Oncology, Inc. (the
"Company") under the Securities Act of 1933, as amended, relating to an
aggregate of 3,000,000 shares of Common Stock, $.01 par value ("Common Stock"),
to be sold by certain selling stockholders listed in the Registration Statement
(the "Selling Stockholders").
As counsel for the Company, we have examined such corporate records,
documents and such questions of law as we have considered necessary or
appropriate for the purposes of this opinion and, upon the basis of such
examination, advise you that in our opinion the 3,000,000 shares of Common Stock
to be sold by the Selling Stockholders have been duly and validly authorized,
and, when issued, delivered, sold and paid for in accordance with the terms of
the Purchase Agreements between the Company and each selling stockholder, will
be legally issued, fully paid and nonassessable.
We consent to the filing of this opinion as an exhibit to the
Registration Statement and the reference to this firm under the caption "Legal
Matters" in the prospectus contained therein and elsewhere in the Registration
Statement and prospectus. This consent is not to be construed as an admission
that we are a party whose consent is required to be filed with the Registration
Statement under the provisions of the Securities Act of 1933, as amended.
Very truly yours,
/s/ Fulbright & Jaworski L.L.P.
<PAGE> 1
EXHIBIT 10.1
PURCHASE AGREEMENT
THIS AGREEMENT is made as of the 2nd day of March, 2000, by
and between ILEX Oncology, Inc., a corporation organized under the laws of the
State of Delaware, with its principal offices at 11550 I.H. 10 West, Suite 100,
San Antonio, Texas 78230 (the "Company"), and the purchaser whose name and
address is set forth on the signature page hereof (the "Purchaser").
IN CONSIDERATION of the mutual covenants contained in this
Agreement, the Company and the Purchaser agree as follows:
SECTION 1. Authorization of Sale of the Shares. Subject to the
terms and conditions of this Agreement, the Company has authorized the sale of
up to 3,000,000 shares (the "Shares") of common stock, par value $.01 per share
(the "Common Stock"), of the Company.
SECTION 2. Agreement to Sell and Purchase the Shares. At the
Closing (as defined in Section 3), the Company will sell to the Purchaser, and
the Purchaser will buy from the Company, upon the terms and conditions
hereinafter set forth, the number of Shares (at the purchase price) shown below:
Price Per
Number to Be Share In Aggregate
Purchased Dollars Price
------------ --------- ---------
The Company proposes to enter into this same form of purchase
agreement with certain other investors (the "Other Purchasers") and expects to
complete sales of the Shares to them. The Purchaser and the Other Purchasers are
hereinafter sometimes collectively referred to as the "Purchasers," and this
Agreement and the agreements executed by the Other Purchasers are hereinafter
sometimes collectively referred to as the "Agreements." The term "Placement
Agent" shall mean the Prudential Vector Healthcare Group, a unit of Prudential
Securities Incorporated.
SECTION 3. Delivery of the Shares at the Closing. The
completion of the purchase and sale of the Shares (the "Closing") shall occur as
soon as practicable and as agreed by the parties hereto following notification
by the Securities and Exchange Commission (the "Commission") to the Company of
the Commission's willingness to declare effective the registration statement to
be filed by the Company pursuant to Section 7.1 hereof (the "Registration
Statement") at a place and time (the "Closing Date") to be agreed upon by the
Company and the Placement Agent and of which the Purchasers will be notified by
facsimile transmission or otherwise.
<PAGE> 2
At the Closing, the Company shall deliver to the Purchaser one
or more stock certificates registered in the name of the Purchaser, or in such
nominee name(s) as designated by the Purchaser in writing, representing the
number of Shares set forth in Section 2 above and bearing an appropriate legend
referring to the fact that the Shares were sold in reliance upon the exemption
from registration under the Securities Act of 1933, as amended (the "Securities
Act"), provided by Section 4(2) thereof and Rule 506 thereunder. The Company
will promptly substitute one or more replacement certificates without the legend
at such time as the Registration Statement becomes effective. The name(s) in
which the stock certificates are to be registered are set forth in the
Registration Statement Questionnaire attached hereto as part of Appendix I. The
Company's obligation to complete the purchase and sale of the Shares and deliver
such stock certificate(s) to the Purchaser at the Closing shall be subject to
the following conditions, any one or more of which may be waived by the Company:
(a) receipt by the Company of same-day funds in the full amount of the purchase
price for the Shares being purchased hereunder; (b) completion of the purchases
and sales under the Agreements with all of the Other Purchasers; and (c) the
accuracy of the representations and warranties made by the Purchasers and the
fulfillment of those undertakings of the Purchasers to be fulfilled prior to the
Closing. The Purchaser's obligation to accept delivery of such stock
certificate(s) and to pay for the Shares evidenced thereby shall be subject to
the following conditions: (a) the Commission has notified the Company of the
Commission's willingness to declare the Registration Statement effective on or
prior to the 75th day after the date such Registration Statement was filed by
the Company; and (b) the accuracy in all material respects of the
representations and warranties made by the Company herein, and the fulfillment
in all material respects of those undertakings of the Company to be fulfilled
prior to Closing. The Purchaser's obligations hereunder are expressly not
conditioned on the purchase by any or all of the Other Purchasers of the Shares
that they have agreed to purchase from the Company.
SECTION 4. Representations, Warranties and Covenants of the
Company. The Company hereby warrants to, and covenants with, the Purchaser as
follows:
4.1. The Company and each of its Subsidiaries (as hereinafter
defined) is a corporation duly organized, validly existing and in good standing
under the laws of the state of the jurisdiction of its incorporation. The
Company and each such subsidiary or other entity controlled directly or
indirectly by the Company (collectively, "Subsidiaries") is duly qualified to do
business and is in good standing as a foreign corporation in each jurisdiction
in which the nature of the business conducted by it or location of the assets or
properties owned, leased or licensed by it requires such qualification, except
for such jurisdictions where the failure to so qualify would not have a material
adverse effect on the assets or properties, business, results of operations or
financial condition of the Company (a "Material Adverse Effect").
4.2. The Company and each of its Subsidiaries has all
requisite corporate power and authority, and all necessary approvals, consents,
orders, licenses, certificates and permits of and from all governmental or
regulatory bodies or any other person or entity (collectively, the "Permits"),
to own, lease and license its assets and properties and conduct its business,
all of which are valid and in full force and effect as described in the November
Registration Statement (as defined above), except where the lack of such
Permits, individually or
-2-
<PAGE> 3
in the aggregate, would not have a Material Adverse Effect. The Company and each
of its Subsidiaries has fulfilled and performed in all material respects all of
its material obligations with respect to such Permits and no event has occurred
that allows, or after notice or lapse of time would allow, revocation or
termination thereof or results in any other material impairment of the rights of
the Company thereunder. Except as may be required under the Securities Act and
state and foreign Blue Sky laws, no other Permits are required to enter into,
deliver and perform this Agreement and to issue and sell the Shares.
4.3. The financial statements of the Company (including all
notes and schedules thereto) incorporated by reference in the confidential
offering memorandum dated February 29, 2000 prepared by the Company, including
all Exhibits (except this Agreement), supplements and amendments thereto (the
"Offering Memorandum"), present fairly the financial position, the results of
operations, the statements of cash flows and the statements of stockholders'
equity and the other information purported to be shown therein of the Company at
the respective dates and for the respective periods to which they apply; and
such financial statements and related schedules and notes have been prepared in
conformity with generally accepted accounting principles, consistently applied
throughout the periods involved, and all adjustments necessary for a fair
presentation of the results for such periods have been made. The summary and
selected financial data incorporated by reference in the Offering Memorandum
present fairly the information shown therein as at the respective dates and for
the respective periods specified and the summary and selected financial data
have been presented on a basis consistent with the consolidated financial
statements incorporated in the Offering Memorandum.
4.4. Arthur Andersen LLP, whose reports are incorporated by
reference as a part of the Company's Registration Statement on Form S-3 (No.
333-87721), as amended (the "November Registration Statement"), are and, during
the periods covered by their reports, were independent public accountants as
required by the Securities Act and the published rules and regulations
thereunder (the "Rules and Regulations").
4.5. The Company and each of its Subsidiaries own or possess
adequate and enforceable rights to use all patents, patent applications,
trademarks, trademark applications, trade names, service marks, copyrights,
copyright applications, licenses, know-how and other similar rights and
proprietary knowledge (collectively, "Intangibles") described in the Offering
Memorandum as being owned by them necessary for the conduct of their businesses.
Neither the Company nor any of its Subsidiaries has received any notice of, or
is not aware of, any infringement of or conflict with asserted rights of others
with respect to any Intangibles.
4.6. The Company and each of its Subsidiaries have good and
marketable title in fee simple to all items of real property and good and
marketable title to all personal property described in the Offering Memorandum
as being owned by them. Any real property and buildings described in the
Offering Memorandum as being held under lease by the Company and each of its
Subsidiaries is held by them under valid, existing and enforceable leases, free
and clear of all liens, encumbrances, claims, security interests and defects,
except such as are described in the Offering Memorandum, or would not have a
Material Adverse Effect.
-3-
<PAGE> 4
4.7. There are no litigation or governmental proceedings to
which the Company or its Subsidiaries is subject or which is pending or, to the
knowledge of the Company, threatened, against the Company or any of its
Subsidiaries, which, individually or in the aggregate, might have a Material
Adverse Effect, affect the consummation of this Agreement or which are required
to be disclosed in the Offering Memorandum.
4.8. Subsequent to the respective dates as of which
information is given in the Offering Memorandum, except as described therein,
(i) there has not been any material adverse change with regard to the assets or
properties, business, results of operations or financial condition of the
Company, (ii) neither the Company nor any of its Subsidiaries has sustained any
loss or interference with its assets, businesses or properties (whether owned or
leased) from fire, explosion, earthquake, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or any court or legislative
or other governmental action, order or decree which would have a Material
Adverse Effect; and (iii) since the date of the latest balance sheet
incorporated by reference in the Offering Memorandum, except as reflected
therein neither the Company nor any of its Subsidiaries has (A) issued any
securities or incurred any liability or obligation, direct or contingent, for
borrowed money, except such liabilities or obligations incurred in the ordinary
course of business, (B) entered into any transaction not in the ordinary course
of business or (C) declared or paid any dividend or made any distribution on any
shares of its stock or redeemed, purchased or otherwise acquired or agreed to
redeem, purchase or otherwise acquire any shares of its stock.
4.9. There is no document, contract or other agreement of a
character required to be described in the November Registration Statement or to
be filed as an exhibit to the November Registration Statement which was not
described or filed as required by the Securities Act or the Rules and
Regulations. Each description of a contract, document or other agreement in the
November Registration Statement accurately reflects in all respects the terms of
the underlying document, contract or agreement. Each agreement described in the
November Registration Statement is in full force and effect and is valid and
enforceable by and against the Company or a Subsidiary, as the case may be, in
accordance with its terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium, or other similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles, except those agreements, if any, which have expired in
accordance with their own terms. Neither the Company nor a Subsidiary, if a
Subsidiary is a party, nor to the Company's knowledge, any other party is in
default in the observance or performance of any term or obligation to be
performed by it under any such agreement, and no event has occurred which with
notice or lapse of time or both would constitute such a default, in any such
case which default or event, individually or in the aggregate, would have a
Material Adverse Effect. No default exists, and no event has occurred which with
notice or lapse of time or both would constitute a default, in the due
performance and observance of any term, covenant or condition, by the Company or
a Subsidiary, if a Subsidiary is a party thereto, of any other agreement or
instrument to which the Company or a Subsidiary is a party or by which the
Company, the Subsidiaries or their properties or business may be bound or
affected which default or event, individually or in the aggregate, would have a
Material Adverse Effect.
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4.10. Neither the Company nor any of its Subsidiaries is in
violation of any term or provision of its charter or by-laws or of any
franchise, license, permit, judgment, decree, order, statute, rule or
regulation, where the consequences of such violation, individually or in the
aggregate, would have a Material Adverse Effect.
4.11. Neither the execution, delivery and performance of this
Agreement by the Company nor the consummation of any of the transactions
contemplated hereby (including, without limitation, the issuance and sale by the
Company of the Shares) will give rise to a right to terminate or accelerate the
due date of any payment due under, or conflict with or result in the breach of
any term or provision of, or constitute a default (or an event which with notice
or lapse of time or both would constitute a default) under, or require any
consent or waiver under, or result in the execution or imposition of any lien,
charge or encumbrance upon any properties or assets of the Company or any of its
Subsidiaries pursuant to the terms of, any indenture, mortgage, deed of trust or
other agreement or instrument to which the Company or any of its Subsidiaries is
a party or by which either the Company or any of its Subsidiaries or any of
their properties or businesses is bound, or any franchise, license, permit,
judgment, decree, order, statute, rule or regulation applicable to the Company
or any of its Subsidiaries or violate any provision of the charter or by-laws of
the Company or any of its Subsidiaries, except for such consents or waivers
which have already been obtained and are in full force and effect and except for
such events which would not have a Material Adverse Effect.
4.12. The Company has authorized and outstanding capital stock
as set forth under the caption "Capitalization" in the Offering Memorandum. All
of the issued and outstanding shares of Common Stock have been duly and validly
issued and are fully paid and nonassessable. There are no statutory preemptive
or other similar rights to subscribe for or to purchase or acquire any shares of
Common Stock or any shares of capital stock of its Subsidiaries or any such
rights pursuant to their charter or by-laws or any agreement or instrument to or
by which the Company or any of its Subsidiaries is a party or bound. The Shares,
when issued and sold pursuant to this Agreement, will be duly and validly
issued, fully paid and nonassessable and none of them will be issued in
violation of any preemptive or other similar right. Except as disclosed in the
Offering Memorandum, there is no outstanding option, warrant or other right
calling for the issuance of, and there is no commitment, plan or arrangement to
issue, any share of stock of the Company or its Subsidiaries or any security
convertible into, or exercisable or exchangeable for, such stock. The Common
Stock and the Shares conform in all material respects to all statements in
relation thereto contained in the Offering Memorandum. All outstanding shares of
capital stock of each Subsidiary have been duly authorized and validly issued,
and are fully paid and nonassessable and, other than as described in the
November Registration Statement, are owned directly by the Company or by another
wholly-owned subsidiary of the Company free and clear of any security interests,
liens, encumbrances, equities or claims, other than those described in the
Offering Memorandum.
4.13. No holder of any security of the Company has the right
to have any security owned by such holder included in the Registration Statement
or to demand registration of any security owned by such holder during the period
ending 90 days after the date of this Agreement.
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<PAGE> 6
4.14. All necessary corporate action has been duly and validly
taken by the Company to authorize the execution, delivery and performance of
this Agreement and the issuance and sale of the Shares by the Company. The
Agreements and the transactions contemplated hereby and thereby have been duly
and validly authorized, executed and delivered by the Company and constitute
legal, valid and binding obligations of the Company, enforceable in accordance
with their respective terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' and contracting parties' rights generally and except as
enforceability may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law)
and except as the indemnification agreements of the Company in Section 7.3
hereof may be legally unenforceable.
4.15. Neither the Company nor any of its Subsidiaries is
involved in any labor dispute nor, to the knowledge of the Company, is any such
dispute threatened, which dispute would have a Material Adverse Effect. The
Company is not aware of any existing or imminent labor disturbance by the
employees of any of its principal suppliers or contractors which would have a
Material Adverse Effect. The Company is not aware of any threatened or pending
litigation between the Company or any of its Subsidiaries and any of its
executive officers which, if adversely determined, could have a Material Adverse
Effect and has no reason to believe that such officers will not remain in the
employment of the Company.
4.16. Other than transactions occurring in the ordinary course
of business, no transaction has occurred between or among the Company and any of
its officers, directors or five percent stockholders or any affiliate or
affiliates of any such officer, director or five percent stockholders that
should be described in and is not described in the Offering Memorandum.
4.17. The Company has not taken, nor will it take, directly or
indirectly, any action designed to or which might reasonably be expected to
cause or result in, or which has constituted or which might reasonably be
expected to constitute, the stabilization or manipulation of the price of the
Common Stock to facilitate the sale or resale of any of the Shares.
4.18. The Company and its Subsidiaries have filed all Federal,
state, local and foreign tax returns which are required to be filed through the
date hereof, or has received extensions thereof, and has paid all taxes shown on
such returns and all assessments received by it to the extent that the same are
material and have become due. There are no tax audit or investigations pending,
which if adversely determined would have a Material Adverse Effect; nor are
there any material proposed additional tax assessments against the Company or
any of its Subsidiaries.
4.19. Prior to the Closing Date, the Shares will be listed for
trading on the Nasdaq National Market.
4.20. The books, records and accounts of the Company and each
of its Subsidiaries accurately and fairly reflect, in reasonable detail, the
transactions in, and dispositions of, the assets of, and the results of
operations of, the Company and each of its
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<PAGE> 7
Subsidiaries. The Company and each of its Subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management's general or
specific authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted
accounting principles and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management's general or specific
authorization and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
4.21. The Company and each of its Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are customary in the businesses in which they are engaged
or propose to engage after giving effect to the transactions described in the
Offering Memorandum; all policies of insurance and fidelity or surety bonds
insuring the Company or any of its subsidiaries or the Company's or its
subsidiaries' respective businesses, assets, employees, officers and directors
are in full force and effect; the Company and each of its subsidiaries are in
compliance with the terms of such policies and instruments in all material
respects; and neither the Company nor any Subsidiary of the Company has reason
to believe that it will not be able to renew its existing insurance coverage
from similar insurers as may be necessary to continue its business at a cost
that would not have a Material Adverse Effect. Neither the Company nor any
Subsidiary has been denied any insurance coverage which it has sought or for
which it has applied.
4.22. Each approval, consent, order, authorization,
designation, declaration or filing of, by or with any regulatory, administrative
or other governmental body necessary in connection with the execution and
delivery by the Company of this Agreement and the consummation of the
transactions herein contemplated required to be obtained or performed by the
Company (except such additional steps as may be required by the National
Association of Securities Dealers, Inc. (the "NASD") has been obtained or made
and is in full force and effect.
4.23. There are no affiliations with the NASD among the
Company's officers, directors or, to the best of the knowledge of the Company,
any five percent or greater stockholder of the Company, except as set forth in
the Offering Memorandum or otherwise disclosed.
4.24. (i) Each of the Company and its Subsidiaries are in
compliance in all material respects with all rules, laws and regulations
relating to the development, testing, manufacturing, sale and distribution of
pharmaceuticals and other products regulated by the U.S. Food and Drug
Administration, or similar state or foreign government agency, the use,
treatment, storage and disposal of toxic substances and protection of health or
the environment ("Environmental Law") which are applicable to its business; (ii)
neither the Company nor its Subsidiaries has received any notice from any
governmental authority or third party of an asserted claim under Environmental
Laws; (iii) each of the Company and its Subsidiaries have received all permits,
licenses or other approvals required of it under applicable Environmental Laws
to conduct its business and is in compliance with all terms and conditions of
any such permit, license or approval; (iv) to the Company's knowledge, no facts
currently exist that will require the Company or its Subsidiaries to make future
material capital expenditures to comply
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<PAGE> 8
with Environmental Laws; and (v) no property which is or has been owned, leased
or occupied by the Company or its Subsidiaries has been designated as a
Superfund site pursuant to the Comprehensive Environmental Response,
Compensation of Liability Act of 1980, as amended (42 U.S.C. Section 9601, et.
seq.) ("CERCLA") or otherwise designated as a contaminated site under applicable
state or local law. Neither the Company nor any of its Subsidiaries has been
named as a "potentially responsible party" under CERCLA.
4.25. In the ordinary course of its business, the Company
periodically reviews the effect of Environmental Laws on the business,
operations and properties of the Company and its subsidiaries, in the course of
which the Company identifies and evaluates associated costs and liabilities
(including, without limitation, any capital or operating expenditures required
for clean-up, closure of properties or compliance with Environmental Laws, or
any permit, license or approval, any related constraints on operating activities
and any potential liabilities to third parties). On the basis of such review,
the Company has reasonably concluded that such associated costs and liabilities
would not, individually or in the aggregate, have a Material Adverse Effect.
4.26. The Company is not and, after giving effect to the
offering and sale of the Shares and the application of proceeds thereof as
described in the Offering Memorandum, will not be an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
4.27. The Company, its Subsidiaries or any other person
associated with or acting on behalf of the Company or its Subsidiaries
including, without limitation, any director, officer, agent or employee of the
Company or any of its Subsidiaries has not, directly or indirectly, while acting
on behalf of the Company or any of its Subsidiaries (i) used any corporate funds
for unlawful contributions, gifts, entertainment or other unlawful expenses
relating to political activity; (ii) made any unlawful payment to foreign or
domestic government officials or employees or to foreign or domestic political
parties or campaigns from corporate funds; (iii) violated any provision of the
Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any other
unlawful payment.
4.28. The information contained in the following documents,
which the Placement Agent has furnished to the Purchaser, or will furnish prior
to the Closing, is or will be true and correct in all material respects as of
their respective final dates:
(a) the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998;
(b) the Company's Quarterly Reports on Form 10-Q for the periods ended
March 31, 1999, June 30, 1999 and September 30, 1999;
(c) the Company's Proxy Statement for the 1999 Annual Meeting of
Stockholders;
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<PAGE> 9
(d) the Company's Current Report on Form 8-K filed July 30, 1999,
(e) the Company's Current Report on Form 8-K/A filed on September 21,
1999,
(f) the Company's Current Report on Form 8-K filed on February 24,
2000;
(g) the Company's prospectus dated November 23, 1999 included as part
of the November Registration Statement;
(h) the Registration Statement;
(i) the Offering Memorandum, including all addenda and exhibits thereto
(other than the Appendices); and
(j) all other documents, if any, filed by the Company with the
Securities and Exchange Commission since September 30, 1999
pursuant to the reporting requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act").
4.29. Prior to and as a condition to the Closing, (i)
Fulbright & Jaworski LLP, counsel to the Company, will deliver its legal opinion
to the Purchasers in a form acceptable to the Placement Agent and its counsel
and (ii) Albert Jecminek, Vice President of Business Development and
Intellectual Property counsel of the Company, will deliver its legal opinion to
the Purchasers as to certain intellectual property matters in form and substance
reasonably satisfactory to the Placement Agent and its counsel. Each such
opinion shall also state that the Placement Agent may rely thereon as though it
were addressed directly to the Placement Agent.
4.30. At the Closing, the Company will deliver to the
Purchasers a certificate executed by the President and the Chief Financial
Officer of the Company, dated the Closing Date, in form and substance reasonably
satisfactory to the Purchasers, to the effect that the representations and
warranties of the Company set forth in this Section 4 are true and correct in
all material respects as of the date of this Agreement and as of the Closing
Date, and that the Company has complied with all the agreements and satisfied
all the conditions herein on its part to be performed or satisfied on or prior
to such Closing Date.
SECTION 5. Representations, Warranties and Covenants of the
Purchaser. (a) The Purchaser represents and warrants to, and covenants with, the
Company that: (i) the Purchaser is knowledgeable, sophisticated and experienced
in making, and is qualified to make, decisions with respect to investments in
shares representing an investment decision like that involved in the purchase of
the Shares, including investments in securities issued by the Company, and has
requested, received, reviewed and considered all information it deems relevant
in making an informed decision to purchase the Shares; (ii) the Purchaser is
acquiring the number of Shares set forth in Section 2 above in the ordinary
course of its business and for its own account for investment only and with no
present intention of distributing any of such Shares
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<PAGE> 10
or any arrangement or understanding with any other persons regarding the
distribution of such Shares (this representation and warranty not limiting the
Purchaser's right to sell pursuant to the Registration Statement or, other than
with respect to any claims arising out of a breach of this representation and
warranty, the Purchaser's right to indemnification under Section 7.3); (iii) the
Purchaser will not, directly or indirectly, offer, sell, pledge, transfer or
otherwise dispose of (or solicit any offers to buy, purchase or otherwise
acquire or take a pledge of) any of the Shares except (1) by delivering to the
transferee thereof a copy of the most recent prospectus related to the Shares
provided to the Purchaser by the Company or (2) pursuant to the exemption from
registration provided by Rule 144 of the Securities Act; (iv) the Purchaser has
completed or caused to be completed the Registration Statement Questionnaire
attached hereto as Appendix I, for use in preparation of the Registration
Statement, and the answers thereto are true and correct as of the date hereof
and will be true and correct as of the effective date of the Registration
Statement; (v) the Purchaser has, in connection with its decision to purchase
the number of Shares set forth in Section 2 above, relied solely upon the
Offering Memorandum and the documents included therein and the representations
and warranties of the Company contained herein; and (vi) the Purchaser is an
"accredited investor" within the meaning of Rule 501(a) of Regulation D
promulgated under the Securities Act.
(b) The Purchaser hereby covenants with the Company not to
make any sale of the Shares under the Registration Statement without delivering
to the transferee thereof a copy of the most recent prospectus related to the
Shares provided to the Purchaser by the Company, and the Purchaser acknowledges
and agrees that such Shares are not transferable on the books of the Company
unless pursuant to a valid exemption under the Securities Act or unless the
certificate submitted to the transfer agent evidencing the Shares is accompanied
by a separate Notice of Transfer: (i) in the form of Appendix II hereto, (ii)
executed by a broker, or other authorized person designated by, the Purchaser,
and (iii) to the effect that (A) the Shares have been sold in accordance with
the Registration Statement, the Securities Act and any applicable state
securities or blue sky laws and (B) the requirement of delivering a current
prospectus (the most recent prospectus related to the Shares provided to the
Purchaser by the Company) has been satisfied. The Purchaser acknowledges that
there may occasionally be times when the Company must suspend the use of the
prospectus forming a part of the Registration Statement until such time as an
amendment to the Registration Statement has been filed by the Company and
declared effective by the Commission, or until such time as the Company has
filed an appropriate report with the Commission pursuant to the Exchange Act.
The Purchaser hereby covenants that it will not sell any Shares pursuant to said
prospectus during the period commencing at the time at which the Company gives
the Purchaser written notice of the suspension of the use of said prospectus and
ending at the time the Company gives the Purchaser written notice that the
Purchaser may thereafter effect sales pursuant to said prospectus. The Purchaser
further covenants to notify the Company promptly of the sale of all of its
Shares.
(c) The Purchaser further represents and warrants to, and
covenants with, the Company that (i) the Purchaser has full right, power,
authority and capacity to enter into this Agreement and to consummate the
transactions contemplated hereby and has taken all necessary action to authorize
the execution, delivery and performance of this Agreement, and (ii) this
Agreement constitutes a legal, valid and binding obligation of the Purchaser,
enforceable in
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accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally and except as enforceability may be subject to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law) and except as the
indemnification agreements of the Purchaser in Section 7.3 hereof may be legally
unenforceable.
SECTION 6. Survival of Representations, Warranties and
Agreements. Notwithstanding any investigation made by any party to this
Agreement or by the Placement Agent, all covenants, agreements, representations
and warranties made by the Company and the Purchaser herein and in the
certificates for the Shares delivered pursuant hereto shall survive the
execution of this Agreement, the delivery to the Purchaser of the Shares being
purchased and the payment therefor.
SECTION 7. Registration of the Shares; Compliance with the
Securities Act.
7.1 Registration Procedures and Expenses. The Company shall:
(a) as soon as practicable, prepare and file with the
Commission the Registration Statement on Form S-3 relating
to the sale of the Shares by the Purchaser from time to
time on the Nasdaq National Market or the facilities of
any national securities exchange on which the Common Stock
is then traded or in privately-negotiated transactions;
(b) use its reasonable efforts, subject to receipt of
necessary information from the Purchasers, to cause the
Commission to notify the Company of the Commission's
willingness to declare the Registration Statement
effective within 75 days after the Registration Statement
is filed by the Company;
(c) promptly prepare and file with the Commission (and provide
notice to the Purchaser of any such filing) such
amendments and supplements to the Registration Statement
and the prospectus used in connection therewith as may be
necessary to keep the Registration Statement effective
until the earlier of (i) two years after the effective
date of the Registration Statement or (ii) the date on
which the Shares may be resold by the Purchasers without
registration by reason of Rule 144(k) under the Securities
Act or any other rule of similar effect;
(d) furnish to the Purchaser with respect to the Shares
registered under the Registration Statement (and to each
underwriter, if any, of such Shares) such number of copies
of prospectuses and such other documents as the Purchaser
may reasonably request, in order to facilitate the public
sale or other disposition of all or any of the Shares by
the Purchaser; provided, however, that the obligation of
the Company to deliver copies of prospectuses to the
Purchaser shall be subject to the receipt by the Company
of reasonable assurances from the Purchaser that the
Purchaser
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<PAGE> 12
will comply with the applicable provisions of the
Securities Act and of such other securities or blue sky
laws as may be applicable in connection with any use of
such prospectuses;
(e) file documents required of the Company for normal blue sky
clearance in states specified in writing by the Purchaser;
provided, however, that the Company shall not be required
to qualify to do business or consent to service of process
in any jurisdiction in which it is not now so qualified or
has not so consented; and
(f) bear all expenses in connection with the procedures in
paragraphs (a) through (e) of this Section 7.1 and the
registration of the Shares pursuant to the Registration
Statement, other than fees and expenses, if any, of
counsel or other advisers to the Purchaser or the Other
Purchasers or underwriting discounts, brokerage fees and
commissions incurred by the Purchaser or the Other
Purchasers, if any.
The Company understands that the Purchaser disclaims being an
underwriter, but the Purchaser being deemed an underwriter shall not relieve the
Company of any obligations it has hereunder. A draft of the proposed form of the
Registration Statement has been included as an exhibit to the Offering
Memorandum and a questionnaire related thereto to be completed by the Purchaser
is attached hereto as Appendix I.
7.2 Transfer of Shares After Registration. The Purchaser
agrees that it will not effect any disposition of the Shares or its right to
purchase the Shares that would constitute a sale within the meaning of the
Securities Act, except as contemplated in the Registration Statement referred to
in Section 7.1 or, and that it will promptly notify the Company of any changes
in the information set forth in the Registration Statement regarding the
Purchaser or its plan of distribution.
7.3 Indemnification. For the purpose of this Section 7.3:
(i) the term "Purchaser/Affiliate" shall mean any affiliates
of the Purchaser and any officer, director, trustee or
other person who controls the Purchaser or any affiliate
of the Purchaser within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act; and
(ii) the term "Registration Statement" shall include any final
prospectus, exhibit, supplement or amendment included in
or relating to, and any document incorporated by
reference in, the Registration Statement referred to in
Section 7.1.
(a) The Company agrees to indemnify and hold harmless each
Purchaser and each Purchaser/Affiliate against any losses, claims, damages,
liabilities or expenses, joint or several, to which such Purchaser or
Purchaser/Affiliate may become subject, under the Securities
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<PAGE> 13
Act, the Exchange Act, or any other federal or state statutory law or
regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of the
Company), insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof as contemplated below) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement, including the prospectus, financial statements
and schedules, and all other documents filed as a part thereof, as amended at
the time of effectiveness of the Registration Statement, including any
information deemed to be a part thereof as of the time of effectiveness pursuant
to paragraph (b) of Rule 430A, or pursuant to Rule 434, of the Rules and
Regulations, or the prospectus, in the form first filed with the Commission
pursuant to Rule 424(b) of the Regulations, or filed as part of the Registration
Statement at the time of effectiveness if no Rule 424(b) filing is required (the
"prospectus"), or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state in any of them a material
fact required to be stated therein or necessary to make the statements in any of
them, in the light of the circumstances under which they were made, not
misleading, or arise out of or are based in whole or in part on any material
inaccuracy in the representations and warranties of the Company contained in
this Agreement, or any failure of the Company to perform its obligations
hereunder or under law, and will reimburse each Purchaser and each such
Purchaser/Affiliate for any legal and other expenses as such expenses are
reasonably incurred by such Purchaser or such Purchaser/Affiliate in connection
with investigating, defending, settling, compromising or paying any such loss,
claim, damage, liability, expense or action; provided, however, that the Company
will not be liable in any such case to the extent that any such loss, claim,
damage, liability or expense arises out of or is based upon (i) an untrue
statement or alleged untrue statement or omission or alleged omission made in
the Registration Statement, the prospectus or any amendment or supplement
thereto in reliance upon and in conformity with written information furnished to
the Company by or on behalf of such Purchaser expressly for use therein, or (ii)
the failure of such Purchaser to comply with the covenants and agreements
contained in Sections 5(b) or 7.2 hereof respecting sale of the Shares, or (iii)
the inaccuracy of any representations or warranties made by such Purchaser
herein, or (iv) or any failure of such Purchaser to perform its obligations
hereunder, or (v) any statement or omission in any prospectus that is corrected
in any subsequent prospectus that was delivered to such Purchaser prior to the
pertinent sale or sales by such Purchaser.
(b) Each Purchaser will severally indemnify and hold harmless
the Company, each of its directors, each of its officers who signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act (a "Controlling Person") against any losses, claims, damages, liabilities or
expenses to which the Company, each of its directors, each of its officers who
signed the Registration Statement or a Controlling Person may become subject,
under the Securities Act, the Exchange Act, or any other federal or state
statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of such Purchaser) insofar as such losses, claims, damages, liabilities
or expenses (or actions in respect thereof as contemplated below) arise out of
or are based upon (i) any failure to comply with the covenants and agreements
contained in Sections 5(b) or 7.2 hereof respecting the sale of the Shares or
(ii) the inaccuracy of any representation or warranty made by
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<PAGE> 14
such Purchaser herein or (iii) any failure of such Purchaser to perform its
obligations hereunder or (iv) any untrue or alleged untrue statement of any
material fact contained in the Registration Statement, the prospectus, or any
amendment or supplement thereto, or (v) the omission or alleged omission to
state in the Registration Statement, the prospectus or any amendment or
supplement thereto a material fact required to be stated therein or necessary to
make the statements therein not misleading, in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in the Registration Statement, the
prospectus, or any amendment or supplement thereto, in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such Purchaser expressly for use therein, and will reimburse the Company, each
of its directors, each of its officers who signed the Registration Statement or
Controlling Person for any legal and other expense reasonably incurred by the
Company, each of its directors, each of its officers who signed the Registration
Statement or Controlling Person in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage, liability,
expense or action.
(c) Promptly after receipt by an indemnified party under this
Section 7.3 of notice of the threat or commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party under this Section 7.3, promptly notify the indemnifying
party in writing thereof; but the omission to so notify the indemnifying party
will not relieve it from any liability which it may have to any indemnified
party for contribution or otherwise than under the indemnity agreement contained
in this Section 7.3 to the extent it is not prejudiced as a result of such
failure. In case any such action is brought against any indemnified party and
such indemnified party seeks or intends to seek indemnity from an indemnifying
party, the indemnifying party will be entitled to participate in, and, to the
extent that it may wish, jointly with all other indemnifying parties similarly
notified, to assume the defense thereof with counsel reasonably satisfactory to
such indemnified party; provided, however, if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be a conflict
between the positions of the indemnifying party and the indemnified party in
conducting the defense of any such action or that there may be legal defenses
available to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, the indemnified party
or parties shall have the right to select separate counsel to assume such legal
defenses and to otherwise participate in the defense of such action on behalf of
such indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of its election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 7.3 for any
legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof unless (i) the indemnified party shall have
employed such counsel in connection with the assumption of legal defenses in
accordance with the proviso to the preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel, approved by such indemnifying party in the case
of paragraph (a), representing all of the indemnified parties who are parties to
such action) or (ii) the indemnified party shall not have employed counsel
reasonably satisfactory to the indemnifying party to represent the indemnified
-14-
<PAGE> 15
party within a reasonable time after notice of commencement of action, in each
of which cases the reasonable fees and expenses of counsel shall be at the
expense of the indemnifying party.
(d) If the indemnification provided for in this Section 7.3 is
required by its terms but is for any reason held to be unavailable to or
otherwise insufficient to hold harmless an indemnified party under paragraphs
(a), (b) or (c) of this Section 7.3 in respect to any losses, claims, damages,
liabilities or expenses referred to herein, then each applicable indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of any losses, claims, damages, liabilities or expenses referred to
herein (i) in such proportion as is appropriate to reflect the relative fault of
the Company and such Purchaser in connection with the statements or omissions or
inaccuracies in the Registration Statement, the prospectus, any amendment or
supplement thereto, or the representations and warranties in this Agreement
which resulted in such losses, claims, damages, liabilities or expenses, as well
as any other relevant equitable considerations. The relative fault of the
Company on the one hand and such Purchaser on the other shall be determined by
reference to, among other things, whether the untrue or alleged statement of a
material fact or the omission or alleged omission to state a material fact or
the inaccurate or the alleged inaccurate representation and/or warranty relates
to information supplied by the Company or by such Purchaser and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The amount paid or payable by a party as a
result of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include, subject to the limitations set forth in
paragraph (c) of this Section 7.3, any legal or other fees or expenses
reasonably incurred by such party in connection with investigating or defending
any action or claim. The provisions set forth in paragraph (c) of this Section
7.3 with respect to the notice of the threat or commencement of any threat or
action shall apply if a claim for contribution is to be made under this
paragraph (d); provided, however, that no additional notice shall be required
with respect to any threat or action for which notice has been given under
paragraph (c) for purposes of indemnification. The Company and such Purchaser
agree that it would not be just and equitable if contribution pursuant to this
Section 7.3 were determined solely by pro rata allocation (even if each
Purchaser were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to in this paragraph. The liability of each Purchaser hereunder shall be limited
to an amount equal to the Purchaser's purchase price for the Shares.
Notwithstanding the provisions of this Section 7.3, no Purchaser shall be
required to contribute any amount in excess of the amount by which the
difference between the amount such Purchaser paid for the Shares that were sold
pursuant to the Registration Statement and the amount received by such Purchaser
from such sale exceeds the amount of any damages that such Purchaser has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Purchaser's obligations to contribute pursuant
to this Section 7.3 are several and not joint.
7.4 Termination of Conditions and Obligations. The conditions
precedent imposed by Section 5 or this Section 7 upon the transferability of the
Shares shall cease and terminate as to any particular number of the Shares upon
the passage of two years from the
-15-
<PAGE> 16
effective date of the Registration Statement covering such Shares or at such
time as an opinion of counsel satisfactory in form and substance to the Company
shall have been rendered to the effect that such conditions are not necessary in
order to comply with the Securities Act.
7.5 Information Available. So long as the Registration
Statement is effective covering the resale of Shares owned by the Purchaser, the
Company will furnish to the Purchaser, upon its request:
(a) as soon as practicable after available (but in the case of
the Company's Annual Report to Stockholders, within the
later of (i) 120 days after the end of each fiscal year of
the Company or (ii) the date six weeks prior to the
Company's annual meeting), one copy of (i) its Annual
Report to Stockholders (which Annual Report shall contain
financial statements audited in accordance with generally
accepted accounting principles by a national firm of
certified public accountants), (ii) if not included in
substance in the Annual Report to Stockholders, upon the
request of the Purchaser, its Annual Report on Form 10-K,
(iii) upon the request of the Purchaser, its Quarterly
Reports on Form 10-Q, (iv) upon the request of the
Purchaser, its Current Reports on Form 8-K, and (v) a full
copy of the particular Registration Statement covering the
Shares (the foregoing, in each case, excluding exhibits);
(b) all exhibits excluded by the parenthetical to subparagraph
(a)(v) of this Section 7.5; and
(c) a reasonable number of copies of the prospectuses to
supply to any other party requiring such prospectuses;
and the Company, upon the reasonable request of the Purchaser, will meet with
the Purchaser or a representative thereof at the Company's headquarters to
discuss information relevant for disclosure in the Registration Statement
covering the Shares and will otherwise cooperate with any Purchaser conducting
an investigation for the purpose of reducing or eliminating such Purchaser's
exposure to liability under the Securities Act, including the reasonable
production of information at the Company's headquarters, subject to appropriate
confidentiality limitations.
SECTION 8. Broker's Fee. The Purchaser acknowledges that the
Company intends to pay to the Placement Agent a fee in respect of the sale of
the Shares to the Purchaser. Each of the parties hereto hereby represents that,
on the basis of any actions and agreements by it, there are no other brokers or
finders entitled to compensation in connection with the sale of the Shares to
the Purchaser.
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<PAGE> 17
SECTION 9. Notices. All notices, requests, consents and other
communications hereunder shall be in writing, shall be mailed by first-class
registered or certified airmail, confirmed facsimile or nationally recognized
overnight express courier postage prepaid, and shall be deemed given when so
mailed and shall be delivered as addressed as follows:
(a) if to the Company, to:
ILEX Oncology, Inc.
11550 I.H. 10 West, Suite 100
San Antonio, Texas 78230
Attention: Ronald G. Tefteller
Facsimile: (210) 949-8390
with a copy to:
Fulbright & Jaworski LLP
300 Convent Street, Suite 2200
San Antonio, Texas 78205
Attention: Philip Renfro, Esq.
Facsimile: (210) 270-7205
or to such other person at such other place as the Company
shall designate to the Purchaser in writing; and
(b) if to the Purchaser, at its address as set forth at the
end of this Agreement, or at such other address or
addresses as may have been furnished to the Company in
writing.
SECTION 10. Changes. This Agreement may not be modified or
amended except pursuant to an instrument in writing signed by the Company and
the Purchaser.
SECTION 11. Headings. The headings of the various sections of
this Agreement have been inserted for convenience of reference only and shall
not be deemed to be part of this Agreement.
SECTION 12. Severability. In case any provision contained in
this Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
SECTION 13. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York and the
federal law of the United States of America.
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<PAGE> 18
SECTION 14. Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall constitute an original, but all of
which, when taken together, shall constitute but one instrument, and shall
become effective when one or more counterparts have been signed by each party
hereto and delivered to the other parties.
SECTION 15. Entire Agreement. This Agreement and the
instruments referenced herein contain the entire understanding of the parties
with respect to the matters covered herein and therein and, except as
specifically set forth herein or therein, neither the Company nor the Purchaser
makes any representation, warranty, covenant or undertaking with respect to such
matters.
SECTION 16. Third Party Beneficiaries. This Agreement is
intended for the benefit of the parties hereto and their respective permitted
successors and assigns, and is not for the benefit of, nor may any provision
hereof be enforced by, any other person.
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<PAGE> 19
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized representatives as of the day
and year first above written.
ILEX ONCOLOGY, INC.
By:
--------------------------------------
Name:
Title:
Print or Type:
Name of Purchaser
(Individual or Institution):
-----------------------------------------
Name of Individual representing
Purchaser (if an Institution):
-----------------------------------------
Title of Individual representing
Purchaser (if an Institution):
-----------------------------------------
Signature by:
Individual Purchaser or Individual
representing Purchaser:
-----------------------------------------
Address:
---------------------------------
Telephone:
-------------------------------
Facsimile:
-------------------------------
-19-
<PAGE> 20
SUMMARY INSTRUCTION SHEET FOR PURCHASER
(to be read in conjunction with the entire
Purchase Agreement which follows)
A. Complete the following items on BOTH Purchase Agreements:
1. Page 19 - Signature:
(i) Name of Purchaser (Individual or Institution)
(ii) Name of Individual representing Purchaser (if an
Institution)
(iii) Title of Individual representing Purchaser (if an
Institution)
(iv) Signature of Individual Purchaser or Individual
representing Purchaser
2. Appendix I - Registration Statement Questionnaire:
Provide the information requested by the Registration Statement
Questionnaire.
3. Return BOTH properly completed and signed Purchase Agreements
including the properly completed Appendix I to:
Prudential Vector Healthcare Group
1751 Lake Cook Road, Suite 350
Deerfield, Illinois 60015
Attention: Mr. Charlie Hoffmann
B. Instructions regarding the transfer of funds for the purchase of Shares will
be sent by facsimile to the Purchaser by the Placement Agent at a later date.
C. Upon the resale of the Shares by the Purchasers after the Registration
Statement covering the Shares is effective, as described in the Purchase
Agreement, the Purchaser:
(i) must deliver a current prospectus of the Company to the
buyer (prospectuses must be obtained from the Company at
the Purchaser's request); and
(ii) must send a letter in the form of Appendix II to the
Company so that the Shares may be properly transferred.
<PAGE> 21
APPENDIX I
IILEX ONCOLOGY, INC.
REGISTRATION STATEMENT QUESTIONNAIRE
The undersigned (the "Selling Stockholder") a purchaser of Common Stock
(the "Registrable Shares") of ILEX Oncology, Inc. (the "Company") purchased
pursuant to the Purchase Agreement, dated as of March __, 2000 by and between
the Company and the Selling Stockholder (the "Purchase Agreement"), hereby
elects to include in the Registration Statement for the registration and resale
of the Registrable Shares, the Registrable Shares listed below in Item (3)
(unless otherwise specified under Item 3). The undersigned agrees to be bound
with respect to such Registrable Shares by the terms and conditions of this
Registration Statement Questionnaire and the Purchase Agreement.
Upon any sale of Registrable Shares pursuant to the Registration
Statement under the Securities Act of 1933, as amended (the "Securities Act"),
the Selling Stockholder will be required to deliver to the Company the Notice of
Transfer set forth in Appendix II attached hereto (completed and signed) and
hereby undertakes to do so.
The Selling Stockholder hereby provides the following information to
the Company and represents and warrants that such information is accurate and
complete:
(1) (a) Full Legal Name of the Selling Stockholder:
----------------------------------------------------------
(b) The exact name that the Registrable Shares are to be
registered in (if not the same as in (a) above) (this is
the name that will appear on your stock certificate (s)).
The Selling Stockholder may use a nominee name if
appropriate:
----------------------------------------------------------
(c) Full Legal Name of Registered Holder (if not the same
as in (a) above) of the Registrable Shares listed in (3)
below:
----------------------------------------------------------
(2) Address and Telephone Numbers for the Selling Stockholder:
----------------------------------------------------------
----------------------------------------------------------
Telephone:
------------------------------------------------
II-1
<PAGE> 22
Facsimile:
-----------------------------------------------
Contact Person:
------------------------------------------
(3) Beneficial Ownership:
Fill in the number of shares of Common Stock owned of
record and beneficially (see definition) by the Selling
Stockholder:
Of Record Beneficially
----------- ------------
Common Stock (other than the Registrable
Shares to be included in the Registration
Statement)
----------- ------------
Registrable Shares to be included in
the Registration Statement
----------- ------------
(a) Fill in the number of shares to which the Selling Stockholder
disclaims beneficial ownership (see definition)
-----------------------------------------------
(b) Reason for disclaiming beneficial ownership (see definition) in (a)
above, if applicable:
-----------------------------------------------
-----------------------------------------------
-----------------------------------------------
II-2
<PAGE> 23
(4) Other securities of the Company owned by the Selling Stockholder:
Except as set forth below and under Item (3) above, the undersigned
Selling Stockholder is not the beneficial or registered owner of any
shares of Common Stock or any other securities of the Company.
State any exceptions here:
---------------------------------------------
-----------------------------------------------------------------------
(5) Relationships with the Company:
Except as set forth below, neither the Selling Stockholder nor any
of its affiliates, officers (see definition), directors or
principal stockholders (5% or more) has held any position or office
or has had any other material (see definition) relationship with
the Company (or its predecessors or affiliate) during the past
three years.
State any exceptions here:
---------------------------------------------
-----------------------------------------------------------------------
(6) Plan of Distribution:
Except as set forth below, the undersigned Selling Stockholder
intends to distribute the Registrable Shares pursuant to the
Registration Statement only as follows: All or a portion of such
Registrable Shares may be sold from time to time directly by the
undersigned Selling Stockholder or, alternatively, through
underwriters, broker-dealers or agents. Such Registrable Shares may
be sold in one or more transactions at fixed prices, at prevailing
market prices at the time of sale, at varying prices determined at
the time of sale, or at negotiated prices. Such sales may be
effected in transactions (which may involve crosses or block
transactions) (i) on any national securities exchange or quotation
service on which the Registrable Shares may be listed or quoted at
the time of sale, (ii) in the over-the-counter market or (iii) in
transactions otherwise than on such exchanges or services or in the
over-the-counter market. The Selling Stockholder may also loan or
pledge Registrable Shares to broker-dealers that in turn may sell
such securities.
State any exceptions here:
---------------------------------------------
-----------------------------------------------------------------------
II-3
<PAGE> 24
(7) NASD Matters:
A. Do you know of any information pertaining to underwriting
compensation and arrangements (see definition) or any dealings between any
Underwriter or Related Person (see definition), NASD Member (see definition) or
Person Associated with a Member of the NASD (see definition) on the one hand,
and the Company or any parent, subsidiary or Controlling (see definition)
shareholder thereof on the other hand?
Answer: [ ] Yes [ ] No If "yes," please describe
----------------------------------------------------------
B. Are you (i) an NASD Member (see definition), (ii) a Controlling (see
definition) shareholder of an NASD Member, (iii) a Person Associated with a
Member of the NASD (see definition), or (iv) an Underwriter or a Related Person
(see definition) with respect to the proposed offering; or (b) do you own any
shares or other securities of any NASD Member not purchased in the open market;
or (c) have you made any outstanding subordinated loans to any NASD Member?
Answer: [ ] Yes [ ] No If "yes," please describe
----------------------------------------------------------
C. Have you been an underwriter, or a Controlling (see definition)
person or member of any investment banking or brokerage firm which has been or
might be an underwriter, for securities of the Company?
Answer: [ ] Yes [ ] No If "yes," please describe
----------------------------------------------------------
D. If the answer to either Question B or C above is "yes," set forth
below information as to all purchases and acquisitions (including contracts for
purchase or acquisition) of securities of the Company by you during the last 18
months, as well as to all proposed purchases and acquisitions which are to be
consummated in whole or in part within the next 12 months.
II-4
<PAGE> 25
SELLER OR AMOUNT AND DESCRIPTION
PROSPECTIVE NATURE OF PRICE OR OTHER OF
SELLER SECURITIES CONSIDERATION DATE RELATIONSHIP
E. Set forth below information as to all sales and dispositions
(including contracts to sell or to dispose) of securities of the Company during
the last 18 months by you to any NASD Member (see definition) or any Person
Associated with a Member of the NASD (see definition) or any Underwriter or
Related Person (see definition) as well as to all proposed sales and
dispositions by you to such persons which are to be consummated by you in whole
or in part within the next 12 months. Also set forth below a description of the
relationship, affiliation or association of you and, if known, the other party
or parties to the above transactions with an underwriter or other person or
entity "in the stream of distribution" with respect to the offering.
BUYER OR AMOUNT AND DESCRIPTION
PROSPECTIVE NATURE OF PRICE OR OTHER OF
BUYER SECURITIES CONSIDERATION DATE RELATIONSHIP
F. If you have had during the last 18 months, or are to have within the
next 12 months, any transactions of the character referred to in Question D or E
of this Section, describe briefly below the relationship, affiliation or
association of both you and, if known, the other party or parties to any such
transaction with an underwriter or other person or entity "in the stream of
distribution" with respect to the proposed transaction. In any case, where the
purchaser (whether you or any such party) is known by you to be a member of a
"private investment group," such as a hedge fund or other group of purchasers,
furnish, if known, the names of all persons comprising the Group (see
definition) and their association with or relationship to any broker-dealer.
II-5
<PAGE> 26
Description:
The Selling Stockholder acknowledges that it understands it obligation
to comply with the provisions of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and the rules thereunder, relating to stock manipulation,
particularly Regulation M thereunder (or any successor rules), in connection
with the offering of its Registrable Shares covered by the Registration
Statement. The Selling Stockholder agrees that neither it nor any person acting
on its behalf, will sell or purchase any securities of the Company in violation
of such provisions, so long as the Registrable Shares beneficially owned by it
are being offered pursuant to the Registration Statement.
In the event that the Selling Stockholder transfers all or any portion
of the Registrable Shares listed in Item (3) above after the date on which such
information is provided to the Company, the Selling Stockholder agrees to notify
the transferee(s) at the time of the transfer of the transferee(s) rights and
obligations under this Registration Statement Questionnaire and the Purchase
Agreement.
By signing below, the Selling Stockholder consents to the disclosure of
the information contained herein in its answers to Items (1) through (7) above
and the inclusion of such information in the Registration Statement and related
prospectus. The Selling Stockholder understands that such information will be
relied upon by the Company in connection with the preparation of the
Registration Statement and related prospectus and any amendments or supplements
thereto.
The undersigned Selling Stockholder agrees to promptly notify the
Company of any inaccuracies or changes in the information provided herein which
may occur subsequent to the date hereof at any time while the Registration
Statement is in effect. All notices hereunder shall be made in writing and shall
be deemed given (i) when made, if made by hand delivery, (ii) upon confirmation,
if made by facsimile or (iii) one business day after being deposited with a
reputable next-day courier, postage prepaid, as follows:
(i) To the Company
ILEX Oncology, Inc.
11550 I.H. West, Suite 100,
San Antonio, Texas 78230-1064
Attention:
--------------------
Facsimile:
--------------------
II-6
<PAGE> 27
(ii) With a copy to:
Fulbright & Jaworski LLP
300 Convent Street, Suite 2200
San Antonio, Texas 78205
Attention:
--------------------
Facsimile:
--------------------
Once this Registration Statement Questionnaire is executed by the
Selling Stockholder and received by the Company, this Registration Statement
Questionnaire, and the representations and warranties contained herein, shall be
binding on, shall inure to the benefit of and shall be enforceable by the
respective successors, heirs, personal representatives, and assigns of the
Company and the Selling Stockholder (with respect to the Registrable Shares
beneficially owned by such Selling Stockholder and listed in Item (3) above).
II-7
<PAGE> 28
IN WITNESS WHEREOF, the undersigned, by authority duly given, has
caused this Registration Statement Questionnaire to be executed and delivered
either in person or by its duly authorized agent.
Dated:
--------------------------- --------------------------------------
Selling Stockholder
(Print/type full legal name of Selling
Stockholder)
By:
----------------------------------
Name:
Title:
II-8
<PAGE> 29
EXHIBIT A
DEFINITIONS
For purposes of the representations made in this Registration Statement
Questionnaire, the following definitions shall be applicable:
Arrangement. The term "arrangement" means any plan, contract, agreement,
authorization or arrangement, whether or not set forth in writing.
Beneficial Ownership. The term "beneficially owned" as applied to an
interest in securities means (a) any direct or indirect interest in the
securities which entitles you to any of the rights or benefits of ownership,
even though you are not the holder or owner of record or (b) securities owned by
you or to which you have a right to acquire, directly or indirectly, including
those held for your own benefit (regardless of how registered) or securities
held by others for your own benefit (regardless of how registered), such as
custodians, brokers, nominees, pledgees, etc. and including securities held by
an estate or trust in which you have an interest as legatee or beneficiary,
securities owned by a partnership of which you are a partner, securities held by
a personal holding company of which you are a shareholder, etc., and securities
held in the name of your spouse, minor children and any relative (sharing the
same home). "Beneficial ownership" includes having or sharing, directly or
indirectly, through any contract, arrangement, understanding, relationship or
otherwise:
(1) voting power which includes the power to vote, or to direct the
voting of, such security; and/or
(2) investment power which includes the power to dispose, or to direct
the disposition, of such security. Any person who, directly or indirectly,
creates or uses a trust, proxy, power of attorney, pooling arrangement or any
other contract, arrangement or device with the purpose or effect of divesting
such person of beneficial ownership of a security or preventing the vesting of
such beneficial ownership as part of a plan or scheme to evade the reporting
requirements of Section 13(d) of the Exchange Act, is deemed for purposes of
such section to be the beneficial owner of such security.
The Securities and Exchange Commission (the "SEC") has expressed the view
that a person may be regarded as the beneficial owner of securities which are
held in the name of such person's spouse, minor children or other relatives
(including relatives of the person's spouse) who share the person's home if the
relationship which exists results in such person obtaining benefits
substantially equivalent of ownership of the securities.
The SEC has expressed the view that a person may be deemed to be the
beneficial owner of a security if that person has the right to acquire
beneficial ownership of such security within 60 days, including, but not limited
to, any right to acquire: (1) through the exercise of any option, warrant or
right; (2) through the conversion of a security; (3) pursuant to the right to
revoke a trust, discretionary
II-9
<PAGE> 30
account or similar arrangements; or (4) pursuant to the automatic termination of
a trust, discretionary account or similar arrangement.
If you have any reason to believe that any interest in securities of the
Company, however remote, which you or the above-described relatives may have is
a beneficial interest, please describe such interest.
Control. The term "control" (including the terms "controlling,"
"controlled by" and "under common control with") means the possession, direct or
indirect, of the power, either individually or with others, to direct or cause
the direction of the management and policies of a person, whether through the
ownership of voting securities, by contract, or otherwise. (Rule 405 under the
Securities Act of 1933, as amended)
Group. The term "group" includes a partnership, syndicate or other group,
whether formally organized or not, which has as a purpose the acquiring, holding
or disposing of securities of the Company.
Material. The term "material," when used in this Registration Statement
Questionnaire to qualify a requirement for the furnishing of information as to
any subject, limits the information required to those matters as to which there
is a substantial likelihood that a reasonable investor would attach importance
in determining whether to purchase securities of the Company. The materiality of
any relationship is to be determined on the basis of the significance of the
information to investors in light of all of the circumstances of the particular
case. The importance of the relationship, the relationship of the parties to the
transaction with each other and the amount involved in the transaction are among
the factors to be considered in determining the significance of the information
to investors. If you have any question as to whether or not a matter is
"material," please describe the matter, and, if such is the case, state your
belief that the matter is not "material."
NASD Member. The term "NASD member" means either any broker or dealer
admitted to membership in the National Association of Securities Dealers, Inc.
("NASD"). (NASD Manual, By-laws Article I, Definitions)
Officers. The term "officers" means that of the president, secretary,
treasurer, any vice president in charge of a principal business function (such
as sales, administration or finance) and any other person who performs similar
policy-making functions for the Company.
Person Associated with a member of the NASD. The term "person associated
with a member of the NASD" means every sole proprietor, partner, officer,
director, branch manager or executive representative of any NASD Member, or any
natural person occupying a similar status or performing similar functions, or
any natural person engaged in the investment banking or securities business who
is directly or indirectly controlling or controlled by a NASD Member, whether or
not such person is registered or exempt from registration with the NASD pursuant
to its bylaws. (NASD Manual, By-laws Article I, Definitions)
II-10
<PAGE> 31
Underwriter or a Related Person. The term "underwriter or a related
person" means, with respect to a proposed offering, underwriters, underwriters'
counsel, financial consultants and advisors, finders, members of the selling or
distribution group, and any and all other persons associated with or related to
any of such persons. (NASD Interpretation)
II-11
<PAGE> 32
APPENDIX II
BROKER'S NOTICE OF TRANSFER OF SECURITIES PURSUANT TO
REGISTRATION STATEMENT
ILEX Oncology, Inc.
11550 I.H. 10 West, Suite 100,
San Antonio, Texas 78230-1064
Fulbright & Jaworski LLP
300 Convent Street, Suite 2200
San Antonio, Texas 78205
Attention: Darin M. Lippoldt
Re: ILEX Oncology, Inc.
Ladies and Gentlemen:
Please be advised that_________________________has transferred___________shares
(the "Shares") of Common Stock on______________________(date), pursuant to the
Registration Statement on Form S-3 (File No. 333-____________) filed by ILEX
Oncology, Inc:
We hereby certify that the prospectus delivery requirements, if any, of the
Securities Act of 1933, as amended, have been satisfied with respect to the
transfer described above and that the above-named beneficial owner of the Shares
is named as a selling stockholder in the prospectus dated ____________________
or in amendments or supplements thereto, and that the aggregate number of shares
of Common Stock transferred are [a portion of] the Common Stock listed in such
owner's name.
Dated:
------------------------
Very truly yours,
------------------------------
Name:
Title:
II-1
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement of our report dated January 29, 1999,
included in ILEX Oncology, Inc.'s Form 10-K for the year ended December 31,
1998, and to all references to our firm included in this Registration Statement.
/s/ ARTHUR ANDERSON LLP
San Antonio, Texas
March 3, 2000
