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REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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INNOVASIVE DEVICES, INC.
(Exact name of registrant as specified in its charter)
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NO. 04-3132641
MASSACHUSETTS (IRS Employer Identification No.)
(State or other jurisdiction of
incorporation or organization)
734 FOREST STREET
MARLBOROUGH, MASSACHUSETTS 01752-3032
(508) 460-8229
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
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RICHARD D. RANDALL
PRESIDENT AND CHIEF EXECUTIVE OFFICER
INNOVASIVE DEVICES, INC.
734 FOREST STREET
MARLBOROUGH, MASSACHUSETTS 01752-3032
(508) 460-8229
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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COPY TO:
ROSLYN G. DAUM, ESQ.
CHOATE, HALL & STEWART
EXCHANGE PLACE
53 STATE STREET
BOSTON, MASSACHUSETTS 02109
(617) 248-5000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time or at one time after effective date of this Registration Statement.
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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, check the following box and
list the Securities Act registration statement number of earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to a 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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<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE TO BE OFFERING PRICE OFFERING REGISTRATION
REGISTERED REGISTERED PER UNIT(1) PRICE(1) FEE
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<S> <C> <C> <C> <C>
Common Stock, par value
$.0001 per share...... 1,885,000 shares $9.25 $17,436,250 $10,567.42
</TABLE>
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(1) Estimated solely for the purposes of calculating the registration fee
pursuant to Rule 457(c) based on the average of the high and low sales
prices of Innovasive Devices, Inc. Common Stock as reported on the Nasdaq
National Market on July 29, 1997.
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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 SAID
SECTION 8(A), MAY DETERMINE.
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PROSPECTUS
1,885,000 SHARES
INNOVASIVE DEVICES, INC.
COMMON STOCK
The Prospectus relates to the resale of up to 1,885,000 shares (the
"Shares") of Common Stock, $.0001 par value per share, of Innovasive Devices,
Inc. (the "Company" or "Innovasive") held by certain shareholders of the
Company identified herein under the caption "Selling Shareholders".
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THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK. FOR A
DISCUSSION OF CERTAIN FACTORS WHICH SHOULD BE CONSIDERED IN CONNECTION WITH
THE PURCHASE OF THESE SECURITIES, SEE "RISK FACTORS" BEGINNING ON PAGE 4.
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The Selling Shareholders and their agents, donees, distributees, pledgees
and other successors in interest may offer and sell the Shares from time to
time in one or more transactions on The Nasdaq Stock Market, or otherwise, at
market prices then prevailing or in negotiated transactions. The Shares may
also be sold pursuant to option, hedging or other transactions with broker-
dealers. The Shares may also be offered in one or more underwritten offerings.
The underwriters in an underwritten offering, if any, and the terms and
conditions of any such offering will be described in a supplement to this
Prospectus. See "Selling Shareholders" and "Plan of Distribution."
The Company will not receive any of the proceeds from the sale of the Shares
by the Selling Shareholders. See "Use of Proceeds".
The Common Stock of the Company is traded on the National Market of The
Nasdaq Stock Market (the "Nasdaq National Market") under the symbol "IDEA". On
July 29, 1997, the last reported sale price of Common Stock on the Nasdaq
National Market was $9.25 per share.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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THE DATE OF THIS PROSPECTUS IS JULY , 1997.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company with the Commission
pursuant to the informational requirements of the Exchange Act may be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
Commission's regional offices located at Seven World Trade Center, 13th Floor,
New York, New York 10048, and at Northwestern Atrium Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of such materials also may
be obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. Such material may
also be obtained from the Commission's web site at http://www.sec.gov. The
Common Stock of the Company is traded on the Nasdaq National Market. Reports,
proxy statements and other information concerning the Company also may be
inspected at the National Association of Securities Dealers, Inc., 1735 K
Street, N.W., Washington, D.C. 20006.
The Company has filed with the Commission a Registration Statement on Form
S-3 under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the Common Stock offered hereby. This Prospectus does not contain
all of the information set forth in the Registration Statement and the
exhibits and schedules filed therewith. For further information with respect
to the Company and the Common Stock offered hereby, reference is hereby made
to such Registration Statement and to the exhibits and schedules filed
therewith. Statements contained in this Prospectus regarding the contents of
any agreement or other document are not necessarily complete, and in each
instance reference is made to the copy of such agreement or document filed as
an exhibit to the Registration Statement, each such statement being qualified
in all respects by such reference. The Registration Statement, including the
exhibits and schedules thereto, may be inspected without charge at the
principal office of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549, and copies of all or any part thereof may be obtained from such office
upon payment of the prescribed fees.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission (File No.
0-28492) are incorporated herein by reference: (1) the Company's Current
Report on Form 8-K filed on July 10, 1997; (2) the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1996; (3) the Company's
interim report on Form 10-Q for the fiscal quarter ended March 31, 1997; and
(4) the Company's Registration Statement on Form 8-A filed on June 5, 1996
registering the Company's Common Stock under Section 12(g) of the Exchange
Act.
All documents filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date hereof
and prior to the termination of the offering of the Common Stock registered
hereby shall be deemed to be incorporated by reference into this Prospectus
and to be a part hereof from the date of filing of such documents. Any
statements contained in a document incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded for purposes
of this Prospectus to the extent that a statement contained herein or in any
other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus. The Company will
provide without charge to each person to whom this Prospectus is delivered,
upon a written request of such person, a copy of any or all of the foregoing
documents incorporated by reference into this Prospectus (other than exhibits
to such documents, unless such exhibits are specifically incorporated by
reference into such documents). Requests for such copies should be directed to
the Chief Financial Officer of the Company, 734 Forest Street, Marlborough,
Massachusetts 01752-3032, Telephone: (508) 460-8229.
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THE COMPANY
The Company competes in the soft tissue repair segment of the sports
medicine/arthroscopic surgery market. The Company markets its products and
related instruments principally to sports medicine surgeons and orthopaedic
specialists who treat and repair soft tissues, within and around joints, which
have been damaged by traumatic injury or degenerative disease.
The Company designs, develops manufactures and markets proprietary tissue
repair systems which facilitate the repair of soft tissue injuries. The
Company's tissue repair systems are designed to be used in either open
surgical or minimally invasive arthroscopic procedures. Performing repairs
arthroscopically offers several benefits, including reduced patient trauma and
shorter rehabilitation times, resulting in an expedited return to full
physical activity. The Company's initial products consisted of the ROC(TM)
(Radial Osteo Compression) family of suture fasteners and related arthroscopic
instruments which are marketed for use in the sports medicine/arthroscopy
segment of the orthopaedic market. The Company's suture fastener, a bone
anchor with an attached suture, is deployed into bone and used to secure soft
tissue, such as ligaments and tendons, to the bone. The Company has expanded
its product offering to include the ROC XS(TM) and Mini ROC(TM) suture
fastener systems for soft bone and small joint indications and the COR(TM)
system for the repair of osteochondral defects.
Effective on June 27, 1997, the Company acquired substantially all of the
operating assets and assumed substantially all of the operating liabilities of
MedicineLodge, Inc., a Delaware corporation ("MLI") in exchange for the
Company's issuance to MLI of the Shares. This acquisition has further expanded
the Company's product offerings to include a suite of proprietary surgical
implant systems which facilitate the repair of the anterior cruciate ligament
("ACL") of the knee.
The Company's suture fasteners are based on unique and proprietary
technologies which afford them many advantages when compared to the most
widely-used metal bone anchors. The unique radial osteo compression method of
attachment has allowed the Company to develop a family of suture fasteners
which are efficacious in a broad variety of bone densities and sizes. The ROC
design allows for placement of suture fasteners in close proximity for precise
positioning, which enhances tissue to bone reattachment. ROC suture fasteners
are not forced, hammered or screwed into the bone and therefore are
particularly suitable for placement in smaller, more fragile bones. ROC suture
fasteners are polymer-based and can be removed and replaced with another ROC
suture fastener in the event a revision or a second surgery is required. Based
on its existing designs, the Company is developing and currently testing next
generation suture fasteners using bioabsorbable composites, which degrade and
absorb into surrounding tissue, and collagen-based biomaterial composites,
which remodel into surrounding tissue. In addition, the Company is pursuing
opportunities to apply its core technologies outside of orthopaedics in areas
such as uro/gynecology, maxillo-facial trauma repair and plastic surgery.
The Company will be introducing a family of products that will provide the
orthopaedic surgeon with alternatives for repairing ACL injuries. The ACL
product family will include multiple repair systems and proprietary devices
which facilitate a bone-tendon-bone or soft tissue graft repair.
The Company's principal executive offices are located at 734 Forest Street,
Marlborough, Massachusetts 01752-3032, and its telephone number is (508) 460-
8229.
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RISK FACTORS
In addition to the other information contained in this Prospectus and in the
documents incorporated herein by reference (see "Incorporation of Certain
Documents by Reference" above), the following factors should be considered
carefully in evaluating an investment in the Common Stock.
Forward Looking Statements; Cautionary Statement. When used anywhere in
future filings by the Company with the Securities and Exchange Commission, in
the Company's press releases and in oral statements made with the approval of
an authorized executive officer of the Company, the words or phrases "will
likely result", "are expected to", "will continue", "is anticipated",
"project", or "outlook" or similar expressions (including confirmations by an
authorized executive officer of the Company of any such expressions made by a
third party with respect to the Company) are intended to identify "forward-
looking statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. The Company wishes to caution readers not to place undue
reliance on any such forward-looking statements, which speak only as of the
date made. Such statements are subject to certain risks and uncertainties that
could cause actual results to differ materially from historical earnings and
those presently anticipated or projected. These risk factors are described
below. The Company specifically declines any obligation to publicly release
the result of any revisions which may be made to any forward-looking
statements to reflect anticipated or unanticipated events or circumstances
occurring after the date of such statements.
The Company wishes to caution readers that the following important factors,
among others, in some cases have affected, and in the future could affect, the
Company's actual results and could cause the Company's actual consolidated
results for the Company's current quarter and beyond, to differ materially
from those expressed in any forward-looking statements made by, or on behalf
of, the Company: History of Losses; Probability of Substantial Additional
Future Losses; Uncertainty of Future Results; Seasonality of Sales. The
Company has incurred substantial operating losses since its inception and, as
of June 30, 1997, with the in-process research and development associated with
the acquisition of MLI, had an accumulated deficit of $31.5 million. These
losses have resulted principally from expenses associated with research and
development efforts, expenses associated with obtaining United States Food and
Drug Administration ("FDA") clearance and the establishment of the Company's
sales and marketing organization. The Company expects to generate additional
losses as it continues to expend substantial resources in research and product
development, funding of clinical trials in support of obtaining necessary
regulatory clearances or approvals and expanding its manufacturing
capabilities and marketing and sales activities. Results of operations may
fluctuate significantly from quarter to quarter due to the timing of such
expenditures, absence of a backlog of orders, timing of the receipt of orders,
promotional discounts of the Company's products, timing of regulatory actions,
introduction of new products by competitors of the Company, pricing of
competitive products and the cost and effect of promotional and marketing
programs. In addition, the Company anticipates some seasonality due to the
fact that generally fewer surgical procedures are performed during the third
quarter. The seasonal pattern may cause fluctuations in the Company's results
of operations. It is difficult to predict the impact that this seasonality
will have on the Company's results of operations because of its limited
operating history. The Company's revenue and profitability will be critically
dependent on expanding applications for its current product lines both within
arthroscopy and in other clinical specialties. In addition, the Company's
profitability could be adversely affected if it is required to sell its
products at reduced prices. There can be no assurance that significant
revenues or profitability will ever be achieved.
Potential Volatility of Stock Price. The stock market has from time to time
experienced significant price and volume fluctuations that are unrelated to
the operating performance of particular companies. These broad market
fluctuations may adversely affect the market price of the Company's Common
Stock. In addition, the market price of the shares of Common Stock is likely
to be highly volatile. Factors such as fluctuations in the Company's operating
results, announcements of technological innovations or new products by the
Company or its competitors, FDA and international regulatory actions, actions
with respect to reimbursement matters, developments with respect to patents or
proprietary rights, mergers or acquisitions involving competitors, public
concern as to the safety of products developed by the Company or others,
changes in health care policy in the
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United States and internationally, changes in stock market analyst
recommendations regarding the Company, other medical device companies or the
medical device industry generally and general market conditions may have a
significant effect on the market price of the Common Stock.
Uncertainty of Market Acceptance. The Company's future prospects depend
significantly on increasing penetration of existing markets, acceptance of the
Company's products in new markets, and the development of new products for its
existing and future markets. There can be no assurance that any of the
Company's existing or future products will gain market acceptance among
physicians, patients or healthcare payors, even if reimbursement and necessary
regulatory approvals are obtained. To date, the Company's marketing efforts
have been directed primarily to the sports medicine segment of the orthopaedic
market for tissue-to-bone fixation applications. The Company has limited
experience in establishing marketing or distribution channels in other
clinical areas. With respect to its current products, the Company was not the
first to market devices for the attachment of soft tissue to bone and
therefore, to succeed must both take market share away from its existing
competitors and create new demand for its products. The size of the market for
the Company's products will depend in part on the Company's ability to
persuade physicians that its products offer clinical and other advantages over
existing means of attaching soft tissue structures to tissue or bone and that
its fixation devices could be used for a wider variety of clinical
applications, such as repair of tears in the meniscus cartilage of the knee,
repair of ACL injuries or repair of ligament or tendon damage in the fingers
or toes. In addition, the Company will need to demonstrate that its products
are cost-effective and convenient to use and that the techniques for their use
are relatively straightforward and simple. There can be no assurance that the
market for the Company's products will continue to grow or that they will be
accepted for orthopaedic procedures not currently using fixation devices and
in markets outside of the sports medicine segment of the orthopaedic market.
Limited Product Line. A substantial portion of the Company's sales to date
have derived from the Company's ROC tissue fixation products for use in open
shoulder repair applications and related instruments. As of the date hereof,
the use of the ROC, ROC XS and Mini ROC fasteners have been cleared by the FDA
for applications involving the shoulder, knee, foot, ankle, hand and wrist.
The Company's COR system has been cleared by the FDA for the grafting of bone
plugs in the knee; however, most of the Company's clinical experience to date
involves shoulder procedures. In addition, while the Company's future
prospects depend in part on the use of its products in arthroscopic
procedures, most of the clinical experience involving the Company's products
has been in open surgery procedures. For the fiscal years ended December 31,
1996 and 1995, the ROC fastener and related instruments accounted for
approximately 93.2% and 91.7%, respectively, of the Company's sales. The
Company expects that a significant portion of its revenue in the foreseeable
future will continue to be derived from sales of its ROC products. Failure of
ROC to maintain and gain market acceptance would have a material adverse
affect on the Company's business, financial condition and results of
operations.
Rapid Technological Change and New Product Innovation. The medical device
market is subject to rapid technological change and new product introductions
and enhancements. The Company's ability to remain competitive in this market
will depend in significant part on its ability to develop and introduce new
products and enhancements on a timely and cost-effective basis. The ability of
the Company to develop new and enhanced repair systems depends on a number of
factors, including product selection, timely and efficient completion of
product design, development of new materials and manufacturing processes,
timely regulatory approval, implementation of manufacturing and assembly
processes and effective sales and marketing. There is no assurance that the
Company will be successful in developing such products. If the Company
experiences quality or reliability problems with new products, reductions in
orders, higher manufacturing costs and additional warranty expenses may
result. Because new product development commitments must be made well in
advance of sales, new product decisions must anticipate both future demand and
the availability of technology to satisfy that demand. In the meantime,
competitors may achieve technological advances which provide a competitive
advantage over the Company's products. In addition, advances or developments
in other fixation technologies, including those relating to bioabsorbable
materials or biomaterials, could render the Company's products obsolete or
less desirable. There can be no assurance that the Company will successfully
develop and introduce new products and enhancements or that such products will
achieve market acceptance.
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Reliance on Patents and Proprietary Technology. The Company relies on
proprietary technology which it seeks to protect primarily through patents,
trade secrets and proprietary know-how. The Company currently holds
approximately 35 patents and has approximately 69 United States and foreign
patent applications pending which cover certain aspects of its technology.
With respect to the patent applications, however, the breadth of the claims
that will be covered by the issued patents cannot be known until they are
issued. Moreover, the degree of protection against competing devices afforded
by the Company's patents is subject to uncertainties. There can be no
assurance that others will not be successful in challenging, invalidating or
circumventing the Company's patents or that the Company's patents and
intellectual property rights will confer a competitive advantage on the
Company. In addition, there can be no assurance that the Company will be able
to obtain patents on future products, or that the Company's products will not
infringe the patents and proprietary rights of third parties. The medical
device industry has been characterized by extensive litigation involving
patents and other intellectual property rights, and certain companies in the
medical device industry have employed intellectual property litigation to gain
a competitive advantage. The Company has received a notice alleging that
instruments based on one of its patents may infringe the patent of a third
party. The only products currently manufactured by the Company using the
Company's patent are its knot pusher and laparascopic scissors. After its
initial response denying such infringement, the Company has not received any
recent notices relating to this claim. The Company may not be able to
successfully defend against a claimed infringement and there can be no
assurance that the Company will not become subject to patent infringement
claims or litigation or interference proceedings. Litigation may be necessary
to enforce patents issued to the Company or to protect its trade secrets and
other intellectual property rights. Any litigation or interference proceedings
will likely result in substantial expense to the Company and a significant
diversion of effort by its employees, and, if adversely determined to the
Company, could result in significant liabilities to third parties and
limitations on the manufacture, distribution or sale of the Company's products
or on the use of certain technologies in the Company's products.
Future Capital Needs; Uncertainty of Additional Funding. There can be no
assurance that additional equity or debt financing will not be required prior
to the time, if ever, the Company achieves and sustains profitability. The
Company may require additional financing to fund its operations. The Company's
future capital requirements will depend on many factors, including the
progress of the Company's research and development, the scope and results of
preclinical studies and clinical trials, the cost, timing and outcome of
regulatory reviews, the rate of technological advances, the market acceptance
of any of the Company's products, administrative and legal expenses,
competitive products, and manufacturing and marketing arrangements. Any
additional equity financing may result in dilution to the Company's
stockholders. There can be no assurance that funds will be available on
favorable terms, if at all. If adequate funds are not available, the Company
may be required to cut back or discontinue one or more of its product
development programs, or obtain funds through strategic alliances that may
require the Company to relinquish rights to certain of its technologies or
products.
Regulatory Risks. The manufacturing, labeling, distribution and marketing of
the Company's products are subject to extensive and rigorous governmental
regulation in the United States and certain other countries where the process
of obtaining and maintaining required regulatory approvals is lengthy,
expensive and uncertain. In order initially to market its products for
clinical use in the United States, the Company must obtain clearance from the
FDA either through a procedure known as 510(k) pre-market notification or must
receive approval by a lengthier and more difficult procedure known as pre-
market approval ("PMA"). Although all of the Company's current products have
been cleared using the 510(k) procedure, there can be no assurance that the
Company's future products or modifications to the Company's existing products
will be cleared by the FDA using the 510(k) process rather than the more
arduous and lengthy procedures required for a PMA application, which may
include extensive clinical studies, manufacturing information and review by a
panel of experts outside the FDA. For example, to the Company's knowledge, the
closest predicate device for a collagen-based fastener required PMA approval.
If the FDA were to require the Company to obtain pre-market approval for the
sale of its future products using the PMA process, the time from development
to marketing of those products could be significantly extended, with a
concomitant negative impact on the Company's financial performance. The
Company may market its products only for indications that have been cleared by
the FDA. The Company has no control over the use of its devices by physicians.
There can be no assurance that the Company will not become
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subject to FDA actions resulting from physician use of its products for non-
approved indications. FDA regulations for the commercial sale of products is
subject to interpretation. Failure to comply with FDA requirements could
result in the FDA's refusal to accept clinical data from the Company or the
imposition of regulatory sanctions. In addition, there can be no assurance
that the FDA will not place significant limitations upon the intended use of
the Company's products as a condition to 510(k) clearance or PMA approval.
Failure to receive, or delays in receipt of, FDA clearances or approvals,
including the need for clinical trials or additional data as a prerequisite to
clearance or approval, or any FDA limitations on the intended use of the
Company's products, could have a material adverse effect on the Company's
business, financial condition and results of operations.
The Company has not obtained regulatory approval in all foreign countries in
which it plans to sell product. Starting in mid-1998, the Company will be
required to obtain "CE" mark certification, which is an international symbol
of quality and compliance with applicable European medical device directives,
in order for it to sell its products in Europe. There can be no assurance that
the Company will be able to obtain the proper certification. If the Company
obtains regulatory approval to sell its products in foreign countries, it
would rely on independent distributors to comply with certain of the foreign
regulatory requirements. The inability or failure of the Company's independent
distributors to comply with applicable regulatory requirements could
materially and adversely affect the Company's business, financial condition
and results of operations.
The Company and its contract manufacturers will be required to adhere to
"Good Manufacturing Practices" of the FDA and similar requirements in other
countries, which include testing, control and documentation requirements.
Ongoing compliance with good manufacturing practices ("GMP") and other
applicable regulatory requirements will be monitored through periodic
inspections by state and federal agencies, including the FDA, and by
comparable foreign agencies. Failure to comply with applicable regulatory
requirements could result in, among other things, warning letters, fines,
injunctions, civil penalties, recall or seizure of products, total or partial
suspension of production, refusal of the government to grant clearance or
approval to the marketing of devices, withdrawals of approvals and criminal
prosecution. The restriction, suspension or revocation of regulatory approvals
or any other failure to comply with regulatory requirements could have a
material adverse effect on the Company.
Limited Manufacturing Experience. The Company has been manufacturing and
assembling its ROC suture fastener products since 1994, but has yet to
manufacture the volumes necessary for the Company to achieve profitability.
There can be no assurance that reliable, high-volume manufacturing can be
achieved at a commercially reasonable cost. The Company intends to expand its
manufacturing capabilities to include bioabsorbable products and biomaterials,
and if the Company encounters difficulties in scaling up production of new
products, including problems involving production yields, quality control and
assurance, component supply and shortages of qualified personnel, such
problems could have a material adverse effect on the Company's business,
financial condition and results of operations.
Reliance on Sole or Limited Sources of Supply. The Company's handles and
suture fasteners are manufactured from molded polymers. The Company owns only
one set of molds for each of its products requiring a molding manufacturing
process. In the event that the molds are damaged, approximately 12 to 16 weeks
would be required for the manufacture of new molds. Should the Company's
manufacturing process be disrupted, there can be no assurance that the Company
would be able to meet its commitments to customers. The failure of the Company
to meet its commitments could have a material adverse effect on the Company's
business, financial condition and results of operations.
In addition, certain suppliers may terminate sales of certain materials to
companies that manufacture medical devices in an attempt to limit their
potential product liability exposure. If the polymers which are used to
manufacture the Company's ROC suture fasteners became unavailable, the Company
would be required to identify a new polymer material for the suture fasteners
and certify the quality and suitability of the new material. In additional, a
new 510(k) clearance would have to be obtained to market products manufactured
from the new
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materials. This process could take a substantial period of time and there is
no assurance that the Company would be able to identify, certify or obtain
clearance for the new polymer-based fasteners. The Company is attempting to
develop new tissue fixation devices from bioabsorbable materials and
biomaterials, particularly collagen. The Company believes that there are only
a few sources of bioabsorbable materials with the ability and expertise to
manufacture bioabsorbable materials for the Company's products. The Company
believes that even fewer sources of supply for collagen materials currently
exist. The Company has entered into a research and development and a
manufacturing and supply agreement with Collagen Corporation in connection
with a program to develop tissue fixation devices from collagen, but there are
provisions in those agreements that would enable either party to terminate the
arrangements in certain circumstances. If the Company were unable to obtain
sources of bioabsorbable materials or biomaterials to produce the next
generation of its products, the Company's future prospects and opportunities
would be substantially reduced, resulting in a material adverse effect on its
business, financial condition and results of operations.
Reliance on International Distributors. The Company has one sales employee
outside the United States. Accordingly, the Company depends primarily on
outside independent sales representatives and distributors for its
international sales. None of the Company's foreign representatives are subject
to any long-term commitments to the Company, and all of them represent a
number of manufacturers and sell a broad range of products in addition to
those offered by the Company. The revenues that such representatives are
likely to receive from the promotion and sale of other products may be
substantially greater than the compensation they may receive from the sale of
the Company's products, and it may be difficult for the Company to provide
incentives to such representatives in order to cause them to devote
substantial attention to marketing and selling the Company's products.
International sales accounted for 26.9% of the Company's revenues in 1996. The
failure of the Company's foreign independent representatives to generate
substantial sales for the Company could have a material adverse effect on the
Company's business, financial condition and results of operations. The loss of
such sales representatives or distributors or the inability of the Company to
develop and maintain an alternative foreign distribution network could have a
material adverse impact on the Company's international sales. The Company will
depend in part on its international sales representatives to obtain needed
regulatory approval for the sale of the Company's products in overseas
markets. The failure of its international sales representatives to obtain or
maintain the necessary approvals could have a material adverse effect on the
Company's business, financial condition and results of operations.
Certain risks are inherent in international operations, including changes in
demand resulting from fluctuations in exchange rates, the risk of government
financed or subsidized competition, changes in trade policies and tariff
regulations. Although the Company's international sales are denominated in
dollars, fluctuations in foreign currencies can impact the prices quoted by
the Company to prospective customers and thereby affect the Company's ability
to obtain orders from foreign customers.
Product Liability Risk. The development, manufacture and sale of medical
devices entail significant risks of product liability claims. There can be no
assurance that the amount of the Company's insurance coverage will be adequate
to protect it from product liability claims, that the Company will be able to
obtain adequate coverage at competitive rates in the future, or that the
Company's product liability experience in the future will enable it to obtain
insurance coverage in the future. Product liability insurance is expensive,
and may not be available on acceptable terms, if at all, in the future. A
successful product liability suit not covered by such insurance would have a
material adverse effect on the Company's business, financial condition and
results of operations.
Influence of Collagen Corporation. An important part of the Company's long-
term strategy is to develop and sell products manufactured from collagen.
Collagen Corporation holds approximately 9.2% of the Company's Common Stock.
Collagen Corporation is entitled to designate one member of the Company's
Board of Directors so long as it holds at least five percent of the Company's
Common Stock on a fully-diluted basis and a representative of Collagen
Corporation currently serves on the Board of Directors of the Company. In
addition, the Company and Collagen Corporation are parties to a research and
development agreement, a manufacturing and supply agreement and a distribution
agreement with respect to tissue fixation devices
8
<PAGE>
manufactured from collagen-based materials using Collagen Corporation's
proprietary technology. Pursuant to those agreements, certain of the Company's
products under development will be based upon patents and intellectual
property owned by Collagen Corporation. Accordingly, Collagen Corporation may
be able to exercise influence over the business and financial affairs of the
Company. If Collagen Corporation's licensed technology is invalidated or
challenged, the Company's ability to sell products based on such technology
could be severely limited. In the event that the Company materially breaches
any of the terms of its agreements with Collagen Corporation, Collagen
Corporation could terminate the Company's license to develop, manufacture and
sell products using Collagen Corporation's technology, which could have a
material adverse effect on the Company's business, financial condition and
results of operations.
Risk of Intense Competition. The medical device industry is highly
competitive and characterized by innovation and rapid technological change.
Among the Company's principal competitors are Mitek Surgical Products, Inc., a
division of Johnson & Johnson; the Zimmer and Linvatec divisions of Bristol-
Myers Squibb Company; Dyonics, Inc., a subsidiary of Smith & Nephew, Inc.,
Arthrotek Inc., a division of Biomet, Inc., Arthrex and U.S. Surgical Inc.
Each of these competitors has significantly greater financial, manufacturing,
marketing, distribution and technical resources than the Company and a greater
share of the tissue fixation market than the Company. In addition, a number of
smaller companies are entering or have entered the tissue fixation market.
Dyonics, Inc. has already released to the market a number of bioabsorbable
products. In addition, Mitek recently introduced a bioabsorbable anchor. Many
of the Company's competitors have large existing sales organizations devoted
to a wide variety of orthopaedic products. These companies are well
capitalized and may be able to withstand price pressures and deep discounting
better than the Company. The Company has a small number of sales employees and
independent sales representatives focused on tissue fixation devices in the
sports medicine market and with relatively little experience selling the
Company's products. There can be no assurance that the Company's competitors
will not succeed in developing technologies and products that are more
effective or less costly than any which have been developed or may be
developed by the Company or that would render the Company's products obsolete
or not competitive.
Price Pressure Resulting From Consolidation of Health Care Industry. The
health care industry is undergoing rapid change and consolidation as health
care systems merge to effect cost savings and operating efficiencies. In
addition, a number of large, national buying consortiums have formed to engage
in group purchasing of medical supplies and services in an effort at cost
containment for member hospital systems and health care providers. These
consolidated systems and large purchasing organizations are likely to apply
pressure to manufacturers and distributors of medical devices to reduce the
purchase prices of their goods. Manufacturers such as the Company may be
forced to lower prices in response to those pressures in order for their
products to be approved for purchase by those organizations, which could have
a material adverse effect on the Company's business, financial condition and
results of operations.
Possible Limitations on Third-Party Reimbursement. The Company's products
are generally purchased directly by hospitals and other health care providers,
which in turn bill third-party payors such as Medicare, Medicaid and private
insurance companies. Many of these payors are attempting to control health
care costs by authorizing fewer surgical procedures and by limiting
reimbursement for procedures to fixed amounts. The Company's strategy includes
the expansion of its market by encouraging physicians to use its tissue
fixation devices for procedures that are not routinely performed, or if
performed, are performed without the use of tissue fasteners. Failure by
physicians, hospitals and other users of the Company's products to obtain
sufficient reimbursement from third-party payors for procedures in which the
Company's products are used, or adverse changes in government and private
third-party payors' policies toward reimbursement for such procedures, could
have a material adverse effect on the Company's business, financial condition
and results of operations.
9
<PAGE>
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the Shares
by the Selling Shareholders.
SELLING SHAREHOLDERS
The following table sets forth the names of the Selling Shareholders, the
nature of any position, office or other material relationship between the
Selling Shareholder and the Company or its affiliates, the number of shares of
Common Stock beneficially owned by each of them prior to the offering to be
made by this Prospectus, the maximum number of shares to be offered hereby for
the account of each Selling Shareholder, and the number of shares of Common
Stock to be beneficially owned by each Selling Shareholder after completion of
this offering, assuming all Shares offered hereby are in fact sold.
<TABLE>
<CAPTION>
TOTAL NUMBER OF NUMBER OF SHARES
SHARES OWNED NUMBER OF SHARES TO BE OWNED
SELLING SHAREHOLDER PRIOR TO OFFERING(1) TO BE OFFERED OR SOLD AFTER THE OFFERING
- ------------------- -------------------- --------------------- ------------------
<S> <C> <C> <C>
Alan Chervitz (2)....... 275,087 275,087 0
E. Marlowe Goble........ 888,839 888,839 0
Richard B. Caspari (3).. 330,981 330,981 0
Judith B. Caspari....... 37,340 37,340 0
T. Wade Fallin (4)...... 123,869 123,869 0
Stephen J. Snyder,
Trustee of the Stephen
J. and
Lee Ann Snyder Family
Trust.................. 113,044 113,044 0
Thomas Winters.......... 28,911 28,911 0
Kenneth L. Jensen....... 33,506 33,506 0
Dan A. Perkins.......... 33,506 33,506 0
Daniel Justin........... 14,777 14,777 0
Jeff J. Robbins......... 5,140 5,140 0
</TABLE>
- --------
(1) Includes Shares held in escrow pursuant to the terms of an Escrow
Agreement, dated June 27, 1997, between the Company, MLI and Brown
Brothers Harriman & Co., as escrow agent. The Escrow Agreement was entered
into in connection with the purchase by the Company of certain of MLI's
operating assets pursuant to an Asset Purchase Agreement dated as of
February 4, 1997. Although the Shares were initially issued by the Company
to MLI on June 27, 1997, MLI subsequently distributed such Shares pro rata
to the Selling Shareholders pursuant to MLI's liquidation of assets.
(2) Executive Vice President and Director of the Company.
(3) Director of the Company.
(4) Vice President of the Company.
PLAN OF DISTRIBUTION
The Selling Shareholders and their agents, donees, distributees, pledgees
and other successors in interest may, from time to time, offer for sale and
sell or distribute the Shares to be offered by them hereby (a) in transactions
executed on the Nasdaq National Market, or any securities exchange on which
the shares may be traded, through registered broker-dealers (who may act as
principals, pledgees or agents), (b) in privately negotiated transactions, or
(c) through other means. The Shares may be sold from time to time in one or
more transactions at market prices prevailing at the time of sale or a fixed
offering price, which may be changed, or at varying prices determined at the
time of sale or at negotiated prices. Such prices will be determined by the
Selling Shareholders or by agreement between the Selling Shareholders and
their underwriters, dealers, brokers or agents. The Shares may also be offered
in one or more underwritten offerings. The underwriters in an underwritten
offering, if any, and the terms and conditions of any such offering will be
described in a supplement to this Prospectus.
10
<PAGE>
In connection with distribution of the Shares, the Selling Shareholders may
enter into hedging or other option transactions with broker-dealers in
connection with which, among other things, such broker-dealers may engage in
short sales of the Shares pursuant to this Prospectus in the course of hedging
the positions they may assume with one or more of the Selling Shareholders.
The Selling Shareholders may also sell Shares short pursuant to this
Prospectus and deliver the Shares to close out such short positions. The
Selling Shareholders may also enter into option or other transactions with
broker-dealers which may result in the delivery of Shares to such broker-
dealers who may sell such Shares pursuant to this Prospectus. The Selling
Shareholders may also pledge the Shares to a broker-dealer or financial
institution and upon default the broker-dealer or financial institution may
effect the sales of the pledged Shares pursuant to this Prospectus.
The distribution of the Shares by the Selling Shareholders is not subject to
any underwriting agreement. Any underwriters, dealers, brokers or agents
participating in the distribution of the Shares may receive compensation in
the form of underwriting discounts, concessions, commissions or fees from the
Selling Shareholders and/or purchasers of Shares, for whom they may act. Such
discounts, concessions, commissions or fees will not exceed those customary
for the type of transactions involved. In addition, the Selling Shareholders
and any such underwriters, dealers, brokers or agents that participate in the
distribution of Shares may be deemed to be "underwriters" under the Securities
Act, and any profits on the sale of Shares by them and any discounts,
commissions or concessions received by any of such persons may be deemed to be
underwriting discounts and commissions under the Securities Act. Those who act
as underwriter, broker, dealer or agent in connection with the sale of the
Shares will be selected by the Selling Shareholders and may have other
business relationships with the Company and its subsidiaries or affiliates in
the ordinary course of business.
The aggregate proceeds to the Selling Shareholders from the sale of the
Shares offered hereby will be the purchase price of such Shares less any
broker's commissions.
In order to comply with the securities laws of certain states, if
applicable, the Shares will be sold in such jurisdiction only through
registered or licensed brokers or dealers. In addition, in certain states the
Shares may not be sold unless they have been registered or qualified for sale
in the applicable state or an exemption from the registration of qualification
requirement is available and is complied with. Brokers, dealers and others
effecting transactions in the Shares should confirm the registration or
qualification of the Shares under the securities laws of the states in which
such transactions occur or the existence of any exemption from such
registration.
There is no assurance that the Selling Shareholders will sell any or all of
the Shares described herein and may transfer, devise or gift such securities
by other means not described herein. The Company is permitted to suspend the
use of this Prospectus in connection with sales of the Shares by holders
during certain periods of time under certain circumstances relating to pending
corporate developments and public filings with the Commission and similar
events. Expenses of preparing and filing the registration statement and all
post-effective amendments will be borne by the Company.
The Company has agreed to indemnify the Selling Shareholders against certain
liabilities, including liabilities under the Securities Act. The Selling
Shareholders have agreed to indemnify the Company and certain related persons
against certain liabilities, including liabilities under the Securities Act.
INTERESTS OF NAMED EXPERTS AND COUNSEL
The legality of the Common Stock offered hereby is being passed upon for the
Company by Choate, Hall & Stewart, Boston, Massachusetts. Roslyn G. Daum, a
partner of Choate, Hall & Stewart, is the Clerk of the Company.
11
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY IN-
FORMATION 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 OR ANY SALES AGENT. THIS PRO-
SPECTUS DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES OTHER THAN THOSE TO
WHICH IT RELATES OR AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, TO
ANY PERSON IN ANY JURISDICTION WHERE SUCH AN OFFER OR SOLICITATION WOULD BE
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION
CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
---------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information...................................................... 2
Incorporation of Certain Documents by Reference............................ 2
The Company................................................................ 3
Risk Factors............................................................... 4
Use of Proceeds............................................................ 10
Selling Shareholders....................................................... 10
Plan of Distribution....................................................... 10
Interests of Named Experts and Counsel..................................... 11
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
1,885,000 SHARES
INNOVASIVE DEVICES, INC.
COMMON STOCK
---------------
PROSPECTUS
---------------
JULY , 1997
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses payable by the Company
in connection with the distribution of the securities being registered
hereunder. All of the amounts shown are estimates, except the Securities and
Exchange Commission registration fee.
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee.............. $10,567.42
Legal Fees and Expenses.......................................... 15,000.00
----------
Total.......................................................... $25,567.42
==========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 67 of Chapter 156B of the Massachusetts General Laws provides that a
corporation may indemnify its directors and officers to the extent specified
in or authorized by (i) the articles of organization, (ii) a by-law adopted by
the stockholders, or (iii) a vote adopted by the holders of a majority of the
shares of stock entitled to vote on the election of directors. In all
instances, the extent to which a corporation provides indemnification to its
directors and officers under Section 67 is optional. In its Third Restated
Articles of Organization, the Company has elected to commit to provide
indemnification to its directors and officers in specified circumstances.
Generally, Article 6 of the Company's Third Restated Articles of Organization
indemnifies directors and officers of the Company against liabilities and
expenses arising out of legal proceedings brought against them by reason of
their status as directors or officers, by reason of their agreeing to serve,
at the request of the Company, as a director or officer with an other
organization or by reason of their serving at the request of the Company in
any capacity with respect to any employee benefit plan. Under this provision,
a director or officer of the Company shall be indemnified by the Company for
all costs and expenses (including attorneys fees), judgments, liabilities and
amounts paid in settlement of such proceedings, even if he is not successful
on the merits, if he acted in good faith in the reasonable belief that his
action was in the best interests of the Company or, in the case of an employee
benefit plan, in the best interest of the participants or beneficiaries of
such plan. The Board of Directors may authorize advancing litigation expenses
to a director or officer at his request upon receipt of an undertaking by any
such director or officer to repay such expenses if it is ultimately determined
that he is not entitled to indemnification for such expenses.
Article 6 of the Company's Third Restated Articles of Organization
eliminates the personal liability of the Company's directors to the Company or
its stockholders for monetary damages for breach of a director's fiduciary
duty, except to the extent Chapter 156B of the Massachusetts General Laws
prohibits the elimination or limitation of such liability.
ITEM 16. EXHIBITS
<TABLE>
<S> <C>
5.1 Opinion of Choate, Hall & Stewart as to validity of shares being registered and Consent.
23.1 Consent of Price Waterhouse.
23.2 Consent of Choate, Hall & Stewart (included in Exhibit 5.1).
24.1 Power of Attorney (part of Signature Page).
</TABLE>
ITEM 17. UNDERTAKINGS
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:
II-1
<PAGE>
(i) 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 of 1933, 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.
(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.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) 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.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4), or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
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.
Insofar as indemnification of liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described under Item 15 above, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange 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 any of 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 Act and will be governed by the final adjudication
of such issue.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of 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 Town of Marlborough, The Commonwealth of Massachusetts, on
the 28th day of July, 1997.
Innovasive Devices, Inc.
/s/ Richard D. Randall
By: _________________________________
RICHARD D. RANDALL
PRESIDENT AND CHIEF EXECUTIVE
OFFICER
II-3
<PAGE>
POWER OF ATTORNEY
We, the undersigned officers and directors of Innovasive Devices, Inc.,
hereby severally constitute and appoint Richard D. Randall, James V. Barrile
and Roslyn G. Daum, and each of them singly, our true and lawful attorneys with
full power to them, and each of them singly, to sign for us and in our names in
the capacities indicated below, the Registration Statement on Form S-3 filed
herewith and any and all pre-effective and post-effective amendments to said
Registration Statement, and generally to do all such things in our names and on
our behalf in our capacities as officers and directors to enable Innovasive
Devices, Inc. to comply with the provisions of the Securities Act of 1933, as
amended, and all requirements of the Securities and Exchange Commission, hereby
ratifying and confirming our signatures as they may be signed by our said
attorneys or any of them, to said Registration Statement and any and all
amendments thereto.
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below on July 28, 1997 by the following persons in
the capacities indicated.
SIGNATURE CAPACITY
/s/ Richard D. Randall President, Chief Executive Officer
- ------------------------------------- and Director (Principal Executive
RICHARD D. RANDALL Officer)
/s/ James V. Barrile Executive Vice President, Chief
- ------------------------------------- Financial Officer and Treasurer
JAMES V. BARRILE (Principal Financial Officer and
Principal Accounting Officer)
/s/ James E. Nicholson Director
- -------------------------------------
JAMES E. NICHOLSON
/s/ Joseph A. Ciffolillo Director
- -------------------------------------
JOSEPH A. CIFFOLILLO
/s/ Thomas C. McConnell Director
- -------------------------------------
THOMAS C. MCCONNELL
/s/ Robert R. Momsen Director
- -------------------------------------
ROBERT R. MOMSEN
/s/ Howard D. Palefsky Director
- -------------------------------------
HOWARD D. PALEFSKY
/s/ Richard B. Caspari Director
- -------------------------------------
RICHARD B. CASPARI
/s/ Alan Chervitz Director
- -------------------------------------
ALAN CHERVITZ
/s/ David Foster Director
- -------------------------------------
DAVID FOSTER
II-4
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
-------
<C> <S>
Opinion of Choate, Hall & Stewart as to validity of shares being
5.1 registered and Consent.
23.1 Consent of Price Waterhouse LLP.
23.2 Consent of Choate, Hall & Stewart (included in Exhibit 5.1).
24.1 Power of Attorney (part of Signature Page).
</TABLE>
<PAGE>
EXHIBIT 5.1
CHOATE, HALL & STEWART
A PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS
EXCHANGE PLACE
53 STATE STREET
BOSTON, MASSACHUSETTS 02109-2891
TELEPHONE (617) 248-5000
FACSIMILE (617) 248-4000
TELEX 49615860
July 31, 1997
Innovasive Devices, Inc.
734 Forest Street
Marlborough, MA 01752-3032
Gentlemen:
This opinion is delivered to you in connection with a registration statement
on Form S-3 (the "Registration Statement") to be filed on July 31, 1997, by
Innovasive Devices, Inc. (the "Company") under the Securities Act of 1933, as
amended, for registration under said Act of 1,885,000 shares of Common Stock,
$.0001 par value per share (the "Common Stock") of the Company. Terms not
otherwise defined herein shall be deemed to have the meaning ascribed such
term in the Registration Statement.
In connection with rendering this opinion, we have examined such corporate
records, certificates and other documents as we have considered necessary for
the purposes of this opinion. In such examination, we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to
us as originals, the conformity to the original documents of all documents
submitted to us as copies and the authenticity of the originals of such latter
documents. As to any facts material to our opinion, we have, when relevant
facts were not independently established, relied upon the aforesaid records,
certificates and documents.
Based upon the foregoing, we are of the opinion that the shares of Common
Stock to be sold by the Selling Shareholders are and, when sold by the Selling
Shareholders, will be, legally issued, fully paid and non-assessable.
We hereby consent to be named in the Registration Statement and in any
amendments thereto as counsel for the Company, to the statements with
reference to our firm made in the Registration Statement, and to the filing
and use of this opinion as an exhibit to the Registration Statement.
Very truly yours,
CHOATE, HALL & STEWART
<PAGE>
EXHIBIT 23.1
CONSENT OF PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report
dated February 19, 1997 appearing on page 19 of Innovasive Devices, Inc.'s
Annual Report on Form 10-K for the year ended December 31, 1996.
PRICE WATERHOUSE LLP
Boston, Massachusetts
July 30, 1997
