COLLAGENEX PHARMACEUTICALS INC
S-3/A, 2000-08-01
PHARMACEUTICAL PREPARATIONS
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      As Filed with the Securities and Exchange Commission on August 1, 2000
                                                      Registration No. 333-35634
================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                          -----------------------------
                               AMENDMENT NO. 2 TO
                                    FORM S-3
                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933

                        CollaGenex Pharmaceuticals, Inc.
                   -------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)
         Delaware                                              52-1758016
---------------------------------                       -----------------------
(State or Other Jurisdiction                                (I.R.S. Employer
 of Incorporation or Organization)                        Identification Number)

                               41 University Drive
                           Newtown, Pennsylvania 18940
                                 (215) 579-7388
            --------------------------------------------------------
               (Address, Including Zip Code, and Telephone Number,
                 Including Area Code, of Registrant's Principal
                               Executive Offices)

                            Brian M. Gallagher, Ph.D.
                      President and Chief Executive Officer
                        CollaGenex Pharmaceuticals, Inc.
                               41 University Drive
                           Newtown, Pennsylvania 18940
                                 (215) 579-7388
            --------------------------------------------------------
            (Name, Address, Including Zip Code, and Telephone Number,
                   Including Area Code, of Agent for Service)

                                    Copy to:
                              David J. Sorin, Esq.
                              Tod K. Reichert, Esq.
                   Buchanan Ingersoll Professional Corporation
                                 College Centre
                              650 College Road East
                           Princeton, New Jersey 08540
                                 (609) 987-6800

                           ---------------------------
     Approximate date of commencement of proposed sale to the public:  From time
to time after this Registration Statement becomes effective.

                           ---------------------------

      If the only  securities  being  registered  on this form are being offered
pursuant to dividend or interest  reinvestment plans, please 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. |_|
<PAGE>





--------------------------------------------------------------------------------

                        CALCULATION OF REGISTRATION FEE
================================================================================

                                    Proposed        Proposed
                       Amount        Maximum         Maximum        Amount Of
  Title of Shares      To Be     Aggregate Price    Aggregate     Registration
 To Be Registered    Registered   Per Share(1)   Offering Price      Fee(2)
--------------------------------------------------------------------------------

Common Stock,
 $.01 par value...    131,760       $9.84375      $1,297,012.50      $342.50

================================================================================


----------


(1)  Estimated  solely  for the  purpose of  calculating  the  registration  fee
     pursuant to Rule  457(c).  Such price is based upon the average of the high
     and low price per share of the Registrant's common stock as reported on the
     Nasdaq National Market on July 27, 2000.

(2)  The Registrant previously paid $100.55 of such fee on April 26, 2000.


     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.


================================================================================


<PAGE>



PROSPECTUS (Not Complete)
Dated:  August 1, 2000



                                 131,760 Shares



                        COLLAGENEX PHARMACEUTICALS, INC.

                                  Common Stock


     This  prospectus  relates to the public  resale,  from time to time,  of an
aggregate  of 131,760  shares of our common  stock,  $.01 par value,  by certain
stockholders   identified   below  in  the   section   entitled   "The   Selling
Shareholders."



     We will not  receive  any of the  proceeds  from  the  sale by the  selling
shareholders of the shares covered by this prospectus.


     Our common stock is traded on the Nasdaq  National  Market under the symbol
"CGPI." On July 27,  2000,  the  closing  sale price of our common  stock on the
Nasdaq National Market was $9.875 per share.



        Investing in the common stock involves a high degree of risk. See
                       "Risk Factors" beginning on page 3.

     Neither the  Securities and Exchange  Commission  nor any state  securities
commission has approved or disapproved of these securities or determined if this
prospectus  is truthful or  complete.  Any  representation  to the contrary is a
criminal offense.

                                 August 1, 2000.



<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
The  information  in this  prospectus  is not complete  and may be changed.  The
selling  shareholders  may not sell  their  securities  until  the  Registration
Statement filed with the Securities and Exchange  Commission is effective.  This
prospectus is not an offer to sell these  securities and it is not soliciting an
offer to buy  these  securities  in any  state  where  the  offer or sale is not
permitted.
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++


<PAGE>



                          PROSPECTUS TABLE OF CONTENTS

                                                                            Page
                                                                            ----
CollaGenex Pharmaceuticals, Inc.......................................       2
Risk Factors..........................................................       3
     If Periostat is Not Adopted Routinely by Dental Professionals or
       if Managed Care Providers Do Not Continue to Reimburse Patients,
       Our Sales Growth Will Suffer...................................       3
     We Rely on Periostat for Most of Our Revenue.....................       3
     We Anticipate Future Losses......................................       3
     We Have a Limited Marketing and Sales History and May Not be
       Able to Successfully Market Our Product Candidates.............       4
     Our Competitive Position in the Marketplace Depends on Enforcing
       and Successfully Defending Our Intellectual Property Rights....       4
     If We Lose Our Sole Supplier of Doxycycline or Our Current
       Manufacturer of Periostat, Our Commercialization of Periostat
       Will be Interrupted or Less Profitable.........................       5
     We Are Subject to Extensive Government Regulations...............       5
     If Our Products Cause Injuries, We May Incur Significant Expense        6
       and Liability..................................................
     If We Need Additional Financing, and Financing is Unavailable,
       Our Ability to Develop and Commercialize Products and Our
       Operations Will be Adversely Affected..........................       6
     Delaware Law, Our Certificate of Incorporation and Our By-Laws
       Contain Provisions That Could Discourage a Takeover of Our            6
       Company........................................................
     Because Our Executive Officers, Directors and Affiliated
       Entities Own Approximately 42% of Our Capital Stock, They
       Could Control Our Actions in a Manner That Conflicts With Our
       Interests and the Interests of Our Other Stockholders..........       7
     Our Stock Price is Highly Volatile, and Therefore the Value of
       Your Investment May Fluctuate Significantly....................       7
Special Note Regarding Forward-Looking Information....................       7
Use of Proceeds.......................................................       8
Selling Shareholders..................................................       8
Plan of Distribution..................................................      11
Legal Matters.........................................................      12
Experts...............................................................      12
Information Incorporated by Reference.................................      12
Where You Can Find More Information...................................      13
Indemnification of Directors and Officers.............................      14

<PAGE>



                        COLLAGENEX PHARMACEUTICALS, INC.


      CollaGenex  Pharmaceuticals,  Inc.  and its  subsidiaries  is a  specialty
pharmaceutical  company focused on providing innovative medical therapies to the
dental market. In September 1998, the FDA approved our first product, Periostat,
a   prescription   pharmaceutical   capsule   to  treat   adult   periodontitis.
Periodontitis, the leading cause of tooth loss, is a disease of the gums that is
initiated by the  accumulation of bacterial plaque above and below the gum line.
The FDA approved Periostat as an adjunct to scaling and root planing, which is a
mechanical  procedure  that  dentists  use to remove  bacterial  plaque.  We are
marketing  Periostat to the dental  community  through our  professional  dental
pharmaceutical  sales  force of  approximately  135  sales  representatives  and
managers. This sales force also co-promotes Vioxx, a prescription  non-steroidal
anti-inflammatory   drug  developed  by  Merck  &  Co.,  Inc.,  and  Denavir,  a
prescription  cold sore  medication  developed by  SmithKline  Beecham  Consumer
Healthcare,  L.P. We are actively pursuing other prescription products to market
to the dental community.


      We are a Delaware  corporation.  We were incorporated and began operations
in 1992 under the name  CollaGenex,  Inc.  and  changed  our name to  CollaGenex
Pharmaceuticals, Inc. in April 1996. Our principal executive offices are located
at 41 University Drive, Newtown, Pennsylvania 18940, and our telephone number is
(215) 579-7388.

      In this prospectus, the terms "CollaGenex," "we," "us" and "our" includes
CollaGenex Pharmaceuticals, Inc. and its subsidiaries.

                                      -2-
<PAGE>


                                  RISK FACTORS


      IF  PERIOSTAT  IS NOT  ADOPTED  ROUTINELY  BY DENTAL  PROFESSIONALS  OR IF
MANAGED CARE PROVIDERS DO NOT CONTINUE TO REIMBURSE  PATIENTS,  OUR SALES GROWTH
WILL SUFFER.

      Our growth and success depends in large part on our ability to continue to
demonstrate the safety and  effectiveness  of Periostat for the treatment of gum
disease  to  dental  practitioners.  Periostat  is the first  long-term  medical
therapy for any dental  disease,  and dentists are not accustomed to prescribing
drugs for a minimum 90-day  duration.  Periostat  works by  suppressing  certain
enzymes involved in the periodontal disease process,  which is a new concept for
many  dentists who believe  that  removing  bacterial  plaque is the only way to
treat this  disease.  Accordingly,  our sales  efforts  are  largely  focused on
educating  dental  professionals  about an  entirely  new  approach  to treating
periodontitis. Although nearly 30,000 dentists in the U.S. have written at least
one prescription for Periostat,  a number of dentists have not adopted Periostat
routinely  into their  treatment of adult  periodontitis.  Other  dentists  have
prescribed  Periostat for only a subset of their  eligible  patients,  typically
their most advanced or  refractory  cases.  If we are unable to initiate  and/or
expand usage of Periostat by dentists, our sales growth will suffer.

      Approximately 65% of the large managed care providers in the U.S. (defined
as those  that  cover  100,000  or more  lives)  reimburse  their  patients  for
Periostat,  typically  requiring  a modest  co-payment.  Our goal is to  achieve
reimbursement from approximately 75% of the large managed care providers,  since
the  remainder  have  policies  that do not  reimburse for drugs to treat dental
conditions.  Patients who are not  reimbursed by managed care  providers may not
accept  Periostat  as a  treatment.  In  addition,  we  have  not  yet  achieved
reimbursement from most of the large managed care providers in California,  thus
limiting prescription and sales growth in that state.


      WE RELY ON PERIOSTAT FOR MOST OF OUR REVENUE.


      During 1999, Periostat accounted for 95% of our total net revenues. During
the  second  quarter  of 2000,  Periostat  accounted  for 85% of our  total  net
revenues.  Although we currently  derive  revenues from  co-promoting  two other
products and from licensing fees from foreign  marketing  partners,  our revenue
and  profitability in the near future will depend on our ability to successfully
market and sell Periostat.

      WE ANTICIPATE FUTURE LOSSES.

      From our  founding in 1992 through the  commercial  launch of Periostat in
November,  1998,  we had no  revenue  from  sales of our own  products.  For the
quarter ended March 31, 2000, we  experienced a net loss of  approximately  $2.4
million.  During the year ended  December 31, 1999, we experienced a net loss of
approximately  $14.6 million.  From inception through December 31, 1999, we have
experienced an aggregate net loss of $52.5 million.  Our historical  losses have
resulted  primarily  from  the  expenses   associated  with  our  pharmaceutical
development program, clinical trials, the regulatory approval process associated
with  Periostat and sales and  marketing  activities  relating to Periostat.  We
expect to incur  significant  future expenses,  particularly with respect to the
sales and marketing of Periostat.  As a result,  we anticipate losses through at
least year-end 2000.

                                      -3-

<PAGE>



     WE HAVE A LIMITED MARKETING AND SALES HISTORY AND MAY NOT BE ABLE TO
SUCCESSFULLY MARKET OUR PRODUCT CANDIDATES.

     We  have  a  limited  history  of  marketing,   distributing   and  selling
pharmaceutical products in the dental market. We market and sell our products in
the  United  States  through  a  direct  sales  force  and   internationally  in
collaboration  with  marketing  partners upon receipt of the  necessary  foreign
regulatory approvals. In January 1999, we trained a sales force of approximately
125 sales  representatives  and managers  and began to promote  Periostat to the
dental community.  Further,  we have entered into agreements to market Periostat
in certain  countries  in Europe,  North  Africa and Canada,  and we continue to
evaluate  partnering  arrangements in countries outside the United States. If we
are unable to continue to recruit and retain sales and marketing  personnel,  we
will  be  unable  to  successfully  expand  our  sales  and  marketing  efforts.
Furthermore,  if our foreign  partners  do not devote  sufficient  resources  to
perform their  contractual  obligations  with us, we may not achieve our foreign
sales goals.



     OUR COMPETITIVE POSITION IN THE MARKETPLACE DEPENDS ON ENFORCING AND
SUCCESSFULLY DEFENDING OUR INTELLECTUAL PROPERTY RIGHTS.

     In order to be competitive in the pharmaceutical  industry, it is important
to  establish,   enforce,  and  successfully  defend  patent  and  trade  secret
protection  for  our  established  and new  technologies.  We  must  also  avoid
liability from infringing the proprietary rights of others.

     Our core  technology is licensed from The Research  Foundation of the State
University of New York ("SUNY"),  and other  academic and research  institutions
collaborating  with SUNY  (hereinafter  referred  to  collectively  as the "SUNY
License").  Under the SUNY  License we have an  exclusive  worldwide  license to
SUNY's  rights in  certain  patents  and  patent  applications  to make and sell
products employing  tetracyclines to treat certain disease conditions.  The SUNY
License imposes various payment and reporting  obligations on us and our failure
to comply with these requirements permits SUNY to terminate the SUNY License. If
the SUNY License is terminated,  we would lose our right to exclude  competitors
from commercializing  similar products,  and we could be excluded from marketing
the same  products if SUNY  licensed the  underlying  technology to a competitor
after terminating the SUNY License.

     SUNY owns twenty-four U.S. patents and eight U.S. patent  applications that
are licensed to us. The patents licensed from SUNY expire between 2004 and 2018.
Two of the  patents  are  related  to  Periostat  and  expire  in 2004 and 2007.
Technology  covered by these patents  becomes  available to  competitors  as the
patents expire.

     Since many of our patent rights cover new treatments  using  tetracyclines,
which are  generally  available  for their known use as  antibiotics,  we may be
required  to bring  expensive  infringement  actions to enforce  our patents and
protect  our  technology.  Although  federal  law  prohibits  making and selling
pharmaceuticals for infringing use, competitors and/or practitioners may provide
generic  forms of  tetracycline  for  treatment(s)  which  infringe our patents,
rather than  prescribe  our  Periostat  product.  Enforcement  of patents can be
expensive and time consuming.


                                      -4-
<PAGE>



     Our success also depends upon know-how, unpatentable trade secrets, and the
skills,  knowledge and experience of our scientific and technical personnel.  To
that end,  we require all of our  employees  and,  to the extent  possible,  all
consultants,  advisors and research collaborators, to enter into confidentiality
agreements  prohibiting  unauthorized  disclosure  and  requiring  assignment of
rights to their ideas, developments, discoveries and inventions. With respect to
information and chemical  compounds we provide for testing to  collaborators  in
academic institutions, we cannot guarantee that the institutions will not assert
property  rights  in the  results  of  such  tests  nor  that a  license  can be
reasonably obtained from such institutions which assert such rights.  Failure to
obtain the  benefit  of such  testing  could  adversely  affect  our  commercial
position and, consequently, our financial condition.



     IF WE LOSE OUR SOLE SUPPLIER OF DOXYCYCLINE OR OUR CURRENT MANUFACTURER OF
PERIOSTAT, OUR COMMERCIALIZATION OF PERIOSTAT WILL BE INTERRUPTED OR LESS
PROFITABLE.

     We rely on a single  supplier for  doxycycline,  the active  ingredient  in
Periostat.  There are relatively few  alternative  suppliers of doxycycline  and
this  supplier  produces  the  majority  of the  doxycycline  used in the United
States.  If we are unable to procure a commercial  quantity of doxycycline  from
our current supplier on an ongoing basis at a competitive price, or if we cannot
find a replacement  supplier in a timely manner or with favorable pricing terms,
our costs may increase  significantly and we may experience delays in the supply
of Periostat.

     We rely on a single third-party contract manufacturer to produce Periostat.
We  are  currently  working  with  another  contract  manufacturer  on a  tablet
formulation   for  Periostat   and  we  intend  to  contract   with   additional
manufacturers  for the  commercial  manufacture  of  Periostat.  An inability to
maintain our arrangements with our present  manufacturer  could result in delays
in the supply of  Periostat  and we believe that it could take up to one year to
successfully transition to a new manufacturer.

     WE ARE SUBJECT TO EXTENSIVE GOVERNMENT REGULATIONS.

     We are subject to comprehensive  regulation by the FDA in the United States
and by comparable  authorities in other countries.  These national  agencies and
other federal,  state, and local authorities  regulate,  among other things, the
research and development,  including  preclinical and clinical testing,  safety,
effectiveness,   approval,  manufacturing,   labeling,  advertising,  promotion,
export,  and marketing of our products.  In the United States, the FDA regulates
drug products under the Federal Food, Drug, and Cosmetic Act, and other laws.

     Both  before and after  approval  is  obtained,  violations  of  regulatory
requirements  may result in various  adverse  consequences,  including the FDA's
delay in approving or refusal to approve a product,  recalls,  withdrawal  of an
approved  product from the market,  and/or the  imposition  of civil or criminal
sanctions.

     We also  will  be  subject  to a  variety  of  foreign  regulatory  regimes
governing clinical trials and sales of our products.  Our products have not been
approved in any foreign country.  Whether or not FDA approval has been obtained,
approval  of a product  by the  comparable  regulatory  authorities  of  foreign
countries must be obtained prior to the commencement of marketing of the

                                      -5-
<PAGE>


product in those countries. The approval process varies from country to country,
and other countries may also impose post-approval requirements.

     IF OUR PRODUCTS CAUSE INJURIES, WE MAY INCUR SIGNIFICANT EXPENSE AND
LIABILITY.

     Our business may be adversely affected by potential product liability risks
inherent in the testing,  manufacturing  and  marketing  of Periostat  and other
products  developed  by or for us. We have $10.0  million  in product  liability
insurance for Periostat.  This level of insurance may not adequately  protect us
against product liability claims. Insufficient insurance coverage or the failure
to obtain  indemnification  from third parties for their respective  liabilities
may expose us to product  liability  claims  and/or  recalls and could cause our
business, financial condition and results of operations to decline.

     IF WE NEED ADDITIONAL FINANCING, AND FINANCING IS UNAVAILABLE, OUR ABILITY
TO DEVELOP AND COMMERCIALIZE PRODUCTS AND OUR OPERATIONS WILL BE ADVERSELY
AFFECTED.

     We have  historically  financed our  operations  through public and private
equity  financings.   Our  capital  requirements  depend  on  numerous  factors,
including  our  ability  to  successfully  commercialize  Periostat,   competing
technological and market  developments,  our ability to enter into collaborative
arrangements for the development,  regulatory approval and  commercialization of
other  products,  and the cost of filing,  prosecuting,  defending and enforcing
patent claims and other intellectual  property rights. We anticipate that we may
be required  to raise  additional  capital in order to conduct  our  operations.
Additional funding, if necessary, may not be available on favorable terms, if at
all.  If  adequate  funds  are not  available,  we may be  required  to  curtail
operations   significantly  or  to  obtain  funds  through   arrangements   with
collaborative  partners or others that may  require us to  relinquish  rights to
certain of our technologies,  product candidates, products or potential markets.
At March 31, 2000 we had cash, cash  equivalents  and short-term  investments of
approximately  $12.1 million and we anticipate that our existing working capital
will be sufficient to fund our operations through the year-end 2000.

     DELAWARE LAW, OUR CERTIFICATE OF INCORPORATION AND OUR BY-LAWS CONTAIN
PROVISIONS THAT COULD DISCOURAGE A TAKEOVER OF OUR COMPANY.

     Anti-takeover  provisions of Delaware law, our Certificate of Incorporation
and our  By-Laws  could  make it more  difficult  for a third  party to  acquire
control of us, even if such change would be beneficial to our stockholders.  Our
Certificate  of  Incorporation  provides  that our board of directors  may issue
preferred stock with superior rights and preferences  without common stockholder
approval.  The  issuance of  preferred  stock could have the effect of delaying,
deterring  or  preventing a change in control.  Our board of directors  has also
adopted a "poison  pill"  rights plan that may further  discourage a third party
from  making a proposal  to acquire  us. In  addition,  in  connection  with the
issuance of our preferred  stock,  the rights of our common  stockholders may be
limited  in  certain  instances  with  respect  to  divided  rights,  rights  on
liquidation, winding up and dissolution and certain other matters submitted to a
vote of our common stockholders.

                                      -6-
<PAGE>


     BECAUSE OUR EXECUTIVE OFFICERS, DIRECTORS AND AFFILIATED ENTITIES OWN
APPROXIMATELY 42% OF OUR CAPITAL STOCK, THEY COULD CONTROL OUR ACTIONS IN A
MANNER THAT CONFLICTS WITH OUR INTERESTS AND THE INTERESTS OF OUR OTHER
STOCKHOLDERS.

     Currently,  our  executive  officers,  directors  and  affiliated  entities
together  beneficially own  approximately  42% of the outstanding  shares of our
common stock or equity  securities  convertible  into common stock. As a result,
these  stockholders,   acting  together,   or  in  the  case  of  our  preferred
stockholders, in certain instances, as a class, will be able to exercise control
over corporate actions requiring stockholder approval, including the election of
directors.  This  concentration  of ownership may have the effect of delaying or
preventing a change in control, including transactions in which our stockholders
might  otherwise  receive a premium for their  shares over then  current  market
prices.

     OUR STOCK PRICE IS HIGHLY VOLATILE, AND THEREFORE THE VALUE OF YOUR
INVESTMENT MAY FLUCTUATE SIGNIFICANTLY.

     The market price of our common stock has  fluctuated  and will  continue to
fluctuate as a result of variations in our quarterly  operating  results.  These
fluctuations  may be  exaggerated  if the trading  volume of our common stock is
low. In addition, the stock market in general has experienced dramatic price and
volume  fluctuations  from time to time.  These  fluctuations  may or may not be
based upon any business or operating  results.  Our common stock may  experience
similar or even more dramatic price and volume  fluctuations  which may continue
indefinitely.

               SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION

     This   prospectus   and   the   documents   incorporated   herein   contain
forward-looking statements. For this purpose, any statements contained herein or
incorporated   herein  that  are  not  statements  of  historical  fact  may  be
forward-looking  statements.  For example,  the words "may," "will," "continue,"
"believes,"  "expects,"  "anticipates,"  "intends,"  "estimates,"  "should"  and
similar expressions are intended to identify forward-looking  statements.  There
are a number of  important  factors  that could  cause  CollaGenex's  results to
differ materially from those indicated by such forward-looking statements. These
factors  include  those set forth in the section  entitled  "Risk  Factors."  In
particular,   CollaGenex's   business  of  selling,   marketing  and  developing
pharmaceutical  products is subject to a number of significant risks,  including
risks relating to the  implementation of CollaGenex's  sales and marketing plans
for Periostat(R),  risks inherent in research and development activities,  risks
associated  with  conducting  business  in a highly  regulated  environment  and
uncertainty   relating  to  clinical  trials  of  products  under   development.
CollaGenex's  success  depends to a large degree upon the market  acceptance  of
Periostat by periodontists,  dental practitioners,  other health care providers,
patients and insurance  companies.  In addition,  there can be no assurance that
CollaGenex's  product  candidates (other than the FDA's approval of Periostat in
the United States) will be approved by any regulatory authority for marketing in
any  jurisdiction  or, if  approved,  that any such  products or  Denavir(R)  or
Vioxx(R) will be successfully  commercialized by CollaGenex. As a result of such
risks and others  expressed from time to time in  CollaGenex's  filings with the
Securities  and  Exchange  Commission,  CollaGenex's  actual  results may differ
materially  from the  results  discussed  in or implied  by the  forward-looking
statements contained herein.

                                      -7-
<PAGE>


                                 USE OF PROCEEDS

     CollaGenex will not receive any of the proceeds from the sale of the shares
offered by the selling shareholders set forth in this prospectus.

                              SELLING SHAREHOLDERS


     The  individuals  and entities  listed below  received  shares of preferred
stock in  connection  with the  execution  of a stock  purchase  agreement  with
CollaGenex,  dated  March  19,  1999.  The  preferred  stock  is  by  its  terms
convertible,  in certain circumstances,  into shares of common stock. Holders of
the preferred stock are also entitled to certain dividend payments to be made in
shares of common stock.  Under the terms of the stock  purchase  agreement,  all
such dividend  payments issued to the selling  shareholders are to be registered
with the  Securities  and Exchange  Commission.  The  registration  of shares of
common stock paid as dividends to the selling  shareholders for the periods July
1, 1999  through  December 31, 1999 and January 1, 2000 through June 30, 2000 is
included herein.

     The following table sets forth as of June 30, 2000 certain information with
respect to the selling  shareholders.  CollaGenex  cannot assure that any of the
selling  shareholders  will  offer  for  sale or sell  any or all of the  shares
offered by them pursuant to this prospectus.

<TABLE>
<CAPTION>

                                  Beneficial Ownership
                                      of Selling        Number of         Beneficial
                                     Shareholders        Shares         Ownership of
        Name of                        Prior to          Offered            Shares
  Selling Shareholders                Offering(1)       Hereby (2)     After Offering(2)
  --------------------                -----------       ----------     -----------------


                                     Number   Percent                 Number   Percent
                                     ------   -------                 ------   -------


<S>                              <C>            <C>       <C>        <C>         <C>



OCM Principal Opportunities
  Fund, L.P..................    1,744,555(3)   16.9(3)   116,605    1,627,950   15.8

Richard A. Horstmann.........      712,165(4)    8.1(4)     6,589      705,576    8.0

Marquette Venture                  986,683(5)   11.2(5)     6,405      980,278   11.1
  Partners II, L.P...........

MVP II Affiliates Fund, L.P.        28,195(5)      *(5)       184       28,011      *

Robert J. Easton.............       69,009(6)      *(6)     1,318       67,691      *

Pebblebrook Partners Ltd.....        9,857(7)      *(7)       659        9,198      *
</TABLE>





---------
*   Less than one percent



(1)  Such number of shares held  includes  shares of common stock issued to each
     such holder in payment of dividends on the preferred  stock declared by the
     CollaGenex's Board of Directors in December 1999 and in June 2000 that were
     distributed  in  January  2000  and  July  2000,  respectively.  Applicable
     percentage  of  ownership  is based on  8,678,904  shares of  common  stock
     outstanding  as of June 30,  2000,  plus any common  stock  equivalents  or
     convertible  securities held, shares beneficially owned by each such holder
     and shares of common stock issued by  CollaGenex in payment of dividends on
     the preferred stock.


                                      -8-
<PAGE>


(2)  Assumes  that all  shares  to be  offered,  as set  forth  above,  are sold
     pursuant  to this  offering  and that no other  shares of common  stock are
     acquired  or  disposed  of  by  the  selling   shareholders  prior  to  the
     termination of this  offering.  Because the selling  shareholders  may sell
     all, some or none of their shares or may acquire or dispose of other shares
     of common stock, no reliable  estimate can be made of the aggregate  number
     of shares  that will be sold  pursuant  to this  offering  or the number or
     percentage of shares of common stock that each selling shareholder will own
     upon completion of this offering.


(3)  Stephen  A.  Kaplan,  a member of  CollaGenex's  Board of  Directors,  is a
     Principal of Oaktree Capital Management,  LLC, which is the general partner
     of OCM Principal  Opportunities  Fund,  L.P.  ("OCM").  Includes  1,609,091
     shares of common stock  issuable upon the  conversion of 177,000  shares of
     preferred  stock held by OCM and 135,464  shares of common  stock issued in
     payment  of  dividends  on  such  preferred  stock.  Mr.  Kaplan  expressly
     disclaims beneficial ownership of such shares,  except to the extent of any
     indirect pecuniary interest therein.

(4)  Mr.  Horstmann is a principal of Thomson  Horstmann & Bryant,  Inc. and, as
     such,  has the power to vote or to direct  the vote of and to dispose of or
     direct the  disposition of the shares owned by Thomson  Horstmann & Bryant,
     Inc. (613,600 shares of common stock).  Mr. Horstmann  expressly  disclaims
     beneficial  ownership  of  such  shares,  except  as to  his  proportionate
     interest in Thomson Horstmann & Bryant, Inc. Also includes 90,910 shares of
     common stock  issuable  upon the  conversion  of 10,000 shares of preferred
     stock held by Mr.  Horstmann  and 7,655  shares of common  stock  issued in
     payment of dividends on such preferred stock.

(5)  James E.  Daverman,  a  member  of  CollaGenex's  Board  of  Directors,  is
     President of Marquette  Management  Partners,  LLC, the general  partner of
     Marquette Venture Partners,  L.P. and a general partner of MG II, L.P., the
     general partner of Marquette  Venture Partners II, L.P.  ("Marquette")  and
     MVP II Affiliates Fund, L.P. ("MVP II") and, as such, has the power to vote
     or direct the vote of and to dispose  of or direct the  disposition  of the
     shares owned by Marquette  (which  includes  88,382  shares of common stock
     issuable  upon the  conversion  of 9,722 shares of preferred  stock held by
     Marquette,  7,441  shares of common stock issued in payment of dividends on
     such preferred  stock and 890,860 shares of common stock  otherwise held by
     Marquette) and MVP II (which includes 2,528 shares of common stock issuable
     upon the  conversion  of 278 shares of preferred  stock held by MVP II, 214
     shares of common stock  issued in payment of  dividends  on such  preferred
     stock and 25,453  shares of common  stock  otherwise  held by MVP II).  Mr.
     Daverman expressly disclaims beneficial ownership of such shares, except as
     to his proportionate interest in each of Marquette and MVP II.

(6)  Mr. Easton is a member of CollaGenex's Board of Directors.  Includes 17,000
     shares of common stock underlying  options which are exercisable as of June
     30, 2000 or 60 days after such date.  Also includes 18,182 shares of common
     stock issuable upon the conversion of 2,000 shares  preferred stock held by
     Mr.  Easton and 1,532 shares of common stock issued in payment of dividends
     on such preferred stock. Also includes 6,400 shares of common stock held as
     trustee for Second  Easton  Family  Charitable  Trust and 25,895  shares of
     common stock otherwise held by Mr. Easton.


                                      -9-
<PAGE>



(7)  Includes 9,091 shares of common stock issuable upon the conversion of 1,000
     shares of preferred stock held by Pebblebrook  Partners Ltd. and 766 shares
     of common stock issued in payment of dividends on such preferred stock.



     All  offering  expenses  are being paid by  CollaGenex  except the fees and
expenses of any counsel and other  advisors  that the Selling  Shareholders  may
employ to represent  them in  connection  with the offering and all brokerage or
underwriting  discounts or commissions paid to broker-dealers in connection with
the sale of the shares.

                                      -10-
<PAGE>


                              PLAN OF DISTRIBUTION

     The selling  shareholders have not advised  CollaGenex of any specific plan
for  distribution of the shares offered hereby,  but it is anticipated  that the
shares  will  be sold  from  time to  time  by the  selling  shareholders  or by
permitted  pledgees,  donees,  transferees  or  other  permitted  successors  in
interest. Such sales may be made in any of the following manners:

     -    On the  Nasdaq  National  Market (or  through  the  facilities  of any
          national securities exchange or U.S. inter-dealer  quotation system of
          a registered national securities association,  on which the shares are
          then listed,  admitted to unlisted trading  privileges or included for
          quotation);

     -    In public or privately negotiated transactions;

     -    In transactions involving principals or brokers;

     -    In a combination of such methods of sale; or

     -    Any other lawful methods.

     Although sales of the shares are, in general, expected to be made at market
prices  prevailing  at the time of sale,  the  shares may also be sold at prices
related to such  prevailing  market  prices or at negotiated  prices,  which may
differ considerably.

     In  offering  the shares  covered by this  prospectus,  each of the selling
shareholders  and any  broker-dealers  who  sell  the  shares  for  the  selling
shareholders may be  "underwriters"  within the meaning of the Securities Act of
1933, and any profits realized by such selling shareholders and the compensation
of such broker-dealers may be underwriting discounts and commissions.

     Sales  through  brokers may be made by any method of trading  authorized by
any stock exchange or market on which the shares may be listed,  including block
trading in negotiated transactions. Without limiting the foregoing, such brokers
may act as  dealers  by  purchasing  any or all of the  shares  covered  by this
prospectus, either as agents for others or as principals for their own accounts,
and reselling such shares pursuant to this prospectus.  The selling shareholders
may effect such  transactions  directly,  or  indirectly  through  underwriters,
broker-dealers  or agents acting on their behalf. In connection with such sales,
such  broker-dealers  or  agents  may  receive   compensation  in  the  form  of
commissions,  concessions, allowances or discounts, any or all of which might be
in excess of customary amounts.

     Each of the selling  shareholders is acting  independently of CollaGenex in
making  decisions  with  respect to the timing,  manner and size of each sale of
shares. CollaGenex has not been advised of any definitive selling arrangement at
the  date  of  this   prospectus   between  any  selling   shareholder  and  any
broker-dealer or agent.

     To the  extent  required,  the  names  of  any  agents,  broker-dealers  or
underwriters and applicable commissions,  concessions,  allowances or discounts,
and any other required  information  with respect to any particular offer of the
shares  by  the  selling  shareholders,  will  be  set  forth  in  a  prospectus
supplement.

                                      -11-
<PAGE>

     The  expenses  of  preparing  and filing  this  prospectus  and the related
registration  statement with the Securities and Exchange Commission will be paid
entirely by CollaGenex.  Shares of common stock covered by this  prospectus also
may qualify to be sold  pursuant to Rule 144 under the  Securities  Act of 1933,
rather than  pursuant to this  prospectus.  The selling  shareholders  have been
advised that they are subject to the  applicable  provisions  of the  Securities
Exchange  Act of 1934,  as amended,  including  without  limitation,  Rule 10b-5
thereunder.

     Neither CollaGenex nor the selling shareholders can estimate at the present
time the amount of  commissions  or discounts,  if any, that will be paid by the
selling shareholders on account of their sales of the shares from time to time.

                                  LEGAL MATTERS

     The  validity of the shares of common stock  offered  hereby will be passed
upon for CollaGenex by Buchanan Ingersoll Professional Corporation,  650 College
Road East, Princeton, New Jersey 08540.

                                     EXPERTS

     The   consolidated   financial   statements   and  schedule  of  CollaGenex
Pharmaceuticals, Inc. and subsidiaries as of December 31, 1998 and 1999, and for
each of the years in the three-year  period ended  December 31, 1999,  have been
incorporated by reference herein and in the  registration  statement in reliance
upon  the  report  of  KPMG  LLP,  independent   certified  public  accountants,
incorporated by reference herein, and upon the authority of said firm as experts
in accounting and auditing.

                      INFORMATION INCORPORATED BY REFERENCE

     The Securities and Exchange Commission allows CollaGenex to "incorporate by
reference"  the  information  CollaGenex  files with the Securities and Exchange
Commission,  which means that CollaGenex can disclose  important  information to
you by  referring  you to  those  documents.  The  information  incorporated  by
reference  is an  important  part  of  this  prospectus,  and  information  that
CollaGenex  files  later  with  the  Securities  and  Exchange  Commission  will
automatically update and supersede this information.  CollaGenex incorporates by
reference the documents  listed below and any future  filings made by CollaGenex
with the Securities and Exchange  Commission under Sections 13(a),  13(c), 14 or
15(d)  of  the  Exchange  Act  of  1934,  as  amended,  until  the  filing  of a
post-effective  amendment to this prospectus which indicates that all securities
registered  have been sold or which  deregisters  all securities  then remaining
unsold:

     -    CollaGenex's  Annual  Report on Form 10-K for the year ended  December
          31, 1999 filed with the  Securities  and Exchange  Commission on March
          29, 2000;

     -    All other  reports  filed by  CollaGenex  pursuant to Section 13(a) or
          15(d) of the  Exchange  Act of 1934,  as amended,  since  December 31,
          1999; and

     -    The description of CollaGenex's common stock, $.01 par value, which is
          contained  in  CollaGenex's  Registration  Statement on Form 8-A filed
          pursuant to Section 12(g)

                                      -12-
<PAGE>

          of the  Exchange  Act of  1934,  as  amended,  in  the  form  declared
          effective by the Securities and Exchange  Commission on June 20, 1996,
          including any  subsequent  amendments or reports filed for the purpose
          of updating such description.

     CollaGenex  will provide to any person,  including any beneficial  owner of
its securities,  to whom this  prospectus is delivered,  a copy of any or all of
the information  that has been  incorporated by reference in this prospectus but
not delivered with this prospectus. You may make such requests at no cost to you
by writing or telephoning CollaGenex at the following address or number:

            CollaGenex Pharmaceuticals, Inc.
            41 University Drive
            Newtown, Pennsylvania 18940
            Attention:  Chief Financial Officer
            Telephone:  (215) 579-7388

     You  should  rely only on the  information  incorporated  by  reference  or
provided in this  prospectus or any  prospectus  supplement.  CollaGenex has not
authorized anyone else to provide you with different information.  CollaGenex is
not  making an offer of these  securities  in any  state  where the offer is not
permitted.  You should not assume that the information in this prospectus or any
prospectus  supplement  is  accurate  as of any date  other than the date on the
front of those documents.

                       WHERE YOU CAN FIND MORE INFORMATION

     CollaGenex files annual,  quarterly and special  reports,  proxy statements
and other information with the Securities and Exchange Commission.  CollaGenex's
Securities and Exchange  Commission filings are available to the public over the
Internet   at   the   Securities   and   Exchange    Commission's   website   at
http://www.sec.gov.  You may also  read  and  copy,  at  prescribed  rates,  any
document  CollaGenex  files with the Securities  and Exchange  Commission at the
Securities and Exchange  Commission's Public Reference Room at 450 Fifth Street,
N.W.,  Washington,  D.C. 20549 and at the regional offices of the Securities and
Exchange Commission at Seven World Trade Center,  Suite 1300, New York, New York
10048 and  Citicorp  Center,  500 West  Madison  Street,  Suite  1400,  Chicago,
Illinois  60661-2511.  Please call the  Securities  and Exchange  Commission  at
1-800-SEC-0330   for  further   information   on  the  Securities  and  Exchange
Commission's Public Reference Room.

     CollaGenex  has  filed  with  the  Securities  and  Exchange  Commission  a
Registration Statement on Form S-3 under the Securities Act of 1933 with respect
to the shares offered hereby. This prospectus,  which constitutes a part of that
registration  statement,  does not contain all the information  contained in the
registration statement and its exhibits. For further information with respect to
CollaGenex and the shares, you should consult the registration statement and its
exhibits.  Statements contained in this prospectus  concerning the provisions of
any documents are necessarily  summaries of those documents,  and each statement
is qualified in its entirety by reference to the copy of the document filed with
the Securities and Exchange  Commission.  The registration  statement and any of
its amendments, including exhibits filed as a

                                      -13-
<PAGE>

part  of  the  registration  statement  or  an  amendment  to  the  registration
statement, are available for inspection and copying as described above.

                    INDEMNIFICATION OF DIRECTORS AND OFFICERS

     Subsection  (a) of Section  145 of the  Delaware  General  Corporation  Law
empowers a  corporation  to indemnify  any person who was or is threatened to be
made a party to any threatened, pending or completed action, suit or proceeding,
whether civil,  criminal,  administrative or investigative (other than an action
by or in the right of the  corporation)  by reason of the fact that he or she 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 or her in
connection with such action, suit or proceeding if he or she acted in good faith
and in a manner he or she  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 or her conduct was unlawful.

     Subsection  (b) of Section 145  empowers a  corporation  to  indemnify  any
person  who  was or is a  party  or is  threatened  to be  made a  party  to any
threatened,  pending  or  completed  action  or suit by or in the  right  of the
corporation  to procure a judgment in its favor by reason of the fact that he or
she 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) actually and
reasonably  incurred by him or her in connection  with the defense or settlement
of such  action or suit if he or she  acted in good  faith and in a manner he or
she  reasonably  believed to be in or not opposed to the best  interests  of the
corporation and except that no  indemnification  shall be made in respect of any
claim,  issue or matter as to which such person  shall have been  adjudged to be
liable  to the  corporation  unless  and only to the  extent  that the  Court of
Chancery or the court in which such action or suit was brought  shall  determine
upon application that,  despite the adjudication of liability but in view of all
of the circumstances of the case, such person is fairly and reasonably  entitled
to indemnity for such  expenses  which the Court of Chancery or such other court
shall deem proper.

     Section 145 further  provides that to the extent a director or officer of a
corporation has been successful in the defense of any action, suit or proceeding
referred to in subsection  (a) and (b) or in the defense of any claim,  issue or
matter  therein,  he or she shall be  indemnified  against  expenses  (including
attorneys'  fees) actually and  reasonably  incurred by him or her in connection
therewith;  that the indemnification provided by Section 145 shall not be deemed
exclusive  of any other rights to which the  indemnified  party may be entitled;
and that the scope of indemnification extends to directors, officers, employees,
or agents of a constituent corporation absorbed in a consolidation or merger and
persons serving in that capacity at the request of the  constituent  corporation
for another.  Section 145 also empowers the corporation to purchase and maintain
insurance  on behalf of a director  or officer of the  corporation  against  any
liability  asserted  against  him or her or  incurred  by him or her in any such
capacity or arising out of his or her status as

                                      -14-
<PAGE>

such whether or not the corporation would have the power to indemnify him or her
against such liabilities under Section 145.

     Article  IX  of  CollaGenex's   By-laws  specifies  that  CollaGenex  shall
indemnify its directors, officers, employees and agents because he or she was or
is a  director,  officer,  employee  or  agent of the  Corporation  or was or is
serving at the request of the  Corporation as a director,  officer,  employee or
agent of  another  entity to the full  extent  that such right of  indemnity  is
permitted by the laws of the State of Delaware. This provision of the By-laws is
deemed to be a contract  between  CollaGenex  and each  director and officer who
serves in such  capacity  at any time  while  such  provision  and the  relevant
provisions of the Delaware General Corporation Law are in effect, and any repeal
or  modification  thereof  shall  not  offset  any  action,  suit or  proceeding
theretofore or thereafter  brought or threatened  based in whole or in part upon
any such state of facts.  The affirmative vote of the holders of at least 80% of
the voting power of all  outstanding  shares of the capital stock of CollaGenex,
and, in certain  circumstances,  66 2/3% of the voting power of all  outstanding
shares of the Series D cumulative convertible preferred stock of CollaGenex,  is
required to adopt, amend or repeal such provision of the By-laws.

     CollaGenex  has  executed  indemnification  agreements  with  each  of  its
officers and directors pursuant to which CollaGenex has agreed to indemnify such
parties to the full extent permitted by law, subject to certain  exceptions,  if
such party  becomes  subject  to an action  because  such  party is a  director,
officer, employee, agent or fiduciary of CollaGenex.

     Section  102(b)(7)  of the  Delaware  General  Corporation  Law  enables  a
corporation in its certificate of incorporation to limit the personal  liability
of members of its board of directors  for  violation  of a director's  fiduciary
duty of care. This section does not, however,  limit the liability of a director
for breaching his or her duty of loyalty, failing to act in good faith, engaging
in intentional  misconduct or knowingly violating a law, or from any transaction
in which the director derived an improper  personal  benefit.  This section also
will have no effect on claims arising under the federal securities laws.

     CollaGenex's  Amended and Restated  Certificate of Incorporation limits the
liability of its directors as authorized by Section  102(b)(7).  The affirmative
vote of the  holders  of at least  75% of the  voting  power of all  outstanding
shares of the capital stock of  CollaGenex,  and, in certain  circumstances,  66
2/3% of the voting  power of all  outstanding  shares of the Series D cumulative
convertible  preferred  stock of the  CollaGenex,  is  required  to  amend  such
provisions.

     CollaGenex  has  obtained  liability  insurance  for  the  benefit  of  its
directors  and officers  which  provides  coverage  for losses of directors  and
officers for  liabilities  arising out of claims  against such persons acting as
directors  or officers of  CollaGenex  (or any  subsidiary  thereof)  due to any
breach of duty, neglect, error, misstatement,  misleading statement, omission or
act done by such directors and officers, except as prohibited by law.

     Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to  directors,  officers,  and  controlling  persons of
CollaGenex pursuant to the foregoing  provisions,  or otherwise,  CollaGenex has
been advised that in the opinion of the Securities and Exchange  Commission such
indemnification  is against  public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable.

                                      -15-
<PAGE>



                                     PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14.    OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.


         SEC registration fee............................        $     342.50
         Counsel fees and expenses*......................        $  30,000.00
         Accounting fees and expenses*...................        $  10,000.00
                                                                 ------------
            Total*.......................................        $  40,342.50
                                                                 ============


-----------
*     Estimated

     All  expenses of issuance  and  distribution  listed above will be borne by
CollaGenex.  The costs of fees and expenses of legal counsel and other advisors,
if any, that the selling  shareholders  employ in  connection  with the offering
will be borne by the selling shareholders.

ITEM 15.    INDEMNIFICATION OF DIRECTORS AND OFFICERS.

     Subsection  (a) of Section  145 of the  Delaware  General  Corporation  Law
empowers a  corporation  to indemnify  any person who was or is threatened to be
made a party to any threatened, pending or completed action, suit or proceeding,
whether civil,  criminal,  administrative or investigative (other than an action
by or in the right of the  corporation)  by reason of the fact that he or she 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 or her in
connection with such action, suit or proceeding if he or she acted in good faith
and in a manner he or she  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 or her conduct was unlawful.

     Subsection  (b) of Section 145  empowers a  corporation  to  indemnify  any
person  who  was or is a  party  or is  threatened  to be  made a  party  to any
threatened,  pending  or  completed  action  or suit by or in the  right  of the
corporation  to procure a judgment in its favor by reason of the fact that he or
she 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) actually and
reasonably  incurred by him or her in connection  with the defense or settlement
of such  action or suit if he or she  acted in good  faith and in a manner he or
she  reasonably  believed to be in or not opposed to the best  interests  of the
corporation and except that no  indemnification  shall be made in respect of any
claim,  issue or matter as to which such person  shall have been  adjudged to be
liable  to the  corporation  unless  and only to the  extent  that the  Court of
Chancery or the court in which such action or suit was brought  shall  determine
upon application that,  despite the adjudication of liability but in view of all
of the circumstances of the

                                      II-1
<PAGE>


case,  such  person is fairly and  reasonably  entitled  to  indemnity  for such
expenses which the Court of Chancery or such other court shall deem proper.

     Section 145 further  provides that to the extent a director or officer of a
corporation has been successful in the defense of any action, suit or proceeding
referred to in subsection  (a) and (b) or in the defense of any claim,  issue or
matter  therein,  he or she shall be  indemnified  against  expenses  (including
attorneys'  fees) actually and  reasonably  incurred by him or her in connection
therewith;  that the indemnification provided by Section 145 shall not be deemed
exclusive  of any other rights to which the  indemnified  party may be entitled;
and that the scope of indemnification extends to directors, officers, employees,
or agents of a constituent corporation absorbed in a consolidation or merger and
persons serving in that capacity at the request of the  constituent  corporation
for another.  Section 145 also empowers the corporation to purchase and maintain
insurance  on behalf of a director  or officer of the  corporation  against  any
liability  asserted  against  him or her or  incurred  by him or her in any such
capacity  or  arising  out of his or her  status  as  such  whether  or not  the
corporation  would  have  the  power  to  indemnify  him  or  her  against  such
liabilities under Section 145.

     Article  IX  of  CollaGenex's   By-laws  specifies  that  CollaGenex  shall
indemnify its directors, officers, employees and agents because he or she was or
is a director,  officer, employee or agent of CollaGenex or was or is serving at
the request of CollaGenex as a director,  officer,  employee or agent of another
entity to the full extent that such right of  indemnity is permitted by the laws
of the  State of  Delaware.  This  provision  of the  By-laws  is deemed to be a
contract  between  CollaGenex  and each  director and officer who serves in such
capacity at any time while such  provision  and the relevant  provisions  of the
Delaware General  Corporation Law are in effect,  and any repeal or modification
thereof  shall  not  offset  any  action,  suit  or  proceeding  theretofore  or
thereafter  brought or threatened  based in whole or in part upon any such state
of facts.  The  affirmative  vote of the  holders  of at least 80% of the voting
power of all  outstanding  shares of the capital  stock of  CollaGenex,  and, in
certain circumstances,  66 2/3% of the voting power of all outstanding shares of
the Series D cumulative  convertible preferred stock of CollaGenex,  is required
to adopt, amend or repeal such provision of the By-laws.

     CollaGenex  has  executed  indemnification  agreements  with  each  of  its
officers and directors pursuant to which CollaGenex has agreed to indemnify such
parties to the full extent permitted by law, subject to certain  exceptions,  if
such party  becomes  subject  to an action  because  such  party is a  director,
officer, employee, agent or fiduciary of CollaGenex.

     Section  102(b)(7)  of the  Delaware  General  Corporation  Law  enables  a
corporation in its certificate of incorporation to limit the personal  liability
of members of its board of directors  for  violation  of a director's  fiduciary
duty of care. This section does not, however,  limit the liability of a director
for breaching his or her duty of loyalty, failing to act in good faith, engaging
in intentional  misconduct or knowingly violating a law, or from any transaction
in which the director derived an improper  personal  benefit.  This section also
will have no effect on claims arising under the federal securities laws.

     CollaGenex's  Amended and Restated  Certificate of Incorporation limits the
liability of its directors as authorized by Section  102(b)(7).  The affirmative
vote of the holders of at least 75%

                                      II-2
<PAGE>

of  the  voting  power  of  all  outstanding  shares  of the  capital  stock  of
CollaGenex,  and, in certain  circumstances,  66 2/3% of the voting power of all
outstanding  shares of the Series D cumulative  convertible  preferred  stock of
CollaGenex, is required to amend such provisions.

     CollaGenex  has  obtained  liability  insurance  for  the  benefit  of  its
directors  and officers  which  provides  coverage  for losses of directors  and
officers for  liabilities  arising out of claims  against such persons acting as
directors  or officers of  CollaGenex  (or any  subsidiary  thereof)  due to any
breach of duty, neglect, error, misstatement,  misleading statement, omission or
act done by such directors and officers, except as prohibited by law.

                                      II-3
<PAGE>


ITEM 16.    EXHIBITS.

      Exhibit No.                        Description of Exhibit
      -----------                        ----------------------

           5            Opinion of Buchanan Ingersoll Professional Corporation
                        as to legality of the shares of common stock.
          23.1          Consent of KPMG LLP.
          23.2          Consent of Buchanan Ingersoll Professional Corporation
                        (contained in the opinion filed as Exhibit 5 to the
                        Registration Statement).
         *24            Powers of Attorney of certain officers and directors of
                        CollaGenex.

*  Previously filed.


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
this  Registration  Statement or any material change to such information in this
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.

     (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 (and,  where  applicable,  each filing of an employee  benefit plan's annual
report  pursuant to Section 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) 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 Securities  and Exchange  Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification

                                      II-4
<PAGE>


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-5
<PAGE>


                                   SIGNATURES


     Pursuant to the  requirements of the Securities Act of 1933, the Registrant
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  Amendment  to the
Registration  Statement  on  Form  S-3  to  be  signed  on  its  behalf  by  the
undersigned,  thereunto  duly  authorized,  in the  city of  Newtown,  State  of
Pennsylvania on this 31st day of July, 2000.


                                    COLLAGENEX PHARMACEUTICALS, INC.



                                    By: /s/  Brian M. Gallagher, Ph.D.
                                        ------------------------------
                                        Brian M. Gallagher, Ph.D.
                                        President and Chief Executive Officer



                                      II-6
<PAGE>


     Pursuant to the  requirements of the Securities Act of 1933, this Amendment
to the  Registration  Statement has been signed by the following  persons in the
capacities and on the dates indicated.

           Signature                         Title                    Date
           ---------                         -----                    ----


/s/  Brian M. Gallagher, Ph.D.  Chairman of the Board,           July 31, 2000
-----------------------------   President, Chief Executive
Brian M. Gallagher, Ph.D.       Officer and Director
                                (Principal Executive Officer)

/s/  Nancy C. Broadbent         Chief Financial Officer,         July 31, 2000
-----------------------------   Treasurer and Secretary
Nancy C. Broadbent              (Principal Financial and
                                Accounting Officer)

               *                Director                         July 31, 2000
-----------------------------
Helmer P.K. Agersborg, Ph.D.

               *                Director                         July 31, 2000
-----------------------------
Peter Barnett, D.M.D.

               *                Director                         July 31, 2000
-----------------------------
Robert C. Black

               *                Director                         July 31, 2000
-----------------------------
James E. Daverman

               *                Director                         July 31, 2000
-----------------------------
Robert J. Easton

               *                Director                         July 31, 2000
-----------------------------
Stephen A. Kaplan

               *                Director                         July 31, 2000
-----------------------------
Terence E. Winters, Ph.D.



* By the signature set forth below, the undersigned, pursuant to duly authorized
powers of attorney filed with the Securities and Exchange  Commission has signed
this Amendment to the Registration Statement on behalf of the person indicated.

/s/ Nancy C. Broadbent
----------------------------
Nancy C. Broadbent
(Attorney-in-fact)

                                      II-7
<PAGE>



                                  EXHIBIT INDEX


 Exhibit No.                        Description of Exhibit
 -----------                        ----------------------

     *5        Opinion of Buchanan Ingersoll Professional Corporation as to
               legality of the shares of common stock.
    23.1       Consent of KPMG LLP.
    23.2       Consent of Buchanan Ingersoll Professional Corporation
               (contained in the opinion filed as Exhibit 5 to the Registration
               Statement).
    *24        Powers of Attorney of certain officers and directors of
               CollaGenex.

*  Previously filed.


<PAGE>


                                                                      EXHIBIT 5


                   BUCHANAN INGERSOLL PROFESSIONAL CORPORATION
                         (Incorporated in Pennsylvania)
                                    Attorneys
                              650 College Road East
                           Princeton, New Jersey 08540

                                  August 1, 2000

CollaGenex Pharmaceuticals, Inc.
41 University Drive
Newtown, Pennsylvania 18940

Gentlemen:

     We have acted as counsel to  CollaGenex  Pharmaceuticals,  Inc., a Delaware
corporation (the  "Company"),  in connection with the filing by the Company of a
Registration  Statement on Form S-3 (the  "Registration  Statement"),  under the
Securities Act of 1933, as amended, relating to the registration of an aggregate
of 131,760 shares (the "Shares") of the Company's common stock,  $.01 par value,
all of  which  are to be  offered  by the  selling  shareholders  (the  "Selling
Shareholders") as set forth therein.

     In  connection  with the  Registration  Statement,  we have  examined  such
corporate records and documents,  other documents,  and such questions of law as
we have deemed  necessary or  appropriate  for purposes of this opinion.  On the
basis of such examination, it is our opinion that:

     1.   The  issuance  of the  Shares,  in  connection  with  the  payment  of
          dividends to the Selling Shareholders with respect to their respective
          ownership of the Company's Series D Cumulative  Convertible  Preferred
          Stock,  as declared by the  Company's  Board of  Directors  on each of
          November  19, 1999 and June 29, 2000 (the  "Dividend  Payments"),  was
          duly and validly authorized; and

     2.   The Shares  issued in  connection  with the  Dividend  Payments to the
          Selling    Shareholders   are   legally   issued,   fully   paid   and
          non-assessable.

     We  hereby  consent  to the  filing  of this  opinion  as  Exhibit 5 to the
Registration  Statement  and to the  reference  to this firm  under the  heading
"Legal Matters" in the Registration Statement.



                                       Very truly yours,

                                       BUCHANAN INGERSOLL PROFESSIONAL
                                       CORPORATION

                                       /s/  William J. Thomas
                                       -------------------------------
                                       By:   William J. Thomas, Esq.
                                             a member of the firm



<PAGE>



                                                                   EXHIBIT 23.1

                              Accountants' Consent

The Board of Directors
CollaGenex Pharmaceuticals, Inc.:

We consent to the use of our report  incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the prospectus.



                                                                /s/ KPMG LLP

Princeton, New Jersey
July 31, 2000


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