As filed with the Securities and Exchange Commission on July 16, 1998
Registration No. 333-
- - -------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
------------------
XOMA CORPORATION
(Exact name of registrant as specified in its charter)
94-2756657 Delaware
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2910 Seventh Street
Berkeley, California 94710
(510) 644-1170
(Address, including ZIP code, and telephone number,
including area code, of registrant's principal
executive offices)
------------------
CHRISTOPHER J. MARGOLIN, ESQ.
XOMA CORPORATION
2910 Seventh Street
Berkeley, California 94710
(510) 644-1170
(Name, address, including ZIP code, and telephone number,
including area code, of agent for service)
------------------
Copy to:
GEOFFREY E. LIEBMANN, ESQ.
CAHILL GORDON & REINDEL
80 Pine Street
New York, New York 10005
(212) 701-3000
------------------
Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this Registration Statement.
<PAGE>
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. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Each Class Proposed Proposed
of Securities Amount Maximum Maximum Amount of
To Be To Be Offering Price Aggregate Registration
Registered Registered per Unit(1) Offering Price(1) Fee
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
par value $.0005 per
share............. 5,500,000(2)(3) $4.65625 $25,609,375 $7,555
</TABLE>
(1) Estimated solely for purposes of computing the registration fee pursuant to
Rule 457(c).
(2) Includes a like number of Preferred Stock Purchase Rights (the "Rights").
Since no separate consideration is paid for the Rights, the registration
fee is included in the fee for the Common Stock.
(3) Pursuant to Rule 416 under the Securities Act of 1933, any additional
shares of Common Stock issued either as a result of the anti-dilution
provisions of the Certificate of Designation relating to the Preferred
Stock or of the Common Stock Purchase Warrants pursuant to which the Common
Stock will be issued or by reason of a reduction in the conversion price of
the Preferred Stock in accordance with the terms thereof are deemed to be
registered herewith.
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>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
<PAGE>
SUBJECT TO COMPLETION, DATED JULY 16, 1998
5,500,000 Shares
XOMA CORPORATION
COMMON STOCK
This Prospectus relates to 5,500,000 shares of Common Stock, par value
$.0005 per share (the "Common Stock"), of XOMA Corporation (the "Company"),
which have been registered for sale from time to time by the selling
stockholders named herein or their permitted transferees or successors (the
"Selling Stockholders"). Any or all of the Common Stock being registered hereby
may be sold from time to time to purchasers directly by the Selling
Stockholders. Alternatively, the Selling Stockholders may from time to time
offer the Common Stock through underwriters, dealers or agents who may receive
compensation in the form of underwriting discounts, concessions or commissions
from the Selling Stockholders and/or the purchasers of Common Stock for whom
they may act as agent. To the extent required, the names of the Selling
Stockholders, the number of shares of Common Stock to be sold, purchase price,
public offering price, the name of any agent, dealer or underwriter and any
applicable commission or discount or other items constituting compensation or
indemnification arrangements with respect to a particular offering will be set
forth in an accompanying Prospectus Supplement. The Company will receive no
proceeds from the sale by the Selling Stockholders of the Common Stock offered
hereby. The shares of Common Stock to which this Prospectus relates were issued
to the Selling Stockholders from time to time upon conversion of, as dividends
on or upon exercise of certain securities received in the Series H Private
Placement (as defined herein) and, in the case of certain Selling Stockholders,
upon exercise of warrants received as compensation for acting as placement
agents in the Series G Private Placement (as defined herein) and the Series H
Private Placement. All Registration Expenses (as defined herein) incurred in
connection with the registration of the Common Stock to which this Prospectus
relates will be borne by the Company. The Company has agreed to indemnify the
Selling Stockholders against certain liabilities, including certain liabilities
under the Securities Act of 1933, as amended (the "Securities Act"), or to
contribute to payments which the Selling Stockholders may be required to make in
respect thereof. See "Plan of Distribution."
The Common Stock is traded on the Nasdaq National Market under the symbol
"XOMA." The last reported sale price of the Common Stock as reported by the
Nasdaq National Market on June 30, 1998 was $4 13/16 per share.
The Common Stock offered hereby involves a high degree of risk. See "Risk
Factors" beginning on page 4 for a discussion of certain factors that should be
considered by prospective investors.
--------------------
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.
--------------------
The date of this Prospectus is , 1998.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and is required to file
periodic reports, proxy statements and other information with the Securities and
Exchange Commission (the "SEC") relating to its business, financial statements
and other matters. Such reports, proxy statements and other information may be
inspected and copied at the public reference facilities maintained by the SEC at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
regional offices of the SEC located at 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661 and at Seven World Trade Center, 13th Floor, New York,
New York 10048. Copies of such material can also be obtained from the SEC at
prescribed rates from the Public Reference Section of the SEC at 450 Fifth
Street, N.W., Washington, D.C. 20549.
The Company has filed a Registration Statement on Form S-3 with the SEC
under the Securities Act with respect to the Common Stock offered hereby. As
permitted by the rules and regulations of the SEC, this Prospectus omits certain
information contained in the Registration Statement. For further information,
reference is made to the Registration Statement, including the financial
schedules and exhibits incorporated therein by reference or filed as a part
thereof. Copies of the Registration Statement and its exhibits may be inspected
without charge at the public reference facilities maintained by the SEC at 450
Fifth Street, N.W. Washington, D.C. 20549, and copies of this material can be
obtained from the Public Reference Section of the SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. In addition, the SEC maintains a Web
site on the World Wide Web, and copies of the Registration Statement and its
exhibits may be accessed at this Web site (http://www.sec.gov). Statements made
in this Prospectus as to the contents of any contract, agreement or other
document referred to are not necessarily complete, and, in each instance,
reference is made to the copy of such document filed as an exhibit to the
Registration Statement or otherwise filed with the SEC. Each such statement
shall be deemed qualified in its entirety by such reference.
--------------------
The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, upon the written or oral request of such person, a
copy of any or all of the documents incorporated herein by reference (other than
exhibits to such documents, unless such exhibits are specifically incorporated
by reference in such documents). Requests for such copies should be directed to
Director, Corporate Communications, XOMA Corporation, 2910 Seventh Street,
Berkeley, California 94710, (510) 644-1170.
-2-
<PAGE>
INFORMATION INCORPORATED BY REFERENCE
The following documents filed by the Company with the SEC pursuant to the
Exchange Act are hereby incorporated by reference in this Prospectus:
(1) Annual Report on Form 10-K for the fiscal year ended December 31,
1997, as amended by Amendment No. 1 thereto on Form 10-K/A dated March 26,
1998 (File No. 0-14710);
(2) Quarterly Report on Form 10-Q for the quarterly period ended March
31, 1998 (File No. 0-14710);
(3) Current Report on Form 8-K dated January 9, 1998 (File No.
0-14710);
(4) Current Report on Form 8-K dated June 29, 1998, as amended by
Amendment No. 1 thereto on Form 8-K/A dated June 29, 1998 (File No.
0-14710);
(5) Current Report on Form 8-K dated July 16, 1998 (File No. 0-14710);
and
(6) The description of XOMA's Common Stock in the Registration
Statement on Form 8-A dated June 9, 1986 filed on June 11, 1986 under
Section 12 of the Exchange Act, including any amendment or report for the
purpose of updating such description (Registration No. 33-4793).
All documents filed by the Company with the SEC pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and
prior to the termination of the offering of the Common Stock offered hereby
shall be deemed to be incorporated by reference in this Prospectus and to be a
part hereof from the date any such document is filed.
Any statements contained in a document incorporated by reference in this
Prospectus shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained in this Prospectus (or in
any other subsequently filed document which also is incorporated by reference in
this Prospectus) modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed to constitute a part of this
Prospectus except as so modified or superseded.
--------------------
No person has been authorized in connection with the offering made hereby
to give any information or make any representation not contained in this
Prospectus and, if given or made, such information or representation must not be
relied upon as having been authorized by the Company or any other person. This
Prospectus does not constitute an offer to sell or solicitation of any offer to
buy any of the securities offered hereby in any jurisdiction in which it is
unlawful to make such offer or solicitation. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances, create
any implication that the information contained herein is correct as of any date
subsequent to the date hereof.
-3-
<PAGE>
RISK FACTORS
In addition to the other information included or incorporated by reference
in this Prospectus, the following factors should be considered carefully in
evaluating an investment in the shares of Common Stock offered by this
Prospectus.
No Assurance of Regulatory Approvals or Additional Product Development
XOMA's products are subject to rigorous preclinical and clinical testing
requirements and to approval processes by the U.S. Food and Drug Administration
(the "FDA") and similar authorities in other countries. The Company's products
are primarily regulated under the U.S. Food, Drug and Cosmetic Act and Section
351(a) of the Public Health Service Act. Most of the Company's human therapeutic
products are or will be classified as biologic products and would be subject to
regulation by the FDA Center for Biologics Evaluation and Research ("CBER").
Approval of a biologic product for commercialization requires licensure of the
product and the manufacturing facilities.
In December 1992, XOMA submitted an investigational new drug application
("IND") to the FDA to begin Phase I human testing of Neuprex(TM), a
recombinantly-derived modified fragment of human
bactericidal/permeability-increasing protein ("BPI"). In March 1993, the Company
initiated human safety and pharmacokinetic testing under the IND. In mid-1995,
the Company initiated three clinical efficacy trials testing the Neuprex(TM)
product as a treatment for the following indications: infectious complications
of severe blood loss due to trauma (hemorrhagic trauma), meningococcemia (a
potentially deadly bacterial infection principally of children) and
complications following partial hepatectomy (a type of major liver surgery). A
fourth trial, testing the product in combination with antibiotics to treat
severe intra-abdominal infections, started in the first quarter of 1996. In the
third quarter of 1997, XOMA initiated a Phase I/II clinical trial to test
Neuprex(TM) in cystic fibrosis patients whose genetic disorder predisposes them
to recurring bacterial lung infections. In August 1996, CBER granted XOMA a
Subpart E designation for Neuprex(TM) for the treatment of severe pediatric
meningococcemia following favorable results in an open label Phase I/II pilot
study. The Company subsequently began a Phase III pivotal trial for the
indication in October 1996 in the United States and Canada. Beginning in the
first quarter of 1997, XOMA added trial sites in the United Kingdom to increase
patient accrual. In June 1998, the Company announced that Neuprex(TM) had been
designated as an "orphan drug" under the Orphan Drug Act by the FDA for the
treatment of severe meningococcal disease. Based on data from its Phase II
hemorrhagic trauma studies, XOMA initiated in the fourth quarter of 1997 a Phase
III pivotal trial testing Neuprex(TM) to prevent serious pulmonary complications
in trauma patients. Review and analysis of results of the Phase II partial
hepatectomy study, concluded at the end of 1997, is in progress. No assurance
can be given that product approval for Neuprex(TM) or any other BPI product will
be obtained.
FDA licensure of XOMA's manufacturing facilities for Neuprex(TM) will be
required prior to any commercial use or sale of Neuprex(TM). No assurance can be
given that approval of the manufacturing facilities for Neuprex(TM) will be
obtained.
In March 1989, XOMA filed a product license application for approval of
E5(R), a monoclonal antibody product, for the treatment of gram-negative sepsis.
XOMA had completed several clinical trials of E5(R), including two randomized,
double-blind, placebo-controlled, multicenter Phase III studies involving nearly
1,300 patients. In June 1992, the FDA informed XOMA that E5(R) was not
approvable without further clinical testing. In June 1993, a third Phase III
clinical trial of the E5(R) product commenced with narrower entry criteria than
the previous trials. The trial was managed and co-funded by Pfizer Inc.
("Pfizer"). In April 1997, the Company announced that results of an interim
analysis completed on 1,000 patients in the third trial did not support
continuation of the trial, and in June 1997 the Company announced that Pfizer
had decided to end its marketing arrangement with XOMA for E5(R).
-4-
<PAGE>
In September 1996, the Company and Genentech, Inc. ("Genentech") announced
that the Company had filed an IND with the FDA for clinical testing of hu1124 in
patients with moderate to severe psoriasis. The hu1124 product, previously
referred to as anti-CD11a, is a humanized monoclonal antibody product XOMA is
developing in collaboration with Genentech for treatment of psoriasis and for
organ transplant rejection. In the second quarter of 1997, in response to
findings about the activity of hu1124 in psoriasis patients, XOMA started
additional Phase I studies at lower doses. XOMA announced a Phase II efficacy
study in Canadian psoriasis patients in February 1998. No assurance can be given
that product approval for hu1124 in these or any other indications will be
obtained.
The FDA has substantial discretion in both the product approval process and
manufacturing facility approval process and it is not possible to predict at
what point, or whether, the FDA will be satisfied with the Company's submissions
or whether the FDA will raise questions which may be material and delay or
preclude product approval or manufacturing facility approval. As additional
clinical data are accumulated, they will be submitted to the FDA and may have a
material impact on the FDA product approval process.
Other potential XOMA products will require significant additional
development, including extensive preclinical and clinical testing. There can be
no assurance that any of the products under development by the Company will be
developed successfully, obtain the requisite regulatory approval or be
successfully manufactured or marketed.
Need for Additional Funds
XOMA has expended and expects to continue to expend substantial funds in
connection with research and development relating to its products and production
technologies, the scale-up of its production capabilities, extensive human
clinical trials and the protection of its intellectual property. The Company's
cash position and resulting investment income are sufficient to finance the
Company's currently anticipated needs for operating expenses, working capital,
equipment and current research projects for at least the next twelve months. The
Company continues to evaluate strategic alliances, potential partnerships and
financing arrangements which would further strengthen its competitive position
and provide additional funding. However, no assurance can be given that
operations will generate meaningful funds, that additional agreements for
product development funding or strategic alliances can be negotiated or that
adequate additional financing will be available for the Company to finance its
own development on acceptable terms, if at all. If adequate funds are not
available, the business of the Company will be materially adversely affected.
History of Losses and Accumulated Deficit
XOMA has experienced significant losses and, as of March 31, 1998, had an
accumulated deficit of approximately $365.4 million.
For the year ended December 31, 1997 and the three months ended March 31,
1998, XOMA had net losses of approximately $15.8 million, or $0.44 per share
(basic and diluted), and $10.3 million, or $0.27 per share (basic and diluted),
respectively. The Company expects to incur additional losses in the future. Its
ability to achieve a profitable level of operations is dependent in large part
on obtaining regulatory approval for its products and entering into agreements
for product development and commercialization. XOMA's ability to fund its
ongoing operations is dependent on the foregoing factors and on its ability to
secure additional funds. There can be no assurance that the Company will ever
achieve a profitable level of operations or that cash flow from future
operations will be sufficient to meet such obligations.
-5-
<PAGE>
No Assurance of Effective Marketing
As of the date of this Prospectus, the Company has not entered into any
marketing agreements regarding its Neuprex(TM) product. Although the Company
continues to evaluate strategic alliances and potential partnerships, the
Company cannot predict whether or when any such alliances or partnerships will
be consummated.
Assuming timely regulatory approval, which cannot be assured, the
successful commercialization of XOMA's products may be dependent to a large
extent upon the marketing capabilities of its pharmaceutical partners.
No Assurance of Scale-up of Manufacturing Processes
The Company has never commercially introduced any pharmaceutical products.
In addition, there can be no assurance that the Company's manufacturing
facilities will receive regulatory approval in a timely manner. If one or more
of the Company's products and the relevant manufacturing facilities were to
receive regulatory approval, no assurance can be given that these existing
manufacturing capabilities would be able to produce sufficient quantities of
such products to meet market demand. Additionally, no assurance can be given
that if additional manufacturing facilities are needed to meet market demand,
such manufacturing facilities will be successfully obtained or that the
requisite regulatory approval for such facilities will be obtained.
No Assurance of Patent Protection/Avoidance of Patent Infringement
Because of the length of time and the expense associated with bringing new
products through development and government approval to the marketplace, the
pharmaceutical industry has traditionally placed considerable importance on
obtaining and maintaining patent and trade secret protection for significant new
technologies, products and processes. The Company and other biotechnology firms
hold and are in the process of applying for a number of patents in the United
States and abroad to protect their products and important processes and also
have obtained or have the right to obtain exclusive licenses to certain patents
and applications filed by others. However, the patent position of biotechnology
companies generally is highly uncertain and no consistent policy regarding the
breadth of allowed claims has emerged from the actions of the U.S. Patent and
Trademark Office (the "Patent Office") with respect to biotechnology patents.
Legal considerations surrounding the validity of biotechnology patents continue
to be in transition, and no assurance can be given that historical legal
standards surrounding questions of validity will continue to be applied or that
current defenses as to issued biotechnology patents will in fact be considered
substantial in the future. Accordingly, no assurance can be given as to the
degree and range of protection any patents will afford against competitors with
similar technologies, that patents will issue, that others will not obtain
patents claiming aspects similar to those covered by the Company's patent
applications or as to the extent to which the Company will be successful in
avoiding any patents granted to others.
During the period from September 1994 to June 1998, the Patent Office
issued 26 patents to the Company related to its BPI-based products, including
novel compositions, their manufacturer, formulation, assay and use. The Company
has received Notices of Allowance for eight additional U.S. patents and has more
than twenty pending patent applications worldwide related to its BPI-based
products. In addition, the Company is the exclusive licensee of BPI-related
patents and applications owned by NYU. These include four issued U.S. patents,
one additional U.S. Notice of Allowance and one granted European patent.
Effective July 9, 1998, the Company is also the exclusive licensee of
BPI-related patents and applications owned by Incyte Pharmaceuticals Inc.
("Incyte"), including seven issued U.S. patents.
During the period from July 1991 to June 1998, the Patent Office issued
seven patents and one Notice of Allowance to the Company related to its
bacterial expression technology, including claims to novel pro-
-6-
<PAGE>
moter sequences, secretion signal sequences, compositions and methods for
expression and secretion of recombinant proteins from bacteria, including
immunoglobulin gene products. Numerous foreign patents have been granted which,
along with additional pending foreign patent applications, correspond to the
patents issued and allowed in the U.S.
If certain patents issued to others are upheld or if certain patent
applications filed by others issue and are upheld, the Company may require
certain licenses from others in order to develop and commercialize certain
potential products incorporating the Company's technology. There can be no
assurance that such licenses, if required, will be available on acceptable
terms.
While the Company pursues patent protection, due to uncertainty as to the
future utility of patent protection for biotechnology products or processes, the
Company also relies upon trade secrets, know-how and continuing technological
advancement to develop and maintain its competitive position. All Company
employees have signed confidentiality agreements under which they have agreed
not to use or disclose any of the Company's proprietary information. Research
and development contracts and relationships between the Company and its
scientific consultants and potential customers provide access to aspects of the
Company's know-how that are protected generally under confidentiality agreements
with the parties involved. There can be no assurance that all confidentiality
agreements will be honored or are enforceable.
No Assurance of Product Efficacy or the Ability To Compete Successfully
The biotechnology and pharmaceutical industries are subject to continuous
and substantial technological change. Competition in the areas of recombinant
DNA-based and monoclonal antibody-based technologies is intense and expected to
increase in the future as a number of established biotechnology firms and large
chemical and pharmaceutical companies diversify into the field. A number of
these large pharmaceutical and chemical companies have enhanced their
capabilities by entering into arrangements with, or acquiring, biotechnology
companies. Substantially all of these companies have significantly greater
financial resources, larger research and development and marketing staffs and
larger production facilities than those of the Company. Moreover, certain of
these companies have extensive experience in undertaking preclinical testing and
human clinical trials. These factors may enable such companies to develop
products and processes competitive with or superior to those of the Company. In
addition, a significant amount of research in biotechnology is being carried out
in universities and other non-profit research organizations. These entities are
becoming increasingly aware of the commercial value of their work and may become
more aggressive in seeking patent protection and licensing arrangements. There
can be no assurance that developments by others will not render the Company's
products or technologies obsolete or uncompetitive.
It is possible that another company is developing one or more products
based on BPI, and there can be no assurance that such product(s) will not prove
to be more effective than Neuprex(TM).
Potential Impact of Healthcare Reform
The successful commercialization of the Company's products will depend
upon, among other things, the Company's marketing arrangements for its products.
The Company's ability to enter into marketing arrangements on acceptable terms
and/or the terms of its existing arrangements could be materially adversely
affected if legislation were to be enacted or regulations adopted which mandates
or otherwise results in the reduction or containment of the cost of
pharmaceutical products to consumers. In addition, if legislation were to be
enacted or regulations adopted which mandates or otherwise results in the
reduction of pharmaceutical product manufacturer's prices, the Company's
business could be materially adversely affected.
-7-
<PAGE>
Uncertainties in Attracting and Retaining Qualified Personnel
The Company's success in developing marketable products and achieving a
competitive position will depend, in part, on its ability to attract and retain
qualified scientific and management personnel. Competition for such personnel is
intense, and no assurances can be given that the Company will be able to attract
or retain such personnel. The loss of a significant group of key personnel would
adversely affect the Company's product development efforts.
Risk of Product Liability Claims
The testing and marketing of medical products entails an inherent risk of
allegations of product liability. The Company believes it currently has adequate
levels of insurance for its clinical trials. The Company will seek to obtain
additional insurance, if needed, if and when the Company's products are
commercialized; however, there can be no assurance that adequate insurance
coverage will be available or be available at acceptable costs or that a product
liability claim would not materially adversely affect the business or financial
condition of the Company.
Certain Provisions Relating to Changes in Control
The Stockholder Rights Agreement, dated as of October 27, 1993 (the "Rights
Agreement"), between the Company and First Interstate Bank of California, as
Rights Agent, and the Company's Amended and Restated By-Laws (the "By-Laws")
contain provisions that may have the effect of making more difficult an
acquisition of control of the Company that has not been approved by the
Company's Board of Directors. See "Description of Equity Securities -- Certain
Provisions Relating to Changes in Control of the Company."
Volatility of Stock Price
The market prices for securities of biotechnology companies, including
XOMA, have been highly volatile. See "Price Range of Common Stock and Dividend
Information." Announcements regarding the results of regulatory approval
filings, clinical trials or other testing, technological innovations or new
commercial products by XOMA or its competitors, government regulations,
developments concerning proprietary rights or public concern as to safety of
biotechnology have historically had, and are expected to continue to have, a
significant impact on the market price of XOMA's Common Stock.
-8-
<PAGE>
THE COMPANY
The Company is a biopharmaceutical company developing products to treat
infections, infectious complications of traumatic injury and surgery, and
immunologic and inflammatory disorders. The Company's current product
development programs include:
- Neuprex(TM) (rBPI21), a modified recombinantly-derived
fragment of BPI and XOMA's lead BPI-derived product,
which is currently in Phase III efficacy clinical
trials in two indications and in earlier-stage clinical
trials in three additional indications.
- I-PREX(TM), a proprietary topical formulation of rBPI21
for the treatment of ophthalmic disorders, which is
undergoing preclinical testing as a treatment for
corneal injuries, including ulcerations and
transplants.
- Mycoprex(TM), a fungicidal peptide compound derived
from BPI that is currently in preclinical product
development.
- hu1124 (anti-CDlla), a humanized monoclonal antibody
product being developed in collaboration with
Genentech, which originally discovered the antibody and
characterized it as anti-CD11a. The hull24 product is
in Phase II clinical trials for psoriasis. Other
indications are under review.
The Company's cash position and resulting investment income are sufficient
to finance the Company's currently anticipated needs for operating expenses,
working capital, equipment and current research projects for at least the next
twelve months. The Company continues to evaluate strategic alliances, potential
partnerships, and financing arrangements which would further strengthen its
competitive position and provide additional funding. The Company cannot predict
whether or when any such alliances, partnerships or arrangements will be
consummated or whether additional funding will be available when required.
The Company is currently reviewing its computer systems and automated
equipment in order to evaluate necessary modifications for the year 2000. The
Company does not currently anticipate that it will incur material expenditures
to complete any such modifications. The Company can provide no assurance that
there will be no material year 2000 impact, including through third parties such
as suppliers of raw materials for manufacturing and clinical research
organizations.
Certain statements contained herein that are not related to historical
facts may contain "forward looking" information, as that term is defined in the
Private Securities Litigation Reform Act of 1995. Such statements are based on
the Company's current beliefs as to the outcome and timing of future events, and
actual results may differ materially from those projected or implied in the
forward looking statements. Further, certain forward looking statements are
based upon assumptions of future events which may not prove to be accurate. The
forward looking statements involve risks and uncertainties including, but not
limited to, the risks and uncertainties referred to under "Risk Factors" and
elsewhere herein and in other of the Company's SEC filings.
-9-
<PAGE>
PRICE RANGE OF COMMON STOCK AND DIVIDEND INFORMATION
The Company's Common Stock trades on the Nasdaq National Market under the
symbol "XOMA." The following table sets forth the quarterly range of high and
low reported sale prices of the Company's Common Stock on the Nasdaq National
Market for the periods indicated.
High Low
1996:
First Quarter $5 3/16 $3 5/8
Second Quarter 8 3 7/8
Third Quarter 7 5/8 4 1/16
Fourth Quarter 5 7/8 3 1/16
1997:
First Quarter $7 1/4 $4 15/16
Second Quarter 5 11/16 3 1/8
Third Quarter 8 1/2 4 5/8
Fourth Quarter 8 1/2 4 7/8
1998:
First Quarter $6 1/2 $4 5/16
Second Quarter 6 4 1/4
On June 30, 1998 the last reported sale price of the Common Stock as
reported on the Nasdaq National Market was $4 13/16 per share. On June 30, 1998,
there were approximately 4,691 record holders of XOMA's Common Stock.
The Company has not paid cash dividends on its Common Stock. The Company
currently intends to retain earnings for use in the development and expansion of
its business and, therefore, does not anticipate paying cash dividends on its
Common Stock in the foreseeable future.
-10-
<PAGE>
SELLING STOCKHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of Common Stock by the Selling Stockholders as of June 30, 1998, and
the number of shares of Common Stock covered by this Prospectus.
<TABLE>
<CAPTION>
Beneficial Ownership
Name and Address of of Common Stock Number of
Selling Stockholders prior to the Offering Shares Offered(1)
- - -------------------- ------------------------------------ -----------------
Number of Percent
Shares of Class
<S> <C> <C> <C>
Southbrook International 1,737,736(2) 4.0% 1,776,706
Investments, Ltd.
c/o Trippoak Advisors, Inc.
630 Fifth Avenue
Suite 2000
New York, NY 10111
HBK Cayman L.P. 485,714(3) 1.1% 533,012
c/o HBK Investments L.P.
300 Crescent Court
Suite 700
Dallas, TX 75201
HBK Offshore Fund Ltd. 914,838(4) 2.1% 1,243,694
c/o HBK Investments L.P.
300 Crescent Court
Suite 700
Dallas, TX 75201
Marshall Capital Management, Inc. 1,852,614(5) 4.2% 1,776,706
(formerly Proprietary Convertible
Investment Group, Inc.)
c/o Credit Suisse First
Boston Corporation
11 Madison Avenue
Third Floor
New York, NY 10010
Pine Street Asset 81,054(6) * 25,812
Management, LP
1 Tower Bridge
Suite 1370
West Conshohocken, PA 19428
-11-
<PAGE>
Beneficial Ownership
Name and Address of of Common Stock Number of
Selling Stockholders prior to the Offering Shares Offered(1)
- - -------------------- ------------------------------------ -----------------
Number of Percent
Shares of Class
Brown Simpson Strategic 50,467(7) * 21,510
Growth Fund L.P.
152 West 57th Street
40th Floor
New York, NY 10019
Shipley Raidy Capital Partners L.P. 82,088(8) * 82,088
1 Tower Bridge
Suite 1370
West Conshohocken, PA 19428
Michael Arnouse 110,545(9) * 40,472
Business Consulting
3 Edward Lane
Syosset, NY 11791
</TABLE>
- - ------------------
(*) Indicates less than 1%.
(1) In order to provide for (i) fluctuations in the market price of the Common
Stock, (ii) provisions in the formula for determining the conversion price
of the Series H Preferred Stock (as defined below under "Description of
Equity Securities") provided for in the terms thereof (see "Description of
Equity Securities -- The Series H Preferred Stock") and (iii) shares of
Common Stock which may be issued in payment of dividends on the Series H
Preferred Stock, the aggregate number of shares of Common Stock registered
hereby exceeds the aggregate number of such shares issuable upon conversion
of shares of the Series H Preferred Stock at the conversion price in effect
on the date hereof. For each Selling Stockholder, the number in this column
represents the sum of (i) such Selling Stockholder's pro rata portion
(based on the number of shares of Series H Preferred Stock, if any, issued
to such Selling Stockholder) of the aggregate number of shares of Common
Stock registered hereby, after subtracting the aggregate number of shares
of Common Stock issuable upon exercise of the Series H Warrants (as defined
under "Description of Equity Securities - The Series H Warrants") and the
Series G Warrants (as defined under "Description of Equity Securities - The
Series G Warrants") issued to Shipley Raidy Capital Partners L.P. ("Shipley
Raidy") and Mr. Arnouse, and (ii) the number of shares of Common Stock
issuable upon exercise of the Series H Warrants issued to such Selling
Stockholder and, in the case of Shipley Raidy and Mr. Arnouse, the number
of shares of Common Stock issuable upon exercise of their Series G
Warrants.
(2) Includes (i) 61,675 shares of Common Stock issuable upon conversion of
shares of the Series G Preferred Stock (as defined below under "Description
of Equity Securities"), assuming conversion at the formula price in effect
on June 30, 1998 (which price will fluctuate from time to time based on
changes in the market price of the Common Stock and provisions in the
formula for determining the conversion price), (ii) 896,608 shares of
Common Stock issuable upon conversion of shares of the Series H Preferred
Stock, assuming conversion at the formula price in effect on June 30, 1998
(which price will fluctuate from time to time based on changes in the
market price of the Common Stock and provisions in the formula for
determining the conversion price), (iii) 142,733 shares of Common
-12-
<PAGE>
Stock issuable upon exercise of the Series G Warrants and (iv) 181,720
shares of Common Stock issuable upon exercise of the Series H Warrants.
(3) Includes (i) 268,982 shares of Common Stock issuable upon conversion of
shares of the Series H Preferred Stock, assuming conversion at the formula
price in effect on June 30, 1998 (which price will fluctuate from time to
time based on changes in the market price of the Common Stock and
provisions in the formula for determining the conversion price), (ii)
53,654 shares of Common Stock issuable upon exercise of the Series G
Warrants and (iii) 54,516 shares of Common Stock issuable upon exercise of
the Series H Warrants.
(4) Includes (i) 627,626 shares of Common Stock issuable upon conversion of
shares of the Series H Preferred Stock, assuming conversion at the formula
price in effect on June 30, 1998 (which price will fluctuate from time to
time based on changes in the market price of the Common Stock and
provisions in the formula for determining the conversion price), (ii)
53,395 shares of Common Stock issuable upon exercise of the Series G
Warrants and (iii) 127,204 shares of Common Stock issuable upon exercise of
the Series H Warrants.
(5) Includes (i) 631,553 shares of Common Stock issuable upon conversion of
shares of the Series G Preferred Stock, assuming conversion at the formula
price in effect on June 30, 1998 (which price will fluctuate from time to
time based on changes in the market price of the Common Stock and
provisions in the formula for determining the conversion price), (ii)
896,608 shares of Common Stock issuable upon conversion of shares of the
Series H Preferred Stock, assuming conversion at the formula price in
effect on June 30, 1998 (which price will fluctuate from time to time based
on changes in the market price of the Common Stock and provisions in the
formula for determining the conversion price), (iii) 142,733 shares of
Common Stock issuable upon exercise of the Series G Warrants and (iv)
181,720 shares of Common Stock issuable upon exercise of the Series H
Warrants.
(6) Includes (i) 14,802 shares of Common Stock issuable upon conversion of
shares of the Series G Preferred Stock, assuming conversion at the formula
price in effect on June 30, 1998 (which price will fluctuate from time to
time based on changes in the market price of the Common Stock and
provisions in the formula for determining the conversion price), (ii)
13,026 shares of Common Stock issuable upon conversion of shares of the
Series H Preferred Stock, assuming conversion at the formula price in
effect on June 30, 1998 (which price will fluctuate from time to time based
on changes in the market price of the Common Stock and provisions in the
formula for determining the conversion price), (iii) 2,073 shares of Common
Stock issuable upon exercise of the Series G Warrants, (iv) 2,640 shares of
Common Stock issuable upon exercise of the Series H Warrants and (v) 28,260
shares of Common Stock issuable upon exercise of certain options to
purchase such shares at an exercise price of $5.00 per share, which options
expire on March 27, 1999.
(7) Includes (i) 10,855 shares of Common Stock issuable upon conversion of
shares of the Series H Preferred Stock, assuming conversion at the formula
price in effect on June 30, 1998 (which price will fluctuate from time to
time based on changes in the market price of the Common Stock and
provisions in the formula for determining the conversion price), (ii)
37,412 shares of Common Stock issuable upon exercise of the Series G
Warrants and (iii) 2,200 shares of Common Stock issuable upon exercise of
the Series H Warrants.
(8) Includes (i) 36,099 shares of Common Stock issuable upon exercise of the
Series G Warrants and (ii) 45,989 shares of Common Stock issuable upon
exercise of the Series H Warrants.
(9) Includes (i) 17,780 shares of Common Stock issuable upon exercise of the
Series G Warrants, (ii) 22,692 shares of Common Stock issuable upon
exercise of the Series H Warrants and (iii) 70,073
-13-
<PAGE>
shares of Common Stock issuable upon exercise of certain options to
purchase such shares at an exercise price of $5.00 per share, which options
expire on March 27, 1999.
DESCRIPTION OF EQUITY SECURITIES
The authorized capital stock of the Company consists of 70,000,000 shares
of Common Stock, $.0005 par value, of which 42,517,621 shares were outstanding
on June 30, 1998, and 1,000,000 shares of preferred stock, $.05 par value, of
which 650,000 have been designated Series A Cumulative Preferred Stock (the
"Series A Preferred Stock"), of which none were outstanding on such date, 7,500
have been designated Convertible Preferred Stock, Series E (the "Series E
Preferred Stock"), of which none were outstanding on such date, 1,250 have been
designated Convertible Preferred Stock, Series G (the "Series G Preferred
Stock"), 287 of which were outstanding on such date, and 1,250 have been
designated Convertible Preferred Stock, Series H (the "Series H Preferred
Stock"), all of which were outstanding on such date..
Common Stock
Holders of shares of Common Stock are entitled to one vote per share on all
matters to be voted on by stockholders. The holders of Common Stock are entitled
to receive such dividends, if any, as may be declared from time to time by the
Company's Board of Directors out of funds legally available therefor. Upon
liquidation or dissolution of the Company, the holders of the Common Stock are
entitled to share ratably in the distribution of assets, subject to the rights
of the holders of the Series G Preferred Stock, the Series H Preferred Stock or
any other series of preferred stock or debt that may then be outstanding. There
are no redemption or sinking fund provisions with respect to the Common Stock.
All of the outstanding shares of Common Stock are validly issued, fully paid and
nonassessable.
Preferred Stock Purchase Rights
On October 27, 1993, the Board of Directors of the Company declared a
dividend distribution of one Preferred Stock Purchase Right (a "Right") for each
outstanding share of Common Stock. Each Right entitles the holder to purchase
from the Company a unit consisting of one one-hundredth of a share (a "Unit") of
Series A Preferred Stock at a cash exercise price of $30.00 per Unit, subject to
adjustment.
The Rights are attached to all outstanding shares of Common Stock,
including the shares of Common Stock offered hereby. The Rights will separate
from the Common Stock and will be distributed to holders of Common Stock upon
the earliest of (i) ten business days after the first public announcement that a
person or group of affiliated or associated persons (an "Acquiring Person") has
acquired beneficial ownership of 20% or more of the Common Stock then
outstanding (the date of said announcement being referred to as the "Stock
Acquisition Date"), (ii) ten business days following the commencement of a
tender offer or exchange offer that would result in a person or group of persons
becoming an Acquiring Person or (iii) the declaration by the Board of Directors
of the Company that any person is an "Adverse Person" (the earliest of such
dates, the "Distribution Date").
The Board of Directors of the Company may generally declare a person to be
an Adverse Person after a declaration that such person has become the beneficial
owner of 10% or more of the outstanding shares of Common Stock and a
determination that (a) such beneficial ownership by such person is intended to
cause or is reasonably likely to cause the Company to repurchase the Common
Stock owned by such Person or to cause the Company to enter into other
transactions not in the best long-term interests of the Company or (b) such
beneficial ownership is reasonably likely to cause a material adverse impact on
the business or prospects of the Company. The Rights are not exercisable until
the Distribution Date and will expire on December 31, 2002, unless previously
redeemed or exchanged by the Company.
-14-
<PAGE>
In the event that a person becomes an Acquiring Person or the Board of
Directors determines that a person is an Adverse Person, each holder of a Right
will thereafter have the right (a "Subscription Right") to receive upon exercise
that number of Units of Series A Preferred Stock having a market value of two
times the exercise price of the Rights. In the event that, at any time following
the Stock Acquisition Date, (i) the Company consolidates with, or merges with
and into, any person, and the Company is not the surviving corporation; (ii) any
person consolidates with the Company, or merges with and into the Company and
the Company is the continuing or surviving corporation of such merger and, in
connection with such merger, all or part of the shares of Common Stock are
changed into or exchanged for other securities of any other person or cash or
any other property, or (iii) 50% or more of the Company's assets are sold or
otherwise transferred, each holder of a Right shall thereafter have the right (a
"Merger Right") to receive, upon exercise, common stock of the acquiring company
having a market value equal to two times the exercise price of the Rights.
Rights that are beneficially owned by an Acquiring or Adverse Person may, under
certain circumstances, become null and void.
At any time after a person becomes an Acquiring Person or the Board of
Directors of the Company determines that a person is an Adverse Person, the
Board of Directors of the Company may exchange all or any part of the then
outstanding and exercisable Rights for shares of Common Stock or Units of Series
A Preferred Stock at an exchange ratio of one share of Common Stock or one Unit
of Series A Preferred Stock per Right. Notwithstanding the foregoing, the Board
of Directors of the Company generally will not be empowered to effect such
exchange at any time after any person becomes the beneficial owner of 50% or
more of the Common Stock then outstanding.
The Rights may be redeemed in whole, but not in part, at a price of $.001
per Right by the Board of Directors of the Company at any time prior to the date
on which a person is declared to be an Adverse Person, the tenth business day
after the Stock Acquisition Date, the occurrence of an event giving rise to the
Merger Right or the expiration date of the Rights Agreement.
The Series A Preferred Stock
There are currently no shares of Series A Preferred Stock outstanding.
Pursuant to the Certificate of Designation relating to the Series A Preferred
Stock, subject to the rights of holders of any shares of any series of preferred
stock ranking prior and superior (such as the Series G Preferred Stock and the
Series H Preferred Stock), the holders of Series A Preferred Stock are entitled
to receive, when, as and if declared by the Board of Directors of the Company
out of funds legally available for the purpose, quarterly dividends payable in
cash on the first day of March, June, September and December in each year (a
"Dividend Payment Date"), commencing on the first Dividend Payment Date after
the first issuance of a share or fraction of a share of Series A Preferred
Stock, in an amount per share equal to the greater of (a) $1.00 or (b) 100 times
the aggregate per share amount of all cash dividends, plus 100 times the
aggregate per share amount of all non-cash dividends or other distributions,
other than a dividend payable in shares of Common Stock, declared on the Common
Stock since the immediately preceding Dividend Payment Date, or, with respect to
the first Dividend Payment Date, since the first issuance of Series A Preferred
Stock.
In addition to any other voting rights required by law, holders of Series A
Preferred Stock shall have the right to vote on all matters submitted to a vote
of stockholders of the Company with each share of Series A Preferred Stock
entitled to 100 votes. Except as otherwise provided by law, holders of Series A
Preferred Stock and holders of Common Stock shall vote together as one class on
all matters submitted to a vote of stockholders of the Company.
Unless otherwise provided in a Certificate of Designation relating to a
subsequently designated series of preferred stock of the Company, the Series A
Preferred Stock shall rank junior to any other series of preferred stock as to
the payment of dividends and distribution of assets on liquidation, dissolution
or winding-up
-15-
<PAGE>
and shall rank senior to the Common Stock. Upon any liquidation, dissolution or
winding-up of the Company, no distributions shall be made to holders of shares
of stock ranking junior to the Series A Preferred Stock unless, prior thereto,
the holders of Series A Preferred Stock shall have received an amount equal to
accrued and unpaid dividends and distributions, whether or not declared, to the
date of such payment, plus an amount equal to the greater of (1) $100.00 per
share or (2) an aggregate amount per share equal to 100 times the aggregate
amount to be distributed per share to holders of Common Stock or to the holders
of stock ranking on parity with the Series A Preferred Stock, except
distributions made ratably on the Series A Preferred Stock and all other such
parity stock in proportion to the total amount to which the holders of all such
shares are entitled upon such liquidation, dissolution or winding-up.
If the Company shall enter into any consolidation, merger, combination or
other transaction in which shares of Common Stock are exchanged for or changed
into cash, other securities and/or any other property, then any shares of Series
A Preferred Stock outstanding shall at the same time be similarly exchanged or
changed in an amount per share equal to 100 times the aggregate amount of cash,
securities and/or other property, as the case may be, into which or for which
each share of Common Stock is changed or exchanged.
The shares of Series A Preferred Stock shall not be redeemable. The Series
B Preferred Stock
The 18,775 shares of Senior Convertible Preferred Stock, Series B, issued
by the Company in a private placement consummated in December 1993 in reliance
upon the exemption contained in Section 4(2) of the Securities Act, have been
converted into an aggregate of 3,751,454 shares of Common Stock.
The Series C Preferred Stock
The 4,799 shares of Convertible Preferred Stock, Series C, issued by the
Company in an offering made to foreign investors in reliance on Regulation S
under the Securities Act in August 1995, have been converted into an aggregate
of 2,728,190 shares of Common Stock.
The Series D Preferred Stock
The 5,000 shares of Non-Voting Cumulative Convertible Preferred Stock,
Series D, issued by the Company in an offering exempt from the registration
requirements of the Securities Act pursuant to Regulation D thereunder in March
1996, have been converted into an aggregate of 1,048,610 shares of Common Stock.
The Series E Preferred Stock
There are currently no shares of Series E Preferred Stock outstanding. The
7,500 shares of Series E Preferred Stock have been designated by the Company for
issuance upon conversion of the convertible subordinated loans to the Company
made and to be made by Genentech in connection with the funding of the Company's
development costs for hull24 through 1998. Such loans are and will be
convertible into Series E Preferred Stock upon the occurrence of certain events
relating to certain regulatory approvals, payment defaults, prepayments and
other circumstances. Pursuant to the Certificate of Designation relating to the
Series E Preferred Stock, the holders of shares of Series E Preferred Stock will
not be entitled to receive any dividends on shares of the Series E Preferred
Stock.
The Series E Preferred Stock will rank senior with respect to rights on
liquidation, winding-up and dissolution of the Company to all classes of Common
Stock. Upon any voluntary or involuntary liquidation, dissolution or winding-up
of the Company, holders of Series E Preferred Stock will be entitled to receive
$10,000 per share of Series E Preferred Stock before any distribution is made on
the Common Stock. The
-16-
<PAGE>
holders of shares of Series E Preferred Stock will have no voting rights, except
as required under the General Corporation Law of the State of Delaware.
The holders of Series E Preferred Stock will have the right to convert
shares of Series E Preferred Stock into shares of Common Stock at a conversion
price equal to the current market price of the Common Stock (determined as
provided below). The current market price will be determined (a) for shares of
Series E Preferred Stock issued in connection with a conversion of one or more
of the convertible subordinated loans upon certain regulatory approvals, payment
defaults or in certain other circumstances, as of the first date on which such a
conversion occurs, and (b) for shares of Series E Preferred Stock issued in
connection with certain prepayments of one or more of the convertible
subordinated loans or a conversion thereof in certain other circumstances, as of
the date of the issuance of such shares of Series E Preferred Stock.
The Series E Preferred Stock will be automatically converted into Common
Stock at its then effective conversion rate immediately upon the transfer by the
initial holder to any third party which is not an affiliate of such holder.
The Company will have the right, at any time and from time to time, to
redeem any or all shares of Series E Preferred Stock for cash in an amount equal
to the conversion price multiplied by the number of shares of Common Stock into
which each such share of Series E Preferred Stock would then be convertible.
The Series F Preferred Stock
The 1,600 shares of Non-Voting Cumulative Convertible Preferred Stock,
Series F (the "Series F Preferred Stock"), issued by the Company in an offering
exempt from the registration requirements of the Securities Act pursuant to
Regulation D thereunder in September 1996, have been converted into an aggregate
of 5,269,870 shares of Common Stock.
The Series G Preferred Stock
The Company issued 1,250 shares of Series G Preferred Stock to the Selling
Stockholders in August 1997 in a transaction exempt from the registration
requirements of the Securities Act (the "Series G Private Placement"). As of
June 30, 1998, shares of Series G Preferred Stock had been converted into an
aggregate of 2,346,903 shares of Common Stock. Pursuant to the Certificate of
Designation relating to the Series G Preferred Stock, the holders thereof are
entitled to receive, when and as declared by the Board of Directors of the
Company out of funds legally available therefor, cumulative dividends at a rate
per share (as a percentage of the stated value per share) equal to 5% per annum.
Dividends are payable, at the option of the Company, in cash or Common Stock
(subject to certain restrictions thereon). In addition, the Company may elect
not to declare or make payment of any dividend, in which event the accrued and
unpaid dividends shall be calculated and paid at the time of conversion, as
described below.
The Series G Preferred Stock ranks senior with respect to rights on
liquidation, dissolution or winding-up of the Company to the Common Stock. Upon
any voluntary or involuntary liquidation, dissolution or winding-up of the
Company, holders of Series G Preferred Stock will be entitled to receive $10,000
per share, plus accrued but unpaid dividends, before any distribution or payment
is made on the Common Stock or any preferred stock of the Company ranking junior
as to liquidation rights to the Series G Preferred Stock. Except as may be
required by law and except with respect to certain actions which may adversely
affect the holders of Series G Preferred Stock, the holders of Series G
Preferred Stock are not entitled to vote on any matter submitted to a vote of
stockholders of the Company.
The holders of Series G Preferred Stock have the right to convert shares of
Series G Preferred Stock into Common Stock at a conversion price equal to (a) a
percentage of the 5-day trailing average market price
-17-
<PAGE>
of the Common Stock at the time of conversion, beginning at 100% immediately
following the closing of the Series G Private Placement and declining by 2% per
month until such percentage equals 88%, or (b) during the first six months
following such closing, the lesser of the percentage described in the foregoing
clause (a) and 140% of the 5-day trailing average market price of the Common
Stock as of the date of such closing; provided that the Selling Stockholders
have agreed that in no event shall any such holder be entitled to (i) convert
any shares of Series G Preferred Stock during the 60 days immediately following
the closing of the Series G Private Placement at a price below 120% of the 5-day
trailing average market price of the Common Stock as of the date of such
closing, and (ii) convert any shares of Series G Preferred Stock (or exercise
any Series G Warrants) to the extent the issuance of shares of Common Stock upon
a proposed conversion (or exercise) would result in such Selling Stockholder
beneficially owning more than 4.999% of the outstanding shares of Common Stock,
absent certain defaults by the Company; and provided, further, that in the event
that on any conversion date the conversion of all the outstanding shares of
Series G Preferred Stock upon surrender thereof, together with all shares of
Common Stock previously issued upon conversion of Series G Preferred Stock and
in respect of payment of dividends thereon, would require the issuance of a
number of shares of Common Stock in excess of 20% of the number of such shares
outstanding on August 14, 1997 (the closing date of the Series G Private
Placement), the Company shall, at its option, either redeem all of such holder's
shares of the Series G Preferred Stock not convertible by reason of the
limitation described in this proviso at a redemption price per share based on
the five day trailing average market price at the time of conversion or at the
time of redemption, whichever is greater, or, after obtaining stockholder
approval, convert such Series G Preferred Stock into shares of Common Stock;
provided, that, if the Company elects to seek stockholder approval, the holders
of a majority of the outstanding shares of Series G Preferred Stock may request,
in lieu of such approval, that the Company redeem the Series G Preferred Stock
as set forth above. In addition, subject to the limitation described in the
second proviso of the preceding sentence, the Company has the right, so long as
it is in compliance with its obligations to the holders of the Series G
Preferred Stock and the Registration Statement is then effective, exercisable at
any time on or after the third anniversary of the closing of the Series G
Private Placement, to require the holders thereof to convert all or a portion of
their shares of Series G Preferred Stock into Common Stock at the then
applicable conversion price.
The Selling Stockholders are entitled to redeem their shares of Series G
Preferred Stock at the redemption price described in the preceding paragraph if
the Common Stock is no longer listed for trading on the Nasdaq National Market
or any other principal market or exchange for such shares (other than as a
result of the suspension of trading in securities generally or temporarily
pending release of material information) for five trading days in the aggregate.
The Series H Preferred Stock
The 1,250 outstanding shares of Series H Preferred Stock were issued by the
Company to the Selling Stockholders in June 1998 in a transaction exempt from
the registration requirements of the Securities Act (the "Series H Private
Placement"). Pursuant to the Certificate of Designation relating to the Series H
Preferred Stock, the holders thereof are entitled to receive, when and as
declared by the Board of Directors of the Company out of funds legally available
therefor, cumulative dividends at a rate per share (as a percentage of the
stated value per share) equal to 5% per annum. Dividends are payable, at the
option of the Company, in cash or Common Stock (subject to certain restrictions
thereon). In addition, the Company may elect not to declare or make payment of
any dividend, in which event the accrued and unpaid dividends shall be
calculated and paid at the time of conversion, as described below.
The Series H Preferred Stock ranks senior with respect to rights on
liquidation, dissolution or winding-up of the Company to the Common Stock. Upon
any voluntary or involuntary liquidation, dissolution or winding-up of the
Company, holders of Series H Preferred Stock will be entitled to receive $10,000
per share, plus accrued but unpaid dividends, before any distribution or payment
is made on the Common Stock or any preferred stock of the Company ranking junior
as to liquidation rights to the Series H Preferred Stock. Except
-18-
<PAGE>
as may be required by law and except with respect to certain actions which may
adversely affect the holders of Series H Preferred Stock, the holders of Series
H Preferred Stock are not entitled to vote on any matter submitted to a vote of
stockholders of the Company.
The holders of Series H Preferred Stock have the right to convert shares of
Series H Preferred Stock into Common Stock at a conversion price equal to (a) a
percentage of the 5-day trailing average market price of the Common Stock at the
time of conversion, beginning at 100% immediately following the closing of the
Series H Private Placement and declining by 2% per month until such percentage
equals 88%, or (b) during the first six months following such closing, the
lesser of the percentage described in the foregoing clause (a) and 140% of the
5-day trailing average market price of the Common Stock as of the date of such
closing; provided that the Selling Stockholders have agreed that in no event
shall any such holder be entitled to (i) convert any shares of Series H
Preferred Stock during the 60 days immediately following the closing of the
Series H Private Placement at a price below 120% of the 5-day trailing average
market price of the Common Stock as of the date of such closing, and (ii)
convert any shares of Series H Preferred Stock (or exercise any Series H
Warrants) to the extent the issuance of shares of Common Stock upon a proposed
conversion (or exercise) would result in such Selling Stockholder beneficially
owning more than 4.999% of the outstanding shares of Common Stock, absent
certain defaults by the Company; and provided, further, that in the event that
on any conversion date the conversion of all the outstanding shares of Series G
Preferred Stock and Series H Preferred Stock upon surrender thereof, together
with all shares of Common Stock previously issued upon conversion of Series G
Preferred Stock and Series H Preferred Stock and in respect of payment of
dividends thereon, would require the issuance of a number of shares of Common
Stock in excess of 20% of the number of such shares outstanding on June 26, 1998
(the closing date of the Series H Private Placement), the Company shall, at its
option, either redeem all of such holder's shares of the Series H Preferred
Stock not convertible by reason of the limitation described in this proviso at a
redemption price per share based on the five day trailing average market price
at the time of conversion or at the time of redemption, whichever is greater,
or, after obtaining stockholder approval, convert such Series H Preferred Stock
into shares of Common Stock; provided, that, if the Company elects to seek
stockholder approval, the holders of a majority of the outstanding shares of
Series H Preferred Stock may request, in lieu of such approval, that the Company
redeem the Series H Preferred Stock as set forth above. In addition, subject to
the limitation described in the second proviso of the preceding sentence, the
Company has the right, so long as it is in compliance with its obligations to
the holders of the Series H Preferred Stock and the Registration Statement is
then effective, exercisable at any time on or after the third anniversary of the
closing of the Series H Private Placement, to require the holders thereof to
convert all or a portion of their shares of Series H Preferred Stock into Common
Stock at the then applicable conversion price.
The Selling Stockholders are entitled to redeem their shares of Series H
Preferred Stock at the redemption price described in the preceding paragraph if
the Common Stock is no longer listed for trading on the Nasdaq National Market
or any other principal market or exchange for such shares (other than as a
result of the suspension of trading in securities generally or temporarily
pending release of material information) for five trading days in the aggregate.
The Series F Warrants
The Company issued 109,739 warrants (the "Series F Warrants") to purchase
shares of Common Stock in connection with the offering of the Series F Preferred
Stock in September 1996 in a transaction exempt from the registration
requirements of the Securities Act pursuant to Regulation D thereunder. Each
Series F Warrant entitles the holder thereof to purchase one share of Common
Stock, subject to anti-dilution adjustments. The Series F Warrants are
exercisable from and after September 24, 1996, with one-half thereof having
expired on March 24, 1998 and the remainder expiring on September 24, 1999, at
an exercise price of $7.29 per share.
-19-
<PAGE>
The Series F Warrants have not been registered under the Securities Act and
may not be transferred except pursuant to an effective registration statement
under the Securities Act or pursuant to an exception from registration
thereunder. Additionally, the Series F Warrants contain certain restrictions on
their transfer. The Company is not obligated and does not intend to register the
Series F Warrants under the Securities Act.
The Series G Warrants
The Company issued 485,879 warrants (the "Series G Warrants") to purchase
shares of Common Stock in the Series G Private Placement. Each Series G Warrant
entitles the holder thereof to purchase one share of Common Stock, subject to
anti-dilution adjustments. The Series G Warrants are exercisable from and after
August 14, 1997, expiring on August 14, 2000, at an exercise price of $10.00 per
share.
The Series G Warrants have not been registered under the Securities Act and
may not be transferred except pursuant to an effective registration statement
under the Securities Act or pursuant to an exception from registration
thereunder. Additionally, the Series G Warrants contain certain restrictions on
their transfer. The Company is not obligated and does not intend to register the
Series G Warrants under the Securities Act.
The Series H Warrants
The Company issued 618,681 warrants (the "Series H Warrants") to purchase
shares of Common Stock in the Series H Private Placement. Each Series H Warrant
entitles the holder thereof to purchase one share of Common Stock, subject to
anti-dilution adjustments. The Series H Warrants are exercisable from and after
June 26, 1998, expiring on June 26, 2001, at an exercise price of $7.00 per
share.
The Series H Warrants have not been registered under the Securities Act and
may not be transferred except pursuant to an effective registration statement
under the Securities Act or pursuant to an exception from registration
thereunder. Additionally, the Series H Warrants contain certain restrictions on
their transfer. The Company is not obligated and does not intend to register the
Series H Warrants under the Securities Act.
The Incyte Warrants
The Company issued 250,000 warrants (the "Incyte Warrants") to purchase
shares of Common Stock in July 1998 in a transaction exempt from the
registration requirements of the Securities Act. Each Incyte Warrant entitles
the holder thereof to purchase one share of Common Stock, subject to
anti-dilution adjustments. The Incyte Warrants are exercisable from and after
July 9, 1998, expiring on July 9, 2008 or earlier upon the related license
becoming fully paid up, at an exercise price of $6.00 per share.
The Incyte Warrants have not been registered under the Securities Act and
may not be transferred except pursuant to an effective registration statement
under the Securities Act or pursuant to an exception from registration
thereunder. Additionally, the Incyte Warrants contain certain restrictions on
their transfer. The Company is not obligated and does not intend to register the
Incyte Warrants under the Securities Act.
Certain Provisions Relating to Changes in Control of the Company
Certain provisions of the By-Laws and the Rights (summarized above) may
delay, defer or prevent a change in control of the Company that a stockholder
might consider to be in his or her best interest, including those applicable to
a change in control of the Company that might result in a premium over the
market price for the shares of Common Stock held by stockholders.
Special Meeting of Stockholders. The By-Laws provide that meetings of
stockholders of the Company may be called only by the Chief Executive Officer or
the Board of Directors of the Company. This pro-
-20-
<PAGE>
vision may make it more difficult for stockholders to take action opposed by
management or the Board of Directors of the Company.
Advance Notice Requirements for Stockholder Proposals and Director
Nominations. The By-Laws provide that stockholders seeking to bring business
before an annual meeting of stockholders or to nominate candidates for election
as directors at an annual meeting of stockholders, must provide timely notice
thereof in writing. To be timely, a stockholder's notice must be received by the
Secretary of the Company not less than sixty nor more than ninety days prior to
the first anniversary of the preceding year's annual meeting, or in the case of
an annual meeting that is called for a date that is more than thirty days or
delayed by more than sixty days from such anniversary, notice by the stockholder
to be timely must be so received not earlier than the ninetieth day prior to
such annual meeting and not later than the close of business on the later of (1)
the sixtieth day prior to such annual meeting or (2) the tenth day following the
day on which such notice of the date of the annual meeting was mailed or
publicly disclosed. These provisions may preclude some stockholders from
bringing matters before an annual meeting of stockholders or making nominations
for directors at an annual meeting of stockholders.
Preferred Stock Purchase Rights. The provisions of the Rights and the
Series A Preferred Stock may make it more difficult or more costly for a person
or group of persons to acquire control of the Company in a transaction opposed
by the Board of Directors of the Company. See "-- Preferred Stock Purchase
Rights" and "-- The Series A Preferred Stock."
Transfer Agent and Registrar
ChaseMellon Shareholder Services, L.L.C. is the transfer agent and
registrar of the Common Stock.
PLAN OF DISTRIBUTION
Any or all of the Common Stock being registered hereby may be sold from
time to time to purchasers directly by any Selling Stockholder. Alternatively,
any Selling Stockholder may from time to time offer the Common Stock through
underwriters, dealers or agents who may receive compensation in the form of
underwriting discounts, concessions or commissions from such Selling Stockholder
and/or the purchasers of Common Stock for whom they may act as agent. Any such
Selling Stockholder, and any such underwriters, dealers or agents that
participate in the distribution of Common Stock, may be deemed to be
underwriters, and any profit on the sale of the Common Stock by them and any
discounts, commissions or concessions received by them may be deemed to be
underwriting discounts and commissions under the Securities Act. Any such shares
of Common Stock may be so offered or sold in the open market, on the Nasdaq
National Market, in privately negotiated transactions, in an underwrittten
offering, or a combination of such methods, at market prices prevailing at the
time of sale, at prices related to such prevailing market prices or at
negotiated prices. To the extent required, the names of the Selling
Stockholders, the number of shares of Common Stock to be sold, purchase price,
public offering price, the name of any agent, dealer or underwriter and any
applicable commission or discount or other items constituting compensation or
indemnification arrangements with respect to a particular offering will be set
forth in an accompanying Prospectus Supplement. The Company will receive no
proceeds from the sale by any Selling Stockholder of the Common Stock offered
hereby.
In connection with distributions of the Common Stock, any Selling
Stockholder may enter into hedging transactions with broker-dealers and the
broker-dealers may engage in short sales of the Common Stock in the course of
hedging the positions they assume with such Selling Stockholder. Any Selling
Stockholder also may sell the Common Stock short and deliver the Common Stock to
close out such short positions. Any Selling Stockholder also may enter into
option or other transactions with broker-dealers that involve the delivery of
the Common Stock to the broker-dealers, which may then resell or otherwise
transfer such Common Stock. Any Selling Stockholder also may loan or pledge the
Common Stock to a broker-dealer and the broker-dealer
-21-
<PAGE>
may sell the Common Stock so loaned or upon a default may sell or otherwise
transfer the pledged Common Stock.
The shares of Common Stock covered by this Prospectus are (i) shares of
Common Stock issuable upon conversion of shares of the Series H Preferred Stock,
(ii) shares of Common Stock that may be paid as dividends on the Series H
Preferred Stock, (iii) shares of Common Stock underlying the Series H Warrants,
and (iv) in the case of Shipley Raidy and Mr. Arnouse, shares of Common Stock
underlying the Series G Warrants. Shipley Raidy and Mr. Arnouse received their
Series G Warrants and Series H Warrants for services rendered as placement
agents in connection with the Series G Private Placement and the Series H
Private Placement, respectively.
All Registration Expenses incurred in connection with the registration of
the Common Stock to which this Prospectus relates, estimated to be approximately
$70,000, will be borne by the Company. As and when the Company is required to
update this Prospectus, it may incur additional expenses in excess of this
estimated amount. "Registration Expenses" means all fees and expenses incident
to the registration of the Common Stock to which this Prospectus relates,
including fees and expenses of counsel to the Company and the Selling
Stockholders (limited, in the case of counsel to the Selling Stockholders, to
$5,000) but excluding, in the case of an underwritten offering, all fees and
disbursements of any underwriters (including discounts and commissions), their
counsel and accountants and all registration and filing fees.
The Company has agreed to indemnify the Selling Stockholders against
certain liabilities, including certain liabilities under the Securities Act, or
to contribute to payments which the Selling Stockholders may be required to make
in respect thereof.
LEGAL OPINIONS
The validity of the shares of Common Stock to which this Prospectus relates
has been passed upon for the Company by Cahill Gordon & Reindel, a partnership
including a professional corporation, located in New York, New York.
EXPERTS
The financial statements of XOMA incorporated by reference in this
Prospectus and elsewhere in the Registration Statement, to the extent and for
the periods indicated in their report, have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their report with respect
thereto, and are incorporated by reference herein in reliance upon the authority
of said firm as experts in giving said report. The Company has appointed, and
its stockholders have ratified the appointment of, Ernst & Young LLP to serve as
the Company's independent accountants for 1998.
-22-
<PAGE>
<TABLE>
<CAPTION>
======================================================== =================================================
<S> <C>
No dealer, salesman or other person has been
authorized to give any information or to make
representations other than those contained in this 5,500,000 Shares
Prospectus, and, if given or made, such information or
representations must not be relied upon as having been
authorized by the Company or the Selling XOMA CORPORATION
Stockholders. Neither the delivery of this Prospectus
nor any sale made hereunder shall, under any
circumstances, create an implication that the
information herein is correct as of any time Common Stock
subsequent to its date. This Prospectus does not
constitute an offer or solicitation by anyone in any
jurisdiction in which such offer or solicitation is
not authorized or in which the person making such ________________
offer or solicitation is not qualified to do so or to
anyone to whom it is unlawful to make such offer or PROSPECTUS
solicitation. _________________
------------------
TABLE OF CONTENTS
Page
Available Information.........................2
Information Incorporated by Reference.........3
Risk Factors..................................4
The Company...................................9
Price Range of Common Stock and Dividend
Information................................10
Selling Stockholders..........................11
Description of Equity Securities..............14 , 1998
Plan of Distribution..........................21
Legal Opinions................................22
Experts.......................................22
======================================================== =================================================
</TABLE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The estimated expenses in connection with this offering are as follows:
Amount
to be Paid
SEC registration fee $ 7,555
Nasdaq fee 17,500
Legal fees and expenses (including
Blue Sky fees and expenses) 35,000
Accounting fees and expenses 3,000
Miscellaneous 6,945
-------
Total $70,000
Item 15. Indemnification of Directors and Officers
The Delaware General Corporation Law provides for indemnification of
directors, officers, employees and agents, subject to certain limitations (Del.
Code, Title 8 Sec. 145). Article VII of the Company's Bylaws provides that
expenses incurred by an officer or director of the Company in defending a civil
or criminal action, suit or proceeding shall be paid by the Company in advance
of a final disposition of the action, suit or proceeding upon receipt by the
Company of an undertaking by the officer or director that he or she will repay
such expenses if it is ultimately determined that he or she is not entitled to
indemnification under the Delaware General Corporation Law.
As permitted by Section 102 of the Delaware General Corporation Law, the
Company's Certificate of Incorporation contains provisions eliminating a
director's personal liability for monetary damages to the Company and its
stockholders arising from a breach of a director's fiduciary duty except for
liability under Section 174 of the Delaware General Corporation Law or liability
for any breach of the director's duty of loyalty to the Company or its
stockholders, for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law or for any transaction by
which the director derived an improper personal benefit. The Company has also
entered into indemnification agreements with its directors and officers
providing for indemnification and advancements of expenses to the fullest extent
permitted under Delaware law.
II-1
<PAGE>
Item 16. Exhibits and Financial Statement Schedules
(a) Exhibits
Exhibit
Number
4.1 Restated Certificate of Incorporation(1)
4.2 Certificate of Amendment of Restated Certificate of
Incorporation(2)
4.3 Amended and Restated By-Laws(3)
4.4 Stockholder Rights Agreement dated October 27, 1993 by and
between the Company and First Interstate Bank of California as
Rights Agent(4)
4.5 Certificate of Designation of Convertible Preferred Stock, Series
E(5)
4.6 Amended Certificate of Designation of Convertible Preferred
Stock, Series E(2)
4.7 Certificate of Designation of Convertible Preferred Stock, Series
G(6)
4.8 Certificate of Designation of Convertible Preferred Stock, Series
H(7)
4.9 Form of Common Stock Purchase Warrant (Series F Warrants)(2)
4.10 Form of Common Stock Purchase Warrant (Series G Warrants)(6)
4.11 Form of Common Stock Purchase Warrant (Series H Warrants)(7)
4.12 Form of Common Stock Purchase Warrant (Incyte Warrants)(8)
5.1 Opinion of Cahill Gordon & Reindel
10.1 Form of Convertible Preferred Stock Purchase Agreement, dated as
of August 13, 1997, by and between XOMA Corporation and the
purchasers of Series G Preferred Stock and Series H Preferred
Stock (6)
10.2 First Amendment dated as of January 1, 1998 to Convertible
Preferred Stock Purchase Agreement (9)
10.3 Second Amendment dated as of June 26, 1998 to Convertible
Preferred Stock Purchase Agreement
10.4 Form of Registration Rights Agreement, dated as of August 13,
1997, by and between XOMA Corporation and the purchasers of
Series G Preferred Stock and Series H Preferred Stock (6)
II-2
<PAGE>
10.5 Form of Registration Rights Agreement, dated as of July 9, 1998,
by and between XOMA Corporation and Incyte Pharmaceuticals Inc.
(8)
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Cahill Gordon & Reindel (included in Exhibit 5.1)
24.1 Power of Attorney (included on the signature page hereto)
- - --------------------
(1) Incorporated by reference to the Company's Registration Statement on Form
S-3 (File No. 33-59379).
(2) Incorporated by reference to the Company's Registration Statement on Form
S-3 (File No. 333-07263).
(3) Incorporated by reference to the Company's Registration Statement on Form
S-3 (File No. 33-74982).
(4) Incorporated by reference to the Company's Current Report on Form 8-K dated
October 27, 1993.
(5) Incorporated by reference to the Company's Registration Statement on Form
S-3 (File No. 333-2493).
(6) Incorporated by reference to the Company's Current Report on Form 8-K dated
August 18, 1997.
(7) Incorporated by reference to the Company's Current Report on Form 8-K dated
June 29, 1998.
(8) Incorporated by reference to the Company's Current Report on Form 8-K dated
July 16, 1998.
(9) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarterly period ended March 31, 1998.
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:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement;
(iii) 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;
II-3
<PAGE>
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
registration statement is on Form S-3 or Form S-8, and the information required
to be included in the post-effective amendment by those paragraphs is contained
in periodic reports filed by the registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that are incorporated by reference
in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered herein, 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 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 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
of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of 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 of 1933 and will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
II-4
<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 Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Berkeley, State of California, on July 16, 1998.
XOMA CORPORATION
By: /s/ John L. Castello
---------------------------------
Name: John L. Castello
Title: Chairman of the Board,
President and Chief
Executive Officer
II-5
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints John L. Castello and Christopher J.
Margolin, and each of them, as his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) and supplements to this registration
statement, and to file the same, with the Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as he might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents, or any of them, or their or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons on behalf
of the registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
Chairman of the Board, President July 16, 1998
and Chief Executive Officer
/s/ John L. Castello (Principal Executive Officer)
- - ------------------------------
John L. Castello
Chief Scientific and Medical July 16, 1998
/s/ Patrick J. Scannon Officer and Director
- - ------------------------------
Patrick J. Scannon
Vice President, Finance and Chief July 16, 1998
Financial Officer (Principal
/s/ Peter B. Davis Financial and Accounting Officer)
- - ------------------------------
Peter B. Davis
/s/ James G. Andress Director July 16, 1998
- - ------------------------------
James G. Andress
/s/ William K. Bowes, Jr. Director July 16, 1998
- - ------------------------------
William K. Bowes, Jr.
/s/ Arthur Kornberg Director July 16, 1998
- - ------------------------------
Arthur Kornberg
II-6
<PAGE>
/s/ Steven C. Mendell Director July 16, 1998
- - ------------------------------
Steven C. Mendell
/s/ W. Denman Van Ness Director July 16, 1998
- - ------------------------------
W. Denman Van Ness
</TABLE>
II-7
<PAGE>
EXHIBIT INDEX
Exhibit
Number Page
4.1 Restated Certificate of Incorporation(1)
4.2 Certificate of Amendment of Restated Certificate of
Incorporation(2)
4.3 Amended and Restated By-Laws(3)
4.4 Stockholder Rights Agreement dated October 27, 1993 by and
between the Company and First Interstate Bank of California
as Rights Agent(4)
4.5 Certificate of Designation of Convertible Preferred Stock,
Series E (5)
4.6 Amended Certificate of Designation of Convertible Preferred
Stock, Series E(2)
4.7 Certificate of Designations of Convertible Preferred Stock,
Series G(6)
4.8 Certificate of Designation of Convertible Preferred Stock,
Series H(7)
4.9 Form of Common Stock Purchase Warrant (Series F Warrants)(2)
4.10 Form of Common Stock Purchase Warrant (Series G Warrants)(6)
4.11 Form of Common Stock Purchase Warrant (Series H Warrants) (7)
4.12 Form of Common Stock Purchase Warrant (Incyte Warrants) (8)
5.1 Opinion of Cahill Gordon & Reindel
10.1 Form of Convertible Preferred Stock Purchase Agreement, dated
as of August 13, 1997, by and between XOMA Corporation and
the purchasers of Series G Preferred Stock and Series H
Preferred Stock (6)
<PAGE>
10.2 First Amendment dated as of January 1, 1998 to Convertible
Preferred Stock Purchase Agreement (9)
10.3 Second Amendment dated as of June 26, 1998 to Convertible
Preferred Stock Purchase Agreement
10.4 Form of Registration Rights Agreement, dated as of August
13, 1997, by and between XOMA Corporation and the
purchasers of Series G Preferred Stock and Series H
Preferred Stock (6)
10.5 Form of Registration Rights Agreement, dated as of July 9,
1998, by and between XOMA Corporation and Incyte
Pharmaceuticals Inc. (8)
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Cahill Gordon & Reindel (included in Exhibit 5.1)
25.1 Power of Attorney (included on signature page to Registration
Statement)
- - ---------------------
(1) Incorporated by reference to the Company's Registration Statement on Form
S-3 (File No. 33-59379).
(2) Incorporated by reference to the Company's Registration Statement on Form
S-3 (File No. 333-07263)
(3) Incorporated by reference to the Company's Registration Statement on Form
S-3 (File No. 33-74982).
(4) Incorporated by reference to the Company's Current Report on Form 8-K dated
October 27, 1993.
(5) Incorporated by reference to the Company's Registration Statement on Form
S-3 (File No. 333-2493).
(6) Incorporated by reference to the Company's Current Report on Form 8-K dated
August 18, 1997.
(7) Incorporated by reference to the Company's Current Report on Form 8-K dated
June 29, 1998.
(8) Incorporated by reference to the Company's Current Report on Form 8-K dated
July 16, 1998.
(9) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarterly period ended March 31, 1998.
-2-
EXHIBIT 5.1
[LETTERHEAD OF CAHILL GORDON & REINDEL]
July 16, 1998
(212) 701-3000
XOMA Corporation
2910 Seventh Street
Berkeley, California 94710
Ladies and Gentlemen:
As counsel for XOMA Corporation (the "Company"), we are representing the
Company in connection with the registration statement on Form S-3 (the
"Registration Statement") filed with the Securities and Exchange Commission (the
"Commission"), relating to the registration under the Securities Act of 1933, as
amended (the "Act"), of 5,500,000 shares (the "Shares") of the Company's Common
Stock, par value $.0005 per share.
We advise you that in our opinion the Shares, when issued in the manner and
for the consideration contemplated by the Registration Statement, will be
validly issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion with the Commission as an
exhibit to the Registration Statement. We also consent to the reference under
the heading "Legal Opinions" in the Registration Statement to our having passed
upon the legal matters referred to above. Our consent to such reference does not
constitute a consent under Section 7 of the Act, as in consenting to such
reference we have not certified any part of the Registration Statement and do
not otherwise come within the categories of persons whose consent is required
under said Section 7 or under the rules and regulations of the Commission
thereunder.
Very truly yours,
CAHILL GORDON & REINDEL
XOMA CORPORATION
Second Amendment
to
Convertible Preferred Stock Purchase Agreement
dated August 13, 1997
This AMENDMENT, dated as of June 26, 1998 (the "Amendment"), to the
Convertible Preferred Stock Purchase Agreement dated August 13, 1997 (the
"Purchase Agreement"), among XOMA Corporation (the "Company") and the entities
who have signed this Amendment, as set forth below (collectively, the
"Purchasers").
W I T N E S S E T H:
WHEREAS, the parties hereto are parties to the Purchase Agreement, pursuant
to which the Purchasers acquired shares of Series G Convertible Preferred Stock
of the Company; and
WHEREAS, the Purchase Agreement provides for an additional closing for the
issue and sale by the Company to the Purchasers of an additional series of
convertible preferred stock of the Company; and
WHEREAS, the parties desire to amend certain provisions of the Purchase
Agreement, effective as of the date of this Agreement.
NOW THEREFORE, the parties agree that the Purchase Agreement is amended as
follows:
1. Defined Terms. Capitalized terms used in this Agreement, unless
otherwise defined herein, have the meanings set forth in the Purchase Agreement.
2. Revised Schedules. The Purchase Agreement is hereby amended by deleting
in their entirety Schedules 2.1(c) and 2.1(t) thereto and inserting in lieu
thereof the corresponding schedules attached hereto.
3. No Other Amendments. Except as specifically amended or supplemented
hereby, (i) the Purchase Agreement shall not be amended and no provisions
thereof shall be waived by any party, and (ii) the Purchase Agreement is hereby
ratified and confirmed in all respects.
<PAGE>
-2-
4. Counterparts. This Amendment may be executed in two or more
counterparts, each of which shall be deemed an original and all of which taken
together shall constitute a single instrument.
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the
date first written above.
XOMA CORPORATION SOUTHBROOK INTERNATIONAL
INVESTMENTS LTD.
By:_________________________ By:_________________________
HBK CAYMAN L.P. HBK OFFSHORE FUND, LTD.
By:_________________________ By:_________________________
HBK INVESTMENTS LTD. MARSHALL CAPITAL MANAGEMENT, INC.
(formerly Proprietary Convertible
Investment Group, Inc.)
By:_________________________ By:_________________________
PINE STREET ASSET BROWN SIMPSON STRATEGIC
MANAGEMENT L.P. GROWTH FUND, L.P.
By:_________________________ By:_________________________
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this Registration Statement on Form S-3 of our report dated
February 3, 1998 included in XOMA Corporation's Form 10-K for the year ended
December 31, 1997, and to all references to our Firm included in this
Registration Statement.
ARTHUR ANDERSEN LLP
San Francisco, California
July 13, 1998
