As filed with the Securities and Exchange Commission on May 2, 2000
Registration No. 333-30370
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1
To
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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XOMA LTD.
(Exact name of registrant as specified in its charter)
Bermuda 52-2154066
(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)
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CHRISTOPHER J. MARGOLIN, ESQ.
XOMA LTD.
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
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Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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> <C>
Common Shares,
par value U.S. $.0005
per share................... 6,395,000(2)(3) $5.96875 $38,170,156.25 $10,077(4)
</TABLE>
(1) Estimated solely for purposes of computing the registration fee pursuant to
Rule 457(c).
(2) Includes a like number of Preference Share Purchase Rights (the "Rights").
Since no separate consideration is paid for the Rights, the registration
fee is included in the fee for the Common Shares.
(3) Pursuant to Rule 416 under the Securities Act of 1933, any additional
Common Shares issued as a result of stock splits, stock dividends or
similar transactions are deemed to be registered herewith.
(4) Previously paid.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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-2-
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The information contained in this prospectus is not complete and may be changed.
This prospectus is not an offer to sell these securities and it is not
soliciting an offer to buy these securities in any state where the offer or sale
is not permitted.
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Prospectus Subject to Completion,
dated May 2, 2000
XOMA Ltd.
6,395,000 Common Shares
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o All of the common shares o Our common shares are listed
offered by this prospectus are on the Nasdaq National Market
being offered by certain of under the symbol "XOMA." The
our shareholders, who will last reported sale price for
receive all of the proceeds. the common shares on May 1,
2000 was US$4 1/4 per share.
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This investment involves a high degree of risk. Consider carefully the
risk factors beginning on page 3 of this prospectus before you invest.
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Neither the SEC nor any state securities commission has approved these
securities or determined that this prospectus is accurate or complete. Any
representation to the contrary is a criminal offense.
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The date of this prospectus is , 2000.
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TABLE OF CONTENTS
Risk Factors............................... 3
Incorporation of Information We File
with the SEC.......................... 10
Disclosure Regarding Forward-Looking
Statements............................ 11
XOMA....................................... 12
Price Range of Common Shares and
Dividend Information.................. 13
Selling Shareholders....................... 14
Description of Share Capital............... 17
Plan of Distribution....................... 21
Legal Opinion.............................. 22
Experts.................................... 22
Where You Can Get More Information......... 22
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RISK FACTORS
You should carefully consider the following factors and other
information in this prospectus before deciding to invest in common shares.
None Of Our Pharmaceutical Products Have Received Regulatory Approval; If We Do
Not Receive Regulatory Approval, We Will Not Be Able To Manufacture And Market
Our Products
Even our most developed pharmaceutical product has yet to complete
final clinical testing. We will be unable to manufacture and market our products
without required regulatory approvals in the United States and other countries.
The United States government and governments of other countries extensively
regulate many aspects of our products, including:
o testing
o manufacturing
o promotion and marketing and
o exporting.
In the United States, the Food and Drug Administration regulates
pharmaceutical products under the Federal Food, Drug, and Cosmetic Act and other
laws, including, in the case of biologics, the Public Health Service Act. At the
present time, we believe that our products will be regulated by the FDA as
biologics. State regulations may also affect our proposed products.
In December 1992, we submitted an investigational new drug application
to the FDA to begin human testing of our NEUPREX(R) product, a
genetically-engineered fragment of a human protein (BPI). In a recent meeting
with members of the FDA, representatives of XOMA and Baxter Healthcare
Corporation, to whom we have licensed worldwide rights to NEUPREX(R) for
treatment of meningococcemia and in all future anti-bacterial and anti-endotoxin
indications, discussed results from the Phase III trial that tested NEUPREX(R)
in pediatric patients with severe meningococcemia (a potentially deadly
bacterial infection principally of children), and senior representatives of the
FDA indicated that the data presented were not sufficient to support the filing
of an application for marketing approval at this time. We and Baxter are
therefore examining ways to supply additional data necessary to proceed with the
filing. If we conduct an additional trial, we cannot assure you that the results
will be adequate for approval. In September 1999, we discontinued patient
enrollment in our Phase III clinical trial testing NEUPREX(R) in trauma patients
with severe blood loss because an independent data safety monitoring board told
us that interim results from the trial did not support continuing the trial. We
have conducted earlier stage clinical trials testing NEUPREX(R) as a treatment
in three additional indications:
o prevention of complications following partial hepatectomy (a type
of major liver surgery)
o treatment of severe infections within the abdomen in combination
with antibiotics and
o treatment of cystic fibrosis patients (whose genetic disorder
predisposes them to recurring bacterial lung infections).
We are currently evaluating this data with Baxter in connection with decisions
to be made regarding future indications. Should we decide to conduct further
trials in these or other indications, we cannot predict that the results will
justify further development.
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In September 1996, XOMA and Genentech, Inc. announced that an
investigational new drug application with the FDA for clinical testing of
anti-CD11a in patients with moderate to severe psoriasis had been filed. We
completed a Phase II efficacy study in Canada in psoriasis patients in late
1998, subsequently received a $2 million milestone payment from Genentech, and
agreed with Genentech to continue collaborative development of the product in
psoriasis through Phase III and to expand the program to include organ
transplant rejection. We have initiated a Phase I/II study of anti-CD11a in
kidney transplant recipients and two Phase III trials of anti-CD11a in
psoriasis.
Our other potential products will also require significant additional
development, including extensive preclinical and clinical testing.
The FDA has substantial discretion in both the product approval process
and manufacturing facility approval process and we cannot predict at what point,
or whether, the FDA will be satisfied with our submissions or whether the FDA
will raise questions which may be material and delay or preclude product
approval or manufacturing facility approval. As we accumulate additional
clinical data, we will submit it to the FDA, which may have a material impact on
the FDA product approval process.
Given that regulatory review is an interactive and continuous process,
we maintain a policy of limiting announcements and comments upon the specific
details of the ongoing regulatory review of our products, subject to our
obligations under the securities laws, until definitive action is taken.
We Expect To Have An Important Meeting With The FDA Which Could Affect Our Share
Price
We expect to have an important meeting with the Food and Drug
Administration to review data from our Phase III clinical trial of our lead
product, NEUPREX(R), in its first indication to reach this stage,
meningococcemia. The outcome of this review could significantly impact the price
and trading volume of our common shares.
Because All Of Our Products Are Still In Development, We Will Require
Substantial Funds To Continue; We Cannot Be Certain That Funds Will Be Available
And, If Not Available, We May Have To Take Actions Which Could Adversely Affect
Your Rights
If adequate funds are not available, we may have to dilute or otherwise
adversely affect the rights of existing shareholders, curtail or cease
operations or, in extreme circumstances, file for bankruptcy protection. We have
spent, and we expect to continue to spend, substantial funds in connection with:
o research and development relating to our products and production
technologies
o scale-up of our production capabilities
o extensive human clinical trials and
o protection of our intellectual property.
We believe we have enough cash (including interest income) to meet our currently
anticipated needs for operating expenses, working capital, equipment
acquisitions and current research projects for approximately two years. We
continue to evaluate strategic alliances, potential partnerships and financing
arrangements which would further strengthen our competitive position and provide
additional funding. However, we cannot assure you that:
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o operations will generate meaningful funds
o additional agreements for product development funding can be
reached
o strategic alliances can be negotiated or
o adequate additional financing will be available for us to finance
our own development on acceptable terms, if at all.
Because All Of Our Products Are Still In Development, We Have Sustained Losses
In The Past And We Expect To Sustain Losses In The Future
We have experienced significant losses and, as of December 31, 1999, we
had an accumulated deficit of approximately $450.2 million.
For the years ended December 31, 1998 and December 31, 1999, we had net
losses of approximately $47.2 million, or $1.16 per common share (basic and
diluted), and $45.8 million, or $0.87 per common share (basic and diluted),
respectively. We expect to incur additional losses in the future. Our ability to
make profits is dependent in large part on obtaining regulatory approval for our
products and entering into agreements for product development and
commercialization. Our ability to fund our ongoing operations is dependent on
the foregoing factors and on our ability to secure additional funds. We cannot
assure you that we will ever make a profit or that cash flow from future
operations will be sufficient to meet our needs.
Because Of Our Limited Experience, If The Parties To Whom We Grant Marketing
Rights Do Not Have Effective Marketing Capabilities, We May Not Be Able To
Market Our Products
Because all of our products are still in development, our marketing
experience and expertise are limited. Consequently, we may be dependent to a
large extent upon the marketing capabilities of third parties to whom we grant
marketing rights. In January 2000, we licensed the worldwide rights to
NEUPREX(R) for treatment of meningococcemia and all future anti-bacterial and
anti-endotoxin indications to Baxter Healthcare Corporation. In June 1999, we
licensed certain genetically-engineered fragments of BPI to Allergan Inc. to use
in combination with other anti-infectives in products to treat bacterial
ophthalmic infections. We cannot assure you that either Baxter or Allergan will
successfully market the products we have licensed to them. As of the date of
this prospectus, we have not entered into any other marketing agreements
regarding our BPI-derived products. Although we continue to evaluate strategic
alliances and potential partnerships, we cannot predict whether or when any such
alliances or partnerships will be entered into.
If Any Of Our Products Receives Regulatory Approval, We May Not Be Able To
Increase Existing Or Acquire New Manufacturing Capacity Sufficient To Meet
Market Demand
We have never commercially introduced any pharmaceutical products. We
cannot assure you that the capacity of our existing manufacturing facilities can
be increased to produce sufficient quantities of our products to meet market
demand. Also, if we need additional manufacturing facilities to meet market
demand, we cannot assure you that we will successfully obtain those facilities.
If Our Patent Protection For Our Principal Products Is Not Enforceable, We Will
Not Realize Our Profit Potential
Because of the length of time and the expense associated with bringing
new products to the marketplace, we hold and are in the process of applying for
a number of patents in the United States and abroad to
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protect our 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 with
respect to biotechnology patents. Legal considerations surrounding the validity
of biotechnology patents continue to be in transition, and we cannot assure you
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, we cannot assure
you as to:
o the degree and range of protection any patents will afford
against competitors with similar technologies
o if and when patents will issue
o whether or not others will obtain patents claiming aspects
similar to those covered by our patent applications or
o the extent to which we will be successful in avoiding any patents
granted to others.
The Patent Office has issued and/or allowed 48 patents to us related to
our BPI-based products, including novel compositions, their manufacture,
formulation, assay and use. In addition, we are the exclusive licensee of
BPI-related patents and applications owned by New York University and Incyte
Pharmaceuticals Inc. The Patent Office has also issued eight patents to us
related to our bacterial expression technology.
If certain patents issued to others are upheld or if certain patent
applications filed by others issue and are upheld, we may require licenses from
others in order to develop and commercialize certain potential products
incorporating our technology. We cannot assure you that these licenses, if
required, will be available on acceptable terms.
Due to the uncertainties regarding biotechnology patents, we also have
relied and will continue to rely upon trade secrets, know-how and continuing
technological advancement to develop and maintain our competitive position. All
of our employees have signed confidentiality agreements under which they have
agreed not to use or disclose any of our proprietary information. Research and
development contracts and relationships between us and our scientific
consultants and potential customers provide access to aspects of our know-how
that are protected generally under confidentiality agreements. We cannot assure
you that all confidentiality agreements will be honored or are enforceable.
Other Companies May Render Some Or All Of Our Products Noncompetitive Or
Obsolete
We cannot assure you that developments by others will not render our
products or technologies obsolete or uncompetitive. Technologies developed and
utilized by the biotechnology and pharmaceutical industries are continuously and
substantially changing. Competition in the areas of genetically-engineered
DNA-based and 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 advance in these fields. Many of these competitors may
be able to develop products and processes competitive with or superior to our
own for many reasons, including that they may have:
o significantly greater financial resources
o larger research and development and marketing staffs
o larger production facilities
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o entered into arrangements with, or acquired, biotechnology
companies to enhance their capabilities or
o extensive experience in preclinical testing and human clinical
trials.
Without limiting the foregoing, XOMA is aware that Biogen Inc. has
initiated Phase III testing of its Amevive(TM) product in chronic plaque
psoriasis, Immunex Corp. may be testing its rheumatoid arthritis drug in
psoriasis and other companies may be developing monoclonal antibody or other
products for treatment of inflammatory skin disorders.
These factors may enable others to develop products and processes
competitive with or superior to our own. 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
interested in the commercial value of their work and may become more aggressive
in seeking patent protection and licensing arrangements.
It is possible that one or more other companies may be developing one
or more products based on BPI, and we cannot assure you that these product(s)
will not prove to be more effective than NEUPREX(R).
If We Do Business Internationally, We Will Be Subject To Additional Political,
Economic and Regulatory Uncertainties
We cannot assure you that we will be able to successfully operate in
any foreign market. We believe that, because the pharmaceutical industry is
global in nature, international activities will be a significant part of our
future business activities and that, when and if we are able to generate income,
a substantial portion of that income will be derived from product sales and
other activities outside the United States. Foreign regulatory agencies often
establish standards different from those in the United States, and an inability
to obtain foreign regulatory approvals on a timely basis could have an adverse
effect on our business. International operations may be limited or disrupted by:
o imposition of government controls
o export license requirements
o political or economic instability
o trade restrictions
o changes in tariffs
o restrictions on repatriating profits
o taxation and
o difficulties in staffing and managing international operations.
Also, our business may be adversely affected by fluctuations in
currency exchange rates.
Our Research, Testing And Manufacturing Operations May Be Disrupted By The Year
2000 Issue
We have not experienced any problems with our computer systems being
unable to recognize appropriate dates related to the year 2000. We are also not
aware of any material problems with our clients and vendors. While we cannot
assure you that we will not experience any Year 2000 related problems in the
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future, we do not anticipate incurring material expenses or experiencing any
material operational disruptions as a result of any year 2000 issues.
Because We Are A Relatively Small Biopharmaceutical Company With Limited
Resources, We May Not Be Able To Attract And Retain Qualified Personnel, And The
Loss Of Key Personnel Could Delay Or Prevent Achieving Our Objectives
Our success in developing marketable products and achieving a
competitive position will depend, in part, on our ability to attract and retain
qualified scientific and management personnel, particularly in areas requiring
specific technical, scientific or medical expertise. There is intense
competition for such personnel, and we cannot assure you that we will be able to
attract or retain them. Our research, product development and business efforts
would be adversely affected by the loss of a significant group of key members of
our scientific or management staff.
Because We Engage In Human Testing, We Are Exposed To An Increased Risk Of
Product Liability Claims, Which Would Have An Adverse Effect On Our Business
The testing and marketing of medical products entails an inherent risk
of allegations of product liability. We believe that we currently have adequate
levels of insurance for our clinical trials. We will seek to obtain additional
insurance, if needed, if and when our products are commercialized; however, we
cannot assure you that adequate insurance coverage will be available or be
available at acceptable costs or that a product liability claim would not
materially adversely affect our business.
Our Shareholder Rights Agreement Or Bye-laws May Prevent Transactions That Could
Be Beneficial To Our Shareholders
Our shareholder rights agreement could make it considerably more
difficult or costly for a person or group to acquire control of XOMA in a
transaction that our board of directors opposes.
Our bye-laws:
o require certain procedures to be followed and time periods to be
met for any shareholder to propose matters to be considered at
annual meetings of shareholders, including nominating directors
for election at those meetings;
o authorize our board of directors to issue up to 1,000,000
preference shares without shareholder approval and to set the
rights, preferences and other designations, including voting
rights, of those shares as the board of directors may determine;
and
o contain provisions, similar to those contained in the Delaware
General Corporation Law, that may make business combinations with
interested shareholders more difficult.
These provisions, alone or in combination with each other, may
discourage transactions involving actual or potential changes of control,
including transactions that otherwise could involve payment of a premium over
prevailing market prices to holders of common shares, or could limit the ability
of shareholders to approve transactions that they may deem to be in their best
interests.
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Because We Have No History Of Profitability And Because The Biotechnology Sector
Has Been Characterized By Highly Volatile Stock Prices, Announcements We Make
And General Market Conditions For Biotechnology Stocks Could Result In A Sudden
Change In The Value Of Our Stock
As a biopharmaceutical company, we have experienced significant
volatility in our common shares. Fluctuations in our operating results and
general market conditions for biotechnology stocks could have a significant
impact on the volatility of our common share price. From April 1, 1999 through
March 31, 2000, our share price has ranged from a high of $16 to a low of $2.
Factors contributing to such volatility include:
o results of preclinical studies and clinical trials,
o evidence of the safety or efficacy of our products,
o announcements of new collaborations,
o failure to enter into collaborations,
o our funding requirements and the terms of our financing
arrangements,
o announcements of technological innovations or new indications for
our therapeutic products,
o government regulations,
o developments in patent or other proprietary rights,
o market speculation regarding any of the foregoing, and
o announcements regarding other participants in the biotechnology
and pharmaceutical industries.
If You Were To Obtain A Judgment Against Us, It May Be Difficult To Enforce
Against Us Because We Are A Foreign Entity
We are a Bermuda company. All or a substantial portion of our assets
may be located outside the United States. As a result, it may be difficult for
investors to enforce in United States courts judgments obtained against us. We
have irrevocably agreed that we may be served with process with respect to
actions based on offers and sales of securities made hereby in the United States
by serving Christopher J. Margolin, c/o XOMA Ltd., 2910 Seventh Street,
Berkeley, California 94710, our United States agent appointed for that purpose.
XOMA has been advised by its Bermuda counsel, Conyers Dill & Pearman, that there
is doubt as to whether Bermuda courts would enforce judgments of United States
courts obtained in (a) actions against such persons or XOMA that are predicated
upon the civil liability provisions of the Securities Act or (b) original
actions brought in Bermuda against XOMA or such persons predicated upon the
Securities Act. There is no treaty in effect between the United States and
Bermuda providing for such enforcement, and there are grounds upon which Bermuda
courts may not enforce judgments of United States courts. Certain remedies
available under the United States federal securities laws may not be allowed in
Bermuda courts as contrary to that nation's policy.
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INCORPORATION OF INFORMATION WE FILE WITH THE SEC
The following documents filed by XOMA with the SEC pursuant to the
Securities Exchange Act are "incorporated by reference" in this prospectus,
which means we can disclose important information to you by referring you to
these documents and they are considered to be a part of this prospectus:
(1) annual report on Form 10-K for the fiscal year ended December
31, 1999, as amended by an amendment on Form 10-K/A filed on April 25,
2000 (file no. 0-14710);
(2) current report on Form 8-K dated January 24, 2000 filed on
January 25, 2000, as amended by an amendment on Form 8-K/A dated and
filed on February 3, 2000 (file no. 0-14710);
(3) current report on Form 8-K dated February 11, 2000 filed on
February 14, 2000 (file no. 0-14710);
(4) current report on Form 8-K dated and filed on April 25, 2000
(file no. 0-14710); and
(5) the description of the common shares in the registration
statement on Form 8-A dated and filed on May 21, 1999 under Section 12
of the Securities Exchange Act, including any amendment or report for
the purpose of updating such description (registration no. 333-68045).
All documents filed by XOMA with the SEC pursuant to Section 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act after the date of this
prospectus and before all of the common shares offered by this prospectus have
been sold are deemed to be incorporated by reference in, and to be part of, this
prospectus from the date any such document is filed.
Any statements contained in a document incorporated by reference in
this prospectus are 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 is not deemed to constitute a part of this prospectus
except as so modified or superseded.
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DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements made in this prospectus are forward-looking in
nature, including those relating to the sufficiency of our cash position, the
FDA regulatory process, timing and results of clinical trials and other aspects
of product development, strategic collaborative relationships and other
statements that are not historical facts. The occurrence of the events
described, and the achievement of the intended results, depend on many events,
some or all of which are not predictable or not within our control. Actual
results may differ materially from those anticipated in any forward-looking
statements. Many risks and uncertainties are inherent in the biopharmaceutical
industry. Others are more specific to our business. Many of the significant
risks related to our business are described in this prospectus. These include,
among others, risks associated with technology and product development,
sufficiency and availability of funds, marketing risks, patent and intellectual
property matters, regulatory and manufacturing issues and risks associated with
competition from other companies. Many of these risks are discussed further in
"Risk Factors."
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We have not authorized any dealer, salesperson or other person to give
you written information other than this prospectus or to make representations as
to matters not stated in this prospectus. You must not rely on unauthorized
information. This prospectus is not an offer to sell these securities or our
solicitation of your offer to buy the securities in any jurisdiction where that
would not be permitted or legal. Neither the delivery of this prospectus nor any
sales made hereunder after the date of this prospectus should imply that the
information contained in this prospectus or the affairs of XOMA have not changed
since the date of this prospectus.
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XOMA
XOMA is a biopharmaceutical company developing products to treat
bacterial and fungal infections, infectious complications (such as those that
may follow surgery), and immunologic and inflammatory disorders. Our current
product development programs include:
o NEUPREX(R) (rBPI21), a genetically engineered modified fragment
of a human protein known as BPI and XOMA's lead BPI-derived
product. The product completed a Phase III efficacy clinical
trial in 1999 in one indication and has been in various earlier
phase clinical trials in four additional indications. Further
development of this product will continue under a licensing
agreement with Baxter Healthcare Corporation.
o Anti-CD11a, a humanized monoclonal antibody product being
developed in collaboration with Genentech, Inc. The anti-CD11a
product has completed several Phase I clinical studies, one Phase
II study and is in one Phase I/II trial in kidney transplant
recipients and two Phase III trials in psoriasis patients.
o Ophthalmic anti-infective products, including combinations of
rBPI and antibiotics that are being developed under a licensing
agreement with Allergan Inc.
o Mycoprex(TM), a fungicidal compound derived from BPI that is
currently in preclinical product development. It is initially
targeted at systemic fungal infections. XOMA is seeking one or
more partners for clinical development and commercialization of
this product.
o ING-1, a high-affinity antibody to an antigen expressed on
epithelial cell cancers (breast, colorectal, prostate and others)
that destroys cancer cells by recruiting the patient's own immune
system. XOMA has recently accelerated its internal development
program for ING-1.
o Genimune(TM), a product developed using XOMA's proprietary
targeted gelonin fusion technology. The product delivers a
proprietary, genetically-engineered cytotoxin called rGelonin
specifically to CD5-positive cells. The CD5 antigen is expressed
on mature T cells and some B cells, but not stem cells or other
tissues. The product may treat cancers such as T and B-cell
lymphomas and chronic lymphocytic leukemia, as well as autoimmune
diseases such as rheumatoid arthritis. XOMA is seeking one or
more partners for clinical development and commercialization of
the product and plans to outlicense the technology.
Management believes XOMA's cash position and resulting interest income
are sufficient to finance XOMA's currently anticipated needs for operating
expenses, working capital, equipment acquisitions and current research projects
for approximately two years. XOMA continues to evaluate strategic alliances,
potential partnerships and financing arrangements which would further strengthen
its competitive position and provide additional funding. XOMA cannot predict
whether or when any such alliances, partnerships or arrangements will be
consummated or whether additional funding will be available when required and on
terms acceptable to XOMA.
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PRICE RANGE OF COMMON SHARES AND DIVIDEND INFORMATION
XOMA's common shares (such common shares and the common stock of our
predecessor Delaware corporation are referred to in this prospectus as the
common shares) trade 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 common shares on the Nasdaq National Market for the periods
indicated:
High Low
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1998:
First Quarter $6 1/2 $4 5/16
Second Quarter 6 4 1/4
Third Quarter 5 1 27/32
Fourth Quarter 5 1 13/16
1999:
First Quarter $4 3/16 $2 13/16
Second Quarter 6 3/4 2 1/2
Third Quarter 8 2 1/32
Fourth Quarter 3 3/4 2
2000:
First Quarter $16 $2 3/4
Second Quarter (through May 1) 10 1/8 3 1/4
On May 1, 2000 the last reported sale price of the common shares as
reported on the Nasdaq National Market was US$4 1/4 per share. As of April 25,
2000, there were approximately 3,832 record holders of XOMA's common shares.
XOMA has not paid dividends on its common equity. XOMA currently does
not intend to pay dividends and intends to retain any earnings for use in its
business and the financing of its capital requirements for the foreseeable
future. The payment of any future cash dividends on XOMA's common shares will
necessarily be dependent upon the earnings and financial needs of XOMA, along
with applicable legal and contractual restrictions.
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SELLING SHAREHOLDERS
In February 2000, we entered into a financing transaction, which we
previously announced, involving the issuance of 6,145,000 common shares to the
28 investors listed below as selling shareholders for a purchase price of $5.00
per share. We also issued warrants to purchase an aggregate of 250,000 common
shares to Arnhold and S. Bleichroeder, Inc. and Sutro & Co. Incorporated for
acting as placement agents in this transaction.
The following table sets forth certain information regarding the
ownership of common shares by the selling shareholders as of April 25, 2000, and
the number of common shares covered by this prospectus:
<TABLE>
<CAPTION>
Ownership
Ownership of Common Shares
of Common Shares after the Offering (Assuming all
prior to the Offering Shares Offered are sold)
--------------------- ------------------------
Number
Name of Number of Shares Number of Percent
Selling Shareholder of Shares Offered Shares of Class
------------------- --------- ------- ------ --------
<S> <C> <C> <C> <C>
Capital Research & Management
Company 2,000,000 2,000,000 0 0%
Bayerische Landesbank Girozentrale
1,000,000 1,000,000 0 0%
Aries Master Fund 515,033 (1) 515,033 0 0%
Aries Domestic Fund, LP 243,857 (1) 243,857 0 0%
Aries Domestic Fund II, LP 41,110 (1) 41,110 0 0%
S.A.C. Capital Associates, LLC 650,000 650,000 0 0%
Philip J. Hempleman Retained
Annuity Account 230,000 (2) 230,000 0 0%
Spencer Hempleman Trust Account 125,000 (3) 125,000 0 0%
Carter Hempleman Trust Account 125,000 (3) 125,000 0 0%
Kirk Balzer 20,000 20,000 0 0%
Harpel Partners, LP 109,844 109,844 0 0%
Harpel Select Growth 43,517 43,517 0 0%
Harpel Family Partnership 30,316 30,316 0 0%
14
<PAGE>
Ownership of Common Shares
of Common Shares after the Offering (Assuming all
prior to the Offering Shares Offered are sold)
--------------------- ------------------------
Number
Name of Number of Shares Number of Percent
Selling Shareholder of Shares Offered Shares of Class
------------------- --------- ------- ------ --------
Harpel International 16,323 16,323 0 0%
Ziff Asset Management, L.P. 400,000 400,000 0 0%
JMG Capital Partners,L.P. 75,000 (4) 75,000 0 0%
Triton Capital Investments, Ltd. 75,000 (4) 75,000 0 0%
Clarion Capital Corporation 50,000 (5) 50,000 0 0%
Clarion Partners, L.P. 36,000 (5) 36,000 0 0%
Clarion Offshore Fund Ltd. 14,000 (5) 14,000 0 0%
DCF Partners L.P. 550,100 (6) 50,000 500,100 *
DCF Life Sciences Fund Ltd. 300,000 (6) 50,000 250,000 *
Perception Life Sciences, L.P. 75,000 75,000 0 0%
Joseph E. Edelman 45,000 45,000 0 0%
Apollo Medical Partners 158,500 (7) 60,000 98,500 *
Brandon Fradd 57,500 15,000 42,500 *
Doddsley Capital Corp. 30,000 (8) 30,000 0 0%
DeSpain Coby 20,000 20,000 0 0%
Arnhold and S. Bleichroeder, Inc. 241,041 (9) 181,041 60,000 *
Sutro & Co. Incorporated 143,959 (10) 68,959 75,000 *
</TABLE>
- ----------------------------
(*) Indicates less than 1%.
(1) Paramount Capital Asset Management, Inc., of which Lindsay A. Rosenwald,
M.D. is the sole stockholder, is the General Partner of each of the Aries
Domestic Fund, L.P. ("Aries I") and the Aries Domestic Fund II, L.P.
("Aries II") and also serves as the investment manager to The Aries Master
15
<PAGE>
Fund, a Cayman Island exempted company (collectively with Aries I and Aries
II, the "Aries Funds"). Dr. Rosenwald may be deemed to have voting and
investment control over the securities of the issuer owned by the Aries
Funds under Rule 16a-1(a)(1) of the Securities Exchange Act of 1934.
Paramount Capital and Dr. Rosenwald disclaim beneficial ownership of the
securities held by the Aries Funds, except to the extent of their pecuniary
interest therein, if any.
(2) Mr. Philip J. Hempleman has dispositive and voting power over these shares.
(3) Ms. Colleen Hempleman, as trustee, has dispostive and voting power over
these shares.
(4) Mr. Jonathan Glaser, as member manager of JMG Capital Partners, L.P. and
Triton Capital Investments, Ltd., has voting and investment control over
these shares.
(5) Mr. Morton A. Cohen has sole voting and investment power for each of
Clarion Capital Corporation, Clarion Offshore Fund Ltd. and Clarion
Partners, L.P. Mr. Cohen is Chairman of Clarion Capital Corporation and the
investment manager for Clarion Offshore Fund Ltd. and Clarion Partners,
L.P.
(6) Mr. Douglas Floren, Managing Partner of DCF Partners, L.P. and Managing
Member of DCF Life Sciences Fund L.P., may be deemed to have dispositive
and voting power over these shares.
(7) Mr. Brandon Fradd has dispostive and voting power over these shares.
(8) Mr. Richard Solomon has dispositive and voting power over these shares.
Does not include 151,222 shares over which Mr. Solomon has direct
dispositive and voting power, 33,000 shares over which his wife has
dispositive and voting power and a total of 6,000 shares held in two
custodial accounts for the benefit of his children for which Mr. Solomon
acts as custodian.
(9) Consists of shares issuable upon exercise of warrants. Mr. Stanford S.
Warshawsky, the co-President of Arnhold and S. Bleichroeder, Inc., may be
deemed to have dispositive and voting power over these shares.
(10) Consists of shares issuable upon exercise of warrants. Mr. Thomas
Weinberger, the President of Sutro & Co. Incorporated, may be deemed to
have dispositive and voting power over these shares.
16
<PAGE>
DESCRIPTION OF SHARE CAPITAL
The following statements with respect to XOMA's share capital are
subject to the detailed provisions of XOMA's memorandum of continuance and
bye-laws. These statements do not purport to be complete and, while XOMA
believes the descriptions of the material provisions of the memorandum of
continuance and the bye-laws incorporated by reference are accurate statements
with respect to such material provisions, such statements are subject to the
detailed provisions in the memorandum of continuance and the bye-laws, to which
reference is hereby made for a full description of such provisions.
COMMON SHARES
General
The memorandum of continuance and the bye-laws provide that XOMA's
authorized common share capital is limited to 135,000,000 common shares, par
value U.S. $.0005 per share. As of April 25, 2000, there were 65,384,471 common
shares outstanding.
Voting
The holders of common shares are entitled to one vote per share. All
actions submitted to a vote of shareholders shall be voted on by the holders of
common shares, voting together as a single class (together with the Series A
preference shares (as described below), if any), except as provided by law.
Dividends
Holders of common shares are entitled to participate, on a share for
share basis, with the holders of any other common shares outstanding, with
respect to any dividends declared by the board of directors of XOMA, subject to
the rights of holders of preference shares. Dividends will generally be payable
in U.S. dollars. XOMA has not paid cash dividends on the common shares. XOMA
currently does not intend to pay dividends and intends to retain any earnings of
XOMA for use in its business and the financing of its capital requirements for
the foreseeable future. The payment of any future cash dividends on the common
shares is necessarily dependent upon its earnings and financial needs of XOMA,
along with applicable legal and contractual restrictions.
Liquidation
On a liquidation of XOMA, holders of common shares will be entitled to
receive any assets remaining after the payment of XOMA's debts and the expenses
of the liquidation, subject to such special rights as may be attached to any
other class of shares.
Redemption
The common shares are not subject to redemption either by XOMA or the
holder thereof.
Variation Of Rights
Under XOMA's bye-laws, if at any time XOMA's share capital is divided
into different classes of shares, the rights attached to any class (unless
otherwise provided by the terms of the issue of the shares of that class) may be
varied with the consent in writing of the holders of a majority of the issued
shares of that class either in writing or with the sanction of a resolution
passed at a separate general meeting.
17
<PAGE>
PREFERENCE SHARES
General
Under its memorandum of continuance and bye-laws, XOMA has the
authority to issue 1,000,000 preference shares, par value U.S. $.05 per share.
Of these, 650,000 preference shares have been designated Series A Cumulative
Preference Shares and 7,500 preference shares have been designated Convertible
Preference Shares, Series B. Under the bye-laws, subject to the special rights
attaching to any class of shares of XOMA not being varied and to any resolution
approved by the holders of 75% of the issued shares entitled to vote in respect
thereof, the board of directors of XOMA may establish one or more classes or
series of preference shares having the number of shares, designations, relative
voting rights, dividend rates, liquidation and other rights, preferences and
limitations that the board of directors fixes without any shareholder approval.
Preference Share Purchase Rights
Pursuant to XOMA's shareholder rights agreement XOMA issued one
preference share purchase right (a right) for each outstanding common share.
Each right entitles the holder to purchase from XOMA a unit consisting of one
one-hundredth of a share (a unit) of Series A preference shares at a cash
exercise price of $30.00 per unit, subject to adjustment.
The rights are attached to all outstanding common shares, including the
common shares offered hereby. The rights will separate from the common shares
and will be distributed to holders of common shares 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 shares then outstanding (the date of said
announcement being referred to as the share 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 XOMA that any person is an adverse
person (the earliest of such dates, the distribution date).
The board of directors of XOMA 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 common shares and a determination that
(a) such beneficial ownership by such person is intended to cause or is
reasonably likely to cause XOMA to repurchase the common shares owned by such
person or to cause XOMA to enter into other transactions not in the best
long-term interests of XOMA or (b) such beneficial ownership is reasonably
likely to cause a material adverse impact on the business or prospects of XOMA.
The rights are not exercisable until the distribution date and will expire on
December 31, 2002, unless previously redeemed or exchanged by XOMA.
In the event that a person becomes an acquiring person or the board of
directors of XOMA determines that a person is an adverse person, each holder of
a right will thereafter have the right to receive upon exercise that number of
units of Series A preference shares having a market value of two times the
exercise price of the rights. If at any time following the share acquisition
date, (i) XOMA consolidates with, or merges or amalgamates with and into, any
person, and XOMA is not the surviving corporation; (ii) any person consolidates
or amalgamates with XOMA, or merges or amalgamates with and into XOMA and XOMA
is the continuing or surviving corporation of such transaction and, in
connection with such transaction, all or part of the common shares are changed
into or exchanged for other securities of any other person or cash or any other
property, or (iii) 50% or more of XOMA's assets are sold or otherwise
transferred, provision shall be made so that each holder of a right shall
thereafter have the right (a merger right) to receive, upon exercise, common
shares 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.
18
<PAGE>
At any time after a person becomes an acquiring person or the board of
directors of XOMA determines that a person is an adverse person, the board of
directors of XOMA may exchange all or any part of the then outstanding and
exercisable rights for common shares or units of Series A preference shares at
an exchange ratio of one common share or one unit of Series A preference shares
per right. Notwithstanding the foregoing, the board of directors of XOMA
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 shares then
outstanding.
The rights may be redeemed in whole, but not in part, at a price of
U.S. $.001 per right by the board of directors of XOMA at any time prior to the
date on which a person is declared to be an adverse person, the tenth business
day after the share acquisition date, the occurrence of an event giving rise to
the merger right or the expiration date of the rights agreement.
The Series A Preference Shares
There are no Series A preference shares outstanding. Pursuant to the
rights of the Series A preference shares, subject to the rights of holders of
any shares of any series of preference shares ranking prior and superior, the
holders of Series A preference shares are entitled to receive, when, as and if
declared by the board of directors of XOMA 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, commencing on the first dividend
payment date after the first issuance of a share or fraction of a share of
Series A preference shares, 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 common shares, declared on the
common shares since the immediately preceding dividend payment date, or, with
respect to the first dividend payment date, since the first issuance of Series A
preference shares.
In addition to any other voting rights required by law, holders of
Series A preference shares shall have the right to vote on all matters submitted
to a vote of shareholders of XOMA with each share of Series A preference shares
entitled to 100 votes. Except as otherwise provided by law, holders of Series A
preference shares and holders of common shares shall vote together as one class
on all matters submitted to a vote of shareholders of XOMA.
Unless otherwise provided in the rights attaching to a subsequently
designated series of preference shares of XOMA, the Series A preference shares
shall rank junior to any other series of preference shares as to the payment of
dividends and distribution of assets on liquidation, dissolution or winding-up
and shall rank senior to the common shares. Upon any liquidation, dissolution or
winding-up of XOMA, no distributions shall be made to holders of shares ranking
junior to the Series A preference shares unless, prior thereto, the holders of
Series A preference shares 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 shares or to the holders of shares
ranking on parity with the Series A preference shares, except distributions made
ratably on the Series A preference shares and all other such parity shares in
proportion to the total amount to which the holders of all such shares are
entitled upon such liquidation, dissolution or winding-up.
If XOMA shall enter into any consolidation, amalgamation, merger,
combination or other transaction in which common shares are exchanged for or
changed into cash, other securities and/or any other property, then any Series A
preference shares 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 common share is changed or exchanged.
The Series A preference shares shall not be redeemable.
19
<PAGE>
The Series B Preference Shares
There are no Series B preference shares outstanding. The 7,500 Series B
preference shares have been designated for issuance upon conversion of the
convertible subordinated loans to XOMA made and to be made by Genentech in
connection with the funding of the XOMA's development costs for hull24. Such
loans are and will be convertible into Series B preference shares upon the
occurrence of certain events relating to certain regulatory approvals, payment
defaults, prepayments and other circumstances. Pursuant to the rights of the
Series B preference shares, the holders of Series B preference shares will not
be entitled to receive any dividends on the Series B preference shares.
The Series B preference shares will rank senior with respect to rights
on liquidation, winding-up and dissolution of XOMA to all classes of common
shares. Upon any voluntary or involuntary liquidation, dissolution or winding-up
of XOMA, holders of Series B preference shares will be entitled to receive
$10,000 per share of Series B preference shares before any distribution is made
on the common shares. The holders of Series B preference shares will have no
voting rights, except as required under Bermuda law.
The holders of Series B preference shares will have the right to
convert Series B preference shares into common shares at a conversion price
equal to the current market price of the common shares (determined as provided
below). The current market price will be determined (a) for Series B preference
shares 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 Series B preference shares 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
Series B preference shares.
The Series B preference shares will be automatically converted into
common shares 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.
XOMA will have the right, at any time and from time to time, to redeem
any or all Series B preference shares for cash in an amount equal to the
conversion price multiplied by the number of common shares into which each such
share of Series B preference shares would then be convertible.
WARRANTS
XOMA issued 485,879 common stock purchase warrants in August 1997. Each
1997 warrant outstanding entitles the holder thereof to purchase one common
share, subject to anti-dilution adjustments. A holder may exercise the 1997
warrants at an exercise price of $10.00 per share on or before August 14, 2000.
XOMA issued 618,681 common stock purchase warrants in June 1998. Each
1998 warrant outstanding entitles the holder thereof to purchase one common
share, subject to anti-dilution adjustments. A holder may exercise the 1998
warrants at an exercise price of $7.00 per share on or before June 26, 2001.
XOMA issued 250,000 common stock purchase warrants to Incyte in July
1998. Each Incyte warrant outstanding entitles the holder thereof to purchase
one common share, subject to anti-dilution adjustments. A holder may exercise
the Incyte warrants at an exercise price of $6.00 per share on or before July 9,
2008 or earlier upon the related license becoming fully paid up.
XOMA issued 379,000 warrants to purchase common shares in January 1999
and March 1999, of which 205,000 remain outstanding. Each January and March 1999
warrant entitles the holder thereof to purchase one common share, subject to
anti-dilution adjustments. A holder may exercise the January and March 1999
warrants at an exercise price of $5.85008 per share on or before January 29,
2004.
20
<PAGE>
XOMA issued 150,000 warrants to purchase common shares in July 1999.
Each July 1999 warrant entitles the holder thereof to purchase one common share,
subject to anti-dilution adjustments. A holder may exercise the July 1999
warrants at an exercise price of $5.75 per share on or before July 21, 2004.
XOMA issued 250,000 warrants to purchase common shares in February
2000. Each 2000 warrant entitles the holder thereof to purchase one common
share, subject to anti-dilution adjustments. A holder may exercise the 2000
warrants at an exercise price of $5.00 per share on or before February 11, 2005.
None of the warrants described above have been registered under the
Securities Act and none may be transferred except pursuant to an effective
registration statement under the Securities Act or pursuant to an exception from
registration thereunder. Additionally, all of the warrants contain certain
restrictions on their transfer. XOMA is not obligated and does not intend to
register the warrants under the Securities Act.
PLAN OF DISTRIBUTION
Any or all of the common shares being offered by this prospectus may be
sold from time to time to purchasers directly by any selling shareholder or by
pledgees, donees, transferees or other successors in interest. Alternatively,
any selling shareholder may from time to time offer the common shares through
underwriters, dealers or agents who may receive compensation in the form of
underwriting discounts, concessions or commissions from such selling shareholder
and/or the purchasers of common shares for whom they may act as agent. Any such
selling shareholder, and any such underwriters, dealers or agents that
participate in the distribution of common shares, may be deemed to be
underwriters, and any profit on the sale of the common shares 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 common
shares may be so offered or sold in the open market, on the Nasdaq National
Market, in privately negotiated transactions, in an underwritten 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 shareholders, the number of common
shares to be sold, the purchase price, the 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. These and other matters may also be addressed in one or more
post-effective amendments to the registration statement of which this prospectus
is a part. XOMA will receive no proceeds from the sale by any selling
shareholder of the common shares offered by this prospectus.
In connection with distributions of the common shares, any selling
shareholder may enter into hedging transactions with broker-dealers and the
broker-dealers may engage in short sales of the common shares in the course of
hedging the positions they assume with such selling shareholder. Any selling
shareholder also may sell the common shares short and deliver the common shares
to close out such short positions. Any selling shareholder also may enter into
option or other transactions with broker-dealers that involve the delivery of
the common shares to the broker-dealers, which may then resell or otherwise
transfer such common shares. Any selling shareholder also may loan or pledge the
common shares to a broker-dealer and the broker-dealer may sell the common
shares so loaned or upon a default may sell or otherwise transfer the pledged
common shares.
All expenses incurred by XOMA in complying with the registration rights
granted to the selling shareholders pursuant to which the registration statement
to which this prospectus relates has been filed, estimated to be approximately
$115,000, will be borne by XOMA. As and when XOMA is required to update this
prospectus, it may incur additional expenses in excess of this estimated amount.
Any common shares offered by this prospectus that qualify for sale
pursuant to Rule 144 under the Securities Act may be sold under such rule rather
than pursuant to this prospectus.
21
<PAGE>
LEGAL OPINION
The validity of the common shares to which this prospectus relates has
been passed upon for XOMA by Conyers Dill & Pearman, located in Hamilton,
Bermuda.
EXPERTS
The consolidated financial statements of XOMA Ltd. at December 31, 1998
and 1999 and for the years then ended, appearing in XOMA Ltd.'s annual report
(Form 10-K), as amended, for the year ended December 31, 1999 have been audited
by Ernst & Young LLP, independent auditors, as set forth in their report thereon
included therein and incorporated herein by reference. Such consolidated
financial statements are incorporated herein by reference in reliance upon such
report given on the authority of such firm as experts in accounting and
auditing.
The financial statements of XOMA Ltd. for the period through December
31, 1997 incorporated by reference in this prospectus and elsewhere in the
registration statement, to the extent and for the period indicated in their
report, has 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.
WHERE YOU CAN GET MORE INFORMATION
This prospectus is part of a registration statement that we have filed
with the SEC. The registration statement contains exhibits and other information
not included in this prospectus. At your request, we will provide you, without
charge, a copy of any documents incorporated by reference in, or included as
exhibits to, our registration statement. If you would like more information,
write or call us at:
XOMA Ltd.
2910 Seventh Street
Berkeley, CA 94710
Telephone: (510) 644-1170
XOMA files annual, quarterly and current reports, proxy statements and
other information with the SEC. You may read and copy any reports, statements
and other information we file at the SEC's public reference room at 450 Fifth
Street, N.W., Washington D.C. 20549. You can request copies of these documents,
upon payment of a duplicating fee, by writing to the SEC. Please call the SEC at
1-800-SEC-0330 for further information on the operation of the public reference
rooms. XOMA's SEC filings are also available to the public on the SEC Internet
site at http://www.sec.gov.
22
<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 ............................................. $10,077
Nasdaq fee ....................................................... 17,500
Legal fees and expenses (including Blue Sky fees and expenses).... 75,000
Accounting fees and expenses ..................................... 5,000
Miscellaneous .................................................... _ 7,423
----------
Total ................................................... $115,000
Item 15. Indemnification of Directors and Officers
Under Bermuda law, a company is permitted to indemnify any officer or
director, out of the funds of the company, against (i) any liability incurred by
him or her in defending any proceedings, whether civil or criminal, in which
judgment is given in his or her favor, or in which he or she is acquitted, or in
connection with any application under relevant Bermuda legislation in which
relief from liability is granted to him or her by the court and (ii) any loss or
liability resulting from negligence, default, breach of duty or breach of trust,
save for his or her fraud and dishonesty.
The bye-laws of XOMA provide for the indemnity by XOMA of the officers,
directors and employees of XOMA to the fullest extent permitted by law.
Expenses (including attorneys' fees) incurred by an officer or director
of XOMA in defending any civil, criminal, administrative or investigative
action, suit or proceeding shall be paid by XOMA in advance of the final
disposition of such action, suit or proceeding upon receipt of an undertaking by
or on behalf of such director or officer to repay such amount if it shall
ultimately be determined that he is not entitled to be indemnified by XOMA
pursuant to the Securities Act of 1933.
An officer or director of XOMA shall not be personally liable to XOMA
or its shareholders for monetary damages for any breach of fiduciary duty as a
director or officer, except to the extent that such limitation is prohibited by
the Securities Act of 1933 or Bermuda law.
The indemnification and advancement of expenses and the limitation of
liability provided by the bye-laws shall not be deemed exclusive of any other
rights which any officer, director or employee, as such, may have or hereafter
acquire under the Securities Act of 1933, any other provision of the bye-laws,
or any agreement or otherwise. Any repeal or modification of the aforementioned
provisions of the bye-laws shall not adversely affect any right or protection
existing at the time of such repeal or modification.
II-1
<PAGE>
Item 16. Exhibits and Financial Statement Schedules
(a) Exhibits
Exhibit
Number
3.1 Memorandum of Continuance of XOMA Ltd. (Exhibit 3.4)(1)
3.2 Bye-Laws of XOMA Ltd. (Exhibit 3.5) (1)
4.1 Amended and Restated Shareholder Rights Agreement dated as
of October 27, 1993 and amended and restated as of December
31, 1998 by and among XOMA and ChaseMellon Shareholder
Services, L.L.C. as Rights Agent (Exhibit 4.1) (2)
4.2 Form of Resolution Regarding Preferences and Rights of
Series A Preference Shares (Exhibit 4.2) (1)
4.3 Form of Resolution Regarding Preferences and Rights of
Series B Preference Shares (Exhibit 4.3) (1)
4.4 Form of Common Stock Purchase Warrant (1997 Warrants)
(Exhibit 3) (3)
4.5 Form of Common Stock Purchase Warrant (1998 Warrants)
(Exhibit 3) (4)
4.6 Form of Common Stock Purchase Warrant (Incyte Warrants)
(Exhibit 2) (5)
4.7 Form of Common Share Purchase Warrant (January and March
1999 Warrants) (Exhibit 5) (6)
4.8 Form of Common Share Purchase Warrant (July 1999 Warrants)
(Exhibit 4) (7)
4.9 Form of Common Share Purchase Warrant (2000 Warrants)
(Exhibit 4) (8)
5.1 Opinion of Conyers Dill & Pearman*
10.1 Form of Subscription Agreement dated as of February 8, 2000
by and between XOMA Ltd. and the purchasers of Common Shares
in the February 2000 private placement (Exhibit 2) (8) 10.2
Form of Registration Rights Agreement dated as of February
11, 2000 by and between XOMA Ltd. and the purchasers of
Common Shares in the February 2000 private placement
(Exhibit 3) (8) 10.3 Form of Registration Rights Agreement
dated as of February 11, 2000 by and between XOMA Ltd. and
the placement agents in the February 2000 private placement
(Exhibit 5) (8)
23.1 Consent of Ernst & Young LLP, Independent Auditors
II-2
<PAGE>
23.2 Consent of Arthur Andersen LLP, Independent Public
Accountants
23.3 Consent of Conyers Dill & Pearman (included in Exhibit 5.1)
24.1 Power of Attorney*
- --------------------
* Previously filed.
(1) Incorporated by reference to the referenced exhibit to XOMA's Registration
Statement on Form S-4 filed November 27, 1998, as amended (File No.
333-68045).
(2) Incorporated by reference to the referenced exhibit to XOMA's Registration
Statement on Form 8-A filed May 21, 1999 (File No. 0-14710).
(3) Incorporated by reference to the referenced exhibit to XOMA's Current
Report on Form 8-K dated August 13, 1997 filed August 18, 1997 (File No.
0-14710).
(4) Incorporated by reference to the referenced exhibit to XOMA's Current
Report on Form 8-K dated June 28, 1998 filed June 29, 1998 (File No.
0-14710).
(5) Incorporated by reference to the referenced exhibit to XOMA's Current
Report on Form 8-K dated July 9, 1998 filed July 16, 1998 (File No.
0-14710).
(6) Incorporated by reference to the referenced exhibit to XOMA's Current
Report on Form 8-K dated January 28, 1999 filed January 29, 1999, as
amended (File No. 0-14710).
(7) Incorporated by reference to the referenced exhibit to XOMA's Current
Report on Form 8-K dated July 23, 1999 filed July 26, 1999 (File No.
0-14710).
(8) Incorporated by reference to the referenced exhibit to XOMA's Current
Report on Form 8-K dated February 11, 2000 filed February 14, 2000 (File
No. 0-14710).
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;
II-3
<PAGE>
(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;
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 May 2, 2000.
XOMA LTD.
By: /s/ John L. Castello
--------------------
Name: John L. Castello
Title: Chairman of the Board,
President and Chief
Executive Officer
II-5
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
Chairman of the Board, President and Chief May 2, 2000
Executive Officer (Principal Executive
/s/ John L. Castello Officer)
- --------------------
John L. Castello
Chief Scientific and Medical Officer and May 2, 2000
/s/ Patrick J. Scannon Director
- ----------------------
Patrick J. Scannon
Vice President, Finance and Chief Financial May 2, 2000
Officer (Principal Financial and Accounting
/s/ Peter B. Davis Officer)
- ------------------
Peter B. Davis
/s/ James G. Andress Director May 2, 2000
- --------------------
James G. Andress
/s/ William K. Bowes, Jr. Director May 2, 2000
- -------------------------
William K. Bowes, Jr.
/s/ Arthur Kornberg Director May 2, 2000
- -------------------
Arthur Kornberg
/s/ Steven C. Mendell Director May 2, 2000
- ---------------------
Steven C. Mendell
/s/ W. Denman Van Ness Director May 2, 2000
- ----------------------
W. Denman Van Ness
</TABLE>
II-6
<PAGE>
EXHIBIT INDEX
Exhibit
Number Page
------ ----
3.1 Memorandum of Continuance of XOMA Ltd (Exhibit 3.4) (1)
3.2 Bye-Laws of XOMA Ltd. (Exhibit 3.5) (1)
4.1 Amended and Restated Shareholder Rights Agreement dated as of October
27, 1993 and amended and restated as of December 31, 1998 by and among
XOMA and ChaseMellon Shareholder Services, L.L.C. as Rights Agent
(Exhibit 4.1) (2)
4.2 Form of Resolution Regarding Preferences and Rights of Series A
Preference Shares (Exhibit 4.2) (1)
4.3 Form of Resolution Regarding Preferences and Rights of Series B
Preference Shares (Exhibit 4.3) (1)
4.4 Form of Common Stock Purchase Warrant (1997 Warrants) (Exhibit 3) (3)
4.5 Form of Common Stock Purchase Warrant (1998 Warrants) (Exhibit 3) (4)
4.6 Form of Common Stock Purchase Warrant (Incyte Warrants) (Exhibit 2)
(5)
4.7 Form of Common Share Purchase Warrant (January and March 1999
Warrants) (Exhibit 5) (6)
4.8 Form of Common Share Purchase Warrant (July 1999 Warrants) (Exhibit 4)
(7)
4.9 Form of Common Share Purchase Warrant (2000 Warrants) (Exhibit 4) (8)
5.1 Opinion of Conyers Dill & Pearman*
10.1 Form of Subscription Agreement dated as of February 8, 2000 by and
between XOMA Ltd. and the purchasers of Common Shares in the February
2000 private placement (Exhibit 2) (8)
10.2 Form of Registration Rights Agreement dated as of February 11, 2000 by
and between XOMA Ltd. and the purchasers of Common Shares in the
February 2000 private placement (Exhibit 3) (8)
10.3 Form of Registration Rights Agreement dated as of February 11, 2000 by
and between XOMA Ltd. and the placement agents in the February 2000
private placement (Exhibit 5) (8)
<PAGE>
Exhibit
Number Page
------ ----
23.1 Consent of Ernst & Young LLP, Independent Auditors
23.2 Consent of Arthur Andersen LLP, Independent Public Accountants
23.3 Consent of Conyers Dill & Pearman (included in Exhibit 5.1)
24.1 Power of Attorney*
- --------------------
* Previously filed.
(1) Incorporated by reference to the referenced exhibit to XOMA's Registration
Statement on Form S-4 filed November 27, 1998, as amended (File No.
333-68045).
(2) Incorporated by reference to the referenced exhibit to XOMA's Registration
Statement on Form 8-A filed May 21, 1999 (File No. 0-14710).
(3) Incorporated by reference to the referenced exhibit to XOMA's Current
Report on Form 8-K dated August 13, 1997 filed August 18, 1997 (File No.
0-14710).
(4) Incorporated by reference to the referenced exhibit to XOMA's Current
Report on Form 8-K dated June 28, 1998 filed June 29, 1998 (File No.
0-14710).
(5) Incorporated by reference to the referenced exhibit to XOMA's Current
Report on Form 8-K dated July 9, 1998 filed July 16, 1998 (File No.
0-14710).
(6) Incorporated by reference to the referenced exhibit to XOMA's Current
Report on Form 8-K dated January 28, 1999 filed January 29, 1999, as
amended (File No. 0-14710).
(7) Incorporated by reference to the referenced exhibit to XOMA's Current
Report on Form 8-K dated July 23, 1999 filed July 26, 1999 (File No.
0-14710).
(8) Incorporated by reference to the referenced exhibit to XOMA's Current
Report on Form 8-K dated February 11, 2000 filed February 14, 2000 (File
No. 0-14710).
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
the Registration Statement (Form S-3) and related Prospectus of XOMA Ltd. for
the registration of 6,395,000 common shares and to the incorporation by
reference therein of our report dated February 18, 2000 with respect to the 1999
and 1998 consolidated financial statements of XOMA Ltd. included in its Annual
Report (Form 10-K) for the year ended December 31, 1999, filed with the
Securities and Exchange Commission.
/S/ ERNST & YOUNG LLP
Palo Alto, California
April 27, 2000
EXHIBIT 23.2
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 Ltd.'s Form 10-K for the year
ended December 31, 1999, and to all references to our firm included in this
Registration Statement.
ARTHUR ANDERSEN LLP
/s/ARTHUR ANDERSEN LLP
San Francisco, California
April 27, 2000
