As filed with the Securities and Exchange Commission on June 28, 1996
Registration No.333-04557
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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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UNIGENE LABORATORIES, INC.
(Exact name of Registrant as specified in its charter)
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Delaware 22-2328609
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
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110 Little Falls Road
Fairfield, New Jersey 07004
(201) 882-0860
(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive offices)
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Warren P. Levy, President
Unigene Laboratories, Inc.
110 Little Falls Road
Fairfield, New Jersey 07004
(201) 882-0860
(Name, address, including zip code, telephone number, including
area code, of agent for service)
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Copy to:
D. Michael Lefever, Esq.
Covington & Burling
P.O. Box 7566, 1201 Pennsylvania Ave., N.W.
Washington, D.C. 20044-7566
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Approximate date of commencement of proposed sale to public:
From time to time after this Registration Statement becomes effective.
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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 offer. [ ]
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 on the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
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PROSPECTUS
UNIGENE LABORATORIES, INC.
Common Stock
(par value $.01 per share)
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This Prospectus relates to the resale of up to 7,692,201
shares of common stock, par value $.01 per share (the "Common Stock"), of
Unigene Laboratories, Inc., a Delaware corporation (the "Company") issued or
issuable to certain persons or entities (the "Selling Shareholders") in
connection with the transactions described herein. This Prospectus also relates
to an indeterminate number of additional shares of Common Stock that may be
issued to certain of the Selling Shareholders pursuant to anti-dilution
provisions or certain adjustment provisions contained in the warrants, options
and convertible debentures described herein. All of the shares offered hereby
will be offered and sold by the Selling Shareholders. See "Selling
Shareholders." The Company will not receive any proceeds from the sale of the
shares of Common Stock offered hereby.
The Common Stock is listed on the Nasdaq National Market under
the symbol UGNE. On June 25, 1996, the last sale price of the Common Stock, as
reported on the Nasdaq National Market, was $3.31 per share.
The Common Stock may be offered from time to time by the
Selling Shareholders to or through brokers, dealers or other agents or directly
to other purchasers in one or more market transactions, in one or more private
transactions or in a combination of such methods of sale, at prices then
prevailing, at prices related to such prices, or at negotiated prices. In
effecting sales, brokers, dealers or other agents engaged by the Selling
Shareholders may arrange for other brokers, dealers or agents to participate.
Such brokers, dealers or agents may receive commissions, discounts or
concessions from the Selling Shareholders in amounts to be negotiated. Such
brokers or dealers and any other participating brokers or dealers may be deemed
to be "underwriters" within the meaning of the Securities Act of 1933, as
amended (the "Securities Act"), and any such commissions, discounts or
concessions may be deemed to be underwriting discounts or commissions under the
Securities Act.
Certain costs, expenses and fees in connection with the
registration of the Common Stock will be borne by the Company. Commissions,
discounts and transfer taxes, if any, attributable to the sales of the Common
Stock will be borne by the Selling Shareholders.
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INVESTMENT IN THE SECURITIES OFFERED HEREBY INVOLVES A HIGH
DEGREE OF RISK. SEE "RISK FACTORS" ON PAGE 4.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is June 28, 1996.
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NO DEALER, SALESMAN OR OTHER PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO
MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH THE
OFFER MADE HEREBY, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, ANY SELLING
SHAREHOLDER OR ANY UNDERWRITER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL OR A SOLICITATION OF AN OFFER TO BUY THE SECURITIES OFFERED HEREBY TO ANY
PERSON IN ANY STATE OR OTHER JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION
WOULD BE UNLAWFUL. THE DELIVERY OF THIS PROSPECTUS AT ANY TIME DOES NOT IMPLY
THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
ITS DATE.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549; and the public reference facilities
located at the regional offices of the Commission at the following addresses:
New York Regional Office, 7 World Trade Center, Suite 1300, New York, New York
10048 and Chicago Regional Office, Citicorp Center, 500 West Madison Street,
Chicago, Illinois 60661-2511. Copies of such material also can be obtained from
the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates.
This Prospectus constitutes a part of a Registration Statement on Form
S-3 filed by the Company with the Commission under the Securities Act with
respect to the Common Stock being offered by this Prospectus. This Prospectus
does not contain all of the information set forth in the Registration Statement,
certain portions of which have been omitted as permitted by the rules and
regulations of the Commission. For further information, reference is made to the
Registration Statement, and to the exhibits incorporated therein by reference or
filed as a part thereof. Any statements contained herein concerning the
provisions of any such exhibits are not necessarily complete and, in each
instance, reference is made to the copy of such exhibit filed as an exhibit to
the Registration Statement or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the Company with the Commission are
hereby incorporated by reference in this Prospectus:
1. The Annual Report of the Company on Form 10-K for the
year ended December 31, 1995 (the "1995 10-K").
2. The Annual Report of the Company on Form 10-K/A filed
April 29, 1996 amending the 1995 10-K.
3. The Quarterly Report of the Company on Form 10-Q for
the quarter ended March 31, 1996.
4. The description of the Company's Common Stock set
forth in the Company's Registration Statement on Form
8-A, filed with the Commission on August 4, 1987.
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All documents filed by the Company pursuant to section 13(a), 13(c), 14
or 15(d) of the Exchange Act, subsequent to the date of this Prospectus and
prior to the termination of the offerings to which this Prospectus relates shall
be deemed to be incorporated by reference in this Prospectus and to be a part
hereof from the date of filing of such documents. Any statement in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded by this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge copies of all
documents incorporated herein by reference (other than exhibits to such
documents unless such exhibits are specifically incorporated by reference in
such documents) to each person, including any beneficial owner, to whom a copy
of this Prospectus has been delivered on the written or oral request of such
person to: William Steinhauer, Controller, 110 Little Falls Road, Fairfield, New
Jersey 07004 (telephone number (201)882-0860).
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this Prospectus under the captions "Risk Factors"
and "The Company" constitute "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995 (the "Reform Act"). Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause the actual results, performance or activities of
the Company, or industry results, to be materially different from any future
results, performance or activities expressed or implied by such forward-looking
statements. Such factors include: general economic and business conditions, the
financial condition of the Company, competition, the Company's dependence on
other companies to commercialize, manufacture and sell products using the
Company's technologies, the uncertainty of results of preclinical and clinical
testing, the risk of product liability and liability for human clinical trials,
the Company's dependence on patents and other proprietary rights, dependence on
key management officials, the availability and cost of capital, the availability
of qualified personnel, changes in, or the failure to comply with, governmental
regulations, the failure to obtain regulatory approvals of the Company's
products and other factors discussed in this Prospectus. See "Risk Factors".
RISK FACTORS
Prospective investors should consider carefully the following factors
concerning the Company and its business before purchasing securities offered by
this Prospectus. Certain statements under this caption constitute
"forward-looking statements" under the Reform Act. See "Special Note Regarding
Forward-Looking Statements."
Absence of Operating Revenues and Liquidity; History of Losses;
Auditors' Report - Going Concern Considerations. The Company has incurred annual
operating losses since its inception and, as a result, at March 31, 1996, had an
accumulated deficit of $35,700,000. The Company has not received any significant
operating revenues during the last five years.
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In addition to operating its production facility and seeking approval
for its Calcitonin for human use, the Company intends to continue certain
internally funded research activities such as the development of a Calcitonin
pill, all of which will contribute to continuing losses from operations. All of
the Company's contracts to perform sponsored research have been completed or
cancelled and, at present, it has almost no operating revenues. It is unlikely
that the Company's operating results will improve unless it is able to license
its technology, obtain new projects, or successfully produce and sell its
products. The Company may continue to incur losses over the next several years.
The auditors' report for the fiscal year ended December 31, 1995 contains an
explanatory paragraph indicating there is substantial doubt about the Company's
ability to continue as a going concern.
The Company has sufficient financial resources to sustain its
operations at the current level through approximately the third quarter of 1996.
To continue its operations beyond that time will require that the Company enter
into additional financing transactions or marketing, joint venture or licensing
agreements. There can be no assurance that any such financings will occur or
that any such agreements will be entered into by the Company.
Transition to Production; Possibility of Delays or Inability to
Manufacture and Market Products. The Company is currently undergoing a
transition from its historical research orientation toward a business with a
pharmaceutical production focus. Accordingly, the Company is likely to incur the
problems, delays, expenses and difficulties typically encountered by enterprises
in the Company's stage of transition, many of which may be beyond the Company's
control.
No product of the Company has been commercialized for human
pharmaceutical use. The commercial manufacture and sale of any such product will
require the approval of the U.S. Food and Drug Administration ("FDA") and by
comparable regulatory authorities outside of the United States. See "Risk
Factors - Government Regulation." There can be no assurance that clinical
testing will be successful or that the clinical results will be adequate to
support regulatory submissions. Furthermore, there can be no assurance that the
Company's products will be demonstrated to be safe and effective or that they
will be approved by the appropriate regulatory authorities. Even if any such
products are approved, there is no assurance that they can be manufactured in
commercial quantities at reasonable costs. Due to the Company's limited
clinical, manufacturing and regulatory experience and the absence of a marketing
organization, it may be necessary for the Company to rely on sponsors or other
parties to perform such tasks for the commercialization of pharmaceutical-grade
products. See "Risk Factors - Dependence on Large Pharmaceutical Companies."
Expanded consumer acceptance of pharmaceutical-grade Calcitonin may be
dependent on development of a consumer acceptable delivery system. The Company
and others are conducting research on new delivery systems for Calcitonin
including oral technology. There can be no assurance that the Company will
develop suitable oral delivery systems or that governmental approval of any such
delivery system will be obtained. There can also be no assurance that others
will not develop oral or other delivery systems that could compete with or
surpass any oral delivery system developed by the Company. Moreover, there are
non-Calcitonin products currently being marketed for osteoporosis treatment and
other non- Calcitonin products in development that will compete with Calcitonin
products. See "Risk Factors - Technological Change and Competition."
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There can be no assurance that the Company will have sufficient
financial resources to fund its operations until such time as it is able to
generate revenues that are sufficient to sustain its operations. See "Risk
Factors - Absence of Operating Revenues and Liquidity; History of Losses;
Auditors' Report - Going Concern Considerations."
New Production Facility. During 1994, the Company completed
construction of a facility for the production of pharmaceutical-grade Calcitonin
and other peptide hormones. The Company is leasing the facility under a 10-year
agreement which began in February 1994. The Company has two 10-year renewal
options as well as an option to purchase the facility. The Company is
undertaking steps to secure FDA validation of the facility which would allow it
to manufacture Calcitonin for human pharmaceutical use. The facility has begun
producing Calcitonin in accordance with current Good Manufacturing Practice
("cGMP") regulations, but there is no assurance that the facility will be
approved by the FDA. Furthermore, there can be no assurance that the facility
will be able to achieve its production goals, that production at this facility
will be profitable to the Company, that others will not develop processes and
products superior to, or otherwise precluding the Company from commercial
utilization of this facility, that there will be a market for the Company's
products produced by the facility, or that sufficient funds will be available
for the Company to complete the pre-production process or to produce and market
its products from the facility.
Dependence on Large Pharmaceutical Companies. The Company has been and
expects to continue to be dependent on large pharmaceutical companies for
revenues from sales of product, research sponsorship, joint ventures and
licensing arrangements. During the 1987 to 1990 period, the Company's operating
revenues resulted primarily from research which was totally or substantially
funded by pharmaceutical companies. The Company currently has no sponsored
research projects. There is no assurance that the Company will be successful in
its efforts to enter into new research or licensing agreements or other revenue
producing arrangements.
The Company's past contracts with certain pharmaceutical company
sponsors provide for payment of royalties to the Company on commercial sales of
the products of sponsored research projects. However, there can be no assurance
that such sponsors will successfully commercialize any product based on the
Company's technology. It currently is unlikely that the Company will receive any
material royalties under such past agreements.
In June 1995, the Company entered into a joint venture agreement with
the Qingdao General Pharmaceutical Company and its Huanghai factory for the
production and marketing of Calcitonin in China. Under the agreement, the
Chinese partners will finance the project, including the construction and
operation of a dedicated manufacturing facility in China which will utilize the
Company's propriety production technology. The Company will provide the joint
venture with technology and training as well as the Company's proprietary enzyme
at a discounted price. The Company will receive a combination of fixed fees and
minimum annual royalties based upon sales of the end product. There is no
assurance that this joint venture will be successful or that the Company will
receive significant income from the joint venture.
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Risks of International Operations. The Company's potential major
customers, partners and licensees include foreign companies or companies with
significant international business. The business operations of such companies
and their ability to pay license fees, royalties and other amounts due and
otherwise to perform their obligations to the Company under agreements with the
Company may be subject to approval or regulation by foreign governments. There
can be no assurance that required approvals will be received. The failure to
receive required approvals, governmental regulations and other risks, including
political and foreign currency risks, could affect the ability of the Company to
earn or receive payments pursuant to such agreements and, in such event, may
have a material adverse effect on the Company's future operations.
Technological Change and Competition. The Company has concentrated most
of its efforts on one product - the use of Calcitonin for the treatment of
osteoporosis. The market for this treatment of osteoporosis is subject to rapid,
unpredictable and significant technological change. Competition from specialized
biotechnology companies, major pharmaceutical and chemical companies and
universities and research institutions is intense. Most of the competitors of
the Company have substantially greater financial and other resources than does
the Company. There can be no assurance that developments by others, including
alternative chemical means of amidation, alternative processes which eliminate
the need for amidation, and new delivery systems and other osteoporsis
treatments, will not render the Company's technologies and products derived
therefrom obsolete or noncompetitive.
Product Liability. Product liability claims relating to the Company's
technology or products may be asserted against the Company. There can be no
assurance that the Company will have sufficient resources to defend against or
satisfy any such liability. Although the Company has recently obtained product
liability insurance coverage, product liability or other judgments against the
Company in excess of insurance limits could have a material adverse effect upon
the Company's business and financial condition.
Patents and Proprietary Technology. The Company has filed applications
for U.S. patents relating to the proprietary amidation and immunization
processes and Calcitonin pill invented in the course of its research. To date,
the following two patents have issued: Immunization By Immunogenic Implant, a
process patent, and Alpha-Amidation Enzyme, a process and product patent. Other
applications are pending. Filings related to the amidation process have also
been made in selected foreign countries and nine such foreign patents have
issued. There can be no assurance that any of the Company's pending applications
will issue as patents or that the Company's issued patents will provide the
Company with significant competitive advantages. Furthermore, there can be no
assurance that competitors will not independently develop or obtain similar or
superior technologies. Although the Company believes its patents and patent
applications are valid, the invalidation of its Alpha-Amidation Enzyme patent or
the failure of certain of its pending Alpha-Amidation Enzyme-related
applications to issue as patents could have a material adverse effect upon the
Company's business. Difficulties in detecting and proving infringement are
generally greater with process patents than with product patents. In addition,
the value of a process patent may be reduced if the products that can be
produced using such process have been patented by others. Under such
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circumstances, the cooperation of these patent holders or their sublicensees
would be needed for the commercialization of the aforementioned patented
products in countries where these companies hold valid patents.
In some cases, the Company relies on trade secrets to protect its
inventions. It is the policy of the Company to include in all research
contracts, joint development agreements and consulting relationships that
provide access to the Company's trade secrets and other know-how confidentiality
obligations binding on the parties involved. However, there can be no assurance
that these secrecy obligations will not be breached to the detriment of the
Company. To the extent sponsors, consultants or other third parties apply
technological information independently developed by them or by others to
Company projects, disputes may arise as to the proprietary rights to such
information which may not be resolved in favor of the Company.
Government Regulation. The laboratory research activities of the
Company and its sponsors, collaborators and licensees, and the processes and
products which may be developed by them and the new production facility, are
subject to significant regulation by numerous federal, state, local and foreign
governmental authorities. In addition to obtaining the FDA's validation of the
new facility, it is necessary to obtain FDA approval for human use of the
Calcitonin to be produced in the facility. This will require various human and
animal studies. The Company will then apply to the FDA for approval of the
Company's Calcitonin for human use. The regulatory process for a pharmaceutical
product may take a number of years and requires substantial resources. In the
case of the regulatory process for the Company's Calcitonin products, the
Company believes that it may be possible to abbreviate the process. However,
there can be no assurance that regulatory approval will be obtained for the new
facility or any of the Company's products. The inability to obtain, or delays in
obtaining, such approvals would adversely affect the Company's ability to
continue to fund its programs, produce marketable products, or to receive
revenue from product sales or royalties. Furthermore, the extent of any adverse
governmental regulation that may arise from future legislative and
administrative action cannot be predicted.
Dependence on Key Executives. Drs. Warren and Ronald Levy have been the
principal executive officers of the Company since its inception. The Company
relies on them for their leadership and scientific direction. Neither Dr. Warren
P. Levy nor Dr. Ronald S. Levy has an employment agreement with the Company.
Each of them has entered into an agreement with the Company providing that he
shall not engage in any other employment or business for the period of his
employment with the Company. At the present time, the loss of the services of
either of these individuals could have a material adverse impact on the
Company's business.
Attraction and Retention of Key Personnel. The Company's ability to
obtain required governmental approvals, produce its products, obtain research
contracts and develop new technologies will depend in part on its ability to
attract and retain highly qualified scientific personnel. Competition for such
personnel is intense. There can be no assurance that the Company will be able to
attract and retain such personnel.
Shares Eligible For Future Sale; Outstanding Convertible Securities,
Warrants And Options. Other than the issued or to be issued shares of Common
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Stock to which this Prospectus relates, there are 7,982,177 shares of Common
Stock that are registered under the Securities Act and are issuable upon
exercise of its publicly traded Class B Warrants at an exercise price of 3.504
per share as of June 28, 1996; as of June 25, 1996, approximately 2,700,000
shares of Common Stock that are issuable upon conversion of the balance of the
Company's 10% convertible debentures; and 1,603,265 shares issuable under
purchase options exercisable at prices ranging from $1.00 to $3.00 per share. In
addition, 4,138,350 outstanding shares of Common Stock are "restricted
securities" as that term is defined by Rule 144 promulgated under the Securities
Act. Such restricted securities may be sold only in compliance with Rule 144, or
pursuant to registration under the Securities Act or pursuant to another
exemption therefrom. The Company may issue additional convertible securities,
options, warrants and shares in the future. Transactions by the Company, or the
occurrence of certain other future events, may require adjustment of the
exercise or conversion price and other terms of the Company's convertible
securities, options and warrants including, in some circumstances, an increase
in the number of shares issuable thereunder.
The Company cannot predict the adverse effect that market sales of
Common Stock, the conversion of such convertible securities, the exercise of
such options or warrants, or the availability of Common Stock for sale will have
on the market price of the Common Stock prevailing from time to time, although
it is likely that sales of a large number of securities would depress such
market price. The Company also cannot predict the adverse effect, if any, that
such convertible securities, options, warrants and shares available for sale
will have on the ability of the Company to obtain additional capital or the
terms and conditions thereof.
Possible Volatility of Securities Prices. The market prices of the
Company's securities may be highly volatile. Factors such as announcements by
the Company or others of technological innovations, regulatory matters, new
products or procedures, proposed government regulations, developments or
disputes relating to patents or proprietary rights, and public concern over the
safety of activities or products may have a significant impact on the market
price of the Company's securities. In addition, future sales of shares of Common
Stock by shareholders and by the holders of convertible securities, warrants and
options could have an adverse effect on the prices of the Company's securities.
See "Risk Factors - Shares Eligible for Future Sale; Outstanding Convertible
Securities, Warrants and Options."
Voting Control. Warren P. Levy, Ronald S. Levy and Jay Levy, founders
of the Company, beneficially own, approximately 16% of the outstanding Common
Stock (assuming that outstanding convertible securities, warrants and options
held by others are not converted or exercised) and, thus, effectively may have
the ability to elect the entire Board of Directors and control the affairs of
the Company.
Dividends. The Company has not paid any cash dividends on its Common
Stock since its inception and anticipates that, for the foreseeable future, it
will not pay any cash dividends.
Limitation of Marketability of Company Securities. The Common Stock
currently is traded on the Nasdaq National Market. In order for the Common Stock
to continue to qualify for inclusion on the Nasdaq National Market, among other
requirements, the Company must have net tangible assets of at least $4.0
million. As of March 31, 1996 the amount of the Company's net tangible assets
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was approximately $3.0 million. See "Risk Factors - Absence of Operating
Revenues and Liquidity; History of Losses; Auditors' Report - Going Concern
Considerations." The Company has been advised by the National Association of
Securities Dealers, Inc. (the "NASD") that due to a deficiency in its net
tangible assets at March 31, the Company currently does not qualify for the
listing of its Common Stock on the Nasdaq National Market. The Company is
appealing this determination. If the Company is unable to develop a plan
satisfactory to the NASD by which it will be able to restore and maintain
compliance with the Nasdaq National Market listing requirements, the Common
Stock will be removed from trading on the Nasdaq National Market. There is no
assurance, however, that the Company will be successful in preventing the
removal of the Common Stock from trading on the Nasdaq National Market. If the
Common Stock is removed from trading on the Nasdaq National Market, the Company
intends to make an application for the listing of the Common Stock on the Nasdaq
SmallCap Market. If the Company fails to meet the requirements for trading on
the Nasdaq National Market and does not qualify for listing in the Nasdaq
SmallCap Market, the holders of Common Stock may find it difficult to obtain
accurate quotations as to the market value of the Common Stock and may
experience greater difficulties in attempting to sell the Common Stock than if
it were listed on a stock exchange or quoted on the Nasdaq National Market or
the Nasdaq SmallCap Market.
If the Common Stock is not traded on the Nasdaq National Market or the
Nasdaq SmallCap Market, and the market price of the Common Stock is less than
$5.00 per share, the Common Stock would be classified as a "penny stock." As
such the Common Stock would be subject to Rule 15g-9 under the Exchange Act,
which imposes additional sales practice requirements on broker-dealers that
recommend the purchase or sale of such securities to persons other than a person
who qualifies as an "established customer" or an "accredited investor." Among
these requirements is that a broker-dealer must make a determination that
investments in penny stocks are suitable for the customer and must make certain
special disclosures to the customer concerning the risks of penny stocks.
Application of the penny stock rules to the Common Stock could adversely affect
the market liquidity of such securities, which in turn may affect the ability of
the holders of the Common Stock to resell the securities.
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THE COMPANY
Unigene Laboratories, Inc. is a health-care oriented biotechnology
company which is engaged in research and production of cGMP Calcitonin and is
planning to engage in the production and marketing in bulk of pharmaceutical
grade Calcitonin. Certain statements under this caption constitute "forward-
looking statements" under the Reform Act. See "Special Note Regarding Forward-
Looking Statements." The Company's current business focus has shifted toward
pharmaceutical production from its historical research orientation. The Company
has succeeded in combining its proprietary amidation process with bacterial
recombinant DNA technology to develop a peptide hormone production process. The
Company believes that its proprietary amidation process will be a key step in
the more efficient and economical commercial production of certain peptide
hormones with diverse therapeutic applications. Many of these hormones cannot be
produced at a reasonable cost in sufficient quantities for clinical testing or
commercial use by currently available production processes. Using its
proprietary process, the Company has produced laboratory-scale quantities of
seven such peptide hormones: human Calcitonin, salmon Calcitonin, human Growth
Hormone Releasing Factor, human Calcitonin Gene-Related Peptide, human
Corticotropin Releasing Factor, human Amylin and a human Magainin. During 1991,
a study commissioned by the Company was prepared by a professor of chemical
engineering at the Massachusetts Institute of Technology. The study evaluated
the economics for producing multi-kilogram quantities of Calcitonin and
indicated that the Company's process for producing Calcitonin should reduce the
cost and time required for commercial production by up to 95%.
The Company's strategy is to develop proprietary products and processes
with applications in human health-care, independently or in conjunction with
pharmaceutical and chemical companies, in order to generate revenues from
license fees, royalties and product sales in bulk. Generally, the Company seeks
sponsors and licensees to provide research funding and assume responsibility for
obtaining appropriate regulatory approvals, clinical testing, production and
marketing of products derived from the Company's research activities. It has
concentrated most of its efforts on one product - Calcitonin for the treatment
of osteoporosis. The Company has built a production facility and plans to
undertake production of pharmaceutical grade Calcitonin and will assume
responsibility for the clinical testing and/or applying for regulatory approval
for certain Calcitonin products.
Since 1992, the Company has been producing and from time to time
selling small quantities of research-grade salmon Calcitonin. During 1993, the
Company began construction of a cGMP facility for the production of
pharmaceutical-grade Calcitonin in leased premises located in Boonton, New
Jersey which was mechanically completed during the fourth quarter of 1994. The
facility will also produce the Company's proprietary amidating enzyme for use in
producing Calcitonin. The initial production capacity of the facility is
expected to be between 0.5-1.0 kilograms of bulk Calcitonin per year,
representing approximately 10% of the current estimated world supply for this
leading osteoporosis drug.
The Company is following conventional procedures in order to secure the
validation of the facility by the FDA in order to allow the Company to provide
its Calcitonin for human use. Although the facility was inspected by an
independent consultant and found to be in compliance with cGMP guidelines, there
can be no assurance that FDA validation will occur. In addition there is no
assurance that the facility production goals will be achieved, that there will
be a market for the Company's products, that such production will be profitable
- 11 -
<PAGE>
to the Company, that others will not develop processes and products superior to,
or otherwise precluding the commercial utilization of, the processes or products
developed by the Company. The design of the facility is intended to allow for
substantial increases in Calcitonin production utilizing the existing equipment
with no additional capital expenditures or personnel. Although the facility will
initially be exclusively devoted to Calcitonin production, it would be suitable
for producing other peptide hormone products in the future. There can be no
assurance that there will be sufficient acceptance of the Company's products in
the marketplace for successful commercialization. See "Risk Factors - New
Production Facility."
In addition to obtaining the FDA's validation of the new facility, it
is necessary to obtain regulatory approval in each country for human use of the
salmon Calcitonin to be produced in the facility. This will require various
human and animal studies. The Company will then apply to the appropriate
regulatory agencies for approval of the Company's Calcitonin for human use. The
Company requested in May 1996 that the regulatory authority for drugs in the
United Kingdom authorize the Company to conduct pivotal clinical Phase III
trials of its injectable form of Calcitonin, which request was granted in June
1996. The Company expects the trial to be completed during the fourth quarter of
1996. The Company plans to apply for marketing authorization throughout the
European Union soon after completion of the clinical trial. In addition, the
Company recently filed an Investigational New Drug (IND) application for its
injectable form of Calcitonin with the FDA. However, there can be no assurance
that these studies will produce satisfactory results or that the necessary
governmental approvals will be obtained as projected.
Expanded consumer acceptance of pharmaceutical-grade Calcitonin may be
dependent on development of a consumer acceptable delivery system. A major
pharmaceutical company received FDA approval during 1995 for the marketing of a
nasal spray delivery system for Calcitonin, which could enlarge the market for
Calcitonin. The Company and others are conducting research on oral delivery
systems for Calcitonin. There can be no assurance that suitable delivery systems
will be developed or that governmental approval of such delivery systems will be
obtained.
The Company is continuing its efforts to develop a Calcitonin pill. In
December, 1995 and the first half of 1996, the Company successfully tested its
proprietary Calcitonin pill in Phase I clinical trials in the United Kingdom.
The latest of these studies indicated that all of the subjects who received the
pill showed levels of the hormone in blood samples taken during the trial which
are greater than levels generally regarded as required for maximal therapeutic
benefit. The Company believes that this is the first time significant blood
levels of Calcitonin have been observed in humans following oral administration
of the hormone. However, there is no assurance that these results will be
replicated in further studies. The Company has recently filed a patent
application for its oral formulation with the U.S. Patent and Trademark Office
and plans to file an Investigational New Drug (IND) application with the FDA.
There can be no assurance that either application will be approved as projected
or that the Company will be successful in marketing its products.
The planned activities of the Company are all subject to obtaining
adequate financing. There can be no assurance that the Company will have
sufficient resources to complete the preproduction process, to produce and
market its products and to carry on its other projects. See "Risk Factors -
Absence of Operating Revenues and Liquidity; History of Losses; Auditors' Report
- - Going Concern Considerations."
- 12 -
<PAGE>
The Company is currently engaged in two collaborative research
programs. One, with Rutgers University College of Pharmacy, seeks to develop an
oral drug delivery system for Calcitonin. The second collaboration, performed in
conjunction with Yale University, is investigating novel applications for
certain amidated peptide hormones, including CGRP, Calcitonin gene-related
peptide.
At present, the Company has no third party sponsored research
agreements in effect. The Company is currently conducting discussions with major
pharmaceutical companies regarding licensing and/or research agreements. There
can be no assurance that such discussions will result in new research or
licensing agreements or that the Company will be able to obtain adequate funding
for its current or new projects. The Company is dependent on large
pharmaceutical companies, having much greater resources than the Company, for
revenues from sales of product, research sponsorship, joint ventures and
licensing arrangements. See "Risk Factors - Dependence on Large Pharmaceutical
Companies" and "Risk Factors - Risks of International Operations."
The Company has established a multi-disciplinary research team to
adapt current genetic engineering technologies to the development of proprietary
products and processes. The Company, at June 1, 1996, had 60 full-time
employees, including 25 research and development personnel and 24 pre-production
personnel. 10 employees have Ph.D. degrees in the fields of molecular biology,
microbiology, biochemistry, pharmacology or organic chemistry. The Company's
employees have expertise in molecular biology, including DNA cloning, synthesis,
sequencing and expression; protein chemistry, including purification, amino acid
analysis, synthesis and sequencing proteins; immunology, including tissue
culture, monoclonal and polyclonal antibody production and immunoassay
development; chemical engineering; pharmaceutical production; quality assurance;
and quality control. None of the Company's employees is covered by a collective
bargaining agreement.
The Company was incorporated under the laws of the State of Delaware in
November 1980. Its executive offices and laboratory facilities are located at
110 Little Falls Road, Fairfield, New Jersey, 07004, and its telephone number is
(201)882-0860.
SELLING SHAREHOLDERS
2,869,565 of the shares of Common Stock offered hereby were issued or
are issuable by the Company to holders (the "Debenture Holders") of $3,300,000
aggregate principal amount of the Company's 9.5% Senior Secured Convertible
Debentures (the "Debentures") upon conversion of the Debentures. The Debentures
were issued by the Company in a private transaction on March 6, 1996 and
initially are convertible into Common Stock at a conversion rate of $1.15 per
share that is subject to a downward adjustment upon the occurrence of certain
events. The Debentures also contain certain anti-dilution provisions which may
require the Company to issue additional shares of Common Stock upon conversion
thereof. In connection with the issuance of the Debentures, the Company agreed
to register the Common Stock into which the Debentures are convertible under the
Securities Act and to keep such registration effective for a period ending on
the earlier of (i) February 28, 1999 and (ii) the date upon which the Debenture
Holders are able to resell all of the Common Stock into which the Debentures are
convertible without registration under the Securities Act. An additional 225,000
of the shares of Common Stock offered hereby were issued or are issuable by the
Company to the Debenture Holders upon exercise of certain of the Company's
warrants held by the Debenture Holders. The Debenture Holders purchased such
warrants in November 1995 from a holder who received warrants from the Company
in connection with a loan by such holder to the Company. The warrants held by
the Debenture Holders initially are exercisable at a price of $1.375 per share
that is subject to a downward adjustment upon the occurrence of certain events.
- 13 -
<PAGE>
Such warrants also contain certain anti-dilution provisions which may require
the Company to adjust the exercise price and to issue additional shares of
Common Stock upon the exercise thereof. The Company agreed to register the
Common Stock for which such warrants are exercisable under the Securities Act.
The table below sets forth the name of each Debenture Holder and certain
information with respect to the beneficial ownership of Common Stock and number
of shares of Common Stock offered by each Debenture Holder.
3,456,536 of the shares of Common Stock offered hereby were issued or
are issuable by the Company to holders (the "Warrantholders") upon exercise of
warrants of the Company (the "Warrants"). The Warrants were issued by the
Company between October 1994 and April 1996 in consideration of certain
financial and consulting services performed for the Company or in connection
with loans to the Company. The Warrants initially are exercisable at prices
ranging from $1.375 to $3 per share. Certain of the Warrants contain adjustment
provisions which may result in a downward adjustment in the exercise price upon
the occurrence of certain events. Certain of the Warrants also contain certain
anti-dilution provisions which may require the Company to adjust the exercise
price and to issue additional shares of Common Stock upon the exercise thereof.
In connection with the issuance of the Warrants, the Company agreed to register
the Common Stock for which the Warrants are exercisable under the Securities
Act. The table below sets forth the name of each Warrantholder and certain
information with respect to the beneficial ownership of Common Stock and number
of shares of Common Stock offered by each Warrantholder.
115,000 of the shares of Common Stock offered hereby were issued or are
issuable by the Company to holders (the "Optionholders") upon exercise of
options granted by the Company (the "Options"). The Options were granted by the
Company between January 1993 and April 1996 in consideration of certain
consulting services performed for the Company by the holders thereof. The
Options are exercisable at prices ranging from $1.4375 to $4.5625 per share. The
Options also contain certain anti-dilution provisions which may require the
Company to issue additional shares of Common Stock upon the exercise thereof.
The Company agreed to register the Common Stock for which the Options are
exercisable under the Securities Act. The table below sets forth the name of
each Optionholder and certain information with respect to the beneficial
ownership of Common Stock and number of shares of Common Stock offered by each
Optionholder.
826,000 of the shares of Common Stock offered hereby were issued by the
Company to certain stockholders (the "Private Placement Stockholders") in a
private placement completed February 1996. In connection with the private
placement, the Company agreed to register the Common Stock issued in the private
placement under the Securities Act. The table below sets forth the name of each
Private Placement Stockholder and certain information with respect to the
beneficial ownership of Common Stock and number of shares of Common Stock
offered by each Private Placement Stockholder.
200,100 of the shares of Common Stock offered hereby were or will be
issued by the Company to certain other holders (the "Other Holders"). 10,000 of
such shares of Common Stock will be issued to Kien-Tsai Chen in consideration
for services performed for the Company. Certain of the Other Holders received
shares of Common Stock in connection with such Other Holders' exercise, between
June 1994 and January 1995, of options purchased from persons who received such
options from the Company in connection with certain loans made to the Company in
1985. One of the Other Holders, Jay Levy, is one of the founders of the Company
- 14 -
<PAGE>
and currently serves as the Chairman of the Board of Directors and Treasurer of
the Company. Mr. Levy acquired the 109,350 shares of Common Stock offered hereby
on June 21, 1994 for $150,000 upon the exercise of a stock option which was
granted to him in connection with a loan by him to the Company in 1984. The
table below sets forth certain information with respect to the beneficial
ownership of Common Stock and number of shares of Common Stock offered by each
Other Holder.
This Prospectus covers any additional shares of Common Stock that are
issued pursuant to the conversion of the Debentures or the exercise of the
Warrants, the Options and the other outstanding warrants described herein by
reason of the anti-dilution provisions thereof.
Other than as described above, none of the Selling Shareholders has
had any position, office or other material relationship with the Company or any
of its predecessors or affiliates within the past three years. The following
table sets forth as of June 15, 1996, with respect to each Selling Shareholder:
name, number of shares of Common Stock beneficially owned (including any shares
into which the Debentures are immediately convertible and for which the
Warrants, Options and other outstanding warrants are immediately exercisable),
number of shares of Common Stock to be offered and number of shares of Common
Stock to be held following the offering, assuming the sale of all of the Common
Stock offered hereby. The Company may amend or supplement this Prospectus from
time to time to update the disclosure set forth herein or to disclose the names
and relationships to the Company of additional Selling Shareholders (including
persons or entities who may be transferees of the Selling Shareholders named
below) and the holdings of Common Stock of such additional Selling Shareholders.
- 15 -
<PAGE>
<TABLE>
<CAPTION>
Beneficial Ownership of Shares of Common Beneficial Ownership of
Common Stock Prior to Stock Being Common Stock After
Offering Offered Offering
Name Number Percent Number Number Percent
- ---- ------ ------- ------ ------ -------
<S> <C> <C> <C> <C> <C>
Debenture Holders:
Nelson Partners(1) 2,397,391 8.4 2,397,391 0 *
Olympus Securities, Ltd.(2) 697,174 2.6 697,174 0 *
Warrantholders:
DeJufra, Inc. 123,536 * 123,536 0 *
Patrick Tedesco 224,000 * 224,000 0 *
Paul Weber 217,500 * 217,500 0 *
Bishop Rosen & Co., Inc. 107,500 * 107,500 0 *
Annette North 84,000 * 84,000 0 *
Richard Kripaitis 101,000 * 101,000 0 *
Cornerstone Capital, Inc. 70,000 * 70,000 0 *
Thomas Redington 400,000 1.5 400,000 0 *
Michael C. Kendrick 184,750 * 184,750 0 *
P. Bradford Hathorn 20,000 * 20,000 0 *
Lance T. Bury 20,000 * 20,000 0 *
Gerald D. Harris 5,000 * 5,000 0 *
Enigma Investments Limited 12,500 * 12,500 0 *
Charles Krusen 17,000 * 17,000 0 *
Eric S. Swartz 184,750 * 184,750 0 *
David K. Peteler 5,000 * 5,000 0 *
Dwight B. Bronnum 2,500 * 2,500 0 *
Robert L. Hopkins 2,500 * 2,500 0 *
MicroCap Fund, Inc. 615,000 2.3 615,000 0 *
Mark A. Giudice 25,000 * 25,000 0 *
Dr. Charles Goldberg 10,000 * 10,000 0 *
Vincent J. Ricciardi 25,000 * 25,000 0 *
Reseau de Voyages Sterling, Inc. 1,000,000 3.7 1,000,000 0 *
Optionholders:
Agnes Vignery, M.D.(3) 110,000 * 110,000 0 *
Marvin Moser 5,000 * 5,000 0 *
- 16 -
<PAGE>
<CAPTION>
Beneficial Ownership of Shares of Common Beneficial Ownership of
Common Stock Prior to Stock Being Common Stock After
Offering Offered Offering
Name Number Percent Number Number Percent
- ---- ------ ------- ------ ------ -------
<S> <C> <C> <C> <C> <C>
Private Placement Stockholders:
H.T. Ardinger, Jr. 250,000 * 250,000 0 *
Jerome Berkowitz 40,000 * 40,000 0 *
James Sanderson 50,000 * 50,000 0 *
Richard Garrett 10,000 * 10,000 0 *
Stanley Aber 12,000 * 6,000 6,000 *
Michael Samuel 14,565 * 5,000 9,565 *
Sylvia Bond 25,000 * 25,000 0 *
Leonard Leff 48,500 * 25,000 23,500 *
Herb Fisher Trust 150,000 * 50,000 100,000 *
Richard Scagnelli 5,000 * 5,000 0 *
Richard & Vilma Scagnelli (Jt. Ten.) 30,000 * 5,000 25,000 *
Hamdi A. Al-Alami 100,000 * 100,000 0 *
Manny Siegman 50,000 * 50,000 0 *
Raymond Sales 267,000 1.0 55,000 212,000 *
Benedict Morelli 165,000 * 20,000 145,000 *
Charles A. Barnes, Jr. Trust 76,300 * 20,000 56,300 *
Douglas Tygielski 119,800 * 110,000 9,800 *
Other Holders:
Kien-Tsai Chen 10,000 * 10,000 0 *
Jay Levy(4) 439,950 1.7 109,350 330,600 1.3
A. Martin Randall 50,000 * 20,000 30,000 *
Mario Taverna 334,250 1.3 60,750 273,500 1.0
</TABLE>
- --------------------
* Less than one percent.
(1) Includes 2,217,391 shares immediately issuable upon conversion of
Debentures and 180,000 shares immediately issuable upon exercise of
outstanding warrants.
(2) Includes 652,174 shares immediately issuable upon conversion of Debentures
and 45,000 shares immediately issuable upon exercise of outstanding
warrants.
(3) Includes 100,000 shares issuable to Dr. Vignery upon satisfaction of
certain conditions.
(4) Does not include 200,000 shares of Common Stock held by a trust in which
Mr. Levy has a pecuniary interest.
- 17 -
<PAGE>
PLAN OF DISTRIBUTION
The purpose of this Prospectus is to permit the Selling Shareholders,
if they desire, to dispose of some or all of the shares at such times and at
such prices as they choose. Whether sales of shares will be made, and the timing
and amount of any sale made, is within the sole discretion of the Selling
Shareholders.
The Common Stock covered by this Prospectus may be offered for sale
from time to time by the Selling Shareholders to or through underwriters or
directly to other purchasers or through agents in one or more market
transactions, in one or more private transactions or in a combination of such
methods of sale, at prices then prevailing, at prices related to such prices or
at negotiated prices. Such methods of distribution may include, without
limitation: (a) a block trade in which the broker-dealer so engaged will attempt
to sell the Common Stock as agent but may position and resell a portion of the
block as a principal to facilitate the transaction; (b) purchases by a
broker-dealer as a principal and resale by such broker-dealer for its own
account pursuant to this Prospectus; (c) ordinary brokerage transactions and
transactions in which the broker solicits purchasers; and (d) face-to-face
transactions between sellers and purchasers without a broker or dealer. This
Prospectus may be amended and supplemented from time to time to describe a
specific plan of distribution.
In connection with distributions of the Common Stock or otherwise, the
Selling Shareholders may enter into hedging transactions with broker-dealers or
other financial institutions. In connection with such transactions,
broker-dealers or other financial institutions may engage in short sales of
Common Stock in the course of hedging the positions they assume with Selling
Shareholders. The Selling Shareholders may also sell Common Stock short and
redeliver the shares to close out such short positions. The Selling Shareholders
may also enter into options or other transactions with broker-dealers or other
financial institutions which require the delivery to such broker-dealer or
financial institution of the Common Stock offered hereby, which Common Stock
such broker-dealer or other financial institutions may resell pursuant to this
Prospectus (as supplemented or amended to reflect such transaction). The Selling
Shareholders may also pledge the shares registered hereunder to a broker-dealer
or other financial institution and, upon a default, such broker-dealer or other
financial institution may effect sales of the pledged Common Stock pursuant to
this Prospectus (as supplemented or amended to reflect such transaction). In
addition, any Common Stock covered by this Prospectus that qualifies for sale
pursuant to Rule 144 under the Securities Act may be sold under Rule 144 rather
than pursuant to this Prospectus.
Brokers, dealers or agents may receive compensation in the form of
commissions, discounts or concessions from Selling Shareholders in amounts to be
negotiated in connection with sales pursuant hereto. Such brokers or dealers and
any other participating brokers or dealers may be deemed to be "underwriters"
within the meaning of the Securities Act in connection with such sales and any
such commission, discount or concession may be deemed to be underwriting
discounts or commissions under the Securities Act.
- 18 -
<PAGE>
Certain costs, expenses and fees in connection with the registration
of the Common Stock will be borne by the Company. Commissions, discounts and
transfer taxes, if any, attributable to the sales of the Common Stock will be
borne by the Selling Shareholders. Certain of the Selling Shareholders have
agreed or may agree to indemnify the Company or any underwriter, as the case may
be, and any of their respective affiliates, directors, officers and controlling
persons, against certain liabilities in connection with the offering of the
Common Stock pursuant to this Prospectus, including liabilities arising under
the Securities Act. In addition, the Company has in some cases agreed to
indemnify the Selling Shareholders or any underwriter, as the case may be, and
any of their respective affiliates, directors, officers and controlling persons,
against certain liabilities in connection with the offering of the Common Stock
pursuant to this Prospectus, including liabilities arising under the Securities
Act.
The Company has agreed to supply the Selling Shareholders with such
number of copies of this Prospectus as they may reasonably request. The Selling
Shareholders will in all cases be responsible for complying with the prospectus
delivery requirements of Section 5(b)(2) of the Securities Act in connection
with the offering and sale of the shares.
LEGAL MATTERS
Certain legal matters in connection with the securities offered hereby
are being passed upon for the Company by Covington & Burling, Washington, D.C.
and by Becker Ross Stone DeStefano & Klein, New York, N.Y. The wife of James J.
Ross, an attorney who is of counsel to Becker Ross Stone DeStefano & Klein,
holds a one-third interest in a family partnership which is the beneficial owner
of 18,225 shares of the Company's Common Stock.
EXPERTS
The audited financial statements of Unigene Laboratories, Inc. as of
December 31, 1995 and 1994 and for each of the years in the three year period
ended December 31, 1995 incorporated by reference in this Prospectus have been
incorporated by reference herein in reliance upon the report of KPMG Peat
Marwick LLP, independent certified public accountants, incorporated by reference
herein, and upon the authority of said firm as experts in accounting and
auditing.
- 19 -
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution*
The expenses payable by the Registrant in connection with the issuance
and distribution of the securities being registered hereby (other than
underwriting discounts and commissions) are set forth below:
Securities and Exchange Commission Registration Fee.................. $ 12,312
Nasdaq Listing Fee................................................... 34,020
Blue Sky Fees and Expenses........................................... 0
Accounting Fees and Expenses......................................... 2,000
Legal Fees and Expenses.............................................. 35,000
Registrar and Transfer Agent's Fees and Expenses..................... 0
Miscellaneous Expenses............................................... 1,000
Printing Costs....................................................... 0
Total ............................................ $ 84,332
- ----------------------------------
*Except for the Securities and Exchange Commission registration fee and the
Nasdaq listing fee all expenses are estimated.
Item 15. Indemnification of Directors and Officers
Article VI of the Company's By-Laws requires the Company to indemnify
each of its directors and officers to the extent permitted by the Delaware
General Corporation Law (the "DGCL"). Section 145 of the DGCL provides that a
corporation may indemnify any person, including any officer or director, who was
or is a party or who is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the corporation),
by reason of the fact that he is or was a director, officer, employee or agent
of the corporation or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement, actually and reasonably
incurred by such person, if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the corporation and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful. In any threatened pending or completed action
by or in the right of the corporation, a corporation also may indemnify any
director, officer, employee or agent for costs actually and reasonably incurred
by him in connection with the defense or settlement of the action, if he acted
in good faith and in a manner reasonably believed to be in or not opposed to the
best interests of the corporation; however, no indemnification may be made with
respect to any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation, unless and only to the extent that a
court shall determine that such indemnity is proper. Where a director, officer,
II-1
<PAGE>
employee or agent is successful on the merits or otherwise in the defense of any
action referred to above, the corporation is required to indemnify such person
against the expenses (including attorneys' fees) actually and reasonably
incurred.
The Company's Certificate of Incorporation provides that its directors
shall not be liable for monetary damages to the Company or its stockholders for
breach of the directors' fiduciary duty as directors. However, each director is
subject to liability for breach of the director's duty of loyalty to the Company
or its stockholders, for acts or omissions not in good faith or involving
intentional misconduct or knowing violations of law, for actions leading to
improper personal benefit to the director, and for payment of dividends or
approval of stock repurchases or redemptions that are unlawful under Delaware
law.
Item 16. Exhibits
4.1 Certificate of Incorporation and Amendments to Certificate of
Incorporation (incorporated by reference to Exhibits 3.1 and 3.1.1 to
Company's Registration Statement No. 33-6877 on Form S-1).
4.2 By-Laws.
5.1 Opinion of Covington & Burling as to the legality of certain of the
shares being registered.
5.2 Opinion of Becker Ross Stone DeStefano & Klein as to the legality of
certain of the shares being registered.
23.1 Consent of Independent Certified Public Accountants.
23.2 Consent of Covington & Burling (included in opinion filed as Exhibit
5.1).
23.3 Consent of Becker Ross Stone DeStefano & Klein (included in opinion
filed as Exhibit 5.2).
24.1 Powers of Attorney of Directors of Unigene Laboratories, Inc.*
- ----------------------------------
* Previously Filed
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 the Registration
Statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
II-2
<PAGE>
(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.
Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the
total dollar value of securities offered would not
exceed that which was registered) and any deviation
from the low or high end of the estimated maximum
offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume
and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the
effective 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;
Provided, however, That paragraphs (a)(1)(i) and (a)(1)(ii) of
this section do not apply if the information required to be
included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the
Commission 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 such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE>
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 ("Act") may be permitted to directors, officers or controlling
persons of the Registrant by charter, by-law, contract, statute or otherwise,
the Registrant has been advised that, in the opinion of the Securities and
Exchange Commission, such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 certifies
that it has reasonable grounds to believe that it meets all of the requirements
for filing on Form S-3 and the Registrant has duly caused this Amendment No. 1
to the Registration Statement to be signed on its behalf by the undersigned
thereunto duly authorized, in Fairfield, New Jersey, on the 28th day of June,
1996.
UNIGENE LABORATORIES, INC.
By /s/ WARREN P. LEVY
----------------------------
Warren P. Levy, President
II-5
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated:
Signature
- ---------
Title
- -----
Date
- ----
/s/ WARREN P. LEVY
- ----------------------------------
Warren P. Levy
Director, President
(principal executive officer)
June 28, 1996
/s/ RONALD S. LEVY
- ----------------------------------
Ronald S. Levy
Director, Vice President
June 28, 1996
/s/ JAY LEVY
- ----------------------------------
Jay Levy
Chairman of the Board of Directors,
Treasurer (principal financial and
accounting officer)
June 28, 1996
II-6
<PAGE>
*
- ----------------------------------
Robert Ruark
Director
June 28, 1996
*
- ----------------------------------
George M. Weimer
Director
June 28, 1996
*By /s/ RONALD S. LEVY
----------------------------------
Ronald S. Levy
Attorney-in-Fact
June 28, 1996
II-7
BY - LAWS
OF
UNIGENE LABORATORIES, INC.
ARTICLE I - OFFICES
SECTION 1. REGISTERED OFFICE. The registered office shall be
established and maintained at 100 West Tenth Street, Wilmington, in the County
of New Castle, in the State of Delaware.
SECTION 2. OTHER OFFICES. The corporation may have other offices,
either within or without the State of Delaware, at such place or places as the
Board of Directors may from time to time appoint or the business of the
corporation may require.
ARTICLE II - MEETING OF STOCKHOLDERS
SECTION 1. ANNUAL MEETINGS. Annual meetings of stockholders for the
election of directors and for such other business as may be stated in the notice
of the meeting, shall be held at such place, either within or without the State
of Delaware, and at such time and date as the Board of Directors, by resolution,
shall determine and as set forth in the notice of the meeting. In the event the
Board of Directors fails to so determine the time, date and place of meeting,
the annual meeting of stockholders shall be held at the registered office of the
corporation in Delaware on the 20th day of January at 11:00 A.M.
If the date of the annual meeting shall fall upon a legal holiday,
Saturday or Sunday, the meeting shall be held on the next succeeding business
day. At each annual meeting, the stockholders entitled to vote shall elect a
Board of Directors and may transact such other corporate business as shall be
stated in the notice of the meeting.
SECTION 2. OTHER MEETINGS. Meetings of stockholders for any purpose
other than the election of directors may be held at such time and place, within
or without the State of Delaware, as shall be stated in the notice of the
meeting.
SECTION 3. VOTING. Each stockholder entitled to vote in accordance
with the terms and provisions of the Certificate of Incorporation and these
By-Laws shall be entitled to one vote, in person or by proxy, for each share of
stock entitled to vote held by such stockholder, but no proxy shall be voted
after three years from its date unless such proxy provides for a longer period.
Upon the demand of any stockholder, the vote for directors and upon any question
before the meeting shall be by ballot. All elections for directors shall be
decided by plurality vote; all other questions shall be decided by majority vote
except as otherwise provided by the Certificate of Incorporation or the laws of
the State of Delaware.
SECTION 4. STOCKHOLDER LIST. The officer who has charge of the stock
ledger of the corporation shall at least 10 days before each meeting of
stockholders prepare a complete alphabetical addressed list of the stockholders
entitled to vote at the ensuing election, with the number of shares held by
<PAGE>
each. Said list shall be open to the examination of any stockholder, for any
purpose germane to the meeting, during ordinary business hours, for a period of
at least ten days prior to the meeting, either at a place within the city where
the meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall be available for inspection at the meeting.
SECTION 5. QUORUM. Except as otherwise required by law, by the
Certificate of Incorporation or by these By-Laws, the presence, in person or by
proxy, of stockholders holding a majority of the stock of the corporation
entitled to vote shall constitute a quorum at all meetings of the stockholders.
In case a quorum shall not be present at any meeting, a majority in interest of
the stockholders entitled to vote thereat, present in person or by proxy, shall
have power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until the requisite amount of stock entitled to
vote shall be present. At any such adjourned meeting at which the requisite
amount of stock entitled to vote shall be represented, any business may be
transacted which might have been transacted at the meeting as originally noticed
but only those stockholders entitled to vote at the meeting as originally
noticed shall be entitled to vote at any adjournment or adjournments thereof.
SECTION 6. SPECIAL MEETINGS. Special meetings of the stockholders,
for any purpose, unless otherwise prescribed by statute or by the Certificate of
Incorporation, may be called by the president and shall be called by the
president or secretary at the request in writing of a majority of the directors
or stockholders entitled to vote. Such request shall state the purpose of the
proposed meeting.
SECTION 7. NOTICE OF MEETINGS. Written notice, stating the place,
date and time of the meeting, and the general nature of the business to be
considered, shall be given to each stockholder entitled to vote thereat at his
address as it appears on the records of the corporation, not less than ten nor
more than sixty days before the date of the meeting.
SECTION 8. BUSINESS TRANSACTED. No business other than that stated in
the notice shall be transacted at any meeting without the unanimous consent of
all the stockholders entitled to vote thereat.
SECTION 9. ACTION WITHOUT MEETING. Unless otherwise provided by the
Certificate of Incorporation, any action required to be taken at any annual or
special meeting of stockholders, or any action which may be taken at any annual
or special meeting, may be taken without a meeting, without prior notice and
without a vote, if a consent in writing, setting forth the action so taken,
shall be signed by the holders of outstanding stock having not less than the
minimum number of votes that would be necessary to authorize or take such action
at a meeting at which all shares entitled to vote thereon were present and
voted. Prompt notice of the taking of the corporate action without a meeting by
less than unanimous written consent shall be given to those stock- holders who
have not consented in writing.
ARTICLE III - DIRECTORS
SECTION 1. NUMBER AND TERM. The number of directors which shall
constitute the Board of Directors of the Corporation shall be specified from
time to time by resolution of the Board of Directors. The directors shall be
-2-
<PAGE>
elected at the annual meeting of the stockholders and each director shall be
elected to serve until his successor shall be elected and shall qualify. The
number of directors may not be less than three except that where all the shares
of the corporation are owned beneficially and of record by either one or two
stockholders, the number of directors may be less than three but not less than
the number of stockholders. Directors need not be stockholders.
SECTION 2. RESIGNATIONS. Any director, member of a committee or other
officer may resign at any time. Such resignation shall be made in writing, and
shall take effect at the time specified therein, and if no time be specified, at
the time of its receipt by the President or Secretary. The acceptance of a
resignation shall not be necessary to make it effective.
SECTION 3. VACANCIES. If the office of any director, member of a
committee or other officer becomes vacant, the remaining directors in office,
though less than a quorum by a majority vote, may appoint any qualified person
to fill such vacancy, who shall hold office for the unexpired term and until his
successor shall be duly chosen.
SECTION 4. REMOVAL. Any director or directors may be removed either
for or without cause at any time by the affirmative vote of the holders of a
majority of all the shares of stock outstanding and entitled to vote, at a
special meeting of the stockholders called for the purpose and the vacancies
thus created may be filled, at the meeting held for the purpose of removal, by
the affirmative vote of a majority in interest of the stockholders entitled to
vote.
SECTION 5. INCREASE OF NUMBER. The number of directors may be
increased by amendment of these By-Laws by the affirmative vote of a majority of
the directors, though less than a quorum, or, by the affirmative vote of a
majority in interest of the stockholders, at the annual meeting or at a special
meeting called for that purpose, and by like vote the additional directors may
be chosen at such meeting to hold office until the next annual election and
until their successors are elected and qualify.
SECTION 6. COMPENSATION. Directors shall not receive any stated
salary for their services as directors or as members of committees, but by
resolution of the board a fixed fee and expenses of attendance may be allowed
for attendance at each meeting. Nothing herein contained shall be construed to
preclude any director from serving the corporation in any other capacity as an
officer, agent or otherwise, and receiving compensation therefor.
SECTION 7. MEETINGS BY CONFERENCE CALL. Members of the Board of
Directors, or any committee designated by the Board, may participate in a
meeting of the Board or any such committee by means of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and participation in the meeting in this manner
shall constitute presence in person at such meeting.
SECTION 8. POWERS. The Board of Directors shall exercise all of the
powers of the Corporation except such as are by law, or by the Certificate of
Incorporation of the corporation or by these By-Laws conferred upon or reserved
to the stockholders.
-3-
<PAGE>
SECTION 9. ACTION WITHOUT MEETING. Any action required or permitted
to be taken at any meeting of the Board of Directors, or of any committee
thereof, may be taken without a meeting, if prior to such action a written
consent thereto is signed by all members of the Board, or of such committee is
the case may be, and such written consent is filed with the minutes of
proceedings of the board or committee.
ARTICLE IV - OFFICERS
SECTION 1. OFFICERS. The officers of the corporation shall consist of
a President, a Treasurer, and a Secretary, and shall be elected by the Board of
Directors and shall hold office until their successors are elected and
qualified. In addition, the Board of Directors may elect a Chairman, one or more
Vice- Presidents and such Assistant Secretaries and Assistant Treasurers as it
may deem proper. None of the officers of the corporation need be directors. The
officers shall be elected at the first meeting of the Board of Directors after
each annual meeting. More than two offices may be held by the same person.
SECTION 2. OTHER OFFICERS AND AGENTS. The Board of Directors may
appoint such officers and agents as it may deem advisable, who shall hold their
offices for such terms and shall exercise such power and perform such duties as
shall be determined from time to time by the Board of Directors.
SECTION 3. CHAIRMAN. The Chairman of the Board of Directors if one be
elected, shall preside at all meetings of the Board of Directors and he shall
have and perform such other duties as from time to time may be assigned to him
by the Board of Directors.
SECTION 4. PRESIDENT. The President shall be the chief executive
officer of the corporation and shall have the general powers and duties of
supervision and management usually vested in the office of President of a
corporation. He shall preside at all meetings of the stockholders if present
thereat, and in the absence or non-election of the Chairman of the Board of
Directors, at all meetings of the Board of Directors, and shall have general
supervision, direction and control of the business of the corporation. Except as
the Board of Directors shall authorize the execution thereof in some other
manner, he shall execute bonds, mortgages, and other contracts in behalf of the
corporation, and shall cause the seal to be affixed to any instrument requiring
it and when so affixed the seal shall be attested by the signature of the
Secretary or the Treasurer or an Assistant Secretary or an Assistant Treasurer.
SECTION 5. VICE-PRESIDENT. Each Vice-President shall have such powers
and shall perform such duties as shall be assigned to him by the directors.
SECTION 6. TREASURER. The Treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate account of
receipts and disbursements in books belonging to the corporation. He shall
deposit all moneys and other valuables in the name and to the credit of the
corporation in such depositories as may be designated by the Board of Directors.
The Treasurer shall disburse the funds of the corporation as may be ordered by
the Board of Directors, or the President, taking proper vouchers for such
disbursements. He shall render to the President and Board of Directors at the
regular meetings of the Board of Directors, or whenever they may request it, an
account of all his transactions as Treasurer and of the financial condition of
the corporation. If required by the Board of Directors, he shall give the
corporation a bond for the faithful discharge of his duties in such amount and
with such surety as the board shall prescribe.
-4-
<PAGE>
SECTION 7. SECRETARY. The Secretary shall give, or cause to be given,
notice of all meetings of stockholders and directors, and all other notices
required by law or by these By- Laws, and in case of his absence or refusal or
neglect so to do, any such notice may be given by any person thereunto directed
by the President, or by the directors, or stockholders, upon whose requisition
the meeting is called as provided in these By-Laws. He shall record all the
proceedings of the meetings of the corporation and of directors in a book to be
kept for that purpose. He shall keep in safe custody the seal of the
corporation, and when authorized by the Board of Directors, affix the same to
any instrument requiring it, and when so affixed, it shall be attested by his
signature or by the signature of any Assistant Secretary.
SECTION 8. ASSISTANT TREASURERS AND ASSISTANT SECRETARIES. Assistant
Treasurers and Assistant Secretaries, if any, shall be elected and shall have
such powers and shall perform such duties as shall be assigned to them,
respectively, by the directors.
ARTICLE V
SECTION 1. CERTIFICATES OF STOCK. Every holder of stock in the
corporation shall be entitled to have a certificate, signed by, or in the name
of the corporation by, the Chairman or Vice- Chairman of the Board of Directors,
or the President or a Vice- President and the Treasurer or an Assistant
Treasurer, or the Secretary of the corporation, certifying the number of shares
owned by him in the corporation. If the corporation shall be authorized to issue
more than one class of stock or more than one series of any class, the
designations, preferences and relative, participating, optional or other special
rights of each class of stock or series thereof and the qualifications,
limitations, or restrictions of such preferences and/or rights shall be set
forth in full or summarized on the face or back of the certificate which the
corporation shall issue to represent such class of series of stock, provided
that, except as otherwise provided in section 202 of the General Corporation Law
of Delaware, in lieu of the foregoing requirements, there may be set forth on
the face or back of the certificate which the corporation shall issue to
represent such class or series of stock, a statement that the corporation will
furnish without charge to each stockholder who so requests the powers,
designations, preferences and relative, participating, optional or other special
rights of each class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences and/or rights. Where a
certificate is countersigned (1) by a transfer agent other than the corporation
or its employee, or (2) by a registrar other than the corporation or its
employee, the signatures of such officers may be facsimiles.
SECTION 2. LOST CERTIFICATES. New certificates of stock may be issued
in the place of any certificate therefore issued by the corporation alleged to
have been lost or destroyed, and the directors may, in their discretion, require
the owner of the lost or destroyed certificate or his legal representatives, to
give the corporation a bond, in such sum as they may direct, not exceeding
double the value of the stock, to indemnify the corporation against it on
account of the alleged loss of any such new certificate.
SECTION 3. TRANSFER OF SHARES. The shares of stock of the corporation
shall be transferable only upon its books by the holders thereof in person or by
their duly authorized attorneys or legal representatives, and upon such transfer
-5-
<PAGE>
the old certificates shall be surrendered to the corporation by the delivery
thereof to the person in charge of the stock and transfer books and ledgers, or
to such other persons as the directors may designate, by whom they shall be
cancelled, and new certificates shall thereupon be issued. A record shall be
made of each transfer and whenever a transfer shall be made for collateral
security, and not absolutely, it shall be so expressed in the entry of the
transfer.
SECTION 4. STOCKHOLDERS RECORD DATE. In order that the corporation
may determine the stockholders entitled to notice of or to vote at any meeting
of stockholders or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock or
for the purpose of any other lawful action, the Board of Directors may fix, in
advance a record date, which shall not be more than sixty nor less than ten days
before the day of such meeting, nor more than sixty days prior to any other
action. A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting.
SECTION 5. DIVIDENDS. Subject to the provisions of the Certificate of
Incorporation the Board of Directors may, out of funds legally available
therefor at any regular or special meeting, declare dividends upon the capital
stock of the corporation as and when they deem expedient. Before declaring any
dividends there may be set apart out of any funds of the corporation available
for dividends, such sum or sums as the directors from time to time in their
discretion deem proper working capital or as a reserve fund to meet
contingencies or for equalizing dividends or for such other purposes as the
directors shall deem conducive to the interests of the corporation.
SECTION 6. SEAL. The corporate seal shall be circular in form and
shall contain the name of the corporation, the year of its creation and the
words "CORPORATE SEAL DELAWARE". Said seal may be used by causing it or a
facsimile thereof to be impressed or affixed or otherwise reproduced.
SECTION 7. FISCAL YEAR. The fiscal year of the corporation shall be
determined by resolution of the Board of Directors.
SECTION 8. CHECKS. All checks, drafts, or other orders for the
payment of money, notes or other evidences of indebtedness issued in the name of
the corporation shall be signed by the officer or officers, agent or agents of
the corporation, and in such manner as shall be determined from time to time by
resolution of the Board of Directors.
SECTION 9. NOTICE AND WAIVER OF NOTICE. Whenever any notice is
required by these By-Laws to be given, personal notice is not meant unless
expressly stated, and any notice so required shall be deemed to be sufficient if
given by depositing the same in the United States mail, postage prepaid,
addressed to the person entitled thereto at his address as it appears on the
records of the corporation, and such notice shall be deemed to have been given
on the day of such mailing. Stockholders not entitled to vote shall not be
entitled to receive notice of any meetings except as otherwise provided by
statute.
-6-
<PAGE>
Whenever any notice whatever is required to be given under the
provisions of any law, or under the provisions of the Certificate of
Incorporation of the corporation or these By-Laws, a waiver thereof in writing
signed by the person or persons entitled to said notice, whether before or after
the time stated therein, shall be deemed proper notice.
ARTICLE VI - INDEMNIFICATION
The Corporation shall indemnify its officers and directors, to the
extent permitted by the General Corporation Law of Delaware.
ARTICLE VII - AMENDMENTS
These By-Laws may be altered and repealed and By-Laws may be made at
any annual meeting of the stockholders or at any special meeting thereof if
notice thereof is contained in the notice of such special meeting by the
affirmative vote of a majority of the stock issued and outstanding or entitled
to vote thereat, or by the regular meeting of the Board of Directors, at any
regular meeting of the Board of Directors, or at any special meeting of the
Board of Directors, if notice thereof is contained in the notice of such special
meeting.
June 28, 1996
Unigene Laboratories, Inc.
110 Little Falls Road
Fairfield, NJ 07004
Gentlemen:
This opinion is being furnished to you in connection with an
Amendment No. 1 to a Registration Statement on Form S-3, File No. 333-04557
(along with the original filing, the "Registration Statement") being filed today
by Unigene Laboratories, Inc., a Delaware corporation (the "Company"), with the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended, for the registration for resale of up to 7,692,201 shares
of the Company's common stock, par value $.01 per share (the "Common Stock").
This opinion is limited to (i) the 2,217,391 shares of Common
Stock issuable by the Company to Nelson Partners upon the conversion of the
Company's 9.5% Senior Secured Convertible Debentures due November 15, 1998 (the
"Debentures") held by Nelson Partners, (ii) the 652,174 shares of Common Stock
issuable by the Company to Olympus Securities, Ltd. upon the conversion of the
Debentures held by Olympus Securities, Ltd., and (iii) the shares of Common
Stock issuable by the Company to the persons or entities listed on Attachment A
hereto (the "Warrant Holders"), equal in number to the number of shares set
forth on Attachment A opposite the names of the respective Warrant Holders, upon
the exercise of the Company's warrants, dated as of March 6, 1996 (the
"Warrants"), held by such Warrant Holders.
For purposes of this opinion, we have examined a signed copy
of the Registration Statement and the exhibits thereto, the Warrants, the
Debentures, and the Amended and Restated Securities Purchase Agreement, dated as
of March 6, 1996, among the Company, Nelson Partners and Olympus Securities,
Ltd. We also have examined and relied upon a copy of the Company's Certificate
of Incorporation, certified by the Secretary of State of the State of Delaware,
and copies of the Company's By-Laws and certain resolutions adopted by the Board
of Directors of the Company, certified by the Corporate Secretary of the
Company. We further have examined such other documents and made such other
investigations as we have deemed necessary to form a basis for the opinion
hereinafter expressed.
In examining the foregoing documents, we have assumed the
authenticity of documents submitted to us as originals, the genuineness of all
signatures, the conformity to original documents of documents submitted to us as
copies, and the accuracy of the representations and statements included therein.
Based on the foregoing, we are of the opinion that: (i) an
aggregate of 2,869,565 shares of Common Stock have been reserved for issuance
upon conversion of the Debentures and 454,000 shares of Common Stock have been
reserved for issuance upon exercise of the Warrants, and (ii) such shares of
Common Stock have been duly authorized for issuance, respectively, upon
conversion of the Debentures and exercise of the Warrants, and, if and when
issued and delivered by the Company in accordance with the terms of the
Debentures or the Warrants, as applicable, will be validly issued, fully paid
and nonassessable.
<PAGE>
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and to the use of our name in the Prospectus under
the heading "Legal Matters."
Very truly yours,
COVINGTON & BURLING
<PAGE>
<TABLE>
<CAPTION>
Attachment A
to Opinion dated
June 28, 1996
Warrant Holders: Shares
---------------- ------
<S> <C>
Michael C. Kendrick 184,750
P. Bradford Hathorn 20,000
Lance T. Bury 20,000
Gerald D. Harris 5,000
Enigma Investments Limited 12,500
Charles Krusen 17,000
Eric S. Swartz 184,750
David K. Peteler 5,000
Dwight B. Bronnum 2,500
Robert L. Hopkins 2,500
--------
454,000
</TABLE>
June 28, 1996
Unigene Laboratories, Inc.
110 Little Falls Road
Fairfield, NJ 07004
Re: Registration Statement on Form S-3
Gentlemen:
We have acted as co-counsel for Unigene Laboratories, Inc., a Delaware
corporation (the "Company"), in connection with the preparation and filing by
the Company of a Registration Statement (the "Registration Statement") on Form
S-3 under the Securities Act of 1933, as amended, relating to the public
offering by certain Selling Shareholders, from time to time of up to 7,692,201
shares of the Company's Common Stock, $.01 par value (the "Common Stock"), plus
such indeterminate number of additional shares of Common Stock that may be
issuable from time to time pursuant to certain anti-dilution or other adjustment
provisions under the warrants and options described in the Registration
Statement.
This opinion is limited to the Selling Stockholders and their shares
of Common Stock listed in Schedules A, B, C, D and E attached hereto.
826,000 shares of Common Stock were issued to the Selling
Stockholders listed in Schedule A pursuant to Purchase Agreements in a private
placement of the Common Stock commencing July 1995 and completed February, 1996.
Warrants to purchase 1,023,536 shares of Common Stock were issued to the Selling
Stockholders listed in Schedule B in connection with the making of loans to the
Company by such Selling Stockholders or their assignors in March and May, 1995.
Warrants to purchase 2,204,000 shares of Common Stock were issued to the Selling
Stockholders listed in Schedule C in consideration of certain financial services
performed for the Company from October 1994 to April 1996. Options to purchase
115,000 shares of Common Stock were issued to the Selling Stockholders listed in
Schedule D between January 1993 and April 1996 in consideration of certain
consulting services performed for the Company. 10,000 shares of Common Stock are
issuable to Kien-Tsai Chen under an agreement dated December 30, 1994 for
consultation services performed for the Company by him. 190,100 shares of Common
Stock were issued to the Selling Stockholders listed in Schedule E upon the
exercise of stock options issued by the Company in connection with certain loans
to the Company in 1984 and 1985. The shares of Common Stock to be issued upon
due exercise of the warrants and options held by the Selling Shareholders listed
in Schedules B, C and D are hereinafter referred to as Underlying Shares.
We have examined the Registration Statement, the Articles of
Incorporation and By-Laws of the Company, the minutes of various meetings and
consents of the Board of Directors of the Company, Purchase Agreements, Warrant
Agreements, Option Agreements, Consulting and other agreements, originals or
<PAGE>
copies of all such records of the Company, certificates of public officials,
certificates of officers and representatives of the Company and others, and such
other documents, certificates, records, authorizations, proceedings, statutes
and judicial decisions as we have deemed necessary to form the basis of the
opinion expressed below. In such examination, we have assumed the genuineness of
all signatures, the authenticity of all documents submitted to us as originals
and the conformity to originals of all documents submitted to us as copies
thereof. As to various questions of fact material to such opinion, we have
relied upon statements and certificates of officers and representatives of the
Company and others.
Based upon the foregoing, we are of the opinion that:
1. The 826,000 shares of Common Stock of the Company which
have been issued under the Purchase Agreements have been validly issued and are
fully paid and non-assessable.
2. The Underlying Shares have been duly authorized and, if
and when the applicable options or warrants are duly exercised and the said
Underlying Shares are issued by the Company in accordance with the terms of the
applicable option or warrant agreements, the Underlying Shares will be validly
issued, fully paid and non- assessable.
3. The 10,000 shares of Common Stock of the Company to be
issued to Mr. Chen, when issued will be validly issued, fully paid and
non-assessable.
4. The 190,100 shares of Common Stock of the Company which have been
issued under the stock option agreements referred to in Schedule E have been
validly issued and are fully paid and non- assessable. We hereby consent to be
named in the Registration Statement and in the related Prospectus (the
"Prospectus") as attorneys who have passed upon legal matters in connection with
the offering of the Common Stock under the caption "Legal Matters" in the
Prospectus. In giving this consent, we do not hereby admit that we are within
the category of persons whose consent is required under Section 7 of the
Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder.
We further consent to your filing of a copy of this opinion as an
exhibit to the Registration Statement.
Very truly yours,
BECKER ROSS STONE DeSTEFANO & KLEIN
JM:DC
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE A
Private Placement Stockholders Shares
- ------------------------------ ------
<S> <C>
H. T. Ardinger, Jr ........................................... 250,000
Jerome Berkowitz ............................................. 40,000
James Sanderson .............................................. 50,000
Richard Garrett .............................................. 10,000
Stanley Aber ................................................. 6,000
Michael Samuel ............................................... 5,000
Sylvia Bond .................................................. 25,000
Leonard Leff ................................................. 25,000
Herb Fisher Trust ............................................ 50,000
Richard Scagnelli ............................................ 5,000
Richard & Vilma Scagnelli (Jt. Ten.) ......................... 5,000
Hamdi A. Al-Alami ............................................ 100,000
Manny Siegman ................................................ 50,000
Raymond Sales ................................................ 55,000
Benedict Morelli ............................................. 20,000
Charles A. Barnes, Jr. Trust ................................. 20,000
Douglas Tygielski ............................................ 110,000
</TABLE>
Schedule A
<PAGE>
SCHEDULE B
<TABLE>
<CAPTION>
Warrantholders Shares
- -------------- ------
<S> <C>
DeJufra, Inc. ................................................... 123,536
Marco A. Giudice ................................................ 25,000
Dr. Charles Goldberg ............................................ 10,000
MicroCap Fund, Inc. ............................................. 615,000
Nelson Partners ................................................. 180,000
Vincent J. Ricciardi ............................................ 25,000
Olympus Securities, Ltd. ........................................ 45,000
=========
Total ................................ 1,023,536
</TABLE>
Schedule B
<PAGE>
SCHEDULE C
<TABLE>
<CAPTION>
Warrantholders
Name Shares
---- ------
<S> <C>
Patrick Tedesco ........................................... 224,000
Paul Weber ................................................ 217,500
Bishop Rosen & Co., Inc. .................................. 107,500
Annette North ............................................. 84,000
Richard Kripaitis ......................................... 101,000
Cornerstone Capital, Inc. ................................. 70,000
Thomas Redington .......................................... 400,000
Reseau de Voyages Sterling, Inc. .......................... 1,000,000
=========
Total .......................... 2,204,000
</TABLE>
Schedule C
<PAGE>
SCHEDULE D
Option Holders
<TABLE>
<CAPTION>
Name Shares
---- ------
<S> <C>
Agnes Vignery 110,000
Marvin Moser 5,000
=======
115,000
</TABLE>
Schedule D
<PAGE>
SCHEDULE E
Option Holders
<TABLE>
<CAPTION>
Name Shares
--- ------
<S> <C>
Jay Levy 109,350
A. Martin Randall 20,000
Mario Taverna 60,750
=======
190,100
</TABLE>
Schedule E
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Unigene Laboratories, Inc.:
We consent to the incorporation by reference in this Registration
Statement on Form S-3 of Unigene Laboratories, Inc. of our report dated March
22, 1996, relating to the balance sheets of Unigene Laboratories, Inc. as of
December 31, 1995 and 1994 and the related statements of operations,
stockholders' equity, and cash flows for each of the years in the three-year
period ended December 31, 1995 which report appears in the December 31, 1995
annual report on Form 10-K of Unigene Laboratories, Inc. which is incorporated
herein by reference and to the reference to our firm under the heading "Experts"
in the Prospectus.
Our report dated March 22, 1996 contains an explanatory paragraph that
states that the Company has suffered recurring losses from operations and has a
net working capital deficiency, which raise substantial doubt about its ability
to continue as a going concern. The financial statements do not include any
adjustment that might result from the outcome of this uncertainty.
KPMG PEAT MARWICK LLP
New York, New York
June 28, 1996
