As filed with the Securities and Exchange Commission on January 10, 1997
Registration No.333-18079
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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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<PAGE>
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [ X ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same 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. [ ]
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
Prospectus Subject to Completion
January 10, 1997
UNIGENE LABORATORIES, INC.
Common Stock
(par value $.01 per share)
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This Prospectus relates to the resale of up to 6,773,609
shares of common stock, par value $.01 per share (the "Common Stock"), of
Unigene Laboratories, Inc., a Delaware corporation (the "Company"), consisting
of shares of Common Stock, and shares of Common Stock issuable upon the exercise
of warrants, issued to certain persons and entities (the "Selling Shareholders")
identified herein in connection with a private placement completed by the
Company in October 1996. See "Selling Shareholders." This Prospectus also
relates to an indeterminate number of additional shares of Common Stock that may
be issued to the Selling Shareholders pursuant to anti-dilution provisions
contained in the warrants. All of the shares offered hereby will be offered and
sold by the 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 January 9, 1997 the last sale price of the Common Stock, as
reported on the Nasdaq National Market, was 2.06 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.
<PAGE>
INVESTMENT IN THE SECURITIES OFFERED HEREBY INVOLVES A HIGH
DEGREE OF RISK. SEE "RISK FACTORS" ON PAGE 3.
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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 , 1997.
<PAGE>
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, as amended by a Form 10-K/A filed
April 29, 1996 and a Form 10-K/A filed January 10, 1997.
2. The Quarterly Report of the Company on Form 10-Q for the
quarter ended March 31, 1996.
3. The Quarterly Report of the Company on Form 10-Q for the
quarter ended June 30, 1996.
4. The Quarterly Report of the Company on Form 10-Q for the
quarter ended September 30, 1996.
<PAGE>
5. 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.
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 upon the written or oral request of such
person made 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 September 30, 1996,
had an accumulated deficit of $41.2 million. The Company has not received any
significant operating revenues during the last five years.
<PAGE>
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 expects that it 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 believes that it has sufficient financial resources to
sustain its operations at the current level through the middle of the third
quarter of 1997. 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
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."
There are synthetic salmon Calcitonin products as well as
non-Calcitonin products currently being marketed for osteoporosis treatment or
in development that will compete with the Company's Calcitonin products. See
"Risk Factors - Technological Change and Competition." Expanded consumer
acceptance of Calcitonin pharmaceutical products 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 has developed or 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.
<PAGE>
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. See "Risk Factors - Government Regulation." 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 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,
effective as of March 1996, with the Quingdao 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 nonproprietary aspects of the Company's 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 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.
<PAGE>
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 - 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 osteoporosis 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 a Calcitonin pill formulation 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 numerous 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
applications to issue as patents could have a material adverse effect upon the
Company's business. Although two such patent applications currently are the
subject of an interference proceeding, the Company does not believe that an
adverse ruling would have a material adverse effect on the business of the
Company or its prospects. 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
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.
<PAGE>
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 and production
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. The Company has received authorization to proceed with pivotal
clinical trials in the United States and the United Kingdom for its injectable
form of Calcitonin. The Company believes that the abbreviated clinical program
it is undertaking pursuant to these authorizations will be sufficient to satisfy
approval requirements in the United States and the European Union. The Company
believes that it will be eligible for an expedited approval process which would
be shorter than that typically associated with a New Drug Application ("NDA")
submission because (i) the active ingredient is structurally identical to and
biologically indistinguishable from the active ingredient in products already
approved by the FDA, (ii) the formulation is essentially similar to the
formulations used in similar, already approved products and (iii) the clinical
trial program that the FDA authorized was relatively brief and involved small
numbers of subjects, so the amount of information that must be reviewed is far
less than would have been compiled for a typical NDA submission. However, there
can be no assurance that such approval will be received in an accelerated time
frame. See "The Company." In the case of the regulatory process for the
Company's oral form of Calcitonin products, the Company believes that it may
also 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.
The Company's production facility may, from time to time, be audited by
the FDA to ensure that it is operating in compliance with cGMP guidelines which
require that the production operation be conducted in strict compliance with,
among other things, the Company's written protocols for reagent qualification,
process execution, data recording, instrument calibration and quality
monitoring. The FDA is empowered to suspend production operations if, in its
opinion, significant and/or repeated deviations from these protocols have
occurred. Such a suspension could have a material adverse impact on the
Company's future operations.
<PAGE>
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. In addition to the issued or to be issued shares of Common
Stock to which this Prospectus relates, as of November 30, 1996 there are
approximately 435,000 shares of Common Stock that are issuable upon conversion
of the Company's outstanding 10% convertible debentures; approximately 1,278,000
shares of Common Stock issuable upon conversion of the Company's outstanding
9.5% convertible debentures; approximately 3,352,000 shares of Common Stock
issuable upon exercise of warrants at exercise prices ranging from $1.375 to
$3.50 per share; approximately 1,701,000 shares of Common Stock issuable upon
exercise of purchase options exercisable at prices ranging from $1.00 to $4.5625
per share; and 10,000 shares of Common Stock issuable for services performed for
the Company. 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 the
Common Stock issuable upon the conversion of such convertible securities or the
exercise of such options or warrants will have on the market price of the Common
Stock prevailing from time to time, although it is possible 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 and warrants 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 or
existing products or procedures, proposed government regulations, developments
or disputes relating to agreements, 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."
<PAGE>
Voting Control. Warren P. Levy, Ronald S. Levy and Jay Levy, founders
of the Company, beneficially own approximately 12% 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 November 30, 1996 the amount of the Company's net tangible assets
was approximately $12.5 million. However, if the Company in the future is unable
to maintain compliance with the Nasdaq National Market listing requirements, the
Common Stock may be removed from trading on the Nasdaq National Market. If the
Company fails to meet the requirements for trading on the Nasdaq National Market
and does not otherwise qualify for inclusion in the Nasdaq Small-Cap 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 Small-Cap Market.
If the Common Stock is not traded on the Nasdaq National Market or the
Nasdaq Small-Cap 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.
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 prior emphasis on pharmaceutical
research. 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.
<PAGE>
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 kilogram 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
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 minimal or 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."
<PAGE>
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. In
May 1996, the Company requested that both the FDA and the regulatory authority
for drugs in the United Kingdom authorize the Company to conduct pivotal
clinical trials of its injectable form of Calcitonin, which requests were
granted shortly thereafter. The Company expects the trials to be completed by
approximately the end of 1996. The Company plans to apply for marketing
authorization in the United States and throughout the European Union soon after
completion of the clinical trials. 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 Calcitonin pharmaceutical products 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 United
States 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 January 1996, the Company successfully tested its proprietary
Calcitonin pill in Phase I clinical trials in the United Kingdom. These studies
indicated that the majority of those who received the pill showed levels of the
hormone in blood samples taken during the trial which are greater than the
minimum levels generally regarded as required for maximal therapeutic benefit.
The Company believes that these were the first studies to demonstrate that
significant blood levels of Calcitonin could be observed in humans following
oral administration of the hormone. In April 1996, the Company successfully
conducted a third Phase I clinical trial in the United Kingdom which utilized
lower Calcitonin dosages than in the prior two clinical trials. The results of
this trial indicated that every recipient of the pill showed levels of the
hormone in blood samples taken during the trial in excess of the minimum levels
generally regarded as required for maximal therapeutic benefit. However, there
can be no assurance that these results will be replicated in further studies.
The Company has filed a patent application for its oral formulation with the
U.S. Patent and Trademark Office and plans to file an 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 developing, producing or
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 produce and market its products or to carry on its other
projects. See "Risk Factors - Absence of Operating Revenues and Liquidity;
History of Losses; Auditors' Report - Going Concern Considerations."
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.
<PAGE>
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 November 30, 1996, had 60 full-time
employees, including 25 research and development personnel and 24 production
personnel. Ten 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
Of the 6,773,609 shares of Common Stock offered hereby (i) 6,328,206
shares of Common Stock have been issued or are issuable by the Company to
purchasers (or their transferees) of detachable units (the "Units") sold by the
Company in a private placement completed in October 1996 (the "Private
Placement") and (ii) 445,403 of the shares of have been issued or are issuable
to BT Securities Corporation, to which the Company issued 296,935 Units as
compensation for its services as placement agent for the Private Placement. Each
Unit consists of (i) one share of Common Stock, (ii) one quarter of a Class C
warrant, each whole Class C warrant exercisable immediately to purchase one
share of Common Stock, and (iii) one quarter of a Class D warrant (together with
the Class C warrants, the "Warrants"), each whole Class D warrant exercisable
immediately to purchase one share of Common Stock. The Warrants have an initial
exercise price of $3.00 and expire on October 11, 1999, except that the
expiration date of the Class C warrants may be accelerated by the Company under
certain circumstances. In addition, the Warrants contain certain adjustment and
anti-dilution provisions which, upon the occurrence of certain events, may
require the Company to adjust the exercise price of the Warrants and to issue
additional shares of Common Stock upon the exercise thereof.
In connection with the Private Placement, the Company agreed to
register for resale under the Securities Act the Common Stock comprising the
Units and the Common Stock issuable upon exercise of the Warrants (the
"Registrable Securities") and to keep such registration statement effective
until all of the Warrants have been exercised or expired and all of the
Registrable Securities have been disposed of pursuant to an effective
registration statement or are eligible for resale pursuant to Rule 144(k) under
the Securities Act.
<PAGE>
This Prospectus covers any additional shares of Common Stock that are
issued pursuant to the exercise of the Warrants described herein by reason of
the anti-dilution provisions thereof.
In addition to shares of Common Stock issued as part of the Units or
issuable upon exercise of Warrants, Nelson Partners and Olympus Securities,
Ltd., own, or may immediately acquire upon conversion of the Company's
outstanding 9.5% Senior Secured Convertible Debentures (the "Debentures")or
exercise of certain outstanding warrants (the "Citadel Warrants"), 1,148,960 and
375,438 shares of Common Stock (the "Debenture Shares"), respectively. The
Debentures and the Citadel Warrants were issued by the Company to Nelson
Partners and Olympus Securities, Ltd. in private transactions completed in March
1996 and November 1995, respectively. All of the Debenture Shares are registered
for resale under the Company's Registration Statement No. 33-04557.
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 November 30, 1996, with respect to each Selling Shareholder:
name, number of shares of Common Stock beneficially owned (including the shares
issuable upon the exercise of the Warrants), number of shares of Common Stock
being offered and number of shares of Common Stock to be held following the
offering, assuming the sale of all of the shares of 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 who are transferees of Warrants
or Registrable Securities from the Selling Shareholders named below and the
holdings of Common Stock of such additional Selling Shareholders.
<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(1) Number Number Percent
- ---- ------ ---------- ------ ------ -------
<S> <C> <C> <C> <C> <C>
Continental Casualty Company 3,000,000 8.5 3,000,000 0 *
Woodstead Associates II, L.P. 862,500 2.4 862,500 0 *
Legg Mason High Yield Fund 750,000 2.1 750,000 0 *
Annapurna Partners, L.P. 75,000 * 75,000 0 *
Vincent A. Rossi, Jr. 75,000 * 75,000 0 *
Jeffrey Dobbs 15,000 * 15,000 0 *
William J. Jacobs 37,500 * 37,500 0 *
Stephen Mazur 37,500 * 37,500 0 *
Turnberry Capital Partners, L.P. 345,000 * 345,000 0 *
Catalyst Partners, L.P. 375,000 1.1 375,000 0 *
CL Investment Partnership II, L.P. 345,000 * 345,000 0 *
BT Securities Corporation 445,403 1.3 445,403 0 *
Nelson Partners 1,492,130 4.2 343,170(2) 1,148,960 3.3
Olympus Securities, Ltd. 442,974 1.3 67,536(3) 375,438 1.1
- --------------------
* Less than one percent.
(1) Calculated on the basis of 35,218,540 shares of Common Stock outstanding on
November 30, 1996.
(2) Does not include 1,148,960 shares offered for resale by Nelson Partners
under the Company's Registration Statement No. 33-04557 on Form S-3.
(3) Does not include 375,438 shares offered for resale by Olympus Securities,
Ltd. under the Company's Registration Statement No. 33-04557 on Form S-3.
</TABLE>
<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 Registrable Securities 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 or 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 amended or supplemented to reflect such transaction). The Selling
Shareholders also may 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.
<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. The Selling Shareholders have agreed to
indemnify the Company or any underwriter, as the case may be, and any of their
respective affiliates, directors, officers, employees, agents 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 agreed to indemnify the Selling
Shareholders or any underwriter, as the case may be, and any of their respective
affiliates, directors, officers, employees, agents 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 Registrable Securities.
LEGAL MATTERS
Certain legal matters in connection with the shares of Common Stock
offered hereby are being passed upon for the Company by Covington & Burling,
Washington, D.C.
EXPERTS
The audited financial statements of the Company 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.
<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:
<TABLE>
<CAPTION>
<S> <C>
Securities and Exchange Commission Registration Fee......... $ 4,265
Nasdaq Listing Fee.......................................... 17,500
Accounting Fees and Expenses................................ 2,500
Legal Fees and Expenses..................................... 20,000
Registrar and Transfer Agent's Fees and Expenses............ 500
Miscellaneous Expenses...................................... 500
Printing Costs.............................................. 0
--------
Total $ 45,265
========
- --------------
* Except for the Securities and Exchange Commission registration fee and the
Nasdaq listing fee, all expenses are estimated.
</TABLE>
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. Section 145 also 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 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) actually and
reasonably incurred by him in connection with the defense or settlement of the
<PAGE>
action, 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, except that 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 of competent jurisdiction shall
determine that such indemnity is proper. To the extent that a director, officer,
employee or agent is successful on the merits or otherwise in the defense of any
action referred to above, the corporation is required under the DGCL to
indemnify such person against expenses (including attorneys' fees) actually and
reasonably incurred in connection therewith.
The Company's Certificate of Incorporation provides that no director
shall be liable to the Company or its stockholders for monetary damages for
breach of his fiduciary duty as a director, except for liability for (i) any
breach of the director's duty of loyalty to the Company or its stockholders,
(ii) acts or omissions not in good faith or involving intentional misconduct or
knowing violation of law, (iii) any transaction from which the director derived
an improper personal benefit, or (iv) 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 (incorporated by reference to Exhibit 4.2 to Company's
Registration Statement No. 33-04557 on Form S-3).
4.3 Registration Rights Agreement, dated October 11, 1996, among the
Company, BT Securities Corporation and the purchasers named therein
(incorporated by reference to Exhibit 1 to the Company's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1996).
4.4 Warrant Agreement, dated October 11, 1996, among the Company, BT
Securities Corporation and the purchasers named therein (incorporated
by reference to Exhibit 2 to the Company's Quarterly Report on Form
10-Q for the quarter ended September 30, 1996).
5.1 Opinion of Covington & Burling as to the legality 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).
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 this Registration
Statement:
(i) To include any prospectus required by section 10(a)(3)
of the Securities Act of 1933;
<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 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.
<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.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and the Registrant has duly caused
this Amendment No. 1 to be signed on its behalf by the undersigned thereunto
duly authorized, in Fairfield, New Jersey, on the 10th day of January, 1997.
UNIGENE LABORATORIES, INC.
By:/s/ WARREN P. LEVY
------------------
Warren P. Levy
President
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:
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ WARREN P. LEVY Director, President January 10, 1997
- ------------------ (principal executive
Warren P. Levy (officer)
RONALD S. LEVY* Director, Vice President January 10, 1997
---------------
Ronald S. Levy
JAY LEVY* Chairman of the Board January 10, 1997
-------- of Directors, Treasurer
Jay Levy (principal financial and
accounting officer)
ROBERT RUARK* Director January 10, 1997
------------
Robert Ruark
GEORGE M. WEIMER* Director January 10, 1997
-----------------
George M. Weimer
/s/ WARREN P. LEVY
- ------------------
*BY Warren P. Levy
Attorney-in-fact
</TABLE>
COVINGTON & BURLILNG
1201 PENNSYLVANIA AVENUE, N.W.
P.O. BOX 7566
WASHINGTON, D.C. 20044-7566
(202) 662-6000
_____
TELEFAX (202) 662-6291
TELEX: 89-593 (COVLING WSH)
CABLE: COVLING
_____
WRITER'S DIRECT DIAL NUMBER
December 17, 1996
Unigene Laboratories, Inc.
110 Little Falls Road
Fairfield, New Jersey 07004
Gentlemen:
This opinion is being furnished to you in connection with a
Registration Statement on Form S-3 (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
6,773,609 shares of the Company's common stock, par value $.01 per share (the
"Common Stock"). Of the 6,773,609 shares of Common Stock offered by the
Registration Statement, (i) 4,515,739 shares (the "Unit Shares") were issued by
the Company in connection with a private placement (the "Private Placement") of
4,515,739 detachable units (the "Units"), each Unit consisting of (a) one share
of Common Stock, (b) one quarter of a Class C warrant, each whole Class C
warrant exercisable immediately to purchase one share of Common Stock and (c)
one quarter of a Class D warrant (together with the Class C warrants, the
"Warrants"), each whole Class D warrant exercisable immediately to purchase one
share of Common Stock, and (ii) 2,257,870 shares (the "Warrant Shares") are
issuable by the Company upon exercise of the Warrants.
For purpose of this opinion, we have examined the Registration
Statement and the exhibits thereto, copies of the Subscription Agreements
entered into by the Company and each of the purchasers of Units in the Private
Placement (the "Purchasers"), the Placement Agency Agreement, dated as of
October 11, 1996, between the Company and BT Securities Corporation ("BT"), the
Warrant Agreement, dated as of October 11, 1996, among the Company, the
Purchasers and BT, and the Warrants. 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 necesary 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.
<PAGE>
Unigene Laboratories, Inc.
December 17, 1996
Page 2
Based on the foregoing, we are of the opinion that: (i) the Unit Shares
have been validly issued and are fully paid and nonassessable and (ii) the
Warrant Shares have been duly authorized for issuance upon exercise of the
Warrants, and, if and when issued and delivered by the Company in accordance
with the terms of the Warrants and the Warrant Agreement, will be validly
issued, fully paid and nonassessable.
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 forming a
part thereof under the heading "Legal Matters."
Very truly yours,
/s/Covington & Burling
-------------------
Covington & Burling
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.
/s/KPMG Peat Marwick LLP
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KPMG PEAT MARWICK LLP
New York, New York
January 10, 1997
