As filed with the Securities and Exchange Commission on November 4, 1998
Registration No. 333-63245
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 2 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
UNIGENE LABORATORIES, INC.
(Exact name of Registrant as specified in its charter)
Delaware 22-2328609
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
110 Little Falls Road
Fairfield, New Jersey 07004
(973) 882-0860
(Address, including zip code, and telephone
number, including area code, of
Registrant's principal executive offices)
Warren P. Levy, President
Unigene Laboratories, Inc.
110 Little Falls Road
Fairfield, New Jersey 07004
(973) 882-0860
(Name, address, including zip code, telephone number,
including area code, of agent for service)
Copy to:
D. Michael Lefever, Esq.
Covington & Burling
P.O. Box 7566, 1201
Pennsylvania Ave., N.W.
Washington, D.C. 20044-7566
Approximate date of commencement of proposed sale to public: From time
to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
<PAGE>
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. [ ]
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
Prospectus Subject to Completion
November 4, 1998
UNIGENE LABORATORIES, INC.
Common Stock
(par value $.01 per share)
---------------
This Prospectus relates to the resale of up to 3,852,500 shares of
common stock, par value $.01 per share (the "Common Stock"), of Unigene
Laboratories, Inc., a Delaware corporation (the "Company"), issuable by the
Company to the Tail Wind Fund, Ltd. (the "Selling Shareholder") (i) upon the
conversion of $4 million in aggregate principal amount of certain convertible
debentures described herein (the "Debentures") issued by the Company in a
private placement completed in June 1998, (ii) as payment of interest on the
Debentures, and (iii) upon exercise of certain warrants issuable by the Company
upon conversion or redemption of the Debentures. Beginning January 1, 1999, the
Debentures are convertible into (i) Common Stock at a conversion price (the
"Conversion Price") equal to the lower of (a) 110% of the average of the closing
bid prices of the Common Stock on the Nasdaq Stock Market during the fourth
quarter of 1998 (the "Cap Price") and (b) the average of the four lowest closing
bid prices of the Common Stock during the 18 trading days prior to the date of
conversion (the "Market Price") and (ii) warrants, expiring five years from the
date of issuance, to purchase a number of shares of Common Stock equal to 4% of
the number of shares issuable upon conversion of the Debentures at an exercise
price equal to 125% of the Conversion Price. Subject to certain adjustments, up
to 15% of the original principal amount of Debentures may be converted per month
on a non-cumulative basis. In no event will the Company issue more than an
aggregate of the 3,852,500 shares of Comon Stock upon conversion of all of the
Debentures, upon exercise of all warrants issued upon conversion or redemption
of Debentures, and as payment of interest on the Debentures. See "Selling
Shareholder". All of the shares offered hereby will be offered and sold by the
Selling Shareholder. The Company will not receive any proceeds from the sale of
the shares of Common Stock offered hereby.
The Common Stock trades on the Nasdaq Stock Market under the symbol
UGNE. On November 2, 1998 the last sale price of the Common Stock, as reported
on the Nasdaq Stock Market, was $1.50 per share. The Debentures are not
convertible until January 1, 1999. Accordingly, none of the Common Stock offered
hereby has been issued. However, assuming conversion of all $4 million in
aggregate principal amount of Debentures on November 3, 1998 at the Market Price
on such date, such Debentures would be convertible into (i) 3,367,003 shares of
Common Stock and (ii) warrants to purchase 134,680 shares of Common Stock.
<PAGE>
The Common Stock may be offered from time to time by the Selling
Shareholder 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
Shareholder may arrange for other brokers, dealers or agents to participate.
Such brokers, dealers or agents may receive commissions, discounts or
concessions from the Selling Shareholder 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. The Company has advised the Selling Shareholder that (i) it must
comply with applicable prospectus delivery requirements under the Securities Act
in connection with any short sales and (ii) the anti-manipulative provisions of
Regulation M under the Securities Exchange Act of 1934, as amended, may apply to
its sales in the market.
All costs, expenses and fees in connection with the registration of the
Common Stock will be borne by the Company, except commissions, discounts and
transfer taxes, if any, attributable to the sales of the Common Stock, which
will be borne by the Selling Shareholder.
<PAGE>
INVESTMENT IN THE SECURITIES OFFERED HEREBY INVOLVES A HIGH
DEGREE OF RISK. SEE "RISK FACTORS" ON PAGE 5.
---------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is _____, 1998.
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. Such reports, proxy statements and
other information may also be obtained from the web site the Commission
maintains at http://www.sec.gov.
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.
<PAGE>
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, 1997.
2. The Quarterly Report of the Company on Form 10-Q for
the quarter ended March 31, 1998.
3. The Quarterly Report of the Company on Form 10-Q for
the quarter ended June 30, 1998.
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.
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 offering 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 (973) 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."
<PAGE>
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."
History of Losses; Auditors' Report - Going Concern Considerations. The
Company has incurred annual operating losses since its inception and, as a
result, at June 30, 1998, had an accumulated deficit of $58 million. The
auditors' report for the fiscal year ended December 31, 1997 contained an
explanatory paragraph indicating there is substantial doubt about the Company's
ability to continue as a going concern.
Management believes that the Company has sufficient financial resources
to sustain its operations at the current level into the first quarter of 1999.
The Company will require additional funds to ensure continued operations beyond
that time. Although there can be no assurance, the Company expects to achieve
milestones specified under the Warner-Lambert agreement, which will result in
payments to the Company. See "The Company." However, the timing of such payments
is uncertain and the Company may have to rely on outside sources for financing
to sustain the Company's operations. There is no assurance as to the terms on
which such additional funds would be available or that in such circumstances
sufficient funds could be obtained. Management believes that satisfying the
Company's long-term liquidity requirements will require the successful
commercialization of the product licensed to Warner-Lambert or one of its other
Calcitonin products. There can be no assurance that there will be sufficient
acceptance of the Company's products in the marketplace for successful
commercialization.
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 that may be encountered by
enterprises in a stage of transition, some of which may be beyond the Company's
control.
<PAGE>
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 the necessary
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 likely will 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 Calcitonin pharmaceutical products will
depend on the development of a consumer-accepted delivery system. A major
pharmaceutical company received FDA approval in 1995 for the marketing of a
nasal spray delivery system for Calcitonin, which has enlarged the U.S. market
for Calcitonin. The Company, in collaboration with Warner-Lambert, as well as
other companies are conducting research on oral delivery systems for Calcitonin.
There can be no assurance that the Company will develop a suitable oral delivery
system or that governmental approval of 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. 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."
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 - History of Losses; Auditors' Report - Going Concern Considerations."
Production Facility. The Company has constructed a facility intended
for the production of pharmaceutical-grade Calcitonin and other peptide
hormones. The Company is the lessee of this facility under a 10-year lease that
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
approval of the facility by various regulatory agencies, including the FDA,
which would allow it to manufacture Calcitonin for human pharmaceutical use. The
facility is producing Calcitonin in accordance with current Good Manufacturing
Practice ("cGMP") regulations, but there is no assurance that the facility will
be approved by such agencies. 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. In addition, the successful commercialization of
an oral Calcitonin product will require the Company to incur additional
expenditures to expand or upgrade the Company's manufacturing operations to
satisfy its supply obligations under the Warner-Lambert license agreement. See
"Risk Factors - Dependence on Large Pharmaceutical Companies." Neither the cost
or timing of such capital expenditures are determinable at this time.
<PAGE>
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. In July 1997, the Company entered into an agreement
under which it granted to the Parke-Davis division of Warner-Lambert Company a
worldwide license to use the Company's oral Calcitonin technology. The Company
has retained the right to license the use of its technologies for injectable and
nasal formulations of Calcitonin on a worldwide basis. There is no assurance
that the Company will achieve the milestones under the Warner-Lambert agreement
or that the Company will be successful in its efforts to enter into new research
or licensing agreements or other revenue producing arrangements. See "The
Company."
In June 1995, the Company entered into a joint venture agreement,
effective as of March 1996, with the Qingdao General Pharmaceutical Company and
its Huanghai factory for the production and marketing of injectable and nasal
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. This joint venture
contributed $300,000 to 1996 revenues. It is uncertain whether any additional
revenues will be recognized or received in connection with this joint venture.
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 regulation or approval 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 the 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. Major
competitors in the field of osteoporosis treatment include Novartis, American
Home Products, Merck and Eli Lilly. There can be no assurance that others will
not develop processes or products which are superior to, or otherwise preclude
the commercial utilization of, processes or products developed by the Company.
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 would have sufficient resources to defend against or
satisfy any such claims. Although the Company has 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.
<PAGE>
Patents and Proprietary Technology. The Company has filed applications
for U.S. patents relating to proprietary amidation, bacterial expression and
immunization processes and to oral formulations for Calcitonin and other peptide
hormones invented in the course of its research. To date, the following three
patents have issued: Immunization By Immunogenic Implant, a process patent, and
two patents related to the Alpha-Amidation Enzyme, both process and product
patents. In addition, the Company has received a Notice of Allowance for its
patent application covering the oral delivery of salmon Calcitonin. 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 one patent
application currently is 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 by the Company 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, development 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
Company's production facility, are subject to significant regulation by numerous
federal, state, local and foreign governmental authorities. In addition to
obtaining the approval of the production facility by the FDA and other
regulatory agencies, it is necessary to obtain the approval by such agencies of
the Calcitonin to be produced in the facility for human use. The regulatory
approval process for a pharmaceutical product requires substantial resources and
may take a number of years. There can be no assurance that regulatory approval
will be obtained for the production facility or for any of the Company's
products or that such approvals will be obtained in a timely manner. 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, and receive revenue from milestone payments, product sales
or royalties. Furthermore, the extent of any adverse governmental regulation
that may arise from future legislative and administrative action cannot be
predicted.
<PAGE>
The Company's production facility may, from time to time, be audited by
the FDA or other regulatory agencies 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. Such agencies are empowered to
suspend production operations and/or product sales if, in their 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.
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
Levy nor Dr. Ronald 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 3,852,500 shares of Common Stock to
which this Prospectus relates, as of July 31, 1998, there are approximately
214,000 shares of Common Stock that are issuable upon conversion of the
Company's outstanding 10% convertible debentures; approximately 449,000 shares
of Common Stock issuable upon conversion of the Company's outstanding 9.5%
convertible debentures; approximately 4,919,000 shares of Common Stock issuable
upon exercise of outstanding warrants at exercise prices ranging from $1.375 to
$3.50 per share; and approximately 1,916,000 shares of Common Stock issuable
upon exercise of options exercisable at prices ranging from $1.19 to $4.25 per
share. 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 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 the market price. In addition, holders
of such convertible securities, including the Debentures and the warrants
issuable upon conversion thereof, may engage in short sales of Common Stock,
which may have the effect of depressing the market price. If the minimum bid
price for the Common Stock falls below $1 per share, the Common Stock of the
Company no longer would continue to meet all of the maintenance requirements for
trading on the Nasdaq Nationl Market and could be delisted, which could have a
material adverse effect on the quality of the market for the Common Stock. The
Company also cannot predict the adverse effect, if any, that the existence of
such convertible securities, options and warrants would 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
<PAGE>
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."
Voting Control. Warren P. Levy, Ronald S. Levy and Jay Levy, founders
of the Company, beneficially own approximately 11% of the outstanding Common
Stock (assuming that outstanding convertible securities, warrants and options
held by others are not converted or exercised) and, thus, effectively they 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
and the minimum bid price for the Common Stock must be $1 per share. As of June
30, 1998 the amount of the Company's net tangible assets was approximately $5.9
million and on November 2, 1998 the closing bid price of the Common Stock was
$1.50. However, if the Company in the future is unable to maintain compliance
with the Nasdaq National Market listing requirements, the Common Stock could 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
holders of the Common Stock to resell the securities.
THE COMPANY
Unigene Laboratories, Inc. is a biopharmaceutical company that is
focusing on the development of Calcitonin products for the treatment of
osteoporosis. The Company is currently producing pharmaceutical grade Calcitonin
in accordance with current Good Manufacturing Practice guidelines at its
facility in Boonton, New Jersey, developing production technology improvements,
developing novel Calcitonin formulations and associated analytical methods, and
registering its injectable Calcitonin product in Europe.
<PAGE>
The Company's business 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 on third party sales and/or direct sales
of bulk or finished products. Generally, the Company seeks sponsors and
licensees to provide research funding and assume responsibility for obtaining
appropriate regulatory approvals, clinical testing, and marketing of products
derived from the Company's research activities. However, in certain cases, the
Company may retain responsibility for clinical testing and for obtaining the
required regulatory approvals. To date, the Company has focused its efforts
primarily on the manufacture of, and the development of novel delivery systems
for, salmon Calcitonin.
In July 1997, the Company entered into an agreement under which it
granted to the Parke-Davis division of Warner-Lambert Company a worldwide
license to use the Company's oral Calcitonin technology. Upon execution of the
agreement, the Company received payments of $6 million, consisting of a $3
million license fee and a $3 million equity investment by Warner-Lambert
(695,066 shares of the Company's Common Stock were purchased at a price of
approximately $4.32 per share). Under the terms of the license agreement, the
Company is eligible to receive up to an additional $48.5 million in milestone
payments if specified milestones are achieved. The first of these milestones was
achieved in February 1998, resulting in a payment to the Company of $2 million
and other milestones were achieved in August and September 1998 resulting in a
payment of $3 million in September 1998. An additional $10.5 million would be
received if other milestones are achieved prior to the commencement of Phase I
clinical studies in the U.S. Early-stage milestones primarily relate to the
product's performance characteristics, while the latter-stage milestones are
primarily related to regulatory filings and approvals. If the product is
successfully commercialized, the Company also would receive revenue from the
sale of raw material to Warner-Lambert and royalties on product sales by
Warner-Lambert and its affiliates. The Company is actively seeking other
licensing and/or supply agreements with pharmaceutical companies for injectable
and nasal forms of Calcitonin.
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
(973) 882-0860.
Year 2000
The Company has established a Year 2000 taskforce that will review all
of the Company's internal computer systems for Year 2000 compliance, including
workstations, its accounting system, and control systems for equipment in the
Company's manufacturing and laboratory facilities. The Company expects that the
taskforce will commence its compliance review in November 1998 and that the
review will be completed during the first quarter of 1999. After the review is
completed, the taskforce will determine how to address any remediation
necessary. The Company intentds to repair or replace any noncompliant systems in
a timely manner so that the business of the Company will not be interrupted.
Because most of the principal hardware and software used by the Company
(including its accounting system and most of the equipment control systems) were
acquired by the Company within the last several years, the Company expects that
most of its systems will be Year 2000 compliant. However, until the taskforce
completes its review, the Company will not be able to assess the level of
compliance or make an accurate estimate of the costs of any remediation.
<PAGE>
The Company has no material relationships with third party suppliers
and its obligations to its sole material customer, Warner-Lambert, would not be
significantly affected by Year 2000 noncompliance on the part of Warner-Lambert.
However, the loss of the electricity supply to the Company's laboratory,
production and administratiave facilities would cause a shut down of those
facilities which, depending on the duration of the shut down, may have a
material adverse impact on the Company's business. In addition, the loss of
telecommunications services and banking services would, as is the case with all
businesses, adversely affect the Company.
SELLING SHAREHOLDER
In June 1998 the Company completed a private placement (the "Private
Placement") in which it sold to the Selling Shareholder $4 million in aggregate
principal amount of 5% convertible debentures due December 31, 2001 (the
"Debentures"). Interest on the Debentures is payable in cash or, at the option
of the Company, in Common Stock. Beginning January 1, 1999, the Debentures are
convertible into (i) Common Stock at a conversion price (the "Conversion Price")
equal to the lower of (a) 110% of the average of the closing bid prices of the
Common Stock on the Nasdaq Stock Market during the fourth quarter of 1998 (the
"Cap Price") and (b) the average of the four lowest closing bid prices of the
Common Stock during the 18 trading days prior to the date of conversion (the
"Market Price") and (ii) warrants, expiring five years from the date of
issuance, to purchase a number of shares of Common Stock equal to 4% of the
number of shares issuable upon conversion of the Debentures at an exercise price
equal to 125% of the Conversion Price. Up to 15% of the original principal
amount of the Debentures may be converted per month on a non-cumulative basis;
provided, however, that if the Market Price is greater than or equal to 120% of
the Cap Price on the last conversion date in any month, then up to 20% of the
original principal amount may be converted in such month. Under certain
circumstances, the limitation on conversion amounts may be waived by the
Company. After July 31, 1999, all of the Debentures will be fully convertible.
The Debentures by their terms provide that conversion of Debentures or
payment of interest thereon in Common Stock is not permitted, and a holder of
Debentures may not submit them for conversion, if such conversion or payment
would result in the holder owning (as determined pursuant to Rule 13d-3 under
the Exchange Act) more than 4.99% of all issued and outstanding Common Stock.
If a Debenture holder submits a Debenture for conversion and the Market
Price is less than or equal to $1.1156, the Company at its option may redeem the
Debenture in consideration of (i) an amount equal to the principal amount
thereof plus a premium of 12% per year from the date of issuance and (ii)
warrants, expiring five years from the date of issuance, to purchase a number of
shares of Common Stock equal to 25% of the number of shares that would have been
issuable upon conversion of the Debenture at an exercise price equal to 135% of
the Conversion Price at the time of redemption.
In no event will the Company issue more than an aggregate of the
3,852,500 shares of Common Stock offered hereby (the "Share Limit") upon
conversion of all of the Debentures, upon exercise of all warrants issued upon
conversion or redemption of Debentures, and as payment of interest on the
Debentures. If conversion of any Debentures or exercise of any warrants would
require the issuance of shares in excess of the Share Limit, the Company will,
as the case may be, redeem such Debentures at a price equal to 120% of the
principal amount thereof or pay in cash the difference between the market price
and exercise price of the number of shares that would have been issuable upon
exercise of such warrants but for the Share Limit.
<PAGE>
In connection with the Private Placement, the Company agreed to
register for resale under the Securities Act a total of 3,852,500 shares of
Common Stock which represents the Share Limit issuable (i) upon conversion of
the Debentures, (ii) as payment of interest on the Debentures, and (iii) upon
exercise of the warrants issuable by the Company upon conversion or redemption
of the Debentures, and to keep such registration statement effective until such
shares have been sold or until such time as they become eligible for
distribution pursuant to Rule 144(k) under the Securities Act.
The Selling Shareholder has not had any position, office or other
material relationship with the Company or any of its predecessors within the
past three years. The following table sets forth with respect to the Selling
Shareholder: name, number of shares of Common Stock beneficially owned
(including shares issuable upon the exercise of outstanding warrants and
Debentures), 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 Debentures by their terms are not
convertible until January 1, 1999, and the following information assumes that
the only securities of the Company owned by the Selling Shareholder as of
January 1, 1999 will be $4 million in aggregate principal amount of Debentures.
The Company has been advised by the Selling Shareholder that as of the date
hereof it does not own any securities of the Company other than the Debentures.
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 Common
Stock from the Selling Shareholder named below and the holdings of Common Stock
of such additional Selling Shareholders.
<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 (1) Percent (1)(2) Number Number Percent
---- ---------- -------------- ------ ------ -------
<S> <C> <C> <C> <C> <C>
The Tail Wind Fund, Ltd.(3) 3,852,500 9.0 3,852,500 0 0
</TABLE>
(1) Maximum number of shares that may be issued upon conversion of the
Debentures, exercise of warrants, and payment of interest; provided that
conversion of the Debentures or payment of interest thereon in Common Stock
is not permitted if such conversion or payment would result in the holder
of the Debenture owning (as determined pursuant to Rule 13d-3 under the
Exchange Act) more than 4.99% of all issued and outstanding Common Stock.
(2) Based on 38,928,698 shares of Common Stock outstanding as of the date
hereof.
(3) The Selling Shareholder has advised the Company that The Tail Wind Fund,
Ltd., a British Virgin Islands limited liability company, is the record and
beneficial owner of the shares of Common Stock offered hereby. The Selling
Shareholder has further advised the Company that its directors, who share
voting and investment power are the only persons who possess voting and
investment power with respect to the Common Stock owned by the Selling
Shareholder and that its current directors are Ronald J.A. de Graaf,
Michael M. Darville, Anita M. Donaldson, Mizpah A. Albury, Steven E. Cary
and Joan L. Thompson.
PLAN OF DISTRIBUTION
The purpose of this Prospectus is to permit the Selling Shareholder, if
it desires, to dispose of some or all of the Common Stock covered by this
Prospectus at such times and at such prices as it chooses. Whether sales of
shares will be made, and the timing and amount of any sale made, is within the
sole discretion of the Selling Shareholder.
The Common Stock covered by this Prospectus may be offered for sale
from time to time by the Selling Shareholder 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 Shareholder 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
Shareholder. The Selling Shareholder may also sell Common Stock short and
redeliver the shares to close out such short positions. The Selling Shareholder
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
Shareholder also may pledge the shares registered hereunder to a broker-dealer
<PAGE>
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 the Selling Shareholder 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.
All 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 Shareholder. The Selling Shareholder has 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 Shareholder 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 Shareholder with such
number of copies of this Prospectus as it 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 Common Stock, including any short sales.
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, 1997
and 1996, and for each of the years in the three-year period ended December 31,
1997, 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. The
report of KMPG Peat Marwick LLP covering the 1997 financial statements contains
an explanatory paragraph that states that the Company's recurring losses from
operations raises substantial doubt about the Company's ability to continue as a
going concern. The financial statements do not include any adjustment that might
result from the outcome of that uncertainty.
<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........ $ 1,489
Nasdaq Listing Fee......................................... 17,500
Accounting Fees and Expenses............................... 2,500
Legal Fees and Expenses.................................... 5,000
Registrar and Transfer Agent's Fees and Expenses........... 500
Miscellaneous Expenses..................................... 500
Printing Costs............................................. 250
-------
Total $27,739
* 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. 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
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
<PAGE>
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 or
officer 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 Amendment to Certificate of Incorporation (incorporated by reference to
Exhibit 3.1.2 to the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1997).
4.3 By-Laws (incorporated by reference to Exhibit 4.2 to Company's Registration
Statement No. 33-04557 on Form S-3).
4.4 Registration Rights Agreement, dated June 29, 1998, between the Company and
The Tail Wind Fund, Ltd. ("Tail Wind") (incorporated by reference to
Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1998).
4.5 Purchase Agreement, dated June 29, 1998, between the Company and Tail Wind
(incorporated by reference to Exhibit 10.1 to the Company's Quarterly
Report on Form 10-Q for the quarter ended June 30, 1998).
5.1 Opinion of Covington & Burling as to the legality of the shares being
registered. *
23.1 Consent of KPMG Peat Marwick LLP.
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. (included on
page II-4).
* 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;
(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.
<PAGE>
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 (1)(i) and (1)(ii) do not
apply if the registration statement is on Form S-3 or Form
S-8, and the information required to be included in 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.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 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 Registration Statement to be signed on its behalf by the undersigned
thereunto duly authorized, in Fairfield, New Jersey, on the 4th day of November,
1998.
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:
/s/WARREN P. LEVY
- -----------------
Warren P. Levy, President,
Chief Executive Officer and
Director (principal executive officer) November 4, 1998
/s/JAY LEVY *
- -----------
Jay Levy, Treasurer,
(principal financial and
accounting officer) November 4, 1998
/s/RONALD S. LEVY *
- -----------------
Ronald S. Levy, Secretary,
Vice President and Director November 4, 1998
<PAGE>
/s/ROBERT RUARK *
- ---------------
Robert Ruark
Director November 4, 1998
/s/ ALLEN BLOOM *
- ---------------
Allen Bloom
Director November 4, 1998
/s/ROBERT F. HENDRICKSON *
- ----------------------------
Robert F. Hendrickson
Director November 4, 1998
*/s/WARREN P. LEVY
- -----------------
Warren P. Levy
Attorney-in-fact November 4, 1998
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 February 20, 1998,
relating to the balance sheets of Unigene Laboratories, Inc. as of December 31,
1997 and 1996 and the related statements of operations, stockholders' equity,
and cash flows for each of the years in the three-year period ended December 31,
1997, which report appears in the December 31, 1997 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 February 20, 1998 contains an explanatory paragraph that states
that the Company has suffered recurring losses from operations which raises
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
-------------------------
KPMG PEAT MARWICK LLP
New York, New York
November 4, 1998
