<PAGE>
As filed with the Securities and Exchange Commission on August 4, 2000
Registration No. 333-40716
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
PRE-EFFECTIVE AMENDMENT NO. 1
TO
REGISTRATION STATEMENT
ON FORM S-3
UNDER THE SECURITIES ACT OF 1933
TECHNICLONE CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 95-3698422
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
14282 FRANKLIN AVENUE
TUSTIN, CALIFORNIA 92780-7017
(714) 508-6000
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
JOHN N. BONFIGLIO
14282 FRANKLIN AVENUE
TUSTIN, CALIFORNIA 92780-7017
(714) 508-6000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
WITH COPIES TO:
OTTO E. SORENSEN, ESQ.
LUCE, FORWARD, HAMILTON & SCRIPPS, LLP
600 WEST BROADWAY, SUITE 2600
SAN DIEGO, CA 92101
(619) 699-2534
APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. | |
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. | |
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. | |
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. | |
The aggregate market value of the voting stock held by non-affiliates of
the Registrant was approximately $264,254,000 as of June 28, 2000, based upon
the price at which such stock was last sold in the principal market for such
stock as of such date.
<PAGE>
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
TITLE OF EACH CLASS OF PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION
REGISTERED REGISTERED(1) SHARE (2) PRICE (2) FEE
================================================================================================================
<S> <C> <C> <C> <C>
Common stock, 742,857 $3.16 $2,347,428 $845
$.001 par value (3)
----------------------------------------------------------------------------------------------------------------
Shares of common stock, 125,000 $3.16 $395,000 $142
$.001 par value (4)
----------------------------------------------------------------------------------------------------------------
Shares of common stock, 1,500,000 $3.16 $4,740,000 $1,706
$.001 par value (5)
----------------------------------------------------------------------------------------------------------------
Common stock, 638,458 $3.16 $2,017,527 $726
$.001 par value (6)
----------------------------------------------------------------------------------------------------------------
Shares of common stock, 15,625 $3.16 $49,375 $18
$.001 par value (7)
----------------------------------------------------------------------------------------------------------------
Shares of common stock, 9,310 $3.16 $29,420 $11
$.001 par value (8)
----------------------------------------------------------------------------------------------------------------
Shares of common stock, 14,210 $3.16 $44,904 $16
$.001 par value (9)
----------------------------------------------------------------------------------------------------------------
Shares of common stock, 10,188 $3.16 $32,194 $12
$.001 par value (10)
----------------------------------------------------------------------------------------------------------------
Shares of common stock, 6,430 $3.16 $20,319 $7
$.001 par value (11)
----------------------------------------------------------------------------------------------------------------
Shares of common stock, 8,080 $3.403 $27,496 $10
$.001 par value (12)
----------------------------------------------------------------------------------------------------------------
Shares of common stock, 750,000 $3.16 $2,370,000 $853
$.001 par value (13)
----------------------------------------------------------------------------------------------------------------
Common stock, 585,009 $3.16 $1,848,628 $666
$.001 par value (14)
----------------------------------------------------------------------------------------------------------------
Total.................. 4,405,167 $13,922,291 $5,012
================================================================================================================
</TABLE>
(1) In the event of a stock split, stock dividend or similar transaction
involving our common stock, in order to prevent dilution, the number of
shares registered shall automatically be increased to cover the additional
shares in accordance with Rule 416(a) under the Securities Act of 1933, as
amended (the "Securities Act").
(2) In accordance with Rule 457(c), the aggregate offering price of shares of
common stock of Techniclone Corporation (the "Company") is estimated
solely for purposes of calculating the registration fees payable pursuant
hereto, using the average of the high and low sales price reported by the
Nasdaq SmallCap Market for our common stock on June 28, 2000, which was
$3.16 per share and, with respect to shares of common stock of the Company
issuable upon exercise of outstanding warrants, the higher of (i) such
average sales price or (ii) the exercise price of such warrants.
<PAGE>
(3) Represents shares of common stock which may be issued to Schering A.G. in
connection with an amendment agreement dated June 14, 2000 (the "Amendment
Agreement"), pursuant to which $1.3 million worth of common stock would be
issued to Schering A.G. on the date this Registration Statement becomes
effective. Two times the number of shares which would be issued with the
share price of $3.50 per share are being registered.
(4) Represents shares of common stock issuable upon the exercise of
outstanding options to purchase 125,000 shares issued to Biotechnology
Development Ltd. ("BTD") under the Option Agreement of October 23, 1998,
at an exercise price of $3.00 per share which rights were later assigned
to Cresent Mortgage Corporation.
(5) Represents shares of common stock issuable upon the exercise of
non-qualified options held by one director and two consultants of the
Registrant at an exercise price of $.34 per share.
(6) Represents shares of common stock issued to Dunwoody Brokerage Services,
Inc. ("Dunwoody") pursuant to the terms of a Placement Agent Agreement
dated as of June 16, 1998 by and between the Company and Dunwoody, as
successor in interest to Swartz Investments, LLC, a Georgia limited
liability company, in connection with the issuance of shares of common
stock to two institutional investors pursuant to the terms of a Regulation
D Common Stock Equity Line Subscription Agreement (the "Equity Line")
dated as of June 16, 1998, by and between the Company and the two
institutional investors, as follows: (i) 156,250 shares of common stock
were issued to Dunwoody on or about August 16, 1999 in connection with the
issuance of 1,562,500 shares of common stock to the two institutional
investors (the "August 16, 1999 Issuance"); (ii) 93,103 shares of common
stock were issued to Dunwoody on or about October 13, 1999 in connection
with the issuance of 931,033 shares of common stock to the two
institutional investors (the "October 13, 1999 Issuance"); (iii) 142,105
shares of common stock were issued to Dunwoody on or about November 19,
1999 in connection with the issuance of 1,421,052 shares of common stock
to the two institutional investors (the "November 19, 1999 Issuance");
(iv) 101,886 shares of common stock were issued to Dunwoody on or about
January 14, 2000 in connection with the issuance of 1,018,867 shares of
common stock to the two institutional investors (the "January 14, 2000
Issuance"); (v) 64,306 shares of common stock were issued to Dunwoody on
or about February 4, 2000 in connection with the issuance of 643,061
shares of common stock to the two institutional investors (the "February
4, 2000 Issuance"); and (vi) 80,808 shares of common stock were issued to
Dunwoody on or about February 25, 2000 in connection with the issuance of
808,080 shares of common stock to the two institutional investors (the
"February 25, 2000 Issuance"). Ownership of the Dunwoody shares has been
transferred to Eric S. Swartz and Michael C. Kendrick, with each receiving
one-half of the shares.
(7) Represents shares of common stock formerly issuable to Dunwoody upon
exercise of outstanding warrants, exercisable at any time until December
31, 2004 at an exercise price of $.80 per share, issued to Dunwoody on or
about August 16, 1999 as a placement agent fee in connection with the
August 16, 1999 Issuance. Ownership of the Dunwoody warrants has been
transferred to Eric S. Swartz and Michael C. Kendrick, with each receiving
one-half of the warrants.
(8) Represents shares of common stock formerly issuable to Dunwoody upon
exercise of outstanding warrants, exercisable at any time until December
31, 2004 at an exercise price of $0.3625 per share, issued to Dunwoody on
or about October 13, 1999 as a placement agent fee in connection with the
October 13, 1999 Issuance. Ownership of the Dunwoody warrants has been
transferred to Eric S. Swartz and Michael C. Kendrick, with each receiving
one-half of the warrants.
(9) Represents shares of common stock formerly issuable to Dunwoody upon
exercise of outstanding warrants, exercisable at any time until December
31, 2004 at an exercise price of $0.2375 per share, issued to Dunwoody on
or about November 19, 1999 as a placement agent fee in connection with the
November 19, 1999 Issuance. Ownership of the Dunwoody warrants has been
transferred to Eric S. Swartz and Michael C. Kendrick, with each receiving
one-half of the warrants.
(10) Represents shares of common stock formerly issuable to Dunwoody upon
exercise of outstanding warrants, exercisable at any time until December
31, 2004 at an exercise price of $0.33125 per share, issued to Dunwoody on
or about January 14, 2000 as a placement agent fee in connection with the
January 14, 2000 Issuance. Ownership of the Dunwoody warrants has been
transferred to Eric S. Swartz and Michael C. Kendrick, with each receiving
one-half of the warrants.
<PAGE>
(11) Represents shares of common stock formerly issuable to Dunwoody upon
exercise of outstanding warrants, exercisable at any time until December
31, 2004 at an exercise price of $2.4492 per share, issued to Dunwoody on
or about February 4, 2000 as a placement agent fee in connection with
February 4, 2000 Issuance. Ownership of the Dunwoody warrants has been
transferred to Eric S. Swartz and Michael C. Kendrick, with each receiving
one-half of the warrants.
(12) Represents shares of common stock formerly issuable to Dunwoody upon
exercise of outstanding warrants, exercisable at any time until December
31, 2004 at an exercise price of $3.403 per share, issued to Dunwoody on
or about February 25, 2000 as a placement agent fee in connection with the
February 25, 2000 Issuance. Ownership of the Dunwoody warrants has been
transferred to Eric S. Swartz and Michael C. Kendrick, with each receiving
one-half of the warrants.
(13) Represents shares of common stock upon exercise of outstanding warrants
issued to Swartz Private Equity, LLC pursuant to a Letter of Agreement for
an equity line commitment dated November 5, 1999 exercisable at the lower
of the initial exercise price of $.46875 or the lowest reset price (see
"The Investor Commitment Warrant").
(14) Represents shares of common stock issued to Oxigene, Inc. in connection
with the joint venture agreement entered into in May of 2000.
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>
SUBJECT TO COMPLETION; DATED AUGUST __, 2000
PROSPECTUS
4,405,167 SHARES
[Logo here] TECHNICLONE
CORPORATION
COMMON STOCK
This prospectus relates to the resale of up to 4,405,167 shares of the
common stock of Techniclone Corporation (the "Company") by the selling
shareholders. All or a portion of the shares offered by this prospectus may be
offered for sale, from time to time, by the selling shareholders for their own
benefit. The shares offered by this prospectus include shares already issued by
us and shares issuable upon the exercise of options and warrants held by the
selling shareholders. The total proceeds to the Company from the exercise of
warrants and options, if exercised in full on a cash basis, would be a maximum
of $1,236,565. We will receive no proceeds from the sale of our common stock by
the selling shareholders or from the exercise of warrants issued under the
Regulation D Common Stock Equity Line Subscription Agreement, which may be
exercised on cashless basis only. See "Selling Shareholders" and "Plan of
Distribution."
Our common stock is registered under Section 12(g) of the Securities
Exchange Act of 1934 and is listed on The Nasdaq SmallCap Market under the
symbol "TCLN." On June 28, 2000, the last reported sale price of our common
stock on The Nasdaq SmallCap Market was $3.06 per share.
INVESTING IN OUR COMMON STOCK INVOLVES SIGNIFICANT RISKS. SEE "RISK
FACTORS" BEGINNING ON PAGE 4 FOR A DESCRIPTION OF CERTAIN FACTORS WHICH SHOULD
BE CONSIDERED BY INVESTORS BEFORE PURCHASING THE SHARES OFFERED BY THIS
PROSPECTUS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THIS
PROSPECTUS IS INCLUDED IN THE REGISTRATION STATEMENT THAT WAS FILED BY
TECHNICLONE CORPORATION WITH THE SECURITIES AND EXCHANGE COMMISSION. THE SELLING
SHAREHOLDERS CANNOT SELL THEIR SHARES UNTIL THAT REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THE SHARES OR THE
SOLICITATION OF AN OFFER TO BUY THE SHARES IN ANY STATE WHERE THE OFFER OR SALE
IS NOT PERMITTED.
The date of this Prospectus is August __, 2000
<PAGE>
TABLE OF CONTENTS
PAGE
----
TECHNICLONE CORPORATION.......................................................1
RISK FACTORS..................................................................7
FORWARD-LOOKING STATEMENTS...................................................15
USE OF PROCEEDS..............................................................15
SELLING SHAREHOLDERS.........................................................17
PLAN OF DISTRIBUTION.........................................................19
DESCRIPTION OF SECURITIES....................................................21
THE AMENDMENT AGREEMENT....................................................23
THE OPTION AGREEMENT.......................................................23
NON-QUALIFIED OPTIONS ISSUED TO DIRECTOR AND CONSULTANTS...................23
THE EQUITY LINE AGREEMENT..................................................24
THE INVESTOR COMMITMENT WARRANT............................................27
THE JOINT VENTURE AGREEMENT..................................................27
LEGAL MATTERS................................................................28
EXPERTS ....................................................................28
WHERE TO LEARN MORE ABOUT TECHNICLONE........................................28
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE..............................29
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR
SECURITIES ACT LIABILITIES..........................................30
You should rely only on the information contained in this document or
to which we have referred you. We have not authorized anyone to provide you with
information that is different. This document may only be used where it is legal
to sell these securities. The information in this document may only be accurate
on the date of this document. However, in the event of a material change, this
prospectus will be amended or supplemented accordingly.
<PAGE>
TECHNICLONE CORPORATION
Techniclone Corporation ("Techniclone") was incorporated in the State
of Delaware on September 25, 1996. On March 24, 1997, Techniclone International
Corporation, a California corporation (a predecessor company incorporated in
June 1981), was merged with and into Techniclone. This merger was effected to
change our state of incorporation from California to Delaware and to make
certain changes in our charter documents. Techniclone has one wholly owned
subsidiary, Peregrine Pharmaceuticals, Inc., a Delaware corporation, which was
acquired on April 24, 1997.
Techniclone is a biopharmaceutical company engaged in the research,
development and commercialization of targeted cancer therapeutics. We are
developing product candidates based primarily on collateral (indirect) tumor
targeting for the treatment of solid tumors. In addition, we are in
collaboration with Schering A.G. to develop a direct tumor-targeting agent
(Oncolym(R)) for the treatment of Non-Hodgkins Lymphoma ("NHL").
Collateral targeting is a strategy that has been developed to take
advantage of characteristics common to all solid tumors. These common tumor
characteristics include the development of a blood supply in all solid tumors in
excess of 2mm in size in order to support growth. While all solid tumors in
excess of 2mm in size develop a blood supply, they do not develop an adequate
blood supply. The lack of an adequate blood supply results in starvation and
eventually death of tumor cells farthest from the tumor blood vessels. These
dying and dead tumor cells are known as the necrotic core of the tumor. Our
Collateral Targeting Agents target either intratumoral blood vessels or
structures found in the necrotic core of the tumor.
The most clinically advanced of the Collateral Targeting Agents is
known as Tumor Necrosis Therapy ("TNT"), which utilizes monoclonal antibodies
(targeting molecules that bind to specific structures) that recognize markers
found in the necrotic core of solid tumors. TNT antibodies are potentially
capable of carrying a variety of agents including radiation, chemotherapeutic
agents and cytokines to the interior of solid tumors. A Phase II clinical trial
for a Tumor Necrosis Therapy agent (called Cotara(TM)) for the treatment of
malignant glioma (brain cancer) is currently being conducted at The Medical
University of South Carolina, Temple University, University of Utah-Salt Lake
City, Carolina Neurosurgery & Spine Associates and the University of Miami. In
addition, our Tumor Necrosis Therapy is being used in a clinical trial for the
treatment of pancreatic, prostate and liver cancers in Mexico City.
The second type of Collateral Targeting Agent that we are developing is
known as Vascular Targeting Agents ("VTAs"). VTAs utilize monoclonal antibodies
and other targeting agents that recognize markers found on tumor blood vessels.
The monoclonal antibody carries an effector molecule that creates a blockage
within the blood vessels that supply oxygen and nutrients to the tumor cells.
Cutting off the blood supply to the tumor results in tumor cell death,
potentially destroying the tumor. VTAs are currently in pre-clinical development
in collaboration with our joint development partner, Oxigene, Inc. and
researchers at the University of Texas Southwestern Medical Center at Dallas.
1
<PAGE>
The third type of Collateral Targeting Agents is known as
Vasopermeation Enhancement Agents ("VEAs"). VEAs currently use the same
targeting agent as TNT to deliver an agent that makes the blood vessels inside
the tumor more leaky (permeable). The increased permeability of the tumor blood
vessels makes it possible to deliver an increased concentration of killing
agents into the tumor where they can potentially kill the living tumor cells.
VEAs are currently in pre-clinical development in collaboration with researchers
at the University of Southern California Medical Center.
Techniclone has taken steps to protect its position in the field of
Collateral Targeting Agents. Techniclone currently has exclusive rights to over
40 issued U.S. and foreign patents protecting various aspects of its technology
and has additional pending patent applications that it believes will further
strengthen its position in collateral targeting.
Our direct tumor-targeting agent (Oncolym(R)) for the treatment of
Non-Hodgkins Lymphoma ("NHL") is being developed by Schering A.G., a major
multinational pharmaceutical company. On March 8, 1999, Techniclone entered into
a license agreement with Schering A.G. with respect to the development,
manufacturing and marketing of our direct tumor targeting agent candidate,
Oncolym(R). The Techniclone clinical trial was halted by Schering A.G., and
Schering A.G. has advised the Company that they currently anticipate starting a
single dose dosing trial with a modified treatment in the near future. This dose
escalation study is designed to measure safety and efficacy of a single dose of
Oncolym(R) in intermediate and high grade Non-Hodgkins Lymphoma. Recently, the
Company and Schering A.G. have amended the license agreement whereby Techniclone
has agreed to issue shares of its common stock to Schering A.G. in two traunches
as prepayment to cover the projected clinical trial expenses. The first traunch
of $1.3 million will be given to Schering A.G. upon the effective date of this
Registration Statement of which this Prospectus is a part. A second traunch of
$1.7 million will be given upon the commencement of the Phase II/III study.
Our principal executive offices are located at 14282 Franklin Avenue,
Tustin, California 92780-7017, and our telephone number is (714) 508-6000.
RECENT DEVELOPMENTS
Our management team and the Board of Directors have changed
dramatically since November 3, 1999. During November 1999, four of our five
Board members, Larry O. Bymaster, Rockell Hankin, William C. Shepherd and Thomas
R. Testman, resigned. Mr. Eric Swartz and Mr. Carlton Johnson were appointed as
new members of the Board. On December 29, 1999, the Board appointed Mr. Edward
Legere to also serve on the Board of Directors. Currently, the Board is
comprised of the following four members: Mr. Carlton Johnson, Mr. Edward Legere,
Mr. Eric Swartz, and Dr. Clive Taylor. In November 1999, Mr. Bymaster resigned
2
<PAGE>
as President/Chief Executive Officer ("CEO") and Mr. Steven C. Burke resigned as
Chief Financial Officer and Corporate Secretary. The Board appointed Dr. John N.
Bonfiglio, Techniclone's Vice President of Technology and Business Development,
as Interim President and recently appointed him as President and CEO. In
addition, Mr. Steven King was promoted to the position of Vice President of
Technology and Product Development and Mr. Paul Lytle was promoted to the
position of Vice President of Finance & Accounting and Corporate Secretary.
Techniclone is currently operating with approximately 18 employees compared to
approximately 50 employees previously employed by the Company in October 1999.
With the recent changes in our management team and the Board of
Directors, we have adopted a new strategic business plan. During the quarter
ended April 30, 2000, our new management team and Board of Directors further
defined our business plans, operations and funding requirements. In the past
five years, significant financial resources have been spent on a Good
Manufacturing Practices ("GMP") infrastructure, corporate facility improvements,
staffing and other support activities. Based on our evaluation of the Company,
the management team and the Board of Directors have implemented the following
plan:
CORPORATE STRUCTURE. Our objective is to focus our resources on
clinical trials and licensing. Our new plan started with the elimination of our
in-house manufacturing activities, which reduced the level of staff and fixed
overhead costs required for our operations. We have also decided to outsource
various clinical trial activities, which will allow us to better predict and
manage our costs on a project specific basis. We will continue to outsource our
research efforts through our agreements with the University of Southern
California and the University of Texas Southwestern Medical Center at Dallas.
Techniclone has maintained a core group of employees that will plan, coordinate
and monitor all product development and clinical trial activities being
conducted by outside parties. In addition, the core group of employees will also
maintain the product development activities and technology transfer activities
associated with outsourcing the manufacturing of our product candidates.
MANUFACTURING. Operating a GMP manufacturing facility requires highly
specialized personnel and equipment that must be maintained on a continual
basis. Although we believe that the Company has derived substantial benefits
from our manufacturing operations, management and the Board of Directors believe
that maintaining a GMP manufacturing facility is not an efficient use of our
resources at this time. We intend to use contract manufacturers with excess
capacity to provide cost effective GMP manufacturing of Oncolym(R), Cotara(TM)
and other future products under development. Techniclone has manufactured a
sufficient antibody supply to meet our current clinical trial needs for our
Oncolym(R) and Cotara(TM) technologies and have retained key development
personnel, who will be responsible for developing analytical methods and
processes that will facilitate the transfer of technology to contract
manufacturers.
As part of this new manufacturing strategy, we are looking to sublease
any excess space to further reduce our fixed overhead costs and sell any unused
or idle assets. We are also working with TNCA, LLC, the owner of the Company's
3
<PAGE>
manufacturing facility, who has listed the facility for sale. As the facility
itself and related manufacturing improvements are owned by TNCA, LLC, only the
proceeds from the sale of manufacturing equipment will be paid directly to
Techniclone. In addition, if the manufacturing facility is sold by TNCA, LLC,
Techniclone would receive approximately $932,000 as payment on a note receivable
from TNCA, LLC as of April 30, 2000. The note receivable was received as partial
consideration upon the sale and subsequent leaseback of our facilities in
December 1998. To date, Techniclone has realized a significant reduction of
monthly fixed overhead expenses from the discontinuation of our manufacturing
operations. Techniclone anticipates additional reductions in fixed overhead
costs related to the cessation of manufacturing activities and upon the sale or
subleasing of the manufacturing facility.
LICENSING. We also consider licensing to be an important part of our
strategic business plan. Our management team and the Board of Directors believe
that non-exclusive licensing of our TNT and VTA technology platforms is the
optimal way to maximize the value of these technologies. Because of the
potentially broad range of applications of these technologies and our broad
patent coverage in the VTA, TNT and VEA areas, there is the potential for
multiple products based on these technology platforms. We believe that
opportunities may exist to enter into multiple licenses in areas of our
technologies that we are not actively interested in developing. We believe that
this strategy of entering into multiple strategic alliances for each of our core
technologies is the best way to enhance the probability of seeing a drug
candidate successfully developed.
As evidence of the new strategic business plan, we recently finalized
an agreement to jointly develop and commercialize the overall VTA technology
platform with Oxigene, Inc. As part of the joint development arrangement,
Techniclone and Oxigene, Inc. have formed a joint venture, Arcus Therapeutics
LLC ("Arcus"), that will focus on merging the vascular targeting technologies of
Oxigene, Inc. and Techniclone. The VTA technology is currently in pre-clinical
development, and the Arcus joint venture is expected to begin clinical studies
within the next two years. The joint venture plans to continue sublicensing the
technology to other companies for applications that would not interfere with the
joint venture's combination strategy. Under the terms of the joint venture,
Techniclone will supply its intellectual property and the expertise of Dr.
Thorpe, along with the most promising lead candidates he has developed to date.
Oxigene, Inc. will provide its expertise in the preclinical and clinical
development areas as well as its next generation tubulin-binding compounds. The
joint venture participants will collaborate on research and development of those
compounds for use in combination with the VTA technology. Pursuant to the joint
venture agreement, Oxigene, Inc. has paid us an upfront cash licensing fee of $1
million and has subscribed for $2 million in the current market value of our
common stock. Oxigene, Inc. will also be required to pay Techniclone $1 million
in cash and will subscribe to an additional $1 million in Techniclone stock upon
the filing of an Investigational New Drug Application (IND) for the first
clinical candidate developed by Arcus. Based on development success in the joint
venture, Oxigene, Inc. will be required to spend up to $20 million to fund the
development expenses of Arcus. Any further funding of the joint venture
thereafter would be shared by the partners on an equal basis. Additionally under
the terms of the joint venture agreement, any sublicensing fees generated within
the joint venture will be allocated 75% to Techniclone and 25% to Oxigene, Inc.
until we have received $10 million in sublicense fee revenues. Thereafter, the
joint venture partners will share licensing fees on an equal basis. Furthermore,
Techniclone and Oxigene, Inc. will share equally any royalty income or profits
from the joint venture.
4
<PAGE>
In addition to the joint venture, the Company has signed letters of
intent with SuperGen, Inc., to license a segment of its VTA technology,
specifically related to Vascular Endothelial Growth Factor ("VEGF") and with
Scotia Pharmaceuticals for VTA technology which is specifically related to
applications of Photodynamic Therapy. The terms of the agreements with SuperGen,
Inc. and Scotia Pharmaceuticals would include an upfront payment and future
milestone payments, plus a royalty on net sales or net profits. Also, we entered
into a 90-day option agreement with a multinational pharmaceutical company to
potentially license a specific use of the TNT technology. The Company is in
continued negotiations with the multinational pharmaceutical company. There can
be no assurances that we will be successful in entering into such licensing
transactions on terms that are mutually acceptable.
The overall goal of our licensing strategy is to develop as many
corporate relationships as possible for the development of our platform
technologies, thus increasing the chances that one or several anti-cancer
products will be commercialized utilizing its technologies. We believe that
there are numerous opportunities for non-exclusive licenses of our TNT and VTA
platform technologies. In addition, by granting non-exclusive licensing to other
companies, we maintain the ability to continue to develop our own products, such
as Cotara(TM), for commercialization. We believe this approach should increase
the revenue potential of these two platform technologies and allow us to
commercialize our own proprietary anti-cancer products.
CLINICAL TRIALS. The most critical aspect of our business plan involves
clinical trials of our various technologies. Techniclone plans to expand the
clinical trials of our Cotara(TM) monoclonal antibody. Currently, a Phase II
clinical trial using Cotara(TM) for the treatment of malignant glioma (brain
cancer) is currently being conducted at The Medical University of South
Carolina, Temple University, University of Utah-Salt Lake City, Carolina
Neurosurgery & Spine Associates and the University of Miami. Additional sites
will be added as we increase enrollment during the next few months. In addition,
Cotara(TM) is being used in a clinical trial for the treatment of pancreatic,
prostate and liver cancers in Mexico City. The Mexico City trial was designed as
a safety study to give us information about the drug and its safety profile in
humans. The data obtained from this trial will be useful for designing dosing
regimens and deciding dosing levels for most of the clinical programs under
consideration. The preliminary data from the clinical trial in Mexico City has
yielded sufficient information to help with our plans to initiate two clinical
trials in the U.S. by December 2000. These trials will be for solid tumor
indications and will be designed to take advantage of the drug's safety and
efficacy profile. We plan to continue enrolling patients in the Mexico City
trial throughout the calendar year which will maximize the quantity and quality
of information from this study.
5
<PAGE>
Berlex Laboratories, U.S. subsidiary of Schering A.G. our strategic
partner for our Non-Hodgkins Lymphoma drug, Oncolym(R), has informed the Company
that they will shortly commence patient enrollment for the planned clinical
study. This dose escalation study is designed to measure safety and efficacy of
a single dose of Oncolym(R) in intermediate and high grade Non- Hodgkins
Lymphoma. The study is designed to test a range of doses in order to optimize
the treatment regimen while evaluating the dosimetry, biodistribution, safety
and efficacy of Oncolym(R). Following the successful completion of the dose
escalation study, Berlex will start a Phase II/III clinical trial program
designed to confirm the safety and efficacy of Oncolym(R) in the target patient
population.
6
<PAGE>
RISK FACTORS
INVESTMENT IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. YOU
SHOULD CONSIDER THE FOLLOWING DISCUSSION OF RISKS AS WELL AS OTHER INFORMATION
IN THIS PROSPECTUS BEFORE PURCHASING ANY OF OUR COMMON STOCK, TOGETHER WITH ALL
OF THE OTHER INFORMATION CONTAINED IN THIS PROSPECTUS OR INCORPORATED IN THIS
PROSPECTUS BY REFERENCE.
IF WE CANNOT OBTAIN ADDITIONAL FUNDING, OUR PRODUCT DEVELOPMENT AND
COMMERCIALIZATION EFFORTS MAY BE REDUCED OR DISCONTINUED.
As of April 30, 2000, we had $4,131,000 in cash and cash equivalents.
We have expended substantial funds on the development of our product candidates
and for clinical trials. As a result, we have had negative cash flows from
operations since inception and expect the negative cash flows from operations to
continue until we are able to generate sufficient additional revenue from the
sale and/or licensing of our products. We will require additional funding to
sustain our research and development efforts, provide for future clinical
trials, expand our manufacturing and product commercialization capabilities, and
continue our operations until we are able to generate sufficient revenue from
the sale and/or licensing of our products.
We plan to obtain required financing through one or more methods
including, obtaining additional equity or debt financing and negotiating
additional licensing or collaboration agreements with another company. There can
be no assurances that we will be successful in raising such funds on terms
acceptable to us, or at all, or that sufficient additional capital will be
raised to complete the research, development, and clinical testing of our
product candidates.
During June 1998, we secured a Common Stock Equity Line ("Equity Line")
with two institutional investors, as amended on June 2, 2000. Under the amended
terms of the Equity Line, the Company may, in its sole discretion, and subject
to certain restrictions, periodically sell ("Put") shares of the Company's
common stock until all common shares previously registered under the Equity Line
have been exhausted. The Company has approximately eight million shares
available for issuance under the Equity Line. At a market price of $4.00 per
share, the Company could raise more than $24,000,000 under its existing Equity
Line. Up to $2,800,000 of Puts can be made every month if the Company's closing
bid price is $2.00 or higher during the 10-day pricing period. If the closing
bid price is between $1.00 and $2.00, then the Company can Put up to $1,500,000
per month and, if the Company's closing bid price falls below $1.00 on any
trading day during the ten trading days prior to the Put, the Company's ability
to access funds under the Equity Line in the Put is limited to 15% of what would
otherwise be available. If the closing bid price of the Company's common stock
falls below $0.50 or if the Company is delisted from The Nasdaq SmallCap Market,
the Company would have no access to funds under the Equity Line.
The Company believes it has sufficient cash on hand, and combined with
amounts available pursuant to the Equity Line Agreement (assuming aggregate
future draws of $2,800,000) and anticipated amounts to be received from signed
letters of intent to enter into collaboration agreements with SuperGen, Inc. and
7
<PAGE>
Scotia Pharmaceutical Holdings, to meet its obligations on a timely basis
through June of 2001. Each letter of intent provides for an exclusive period for
the completion of a definitive agreement and will be subject to customary
closing conditions. Although the Company believes it will enter into definitive
agreements and will receive the related up-front payments under the terms as
defined in the letters of intent, there can be no assurance that definitive
agreements will be executed.
WE HAVE HAD SIGNIFICANT LOSSES AND WE ANTICIPATE FUTURE LOSSES.
All of our products are currently in development, preclinical studies
or clinical trials, and no revenues have been generated from commercial product
sales. To achieve and sustain profitable operations, we must successfully
develop and obtain regulatory approval for our products, either alone or with
others, and must also manufacture, introduce, market and sell our products. The
costs associated with clinical trials, contract manufacturing and contract
isotope combination services ("radiolabeling") are very expensive and the time
frame necessary to achieve market success for our products is long and
uncertain. We do not expect to generate significant product revenues for at
least the next year. There can be no guarantee that we will ever generate
product revenues sufficient to become profitable or to sustain profitability.
PROBLEMS IN PRODUCT DEVELOPMENT MAY CAUSE OUR CASH DEPLETION RATE TO INCREASE.
Our ability to obtain financing and to manage expenses and our cash
depletion rate is key to the continued development of product candidates and the
completion of ongoing clinical trials. Our cash depletion rate will vary
substantially from quarter to quarter as we fund non-recurring items associated
with clinical trials, product development, antibody manufacturing, isotope
combination services, patent legal fees and various consulting fees. We have
limited experience with clinical trials, and if we encounter unexpected
difficulties with our operations or clinical trials, we may have to expend
additional funds, which would increase our cash depletion rate.
OUR PRODUCT DEVELOPMENT AND COMMERCIALIZATION EFFORTS MAY NOT BE SUCCESSFUL.
Since inception, we have been engaged in the development of drugs and
related therapies for the treatment of people with cancer. Our product
candidates, which have not received regulatory approval, are generally in the
early stages of development. If the initial results from any of the clinical
trials are poor, those results will adversely affect our ability to raise
additional capital, which will affect our ability to continue full-scale
research and development for our antibody technologies. In addition, product
candidates resulting from our research and development efforts, if any, are not
expected to be available commercially for at least the next year. Our products
currently in clinical trials represent a departure from more commonly used
methods for cancer treatment. These products, if approved, may experience
under-utilization by doctors who are unfamiliar with their application in the
treatment of cancer. As with any new drug, doctors may be inclined to continue
to treat patients with conventional therapies, in most cases chemotherapy,
rather than new alternative therapies. We or our marketing partner may be
required to implement an aggressive education and promotion plan with doctors in
8
<PAGE>
order to gain market recognition, understanding and acceptance of our products.
Market acceptance could also be affected by the availability of third-party
reimbursement. Accordingly, we cannot guarantee that our product development
efforts, including clinical trials, or commercialization efforts will be
successful or that any of our products, if approved, can be successfully
marketed.
OUR TECHNOLOGY AND PRODUCTS MAY PROVE INEFFECTIVE OR BE TOO EXPENSIVE TO MARKET
SUCCESSFULLY.
Our future success is significantly dependent on our ability to develop
and test workable products for which we will seek approval from the United
States Food and Drug Administration to market to certain defined patient groups.
There is a significant risk as to the performance and commercial success of our
technology and products. The products we are currently developing will require
significant additional laboratory and clinical testing and investment over the
foreseeable future. Our proposed products may not prove to be effective in
clinical trials or they may cause harmful side effects during clinical trials.
In addition, our product candidates, if approved, may prove impracticable to
manufacture in commercial quantities at a reasonable cost and/or with acceptable
quality. Any of these factors could negatively affect our financial position and
results of operations.
OUR DEPENDENCY ON A LIMITED NUMBER OF SUPPLIERS MAY NEGATIVELY IMPACT OUR
ABILITY TO COMPLETE CLINICAL TRIALS AND MARKET OUR PRODUCTS.
We currently procure, and intend in the future to procure, our antibody
radioactive isotope combination services ("radiolabeling") under negotiated
contracts with two entities for clinical trials. We cannot guarantee that these
suppliers will be able to qualify their facilities or label and supply antibody
in a timely manner, if at all. Prior to commercial distribution of any of our
products, if approved, we will be required to identify and contract with a
company for commercial antibody manufacturing and radioactive isotope
combination services. We also currently rely on, and expect in the future to
rely on, our current suppliers for all or a significant portion of the raw
material requirements for our antibody products. An antibody that has been
combined with a radioactive isotope cannot be stockpiled against future
shortages. Accordingly, any change in our existing or future contractual
relationships with, or an interruption in supply from, any such third-party
service provider or antibody supplier could negatively impact our ability to
complete ongoing clinical trials and to market our products, if approved.
IF OUR RELATIONSHIP WITH SCHERING A.G. TERMINATES, IT COULD ADVERSELY AFFECT OUR
BUSINESS.
In March 1999, we entered into a license agreement with Schering A.G.
for the worldwide development, marketing and distribution of our direct
tumor targeting agent product candidate, Oncolym(R). Under the agreement,
Schering A.G. has assumed control of the clinical development program,
regulatory approvals in the United States and all foreign countries and sales
9
<PAGE>
and marketing of this product candidate. We are relying on Schering A.G. to
apply its expertise and know-how to the development, launch and sale of this
product candidate. If Schering A.G. decides to discontinue the development of
this product candidate and terminates our license agreement, we may have to find
another licensing partner, develop the product internally or discontinue
development, commercialization and clinical testing of this product candidate,
which could negatively affect our operations and financial performance.
WE DO NOT HAVE A SALES FORCE TO MARKET OUR PRODUCTS.
At the present time, we do not have a sales force to market any of our
products, if and when they are approved. We intend to sell our products in the
United States and internationally in collaboration with one or more marketing
partners. If we receive approval from the United States Food and Drug
Administration for our initial product candidates, the marketing of these
products will be contingent upon our ability to either license or enter into a
marketing agreement with a large company or our ability to recruit, develop,
train and deploy our own sales force. We do not presently possess the resources
or experience necessary to market any of our product candidates. Other than an
agreement with Schering A.G. with respect to the marketing of our direct tumor
targeting agent product candidate, we presently have no agreements for the
licensing or marketing of our product candidates, and we cannot assure that we
will be able to enter into any such agreements in a timely manner or on
commercially favorable terms, if at all. Development of an effective sales force
requires significant financial resources, time and expertise. We cannot assure
that we will be able to obtain the financing necessary to establish such a sales
force in a timely or cost effective manner, if at all, or that such a sales
force will be capable of generating demand for our product candidates, if and
when they are approved.
WE MAINTAIN ONLY LIMITED PRODUCT LIABILITY INSURANCE AND MAY BE EXPOSED TO
CLAIMS IF OUR INSURANCE COVERAGE IS INSUFFICIENT.
The manufacture and sale of human therapeutic products involves an
inherent risk of product liability claims. We maintain only limited product
liability insurance. We cannot assure that we will be able to maintain existing
insurance or obtain additional product liability insurance on acceptable terms
or with adequate coverage against potential liabilities. Product liability
insurance is expensive, difficult to obtain and may not be available in the
future on acceptable terms, if at all. Our inability to obtain sufficient
insurance coverage on reasonable terms or to otherwise protect against potential
product liability claims in excess of our insurance coverage, if any, or a
product recall could negatively impact our financial position and results of
operations.
THE LIQUIDITY OF OUR COMMON STOCK WILL BE ADVERSELY AFFECTED IF OUR COMMON STOCK
IS DELISTED FROM THE NASDAQ SMALLCAP MARKET.
The Common Stock of the Company is presently traded on The Nasdaq
SmallCap Market. To maintain inclusion on The Nasdaq SmallCap Market, we must
continue to have either net tangible assets of at least $2,000,000, market
capitalization of at least $35,000,000, or net income (in either our latest
10
<PAGE>
fiscal year or in two of our last three fiscal years) of at least $500,000. In
addition, we must meet other requirements, including, but not limited to, having
a public float of at least 500,000 shares and $1,000,000, a minimum closing bid
price of $1.00 per share of Common Stock (without falling below this minimum bid
price for a period of 30 consecutive trading days), at least two market makers
and at least 300 stockholders, each holding at least 100 shares of Common Stock.
If we are delisted by The Nasdaq SmallCap Market, the market value of the Common
Stock could fall and holders of Common Stock would likely find it more difficult
to dispose of the Common Stock.
THE SALE OF SUBSTANTIAL SHARES OF OUR COMMON STOCK MAY DEPRESS OUR STOCK PRICE.
As of June 28, 2000, we had approximately 93,563,000 shares of Common
Stock outstanding. There are no shares of Class C Preferred Stock outstanding.
We could issue approximately 16,635,000 additional shares of Common Stock upon
the exercise of outstanding options and warrants at an average exercise price of
$1.86 for proceeds of up to approximately $30,920,000, if exercised in total on
a cash basis. In addition, the Company has reserved for future issuance
approximately 8,239,000 shares of common stock under the Equity Line.
The exercise price of outstanding options and warrants and the purchase
price for the shares of Common Stock and warrants to be issued under the Equity
Line are at a significant discount to the market price. The sale and issuance of
these shares of Common Stock, as well as subsequent sales of shares of Common
Stock in the open market, may cause the market price of the Common Stock to fall
and might impair our ability to raise additional capital through sales of equity
or equity-related securities, whether under the Equity Line or otherwise.
OUR HIGHLY VOLATILE STOCK PRICE AND TRADING VOLUME MAY ADVERSELY AFFECT THE
LIQUIDITY OF THE COMMON STOCK.
The market price of the Common Stock, and the market prices of
securities of companies in the biotechnology industry generally, has been highly
volatile and is likely to continue to be highly volatile. Also, the trading
volume in the Common Stock has been highly volatile, ranging from as few as
76,000 shares per day to as many as 29 million shares per day over the past
year, and is likely to continue to be highly volatile. The market price of the
Common Stock may be significantly impacted by many factors, including
announcements of technological innovations or new commercial products by us or
our competitors, disputes concerning patent or proprietary rights, publicity
regarding actual or potential medical results relating to products under
development by us or our competitors and regulatory developments and product
safety concerns in both the United States and foreign countries. These and other
external factors have caused and may continue to cause the market price and
demand for the Common Stock to fluctuate substantially, which may limit or
prevent investors from readily selling their shares of Common Stock and may
otherwise negatively affect the liquidity of the Common Stock.
11
<PAGE>
WE MAY NOT BE ABLE TO COMPETE WITH OUR COMPETITORS IN THE BIOTECHNOLOGY
INDUSTRY.
The biotechnology industry is intensely competitive. It is also subject
to rapid change and sensitive to new product introductions or enhancements. We
expect to continue to experience significant and increasing levels of
competition in the future. Virtually all of our existing competitors have
greater financial resources, larger technical staffs, and larger research
budgets than we have, as well as greater experience in developing products and
running clinical trials. Two of our competitors, IDEC Pharmaceuticals
Corporation and Coulter Pharmaceuticals, Inc., each has a lymphoma antibody that
may compete with our direct tumor targeting agent product, Oncolym(R). In
addition, there may be other companies which are currently developing
competitive technologies and products or which may in the future develop
technologies and products which are comparable or superior to our technologies
and products. Some or all of these companies may also have greater financial and
technical resources than we have. Accordingly, we cannot assure that we will be
able to compete successfully with our existing and future competitors or that
competition will not negatively affect our financial position or results of
operations in the future.
WE MAY NOT BE SUCCESSFUL IF WE ARE UNABLE TO OBTAIN AND MAINTAIN PATENTS AND
LICENSES TO PATENTS.
Our success depends, in large part, on our ability to obtain or
maintain a proprietary position in our products through patents, trade secrets
and orphan drug designations. We have been granted several United States patents
and have submitted several United States patent applications and numerous
corresponding foreign patent applications, and have also obtained licenses to
patents or patent applications owned by other entities. However, we cannot
assure that any of these patent applications will be granted or that our patent
licensors will not terminate any of our patent licenses. We also cannot
guarantee that any issued patents will provide competitive advantages for our
products or that any issued patents will not be successfully challenged or
circumvented by our competitors. Although we believe that our patents and our
licensors' patents do not infringe on any third party's patents, we cannot be
certain that we can avoid litigation involving such patents or other proprietary
rights. Patent and proprietary rights litigation entails substantial legal and
other costs, and we may not have the necessary financial resources to defend or
prosecute our rights in connection with any litigation. Responding to, defending
or bringing claims related to patents and other intellectual property rights may
require our management to redirect our human and monetary resources to address
these claims and may take years to resolve.
OUR PRODUCT DEVELOPMENT AND COMMERCIALIZATION EFFORTS MAY BE REDUCED OR
DISCONTINUED DUE TO DIFFICULTIES OR DELAYS IN CLINICAL TRIALS.
We may encounter unanticipated problems, including development,
manufacturing, distribution, financing and marketing difficulties, during the
product development, approval and commercialization process. Our product
candidates may take longer than anticipated to progress through clinical trials
or patient enrollment in the clinical trials may be delayed or prolonged
significantly, thus delaying the clinical trials. Delays in patient enrollment
will result in increased costs and further delays. If we experience any such
12
<PAGE>
difficulties or delays, we may have to reduce or discontinue development,
commercialization or clinical testing of some or all of our product candidates.
The Company anticipates that Schering A.G. will initiate a Phase I dosing study
in the near future. If Schering A.G. decides to discontinue the development of
this product candidate and terminates our license agreement for the worldwide
development, distribution and marketing of this product candidate, we may have
to find another licensing partner, develop the product candidate internally or
discontinue development, commercialization and clinical testing of this product
candidate, which could negatively affect our operations and financial
performance.
OUR PRODUCT DEVELOPMENT AND COMMERCIALIZATION EFFORTS MAY BE REDUCED OR
DISCONTINUED DUE TO DELAYS OR FAILURE IN OBTAINING REGULATORY APPROVALS.
We will need to do substantial additional development and clinical
testing prior to seeking any regulatory approval for commercialization of our
product candidates. Testing, manufacturing, commercialization, advertising,
promotion, export and marketing, among other things, of our proposed products
are subject to extensive regulation by governmental authorities in the United
States and other countries. The testing and approval process requires
substantial time, effort and financial resources and we cannot guarantee that
any approval will be granted on a timely basis, if at all. Companies in the
pharmaceutical and biotechnology industries have suffered significant setbacks
in conducting advanced human clinical trials, even after obtaining promising
results in earlier trials. Furthermore, the United States Food and Drug
Administration may suspend clinical trials at any time on various grounds,
including a finding that the subjects or patients are being exposed to an
unacceptable health risk. Even if regulatory approval of a product is granted,
such approval may entail limitations on the indicated uses for which it may be
marketed. Accordingly, we may experience difficulties and delays in obtaining
necessary governmental clearances and approvals to market our products, and we
may not be able to obtain all necessary governmental clearances and approvals to
market our products. At least initially, we intend, to the extent possible, to
rely on licensees to obtain regulatory approval for marketing our products. The
failure by us or our licensees to adequately demonstrate the safety and efficacy
of any of our product candidates under development could delay, limit or prevent
regulatory approval of the product, which may require us to reduce or
discontinue development, commercialization or clinical testing of some or all of
our product candidates.
OUR PRODUCTS, IF APPROVED, MAY NOT BE COMMERCIALLY VIABLE DUE TO HEALTH CARE
REFORM AND THIRD-PARTY REIMBURSEMENT LIMITATIONS.
Recent initiatives to reduce the federal deficit and to reform health
care delivery are increasing cost-containment efforts. We anticipate that
Congress, state legislatures and the private sector will continue to review and
assess alternative benefits, controls on health care spending through
limitations on the growth of private health insurance premiums and Medicare and
Medicaid spending, price controls on pharmaceuticals and other fundamental
changes to the health care delivery system. Legislative debate is expected to
continue in the future, and market forces are expected to drive reductions of
health care costs. Any such changes could negatively impact the commercial
13
<PAGE>
viability of our products, if approved. Our ability to successfully
commercialize our product candidates, if and when they are approved, will depend
in part on the extent to which appropriate reimbursement codes and authorized
cost reimbursement levels of such products and related treatment are obtained
from governmental authorities, private health insurers and other organizations,
such as health maintenance organizations. In the absence of national Medicare
coverage determination, local contractors that administer the Medicare program,
within certain guidelines, can make their own coverage decisions. Accordingly,
there can be no assurance that any of our product candidates, if approved and
when commercially available, will be included within the then, current Medicare
coverage determination or the coverage determination of state Medicaid programs,
private insurance companies and other health care providers. In addition,
third-party payors are increasingly challenging the prices charged for medical
products and services. The trend toward managed health care and the growth of
health maintenance organizations in the United States may all result in lower
prices for our products, if approved and when commercially available, than we
currently expect. The cost containment measures that health care payors and
providers are instituting and the effect of any health care reform could
negatively affect our financial performance, if and when one or more of our
products are approved and available for commercial use.
OUR MANUFACTURING AND USE OF HAZARDOUS AND RADIOACTIVE MATERIALS MAY RESULT IN
OUR LIABILITY FOR DAMAGES, INCREASED COSTS AND INTERRUPTION OF ANTIBODY
SUPPLIES.
The manufacturing and use of our products require the handling and
disposal of the radioactive isotope I131. We currently rely on, and intend in
the future to rely on, our current contract manufacturers to combine antibodies
with radioactive I131 isotope in our products and to comply with various local,
state, national or international regulations regarding the handling and use of
radioactive materials. Violation of these regulations by these companies or a
clinical trial site could significantly delay completion of the trials.
Violations of safety regulations could occur with these manufacturers, so there
is also a risk of accidental contamination or injury. Accordingly, we could be
held liable for any damages that result from an accident, contamination or
injury caused by the handling and disposal of these materials, as well as for
unexpected remedial costs and penalties that may result from any violation of
applicable regulations. In addition, we may incur substantial costs to comply
with environmental regulations. In the event of any noncompliance or accident,
the supply of antibodies for use in clinical trials or commercial products could
also be interrupted.
OUR OPERATIONS AND FINANCIAL PERFORMANCE COULD BE NEGATIVELY AFFECTED IF WE
CANNOT ATTRACT AND RETAIN KEY PERSONNEL.
Our success is dependent, in part, upon a limited number of key
executive officers and technical personnel remaining employed with us, including
Dr. John N. Bonfiglio, our President and Chief Executive Officer and Dr.
Terrence Chew, our V.P. of Clinical and Regulatory Affairs. We also believe that
our future success will depend largely upon our ability to attract and retain
highly-skilled research and development and technical personnel. We face intense
competition in our recruiting activities, including larger companies with
greater resources. We do not know if we will be successful in attracting or
retaining skilled personnel. The loss of certain key employees or our inability
to attract and retain other qualified employees could negatively affect our
operations and financial performance.
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OUR BUSINESS MAY BE ADVERSELY AFFECTED IF OUR COMPUTER SYSTEMS AND THE COMPUTER
SYSTEMS OF OUR SUPPLIERS ARE NOT YEAR 2000 COMPLIANT.
In prior years, the Company discussed the nature and progress of its
plans to become Year 2000 ready. In late 1999, the Company completed its
remediation and testing of systems. As a result of those planning and
implementation efforts, the Company experienced no significant disruptions in
mission critical information technology and non-information technology systems
and believes those systems successfully responded to the Year 2000 date change.
The Company expensed less than $50,000 in connection with remediating its
systems. The Company is not aware of any material problems resulting from Year
2000 issues, its internal systems, or the products and services of third
parties. The Company will continue to monitor its mission critical computer
applications and those of its suppliers and vendors throughout the year 2000 to
ensure that any latent Year 2000 matters that may arise are addressed promptly.
FORWARD-LOOKING STATEMENTS
Except for historical information, the information contained in this
prospectus and in our reports filed with the SEC are "forward looking"
statements about our expected future business and financial performance. These
statements involve known and unknown risks, including, among others, risks
resulting from economic and market conditions, the regulatory environment in
which we operate, pricing pressures, accurately forecasting operating and
capital expenditures and clinical trial costs, competitive activities,
uncertainties of litigation and other business conditions, and are subject to
uncertainties and assumptions contained elsewhere in this prospectus. We base
our forward-looking statements on information currently available to us, and we
assume no obligation to update these statements. Our actual operating results
and financial performance may prove to be very different from what we have
predicted as of the date of this prospectus due to certain risks and
uncertainties. The risks described above in the section entitled "Risk Factors"
specifically address some of the factors that may affect our future operating
results and financial performance.
USE OF PROCEEDS
Holders of warrants and options are not obligated to exercise those
warrants and options, and there can be no assurance that holders will choose to
exercise all or any of their warrants or options. Techniclone will not receive
any proceeds from the exercise of any warrants by Eric Swartz and Michael
Kendrick, which may only be exercised by each on a cashless basis. The gross
proceeds to the Company from the exercise of the warrants held by Swartz Private
Equity would be $351,563 at the initial exercise price of $0.46875, although the
warrants may also be exercised on a cashless basis or at a lower reset price
(see "The Investor Commitment Warrant"). The gross proceeds to the Company from
the exercise of options would be $510,000 from those held by the director and
two consultants of Techniclone and $375,000 from those options issued to
Biotechnology Development, Ltd. under the Option Agreement. The total proceeds
15
<PAGE>
to Techniclone from the exercise of warrants and options, if exercised in full
on a cash basis (where permitted), would be a maximum of $1,236,563. These
proceeds would be used for working capital purposes. We will not receive any
proceeds from the sale of outstanding common stock held by the selling
shareholders. See "Selling Shareholders."
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SELLING SHAREHOLDERS
The following table identifies the selling shareholders and indicates
(i) the nature of any position, office or other material relationship that each
selling shareholder has had within the past three years with Techniclone (or any
of its predecessors or affiliates) and (ii) the number of shares of Common Stock
owned by the selling shareholder prior to the offering, the number of shares to
be offered for the selling shareholder's account and the number of shares and
percentage of outstanding shares to be owned by the selling shareholder after
completion of the offering.
<TABLE>
<CAPTION>
MAXIMUM
SHARES BENEFICIALLY NUMBER OF
NAME OF REGISTERED OWNED PRIOR TO SHARES TO BE SHARES BENEFICIALLY
SHAREHOLDER OFFERING(1) SOLD OWNED AFTER OFFERING(2)
------------------------------- -------------------------------
Number PERCENT NUMBER Percent
------------------------------- -------------- ------------ -------------------- -------------- ------------
<S> <C> <C> <C> <C> <C>
Schering A.G.(3) 742,857 * 742,857 0 0%
D-13342
Berlin, Germany
Cresent Mortgage Corp.(4) 125,000 * 125,000 0 0%
610 West Rio Road
Charlottesville, VA 22901
Alan Epstein, M.D. Ph.D.(5) 975,000 1.06% 600,000 375,000 *
14282 Franklin Avenue
Tustin, California 92780
Clive Taylor, M.D. Ph.D.(6) 1,618,000 1.75% 500,000 1,118,000 1.22%
14282 Franklin Avenue
Tustin, California 92780
Philip E. Thorpe, Ph.D.(7) 843,750 * 400,000 443,750 *
14282 Franklin Avenue
Tustin, California 92780
Eric S. Swartz(8) 2,127,178 2.32% 726,151 1,401,027 1.54%
1080 Holcomb Bridge Road
Building 200, Suite 285
Roswell, GA 30076
Michael C. Kendrick(8) 1,638,380 1.79% 726,150 912,230 1.00%
1080 Holcomb Bridge Road
Building 200, Suite 285
Roswell, GA 30076
Oxigene, Inc.(9) 585,009 * 585,009 0 0%
One Copley Place, Ste. 602
Boston, MA 02116
</TABLE>
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--------------------
* Represents less than 1%.
(1) Based on an aggregate of 90,612,610 shares of common stock issued and
outstanding as of May 3, 2000.
(2) Assumes that all Shares being registered are sold.
(3) Schering A.G., has not had a material relationship with Techniclone or
any of its affiliates within the past three years, other than as a
result of the negotiation and execution of the License Agreement with
the Company dated March 8, 1999, as amended on June 14, 2000.
(4) The 125,000 shares of common stock offered by Cresent Mortgage
Corporation by this prospectus may be issued to Cresent Mortgage
Corporation upon the exercise of outstanding options issued under the
Option Agreement dated October 23, 1998 between Techniclone and
Biotechnology Development Ltd. ("BTD"), at an exercise price of $3.00
per share (see "The Option Agreement"). BTD has transferred its
interest in these options to Cresent Mortgage Corporation. BTD is a
Nevada limited partnership controlled by Mr. Edward Legere, a Director
of the Company, which originally obtained its option under the Option
Agreement dated October 23, 1998 in exchange for an extension of time
for the Company to re-acquire certain Oncolym(R) rights previously
licensed to BTD.
(5) Alan Epstein has a relationship with Techniclone as a consultant. The
600,000 shares of common stock offered may be acquired under a
non-qualified option issued on December 22, 1999, at an exercise price
of $.34 per share. The options will vest over four years from the date
of grant or sooner upon the achievement of predetermined performance
milestones (see "The Non-Qualified Stock Option Agreement").
(6) Clive R. Taylor has a relationship with Techniclone as a Director. The
500,000 shares of common stock offered will be acquired under a
non-qualified option issued on December 22, 1999, at an exercise price
of $.34 per share. The options will vest over four years from the date
of grant or sooner upon the achievement of predetermined performance
milestones (see "The Non-Qualified Stock Option Agreement").
(7) Philip E. Thorpe has a relationship with Techniclone as a consultant.
The 400,000 shares of common stock offered will be acquired under a
non-qualified option issued on December 22, 1999, at an exercise price
of $.34 per share. The options will vest over four years from the date
of grant or sooner upon the achievement of predetermined performance
milestones (see "Non-Qualified Stock Option Agreement").
(8) Of the 1,452,301 shares of common stock offered by Eric Swartz and
Michael Kendrick by this prospectus, 638,458 shares are currently
issued and outstanding and up to an aggregate of 813,843 shares may be
issued to each upon exercise of outstanding warrants, of which up to
15,625 shares are issuable at an exercise price of $0.80 per share, up
to 9,310 shares are issuable at an exercise price of $0.3625 per share,
up to 14,210 shares are issuable at an exercise price of $0.2375 per
share, up to 10,188 shares are issuable at an exercise price of
$0.33125 per share, up to 6,430 shares are issuable at an exercise
price of $2.4492 per share, and up to 8,080 shares are issuable at an
exercise price of $3.403 per share, all of which may be exercised on a
cashless basis only (see "The Equity Line Agreement"). Eric Swartz and
Michael Kendrick each individually own one-half of the common shares
and warrants issued to Dunwoody under the Equity Line Agreement. Also
includes a warrant issued to Swartz Private Equity, LLC to purchase up
to 750,000 shares of common stock under the Investor Commitment Warrant
under the Letter of Agreement, at an initial exercise price of $.46875
or a lower reset price (see "The Investor Commitment Warrant"). Swartz
Private Equity, LLC has not had any material relationship with
Techniclone or any of its affiliates within the past three years, other
than as a result of the negotiation and the execution of the Letter of
Agreement dated November 5, 1999 ("Letter of Agreement"). Swartz
Private Equity, LLC is 50% controlled by Eric Swartz, who is also a
Director of the Company, and 50% controlled by Michael Kendrick.
(9) Oxigene, Inc. has not had a material relationship with Techniclone or
any of its affiliates within the past three years, other than as a
result of the negotiation and execution of the Joint Venture Agreement
with the Company entered into during May 2000.
18
<PAGE>
PLAN OF DISTRIBUTION
As used in this section, the term "selling shareholders" includes the
selling shareholders listed in the "Selling Shareholders" section of this
prospectus, as well as their respective donees, pledgees, transferees and other
successors in interest selling shares received from a selling shareholder after
the date of this prospectus. Sales of shares may be effected by the selling
shareholders at various times in one or more private or negotiated transactions,
in open market transactions on the Nasdaq SmallCap Market, in settlement of
short sale transactions, in settlement of option transactions, or otherwise, or
a combination of these methods, at prices and terms then obtainable, at fixed
prices, at prices then prevailing at the time of sale, at prices related to such
prevailing prices, or at negotiated prices or otherwise. The selling
shareholders may effect these transactions by selling the shares of common stock
offered by this prospectus directly to one or more purchasers or to or through
other broker-dealers or agents including: (a) in a block trade in which the
broker or dealer so engaged will attempt to sell the shares as agent, but may
position and resell a portion of the block as principal to facilitate the
transaction; (b) in purchases by another broker or dealer and resale by such
broker or dealer as a principal for its account; (c) in ordinary brokerage
transactions and (d) in transactions in which the broker solicits purchasers.
The compensation to a particular underwriter, broker-dealer or agent may be in
excess of customary commissions.
To the Company's knowledge, the selling shareholders have made no
arrangement with any brokerage firm for the sale of the shares of common stock
offered by this prospectus. ordinary brokerage transactions at market prices
prevailing at the time of the sale. There is not an underwriter or coordinating
broker acting in connection with the proposed sale of shares by the selling
shareholders. Concurrently with sales under this prospectus, the selling
shareholders may effect other sales of the shares of common stock offered by
this prospectus under Rule 144 or other exempt resale transactions. There can be
no assurance that the selling shareholders will sell any or all of the shares of
common stock offered by this prospectus.
Selling shareholders and any other broker-dealers or agents who act in
connection with the sale of the shares of common stock offered by this
prospectus may be deemed to be underwriters within the meaning of the Securities
Act in connection with the sale of the shares of common stock offered by this
prospectus. Profits on any resale by selling shareholders of the shares of
common stock offered by this prospectus and any discounts, commissions or
concessions received by any such broker-dealers or agents may be deemed to be
underwriting discounts and commissions under the Securities Act of 1933.
Any broker-dealer participating in such transactions as agent may
receive commissions from the selling shareholders (and, if they act as agent for
the purchaser of such shares, from such purchaser). Broker-dealers may agree
with the selling shareholders to sell a specified number of shares of common
stock offered by this prospectus at a stipulated price per share and, to the
extent such a broker-dealer is unable to do so acting as agent for any selling
shareholder to purchase as principal any unsold shares of common stock at the
price required to fulfill the broker-dealer commitment to that selling
shareholder. Broker-dealers who acquire shares of common stock offered by this
prospectus as principal may thereafter resell such shares from time to time in
transactions (which may involve crosses and block transactions and which may
19
<PAGE>
involve sales to and through other broker-dealers, including transactions of the
nature described above) in the over-the-counter market, in negotiated
transactions or otherwise at market prices prevailing at the time of sale or at
negotiated prices, and in connection with such resales may pay to or receive
from the purchasers of such shares commissions computed as described above. To
the extent required under the Securities Act of 1933, a supplemental prospectus
will be filed, disclosing (a) the name of any such broker-dealers; (b) the
number of shares of common stock involved; (c) the price at which such shares
are to be sold; (d) the commissions paid or discounts or concessions allowed to
such broker-dealers, where applicable; (e) that such broker-dealers did not
conduct any investigation to verify the information set out or incorporated by
reference in this prospectus, as supplemented; and (f) other facts material to
the transaction.
Under applicable rules and regulations under the Securities Exchange
Act of 1934, any person engaged in a distribution of the shares of common stock
offered by this prospectus may not simultaneously engage in market making
activities with respect to the shares for a period beginning when such person
becomes a distribution participant and ending upon such person's completion of
participation in the distribution. Such activities include stabilization
activities in our common stock to effect covering transactions, imposing penalty
bids or effecting passive market making bids. In addition, in connection with
transactions in the shares of common stock offered by this prospectus,
Techniclone and the selling shareholders may be subject to applicable provisions
of the Securities Exchange Act of 1934, and its rules and regulations,
including, Rule 10b-5 of the Securities Exchange Act of 1934. If Techniclone and
selling shareholders are deemed to be distribution participants, they may also
be subject to Regulation M and Rules 100, 101, 102, 103, 104 and 105 of the
Securities Exchange Act of 1934. All of the foregoing may affect the
marketability of the shares of common stock offered by this prospectus.
The selling shareholders have agreed that they will not engage in any
trading practice or activity for the purpose of manipulating the price of our
common stock or otherwise engage in any trading practice or activity that
violates the rules and regulations of the SEC.
Selling shareholders will pay all commissions, transfer taxes and other
expenses associated with the sales of shares of common stock by them. The shares
of common stock offered by this prospectus are being registered in compliance
with contractual obligations of Techniclone, and Techniclone has agreed to pay
the expenses of the preparation of this prospectus. Techniclone has also agreed
to indemnify the selling shareholders against certain liabilities, including,
without limitation, liabilities arising under the Securities Act of 1933.
Techniclone will not receive any proceeds from the exercise by Eric
Swartz and Michael Kendrick of any of the warrants described in this prospectus
which were received from Dunwoody, as such warrants may only be exercised by
each in a cashless transaction. The total proceeds to the Company from the
exercise of other warrants and options, if exercised in full on a cash basis,
would be a maximum of $1,236,563. Techniclone will not receive any of the
proceeds from the sale of the shares of common stock offered by this prospectus.
20
<PAGE>
In order to comply with the securities laws of certain states, if
applicable, the shares of common stock offered by this prospectus may be sold in
these jurisdictions only through registered or licensed brokers or dealers. In
addition, in certain states the shares of common stock offered by this
prospectus may not be sold unless such shares have been registered or qualified
for sale in these states or an exemption from registration or qualification is
available and complied with.
Our common stock is currently traded on The Nasdaq SmallCap Market
under the symbol "TCLN."
DESCRIPTION OF SECURITIES
The following description of the capital stock of Techniclone and
certain provisions of Techniclone's Certificate of Incorporation is a summary
and is qualified in its entirety by the provisions of the Certificate of
Incorporation and Bylaws, which have been filed as exhibits to Techniclone's
Registration Statement, of which this Prospectus is a part.
As of the date of this prospectus, the authorized capital stock of
Techniclone consists of 150,000,000 shares of common stock, par value $.001 per
share, and 5,000,000 shares of Preferred Stock, par value $.001 per share, of
which 10,000 shares are designated as Series B Convertible Preferred Stock
("Class B Stock") and 17,200 shares are designated as 5% Adjustable Convertible
Class C Preferred Stock ("Class C Stock"). As of June 28, 2000, there were
93,563,123 shares of common stock outstanding held by 5,571 shareholders of
record. No shares of Class B Stock or Class C Stock were outstanding.
Holders of common stock are entitled to one vote per share on all
matters to be voted upon by the shareholders. Subject to preferences that may be
applicable to the holders of outstanding shares of Preferred Stock, if any, the
holders of common stock are entitled to receive any lawful dividends which may
be declared by the Board of Directors. In the event of the liquidation,
dissolution or winding up of Techniclone, and subject to the rights of the
holders of outstanding shares of Preferred Stock, if any, the holders of shares
of common stock would be entitled to receive pro rata all of the remaining
assets of Techniclone available for distribution to its shareholders. There are
no redemption or sinking fund provisions applicable to our common stock. All
outstanding shares of common stock are fully paid and nonassessable, and shares
of common stock to be issued and resold under this prospectus will be fully paid
and nonassessable.
WARRANTS
For the life of each of the warrants, the holder has the opportunity to
profit from a rise in the market price of our common stock without assuming the
risk of ownership of the shares of common stock issuable upon the exercise of
the warrant. The holder of the warrant may be expected to exercise the warrant
at a time when Techniclone would, in all likelihood, be able to obtain any
needed capital by an offering of common stock on terms more favorable than those
provided for by the warrants. Also, the terms on which Techniclone could obtain
additional capital during the life of the warrants may be adversely affected by
the existence of the warrants.
21
<PAGE>
The shares of common stock underlying the warrants, when issued upon
exercise of the warrants in whole or in part, will be fully paid and
nonassessable.
Each warrant contains provisions that protect the holder against
dilution by adjustment of the exercise price. These adjustments will occur in
the event, among others, of a merger, stock split or reverse stock split, stock
dividend or recapitalization. Techniclone is not required to issue fractional
shares upon the exercise of any of the warrants. Each holder of the warrants
will not possess any rights as a shareholder until such holder exercises the
warrants. Each warrant may be exercised upon surrender on or before its
expiration date at the offices of Techniclone, with an exercise form completed
and executed as indicated, accompanied by payment of the exercise price for the
number of shares with respect to which the warrant is being exercised, except
for the warrants originally issued to Dunwoody. The Dunwoody warrants may only
be exercised by way of a "cashless exercise," in which that number of shares of
common stock underlying the warrant having a fair market value equal to the
aggregate exercise price are canceled as payment of the exercise price.
REGISTRATION RIGHTS
Techniclone has granted certain piggyback registration rights for the
shares originally issued and originally issuable upon the conversion of warrants
to Dunwoody Brokerage Services, Inc. under the Registration Rights Agreement of
the Equity Line Agreement described below.
OPTIONS
For the life of each of the options, the holder has the opportunity to
profit from a rise in the market price of our common stock without assuming the
risk of ownership of the shares of common stock issuable upon the exercise of
the option. The holder of the option may be expected to exercise the option at a
time when Techniclone would, in all likelihood, be able to obtain any needed
capital by an offering of common stock on terms more favorable than those
provided for by the options. Also, the terms on which Techniclone could obtain
additional capital during the life of the options may be adversely affected by
the existence of the options.
The shares of common stock underlying the options, when issued upon
exercise in whole or in part, will be fully paid and nonassessable.
Each of the options contain provisions that protect the holder against
dilution by adjustment of the exercise price. Such adjustments will occur in the
event, among others, of a merger, stock split or reverse stock split, stock
dividend or recapitalization. Techniclone is not required to issue fractional
shares upon the exercise of any of the options. Each holder of the options will
not possess any rights as a shareholder until such holder exercises the options.
Each option may be exercised upon surrender on or before its expiration date at
the offices of Techniclone, with an exercise form completed and executed as
indicated, accompanied by payment of the exercise price for the number of shares
with respect to which the option is being exercised.
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<PAGE>
THE AMENDMENT AGREEMENT
On March 8, 1999, Schering A.G. ("Schering"), was granted the
exclusive, worldwide right to market and distribute Oncolym(R) products under a
License Agreement. Schering and Techniclone have recently agreed to amend the
License Agreement on June 14, 2000 (the "Amendment Agreement"). The Amended
Agreement provides that Schering A.G. will commence patient enrollment for a
Phase I dosing study in the near future. This dose escalation Phase I will be
designed to measure the safety and efficacy of a single dose of Oncolym(R) in
intermediate and high- grade Non-Hodgkin's Lymphoma. This study will be designed
to treat up to 18 patients with provisions to treat more if necessary and is
predicted to take no longer than 18 months to complete, depending upon
enrollment. Following the successful completion of the Phase I study, Schering
will start a Phase II/III study designed to investigate the safety and efficacy
of Oncolym(R) in over 100 patients. This study will initially enroll
approximately 28 patients as part of the Phase II trial. Under the Amendment
Agreement, Techniclone has agreed to issue shares of its common stock to
Schering A.G. to prepay the expenses associated with these clinical trials. The
first traunch of $1.3 million worth of common stock will be issued to Schering
upon effectiveness of this registration statement. The second traunch of $1.7
million worth of common stock will be issued upon the commencement of the Phase
II/III clinical trial.
THE OPTION AGREEMENT
On October 23, 1998, the Company was given an extension of time through
August 30, 1999 to repurchase certain marketing rights to "LYM" products in
Europe in exchange for a payment of $93,750 by the Company to BTD for the period
ended December 1, 1998 and $112,500 for each quarterly period thereafter through
August 30, 1999, and the issuance of options to purchase 125,000 shares of
Common Stock of the Company at an exercise price of $3.00 per share (the "Option
Agreement"). The option has since been assigned to Cresent Mortgage Corporation
of Charlottesville, Virginia and is exercisable at any time beginning on the
date of issuance and ending on December 1, 2005.
NON-QUALIFIED OPTIONS ISSUED TO DIRECTOR AND CONSULTANTS
Options were granted as compensation to consultants of the Company.
These options are non-qualified for tax purposes. The options will vest over a
period of four years, with the first one- third vesting on December 22, 2001,
and one-third vested annually thereafter, until the options are fully vested on
December 22, 2003. We may accelerate the vesting of the option upon the
achievement of predetermined milestones. Options that are vested may be
exercised at the discretion of the recipient at an exercise price of $0.34 per
share. The options expire on December 22, 2009 or 90 days after the termination
of the recipient's services with the Company.
23
<PAGE>
THE EQUITY LINE AGREEMENT
On June 16, 1998, Techniclone entered into a Regulation D Common Stock
Equity Line Subscription Agreement ("Equity Line") with two institutional
investors. Techniclone also entered into a Placement Agent Agreement and engaged
the services of Swartz Investments, LLC, a Georgia limited liability company, as
placement agent in connection with the placement of securities of Techniclone
with the two institutional investors under the Equity Line. Swartz Investments,
LLC subsequently assigned and conveyed all of its rights under the Placement
Agent Agreement and a related Registration Rights Agreement to Dunwoody
Brokerage Services Inc. ("Dunwoody") and also transferred to Dunwoody all of the
shares of common stock and warrants to purchase shares of common stock
previously issued to Swartz Investments, LLC. However, under an additional
agreement, Eric Swartz, a Director of the Company, and Michael Kendrick each
have a contractual right to 50% of the common shares of Techniclone owned by
Dunwoody or to be issued to Dunwoody under the Placement Agent Agreement. The
ownership of the shares originally issued to Dunwoody which are covered by this
prospectus and the warrants originally issued to Dunwoody whose underlying
shares issuable upon conversion of the warrants are covered by this prospectus
have been transferred, one-half each, to Eric Swartz and Michael Kendrick, who
also each have a one-half ownership interest in Swartz Investments, LLC.
Dunwoody is a broker-dealer registered with the SEC and the National
Association of Securities Dealers, Inc.
The following table provides certain information from August 16, 2000
through April 25, 2000 with respect to securities of Techniclone issued to the
two institutional investors and Dunwoody under the Equity Line and the Placement
Agent Agreement:
24
<PAGE>
<TABLE>
<CAPTION>
Issued to
Issued to the Institutional Investors Dunwoody Brokerage Services,
Inc.
---------------------------------------------------------------------------------------------
Warrant Warrant
Purchase Shares of Shares Exercise Shares of Shares Exercise
Date Amount Price per Common subject to Price per Common Subject to Price per
Funded Share Stock Warrants(1) Share Stock Warrants(1) Share
($) ($) ($)
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Aug. 16, 1999 $1,250,000 0.800000 1,562,500 156,250 0.800000 156,250 15,625 0.80000
Oct. 13, 1999 $337,500 0.362500 931,033 93,102 0.362500 93,103 9,310 0.36250
Nov. 19, 1999 $337,500 0.237500 1,421,052 142,105 0.237500 142,105 14,210 0.23750
Jan. 14, 2000 $337,500 0.331250 1,018,867 101,886 0.331250 101,886 10,188 0.33125
Feb. 4, 2000 $1,575,000 2.449200 643,061 64,305 2.449200 64,306 6,430 2.44920
Feb. 25 , 2000 $2,750,000 3.403125 808,080 80,807 3.403000 80,808 8,080 3.40300
</TABLE>
--------------
(1) Warrants are exercisable, on a cashless basis only, at any time through
December 31, 2004.
Under the Equity Line, the Company secured access to funding under
a Common Stock Equity Line ("Equity Line") with two institutional investors, as
amended on June 2, 2000 (the Amendment). Under the amended terms of the Equity
Line, the Company may, in its sole discretion, and subject to certain
restrictions, periodically sell ("Put") shares of the Company's common stock
until all common shares previously registered under the Equity Line have been
sold. As of June 28, 2000, the Company had approximately 8,239,000 shares
available under the Equity Line. Under the amendment, up to $2,800,000 of Puts
can be made every month if the Company's closing bid price is $2.00 or higher
during the 10-day pricing period. If the Company's closing bid price is between
$1.00 and $2.00, then the Company can Put up to $1,500,000 per month, and if the
Company's closing bid price falls below $1.00 on any trading day during the ten
trading days prior to the Put, the Company's ability to access funds under the
Equity Line in the Put is limited to 15% of what would otherwise be available.
If the closing bid price of the Company's common stock falls below $0.50 or if
the Company is delisted from The Nasdaq SmallCap Market, the Company would have
no access to funds under the Equity Line.
The purchase price for the shares to be sold to the institutional
investors is equal to 82.5% of the 10-day low closing bid price immediately
preceding the date of sale. However, if 82.5% of such 10-day low closing bid
price results in a discount of less than twenty cents per share from such price,
the purchase price for the shares will be equal to such 10-day low closing bid
price minus twenty cents. The number of shares which may be sold to the two
institutional investors at any one time is limited to the same number of shares
of restricted securities that the institutional investors would otherwise be
able to sell in compliance with Rule 144(e) promulgated under the Securities Act
of 1933. In addition, at the time of each sale of shares, the two institutional
investors will be issued warrants, expiring on December 31, 2004, to purchase a
number of shares of common stock equal to 15% (for all Puts after June 2000) of
the number of shares of common stock sold in such sale at an exercise price
equal to the price per share at which such shares were sold to the institutional
investors.
This prospectus does not cover any shares of common stock issued or
issuable to the two institutional investors under the Equity Line or shares of
common stock issuable upon exercise of warrants issued or issuable to the two
institutional investors under the Equity Line, which shares have been separately
registered for resale under the Securities Act of 1933, and are the subject of a
separate prospectus.
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<PAGE>
Under the Placement Agent Agreement, Dunwoody is entitled to receive
the following compensation as a placement agent fee in connection with the
placement and sale of securities of Techniclone to the two institutional
investors:
o a cash placement fee equal to 7% of the purchase price of any
and all securities placed under the Equity Line;
o a non-accountable expense allowance equal to 1% of the
purchase price of any and all securities placed up to the
aggregate purchase price of the first $10 million of
securities placed under the Equity Line;
o a one time non-accountable expense allowance equal to one
hundred thousand dollars for any and all securities placed in
excess of the aggregate purchase price of the first $10
million of securities placed under the Equity Line; and
o an amount of securities equal to 10% of all common stock
issued under the Equity Line and an amount of securities equal
to 10% of all warrants issued under the Equity Line.
Techniclone's ability to require the two institutional investors to
purchase shares of its common stock under the Equity Line is subject to certain
conditions and limitations, including:
o the representations and warranties of Techniclone in the
Equity Line must be true and correct in all material respects
as of the date of each sale;
o Techniclone shall have performed and complied with all
obligations under the Equity Line, the Registration Rights
Agreement and the warrants issued to the two institutional
investors required to be performed as of the date of each
sale;
o no statute, rule, regulation, executive order, decree, ruling
or injunction shall be in effect which prohibits or directly
and adversely affects any of the transactions contemplated by
the Equity Line;
o at the time of a sale, there shall have been no material
adverse change in Techniclone's business prospects or
financial condition, except as disclosed in Techniclone's most
recent periodic reports filed since June 16, 1998 with the SEC
under the Securities Exchange Act of 1934;
o Techniclone's common stock shall not have been delisted from
The Nasdaq SmallCap Market nor suspended from trading;
o the closing bid price of our common stock on any trading
during the ten days preceding the date of the sale cannot be
less than or equal to $0.50; and
o if the closing bid price of our common stock on any trading
day during the ten trading days preceding the date of the sale
is less than $1.00 but greater than $0.50, Techniclone may
only require the purchase by the two institutional investors
of an amount of shares not greater than 15% of the amount that
would otherwise be available to Techniclone under the Equity
Line.
The two institutional investors and Dunwoody have further agreed that
they will not engage in any trading practice or activity for the purpose of
manipulating the price of our common stock or otherwise engage in any trading
practice or activity that violates the rules and regulations of the SEC.
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<PAGE>
Under the Placement Agent Agreement and a related Registration Rights
Agreement between Techniclone, the two institutional investors and Dunwoody, as
successor in interest to Swartz Investments, LLC, Techniclone has filed a
registration statement, of which this prospectus forms a part, in order to
permit Dunwoody to resell to the public the shares of common stock issued to
Dunwoody (including shares issuable to Dunwoody upon exercise of outstanding
warrants) under the Placement Agent Agreement. As Dunwoody has transferred the
ownership of the shares covered by this prospectus to Eric Swartz and Michael
Kendrick, the registration statement will cover Eric Swartz's and Michael
Kendrick's resale of the common shares covered by this prospectus to the public.
THE INVESTOR COMMITMENT WARRANT
An investor commitment warrant to purchase up to 750,000 shares of
Common Stock of the Company was issued to Swartz Private Equity, LLC pursuant to
a letter of agreement between the Company and Swartz Private Equity, LLC dated
on or about November 5, 1999 ("Letter of Agreement"). Under the terms of the
warrant, the initial exercise price of the warrant is $.46875, subject to the
future reset provision as defined in the warrant. The warrants may be exercised
on a cash or cashless basis. The warrant is exercisable at any time beginning on
the date of issuance of the warrant and ending on November 19, 2004. Eric Swartz
and Michael Kendrick each own 50% of the shares issuable under the investor
commitment warrant.
THE JOINT VENTURE AGREEMENT
On May 17, 2000, the Company entered into a joint venture with Oxigene,
Inc. for its VTA technology. Under the terms of the joint venture, the Company
has agreed to supply its VTA intellectual property to the joint venture. In
exchange for this, Oxigene, Inc. has agreed to provide its next generation
tubulin-binding compounds and, based on the development success of the joint
venture, will be required to spend up to $20,000,000 to fund the development
expenses of the joint venture. Any further funding of the joint venture
thereafter will be shared equally by the Company and Oxigene, Inc. In addition,
Oxigene, Inc. has paid the Company an up-front licensing fee of $1,000,000 and
purchased $2,000,000 of the Company's stock (or 585,009 common shares) based on
the closing market price for the five days prior and after the closing date.
Additionally, under the terms of the joint venture agreement, any sublicensing
fees generated within the joint venture will be allocated 75% to the Company and
25% to Oxigene, Inc. until the Company has received $10,000,000 in sublicensing
fees. Thereafter, the joint venture partners will share licensing fees equally.
In addition, Oxigene, Inc. will also be required to pay the Company $1,000,000
and to subscribe to an additional $1,000,000 in common stock of the Company upon
the filing of an Investigational New Drug Application ("IND") for the first
clinical candidate developed. Any royalty income or profits will also be shared
equally by the joint venture partners. The Company and Oxigene have agreed to
name the new entity Arcus Therapeutics, LLC.
27
<PAGE>
LEGAL MATTERS
The validity of the shares of common stock offered by this prospectus
will be passed upon for Techniclone by Luce, Forward, Hamilton & Scripps, LLP,
San Diego, California.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements and schedule included in our Annual Report on Form 10-K for
the years ended April 30, 2000 and 1999, as set forth in their report, which is
incorporated by reference in this prospectus and elsewhere in the registration
statement. Our consolidated financial statements and schedule are incorporated
by reference in reliance on Ernst & Young LLP's report, given on their authority
as experts in accounting and auditing.
The consolidated financial statements and related consolidated
financial statement schedule for the fiscal year ended April 30, 1998,
incorporated in this prospectus by reference from Techniclone Corporation's
Annual Report on Form 10-K for the year ended April 30, 2000, have been audited
by Deloitte & Touche LLP, independent auditors, as stated in their report (which
expresses an unqualified opinion and includes an explanatory paragraph regarding
substantial doubt about Techniclone's ability to continue as a going concern),
which is incorporated in this prospectus by reference, and have been so
incorporated in reliance upon the report of such firm given upon their authority
as experts in accounting and auditing.
WHERE TO LEARN MORE ABOUT TECHNICLONE
Techniclone has filed with the SEC a registration statement on Form S-3
under the Securities Act of 1933, relating to the shares of common stock being
offered by this prospectus. For further information pertaining to our common
stock and the shares of common stock being offering by this prospectus,
reference is made to such registration statement. This prospectus constitutes
the prospectus of Techniclone filed as a part of the registration statement and
it does not contain all information in the registration statement, certain
portions of which have been omitted in accordance with the rules and regulations
of the SEC. In addition, Techniclone is subject to the informational
requirements of the Securities Exchange Act of 1934, and, in accordance with
such requirements, files reports, proxy statements and other information with
the SEC relating to its business, financial statements and other matters.
Reports and proxy and information statements filed under Section 14(a) and 14(c)
of the Securities Exchange Act of 1934 and other information filed with the SEC
as well as copies of the registration statement can be inspected and copied at
the public reference facilities maintained by the SEC at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the SEC's Midwest
Regional Offices at 500 West Madison Street, Chicago, Illinois 60606 and
Northeast Regional Office at 7 World Trade Center, New York, New York 10048.
Copies of such material can also be obtained at prescribed rates from the Public
Reference Section of the SEC at its principal office at Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549. Such material may also be obtained
electronically by visiting the SEC's web site on the Internet at
http://www.sec.gov. Our common stock of Techniclone is traded on The Nasdaq
SmallCap Market under the symbol "TCLN." Reports, proxy statements and other
information concerning Techniclone may be inspected at the National Association
of Securities Dealers, Inc., at 1735 K Street, N.W., Washington D.C. 20006.
28
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" into this prospectus
the documents we file with them, which means that we can disclose important
information to you by referring you to these documents. The information that we
incorporate by reference into this prospectus is considered to be part of this
prospectus, and information that we file later with the SEC automatically
updates and supersedes any information in this prospectus. We incorporate by
reference into this prospectus the documents listed below:
1. Annual Report on Form 10-K for the fiscal year ended April 30,
2000, as filed with the SEC on July 31, 2000, under Section
13(a) of the Securities Exchange Act of 1934.
2. Current Report on Form 8-K, as filed with the SEC on June 7,
2000;
3. Current Report on Form 8-K, as filed with the SEC on May 19,
2000;
4. Definitive Proxy Statement with respect to the Annual Meeting
of Stockholders held on October 20, 1999, as filed with the
SEC on August 30, 1999;
5. The description of our common stock contained in our
Registration Statement on Form 8-A and Form 8-B (Registration
of Successor Issuers) filed under the Securities Exchange Act
of 1934, including any amendment or report filed for the
purpose of updating such description; and
6. All other reports filed by us under Section 13(a) or 15(d) of
the Securities Exchange Act of 1934 since the end of our
fiscal year ended April 30, 2000.
All documents we have filed with the SEC under Sections 13(a), 13(c),
14 or 15(d) of the Securities Exchange Act of 1934 after the date of the initial
registration statement and prior to the effective date of the registration
statement or subsequent to the date of this prospectus and prior to the filing
of a post-effective amendment indicating that all securities offered have been
sold (or which re-registers all securities then remaining unsold), are deemed to
be incorporated in this prospectus by this reference and to be made a part of
this prospectus from the date of filing of such documents.
We will provide, without charge, upon written or oral request of any
person to whom a copy of this prospectus is delivered, a copy of any or all of
the foregoing documents and information that has been or may be incorporated in
this prospectus by reference, other than exhibits to such documents. Requests
for such documents and information should be directed to Techniclone
Corporation, Attention: John N. Bonfiglio, President and CEO, 14282 Franklin
Avenue, Tustin, California 92780-7017, telephone number (714) 508-6000. See also
"Where to Learn More About Techniclone."
29
<PAGE>
DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Techniclone's Bylaws provide that Techniclone will indemnify its
directors and officers and may indemnify its employees and other agents to the
fullest extent permitted by law. Techniclone believes that indemnification under
its Bylaws covers at least negligence and gross negligence by indemnified
parties, and permits Techniclone to advance litigation expenses in the case of
shareholder derivative actions or other actions, against an undertaking by the
indemnified party to repay such advances if it is ultimately determined that the
indemnified party is not entitled to indemnification. Techniclone has liability
insurance for its officers and directors.
In addition, Techniclone's Certificate of Incorporation provides that,
under Delaware law, its directors shall not be liable for monetary damages for
breach of the directors' fiduciary duty as a director to Techniclone and its
shareholders. This provision in the Certificate of Incorporation does not
eliminate the directors' fiduciary duty, and in appropriate circumstances
equitable remedies such as injunctive or other forms of non-monetary relief will
remain available under Delaware law. In addition, each director will continue to
be subject to liability for breach of the director's duty of loyalty to
Techniclone for acts or omissions not in good faith or involving intentional
misconduct, for knowing violations of law, for actions leading to improper
personal benefit to the director, and for payment of dividends or approval of
stock repurchases or redemptions that are unlawful under Delaware law. The
provision also does not affect a director's responsibilities under any other
law, such as the federal securities laws or state or federal environmental laws.
Provisions of Techniclone's Bylaws require Techniclone, among other
things, to indemnify them against certain liabilities that may arise by reason
of their status or service as directors or officers (other than liabilities
arising from actions not taken in good faith or in a manner the indemnitee
believed to be opposed to the best interests of Techniclone) to advance their
expenses incurred as a result of any proceeding against them as to which they
could be indemnified and to obtain directors' insurance if available on
reasonable terms. To the extent that indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors, officers or
persons controlling Techniclone as discussed in the foregoing provisions,
Techniclone has been informed that in the opinion of the SEC, such
indemnification is against public policy as expressed in the Securities Act of
1933, and is therefore unenforceable. Techniclone believes that its Certificate
of Incorporation and Bylaw provisions are necessary to attract and retain
qualified persons as directors and officers.
Techniclone has in place a directors' and officers' liability insurance
policy that, subject to the terms and conditions of the policy, insures the
directors and officers of Techniclone against losses arising from any wrongful
act (as defined by the policy) in his or her capacity as a director of officer.
The policy reimburses Techniclone for amounts which Techniclone lawfully
indemnifies or is required or permitted by law to indemnify its directors and
officers.
30
<PAGE>
================================================================================
YOU SHOULD RELY ONLY ON THE INFORMATION
CONTAINED IN THIS DOCUMENT OR TO WHICH WE 4,405,167 SHARES
HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED
ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS
DIFFERENT. THIS DOCUMENT MAY ONLY BE USED
WHERE IT IS LEGAL TO SELL THESE SECURITIES. THE
INFORMATION IN THIS DOCUMENT MAY ONLY BE [Logo TECHNICLONE
ACCURATE ON THE DATE OF THIS DOCUMENT. Here] CORPORATION
-------------------------------
TABLE OF CONTENTS
PAGE
----
TECHNICLONE CORPORATION........................1
RISK FACTORS...................................7
FORWARD-LOOKING STATEMENTS....................15 COMMON STOCK
USE OF PROCEEDS...............................15
SELLING SHAREHOLDERS..........................17
PLAN OF DISTRIBUTION..........................19
DESCRIPTION OF SECURITIES.....................21
THE AMENDMENT AGREEMENT..................23
THE OPTION AGREEMENT.....................23
NON-QUALIFIED OPTIONS ISSUED TO
DIRECTOR AND CONSULTANTS..............23
THE EQUITY LINE AGREEMENT................24
THE INVESTOR COMMITMENT _________________
WARRANT...............................27
THE JOINT VENTURE AGREEMENT..............27 PROSPECTUS
LEGAL MATTERS.................................28 _________________
EXPERTS.......................................28
WHERE TO LEARN MORE ABOUT
TECHNICLONE................................28
INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE.....................29
DISCLOSURE OF COMMISSION POSITION
ON INDEMNIFICATION FOR
SECURITIES ACT LIABILITIES.................30
-------------------------------
August __, 2000
================================================================================
<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCES AND DISTRIBUTION
The following table sets forth the estimated expenses in connection
with the offering described in this registration statement:
SEC registration fee.......................... $ 5,012
Printing and engraving expenses............... 2,500
Legal fees and expenses....................... 25,000
Blue Sky fees and expenses.................... 2,500
Accounting fees and expenses.................. 10,000
Miscellaneous................................. 5,000
-----------
Total................................. $ 50,012
===========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Techniclone Corporation's Certificate of Incorporation (the
"Certificate") and Bylaws include provisions that eliminate the directors'
personal liability for monetary damages to the fullest extend possible under
Delaware Law or other applicable law (the "Director Liability Provision"). The
Director Liability Provision eliminates the liability of directors to
Techniclone and its shareholders for monetary damages arising out of any
violation by a director of his fiduciary duty of due care. However, the Director
Liability Provision does not eliminate the personal liability of a director for
(i) breach of the director's duty of loyalty, (ii) acts or omissions not in good
faith or involving intentional misconduct or knowing violation of law, (iii)
payment of dividends or repurchases or redemption of stock other than from
lawfully available funds, or (iv) any transactions from which the director
derived an improper benefit. The Director Liability Provision also does not
affect a director's liability under the federal securities laws or the recovery
of damages by third parties. Furthermore, under Delaware Law, the limitation
liability afforded by the Director Liability Provision does not eliminate a
director's personal liability for breach of the director's duty of due care.
Although the directors would not be liable for monetary damages to Techniclone
or its shareholders for negligent acts or commissions in exercising their duty
of due care, the directors remain subject to equitable remedies, such as actions
for injunction or rescission, although these remedies, whether as a result of
timeliness or otherwise, may not be effective in all situations. With regard to
directors who also are officers of Techniclone, these persons would be insulated
from liability only with respect to their conduct as directors and would not be
insulated from liability for acts or omissions in their capacity as officers.
These provisions may cover actions undertaken by the Board of Directors, which
may serve as the basis for a claim against Techniclone under the federal and
state securities laws. Techniclone has been advised that it is the position of
the SEC that insofar as the foregoing provisions may be involved to disclaim
liability for damages arising under the Securities Act of 1933, as amended (the
"Securities Act"), such provisions are against public policy as expressed in the
Securities Act and are therefore unenforceable.
Delaware law provides a detailed statutory framework covering
indemnification of directors, officers, employees or agents of Techniclone
against liabilities and expenses arising out of legal proceedings brought
against them by reason of their status or service as directors, officers,
employees or agents. Section 145 of the Delaware General Corporation Law
("Section 145") provides that a director, officer, employee or agent of a
corporation (i) shall be indemnified by the corporation for expenses actually
and reasonably incurred in defense of any action or proceeding if such person is
sued by reason of his service to the corporation, to the extent that such person
has been successful in defense of such action or proceeding, or in defense of
any claim, issue or matter raised in such litigation, (ii) may, in actions other
than actions by or in the right of the corporation (such as derivative actions),
be indemnified for expenses actually and reasonably incurred, judgments, fines
and amounts paid in settlement of such litigation, even if he is not successful
on the merits, if he acted in good faith and in a manner he reasonably believed
II-1
<PAGE>
to be in or not opposed to the best interests of the corporation (and in a
criminal proceeding, if he did not have reasonable cause to believe his conduct
was unlawful), and (iii) may be indemnified by the corporation for expenses
actually and reasonably incurred (but not judgments or settlements) of any
action by the corporation or of a derivative action (such as a suit by a
shareholder alleging a breach by the director or officer of a duty owed to the
corporation), even if he is not successful, provided that he acted in good faith
and in a manner reasonably believed to be in or not opposed to the best
interests of the corporation, provided that no indemnification is permitted
without court approval if the director has been adjudged liable to the
corporation.
Delaware Law also permits a corporation to elect to indemnify its
officers, directors, employees and agents under a broader range of circumstances
than that provided under Section 145. The Certificate contains a provision that
takes full advantage of the permissive Delaware indemnification laws (the
"Indemnification Provision") and provides that Techniclone is required to
indemnify its officers, directors, employees and agents to the fullest extent
permitted by law, including those circumstances in which indemnification would
otherwise be discretionary, provided, however, that prior to making such
discretionary indemnification, Techniclone must determine that the person acted
in good faith and in a manner he or she believed to be in the best interests of
the corporation and, in the case of any criminal action or proceeding, the
person had no reason to believe his or her conduct was unlawful.
In furtherance of the objectives of the Indemnification Provision,
Techniclone has also entered into agreements to indemnify its directors and
executive officers, in addition to the indemnification provided for in
Techniclone's Certificate and Bylaws (the "Indemnification Agreements").
Techniclone believes that the Indemnification Agreements are necessary to
attract and retain qualified directors and executive officers. Pursuant to the
Indemnification Agreements, an indemnitee will be entitled to indemnification to
the extent permitted by Section 145 or other applicable law. In addition, to the
maximum extent permitted by applicable law, an indemnitee will be entitled to
indemnification for any amount or expense which the indemnitee actually and
reasonably incurs as a result of or in connection with prosecuting, defending,
preparing to prosecute or defend, investigating, preparing to be a witness, or
otherwise participating in any threatened, pending or completed claim, suit,
arbitration, inquiry or other proceeding (a "Proceeding") in which the
indemnitee is threatened to be made or is made a party or participant as a
result of his or her position with Techniclone, provided that the indemnitee
acted in good faith and in a manner he or she reasonably believed to be in or
not opposed to the best interests of Techniclone and had no reasonable cause to
believe his or her conduct was unlawful. If the Proceeding is brought by or in
the right of Techniclone and applicable law so provides, the Indemnification
Agreement provides that no indemnification against expenses shall be made in
respect of any claim, issue or matter in the Proceeding as to which the
indemnitee shall have been adjudged liable to Techniclone.
Insofar as indemnification for liabilities arising under the Securities
Act, may be permitted to directors, officers or persons controlling Techniclone
pursuant to the foregoing provisions, Techniclone has been advised that in the
opinion of the Securities and Exchange Commission, such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable.
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION PAGE NO.
------ ----------- --------
<S> <C>
3.1 Certificate of Incorporation of Techniclone Corporation, a
Delaware corporation (Incorporated by reference to Exhibit B
to the Company's 1996 Proxy Statement as filed with the
Commission on or about August 20, 1996)
3.2 Bylaws of Techniclone Corporation, a Delaware corporation
(Incorporated by reference to Exhibit C to the Company's 1996
Proxy Statement as filed with the Commission on or about
August 20, 1996)
3.3 Certificate of Designation of 5% Adjustable Convertible Class
C Preferred Stock as filed with the Delaware Secretary of
State on April 23, 1997. (Incorporated by reference to Exhibit
3.1 contained in Registrant's Current Report on Form 8-K as
filed with the Commission on or about May 12, 1997)
4.1 Form of Certificate for Common Stock (Incorporated by
reference to the exhibit of the same number contained in
Registrants' Annual Report on Form 10-K for the year end April
30, 1988)
4.4 Form of Subscription Agreement entered into with Series B
Convertible Preferred Stock Subscribers (Incorporated by
reference to Exhibit 4.1 contained in Registrant's Report on
Form 8-K dated December 27, 1995, as filed with the Commission
on or about January 24, 1996)
4.5 Registration Rights Agreement dated December 27, 1995, by and
among Swartz Investments, Inc. and the holders of the
Registrant's Series B Convertible Preferred Stock
(incorporated by reference to Exhibit 4.2 contained in
Registrant's Current Report on Form 8-K dated December 27,
1995 as filed with the Commission on or about January 24,
1996)
4.6 Warrant to Purchase Common Stock of Registrant issued to
Swartz Investments, Inc. (Incorporated by reference to Exhibit
4.3 contained in Registrant's Current Report on Form 8-K dated
December 27, 1995 as filed with the Commission on or about
January 24, 1996)
II-3
<PAGE>
EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION PAGE NO.
------ ----------- --------
4.7 5% Preferred Stock Investment Agreement between Registrant and
the Investors (Incorporated by reference to Exhibit 4.1
contained in Registrant's Current Report on Form 8-K as filed
with the Commission on or about May 12, 1997)
4.8 Registration Rights Agreement between the Registrant and the
holders of the Class C Preferred Stock (Incorporated by
reference to Exhibit 4.2 contained in Registrant's Current
Report on Form 8-K as filed with the Commission on or about
May 12, 1997)
4.9 Form of Stock Purchase Warrant to be issued to the holders of
the Class C Preferred Stock upon conversion of the Class C
Preferred Stock (Incorporated by reference to Exhibit 4.3
contained in Registrant's Current Report on Form 8-K as filed
with the Commission on or about May 12, 1997)
4.10 Regulation D Common Equity Line Subscription Agreement dated
June 16, 1998 between the Registrant and the Equity Line
Subscribers named therein (Incorporated by reference to
Exhibit 4.4 contained in Registrant's Current Report on Form
8-K dated as filed with the Commission on or about June 29,
1998)
4.11 Form of Amendment to Regulation D Common Stock Equity Line
Subscription Agreement (Incorporated by reference to Exhibit
4.5 contained in Registrant's Current Report on Form 8-K filed
with the Commission on or about June 29, 1998)
4.12 Registration Rights Agreement between the Registrant and the
Subscribers (Incorporated by reference to Exhibit 4.6
contained in Registrant's Current Report on Form 8-K as filed
with the Commission on or about June 29, 1998)
4.13 Form of Stock Purchase Warrant to be issued to the Equity Line
Subscribers pursuant to the Regulation D Common Stock Equity
Subscription Agreement (Incorporated by reference to Exhibit
4.7 contained in Registrant's Current Report on Form 8-K as
filed with the Commission on or about June 29, 1998)
II-4
<PAGE>
EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION PAGE NO.
------ ----------- --------
4.14 Placement Agent Agreement dated as of June 16, 1998, by and
between the Registrant and Swartz Investments LLC, a Georgia
limited liability company d/b/a Swartz Institutional Finance
(Incorporated by reference to the exhibit contained in
Registration's Registration Statement on Form S-3 (File No.
333-63773))
4.15 Second Amendment to Regulation D Common Stock Equity Line
Subscription Agreement dated as of September 16, 1998, by and
among the Registrant, The Tail Wind Fund, Ltd. and Resonance
Limited (Incorporated by reference to the exhibit contained in
Registration's Registration Statement on Form S-3 (File No.
333-63773))
4.16 Form of Non-Qualified Stock Option Agreement by and between
Techniclone Corporation and certain consultants dated December
22, 1999*
5 Opinion of Luce, Forward, Hamilton & Scripps LLP*
10.23 Incentive Stock Option, Nonqualified Stock Option and
Restricted Stock Purchase Plan - 1986 (Incorporated by
reference to the exhibit contained in Registrant's
Registration Statement on Form S-8 (File No. 33-15102))
10.24 Cancer Biologics Incorporated Incentive Stock Option,
Nonqualified Stock Option and Restricted Stock Purchase Plan -
1987 (Incorporated by reference to the exhibit contained in
Registrant's Registration Statement on Form S-8 (File No.
33-8664))
10.26 Amendment to 1986 Stock Option Plan dated March 1, 1988
(Incorporated by reference to the exhibit of the same number
contained in Registrant's Annual Report on Form 10-K for the
year ended April 30, 1988)
10.31 Agreement dated February 5, 1996, between Cambridge Antibody
Technology, Ltd. and Registrant (Incorporated by reference to
Exhibit 10.1 contained in Registrant's Current Report on Form
8-K dated February 5, 1996, as filed with the Commission on or
about February 8, 1996)
II-5
<PAGE>
EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION PAGE NO.
------ ----------- --------
10.32 Distribution Agreement dated February 29, 1996, between
Biotechnology Development, Ltd. and Registrant (Incorporated
by reference to Exhibit 10.1 contained in Registrant's Current
Report on Form 8-K dated February 29, 1996, as filed with the
Commission on or about March 7, 1996)
10.33 Option Agreement dated February 29, 1996, by and between
Biotechnology Development, Ltd. And Registrant (Incorporated
by reference to Exhibit 10.2 contained in Registrant's Current
Report on Form 8-K dated February 29, 1996, as filed with the
Commission on or about March 7, 1996)
10.40 1996 Stock Incentive Plan (Incorporated by reference to the
exhibit contained in Registrants' Registration Statement in
form S-8 (File No. 333-17513))
10.41 Stock Exchange Agreement dated as of January 15, 1997 among
the stockholders of Peregrine Pharmaceuticals, Inc. and
Registrant (Incorporated by reference to Exhibit 2.1 to
Registrants' Quarterly Report on Form 10-Q for the quarter
ended January 31, 1997)
10.42 First Amendment to Stock Exchange Agreement among the
Stockholders of Peregrine Pharmaceuticals, Inc. and Registrant
(Incorporated by reference to Exhibit 2.1 contained in
Registrant's Current Report on Form 8-K as filed with the
Commission on or about May 12, 1997)
10.43 Termination and Transfer Agreement dated as of November 14,
1997 by and between Registrant and Alpha Therapeutic
Corporation (Incorporated by reference to Exhibit 10.1
contained in Registrant's Current Report on Form 8-K as filed
with the commission on or about November 24, 1997)
10.46 Option Agreement dated October 23, 1998 between Biotechnology
Development Ltd. and the Registrant (Incorporated by reference
to the exhibit contained in Registrant's Quarterly Report on
Form 10-Q for the fiscal quarter ended October 31, 1998, as
filed with the SEC on or about December 15, 1998)
II-6
<PAGE>
EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION PAGE NO.
------ ----------- --------
10.47 Real Estate Purchase Agreement by and between Techniclone
Corporation and 14282 Franklin Avenue Associates, LLC dated
December 24, 1998 (Incorporated by reference to Exhibit 10.47
to Registrants' Quarterly Report on Form 10-Q for the quarter
ended January 31, 1999)
10.48 Lease and Agreement of Lease between TNCA, LLC, as Landlord,
and Techniclone Corporation, as Tenant, dated as of December
24, 1998 (Incorporated by reference to Exhibit 10.48 to
Registrants' Quarterly Report on Form 10-Q for the quarter
ended January 31, 1999)
10.49 Promissory Note dated as of December 24, 1998 between
Techniclone Corporation (Payee) and TNCA Holding, LLC (Maker)
for $1,925,000 (Incorporated by reference to Exhibit 10.49 to
Registrants' Quarterly Report on Form 10-Q for the quarter
ended January 31, 1999)
10.50 Pledge and Security Agreement dated as of December 24, 1998
for $1,925,000 Promissory Note between Grantors and
Techniclone Corporation (Secured Party) (Incorporated by
reference to Exhibit 10.50 to Registrants' Quarterly Report on
Form 10-Q for the quarter ended January 31, 1999)
10.51 Final fully-executed copy of the Regulation D Common Stock
Equity Line Subscription Agreement dated as of June 16, 1998
between the Registrant and the Subscribers named therein
10.53 Termination Agreement dated as of March 8, 1999 by and between
Registrant and Biotechnology Development Ltd. (Incorporated by
reference to Exhibit 10.53 to Registrants' Annual Report on
Form 10-K for the year ended April 30, 1999)
10.54 Secured Promissory Note for $3,300,000 dated March 8, 1999
between Registrant and Biotechnology Development Ltd.
(Incorporated by reference to Exhibit 10.54 to Registrants'
Annual Report on Form 10-K for the year ended April 30, 1999)
10.55 Security Agreement dated March 8, 1999 between Registrant and
Biotechnology Development Ltd. (Incorporated by reference to
Exhibit 10.52 to Registrants' Annual Report on Form 10-K for
the year ended April 30, 1999)
II-7
<PAGE>
EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION PAGE NO.
------ ----------- --------
10.56 License Agreement dated as of March 8, 1999 by and between
Registrant and Schering A.G., Germany (Incorporated by
reference to Exhibit 10.56 to Registrants' Annual Report on
Form 10-K for the year ended April 30, 1999)
10.57 Patent License Agreement dated October 8, 1998 between
Registrant and the Board of Regents of the University of Texas
System for patents related to Targeting the Vasculature of
Solid Tumors (Vascular Targeting Agent patents) (Incorporated
by reference to Exhibit 10.57 to Registrants' Quarterly Report
on Form 10-Q for the quarter ended July 31, 1999)
10.58 Patent License Agreement dated October 8, 1998 between
Registrant and the Board of Regents of the University of Texas
System for patents related to the Coagulation of the Tumor
Vasculature (Vascular Targeting Agent patents) (Incorporated
by reference to Exhibit 10.58 to Registrants' Quarterly Report
on Form 10-Q for the quarter ended July 31, 1999)
10.59 License Agreement between Northwestern University and
Registrant dated August 4, 1999 covering the LYM-1 and LYM-2
antibodies (Oncolym(R)) (Incorporated by reference to Exhibit
10.59 to Registrants' Quarterly Report on Form 10-Q for the
quarter ended July 31, 1999)
10.60 Change in Control Agreement dated August 4, 1999 between
Registrant and John N. Bonfiglio, V.P. of Technology and
Business Development (Incorporated by reference to Exhibit
10.60 to Registrants' Quarterly Report on Form 10-Q for the
quarter ended October 31, 1999)
II-8
<PAGE>
EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION PAGE NO.
------ ----------- --------
10.63 Change in Control Agreement dated September 27, 1999 between
Registrant and Terrence Chew, V.P of Clinical and Regulatory
Affairs (Incorporated by reference to Exhibit 10.63 to
Registrants' Quarterly Report on Form 10-Q for the quarter
ended October 31, 1999)
10.64 Regulation D Subscription Agreement dated January 6, 2000
between Registrant and Subscribers, Swartz Investments, LLC
and Biotechnology Development, LTD. (Incorporated by reference
to Exhibit 10.64 to Registrants' Quarterly Report on Form 10-Q
for the quarter ended January 31, 2000)
10.65 Registration Right Agreement dated January 6, 2000 between
Registrant and Subscribers of the Regulation D Subscription
Agreement dated January 6, 2000 (Incorporated by reference to
Exhibit 10.65 to Registrants' Quarterly Report on Form 10-Q
for the quarter ended January 31, 2000)
10.66 Form of Warrant to be issued to Subscribers pursuant to the
Regulation D Subscription Agreement dated January 6, 2000
(Incorporated by reference to Exhibit 10.66 to Registrants'
Quarterly Report on Form 10-Q for the quarter ended January
31, 2000)
10.67 Warrant to purchase 750,000 shares of Common Stock of
Registrant issued to Swartz Private Equity, LLC dated November
19, 1999 (Incorporated by reference to Exhibit 10.67 to
Registrants' Quarterly Report on Form 10-Q for the quarter
ended January 31, 2000)
10.68 Amendment Agreement dated June 14, 2000 to the License
Agreement dated March 8, 1999 by and between Schering and
Registrant (Incorporated by reference to Exhibit 10.68 to
Registrants' Registration Statement on Form S-3 (File No.
333-40716)).
10.69 Waiver Agreement by and between Registrant and Biotechnology
Development Ltd. effective December 29, 1999 (Incorporated by
reference to Exhibit 10.69 to Registrants' Registration
Statement on Form S-3 (File No. 333-40716)).
10.70 Joint Venture Agreement by and between Registrant and Oxigene,
Inc. dated May 11, 2000 (Incorporated by reference to Exhibit
10.70 to Registrants' Registration Statement on Form S-3 (File
No. 333-40716)).
23.1 Consent of Luce, Forward, Hamilton & Scripps, LLP (contained
in Exhibit 5)*
II-9
<PAGE>
EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION PAGE NO.
------ ----------- --------
23.2 Consent of Ernst & Young LLP, Independent Auditors*
23.3 Consent of Deloitte & Touche LLP*
-------------------------
* Filed herewith.
</TABLE>
II-10
<PAGE>
ITEM 17. UNDERTAKINGS
(a) 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;
(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 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 SEC pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price present 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 information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, 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, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at the time shall be deemed to be
the initial BONA FIDE offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described under Item 15 above, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act 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
II-11
<PAGE>
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.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement on Form S-3 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Tustin, State of California, on August 1, 2000.
TECHNICLONE CORPORATION
By: /S/ JOHN N. BONFIGLIO
--------------------------------
John N. Bonfiglio, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/S/ PAUL LYTLE Vice President of Finance August 1, 2000
------------------------------------- and Accounting and
Paul Lytle Principal Accounting Officer
/S/ CARLTON JOHNSON Director August 1, 2000
-------------------------------------
Carlton Johnson
/S/ EDWARD LEGERE Director August 1, 2000
-------------------------------------
Edward Legere
/S/ ERIC SWARTZ Director August 1, 2000
-------------------------------------
Eric Swartz
Director
-------------------------------------
Clive R. Taylor, M.D., Ph.D.
</TABLE>
II-12
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION PAGE NO.
------ ----------- --------
<S> <C>
3.1 Certificate of Incorporation of Techniclone Corporation, a
Delaware corporation (Incorporated by reference to Exhibit B
to the Company's 1996 Proxy Statement as filed with the
Commission on or about August 20, 1996)
3.2 Bylaws of Techniclone Corporation, a Delaware corporation
(Incorporated by reference to Exhibit C to the Company's 1996
Proxy Statement as filed with the Commission on or about
August 20, 1996)
3.3 Certificate of Designation of 5% Adjustable Convertible Class
C Preferred Stock as filed with the Delaware Secretary of
State on April 23, 1997. (Incorporated by reference to Exhibit
3.1 contained in Registrant's Current Report on Form 8-K as
filed with the Commission on or about May 12, 1997)
4.1 Form of Certificate for Common Stock (Incorporated by
reference to the exhibit of the same number contained in
Registrants' Annual Report on Form 10-K for the year end April
30, 1988)
4.4 Form of Subscription Agreement entered into with Series B
Convertible Preferred Stock Subscribers (Incorporated by
reference to Exhibit 4.1 contained in Registrant's Report on
Form 8-K dated December 27, 1995, as filed with the Commission
on or about January 24, 1996)
4.5 Registration Rights Agreement dated December 27, 1995, by and
among Swartz Investments, Inc. and the holders of the
Registrant's Series B Convertible Preferred Stock
(incorporated by reference to Exhibit 4.2 contained in
Registrant's Current Report on Form 8-K dated December 27,
1995 as filed with the Commission on or about January 24,
1996)
4.6 Warrant to Purchase Common Stock of Registrant issued to
Swartz Investments, Inc. (Incorporated by reference to Exhibit
4.3 contained in Registrant's Current Report on Form 8-K dated
December 27, 1995 as filed with the Commission on or about
January 24, 1996)
<PAGE>
EXHIBIT INDEX
EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION PAGE NO.
------ ----------- --------
4.7 5% Preferred Stock Investment Agreement between Registrant and
the Investors (Incorporated by reference to Exhibit 4.1
contained in Registrant's Current Report on Form 8-K as filed
with the Commission on or about May 12, 1997)
4.8 Registration Rights Agreement between the Registrant and the
holders of the Class C Preferred Stock (Incorporated by
reference to Exhibit 4.2 contained in Registrant's Current
Report on Form 8-K as filed with the Commission on or about
May 12, 1997)
4.9 Form of Stock Purchase Warrant to be issued to the holders of
the Class C Preferred Stock upon conversion of the Class C
Preferred Stock (Incorporated by reference to Exhibit 4.3
contained in Registrant's Current Report on Form 8-K as filed
with the Commission on or about May 12, 1997)
4.10 Regulation D Common Equity Line Subscription Agreement dated
June 16, 1998 between the Registrant and the Equity Line
Subscribers named therein (Incorporated by reference to
Exhibit 4.4 contained in Registrant's Current Report on Form
8-K dated as filed with the Commission on or about June 29,
1998)
4.11 Form of Amendment to Regulation D Common Stock Equity Line
Subscription Agreement (Incorporated by reference to Exhibit
4.5 contained in Registrant's Current Report on Form 8-K filed
with the Commission on or about June 29, 1998)
4.12 Registration Rights Agreement between the Registrant and the
Subscribers (Incorporated by reference to Exhibit 4.6
contained in Registrant's Current Report on Form 8-K as filed
with the Commission on or about June 29, 1998)
4.13 Form of Stock Purchase Warrant to be issued to the Equity Line
Subscribers pursuant to the Regulation D Common Stock Equity
Subscription Agreement (Incorporated by reference to Exhibit
4.7 contained in Registrant's Current Report on Form 8-K as
filed with the Commission on or about June 29, 1998)
<PAGE>
EXHIBIT INDEX
EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION PAGE NO.
------ ----------- --------
4.14 Placement Agent Agreement dated as of June 16, 1998, by and
between the Registrant and Swartz Investments LLC, a Georgia
limited liability company d/b/a Swartz Institutional Finance
(Incorporated by reference to the exhibit contained in
Registration's Registration Statement on Form S-3 (File No.
333-63773))
4.15 Second Amendment to Regulation D Common Stock Equity Line
Subscription Agreement dated as of September 16, 1998, by and
among the Registrant, The Tail Wind Fund, Ltd. and Resonance
Limited (Incorporated by reference to the exhibit contained in
Registration's Registration Statement on Form S-3 (File No.
333-63773))
4.16 Form of Non-Qualified Stock Option Agreement by and between
Techniclone Corporation and certain consultants dated December
22, 1999*
5 Opinion of Luce, Forward, Hamilton & Scripps LLP*
10.23 Incentive Stock Option, Nonqualified Stock Option and
Restricted Stock Purchase Plan - 1986 (Incorporated by
reference to the exhibit contained in Registrant's
Registration Statement on Form S-8 (File No.
33-15102))
10.24 Cancer Biologics Incorporated Incentive Stock Option,
Nonqualified Stock Option and Restricted Stock Purchase Plan -
1987 (Incorporated by reference to the exhibit contained in
Registrant's Registration Statement on Form S-8 (File No.
33-8664))
10.26 Amendment to 1986 Stock Option Plan dated March 1, 1988
(Incorporated by reference to the exhibit of the same number
contained in Registrant's Annual Report on Form 10-K for the
year ended April 30, 1988)
10.31 Agreement dated February 5, 1996, between Cambridge Antibody
Technology, Ltd. and Registrant (Incorporated by reference to
Exhibit 10.1 contained in Registrant's Current Report on Form
8-K dated February 5, 1996, as filed with the Commission on or
about February 8, 1996)
<PAGE>
EXHIBIT INDEX
EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION PAGE NO.
------ ----------- --------
10.32 Distribution Agreement dated February 29, 1996, between
Biotechnology Development, Ltd. and Registrant (Incorporated
by reference to Exhibit 10.1 contained in Registrant's Current
Report on Form 8-K dated February 29, 1996, as filed with the
Commission on or about March 7, 1996)
10.33 Option Agreement dated February 29, 1996, by and between
Biotechnology Development, Ltd. And Registrant (Incorporated
by reference to Exhibit 10.2 contained in Registrant's Current
Report on Form 8-K dated February 29, 1996, as filed with the
Commission on or about March 7, 1996)
10.40 1996 Stock Incentive Plan (Incorporated by reference to the
exhibit contained in Registrants' Registration Statement in
form S-8 (File No.
333-17513))
10.41 Stock Exchange Agreement dated as of January 15, 1997 among
the stockholders of Peregrine Pharmaceuticals, Inc. and
Registrant (Incorporated by reference to Exhibit 2.1 to
Registrants' Quarterly Report on Form 10-Q for the quarter
ended January 31, 1997)
10.42 First Amendment to Stock Exchange Agreement among the
Stockholders of Peregrine Pharmaceuticals, Inc. and Registrant
(Incorporated by reference to Exhibit 2.1 contained in
Registrant's Current Report on Form 8-K as filed with the
Commission on or about May 12, 1997)
10.43 Termination and Transfer Agreement dated as of November 14,
1997 by and between Registrant and Alpha Therapeutic
Corporation (Incorporated by reference to Exhibit 10.1
contained in Registrant's Current Report on Form 8-K as filed
with the commission on or about November 24, 1997)
10.46 Option Agreement dated October 23, 1998 between Biotechnology
Development Ltd. and the Registrant (Incorporated by reference
to the exhibit contained in Registrant's Quarterly Report on
Form 10-Q for the fiscal quarter ended October 31, 1998, as
filed with the SEC on or about December 15, 1998)
10.47 Real Estate Purchase Agreement by and between Techniclone
Corporation and 14282 Franklin Avenue Associates, LLC dated
December 24, 1998 (Incorporated by reference to Exhibit 10.47
to Registrants' Quarterly Report on Form 10-Q for the quarter
ended January 31, 1999)
<PAGE>
EXHIBIT INDEX
EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION PAGE NO.
------ ----------- --------
10.48 Lease and Agreement of Lease between TNCA, LLC, as Landlord,
and Techniclone Corporation, as Tenant, dated as of December
24, 1998 (Incorporated by reference to Exhibit 10.48 to
Registrants' Quarterly Report on Form 10-Q for the quarter
ended January 31, 1999)
10.49 Promissory Note dated as of December 24, 1998 between
Techniclone Corporation (Payee) and TNCA Holding, LLC (Maker)
for $1,925,000 (Incorporated by reference to Exhibit 10.49 to
Registrants' Quarterly Report on Form 10-Q for the quarter
ended January 31, 1999)
10.50 Pledge and Security Agreement dated as of December 24, 1998
for $1,925,000 Promissory Note between Grantors and
Techniclone Corporation (Secured Party) (Incorporated by
reference to Exhibit 10.50 to Registrants' Quarterly Report on
Form 10-Q for the quarter ended January 31, 1999)
10.51 Final fully-executed copy of the Regulation D Common Stock
Equity Line Subscription Agreement dated as of June 16, 1998
between the Registrant and the Subscribers named therein
10.53 Termination Agreement dated as of March 8, 1999 by and between
Registrant and Biotechnology Development Ltd. (Incorporated by
reference to Exhibit 10.53 to Registrants' Annual Report on
Form 10-K for the year ended April 30, 1999)
10.54 Secured Promissory Note for $3,300,000 dated March 8, 1999
between Registrant and Biotechnology Development Ltd.
(Incorporated by reference to Exhibit 10.54 to Registrants'
Annual Report on Form 10-K for the year ended April 30, 1999)
10.55 Security Agreement dated March 8, 1999 between Registrant and
Biotechnology Development Ltd. (Incorporated by reference to
Exhibit 10.52 to Registrants' Annual Report on Form 10-K for
the year ended April 30, 1999)
10.56 License Agreement dated as of March 8, 1999 by and between
Registrant and Schering A.G., Germany (Incorporated by
reference to Exhibit 10.56 to Registrants' Annual Report on
Form 10-K for the year ended April 30, 1999)
<PAGE>
EXHIBIT INDEX
EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION PAGE NO.
------ ----------- --------
10.57 Patent License Agreement dated October 8, 1998 between
Registrant and the Board of Regents of the University of Texas
System for patents related to Targeting the Vasculature of
Solid Tumors (Vascular Targeting Agent patents) (Incorporated
by reference to Exhibit 10.57 to Registrants' Quarterly Report
on Form 10-Q for the quarter ended July 31, 1999)
10.58 Patent License Agreement dated October 8, 1998 between
Registrant and the Board of Regents of the University of Texas
System for patents related to the Coagulation of the Tumor
Vasculature (Vascular Targeting Agent patents) (Incorporated
by reference to Exhibit 10.58 to Registrants' Quarterly Report
on Form 10-Q for the quarter ended July 31, 1999)
10.59 License Agreement between Northwestern University and
Registrant dated August 4, 1999 covering the LYM-1 and LYM-2
antibodies (Oncolym(R)) (Incorporated by reference to Exhibit
10.59 to Registrants' Quarterly Report on Form 10-Q for the
quarter ended July 31, 1999)
10.60 Change in Control Agreement dated August 4, 1999 between
Registrant and John N. Bonfiglio, V.P. of Technology and
Business Development (Incorporated by reference to Exhibit
10.60 to Registrants' Quarterly Report on Form 10-Q for the
quarter ended October 31, 1999)
10.63 Change in Control Agreement dated September 27, 1999 between
Registrant and Terrence Chew, V.P of Clinical and Regulatory
Affairs (Incorporated by reference to Exhibit 10.63 to
Registrants' Quarterly Report on Form 10-Q for the quarter
ended October 31, 1999)
10.64 Regulation D Subscription Agreement dated January 6, 2000
between Registrant and Subscribers, Swartz Investments, LLC
and Biotechnology Development, LTD. (Incorporated by reference
to Exhibit 10.64 to Registrants' Quarterly Report on Form 10-Q
for the quarter ended January 31, 2000)
<PAGE>
EXHIBIT INDEX
EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION PAGE NO.
------ ----------- --------
10.65 Registration Right Agreement dated January 6, 2000 between
Registrant and Subscribers of the Regulation D Subscription
Agreement dated January 6, 2000 (Incorporated by reference to
Exhibit 10.65 to Registrants' Quarterly Report on Form 10-Q
for the quarter ended January 31, 2000)
10.66 Form of Warrant to be issued to Subscribers pursuant to the
Regulation D Subscription Agreement dated January 6, 2000
(Incorporated by reference to Exhibit 10.66 to Registrants'
Quarterly Report on Form 10-Q for the quarter ended January
31, 2000)
10.67 Warrant to purchase 750,000 shares of Common Stock of
Registrant issued to Swartz Private Equity, LLC dated November
19, 1999 (Incorporated by reference to Exhibit 10.67 to
Registrants' Quarterly Report on Form 10-Q for the quarter
ended January 31, 2000)
10.68 Amendment Agreement dated June 14, 2000 to the License
Agreement dated March 8, 1999 by and between Schering and
Registrant (Incorporated by reference to Exhibit 10.68 to
Registrants' Registration Statement on Form S-3 (File No.
333-40716)).
10.69 Waiver Agreement by and between Registrant and Biotechnology
Development Ltd. effective December 29, 1999 (Incorporated by
reference to Exhibit 10.69 to Registrants' Registration
Statement on Form S-3 (File No. 333-40716)).
10.70 Joint Venture Agreement by and between Registrant and Oxigene,
Inc. dated May 11, 2000 (Incorporated by reference to Exhibit
10.70 to Registrants' Registration Statement on Form S-3 (File
No. 333-40716)).
23.1 Consent of Luce, Forward, Hamilton & Scripps, LLP (contained
in Exhibit 5)*
23.2 Consent of Ernst & Young LLP, Independent Auditors*
23.3 Consent of Deloitte & Touche LLP*
-------------------------
* Filed herewith.
</TABLE>
