SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(Amendment No. 2)
Under the Securities Exchange Act of 1934
Cypress Bioscience, Inc.
------------------------------
(Name of Issuer)
Common Stock, par value $.001 per share
---------------------------------------
(Title of Class of Securities)
2 232674 101
---------------------------------------
(CUSIP Number)
Paramount Capital Asset Management, Inc.
c/o Lindsay A. Rosenwald, M.D.
787 Seventh Avenue
New York, NY 10019
(212) 554-4300
with a copy to:
David R. Walner, Esq.
Paramount Capital Asset Management, Inc.
787 Seventh Avenue
New York, NY 10019
(212) 554-4372
----------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
November 26, 1996
----------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on
Schedule 13G to report the acquisition which is the
subject of this Statement because of Rule 13d-1(b)(3) or
(4), check the following:
( )
Check the following box if a fee is being paid with this
Statement:
( )
13D
CUSIP NO. [ ]
------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Paramount Capital Asset Management, Inc.
------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)( ) (b)( )
------------------------------------------------------------------------
3 SEC USE ONLY
------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO (see Item 3 below)
------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO
ITEM 2(d) or 2(e)
( )
------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
------------------------------------------------------------------------
7 SOLE VOTING POWER
None
NUMBER OF -------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 2,769,134
OWNED BY -------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING None
PERSON -------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
2,769,134
------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,769,134
------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN
SHARES*
( )
------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.0%
------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
------------------------------------------------------------------------
13D
CUSIP NO. [ ]
------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Aries Domestic Fund, L.P.
------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)( )
(b)( )
------------------------------------------------------------------------
3 SEC USE ONLY
------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO (see Item 3 below)
------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO
ITEM 2(d) or 2(e)
( )
------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
------------------------------------------------------------------------
7 SOLE VOTING POWER
None
NUMBER OF -------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 819,967
OWNED BY -------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING None
PERSON -------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
819,967
------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
819,967
------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN
SHARES*
( )
------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.3%
------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
------------------------------------------------------------------------
13D
CUSIP NO. [ ]
------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
The Aries Trust
------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)( )
(b)( )
------------------------------------------------------------------------
3 SEC USE ONLY
------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO (see Item 3 below)
------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO
ITEM 2(d) or 2(e)
( )
------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands
7 SOLE VOTING POWER
None
NUMBER OF -------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 1,949,167
OWNED BY -------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING None
PERSON -------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
1,949,167
------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,949,167
------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN
SHARES*
( )
------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.6%
------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO (see Item 2)
------------------------------------------------------------------------
13D
CUSIP NO. [ ]
------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Lindsay A. Rosenwald, M.D.
------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)( )
(b)( )
------------------------------------------------------------------------
3 SEC USE ONLY
------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO (see Item 3 below)
------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO
ITEM 2(d) or 2(e)
( )
------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
------------------------------------------------------------------------
7 SOLE VOTING POWER
None
NUMBER OF -------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 2,769,134
OWNED BY -------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING None
PERSON -------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
2,769,134
------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,769,134
------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN
SHARES*
( )
------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.0%
------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
------------------------------------------------------------------------
Item 1. Security and Issuer.
(a) Common Stock, $.001 par value ("Shares")
Cypress Bioscience, Inc. (the "Issuer")
4350 Executive Drive, Suite 325
San Diego, CA 92121
(619) 452-2323
Item 2. Identity and Background.
Names of Persons Filing:
(a) This statement is filed on behalf of Paramount Capital Asset
Management, Inc. ("Paramount Capital"), Aries Domestic Fund, L.P.
("Aries Domestic"), The Aries Trust ("Aries Trust") and Dr. Lindsay
A. Rosenwald (collectively, "Reporting Parties"). See attached
Exhibit A which is a copy of their agreement in writing to file
this statement on behalf of each of them.
(b) Paramount Capital s, Aries Domestic s and Dr. Rosenwald s business
address is 787 Seventh Avenue, 44th Floor, New York, New York,
10019. The business address for Aries Trust is c/o MeesPierson
(Cayman) Limited, P.O. Box 2003, British American Centre, Phase 3,
Dr. Roy's Drive, George Town, Grand Cayman.
(c) Dr. Rosenwald is an investment banker, venture capitalist, fund
manager and sole shareholder of Paramount Capital,(1) a Subchapter
S corporation incorporated in Delaware. Paramount Capital is the
General Partner of Aries Domestic,(2) a limited partnership
incorporated in Delaware. Paramount Capital is the Investment
Manager to Aries Trust,(3) a Cayman Islands Trust.
(d) Dr. Rosenwald, Paramount Capital, Aries Domestic and Aries Trust
and their respective officers, directors, general partners,
investment managers, or trustees have not, during the five years
prior to the date hereof, been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors).
----------------------
1 Please see attached Exhibit B indicating the executive
officers and directors of Paramount Capital and providing
information called for by Items 2-6 of this statement as to
said officers and directors. Exhibit B is herein
incorporated by reference.
2 Please see attached Exhibit C indicating the general partner
of Aries Domestic and the general partner's executive
officers and directors and providing information called for
by Items 2-6 of this statement as to said general partners,
officers and directors. Exhibit C is herein incorporated by
reference.
3 Please see attached Exhibit D indicating the investment
manager of the Aries Trust and the investment manager's
executive officers and directors and providing information
called for by Items 2-6 of this statement as to said
investment manager and officers and directors. Exhibit D is
herein incorporated by reference.
(e) Dr. Rosenwald, Paramount Capital, Aries Domestic and Aries Trust
and their respective officers, directors, general partners,
investment managers, or trustees have not been, during the five
years prior to the date hereof, parties to a civil proceeding of a
judicial or administrative body of competent jurisdiction, as a
result of which such person was or is subject to a judgment, decree
or final order enjoining future violations of, or prohibiting or
mandating activities subject to, Federal or State securities laws
or finding any violation with respect to such laws.
(f) Dr. Rosenwald is a citizen of the United States.
Item 3. Source and Amount of Funds or Other Consideration.
As previously reported in the original statement on Schedule 13-D
(the "Original Statement") filed by the Reporting Parties on
January 22, 1996, in connection with their initial acquisition of
shares of the Issuer, Aries Domestic used its general funds to
effect its initial purchase of 894,666 shares of the Issuer for an
approximate purchase price of $1,367,019 and Aries Trust used its
general funds to effect its initial purchase of 896,666 shares for
an approximate purchase price of $1,373,663. As previously
reported on Amendment No. 1 to the Original Statement ( Amendment
No. 1") between the date of the Original Statement and the filing
of Amendment No. 1, Aries Domestic and Aries Trust used their
general funds to effect certain purchases of the securities of the
Issuer in open market transactions. In addition, as previously
reported on Amendment No. 1, on October 18, 1996, pursuant to a
private placement, Aries Domestic used its general funds to effect
an additional purchase of 75,000 newly issued shares and warrants
to purchase 37,500 shares of the Issuer directly from the Issuer
for an approximate purchase price of $150,000 and Aries Trust used
its general funds to effect an additional purchase of 175,000 newly
issued shares and warrants to purchase 87,500 shares of the Issuer
directly from the Issuer for an approximate purchase price of
$350,000. Since the date of Amendment No. 1, Aries Domestic and the
Aries Trust have used their general funds to effect certain
purchases of the securities of Issuer in certain open market
transactions as further set forth in Item 5. Further, on November
19, 1996, in a private transaction, the Aries Trust acquired
350,000 shares from Aries Domestic for an approximate aggregate
purchase price of $667,436.
Item 4. Purpose of Transaction.
The Reporting Parties acquired shares of Common Stock and Warrants
of the Issuer as an investment in the Issuer.
Although the Reporting Parties have not formulated any definitive
plans, they may from time to time acquire, or dispose of, Common
Stock and/or other securities of the Issuer if and when they deem
it appropriate. The Reporting Parties may formulate other
purposes, plans or proposals relating to any of such securities of
the Issuer to the extent deemed advisable in light of market
conditions, investment policies and other factors.
Except as indicated in this Schedule 13D, the Reporting Parties
currently have no plans or proposals that relate to or would result
in any of the matters described in subparagraphs (a) through (j) of
Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
(a) As of December 4, 1996, Dr. Rosenwald and Paramount Capital,
through acquisition of the shares by the Aries Trust and Aries
Domestic, beneficially owned 2,769,134 shares or 8.0% of the
Issuer's securities and Aries Domestic and the Aries Trust
beneficially owned as follows:
Amount Owned
------------
Aries Domestic 819,967 Shares
Aries Trust 1,959,167 Shares
(b) Dr. Rosenwald and Paramount Capital share the power to vote or
to direct the vote, to dispose or to direct the disposition of
those shares owned by each of Aries Domestic and Aries Trust.
(c) The following purchases were made by Aries Domestic in the
open market in the sixty days prior to December 4, 1996:
10/30/96 2,100 2.250
10/31/96 15,000 2.063
10/31/96 3,000 2.063
11/12/96 7,500 2.000
11/26/96 6,000 2.188
11/26/96 3,000 2.000
11/26/96 60,000 1.953
11/27/96 6,000 2.000
11/29/96 3,000 2.000
The following purchases were made by Aries Trust in the open
market in the sixty days prior to October 29, 1996:
Date No. of Shares Market Price
--- ------------- ------------
10/30/96 4,900 2.250
10/31/96 35,000 2.063
10/31/96 7,000 2.063
11/12/96 17,500 2.000
11/22/96 50,000 2.000
11/26/96 14,000 2.188
11/26/96 7,000 2.000
11/26/96 140,000 1.953
11/27/96 14,000 2.000
11/29/96 7,000 2.000
On November 19, 1996, Aries Trust acquired 350,000 shares from
Aries Domestic at an approximate aggregate price of $667,436. Other
than as set forth herein the Reporting Parties have not engaged in
any transactions in the Common Stock of the Issuer since the last
filing.
(d) & (e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships
with respect to Securities of the Issuer
Paramount Capital is the investment manager of the Aries Trust and
the General Partner of Aries Domestic and in such capacities has
the authority to make certain investment decisions on behalf of
such entities, including decisions relating to the securities of
the Issuer. In connection with its investment management duties,
Paramount Capital receives certain management fees and performance
allocations from the Aries Trust and Aries Domestic. Dr. Rosenwald
is the sole shareholder of Paramount Capital. Dr. Rosenwald is
also the sole stockholder of Paramount Capital, Inc., which placed
a portion of the securities sold by the Company in its October 9,
1996 private placement and received in connection therewith, a
customary placement agent fee. Except as indicated in this 13D and
exhibits, there is no contract, arrangement, understanding or
relationship between the Reporting Parties and any other person,
with respect to any securities of the Issuer.
Item 7. Material to be Filed as Exhibits:
Exhibit A - Copy of an Agreement between Dr. Rosenwald, Paramount Capital,
Aries Domestic and Aries Trust to file this Statement on
Schedule 13D on behalf of each of them.
Exhibit B - List of executive officers and directors of Paramount Capital
and information called for by Items 2-6 of this statement
relating to said officers and directors.
Exhibit C - List of executive officers and directors of Aries Domestic and
information called for by Items 2-6 of this statement relating
to said officers and directors.
Exhibit D - List of executive officers and directors of Aries Trust and
information called for by Items 2-6 of this statement relating
to said officers and directors.
SIGNATURES
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
PARAMOUNT CAPITAL ASSET MANAGEMENT, INC.
Dated: December 4, 1996
New York, NY By /s/ Lindsay A. Rosenwald, M.D.
-------------------------------
Lindsay A. Rosenwald, M.D.
President
ARIES DOMESTIC FUND
By Paramount Capital Asset Management, Inc.
General Partner
Dated: December 4, 1996
New York, NY By /s/ Lindsay A. Rosenwald, M.D.
-------------------------------
Lindsay A. Rosenwald, M.D.
President
THE ARIES TRUST
By Paramount Capital Asset Management, Inc.
Investment Manager
Dated: December 4, 1996
New York, NY By /s/ Lindsay A. Rosenwald, M.D.
-------------------------------
Lindsay A. Rosenwald, M.D.
President
Dated: December 4, 1996
New York, NY By /s/ Lindsay A. Rosenwald, M.D.
-------------------------------
Lindsay A. Rosenwald, M.D.
EXHIBIT A
AGREEMENT
JOINT FILING OF SCHEDULE 13D
The undersigned hereby agrees to jointly prepare and file with
regulatory authorities a Schedule 13D and any future amendments thereto
reporting each of the undersigned's ownership of securities of Cypress
Bioscience, Inc., and hereby affirm that such Schedule 13D is being filed on
behalf of each of the undersigned.
PARAMOUNT CAPITAL ASSET MANAGEMENT, INC.,
INC.
Dated: December 4, 1996
New York, NY By /s/ Lindsay A. Rosenwald. M.D.
-------------------------------
Lindsay A. Rosenwald, M.D.
President
ARIES DOMESTIC FUND, L.P.
By Paramount Capital Asset Management, Inc.
General Partner
Dated: December 4, 1996
New York, NY By /s/ Lindsay A. Rosenwald M.D.
-------------------------------
Lindsay A. Rosenwald, M.D.
President
THE ARIES TRUST
By Paramount Capital Asset Management, Inc.
Investment Manager
Dated: December 4, 1996
New York, NY By /s/ Lindsay A. Rosenwald, M.D.
-------------------------------
Lindsay A. Rosenwald, M.D.
President
Dated: December 4, 1996
New York, NY By /s/ Lindsay Rosenwald, M.D.
-------------------------------
Lindsay A. Rosenwald, M.D.
EXHIBIT B
The name and principal occupation or employment, which in each instance
is with Paramount Capital Asset Management, Inc. ("Paramount Capital")
located at 787 Seventh Avenue, 44th Floor, New York, New York, 10019, of each
executive officer and director of Paramount Capital is as follows:
PRINCIPAL OCCUPATION
NAME OR EMPLOYMENT
Lindsay A. Rosenwald, M.D. Chairman of the Board, President
of Paramount Capital Asset
Management, Inc., Paramount
Capital LLC and Paramount
Capital, Inc.
Peter Morgan Kash Director of Paramount Capital
Asset Management, Inc., Inc.,
Senior Managing Director,
Paramount Capital, Inc.
Dr. Yuichi Iwaki Director of Paramount Capital
Asset Management, Inc., Inc.,
Professor, University of
Southern California School of
Medicine
Item 2.
During the five years prior to the date hereof, none of the above
persons (to the best of Paramount Capital s knowledge) was convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) or
was a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction, as a result of which such person was or is subject to
a judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, Federal or State securities
laws or finding any violation with respect to such laws.
Items 3-6.
Please refer to Items 3-6 herein reporting the beneficial ownership.
EXHIBIT C
The name and principal occupation or employment, which is located at 787
Seventh Avenue, 44th Floor, New York, New York, 10019, of the General Partner
of Aries Domestic is as follows:
PRINCIPAL OCCUPATION
NAME OR EMPLOYMENT
Paramount Capital Asset Management, Inc. General Partner; Investment Manager
Exhibit B is hereby incorporated by reference.
Item 2.
During the five years prior to the date hereof, the above person (to the
best of Aries Domestic's knowledge) has not been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or was a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction, as a result of which such person was or is subject to a
judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, Federal or State securities
laws or finding any violation with respect to such laws.
Items 3-6.
Please refer to Items 3-6 herein reporting the beneficial ownership.
EXHIBIT D
The name and principal occupation or employment, which in each instance
is with The Aries Trust ("Aries Trust") located at 787 Seventh Avenue, 44th
Floor, New York, New York, 10019, of each executive officer and director of
Aries Trust is as follows:
PRINCIPAL OCCUPATION
NAME OR EMPLOYMENT
Paramount Capital Asset Management, Inc. Investment Manager
MeesPierson (Cayman) Limited Trustee
Exhibit B is hereby incorporated by reference.
Item 2.
During the five years prior to the date hereof, neither of the above
persons (to the best of Aries Trust's knowledge) have been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) or
was a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction, as a result of which such person was or is subject to
a judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, Federal or State securities
laws or finding any violation with respect to such laws.
Items 3-6.
Please refer to Items 3-6 herein reporting the beneficial ownership.
