<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 7, 1997
Registration No. 33-71278
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE
AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CYPRESS BIOSCIENCE, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 2831
(State or other jurisdiction of (Primary Standard Industrial
incorporation or organization) Classification Code Number)
22-2389839
(I.R.S. Employer Identification Number)
-----------
4350 EXECUTIVE DRIVE, SUITE 325
SAN DIEGO, CA 92121
(619) 452-2323
(Address, including zip code, and telephone number, including area
code, of Registrant's principal executive offices)
------------
JAY D. KRANZLER
CHIEF EXECUTIVE OFFICER, CHIEF SCIENTIFIC OFFICER AND VICE CHAIRMAN OF
THE BOARD OF DIRECTORS CYPRESS BIOSCIENCE, INC.
4350 EXECUTIVE DRIVE, SUITE 325
SAN DIEGO, CA 92121
(619) 452-2323
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
FREDERICK T. MUTO, ESQ.
CARL R. SANCHEZ, ESQ.
COOLEY GODWARD LLP
4365 EXECUTIVE DRIVE, SUITE 1100
SAN DIEGO, CA 92121
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Approximate date of commencement of proposed sale to the public:
FROM TIME TO TIME AFTER THE REGISTRATION STATEMENT BECOMES EFFECTIVE.
-----------
If the only securities being registered in 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, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) of the Securities Act, please check the following box
and list the Securities Act registration serial 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. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
================================================================================================================================
TITLE OF SECURITIES AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TO BE REGISTERED REGISTERED (1) OFFERING PRICE PER SHARE (2) AGGREGATE OFFERING PRICE(2) REGISTRATION FEE (3)
================================================================================================================================
<S> <C> <C> <C> <C>
Common Stock, $.02 par value ... 1,850,000 $2.50 $4,625,000 $1,594.83
================================================================================================================================
</TABLE>
(1) Includes indeterminate number of shares of Common Stock that may be issued
in connection with a stock split, stock dividend, recapitalization or
similar event.
(2) Calculated in accordance with Rule 457.
(3) Filing fee was previously paid upon the initial filing of the registration
statement.
- ------------------------
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> 2
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there by any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
SUBJECT TO COMPLETION DATED JANUARY 7, 1997
PROSPECTUS
CYPRESS BIOSCIENCE, INC.
1,850,000
SHARES OF COMMON STOCK
(PAR VALUE $.02 PER SHARE)
ISSUABLE UPON EXERCISE
OF CERTAIN UNIT WARRANTS
This Prospectus relates to an offering of up to 1,850,000 shares of
Common Stock par value $.02 per share (the "Common Stock") of Cypress
Bioscience, Inc. ("Cypress" or the "Company") issuable by the Company upon
exercise of certain outstanding transferable warrants (the "Unit Warrants")
originally issued by the Company to certain persons (the "Unit Warrant Holders")
in connection with the sale of 1,850,000 units, each unit consisting of three
shares of Common Stock of the Company and one warrant to purchase one share of
Common Stock of the Company (the "Units"), by means of a prospectus which was
part of a registration statement on Form S-1 (Registration No. 33-41225)
declared effective by the Securities and Exchange Commission (the "Commission")
on August 29, 1991. See "Description of Unit Warrants and Plan of Distribution."
As of May 21, 1996, the Common Stock of the Company has been traded on
the Nasdaq SmallCap Market under the symbol "CYPB." Prior to May 21, 1996, the
Common Stock of the Company was traded on the Nasdaq SmallCap Market under the
symbol "IMRE." The last reported sales price of the Company's Common Stock on
the Nasdaq SmallCap Market on January 3, 1997 was $1.968 per share. The Unit
Warrants are traded on the Nasdaq SmallCap Market under the symbol "CYPBW."
THE SECURITIES BEING OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" COMMENCING ON PAGE 5 OF THIS PROSPECTUS FOR INFORMATION THAT
SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
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Price to Unit Warrant Holders Proceeds to Company(1)
- --------------------------------------------------------------------------------------
<S> <C> <C>
Per Share $ 2.50 $2.50
- --------------------------------------------------------------------------------------
Total $4,625,000 $4,625,000
- --------------------------------------------------------------------------------------
</TABLE>
(1) Does not exclude costs of registration to be paid by the Company estimated
at $20,000.
THE DATE OF THIS PROSPECTUS IS JANUARY___, 1997.
<PAGE> 3
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files annual and quarterly reports, proxy statements and
other information with the Securities and Exchange Commission (the
"Commission"). Such reports, proxy statements and other information filed by the
Company may be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Room 1024, Judiciary
Plaza, Washington, D.C. 20549, and at the Commission's following Regional
Offices: Chicago Regional Office, 500 West Madison Street, Suite 1400, Northwest
Atrium Center, Chicago, Illinois 60661; and New York Regional Office, Seven
World Trade Center, Suite 1300, New York, New York 10048. Copies of such
material can also be obtained at prescribed rates from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Judiciary Plaza,
Washington, D.C. 20549. The Commission also makes electronic filings publicly
available on the Internet within 24 hours of acceptance. The Commission's
Internet address is http://www.sec.gov. The Commission web site also contains
reports, proxy and information statements, and other information regarding the
Company that has been filed electronically with the Commission. Reports and
other information concerning the Company may be inspected at the National
Association of Securities Dealers, Inc. at 1735 K Street, N.W., Washington, D.C.
20006 and the Common Stock of the Company is quoted on the Nasdaq SmallCap
Market
PROSORBA(R) and IPM are registered trademarks of the Company. All other
brand names or trademarks appearing in this Prospectus are the property of their
respective holders.
ADDITIONAL INFORMATION
A registration statement on Form S-3 with respect to the Common Stock
offered hereby (the "Registration Statement") has been filed with the Commission
under the Securities Act of 1933, as amended (the "Securities Act"). This
Prospectus does not contain all of the information set forth in the Registration
Statement and the exhibits and schedules thereto, certain portions of which have
been omitted pursuant to the rules and regulations of the Commission. Statements
contained in this Prospectus as to the contents of any contract or any other
document filed as an exhibit to the Registration Statement are not necessarily
complete and, in each instance, reference is made to the copy of such contract
or other document filed as an exhibit to the Registration Statement, each such
statement being qualified in all respects by such reference. A copy of the
Registration Statement and the exhibits and schedules thereto may be inspected
by anyone without charge at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549,
and copies of all or any part of the Registration Statement may be obtained from
the Public Reference Section of the Commission upon the payment of certain fees
prescribed by the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K/A for the fiscal year ended
December 31, 1995, the Company's Proxy Statement for the 1996 Annual Meeting of
Stockholders filed on March 11, 1996 pursuant to Rule 14a-6 of the Exchange Act,
the Company's Quarterly Report on Form 10-Q for the quarters ended March 31,
1996, June 30, 1996 and September 30, 1996, the Company's Current Report on Form
8-K dated as of March 8, 1996, the Company's Current Report on Form 8-K dated as
of April 1, 1996, the Company's Current Report on Form 8-K dated as of November
18, 1996 and the Company's registration statement on Form S-3/A (Registration
No. 333-15483) dated November 12, 1996 filed by the Company with the Commission
are hereby incorporated by reference in this Prospectus except as superseded or
modified herein. All documents filed by the Company with the Commission pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of the offering shall be deemed to be
incorporated by reference into this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained in any document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as modified or superseded, to constitute a part of this
Prospectus.
2.
<PAGE> 4
The Company will provide without charge to each person, including any
beneficial owner of shares of Common Stock of the Company, to whom this
Prospectus is delivered, upon written or oral request of such person, a copy of
any and all of the documents that have been or may be incorporated by reference
herein (other than exhibits to such documents which are not specifically
incorporated by reference into such documents). Such requests should be directed
to the Director of Finance at the Company's principal executive offices at 4350
Executive Drive, Suite 325, San Diego, CA 92121 (telephone (619) 452-2323).
3.
<PAGE> 5
THE COMPANY
This Prospectus contains forward-looking statements within the meaning
of Section 27A of the Securities Act and Section 21E of the Exchange Act that
involve risks and uncertainties. The Company's actual results could differ
materially from those projected in the forward-looking statements. Factors that
could cause or contribute to such difference include, but are not limited to,
those discussed in "Risk Factors," as well as those discussed elsewhere in this
Prospectus.
Cypress Bioscience, Inc. was incorporated under the laws of the State
of Delaware in 1981 to research, develop, manufacture and market medical devices
for the treatment and diagnosis of select immune-mediated diseases,
transplantations and cancers. The Company's first product, the PROSORBA(R)
column, a medical device, treats a patient's defective immune system so that it
can more effectively respond to certain diseases. The Company received marketing
approval from the U.S. Food and Drug Administration (the "FDA") in December 1987
to distribute the PROSORBA(R) column for treatment of idiopathic
thrombocytopenic purpura ("ITP"), an immune-mediated bleeding disorder. Since
1987, the Company has had approximately $24,000,000 of sales of the PROSORBA(R)
column.
The Company is in the process of completing a substantial restructuring
of its operations. To date, the restructuring has included a streamlining of
operations and a relocation of all operations of the Company, except
manufacturing operations, to San Diego, California. In addition, the Company has
elected to establish its own internal sales force dedicated solely to selling
the PROSORBA(R) column. In this regard, the Company has hired six salespersons
to date and is in the process of training such sales force. There can be no
assurance that the restructuring, once completed, will be successfully
implemented.
In October 1996, the Company completed a private placement of 1,734,000
Units which were sold to certain "accredited investors" (as defined in Rule 501
of the Securities Act) (the "Private Placement") at a per Unit sales price of
$4.00. The Units sold in the Private Placement each consist of two shares of
Common Stock of the Company and one warrant to purchase one share of Common
Stock of the Company. Net proceeds to the Company from the Private Placement
(after deducting placement agent fees of approximately $506,880) were
$6,429,120. The Private Placement was made in reliance on exemptions from the
registration and qualification requirements of the Securities Act and applicable
state securities laws.
In November 1996, the Company completed the acquisition, pursuant to a
merger (the "Merger"), of PRP, Inc., a Delaware corporation ("PRP"), a
Boston-based biopharmaceutical company engaged in the development of products to
treat disorders of blood platelet functions. In consideration of the purchase of
PRP, the Company issued Units with a value of approximately $4,585,645 to
certain holders of indebtedness of PRP and is obligated to make a certain
milestone payment and payments on net sales of products based upon the
technology of PRP that was acquired in the Merger to the former holders of
equity securities and a creditor of PRP. In connection with the acquisition, the
Company has agreed to allocate certain amounts of funding to commercialize PRP's
lead product, Infusible Platelet Membranes ("IPM").
The Company's executive offices are located at 4350 Executive Drive,
Suite 325, San Diego, California 92121 and its telephone number is (619)
452-2323.
4.
<PAGE> 6
RISK FACTORS
This Prospectus contains forward-looking statements within the meaning
of Section 27A of the Securities Act and Section 21E of the Exchange Act that
involve risks and uncertainties. The Company's actual results could differ
materially from those projected in the forward-looking statements. Factors that
could cause or contribute to such differences include, but are not limited, to
those discussed in this section, as well as those discussed elsewhere in this
Prospectus. The following risk factors should be considered carefully in
addition to the other information contained in this Prospectus before purchasing
any of the Securities being offered hereby.
INTEGRATION OF OPERATIONS. If the Company is to realize the anticipated
benefits of the Merger, the operations of PRP and the Company must be integrated
and combined efficiently. The process of rationalizing management and
administrative resources, facilities, management information systems and other
aspects of operations, while managing a larger and geographically expanded
entity, will present a significant challenge to the management of the combined
company. There can be no assurance that the integration process will be
successful or that the anticipated benefits of the business combination will be
fully realized. The dedication of management resources to such integration may
detract attention from the day-to-day business of the combined company. The
difficulties of integration may be increased by the necessity of coordinating
geographically separated organizations, integrating personnel with disparate
business backgrounds and combining different corporate cultures. There can be no
assurance that there will not be substantial costs associated with the
integration process, that such activities will not result in a decrease in
revenues or that there will not be other material adverse effects of these
integration efforts.
NEED FOR ADDITIONAL CAPITAL. The Company is actively seeking
opportunities to raise additional capital to be used primarily to fund existing
operations related to the manufacture and sale of the PROSORBA(R) column, to
develop new and complete existing research and development activities, and to
fund clinical trials related to the proposed use of the PROSORBA(R) column for
the treatment of rheumatoid arthritis and certain platelet disorders. Except in
very limited circumstances, the Company is obligated to expend no less than
$4,000,000 on the development of IPM. In addition, the Company will require
substantial additional capital over a period of a number of years to further
development and marketing of IPM. To the extent the Company decides to continue
the development of other products previously being developed by PRP, it will be
required to raise additional capital. The amount of capital required by the
Company is primarily dependent upon the following factors: results of clinical
trials, results of current research and development efforts, the FDA regulatory
process, potential competitive and technological advances and levels of product
sales. Because the Company is unable to predict the outcome of the previously
noted factors, some of which are beyond the Company's control, the Company is
unable to estimate, with certainty, its mid- to long-term total capital needs.
Although the Company may seek to raise additional capital through a combination
of additional equity offerings, joint ventures, strategic alliances, borrowings
and other available sources, there can be no assurance that the Company will be
able to raise additional capital through such sources or that funds raised
thereby will allow the Company to maintain its current and planned operations as
provided herein. If the Company is unable to obtain additional financing, it may
be required to delay, scale back or eliminate some or all of its research and
development activities, including those activities associated with the
acquisition of PRP, to license to third parties technologies that the Company
would otherwise seek to develop itself, to seek financing through the debt
market at potentially higher costs to the Company and/or to seek additional
methods of financing.
HISTORY OF OPERATING LOSSES. The Company has operated at a loss since
its formation in October 1981. As of September 30, 1996, the Company had an
accumulated deficit of approximately $49,000,000. The ability of the Company to
achieve profitability is dependent upon, among other things, successful
completion of anticipated clinical trials and obtaining FDA marketing approval
of the PROSORBA(R) column in additional disease indications in a timely manner.
The Company would have to significantly scale back its plans, curtail clinical
trials, and limit its present operations in order to become profitable or
operate on a break-even basis if it does not receive marketing approval from the
FDA for the PROSORBA(R) column for the treatment of diseases in addition to ITP.
There can be no assurance that the Company will successfully complete any
present or future clinical trials, gain approval to begin any new clinical
trials, meet applicable regulatory standards or successfully market its
5.
<PAGE> 7
products to generate sufficient revenues to render the Company profitable. See
"--Prior Exclusive Agreement with Baxter; Necessity of Establishing a Sales
Force."
MANAGEMENT CHANGES; RESTRUCTURING PLAN; DEPENDENCE UPON KEY PERSONNEL.
Within the last 13 months, the Company has undergone changes in senior
management. In December 1995, Martin D. Cleary resigned as Chief Executive
Officer and a member of the Board of Directors of the Company. Mr. Cleary's
resignation was a result of the Company's determination that it would best be
served by having senior management resident on the West Coast near the Company's
principal executive offices and other operations. Mr. Cleary, resident on the
East Coast, was unable to relocate and consequently agreed to resign as Chief
Executive Officer and as a director. Also in December 1995, Harvey J. Hoyt, M.D.
resigned as Executive Vice President and as a director as a result of the
appointments of new members of senior management and the restructuring of the
Company, which restructuring eliminated Dr. Hoyt's position. In March 1996,
Frank R. Jones resigned as Chief Scientific Officer and as Chairman of the Board
and in May 1996, Alex P. de Soto resigned as the Company's Vice President, Chief
Financial Officer, Secretary and Treasurer. Messrs. Jones' and de Soto's
resignations were a result of the restructuring of the Company and the Company's
relocation of its executive offices to San Diego, California. In December 1995,
Jay D. Kranzler, M.D., Ph.D. was appointed as Chief Executive Officer and Vice
Chairman of the Board of Directors and Debby Jo Blank, M.D. was appointed as
President, Chief Operating Officer and a member of the Board of Directors of the
Company. In April 1996, Susan E. Feiner was appointed as the Company's Director
of Finance, Controller, Secretary and Treasurer.
The Company is in the process of completing a substantial restructuring
plan. The restructuring plan is intended to reduce the Company's overhead and
recurring costs by reducing the Company's work force and consolidating its two
manufacturing facilities into one central manufacturing facility located in
Redmond, Washington. By eliminating approximately 20 positions, the Company
expects to realize an annual salary savings in excess of $1,000,000. However, to
date the Company has incurred approximately $700,000 in connection with the
consolidation of its manufacturing operations and estimates it will incur a
total of approximately $1,000,000 in capital expenditures associated with such
consolidation. In connection with the restructuring plan, the Company has
relocated all of its operations, except manufacturing, from Seattle, Washington
to San Diego, California. The restructuring is not yet completed and there can
be no assurance that such a restructuring will be completed as scheduled, if at
all. Even if such a restructuring is completed, there can be no assurance that
it will be successfully implemented.
The Company's success is dependent upon certain key management and
technical personnel, including the new members of senior management. The loss of
the services of any of these key employees could have a material adverse effect
on the Company. The Company does not currently maintain any key employee
insurance coverage.
FDA APPROVAL AND REGULATIONS. The Company is currently conducting a
controlled clinical trial of the PROSORBA(R) column for treatment of rheumatoid
arthritis. Although the FDA has approved the commercial sale of the PROSORBA(R)
column for the treatment of ITP, there can be no assurance that current or
future clinical trials will produce data satisfactory to the FDA to establish
the effectiveness of the PROSORBA(R) column for treatment of diseases other than
ITP, such as rheumatoid arthritis, transplantations and certain cancers, or that
the FDA will approve the PROSORBA(R) column for treatment of such diseases in a
timely manner, if at all.
The Company plans to continue the Phase II clinical trials of IPM
currently underway. Clinical trials are vigorously regulated by the FDA and must
meet requirements for institutional review board oversight and informed consent
as well as FDA review and oversight and good clinical practice regulations.
There can be no assurance that the clinical trials being conducted for IPM will
be completed successfully within any specified period of time, if at all, or
that if successful the Company will be able to further develop IPM. Furthermore,
the Company or the FDA may delay or suspend clinical trials at any time if it is
determined that the subjects participating in such trials are being exposed to
unacceptable health risks. Any such delay or suspension could have a material
adverse effect on the Company's business.
6.
<PAGE> 8
The PROSORBA(R) column is commercially distributed under a premarket
approval ("PMA") application that was approved by the FDA in 1987. Changes to
the product and its manufacturing process, and certain types of labeling changes
must be approved by the FDA prior to implementation. The Company currently has
one supplement to the PMA pending with the FDA for a labeling change addressing
the use of ancillary equipment during the use of the PROSORBA(R) column therapy.
The FDA has indicated to the Company that the PMA supplement would be approvable
if certain additional information is provided. There can be no assurance that
the Company will receive approval of its pending PMA supplement or any future
PMA supplements will be approved by the FDA.
Even if FDA approval is granted to market a product for the treatment
of a particular disease, subsequent discovery of previously unknown problems may
result in restrictions on the product's future use or withdrawal of the product
from the market. In addition, any other products developed in the future will
require clinical testing and FDA marketing approval before they can be
commercially exploited in the United States. Such approval process is typically
very lengthy and there is no assurance that FDA approvals will be obtained.
The manufacture and distribution of medical devices are subject to
continuing FDA regulation. In addition to the requirement that the device be
marketed only for its approved use, applicable law requires compliance with the
FDA's good manufacturing practices ("GMP") regulations. Failure to comply with
the GMP regulations or with other applicable legal requirements can lead to
federal seizure of non-complying products, injunctive actions brought by the
federal government, and potential criminal liability on the part of the Company
and of the officers and employees of the Company who are responsible for the
activities that lead to the violations.
To date, production of commercial quantities of the raw materials
utilized in production of the PROSORBA(R) column has been performed at the
Redmond facility. Final assembly of the PROSORBA(R) column has been performed at
the Seattle facility. In conjunction with the Company's restructuring plan and
corresponding reduction in facilities, the Seattle and Redmond, Washington
facilities are being consolidated into a single manufacturing facility in
Redmond. The Company has already subleased a major portion of its Seattle
facility to a third party. Under the terms of the Company's sub-lease of its
Seattle facility, the Company is required to vacate the remainder of the
facility no later than March 31, 1997. In the event, the Company fails to vacate
the premises by March 31, 1997, the sub-lessee has the option to terminate the
sub-lease. The Redmond facility is under renovation in order to enable both the
production of raw materials, as well as the final assembly of the PROSORBA(R)
column, to be performed in the Redmond facility. The renovated Redmond facility,
when complete, must comply with the FDA's GMP regulations and must complete the
GMP re-approval process. There can be no assurance that the Company will
complete the renovations in time to sustain uninterrupted production of the
PROSORBA(R) column. In addition, there can be no assurance that the renovated
facility will receive GMP approval in a timely manner, if at all.
Furthermore, PRP occupies a facility that includes a GMP-approved pilot
production plant where all phases of production of clinical-grade IPM occurs,
except for filling and lyophilization. There can be no assurance that the
Company will be able to maintain the facility's GMP-approved status or that, if
approval is not maintained, it will be able to find an alternate GMP-approved
production facility.
COMPETITIVE ENVIRONMENT; TECHNOLOGICAL CHANGE; EFFECTIVENESS OF
PRODUCTS. The field of medical devices in general and the particular areas in
which the Company will market its products are extremely competitive. In
developing and marketing medical devices to treat immune-mediated diseases and
cancers, the Company competes with other products, therapeutic techniques and
treatments which are offered by national and international healthcare and
pharmaceutical companies, many of which have greater marketing, human and
financial resources than the Company.
The immunological therapy market is characterized by rapid
technological change and potential introductions of new products or therapies.
To respond to these changes, the Company may be required to develop or purchase
new products to protect its technology from obsolescence. There can be no
assurance that the Company will be able to develop or obtain such products, or,
if developed or obtained, that such products will be
7.
<PAGE> 9
commercially viable. In addition, there can be no assurance that the Company's
PROSORBA(R) column will prove effective in the treatment of diseases other than
ITP or that IPM, if approved for sale by the FDA, will be effective in treating
thrombocytopenia or other blood platelet disorders.
DEPENDENCE ON THIRD PARTY ARRANGEMENTS. The Company's commercial sale
of its proposed products and its future product development may be dependent
upon entering into arrangements with corporate partners and other third parties
for the development, marketing, distribution and/or manufacturing of products
utilizing the Company's proprietary technology. While the Company is currently
seeking collaborative research and development arrangements and joint venture
opportunities with corporate sponsors and other partners, there can be no
assurance that the Company will be successful in entering into such arrangements
or joint ventures or that any such arrangements will prove to be successful.
PRIOR EXCLUSIVE AGREEMENT WITH BAXTER; NECESSITY OF ESTABLISHING A
SALES FORCE. In February 1994, the Company entered into a 10-year exclusive
distribution agreement with Baxter, granting to Baxter distribution rights to
its PROSORBA(R) column in the United States and Canada for the treatment of
thrombocytopenia and the first right to negotiate for new PROSORBA(R) column
indications. Baxter, at its own expense, was to provide sales and marketing
support for the sale of the product during the term of the agreement. Baxter
assumed the Company's sales and distribution responsibilities in April 1994.
In March 1996, the Company and Baxter terminated the exclusive
distribution agreement, whereby, effective May 1, 1996, the Company regained the
right, among other things, to sell its PROSORBA(R) column directly to customers
who had previously purchased PROSORBA(R) columns through Baxter as well as to
any other potential customers who wish to purchase PROSORBA(R) columns. As a
result of the termination of the distribution agreement, the Company is in the
process of establishing an internal domestic sales force dedicated solely to
marketing and selling its PROSORBA(R) column. To date, the Company has hired 6
salespersons whom are directed solely to selling and marketing the PROSORBA(R)
column. There can be no assurance that the Company will be successful in selling
its PROSORBA(R) columns directly to any new customers or to any customers who
previously purchased PROSORBA(R) columns through Baxter.
LIMITED INTERNATIONAL SALES AND MARKETING. The Company conducts limited
marketing of the PROSORBA(R) column outside the United States through foreign
distributors. Sales to foreign distributors have not been material to the
Company's results from operations. There can be no assurance that foreign sales
arrangements will become material to the Company's results of operations.
UNCERTAINTY OF PATENT PROTECTION AND CLAIMS TO TECHNOLOGY. With the
acquisition of PRP, the Company now holds 13 United States and 8 foreign patents
relating to its technology and has also filed other U.S. and foreign patent
applications related to its technology. In addition, the Company has an
exclusive license for a U.S. patent for a genetic screening test to predict
which rheumatoid arthritis patients will develop severe disease. Neither the
protection afforded by these patents nor their enforceability can be assured.
Furthermore, there can be no assurance that additional patents will be obtained
either in the United States or in foreign jurisdictions or that, if issued, such
additional patents will provide sufficient protection to the Company's
technology or be of commercial benefit to the Company. Insofar as the Company
relies on trade secrets and unpatented proprietary know-how, there can be no
assurance that others will not independently develop similar technology or that
secrecy will not be breached. There can be no assurance that the Company will be
able to develop further technological innovations.
Others have filed applications for, or have been issued, patents and
may obtain additional patents and other proprietary rights relating to products
or processes competitive with those of the Company. The scope and validity of
all such patents is presently unknown. However, the holder of one such patent
has challenged the use by the Company of certain technology covered by such
patent. On August 5, 1996, the Company filed a complaint for declaratory
judgment of noninfringement against such holder in the United States District
Court, Southern District of California. On or about December 19, 1996, the
holder of such patent filed a motion to dismiss the Company's complaint.
Although the Company believes that the holder's patent claims are without merit,
there can be no assurances that the Company will be successful in its claim. In
addition, the amount of any damages, if any, that may arise as a result of the
foregoing actions, including amounts that may become payable by the Company if
any, are not reasonably estimable. If other existing or future patents are
challenged in litigation or interference proceedings, the Company may become
subject to significant liabilities to third parties or be required to seek
licenses from third
8.
<PAGE> 10
parties. There can be no assurance that such licenses would be available or, if
available, obtainable on acceptable terms.
In connection with the Merger, the Company acquired certain exclusive
rights with respect to the use, manufacture and sale of products and/or
processes related to analogs of the compound diadenosine tetraphosphate
("AP4A"), which rights were granted to PRP in July 1992 pursuant to a license
agreement between PRP and a collaborator of PRP (the "Licensor"). Under the
terms of the license agreement, PRP was obligated to file an IND with respect to
the commercial application of such rights within four years of acquiring such
rights. Neither PRP nor the Company has filed such IND. Due to such failure,
Licensor has the right to cancel upon 30 days written notice the exclusive
license or to convert the exclusive license to a nonexclusive license. If
Licensor elects to cancel such license, there can be no assurance that the
Company will be able to acquire or license similar rights on terms acceptable to
the Company, if at all.
Various scientific personnel of the Company were previously associated
with non-profit research or education institutions that typically require
researchers to execute agreements giving such institutions broad rights to
inventions created or developed during the period that the scientist is
associated with such institution. While no such institution has to date asserted
rights to the Company's technology, such assertions may be made in the future,
and if made, there can be no assurances that the Company will be successful in
any such litigation.
CONCENTRATION OF OWNERSHIP. As of November 1, 1996, Allen & Company
Incorporated and Mr. Richard M. Crooks, a director of the Company, beneficially
owned approximately 16% and 3.0% respectively, of the outstanding Common
Stock of the Company. Mr. Crooks is also a director and consultant to Allen &
Company Incorporated. Together, Mr. Crooks and Allen & Company Incorporated own
a significant amount of the total outstanding Common Stock of the Company and
may be able to exert substantial influence over the outcome of matters requiring
stockholder approval.
RECOVERABILITY OF ENDING INVENTORIES. As of September 30, 1996, the
Company's ending inventory balances consisted of $335,856 of raw materials,
$686,392 of work in process and $261,720 of finished goods. In order to recover
such ending inventory balances, the Company would have to sell approximately 20%
more PROSORBA(R) column units to customers than that amount sold to customers by
Baxter during 1995. Such increase represents approximately 60% of the total
sales made by the Company's sales force in fiscal year 1993 prior to entering
into the Baxter agreement. As a result of the termination of the distribution
agreement with Baxter, the Company is actively establishing a domestic sales
force to sell the PROSORBA(R) column directly to customers who previously
purchased PROSORBA(R) columns from Baxter and to other potential customers who
wish to purchase PROSORBA(R) columns directly from the Company. To date, the
Company has hired 6 salespersons whom are dedicated solely to selling the
PROSORBA(R) column. Although there can be no assurances that the Company's sales
force will be successful in selling the Company's product, the Company believes,
based upon historical sales figures, that it can generate sufficient sales to
recover the ending inventory balances described above with a sales force of
between 5 and 7 salespersons dedicated solely to selling the Company's
PROSORBA(R) column. On May 1, 1996, the Company increased the sales price of the
PROSORBA(R) columns to be sold directly to customers by approximately 9%, the
first such price increase implemented by the Company since January 1, 1994. The
Company believes that such price increase reflects a nominal price increase for
a medical device for the period covered by such increase. However, there can be
no assurance that the Company will be successful in selling the PROSORBA(R)
column at the increased price, if at all. See "--Prior Exclusive Agreement with
Baxter; Necessity of Establishing a Sales Force."
INSURANCE REIMBURSEMENT. Successful commercialization of a new medical
product, such as the PROSORBA(R) column or IPM depends, in part, on
reimbursement by public and private health insurers to health care providers for
use of such products. The availability of such reimbursement is subject to a
variety of factors, many of which could affect the Company as it commercializes
use of the PROSORBA(R) column and continues development and commercialization of
IPM. Although the Company has been generally successful in assisting health care
providers in arranging reimbursement for the use of the PROSORBA(R) column in
the treatment of ITP, there can no assurance that public and private insurers
will continue to reimburse for the use of the PROSORBA(R)
9.
<PAGE> 11
column. In addition, there can be no assurance that health care providers will
reimburse for the use of IPM, when and if commercialized.
UNCERTAINTY OF HEALTH CARE REFORM. There are widespread efforts to
control health care costs in the U.S. and worldwide. Various federal and state
legislative initiatives regarding health care reform and similar issues continue
to be at the forefront of social and political discussion. These trends may lead
third-party payors to decline or limit reimbursement for the Company's product,
which could negatively impact the pricing and profitability of, or demand for,
the Company's product. The Company believes that government and private efforts
to contain or reduce health care costs are likely to continue. There can be no
assurance concerning the likelihood that any such legislative or regulatory
initiative will be enacted, or market reform initiated, or that, if enacted such
reform or initiative will not result in a material adverse impact on the
business, financial condition or results of operations of the Company.
PRODUCT LIABILITY. The use of the PROSORBA(R) column and, when and if
approved for use by the FDA, IPM, involve the possibility of adverse effects
occurring to end-users that could expose the Company to product liability
claims. The Company believes that its product liability insurance coverage is
adequate in light of the Company's business. However, although the Company
currently maintains product liability insurance coverage, there can be no
assurance that such coverage or any increased amount of coverage will be
adequate to protect the Company and there can be no assurance that the Company
will have sufficient resources to pay any liability resulting from such a claim.
POSSIBLE VOLATILITY OF STOCK PRICE; ABSENCE OF DIVIDENDS. There has
been significant volatility in the market prices of securities of biomedical
companies in general, including the Company's securities. Factors such as
announcements by the Company or others of technological innovations, results of
clinical trials, new commercial products, regulatory approvals or proprietary
rights developments, coverage decisions by third-party payors for therapies and
public concerns regarding the safety and other implications of biotechnology and
biomedical products may have a significant impact on the Company's business and
market price of the Company's securities. In addition, in connection with the
Merger, the Company is obligated to make a $5,000,000 milestone payment to the
former holders of equity securities (including holders of warrants and options)
of PRP upon the public announcement of an FDA approvable letter relating to the
use of IPM for the treatment of thrombocytopenia. The Company has the option to
make such milestone payment in the form of Common Stock of the Company. The
issuance of Common Stock with a value of $5,000,000 could have a significant
impact on the market price of the Company's securities.
No dividends have been paid on the Company's Common Stock to date, and
the Company does not anticipate paying dividends on its Common Stock in the
foreseeable future.
HAZARDOUS MATERIAL. The Company's research and development programs
involve the controlled use of biohazardous materials such as viruses, and may
include the use of the HIV virus that causes AIDS. Although the Company believes
that its safety procedures for handling such materials comply with the standards
prescribed by state and federal regulations, the risk of accidental
contamination or injury from these materials cannot be completely eliminated. In
the event of such an accident, the Company could be held liable for any damages
that result, and any such liability could exceed the resources of the Company.
10.
<PAGE> 12
LIMITATION OF NET OPERATING LOSS CARRYFORWARDS. The Company's sale of
Common Stock in November 1990 and September 1991 when taken together with prior
issuances, caused the limitation of Section 382 of the Internal Revenue Code of
1986, as amended, to be applicable. This limitation will allow the Company to
use only a portion of the net operating loss carryforwards to offset future
taxable income, if any, for federal income tax purposes. Based on the
limitations of Section 382 and before consideration of the effect of the sale of
securities offered hereby, the Company may be allowed to use no more than
approximately $2,450,000 of such losses each year to reduce taxable income, if
any. To the extent not utilized by the Company, unused losses will carry forward
subject to the limitations to offset future taxable income, if any, until such
unused losses expire. All unused net operating losses will expire 15 years after
any year in which they were generated. The years in which such expiration will
take place range from 1998 to 2010.
11.
<PAGE> 13
USE OF PROCEEDS
The net proceeds to be received by the Company upon exercise of all of
the 1,850,000 Unit Warrants, after deducting expenses related to this offering,
are estimated to be $4,605,000. There can be no assurance that any of the Unit
Warrant Holders will exercise their Unit Warrants.
The Company anticipates that any proceeds received from the exercise of
any Unit Warrants will be used to fund the Company's research and development
efforts, including funding preclinical and clinical trials related to the
PROSORBA(R) column and IPM, at the discretion of the Company. The proceeds will
also be used for working capital and general corporate purposes. However, actual
expenditures could vary significantly from these amounts depending upon a large
number of factors, some of which are outside the Company's control.
Pending the foregoing uses, the net proceeds will be invested in
short-term, high-grade, interest-bearing securities. The Company believes it
meets the exemptions from being considered an "investment company" as defined
under the Investment Company Act of 1940, as amended.
The Company anticipates that additional financing will be required
after the use of the proceeds of this offering to continue to fund operations of
the Company. No assurance can be given that such additional financing will be
obtained when needed or on terms acceptable to the Company.
DESCRIPTION OF UNIT WARRANTS AND PLAN OF DISTRIBUTION
The following description of the Unit Warrants does not purport to be
complete and is qualified in its entirety by this reference to that certain
Warrant Agreement dated as of August 29, 1991 (the "Warrant Agreement") between
the Company and Manufacturers Hanover Trust Company of California (now known as
Chemical Trust Company of California), which agreement was subsequently assigned
to American Stock Transfer & Trust Company on July 23, 1996, the warrant agent
for the Unit Warrants.
By means of a prospectus which was a part of a registration statement
on Form S-1 (Registration No. 33-41225) declared effective by the Commission on
August 29, 1991, the Company sold 1,850,000 Units. Pursuant to the Warrant
Agreement, holders of each Unit Warrant (the "Unit Warrant Holders") are
entitled to purchase one share of the Company's Common Stock at an exercise
price of $2.50. The termination date of the Unit Warrants was December 31, 1996
until the Company on December 13, 1996 amended the terms of the Unit Warrants to
provide that they would be exercisable until April 30, 1997. The Company will
issue and sell fully paid and nonassessable Common Stock to Unit Warrant Holders
upon surrender of a Unit Warrant with the form of election to exercise and
payment of the applicable exercise price to the Company's transfer agent. All or
any portion of the Unit Warrants are redeemable, in whole or in part, at the
option of the Company, at a redemption price of $.75 per share. In the event of
certain changes in the Company's capitalization, however, the exercise price and
number of shares of Common Stock purchasable upon exercise of the Unit Warrants
are subject to adjustment. The Unit Warrants are transferable. The Company is
bearing all costs of registering the Common Stock issuable upon exercise of the
Unit Warrants.
LEGAL MATTERS
The validity of the issuance of the Common Stock offered hereby was
passed upon for the Company by Bogle & Gates, Seattle, Washington.
EXPERTS
The consolidated financial statements of the Company at December 31,
1995 and 1994, and for the years then ended, appearing in the Company's Annual
Report (Form 10-K/A) for the year ended December 31, 1995, have been audited by
Ernst & Young LLP, independent auditors, as set forth in their report thereon,
included therein and incorporated herein by reference. Such consolidated
financial statements are incorporated herein by reference in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.
12.
<PAGE> 14
The consolidated statements of operations, cash flows and stockholders'
equity of the Company for the year ended December 31, 1993, incorporated herein
by reference from the Company's Annual Report on Form 10-K/A for the year ended
December 31, 1995, have been included herein in reliance on the report of
Coopers & Lybrand L.L.P., independent accountants, given on the authority of
that firm as experts in accounting and auditing.
13.
<PAGE> 15
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 4. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth all expenses payable by the Registrant
in connection with the sale of the Common Stock being registered. All of the
amounts shown are estimates, except for the SEC registration fee.
<TABLE>
<S> <C>
SEC Registration fee.......................................... $ 1,595*
Legal fees and expenses....................................... 10,000
Accounting fees and expenses.................................. 5,000
Miscellaneous ................................................ 3,405
-----
Total................................................. $20,000
</TABLE>
* Previously paid upon the initial filing of the registration statement.
ITEM 5. INDEMNIFICATION OF OFFICERS AND DIRECTORS
Under Section 145 of the Delaware General Corporation Law (the "DGCL"),
the Registrant has broad powers to indemnify its directors and officers against
liabilities they may incur in such capacities, including liabilities under the
Securities Act of 1933, as amended (the "Securities Act").
The Registrant's Certificate of Incorporation and By-laws include
provisions to (i) eliminate the personal liability of its directors for monetary
damages resulting from breaches of their fiduciary duty to the extent permitted
by Section 102(b)(7) of the DGCL and (ii) require the Registrant to indemnify
its directors and officers to the fullest extent permitted by applicable law,
including circumstances in which indemnification is otherwise discretionary.
Pursuant to Section 145 of the DGCL, a corporation generally has the power to
indemnify its present and former directors, officers, employees and agents
against expenses incurred by them in connection with any suit to which they are
or are threatened to be made, a party by reason of their serving in such
positions so long as they acted in good faith and in a manner they reasonably
believed to be in or not opposed to, the best interests of the corporation and
with respect to any criminal action, they had no reasonable cause to believe
their conduct was unlawful. The Registrant believes that these provisions are
necessary to attract and retain qualified persons as directors and officers.
These provisions do not eliminate the directors' or officers' duty of care, and,
in appropriate circumstances, equitable remedies such as injunctive or other
forms of non-monetary relief will remain available under the DGCL. In addition,
each director will continue to be subject to liability pursuant to Section 174
of the DGCL, for breach of the director's duty of loyalty to the Registrant, for
acts or omissions not in good faith or involving intentional misconduct, for
knowing violations of law, for acts or omissions that the director believes to
be contrary to the best interests of the Registrant or its stockholders, for any
transaction from which the director derived an improper personal benefit, for
acts or omissions involving a reckless disregard for the director's duty to the
Registrant or its stockholders when the director was aware or should have been
aware of a risk of serious injury to the Registrant or its stockholders, for
acts or omission that constitute an unexcused pattern of inattention that
amounts to an abdication of the director's duty to the Registrant or its
stockholders, for improper transactions between the director and the Registrant
and for improper loans to directors and officers. The provision also does not
affect a director's responsibilities under any other law, such as the federal
securities law or state or federal environmental laws.
II-1
<PAGE> 16
The Registrant has entered into a letter agreement with a certain
former executive officer whereby the Registrant has agreed to pay for certain
expenses (including attorney's fees) incurred by such executive officer related
to an inquiry being conducted by the State of Washington's Board of Accountancy
in advance of any final disposition of such inquiry. In the event it is
ultimately determined that such executive officer is not entitled to
indemnification under the terms of the Registrant's Bylaws or other applicable
laws or regulations such executive officer is obligated to repay all amounts
advanced by the Registrant on such executive officer's behalf.
The Registrant has an insurance policy covering the officers and
directors of the Registrant with respect to certain liabilities, including
liabilities arising under the Securities Act or otherwise.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
4.1 Certificate of Incorporation, as amended (Incorporated by reference to
Exhibit 3.2 of the Registrant's registration statement, (No. 33-41225),
declared effective by the Commission on August 29, 1991)
4.2 Bylaws (Incorporated by reference to Exhibit 3.1 of the Registrant's
registration statement, (No. 33-41225), declared effective by the
Commission on August 29, 1991)
*5.1 Opinion of Bogle & Gates
*23.1 Consent of Bogle & Gates (included in Exhibit 5.1)
23.2 Consent of Ernst & Young LLP, independent auditors
23.3 Consent of Coopers & Lybrand L.L.P., 1993 independent auditors
24.1 Power of Attorney. Reference is made to page II-4 of this Registration
Statement
*99.1 Warrant Agreement dated as of August 29, 1991 between IMRE
Corporation and Manufacturers Hanover Trust Company of California (now
known as Chemical Trust Company of California)
*99.2 Successor Warrant Agent Agreement dated July 23, 1996 between the
Registrant and American Stock Transfer & Trust Company
- ------------
* Previously filed with this registration statement
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) That, for the purpose 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 Exchange Act that is incorporated by reference in
the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-2
<PAGE> 17
(2) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement: (i) to include any
prospectus required by section 10(a)(3) of the Securities Act of 1933, (ii) to
reflect in the prospectus any facts or events arising after the effective date
of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement and (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.
(3) That, for the purposes of determining liability under the 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.
(4) 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.
II-3
<PAGE> 18
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
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
Post-Effective Amendment No. 2 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of San Diego,
State of California, on January 2, 1997.
CYPRESS BIOSCIENCE, INC.
By: /s/ JAY D. KRANZLER
-----------------------------
Jay D. Kranzler, M.D., Ph.D.
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 2 to Form S-3 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/ JAY D. KRANZLER Vice Chairman of the Board of Directors January 2, 1997
- --------------------------------------- and Chief Executive Officer
Jay D. Kranzler, M.D., Ph.D. (Principal Executive Officer)
*/s/ DEBBY JO BLANK President, Chief Operating Officer and January 2, 1997
- --------------------------------------- Director
Debby Jo Blank, M.D.
/s/ SUSAN E. FEINER Director of Finance, Controller and January 2, 1997
- --------------------------------------- Secretary
Susan E. Feiner (Principal Financial Officer)
*/s/ RICHARD M. CROOKS, JR. Chairman of the Board January 2, 1997
- ---------------------------------------
Richard M. Crooks, Jr.
*/s/ PHILIP J. O'REILLY Director January 2, 1997
- -------------------------------------
Philip J. O'Reilly
*/s/ JACK H. VAUGHN Director January 2, 1997
- -------------------------------------
Jack H. Vaughn
</TABLE>
*By: /s/ SUSAN E. FEINER
---------------------------------
Susan E. Feiner
Attorney-in-Fact
II-4
<PAGE> 19
EXHIBIT INDEX
-------------
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
4.1 Certificate of Incorporation, as amended (Incorporated by reference to
Exhibit 3.2 of the Registrant's registration statement, (No. 33-41225),
declared effective by the Commission on August 29, 1991)
4.2 Bylaws (Incorporated by reference to Exhibit 3.1 of the Registrant's
registration statement, (No. 33-41225), declared effective by the
Commission on August 29, 1991)
*5.1 Opinion of Bogle & Gates
*23.1 Consent of Bogle & Gates (included in Exhibit 5.1)
23.2 Consent of Ernst & Young LLP, independent auditors
23.3 Consent of Coopers & Lybrand L.L.P., 1993 independent auditors
24.1 Power of Attorney. Reference is made to page II-4 of this Registration
Statement
*99.1 Warrant Agreement dated as of August 29, 1991 between IMRE
Corporation and Manufacturers Hanover Trust Company of California (now
known as Chemical Trust Company of California)
*99.2 Successor Warrant Agent Agreement dated July 23, 1996 between the
Registrant and American Stock Transfer & Trust Company
- ------------
* Previously filed with this registration statement
<PAGE> 1
EXHIBIT 23.2
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
Post-Effective Amendment No. 2 to the Registration Statement (Form S-3 No.
33-71278) and related Prospectus of Cypress Bioscience, Inc. for the
registration of 1,850,000 shares of its common stock and to the incorporation by
reference therein of our report dated January 23, 1996, with respect to the
consolidated financial statements of Cypress Bioscience, Inc. included in its
Annual Report (Form 10-K/A) for the year ended December 31, 1995, filed with the
Securities and Exchange Commission.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
Seattle, Washington
January 2, 1997
<PAGE> 1
Exhibit 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this post effective Amendment
No. 2 to Form S-3 of Cypress Bioscience, Inc. (formerly IMRE Corporation) (No.
33-71278) registering 1,850,000 shares of common stock issuable pursuant to
outstanding common stock purchase warrants, of our report dated March 15, 1994,
on our audits of the consolidated statements of operations, cash flows and
stockholders' equity of Cypress Bioscience, Inc. for the year ended December 31,
1993 included in its Annual Report on Form 10-K/A for the year ended December
1995, filed with the Securities and Exchange Commission.
/s/ Coopers & Lybrand L.L.P.
- ----------------------------
Coopers & Lybrand L.L.P.
Seattle, Washington
January 3, 1997
