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 $.02 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:
Michael S. Weiss
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)
February 9, 1999
-----------------------------
(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:
[ ]
<PAGE>
- ----------------------
CUSIP No. 2 232674 101 13D
- ----------------------
- --------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES None
--------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 9,576,635
--------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING None
--------------------------------------------
PERSON 10 SHARED DISPOSITIVE POWER
WITH 9,576,635
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
9,576,635
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
23.7%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
2
<PAGE>
- ----------------------
CUSIP No. 2 232674 101 13D
- ----------------------
- --------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES None
--------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 2,883,500
--------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING None
--------------------------------------------
PERSON 10 SHARED DISPOSITIVE POWER
WITH 2,883,400
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,883,400
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.1%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- --------------------------------------------------------------------------------
3
<PAGE>
- ----------------------
CUSIP No. 2 232674 101 13D
- ----------------------
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
The Aries Master Fund
- --------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES None
--------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 6,743,135
--------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING None
--------------------------------------------
PERSON 10 SHARED DISPOSITIVE POWER
WITH 6,743,135
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,743,135
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16.8%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO (see Item 2)
- --------------------------------------------------------------------------------
4
<PAGE>
- ----------------------
CUSIP No. 2 232674 101 13D
- ----------------------
- --------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES None
--------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 9,576,635
--------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING None
--------------------------------------------
PERSON 10 SHARED DISPOSITIVE POWER
WITH 9,576,635
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
9,576,635
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
23.7%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
5
<PAGE>
Item 1. Security and Issuer.
-------------------
(a) Common Stock, $0.02 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"), Aries Master Fund, a Cayman Island exempted
company ("Aries Fund") and Lindsay A. Rosenwald, M.D. ("Dr.
Rosenwald" and 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, 48th Floor, New York, New
York, 10019. The business address for Aries Fund 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 Fund, /3/ a Cayman Islands exempted
company.
(d) Dr. Rosenwald, Paramount Capital, Aries Domestic and Aries Fund
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).
(e) Dr. Rosenwald, Paramount Capital, Aries Domestic and Aries Fund
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.
-------------------------------------------------
Since the date of Amendment No. 1 to Schedule 13D ("Amendment No.
1")which was filed on January 10, 1999, Aries Domestic used its general
funds to make certain open market acquisitions of the securities of the
Issuer and the Aries Fund
- -------------------------
/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 Fund 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.
6
<PAGE>
used its general funds to make certain open market acquisitions
of the securities of the Issuer.
The following purchases were made by Aries Domestic in the
open market since those reported in Amendment No. 1:
Date Amount Purchase Price
---- ------ --------------
01/08/99 2,600 2.938
01/11/99 2,600 2.973
01/12/99 2,600 3.048
01/13/99 2,600 3.014
01/15/99 2,600 3.443
01/20/99 3,900 3.733
01/21/99 1,300 3.750
01/22/99 2,600 3.748
01/25/99 33,800 2.891
01/26/99 18,200 3.333
01/27/99 1,300 3.438
01/28/99 1,300 3.443
02/01/99 5,200 3.188
02/02/99 3,900 3.125
02/03/99 5,200 3.083
02/04/99 5,200 3.063
02/05/99 5,200 3.083
02/05/99 10,000 3.083
02/08/99 5,200 3.022
02/09/99 5,200 2.958
02/10/99 5,200 2.959
02/11/99 9,000 2.958
02/12/99 10,000 3.045
02/16/99 3,000 3.031
02/17/99 3,000 2.925
02/18/99 5,200 2.996
02/19/99 10,500 3.041
02/22/99 6,000 3.085
02/23/99 3,000 2.991
02/24/99 1,500 2.993
02/25/99 6,000 3.087
02/26/99 18,000 3.087
02/26/99 3,000 3.031
03/01/99 3,000 3.125
03/02/99 6,000 3.110
03/03/99 4,500 3.114
03/04/99 17,500 3.088
03/05/99 12,000 3.145
03/08/99 9,000 3.312
03/09/99 9,000 3.282
03/10/99 6,000 3.248
03/11/99 6,000 3.359
03/12/99 6,000 3.350
The following purchases were made by Aries Fund in the
open market since those reported in Amedment No. 1:
Date Amount Purchase Price
---- ------ --------------
01/08/99 7,400 2.938
01/11/99 7,400 2.973
01/12/99 7,400 3.048
01/13/99 7,400 3.014
01/15/99 7,400 3.443
01/20/99 11,100 3.733
01/21/99 3,700 3.750
01/22/99 7,400 3.748
01/25/99 96,200 2.891
01/26/99 51,800 3.333
01/27/99 3,700 3.438
01/28/99 3,700 3.443
02/01/99 14,800 3.188
02/02/99 11,100 3.125
02/03/99 14,800 3.083
02/04/99 14,800 3.063
02/05/99 14,800 3.083
02/05/99 14,800 3.083
02/08/99 14,800 3.022
02/09/99 14,800 2.958
02/10/99 14,800 2.959
02/11/99 21,000 2.958
02/12/99 20,000 3.045
02/16/99 7,000 3.031
02/17/99 14,800 2.925
7
<PAGE>
02/18/99 14,800 2.996
02/18/99 5,000 2.996
02/19/99 24,500 3.041
02/22/99 14,000 3.085
02/23/99 7,000 2.991
02/24/99 8,500 2.993
02/25/99 14,000 3.087
02/26/99 42,000 3.087
02/26/99 7,000 3.031
03/01/99 7,000 3.125
03/02/99 14,000 3.110
03/03/99 10,500 3.114
03/04/99 7,500 3.088
03/05/99 28,000 3.145
03/08/99 21,000 3.312
03/09/99 21,000 3.282
03/10/99 14,000 3.248
03/11/99 14,000 3.359
03/12/99 14,000 3.350
Item 4. Purpose of Transaction.
----------------------
The Reporting Parties acquired shares of Common Stock 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 March 15, 1999, Dr. Rosenwald and Paramount Capital,
through acquisition of the shares by the Aries Fund and
Aries Domestic, beneficially owned 9,576,635 shares or
23.7% of the Issuer's securities and Aries Domestic and
the Aries Fund beneficially owned as follows:
Amount Owned
------------
Aries Domestic 2,833,500 Shares
Aries Fund 6,743,135 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 Fund.
(c) Other than certain open market purchases set forth in Item
3, the Reporting Parties have not engaged in any
transactions in the Common Stock of the Issuer during the
past 60 days.
8
<PAGE>
(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 Fund 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 Fund and Aries Domestic. Dr. Rosenwald is the sole shareholder of
Paramount Capital. Except as indicated in this 13D and exhibits, there
is no contract, arrangement, under standing 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 Fund 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 Fund and
information called for by Items 2-6 of this statement relating to
said officers and directors.
9
<PAGE>
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: March 16, 1999
New York, NY By /s/ Lindsay A. Rosenwald, M.D.
------------------------------
Lindsay A. Rosenwald, M.D.
Chairman
ARIES DOMESTIC FUND
By Paramount Capital Asset Management, Inc.
General Partner
Dated: March 16, 1999
New York, NY By /s/ Lindsay A. Rosenwald, M.D.
------------------------------
Lindsay A. Rosenwald, M.D.
Chairman
THE ARIES MASTER FUND
By Paramount Capital Asset Management, Inc.
Investment Manager
Dated: March 16, 1999
New York, NY By /s/ Lindsay A. Rosenwald, M.D.
------------------------------
Lindsay A. Rosenwald, M.D.
Chairman
Dated: March 16, 1999
New York, NY By /s/ Lindsay A. Rosenwald, M.D.
------------------------------
Lindsay A. Rosenwald, M.D.
10
<PAGE>
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.
Dated: March 16, 1999
New York, NY By /s/ Lindsay A. Rosenwald, M.D.
------------------------------
Lindsay A. Rosenwald, M.D.
Chairman
ARIES DOMESTIC FUND
By Paramount Capital Asset Management, Inc.
General Partner
Dated: March 16, 1999
New York, NY By /s/ Lindsay A. Rosenwald, M.D.
------------------------------
Lindsay A. Rosenwald, M.D.
Chairman
THE ARIES MASTER FUND
By Paramount Capital Asset Management, Inc.
Investment Manager
Dated: March 16, 1999
New York, NY By /s/ Lindsay A. Rosenwald, M.D.
------------------------------
Lindsay A. Rosenwald, M.D.
Chairman
Dated: March 16, 1999
New York, NY By /s/ Lindsay A. Rosenwald, M.D.
------------------------------
Lindsay A. Rosenwald, M.D.
11
<PAGE>
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, 48th Floor, New York, New York, 10019, of each executive
officer and director of Paramount Capital is as follows:
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NAME OR EMPLOYMENT
---- -------------
<S> <C>
Lindsay A. Rosenwald, M.D. Chairman of the Board of Paramount Capital Asset Management, Inc.,
Paramount Capital Investments, LLC and Paramount Capital, Inc.
Mark C. Rogers, M.D. President of Paramount Capital Asset Management, Inc., Paramount Capital
Investments, LLC and Paramount Capital, Inc.
Peter Morgan Kash Director of Paramount Capital Asset Management, Inc., Senior Managing
Director, Paramount Capital, Inc.
Dr. Yuichi Iwaki Director of Paramount Capital Asset Management, Inc., Professor, Univer
sity of Southern California School of Medicine
</TABLE>
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.
12
<PAGE>
EXHIBIT C
The name and principal occupation or employment, which is located at 787
Seventh Avenue, 48th Floor, New York, New York, 10019, of the General Partner of
Aries Domestic is as follows:
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NAME OR EMPLOYMENT
---- -------------
<S> <C>
Paramount Capital Asset Management, Inc. General Partner; Investment Manager
</TABLE>
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.
13
<PAGE>
EXHIBIT D
The name and principal occupation or employment, which in each instance
is with The Aries Master Fund ("Aries Fund") located at 787 Seventh Avenue, 48th
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) Management Limited Administrator
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 Fund'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.
14
