As filed with the Securities and Exchange Commission on August 7, 1997
REGISTRATION NO. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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BIO-TECHNOLOGY GENERAL CORP.
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(Exact Name of Registrant as Specified in its Charter)
DELAWARE 13-3033811
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
70 Wood Avenue South, Iselin, New Jersey 08830
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(Address of Principal Executive Offices (Zip Code)
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BIO-TECHNOLOGY GENERAL CORP. 1992 STOCK OPTION PLAN
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(Full Title of the Plan)
SIM FASS
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Chairman of the Board, Chief Executive Officer and President
Bio-technology General Corp.
70 Wood Avenue South, Iselin, New Jersey 08830
(Name and Address of Agent for Service)
Telephone Number, Including Area Code, of Agent for Service: (908) 632-8800
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED
MAXIMUM PROPOSED
OFFERING MAXIMUM
PRICE AGGREGATE AMOUNT OF
TITLE OF SECURITIES AMOUNT TO BE PER OFFERING REGISTRATION
TO BE REGISTERED REGISTERED(1) SHARE(2) PRICE FEE
------------------ ------------- --------- ---------- -------------
<S> <C> <C> <C> <C>
Common Stock, par value
of $.01 per share 6,000,000 shares $12.91 $77,460,000 $23,473.00
</TABLE>
(1) This registration statement shall also cover any additional indeterminable
number of shares as may be required pursuant to the Bio-Technology General
Corp. 1992 Stock Option Plan in the event of a stock dividend, stock
split, recapitalization or other similar change in the Common Stock.
(2) The price is estimated pursuant to Rule 457(h) of the Securities Act of
1933, as amended (the "Act") solely for the purpose of calculating the
registration fee and is $12.91, the average of the high and low prices of
Bio-Technology General Corp. Common Stock as reported on The Nasdaq Stock
Market on August 5, 1997.
In addition, pursuant to Rule 416(c) under the Act, this registration
statement also covers an indeterminate amount of interests to be offered or sold
pursuant to the employee benefit plan described herein.
<PAGE>
PROSPECTUS
6,000,000 SHARES
BIO-TECHNOLOGY GENERAL CORP.
COMMON STOCK
UNDER THE BIO-TECHNOLOGY GENERAL CORP.
1992 STOCK OPTION PLAN
This Prospectus relates to the offer and sale of up to 6,000,000 shares
(the "Shares") of Common Stock, par value $0.01 per share (the "Common Stock"),
of Bio-Technology General Corp. ("BTG" or the "Company"). The Shares are being
offered for sale by certain stockholders of the Company (the "Selling
Stockholders") who acquired such Shares pursuant to the Company's 1992 Stock
Option Plan (the "Plan"). See "Selling Stockholders." The Company's Common Stock
is traded on the Nasdaq Stock Market's National Market (the "Nasdaq National
Market") under the symbol "BTGC." On August 6, 1997, the closing price of the
Common Stock, as reported in the consolidated reporting system, was $12.9375 per
share.
The Company will not receive any of the proceeds from sales of the Shares
by the Selling Stockholders. The Shares may be offered from time to time by the
Selling Stockholders (and their donees and pledgees) through ordinary brokerage
transactions, in negotiated transactions or otherwise, at market prices
prevailing at the time of sale or at negotiated prices. See "Plan of
Distribution."
The Selling Stockholders may be deemed to be "Underwriters" as defined in
the Securities Act of 1933, as amended (the "Securities Act"). If any
broker-dealers are used to effect sales, any commissions paid to broker-dealers
and, if broker-dealers purchase any of the Shares as principals, any profits
received by such broker-dealers on the resale of the Shares, may be deemed to be
underwriting discounts or commissions under the Securities Act. In addition, any
profits realized by the Selling Stockholders may be deemed to be underwriting
commissions. All costs, expenses and fees in connection with the registration of
the Shares will be borne by the Company. Brokerage commissions, if any,
attributable to the sale of the Shares will be borne by the Selling Stockholders
(or their donees and pledgees).
---------------
SEE "RISK FACTORS", WHICH BEGINS ON PAGE 6 OF THIS PROSPECTUS, FOR CERTAIN
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.
The date of this Prospectus is August 7, 1997
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Proxy statements, reports
and other information concerning the Company can be inspected and copied at the
public reference facilities maintained by the Commission at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and the regional offices
of the Commission located at Seven World Trade Center, 13th Floor, New York, New
York 10048, and 500 West Madison Street, Chicago, Illinois 60661, and copies of
such material can be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and its public
reference facilities in New York, New York and Chicago, Illinois, at prescribed
rates. Copies of such information may also be inspected at the reading room of
the library of the National Association of Securities Dealers, Inc., 1735 K
Street, N.W., Washington, D.C. 20006. The Commission maintains a World Wide Web
site on the Internet at http://www.sec.gov that contains reports, proxy and
information statements and other information regarding the Company and other
registrants that file electronically with the Commission.
This Prospectus constitutes a part of a Registration Statement on Form S-8
(herein, together with all amendments and exhibits, referred to as the
"Registration Statement") filed by the Company with the Commission under the
Securities Act. This Prospectus does not contain all of the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information with respect to the Company and the Common Stock, reference is
hereby made to the Registration Statement. Statements contained herein
concerning the provisions of any contract, agreement or other document are not
necessarily complete, and in each instance reference is made to the copy of such
contract, agreement or other document filed as an exhibit to the Registration
Statement or otherwise filed with the Commission. Each such statement is
qualified in its entirety by such reference. Copies of the Registration
Statement together with exhibits may be inspected at the offices of the
Commission as indicated above without charge and copies thereof may be obtained
therefrom upon payment of a prescribed fee.
Private Securities Litigation Reform Act Safe Harbor Statement. This
Prospectus (including the documents incorporated by reference herein) contains
certain forward-looking statements (as such term is defined in the Private
Securities Litigation Reform Act of 1995) and information relating to BTG that
are based on the beliefs of the management of BTG, as well as assumptions made
by and information currently available to the management of BTG. When used in
this Prospectus, the words "estimate," "project," "believe," "anticipate,"
"intend," "expect" and similar expressions are intended to identify
forward-looking statements. Such statements reflect the current views of BTG
with respect to future events and are subject to risks and uncertainties that
could cause actual results to differ materially from those contemplated in such
forward-looking statements, including those discussed under "Risk Factors."
Readers are cautioned not to place undue reliance on these forward-looking
statements, which
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speak only as of the date hereof. BTG does not undertake any obligation to
publicly release any revisions to these forward looking statements to reflect
events or circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The information in the following documents filed by BTG with the Commission
(File No. 0-15313) pursuant to the Exchange Act is incorporated by reference in
this Prospectus:
(a) The Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996.
(b) The Registrant's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1997.
(c) The Registrant's Form 8-A dated July 25, 1983, as amended by Amendment
No. 1 to Form 8-A dated September 29, 1983 and Amendment No. 2 to Form
8-A dated October 1, 1986.
All documents and reports subsequently filed by the Company pursuant to
Sections 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 of the securities
offered hereby shall be deemed incorporated by reference into this Prospectus
and to be a part hereof from the date of the filing of such documents or
reports. The information relating to the Company in this Prospectus should be
read together with the information in the documents incorporated by reference.
Any statement contained in a document incorporated by reference herein,
unless otherwise indicated therein, speaks as of the date of the document. Any
statement contained in a document incorporated by reference herein shall be
deemed to be modified or superseded for all purposes to the extent that a
statement contained in this Prospectus modifies or replaces such statement.
The Company will furnish without charge to each person to whom this
Prospectus is delivered, upon request, a copy of any or all of the documents
described above, other than exhibits to such documents, unless such exhibits are
specifically incorporated by reference into such documents. Requests should be
addressed to: Bio-Technology General Corp., 70 Wood Avenue South, Iselin, New
Jersey 08830, Attention: President (Tel. No. (908) 632-8800). The Company
furnishes its stockholders with an annual report containing audited financial
statements. In addition, the Company may furnish such other reports as may be
authorized, from time to time, by the Board of Directors.
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<PAGE>
THE COMPANY
Bio-Technology General Corp. ("BTG" or the "Company") is engaged in the
research, development, manufacture and marketing of biopharmaceutical products.
The Company has emerged as one of the few profitable publicly-traded
biopharmaceutical companies in the United States. Through a combination of
internal research and development, acquisitions, collaborative relationships and
licensing arrangements, BTG has developed a portfolio of therapeutic products,
including five products that have received regulatory approval for sale, of
which four are currently being marketed, four products in clinical trials and
three products in pre-clinical development. The Company distributes its products
on a worldwide basis through a direct sales force in the United States and
Israel and through third-party license and distribution relationships elsewhere.
The Company seeks both broad markets for its products as well as specialized
markets where it can seek Orphan Drug status and potential marketing
exclusivity.
The Company's approved products include Bio-Tropin(TM) (human growth
hormone), which is currently being marketed in Japan and in several countries in
Europe, Latin America and the Far East for the treatment of growth hormone
deficiency in children; Oxandrin(R) (oxandrolone) for the treatment of weight
loss due to severe trauma, chronic infection, extensive surgery or unknown
pathophysiology, which is primarily marketed in the United States and which to
date has been primarily used to treat weight loss in AIDS patients; BioLon(TM)
(sodium hyaluronate), which is currently marketed in several countries in North
and Latin America, Europe, Asia, Africa and the Far East for the protection of
the corneal endothelium during ophthalmic implant surgery; Delatestryl(R)
(injectable testosterone), which is currently marketed in the United States for
hypogonadism and delayed puberty; and Silkis(R), a vitamin D derivative, which
is currently approved in two European countries for the topical treatment of
recalcitrant psoriasis.
The Company's principal products in registration, advanced stages of
development and clinical testing include a higher dosage formulation of Oxandrin
for AIDS cachexia; Oxandrin for the treatment of Turner syndrome and
malnutrition in persons suffering form alcoholic hepatitis; Androtest-SL(R)
(sublingual testosterone) for the treatment of hypogonadism; Bio-Hep-B(TM), a
third generation vaccine against hepatitis-B virus; OxSODrol(TM) (human
superoxide dismutase) for the treatment of bronchopulmonary dysplasia in
premature infants; and Imagex(TM), a clot-imaging agent. BTG's current
pre-clinical research focus is on cardiovascular drugs, principally BioFlow(TM),
an anti-reocclusion agent, and Factorex(TM), an anti-coagulant, as well as on a
recombinant form of insulin.
The Company's primary objective is to become a leading biopharmaceutical
company focused on developing and commercializing a broad spectrum of
therapeutic products on a worldwide basis. To achieve this objective, the
Company is: (i) expanding acceptance of approved products by seeking broader
application within their current regulatory approvals; (ii) developing new
formulations for approved products by pursuing new dosages, formulations, and
delivery systems which will be easier to use and may provide additional
proprietary protection; (iii) continuing to develop novel and
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innovative products through internal research and development; (iv) expanding
sales and marketing capabilities, both in the United States, where the Company
utilizes a direct sales force, and outside the United States, where the Company
will continue to establish relationships with marketing partners worldwide; and
(v) acquiring complementary technologies and products that enable the Company to
broaden its product line and leverage its distribution network.
The Company was incorporated in Delaware in 1980. The Company's
headquarters are located at 70 Wood Avenue South, Iselin, New Jersey. The
Company's overall administration, licensing, human clinical studies, marketing
activities, quality assurance and regulatory affairs are primarily coordinated
at the Company's headquarters. Pre-clinical studies, research and development
activities and manufacturing of the Company's genetically engineered products
are primarily carried out through its wholly-owned subsidiary in Rehovot,
Israel. The Company's telephone number is 908-632-8800.
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<PAGE>
RISK FACTORS
In addition to the other information in this Prospectus, the following
factors should be considered carefully in evaluating an investment in the shares
of Common Stock offered by this Prospectus. This Prospectus contains, in
addition to historical information, forward-looking statements that involve
risks and uncertainties. The Company's actual results could differ materially.
Factors that could cause or contribute to such differences include, but are not
limited to, those discussed below, as well as those discussed elsewhere in this
Prospectus.
Dependence on Oxandrin. A substantial portion of the increase in the
Company's revenues in 1996 and the first quarter of 1997 resulted from
increasing sales of Oxandrin, which the Company relaunched in the United States
during December 1995. There can be no assurance that such sales increases will
continue. A substantial number of users of Oxandrin are patients with AIDS and
as more successful treatments for this disease, such as protease inhibitors, are
developed, the need to use Oxandrin by these patients may be reduced. Although
the Company is working to expand the use of Oxandrin to treat other conditions
covered by the product's current United States Food and Drug Administration
("FDA") approval, such as the treatment of weight loss suffered by burn victims
and persons suffering from chronic obstructive pulmonary disease and cancer,
there can be no assurance that the Company will be successful in its efforts.
Additionally, there are no patents covering Oxandrin, and there can be no
assurance that others will not introduce an oxandrolone product.
Dependence on Third-Party Suppliers. The Company is dependent on third
parties for the manufacture of Oxandrin and Delatestryl and the filling and
vialing of its Bio-Tropin product. Although the Company is a party to an
exclusive supply arrangement with G.D. Searle & Company Limited ("Searle"), and
an alternative exclusive supply agreement with Societa Prodotti Antibiotici
S.p.A. ("SPA"), covering the supply of Oxandrin to BTG through at least the year
2003, there can be no assurance that Searle will continue to, or that SPA will
be able to, provide the Company with sufficient supplies of Oxandrin to satisfy
its future needs. Bristol-Myers Squibb Company ("Bristol") has manufactured
Delatestryl for the Company pursuant to an agreement which expired in March
1997. Although Bristol has continued to honor the Company's purchase orders to
date, there can be no assurance that Bristol will continue to do so or that the
Company's supply requirements will be satisfied. In addition, the Company is
dependent on Dr. Madaus GmbH ("Dr. Madaus") to fill and vial the Company's
Bio-Tropin product. Any failure of Searle and SPA, Bristol or Dr. Madaus to
fulfill its obligations to the Company could have a material adverse effect on
the business, results of operations and financial condition of the Company.
There can be no assurance that the Company would be able to find an alternative
supplier for any of Searle and SPA, Bristol or Dr. Madaus if they were unable or
unwilling to fulfill their obligations to the Company.
Dependence on Third-Party Licensees. The Company has derived, and expects
to continue to derive over the next several years, revenues from existing and
new licensing, research and development and marketing agreements. These
agreements typically provide the Company's licensees with certain rights,
subject to an obligation to pay royalties to the Company based on any future
product sales or to purchase product from the Company, to manufacture and market
specified products developed using the Company's proprietary technology. Certain
of these agreements provide for funding by licensees of research activities
performed on their behalf by the Company. Continued funding and participation by
these licensees will depend not only on the timely achievement of milestones,
which cannot be assured, but also on each licensee's own financial, competitive,
marketing and strategic considerations. Such considerations include the relative
advantages, including patent and proprietary positions, of alternate products
being marketed or developed by others. Furthermore, the amounts of any payments
to be received by the Company under its license
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agreements from the sale of products by licensees will be dependent on the
extent to which its licensees devote resources to the development and
commercialization of the products. Although the Company believes its licensees
have an economic motivation to commercialize their products, the Company has no
effective control over the licensees' commercialization efforts.
Risk of Pending Patent Litigation. To date, the Company has been, or
currently is, party to several administrative and legal proceedings relating to
its technologies, products and patents and the patents of others. On March 16,
1993, Genentech, Inc. ("Genentech") filed a complaint with the United States
International Trade Commission (the "ITC") alleging, among other things, that
BTG's importation of its human growth hormone ("hGH") into the United States
violates Section 337 of the Tariff Act of 1930 because of the existence of
certain claims in U.S. patents of Genentech. Genentech sought an immediate
investigation and an order that BTG cease and desist from importing hGH into the
United States. The trial on the Genentech complaint was held in April 1994. In
January 1995, the ITC issued a final decision dismissing the complaint with
prejudice as a sanction for Genentech's conduct which resulted in an incomplete
record and violated the due process rights of BTG and Novo-Nordisk A/S, another
respondent in the proceeding. The ITC also found no violation by BTG of Section
337 of the Tariff Act of 1930. Genentech appealed the ITC decision to the United
States Court of Appeals for the Federal Circuit (the "CAFC"). The appeal was
heard on December 4, 1995, and a decision is pending. During 1993 and 1994, BTG
incurred total legal fees of approximately $4.2 million relating to the ITC
proceeding.
On December 1, 1994, Genentech filed a lawsuit against BTG in the United
States District Court for the District of Delaware alleging that BTG's
importation of hGH infringed two Genentech process patents. In January 1995, BTG
commenced an action against Genentech in the United States District Court for
the Southern District of New York seeking, among other things, declaratory
judgments as to the non-infringement, invalidity and unenforceability of such
Genentech patents as well as damages resulting from Genentech's actions in the
ITC proceedings. The Delaware action was consolidated with the New York action,
and in August 1995 the United States District Court for the Southern District of
New York granted a preliminary injunction prohibiting the commercial
introduction in the U.S. of BTG's hGH. In April 1996 the CAFC rejected BTG's
appeal of the grant of the preliminary injunction. In May 1996 the CAFC rejected
BTG's request for a rehearing and a rehearing en banc. BTG filed a petition for
a writ of certiorari with the U.S. Supreme Court, which was denied in October
1996. BTG is now precluded from marketing and distributing its human growth
hormone in the United States pending the outcome of the patent infringement
action. Although BTG believes that it does not infringe any valid Genentech
patent, there can be no assurance that BTG will not be found to be infringing
Genentech's patents. If BTG is ultimately found by the district court to
infringe one or more claims in Genentech's U.S. patents, it likely will be
precluded from selling its hGH in the United States during the life of these
Genentech patents. The Company is currently evaluating its options in light of
the district court and CAFC decisions. During 1995, the Company incurred total
legal fees relating to this litigation of approximately $824,000, which amount
was initially capitalized but subsequently written off in the first quarter of
1996 following the CAFC decision.
In September 1993, JCR Pharmaceuticals Co., Ltd. ("JCR"), the Company's
exclusive distributor of hGH in Japan, received a letter from attorneys
representing Genentech and its licensee, Kabi Pharmacia AV, claiming that JCR's
sale of the Company's hGH infringed certain Genentech patents and patent
applications and demanding that JCR cease the sale of the Company's hGH in
Japan. During 1994, JCR and BTG filed oppositions to two Genentech patent
applications in Japan that were first published for opposition in the first half
of 1994. BTG was informed in 1997 that its and JCR's oppositions were denied.
Although the Company does not believe that it is infringing or has ever
infringed any valid Genentech patent or patent application, there can be no
assurance that BTG's hGH will not be found to infringe certain Genentech patents
in Japan. If the Company's hGH is found to infringe certain Genentech
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patents in Japan, JCR and/or the Company may be obliged to pay damages, and
would need to obtain a license from Genentech in order to continue sales of hGH
in Japan. There can be no assurance that such a license will be granted by
Genentech, or that JCR will not be required to stop selling the Company's hGH in
Japan. Sales of hGH to JCR in 1996 and the first quarter of 1997 were
approximately $12.9 million and $4.7 million, respectively, representing 32% and
33%, respectively, of the Company's total product sales in those periods and 71%
and 69%, respectively, of the Company's total hGH product sales in those
periods.
During 1991, BTG received notification from the U.S. Patent Office Board of
Patent Appeals and Interferences (the "Patent Office") of the declaration of an
interference between an issued patent assigned to BTG covering a method for
producing enzymatically active human copper/zinc superoxide dismutase ("SOD") in
bacteria and a pending application of Chiron Corp. ("Chiron") which claims an
earlier filing date. While BTG is vigorously defending its patent, it cannot
predict the outcome of such interference. However, should BTG's patent be
disallowed and a corresponding patent be issued to Chiron, BTG's present method
of producing enzymatically active human copper/zinc SOD in bacteria may need to
be altered, which may or may not be possible; alternatively, BTG could seek a
license to market under Chiron's patent, which may or may not be available.
Subsequent to the interference being declared, Chiron was issued a U.S. patent
for the bacterially produced form of recombinant human copper/zinc SOD. BTG is
seeking to have the Patent Office either expand the scope of the existing
interference action or declare a separate interference to determine that BTG
rather than Chiron should hold the patent for the bacterially produced form of
recombinant human copper/zinc SOD on the basis that BTG scientists, not Chiron
scientists, invented the method for producing recombinant human copper/zinc SOD
in bacteria. Unless BTG is able to prevail in this effort or to obtain a license
from Chiron, BTG may be unable to commercialize its OxSODrol product in the
United States. This matter is currently under consideration by the Patent
Office. In addition, the Israeli Patent Office has accepted a Chiron patent
application covering a DNA construct having certain specified functions for
expression of active copper/zinc SOD and a method for production of active
copper/zinc SOD in a microorganism harboring this construct. BTG is opposing the
grant of this patent; however, there can be no assurance that this opposition
will be successful. If the opposition is unsuccessful, BTG may be precluded from
manufacturing OxSODrol in Israel. In March 1993, the Patent Office issued a
patent exclusively licensed to BTG containing broad claims for the gene encoding
human copper/zinc SOD, related recombinant expression vectors and genetically
engineered cells containing the gene. BTG believes that Chiron could not
commercialize its yeast-produced SOD product in the United States without
infringing this patent. However, the issuance of this patent does not assure
BTG's ability to commercialize its OxSODrol product.
In September 1991, the Company received a letter from Biogen, Inc.
("Biogen") stating that it believed that the Company's recombinant surface
antigen of the hepatitis-B virus, which is an active ingredient of the Company's
Bio-Hep-B vaccine, or the Company's intermediates for the process of making such
antigen, falls within the claims of one or more of Biogen's patents and/or
patent applications. To date, the Company's activities with respect to its
Bio-Hep-B vaccine have been limited to research and clinical evaluations, which
activities the Company believes do not infringe Biogen's patent rights. The
Company has also made inquiries of Biogen and SmithKline Beecham (the exclusive
licensee of all of Biogen's hepatitis-B patents except those in Japan)
requesting that the Company be granted a license to the Biogen patents; however,
such efforts have not been successful to date.
In January 1992, Bio-Technology General (Israel) Ltd., the Company's
wholly-owned Israeli subsidiary ("BTG-Israel"), filed an application in the
Israeli Patent Office for a compulsory license to manufacture BTG's Bio-Hep-B
vaccine under Biogen's Israeli patent. In September 1995 the Registrar ruled in
an interlocutory decision that BTG-Israel is entitled to a compulsory license to
the Biogen patent. Biogen's appeal of the interlocutory decision was rejected.
In late 1996, the Israeli Registrar of Patents (the "Registrar") set the terms
of the
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license, including royalties to be paid by BTG to Biogen. This decision
(and consequently the license) was to come into effect in December 1996. Biogen
appealed the Registrar's decision to the District Court of Tel Aviv, Israel.
With its appeal Biogen also moved for a stay of the license, which was granted
ex parte pending hearings with both parties. Following hearings which took place
in December 1996, the motion was denied in January 1997; however, the ex parte
stay was left in force pending Biogen's appeal to the Supreme Court and
maintained by the Supreme Court pending the decision by the District Court on
the merits of Biogen's appeal. The District Court heard the appeal in early
March 1997, and in June 1997 the District Court denied Biogen's appeal and
subsequent motion for a stay pending Biogen's appeal of the District Court
decision on the merits. Biogen has the right to appeal the District Court's
decision to the Israeli Supreme Court. The compulsory license is now effective
and allows BTG-Israel to produce the vaccine in Israel upon receipt of
regulatory approval and to export the vaccine to countries in which neither
Biogen nor others have been granted a blocking patent. There can be no assurance
that the compulsory license will not be subsequently overturned by the Israel
Patent Office or by a court. If the compulsory license is overturned, BTG may
not be able to manufacture or sell its Bio-Hep-B vaccine in Israel or to export
such product from Israel unless the patent expires or is revoked.
In August 1992, Biogen sued BTG-Israel for allegedly infringing its Israeli
patent (which is the subject of the compulsory license) by virtue of its
preparation of BTG's Bio-Hep-B vaccine for use in clinical trials, and applied
for an interlocutory injunction restraining BTG-Israel from continuing research
and development activities and clinical trials. In June 1993, the District Court
of Tel Aviv, Israel denied Biogen's application for an interlocutory injunction
in connection with research and development and clinical trials, but enjoined
BTG-Israel from commercial marketing of its Bio-Hep-B vaccine unless permitted
by Biogen or its exclusive licensee, until a compulsory license is obtained, or
until the patent expires or is revoked. These proceedings are continuing. There
can be no assurance that the outcome of these proceedings will be favorable to
BTG, and the Company cannot predict what effect it may have on the compulsory
license or on the ability of BTG to successfully commercialize and market the
Bio-Hep-B vaccine. An outcome unfavorable to BTG may adversely affect the
ability of BTG to commercialize and market the Bio-Hep-B vaccine.
The Company has been advised by Scitech Medical Products, Pte., Ltd.
("Scitech"), its Bio-Hep-B licensee in certain countries in the Far East, that
in April 1993 Biogen initiated suit against Scitech in Singapore asserting that
Scitech's conduct of clinical trials in Singapore with respect to the Company's
hepatitis-B vaccine constitutes infringement of Biogen's patent rights in
Singapore and claiming rights in the data obtained by Scitech through its
clinical trials in Singapore and that an interlocutory hearing was held in
September 1993, although to date no final decision has been rendered. Biogen's
Singapore patent rights are based on the registration of its corresponding UK
patents, and the validity of patents in Singapore depends on the validity of the
corresponding UK patents. Biogen's broad U.K. patent (on which Singapore
registration is based) was invalidated by the U.K. Court of Appeals in October
1994, which decision was upheld by the House of Lords in October 1996. Biogen is
currently attempting to have amended claims allowed. Additionally, three claims
of a narrower UK patent were upheld. The Company believes that none of these
claims will affect commercialization of the Company's vaccine, although there
can be no assurance of this. The Company is aware that certain other patents
have been granted or are pending that may prevent the Company from selling its
vaccine in the United States, Europe and certain other countries. The Company's
failure to obtain any needed license, or a determination that its vaccine
infringes the patent rights of Biogen or others, would substantially limit, if
not prohibit, the commercialization of the Bio-Hep-B vaccine in those countries
in which Biogen or others have a patent until such patent is revoked or expires.
The ability of the Company to secure any necessary licenses or sublicenses to
these patents or applications cannot be predicted.
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Three patent applications of Genentech in Israel which cover general
methods relating to genetically engineered products and to human growth hormone
were accepted in 1983 (two) and 1985 (one). BTG is opposing the grant of these
patents. One of these three Israeli applications corresponds to the two U.S.
patents which are the subject of the complaint asserted by Genentech against BTG
in the United States District Court in Delaware (subsequently consolidated with
related proceedings in New York). Additionally, in 1984 an Israeli patent
application of Biogen which relates to expression vectors was accepted; BTG is
opposing the grant of this patent. There can be no assurance that BTG will be
successful in its opposition to the grant of these patents. If BTG is
unsuccessful in its opposition in Israel, then BTG may be unable to manufacture
its products in Israel.
The Company has also initiated proceedings in Israel and Europe to oppose
the grant to several of its competitors of patents relating to vector systems,
and may oppose corresponding patents in other jurisdictions. Additionally,
during 1991 and 1992, proceedings were initiated in Israel to oppose the grant
of patents relating to the OxSODrol and Bio-Flow products, respectively.
Although the outcome of the proceedings cannot be predicted with certainty and
will likely not be determined for several years, the Company believes that the
outcome will be favorable, although there can be no assurance of this. The
Company is aware of patent applications filed by, or patents issued to, other
entities with respect to technology potentially useful to the Company and, in
some cases, related to products and processes being developed by the Company.
The Company cannot presently assess the effect, if any, that these patents may
have on its operations. The extent to which efforts by other researchers have or
will result in patents and the extent to which the issuance of patents to others
would have a materially adverse effect on the Company or would force the Company
to obtain licenses from others are currently unknown.
In 1986, the Company licensed from the U.S. Department of Commerce a U.S.
patent relating to the sublingual delivery of sex steroids, in which the drug is
absorbed into the bloodstream through the mucosal membrane under the tongue.
Subsequently the Company licensed from the U.S. Department of Commerce one claim
of a related U.S. patent, which patent is currently the subject of an
interference action by Janssen, a division of Johnson & Johnson. The Company is
currently in negotiations to secure a license to Janssen's patents and
technology, although there can be no assurance it will be able to obtain a
license on reasonable terms or at all. If Janssen is successful in this
interference action and BTG is unable to obtain a license, BTG may be prohibited
from commercializing Androtest-SL.
Uncertainty of Protection of Patents and Proprietary Technology. The
Company has developed patentable technology and proprietary know-how and has
acquired from various universities and institutions certain basic technologies,
as to which either patents have been issued or patent applications are pending.
There can be no assurance that patent applications will result in issued
patents, that the claims allowed in such issued patents will be sufficiently
broad to protect the Company's proprietary rights or that patents will not be
challenged, circumvented or invalidated or that rights granted pursuant to such
patents will provide competitive advantages to the Company. The Company's
success depends in part on its ability to continue to obtain patent protection
in the United States and other countries for its technologies and the products,
if any, resulting from such technologies. Patent applications in the United
States are maintained in secrecy until a patent issues, and the Company cannot
be certain that others have not filed patent applications for technology covered
by the Company's pending applications or that the Company was the first to file
patent applications for such technology. The Company also relies on trade
secrets, proprietary know-how and technological innovation which it seeks to
protect with confidentiality agreements with its employees, consultants and
licensees. There can be no assurance that these agreements will not be breached,
that the Company will have adequate remedies for any breach or that BTG's trade
secrets and proprietary know-how will not otherwise become known or be
independently discovered by competitors.
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BTG's commercial success will also depend in part on the Company not
infringing patents or proprietary rights of third parties. A number of companies
and research and academic institutions have developed technologies, filed patent
applications or received patents on various technologies that relate to the
Company's business, and such entities may file applications for or be issued
patents in the future with respect to technology potentially necessary or useful
to BTG. Some of these technologies, applications or patents may conflict with
the Company's technologies and existing or future patents, if any, or patent
applications. Such conflict could limit the scope of patents that BTG has
obtained or may obtain in the future or result in patent applications failing to
issue as patents. In addition, if third parties obtain patents which cover the
Company's activities, there can be no assurance that BTG would be able to
license such patents on reasonable terms, or at all, or be able to license or
develop alternative technology. As more patents are issued to third parties, the
risk that the Company's products and activities may give rise to claims that
they infringe the patents of others increases.
The Company expects that administrative hearings, litigation or both will
be necessary to determine the validity and scope of its and others' proprietary
or biotechnology patents. Such administrative proceedings or litigation have to
date required, and may in the future require, a significant commitment of the
Company's resources. Any such commitment may divert resources from other areas
of the Company.
Limited Manufacturing Capacity and Experience. The Company has limited
commercial scale manufacturing capacity and experience. While it is expected
that the Company's manufacturing facilities will allow the Company to satisfy
its current and anticipated near-term requirements, the Company will need a
larger facility within the next several years to meet anticipated increases in
demand for its products. The Company is required to obtain regulatory approval
for all of its commercial manufacturing processes and facilities, and to date
the Company has been able to obtain such approvals. Any failure to receive, or a
substantial delay in obtaining, regulatory approval for its manufacturing
processes and facilities could have a material adverse effect on the Company.
The manufacture of the Company's products involves a number of technical
steps and requires meeting stringent quality control specifications imposed by
governmental regulatory bodies and by the Company itself. Further, such products
can only be manufactured in facilities approved by the applicable regulatory
authorities. As a result, the Company may not be able to quickly and efficiently
replace its manufacturing capacity in the event that it is unable to manufacture
its products at its facilities. In the event of a natural disaster, equipment
failure, strike, war or other difficulty, BTG may be unable to manufacture its
products in a manner necessary to fulfill demand. BTG's inability to fulfill
demand may permit its licensees and distributors to terminate their agreements,
seek alternate suppliers or manufacture the products themselves. Additionally,
if the Company does not receive regulatory approval for its new facility, it
would likely be unable to meet the anticipated increased demands for its
products, which would have a material adverse effect on BTG's business, results
of operations and financial condition. The Company is dependent on third parties
to manufacture all or a portion of certain of its products. See "-- Dependence
on Third-Party Suppliers."
Limited Marketing Capability and Experience. The Company established a
sales and marketing force in the United States during the second half of 1995 to
promote distribution of Oxandrin and other BTG products in the United States.
With respect to territories outside the United States, the Company does not yet
have an established sales force and relies on third parties to market its
products. There can be no assurance that the Company's marketing strategy will
be successful. The Company's ability to market its products successfully in the
future will be dependent on a number of factors, many of which are not within
its control.
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Limited Commercial Products. The Company's principal activities since its
formation in 1980 have been the research and development of products with
commercial potential. Commercialization of the Company's products is subject to
successful clinical testing and governmental approvals, the timing of which is
not within the control of the Company and has taken and may continue to take
longer than anticipated. Acceptance by the medical community of the Company's
products is also necessary for their successful commercialization.
Historical Operating Losses. Prior to 1995, the Company's revenues were not
sufficient to offset the expenses incurred in its research, development and
production activities. At March 31, 1997, the Company had an accumulated deficit
of approximately $65.2 million. To the extent the Company is unable to sustain
its recent profitability, its ability to continue its operations will depend
upon its ability to secure additional funds from other sources. Revenue has in
the past and may in the immediate future continue to display significant
variations due to the level of sales of existing products, the introduction of
new products and new research and development contracts and licensing
arrangements, the completion or termination of those contracts and arrangements,
the timing and amounts of milestone payments and the timing of regulatory
approvals of products. The Company's profitability will be dependent on its
success in developing, obtaining regulatory approvals for and effectively
marketing its products. The annual cash flows of the Company have fluctuated
significantly due to the impact of net income and losses, capital spending,
working capital requirements and issuances of Common Stock and other financings.
The Company expects that cash flow in the near future will be primarily
determined by the levels of net income (loss) less depreciation and
amortization, and financings, if any, undertaken by the Company.
Capital Needs. The development and commercialization of products requires a
substantial amount of funds. The Company's cash requirements are currently
satisfied primarily through product sales. Historically, cash requirements were
satisfied primarily through (i) product sales; (ii) funding of projects through
collaborative research and development arrangements; (iii) contract fees; (iv)
government of Israel funding of a portion of certain research and development
projects; and (v) equity and debt financings. There can be no assurance that
these financing alternatives will be available in the future to satisfy the
Company's cash requirements. The Company believes that its remaining cash
resources, together with anticipated product sales, scheduled payments to be
made to BTG under its current agreements with pharmaceutical partners and third
parties and continued funding from the Chief Scientist of the State of Israel
(the "Chief Scientist") at current levels, will be sufficient to fund the
Company's ongoing operations for the foreseeable future. There can, however, be
no assurance that product sales will occur as anticipated, that scheduled
payments will be made by third parties, that current agreements will not be
canceled, that the Chief Scientist will continue to provide funding at current
levels, or that unanticipated events requiring the expenditure of funds will not
occur.
The satisfaction of the Company's future cash requirements will depend in
large part on the status of commercialization of the Company's products, the
Company's ability to enter into additional research and development and
licensing arrangements, and the Company's ability to obtain additional equity
investments, if necessary. There can be no assurance that the Company will be
able to obtain additional funds or, if such funds are available, that such
funding will be on favorable terms. If additional funds are raised by issuing
equity securities of the Company, dilution to existing stockholders may result.
In addition, the indentures under which the Company's debt securities were
issued limit the ability of the Company to satisfy its cash requirements through
borrowings or the issuance of debt securities. The Company continues to seek
additional collaborative research and development and licensing arrangements in
order to provide revenue from sales of certain products and funding for a
portion of the research and development expenses relating to the products
covered, although there can be no assurance that the Company will be able to
obtain such agreements. If adequate funds are not available, BTG may be required
to significantly curtail one or more of
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its commercialization efforts or research and development programs or obtain
funds through arrangements with collaborative partners or others on less
favorable terms than might otherwise be available.
Effect of Governmental Regulation. The Company is subject to regulation by
numerous governmental authorities in the United States and other countries. All
of the Company's products, manufacturing processes and facilities require
governmental licensing or approval prior to commercial use. The approval process
applicable to products of the type being developed by the Company usually takes
five to seven years from the commencement of human clinical trials and typically
requires substantial expenditures. The Company and its licensees may encounter
significant delays or excessive costs in their respective efforts to secure
necessary approvals or licenses. Before obtaining regulatory approval for the
commercial sale of its products, the Company is required to conduct preclinical
and clinical trials which demonstrate that the product is safe and efficacious
for the treatment of the target disease. The results from preclinical animal
studies and early clinical trials may not be predictive of results that will be
obtained in large scale testing. A number of biotechnology companies have
recently suffered significant setbacks in advanced clinical trials, even after
experiencing promising results in preclinical and early human testing.
Additionally, the rate of completion of clinical trials is dependent upon a
number of factors, many of which are outside the Company's control, including
the rate of patient enrollment. Patient enrollment is a function of several
factors, including the size of the patient population and the proximity of
patients to clinical sites. Delays in patient enrollment could result in
increased costs and delays in completion of the clinical trials. In addition,
preclinical and clinical trials must meet regulatory and institutional
requirements. Data obtained from preclinical and clinical activities are
susceptible to varying interpretations which could delay, limit or prevent
regulatory approval. In addition, the Company and its partners may encounter
delays or rejections based upon changes in the policies of regulatory
authorities.
Future United States or foreign legislative or administrative acts could
also prevent or delay regulatory approval of the Company's or its licensees'
products. Failure to obtain requisite governmental approvals, or failure to
obtain approvals of the scope requested, could delay or preclude the Company or
its licensees from marketing their products, could limit the commercial use of
the products and could also allow competitors time to introduce competing
products ahead of product introduction by the Company and thereby have a
material adverse effect on the Company's results of operations, liquidity and
financial condition. Even after regulatory approval is obtained, use of the
products could reveal side effects that, if serious, could result in suspension
of existing approvals and delays in obtaining approvals in other jurisdictions.
Regulation by governmental authorities in the United States and other
countries is a significant factor affecting the timing of the commercialization
of the Company's products and its ongoing research and development activities.
The timing of regulatory approvals is not within the Company's control. To date,
the length of time required to obtain regulatory approval of
genetically-engineered products has been significantly longer than expected,
both for the Company and the biotechnology industry in general. These delays
have had, and if they continue could have, a material adverse effect on the
results of operations and financial condition of the Company. The Company
believes that these delays have in the past negatively impacted its ability to
attract funding and that, as a result, the terms of such financings have been
less favorable to the Company than they might otherwise have been had the
Company's product revenues provided sufficient funds to finance the large costs
of taking a product from discovery through commercialization. As a result, the
Company has had to license the commercialization of many of its products to
third parties in exchange for research funding and royalties on product sales;
this will result in lower revenues than if BTG had commercialized the products
on its own.
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Failure to comply with applicable regulatory requirements can, among other
things, result in fines, suspension of regulatory approvals, product recalls,
seizure of products, imposition of operating restrictions and criminal
prosecutions. Further, FDA policy or similar policies of regulatory agencies in
other countries may change and additional governmental requirements may be
established that could prevent or delay regulatory approval of the Company's
products.
Uncertainty of Health Care Reimbursement. The Company's ability to
successfully commercialize human therapeutic products may depend in part on the
extent to which reimbursement for the cost of such products and related
treatment will be available from government health administration authorities,
private health coverage insurers and other organizations. Significant
uncertainty exists as to the reimbursement status of newly approved health care
products, and there can be no assurance that adequate third-party coverage will
be available for the Company to maintain price levels sufficient for realization
of an appropriate return on its investment in product development. Government
and other third-party payors are increasingly attempting to contain health care
costs by limiting both coverage and the level of reimbursement for new
therapeutic products approved for marketing by the FDA and by refusing, in some
cases, to provide any coverage for use of approved products for disease
indications for which the FDA has not granted marketing approval. If adequate
coverage and reimbursement levels are not provided by government and third-party
payors for use of the Company's health care products, the market acceptance of
these products would be adversely affected. In addition, in recent years a
number of federal and state health care reform proposals have been introduced to
contain health care costs. There can be no assurance as to the ultimate content,
timing or effect of any health care reform legislation, nor is it possible at
this time to estimate the impact of potential legislation on the Company.
Regulatory approval of prices is also required in most countries outside the
United States. In particular, certain European countries will condition their
approval of a product on the agreement of the seller not to sell the product for
more than a certain price in that country. There can be no assurance that the
establishment of a price in one European country will not have the practical
effect of requiring the Company's marketing partners to sell the product in
other European countries at no higher than such price. Because BTG generally
supplies product to its marketing partners for a specified percentage of net
sales, there can be no assurance that the resulting prices would be sufficient
to generate an acceptable return on the Company's investment in its products or
even cover the Company's manufacturing costs for such product.
Risk of Technical Obsolescence; Highly Competitive Industry. Biotechnology
has undergone rapid and significant technological change. The Company expects
that this technology will continue to develop rapidly, and the Company's future
success will depend, in large part, on its ability to maintain a competitive
position. Rapid technological development may result in products or processes
becoming obsolete before marketing of these products or before the Company
recovers a significant portion of the research, development and
commercialization expenses incurred with respect to those products. Numerous
companies, including well-known pharmaceutical and biotechnology companies, are
engaged in the business of researching and developing products similar to those
of the Company. Many of these companies have substantially greater capital
resources and larger research and development staffs and facilities than the
Company. Such companies may succeed in their research, developing on a more
timely basis products that may be more effective than any which may be developed
by the Company. These companies may also be more successful than the Company in
the production and marketing of such products.
Retention of Key Personnel. The Company is dependent upon the efforts of
its officers and scientists and other employees. The loss of certain of these
key employees could materially and adversely affect the Company's business.
There is a great deal of competition for the limited number of scientists with
expertise in the area of the Company's operations. The
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business of the Company is dependent upon its ability to attract and retain
qualified research and managerial personnel. The Company does not maintain, and
has no current intention of obtaining, "key man" life insurance on any of its
employees.
Risk of Operations in Israel. The Company's primary research, development
and production operations are at this time conducted in Israel and can be
affected by economic, military and political conditions in that country and in
the Middle East in general. The Company manages its Israeli operations with the
object of protecting against any material net financial loss in U.S. dollars
from the impact of Israeli inflation and currency devaluations on its non-U.S.
dollar assets and liabilities. The Bank of Israel's monetary policy has been to
manage the exchange rate while allowing the Consumer Price Index to rise by
approximately 14% in 1994, 8% in 1995, 11% in 1996 and 2% in the first quarter
of 1997. For those expenses linked to the Israeli Shekel, such as salaries and
rent, this resulted in corresponding increases in these costs in U.S. dollars.
In 1994, 1995, 1996 and the three months ended March 31, 1997, the Shekel was
devalued by approximately 1%, 4%, 4% and 5%, respectively, against the U.S.
dollar. Because of the insignificant devaluation of the Shekel against the U.S.
dollar in 1994, 1995 and 1996 despite the annual rate of increase in the
Consumer Price Index, BTG's cost of local goods and services, to the extent
linked in whole or in part to the Consumer Price Index, increased in U.S. dollar
terms. To the extent that expenses in Shekels exceed BTG's revenues in Shekels
(which to date have consisted primarily of research funding from the Chief
Scientist and product sales in Israel), the devaluations of Israeli currency
have been and will continue to be a benefit to BTG's financial condition.
However, should BTG's revenues in Shekels exceed its expenses in Shekels in any
material respect, the devaluation of the Shekel will adversely affect BTG's
financial condition. Further, to the extent the devaluation of the Shekel with
respect to the U.S. dollar does not substantially offset the increase in the
costs of local goods and services in Israel, BTG's financial results will be
adversely affected as local expenses measured in U.S. dollars will increase.
There can be no assurance that the government of Israel will continue to devalue
the Shekel from time to time to offset the effects of inflation in Israel.
Risk of Product Liability. The testing and marketing of the Company's
products entail risk of product liability. Although the Company has so far been
able to obtain indemnification from pharmaceutical companies commercializing its
products, there can be no assurance that other such companies will agree in the
future to indemnify the Company for other of the Company's products or that such
companies will, if obligated to do so, have adequate resources to fulfill their
indemnity agreements. Further, to the extent the Company elects to test or
market products independently, it will bear the risk of product liability
directly. The Company presently has $10,000,000 of product liability insurance
coverage in place. Any successful product liability claim made against the
Company could substantially reduce or eliminate any stockholders' equity the
Company may have and could have a significant adverse impact on the future of
the Company.
Volatility of Share Price. The market prices for securities of
biotechnology companies, including the Company, have been volatile, and it is
likely that the price of the Common Stock will fluctuate in the future. Factors
such as announcements of technological innovations or new commercial products by
the Company or its competitors, announcements by the Company or its competitors
of results in preclinical testing and clinical trials, governmental regulation,
patent or proprietary rights developments, public concern as to the safety or
other implications of biotechnology products, changes in earnings estimates and
recommendations by securities analysts, and market conditions in general may
have a significant impact on the market price of the Common Stock. In addition,
the market price of the Common Stock could be adversely affected by future
exercises of outstanding warrants and options. At June 30, 1997, options and
warrants to purchase an aggregate of approximately 5,600,519 shares and
4,706,549 shares, respectively, of Common Stock were outstanding. Substantially
all of these options and warrants have exercise prices below the current market
price of the Common Stock.
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Additionally, substantially all of the shares of Common Stock issuable upon
exercise of these outstanding options and warrants have been registered for
resale under the Securities Act of 1933, as amended, and, accordingly, when
issued will be freely tradable without restriction. In addition, the Company may
issue additional stock, warrants and/or options to raise capital in the future.
The Company may also issue additional securities in connection with its employee
benefit plans. During the terms of such options and warrants, the holders
thereof are given the opportunity to profit from a rise in the market price of
the Common Stock. The exercise of such options and warrants may have an adverse
effect on the market value of the Common Stock. The existence of such options
and warrants may adversely affect the terms on which the Company can obtain
additional equity financing. To the extent the exercise prices of such options
and warrants are less than the net tangible book value of the Common Stock at
the time such options and warrants are exercised, the Company's stockholders
will experience an immediate dilution in the net tangible book value of their
investment. Further, the future sale of a substantial number of shares of Common
Stock by existing stockholders and option and warrant holders may have an
adverse impact on the market price of the Common Stock.
Absence of Dividends. No dividends have been paid on the Common Stock to
date and the Company does not anticipate paying dividends in the foreseeable
future. The indenture under which the Company's Series B 11% Senior Secured
Convertible Notes due October 15, 1998 were issued prohibits the payment of cash
dividends on the Common Stock.
Certain Anti-Takeover Effects. The Company's Board of Directors has the
authority to issue up to 4,000,000 shares of Preferred Stock and to determine
the price, rights, preferences and privileges of those shares without any
further vote or action by the Company's stockholders. The rights of the holders
of Common Stock will be subject to, and may be adversely affected by, the rights
of the holders of any Preferred Stock that may be issued in the future. While
the Company has no present intention to issue shares of Preferred Stock, any
such issuance, while providing desirable flexibility in connection with possible
acquisitions and other corporate purposes, could have the effect of making it
more difficult for a third party to acquire a majority of the outstanding voting
stock of the Company. In addition, the Company is subject to the anti-takeover
provisions of Section 203 of the Delaware General Corporation Law, which
prohibits the Company from engaging in a "business combination" with an
"interested stockholder" (defined generally as a person owning 15% or more of
the corporation's outstanding voting stock) for a period of three years after
the date of the transaction in which the person became an interested
stockholder, unless the business combination is approved in a prescribed manner.
The application of Section 203 could have the effect of delaying or preventing a
change of control of the Company.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of Common Stock by
the Selling Stockholders.
SELLING STOCKHOLDERS
The Company will supplement this Prospectus from time to time to include
certain information concerning the security ownership of the Selling
Stockholders and the position, office or other material relationship which a
Selling Stockholder has had within the past three years with the Company or any
of its predecessors or affiliates.
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PLAN OF DISTRIBUTION
The Company is registering the Shares on behalf of the Selling
Stockholders. All costs, expenses and fees in connection with the registration
of the Shares offered hereby will be borne by the Company. Brokerage
commissions, if any, attributable to the sale of Shares will be borne by the
Selling Stockholders (or their donees or pledgees).
Sales of Shares may be effected from time to time in transactions (which
may include block transactions) on the Nasdaq National Market, in negotiated
transactions, or a combination of such methods of sale, at fixed prices which
may be changed, at market prices prevailing at the time of sale, or at
negotiated prices. The Selling Stockholders have advised the Company that they
have not entered into any agreements, understandings or arrangements with any
underwriters or broker-dealers regarding the sale of their securities. The
Selling Stockholders may effect such transactions by selling Common Stock
directly to purchasers or to or through broker-dealers which may act as agents
or principals. Such broker-dealers may receive compensation in the form of
discounts, concessions or commissions from the Selling Stockholder and/or the
purchasers of Common Stock for whom such broker-dealers may act as agents or to
whom they sell as principal, or both (which compensation as to a particular
broker-dealer might be in excess of customary commissions). The Selling
Stockholders and any broker-dealers that act in connection with the sale of the
Common Stock might be deemed to be "underwriters" within the meaning of Section
2(11) of the Securities Act and any commission received by them and any profit
on the resale of the shares of Common Stock as principal might be deemed to be
underwriting discounts and commissions under the Securities Act. The Selling
Stockholders may agree to indemnify any agent, dealer or broker-dealer that
participates in transactions involving sales of the shares against certain
liabilities, including liabilities arising under the Securities Act. Liabilities
under the federal securities laws cannot be waived.
Because the Selling Stockholders may be deemed to be "underwriters" within
the meaning of Section 2(11) of the Securities Act, the Selling Stockholders
will be subject to prospectus delivery requirements under the Securities Act.
Furthermore, in the event of a "distribution" of the Shares, such Selling
Stockholder, any selling broker or dealer and any "affiliated purchasers" may be
subject to Rule 10b-6 under the Exchange Act, which Rule would prohibit, with
certain exceptions, any such person from bidding for or purchasing any security
which is the subject of such distribution until his participation in that
distribution is completed. In addition, Rule 10b-7 under the Exchange Act
prohibits any "stabilizing bid" or "stabilizing purchase" for the purpose of
pegging, fixing or stabilizing the price of Common Stock in connection with this
offering.
The Selling Stockholders may be entitled under agreements entered into with
the Company to indemnification against liabilities under the Securities Act.
LEGAL MATTERS
Legal matters relating to the Common Stock have been passed upon for the
Company by Fulbright & Jaworski L.L.P., New York, New York 10103. Partners and
Of Counsel of Fulbright & Jaworski L.L.P., as of July 15, 1997, beneficially
owned an aggregate of 4,800 shares of the Company's Common Stock.
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EXPERTS
The audited financial statements incorporated by reference in this
Prospectus and elsewhere in the Registration Statement have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in accounting and auditing in giving said
report.
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================================================================================
NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE HEREBY TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS, AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITY OTHER THAN THE
COMMON STOCK OFFERED HEREBY, NOR DOES IT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY TO ANY
PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR
SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPEC- TUS NOR ANY SALE MADE
HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE
HEREOF.
TABLE OF CONTENTS
PAGE
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Available Information ................................................. 2
Incorporation of Certain Documents by Reference........................ 3
The Company............................................................ 4
Risk Factors........................................................... 6
Use of Proceeds........................................................ 16
Selling Stockholders................................................... 16
Plan of Distribution................................................... 17
Legal Matters.......................................................... 17
Experts................................................................ 18
================================================================================
================================================================================
6,000,000
Shares
BIO-TECHNOLOGY
GENERAL CORP.
Common Stock
---------
PROSPECTUS
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August 7, 1997
================================================================================
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
The contents of the Company's Registration Statements on Form S-8 (File
Nos. 33-51202 and 33-83904), as filed with the Securities and Exchange
Commission on August 24, 1992 and September 12, 1994, respectively, are
incorporated herein by reference.
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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-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Iselin, State of New Jersey, on August 6, 1997.
Bio-Technology General Corp.
By: /s/ SIM FASS
----------------------------------------
(Sim Fass, Chairman of the Board,
Chief Executive Officer and President)
-------------------------------
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints SIM FASS and YEHUDA STERNLICHT, or either
of them, his true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement and to file the same with all
exhibits thereto and all documents in connection therewith, with the Securities
and Exchange Commission, granting said attorney-in-fact and agent and each of
them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorney-in-fact and agent or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
II-2
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed below by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ SIM FASS Chairman of the Board, President, August 6, 1997
- ------------------------- CEO, and Treasurer
(Sim Fass) (Principal Executive Officer)
/s/ HERBERT J. CONRAD Director August 6, 1997
- ------------------------
(Herbert J. Conrad)
/s/ MOSES MARX Director August 6, 1997
- ------------------------
(Moses Marx)
/s/ ALLAN ROSENFIELD Director August 6, 1997
- ------------------------
(Allan Rosenfield)
/s/ DAVID TENDLER Director August 6, 1997
- ------------------------
(David Tendler)
/s/ VIRGIL THOMPSON Director August 6, 1997
- ------------------------
(Virgil Thompson)
/s/ DAN TOLKOWSKY Director August 6, 1997
- ------------------------
(Dan Tolkowsky)
/s/ FAYE WATTLETON Director August 6, 1997
- ------------------------
(Faye Wattleton)
/s/ HERBERT WEISSBACH Director August 6, 1997
- ------------------------
(Herbert Weissbach)
/s/ YEHUDA STERNLICHT Vice President_Finance and August 6, 1997
- ------------------------ Chief Financial Officer
(Yehuda Sternlicht) (Principal Financial and
Accounting Officer)
</TABLE>
II-3
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description
----------- -----------
4(a) Bio-Technology General Corp. 1992 Stock Option Plan, as amended
4(b) Form of Incentive Stock Option Agreement+(1)
4(c) Form of Restricted Stock Option Agreement+(1)
5 Opinion of Fulbright & Jaworski L.L.P.
23(a) Consent of Arthur Andersen L.L.P.
23(b) Consent of Fulbright & Jaworski L.L.P.
(included in Exhibit 5)
24 Power of Attorney authorizing representatives to sign this
Registration Statement and any and all amendments (including
post-effective amendments) to this Registration Statement on
behalf of Bio-Technology General Corp. and certain directors and
officers thereof (included on signature page).
- --------------
+ Previously filed
(1) Filed as an Exhibit to the Company's Registration Statement on Form S-8
(No. 33-51202), as filed with the Securities and Exchange Commission on
August 24, 1992, which is incorporated herein by reference.
II-4
EXHIBIT 4.a
BIO-TECHNOLOGY GENERAL CORP.
1992 STOCK OPTION PLAN
1. Purpose. The purpose of the Bio-Technology General Corp. 1992 Stock
Option Plan (the "Plan") is to enable Bio-Technology General Corp. (the
"Company") and its stockholders to secure the benefits of common stock ownership
by key personnel of the Company and its subsidiaries. The Board of Directors of
the Company (the "Board") believes that the granting of options under the Plan
will foster the Company's ability to attract, retain and motivate those
individuals who will be largely responsible for the continued profitability and
long-term future growth of the Company.
2. Stock Subject to the Plan. The Company may issue and sell a total of
12,000,000 shares of its common stock, $.01 par value (the "Common Stock"),
pursuant to the Plan. Such shares may be either authorized and unissued or held
by the Company in its treasury. New options may be granted under the Plan with
respect to shares of Common Stock which are covered by the unexercised portion
of an option which has terminated or expired by its terms, by cancellation or
otherwise.
3. Administration. The Plan will be administered by a committee (the
"Committee") consisting of at least two directors appointed by and serving at
the pleasure of the Board. To the extent required by the applicable provisions
of Rule 16(b)-3 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), no member of the Committee shall have received an option under
the Plan or any other plan within one year before his or her appointment or such
other period as may be prescribed by said Rule. Subject to the provisions of the
Plan, the Committee, acting in its sole and absolute discretion, will have full
power and authority to grant options under the Plan, to interpret the provisions
of the Plan, to fix and interpret the provisions of option agreements made under
the Plan, to supervise the administration of the Plan, and to take such other
action as may be necessary or desirable in order to carry out the provisions of
the Plan. A majority of the members of the Committee will constitute a quorum.
The Committee may act by the vote of a majority of its members present at a
meeting at which there is a quorum or by unanimous written consent. The decision
of the Committee as to any disputed question, including questions of
construction, interpretation and administration, will be final and conclusive on
all persons. The Committee will keep a record of its proceedings and acts and
will keep or cause to be kept such books and records as may be necessary in
connection with the proper administration of the Plan.
4. Eligibility. Options may be granted under the Plan to present or future
key employees of the Company or a subsidiary of the Company (a "Subsidiary")
within the meaning of Section 424(f) of the Internal Revenue Code of 1986 (the
"Code"), and to consultants to the Company or a Subsidiary who are not
employees. Options may not be granted to directors of the Company or a
Subsidiary who are not also employees of or consultants to the Company and/or a
Subsidiary. Subject to the provisions of the Plan, the Committee may from time
to time select the persons to whom options will be granted, and will fix the
number of shares covered by each such option and establish the terms and
conditions thereof, including, without
<PAGE>
limitation, the exercise price, restrictions on exercisability of the option or
on the disposition of the shares of Common Stock issued upon exercise of the
option, and whether or not the option is to be treated as an incentive stock
option within the meaning of Section 422 of the Code (an "Incentive Stock
Option").
5. Terms and Conditions of Options. Each option granted under the Plan will
be evidenced by a written agreement in a form approved by the Committee. Each
such option will be subject to the terms and conditions set forth in this
paragraph and such additional terms and conditions not inconsistent with the
Plan (and, in the case of an Incentive Stock Option, not inconsistent with the
provisions of the Code applicable thereto) as the Committee deems appropriate.
(a) Option Exercise Price. In the case of an option which is not treated as
an Incentive Stock Option, the exercise price per share may not be less than the
par value of a share of Common Stock on the date the option is granted; and, in
the case of an Incentive Stock Option, the exercise price per share may not be
less than 100% of the fair market value of a share of Common Stock on the date
the option is granted (110% in the case of an optionee who, at the time the
option is granted, owns stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company or a Subsidiary (a "ten
percent shareholder")). For purposes hereof, the fair market value of a share of
Common Stock on any date will be equal to the closing sale price per share as
published by a national securities exchange on which shares of the Common Stock
are traded on such date or, if there is no sale of Common Stock on such date,
the average of the bid and asked prices on such exchange at the closing of
trading on such date or, if shares of the Common Stock are not listed on a
national securities exchange on such date, the closing price or, if none, the
average of the bid and asked prices in the over the counter market at the close
of trading on such date, or if the Common Stock is not traded on a national
securities exchange or the over the counter market, the fair market value of a
share of the Common Stock on such date as determined in good faith by the
Committee.
(b) Option Period. The period during which an option may be exercised will
be fixed by the Committee and will not exceed 10 years from the date the option
is granted (5 years in the case of an Incentive Stock Option granted to a "ten
percent shareholder").
(c) Exercise of Options. No option will become exercisable unless the
person to whom the option was granted remains in the continuous employ or
service of the Company or a Subsidiary for at least one year (or for such other
period as the Committee may designate) from the date the option is granted.
Subject to earlier termination of the option as provided herein, unless the
Committee determines otherwise, options will be exercisable from and after the
date of grant. Vesting or other restrictions on the exercisability of an option
will be set forth in the related option agreement. All or part of the
exercisable portion of an option may be exercised at any time during the option
period. An option may be exercised by transmitting to the Company (1) a written
notice specifying the number of shares to be purchased, and (2) payment of the
exercise price, together with the amount, if any, deemed necessary by the
Committee to enable the Company to satisfy its income tax withholding
obligations with
<PAGE>
respect to such exercise (unless other arrangements acceptable to the Company
are made with respect to the satisfaction of such withholding obligations).
(d) Payment of Exercise Price. The purchase price of shares of Common Stock
acquired pursuant to the exercise of an option granted under the Plan may be
paid in cash and/or such other form of payment as may be permitted under the
option agreement, including, without limitation, previously-owned shares of
Common Stock and installment payments under the optionee's promissory note.
(e) Rights as a Stockholder. No shares of Common Stock will be issued in
respect of the exercise of an option granted under the Plan until full payment
therefor has been made (and/or provided for where all or a portion of the
purchase price is being paid in installments), and the applicable income tax
withholding obligation has been satisfied or provided for. The holder of an
option will have no rights as a stockholder with respect to any shares covered
by an option until the date a stock certificate for such shares is issued to him
or her. Except as otherwise provided herein, no adjustments shall be made for
dividends or distributions of other rights for which the record date is prior to
the date such stock certificate is issued.
(f) Nontransferability of Options. No option granted under the Plan may be
assigned or transferred except by will or by the applicable laws of descent and
distribution; and each such option may be exercised during the optionee's
lifetime only by the optionee.
(g) Termination of Employment or Other Service. If an optionee ceases to be
employed by or to perform services for the Company and any Subsidiary for any
reason other than death or disability (defined below), then, unless extended by
the Committee acting in its sole discretion, each outstanding option granted to
him or her under the Plan will terminate on the date three months after the date
of such termination of employment or service, or, if earlier, the date specified
in the option agreement. If an optionee's employment or service is terminated by
reason of the optionee's death or disability (or if the optionee's employment or
service is terminated by reason of his or her disability and the optionee dies
within one year after such termination of employment or service), then, unless
extended by the Committee acting in its sole discretion, each outstanding option
granted to the optionee under the Plan will terminate on the date one year after
the date of such termination of employment or service (or one year after the
later death of a disabled optionee) or, if earlier, the date specified in the
option agreement. For purposes hereof, the term "disability" means the inability
of an optionee to perform the customary duties of his or her employment or other
service for the Company or a Subsidiary by reason of a physical or mental
incapacity which is expected to result in death or be of indefinite duration.
(h) Incentive Stock Options. In the case of an Incentive Stock Option
granted under the Plan, at the time the option is granted, the aggregate fair
market value (determined at the time of grant) of the shares of Common Stock
with respect to which Incentive Stock Options are exercisable for the first time
by the optionee during any calendar year may not exceed $100,000.
<PAGE>
(i) Other Provisions. The Committee may impose such other conditions with
respect to the exercise of options, including, without limitation, any
conditions relating to the application of federal or state securities laws, as
it may deem necessary or advisable.
(j) Maximum Option Grant. The maximum option grant which may be made to an
employee of the Company in any calendar year shall not cover more than 250,000
shares.
6. Capital Changes, Reorganization, Sale.
(a) Adjustments Upon Changes in Capitalization. The aggregate number and
class of shares for which options may be granted under the Plan, the maximum
number of shares for which options may be granted to any employee in any
calendar year, the number and class of shares covered by each outstanding option
and the exercise price per share shall all be adjusted proportionately for any
increase or decrease in the number of issued shares of Common Stock resulting
from a split-up or consolidation of shares or any like capital adjustment, or
the payment of any stock dividend.
(b) Acceleration of Vesting Upon Change of Control. If there is a change of
control of the Company (as defined in subparagraph (f) below), then all
outstanding options shall become fully exercisable whether or not the vesting
conditions, if any, set forth in the related option agreements have been
satisfied, and each optionee shall have the right to exercise his or her options
prior to such change of control and for as long thereafter as the option shall
remain in effect in accordance with its terms and the provisions hereof.
(c) Conversion of Options on Stock for Stock Exchange. If the shareholders
of the Company receive capital stock of another corporation ("Exchange Stock")
in exchange for their shares of Common Stock in any transaction involving a
merger (other than a merger of the Company in which the holders of Common Stock
immediately prior to the merger have the same proportionate ownership of Common
Stock in the surviving corporation immediately after the merger), consolidation,
acquisition of property or stock, separation or reorganization (other than a
mere reincorporation or the creation of a holding company), all options granted
hereunder shall be converted into options to purchase shares of Exchange Stock
unless the Company and the corporation issuing the Exchange Stock, in their sole
discretion, determine that any or all such options granted hereunder shall not
be converted into options to purchase shares of Exchange Stock but instead shall
terminate, subject to the provisions of subparagraph (b) above and the
optionees' prior exercise rights thereunder. The amount and price of converted
options shall be determined by adjusting the amount and price of the options
granted hereunder in the same proportion as used for determining the number of
shares of Exchange Stock the holders of the Common Stock receive in such merger,
consolidation, acquisition of property or stock, separation or reorganization.
In accordance with subparagraph (b) above, the converted options shall be fully
vested whether or not the vesting requirements set forth in the option agreement
have been satisfied.
(d) Fractional Shares. In the event of any adjustment in the number of
shares covered by any option pursuant to the provisions hereof, any fractional
shares resulting from such
<PAGE>
adjustment will be disregarded and each such option will cover only the number
of full shares resulting from the adjustment.
(e) Determination of Board to be Final. All adjustments under this
paragraph 6 shall be made by the Board, and its determination as to what
adjustments shall be made, and the extent thereof, shall be final, binding and
conclusive. Unless an optionee agrees otherwise, any change or adjustment to an
Incentive Stock Option shall be made in such a manner so as not to constitute a
"modification" as defined in Section 424(h) of the Code and so as not to cause
the optionee's Incentive Stock Option issued hereunder to fail to continue to
qualify as an Incentive Stock Option.
(f) Change of Control Defined. For purposes hereof, a change in control of
the Company is deemed to occur if (1) there occurs (A) any consolidation or
merger in which the Company is not the continuing or surviving entity or
pursuant to which shares of the Common Stock would be converted into cash,
securities or other property, other than a merger of the Company in which the
holders of the Common Stock immediately prior to the merger have the same
proportionate ownership of common stock of the surviving corporation immediately
after the merger, or (B) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or substantially all the
Company's assets; (2) the Company's stockholders approve any plan or proposal
for the liquidation or dissolution of the Company; (3) any person (as such term
is used in Sections 13(d) and 14(d)(2) of the Exchange Act) shall become the
beneficial owner (within the meaning of Rule 13d-3 under said Act) of 40% or
more of the Common Stock other than pursuant to a plan or arrangement entered
into by such person and the Company; or (4) during any period of two consecutive
years, individuals who at the beginning of such period constitute the entire
Board of Directors shall cease for any reason to constitute a majority of the
Board unless the election or nomination for election by the Company's
stockholders of each new director was approved by a vote of at least two-thirds
of the directors then still in office who were directors at the beginning of the
period.
7. Amendment and Termination of the Plan. The Board may amend or terminate
the Plan. Except as otherwise provided in the Plan with respect to equity
changes, any amendment which would increase the aggregate number of shares of
Common Stock as to which options may be granted under the Plan, materially
increase the benefits under the Plan, or modify the class of persons eligible to
receive options under the Plan shall be subject to the approval of the holders
of a majority of the Common Stock issued and outstanding. No amendment or
termination may affect adversely any outstanding option without the written
consent of the optionee.
8. No Rights Conferred. Nothing contained herein will be deemed to give any
individual any right to receive an option under the Plan or to be retained in
the employ or service of the Company or any Subsidiary.
9. Governing Law. The Plan and each option agreement shall be governed by
the laws of the State of Delaware.
<PAGE>
10. Decisions and Determinations of Committee to be Final. Except to the
extent rights or powers under this Plan are reserved specifically to the
discretion of the Board, the Committee shall have full power and authority to
interpret the Plan and any option agreement made under the Plan and to determine
all issues which arise thereunder or in connection therewith, and the decision
of the Board or the Committee, as the case may be, shall be binding and
conclusive on all interested persons.
11. Term of the Plan. The Plan shall be effective as of February 28, 1992,
the date on which it was adopted by the Board, subject to the approval of the
stockholders of the Company, which approval was granted on June 1, 1992. The
Plan will terminate on February 27, 2002, the date ten years after the date of
adoption by the Board, unless sooner terminated by the Board. The rights of
optionees under options outstanding at the time of the termination of the Plan
shall not be affected solely by reason of the termination and shall continue in
accordance with the terms of the option (as then in effect or thereafter
amended).
EXHIBIT 5
FULBRIGHT & JAWORSKI
L.L.P.
A Registered Limited Liability Partnership Houston
666 Fifth Avenue Washington, D.C.
New York, New York 10103-3198 Austin
San Antonio
TELEPHONE: 212/318-3000 Dallas
FACSIMILE: 212/752-5958 New York
Los Angeles
WRITER'S DIRECT DIAL NUMBER: London
Hong Kong
August 6, 1997
Bio-Technology General Corp.
70 Wood Avenue South
Iselin, New Jersey 08830
Dear Sirs:
We refer to the Registration Statement on Form S-8 (the "Registration
Statement") to be filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended (the "Act"), on behalf of Bio-Technology
General Corp., a Delaware corporation (the "Company"), relating to 6,000,000
shares of the Company's Common Stock, $.01 par value (the "Common Stock"), to be
issued pursuant to the Bio-Technology General Corp. 1992 Stock Option Plan (the
"Plan").
As counsel to the Company, we have examined such corporate records, other
documents and such questions of law as we have deemed necessary or appropriate
for the purposes of this opinion and, upon the basis of such examinations,
advise you that in our opinion all necessary corporate proceedings by the
Company have been duly taken to authorize the issuance of the Common Stock
pursuant to the Plan and the shares of Common Stock being registered pursuant to
the Registration Statement, when issued and paid for in accordance with the
terms of the Plan, will be duly authorized, validly issued, fully paid and
non-assessable.
We consent to the filing of this opinion as Exhibit 5 to the Registration
Statement. This consent is not to be construed as an admission that we are a
person whose consent is required to be filed with the Registration Statement
under the provisions of the Act.
Very truly yours,
/s/ FULBRIGHT & JAWORSKI L.L.P.
----------------------------------------------
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated February 28, 1997
included in Bio-Technology General Corp.'s Form 10-K for the year ended December
31, 1996 and to all references to our Firm included in this registration
statement on Form S-8 registering 6,000,000 shares of common stock.
New York, New York ARTHUR ANDERSEN LLP
August 4, 1997
