Registration No. 333-_____
Registration No. 333-699751
As filed with the Securities and Exchange Commission on November 9, 1999
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
------------
IMMUNOMEDICS, INC.
(Exact name of registrant as specified in its charter)
Delaware 61-1009366
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
300 American Road
Morris Plains, New Jersey 07950
(973) 605-8200
(Address, including zip code, and telephone
number, including area code, of
registrant's principal executive
offices)
------------
Dr. David M. Goldenberg
Chairman and Chief Executive Officer
Immunomedics, Inc.
300 American Road
Morris Plains, New Jersey 07950
(973) 605-8200
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------
Copies of all communications,
including all communications
sent to the agent for
service, should be sent to:
Michael D. Schwamm, Esq.
Warshaw Burstein Cohen
Schlesinger & Kuh, LLP
555 Fifth Avenue
New York, New York 10017
(212) 984-7700
Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box: [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: [x]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
- --------
1 As permitted by Rule 429 under the Securities Act of 1933, the prospectus
contained in this registration statement also relates to Registration
Statement on Form S-3, registration no. 333-69975.
<PAGE>
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [ ]
<TABLE>
<CAPTION>
====================================================================================================================================
CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Title of Each Class of Amount of Shares to be Proposed Maximum Proposed Maximum Amount of
Securities to be Registered(1) Registered(2) Offering Price Per Aggregate Registration Fee(4)
Share(3)(4) Offering Price(3)(4)
- ------------------------------------------------------------------------------------------------------------------------------------
Common Stock, $.01 par
value per share 9,878,463 $1.1875 $11,730,675 $3,261
- ------------------------------------------------------------------------------------------------------------------------------------
Common Stock, $.01 par 7,950,069 --- -- ---
value per share
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) We originally registered on Form S-3 (Registration No. 333-69975) an
aggregate of 10,000,000 shares of common stock issuable upon conversion
of shares of our Series F Preferred Stock. The Series F Preferred
Stock was originally issued in December 1998. Through the date of this
registration statement, 232.5 shares of Series F Preferred Stock have
been converted into 2,049,931 shares of common stock. Accordingly, this
registration statement is intended to cover an additional 9,878,463
shares of common stock in addition to the 7,950,069 shares of common
stock previously registered, all of which may be issuable upon
conversion of the remaining 1,017.5 shares of Series F Preferred Stock.
(2) Consists of shares of common stock issuable upon conversion of
outstanding shares of Series F Preferred Stock.
(3) Relates to 9,878,463 shares of common stock which may be issuable upon
conversion of shares of the Series F Preferred Stock that have not been
previously registered. As set forth in note (1), we previously
registered pursuant to the original registration statement 10,000,000
shares of common stock issuable upon conversion of the shares of Series
F Preferred Stock, and paid the associated registration fee of $8,601.
Of these shares, 7,950,069 shares of common stock have yet to be resold
pursuant to the original registration statement.
(4) Pursuant to Rule 457(c), the proposed maximum offering price per share
and proposed maximum aggregate offering price have been calculated on
the basis of the average of the high and low sale prices of our common
stock as reported on The Nasdaq National Market on November 3, 1999.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.
<PAGE>
The information in this Prospectus is subject to completion and may be changed.
The selling stockholders may not sell these securities until the registration
statement filed with the Securities and Exchange Commission (of which this
Prospectus is a part) is effective. This Prospectus is not an offer to sell
these securities, and is not soliciting an offer to buy these securities, in any
state where such offer or sale is not permitted
PROSPECTUS
IMMUNOMEDICS, INC.
17,828,532 Shares of Common Stock
THE ISSUER
Immunomedics. Inc.
300 American Road
Morris Plains, New Jersey 07950
(973) 605-8200
THE SELLING STOCKHOLDERS
The selling stockholders are offering to sell shares of common stock that they
may acquire upon conversion of shares of our Series F Convertible Preferred
Stock that we issued to them on December 9, 1998 pursuant to a Securities
Purchase Agreement. This prospectus covers an additional 9,878,463 shares of
common stock in addition to the 7,950,069 shares of common stock included in a
prior prospectus. Additional information concerning our agreement with the
selling stockholders is set forth under the caption "Immunomedics - December
1998 Financing."
TRADING SYMBOL
Nasdaq National Market - "IMMU"
THE OFFERING
The selling stockholders may sell shares of our common stock from time to time
on the Nasdaq National Market at the prevailing market price or in private,
negotiated transactions. The shares will be sold at prices determined by the
selling stockholders. We will not receive any part of the proceeds from the
sale. We are paying the expenses in connection with the registration of the
shares with the SEC. The selling stockholders may be deemed to be "underwriters"
within the meaning of the Securities Act in connection with the sale of shares
that they may receive upon conversion of the Series F Stock.
A purchase of shares involves a high degree of risk. You should purchase shares
only if you can afford a complete loss of your investment. See "Risk Factors"
beginning on page 3.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
_________, 1999
<PAGE>
Table of Contents
Risk Factors...................................................................4
We Have a History of Operating Losses and May Never Become
Profitable..........................................................4
We May Not Be Able to Successfully Develop a Market for Our Approved
Products............................................................4
We May Not Receive Approval to Sell LeukoScan in the United States
in a Timely Manner..................................................4
We May Not Be Able to Bring to Market the Products We Are Currently
Developing..........................................................4
If We Do Not Obtain Additional Capital, We May Be Required to Curtail
Our Operations......................................................5
Our Limited Marketing and Sales Experience and Capability Could Impact
Our Ability to Successfully Sell Our Current Products...............5
We May Have to Rely on Partners to Help Us Market and Sell Our
Products Under Development..........................................5
We Could Be Temporarily Unable to Sell Our Products If Our Agreements
with our Distributors Were Terminated...............................5
We Could Be Temporarily Unable to Sell Our Products If Our Agreement
with our End Stage Manufacturer Was Terminated......................5
Our Internal Manufacturing Capability May Limit What We Can Sell......5
We May Be Unable to Continue to Use Mouse Fluids for Future Products
Which Could Require Us to Make Expensive and Time Consuming Changes
to Our Products in Development......................................6
Our Product Development Is Dependent Upon Our Continued Relationship
with The Center for Molecular Medicine and Immunology...............6
Certain Potential Conflicts of Interest Exist with The Center for
Molecular Medicine and Immunology Which Could Affect Our
Operations..........................................................6
We May Not Be Able to Obtain Government Regulatory Approval in a
Timely Manner to Market and Sell Our Products.......................6
We Must Maintain Our Manufacturing Facilities in Accordance With
Government Regulatory Requirements..................................7
Changes to Health Care Reimbursement Could Adversely Affect Our
Operations..........................................................7
The Loss of Key Employees Could Adversely Affect our Operations.......7
We Face Substantial Competition in the Biotechnology Field and
May Not Be Able to Successfully Compete.............................7
Our Products May Be Rendered Obsolete By Rapid Technological Change...8
If We Are Unable to Protect Our Intellectual Property Rights, We
Could Lose Our Competitive Advantage................................8
Our Products May Infringe Third Party Intellectual Property Rights....8
Our Operations Could Suffer If We Are Unsuccessful in Our Pending
Infringement Claims Concerning Our CEA Antibodies...................8
Product Liability Claims in Excess of the Amount of Our Insurance
Would Adversely Affect Our Financial Condition......................8
Our Principal Stockholder Can Influence Most Matters Requiring
Approval By Our Stockholders........................................9
If We Are Required to Redeem the Series F Stock or Make Penalty
Payments, Our Financial Condition Would Be Adversely Affected.......9
Stockholders May Experience Substantial Dilution From the
Conversion of the Series F Stock....................................9
Short Selling of Our Common Stock Could Further Depress the Market
Price for Our Common Stock..........................................9
Resales of Shares Held By Our Directors and Executive Officers May
Lower the Market Price of Our Common Stock..........................9
Our Stock Price Has Been Volatile....................................10
Potential Loss of Our Nasdaq Listing Could Make it More Difficult
to Sell our Shares and Affect Our Liquidity........................10
Stockholders Could Be Adversely Affected By Our Anti-Takeover
Provisions.........................................................10
Our Operations Could Be Affected By Year 2000 Issues.................10
No Expectation that We Will Pay Dividends............................11
Special Note Regarding Forward-Looking Statements....................11
Where You Can Find More Information...........................................11
Immunomedics..................................................................12
2
<PAGE>
Description of Our Business..........................................12
December 1998 Financing..............................................14
Use of Proceeds...............................................................17
Selling Stockholders..........................................................18
Plan of Distribution..........................................................20
Manner of Sales; Broker-Dealer Compensation..........................20
Filing of a Post-Effective Amendment In Certain Instances............21
Certain Persons May Be Deemed to Be Underwriters.....................21
Regulation M.........................................................21
Legal Matters.................................................................22
Experts .....................................................................22
You should rely on the information incorporated by reference or provided in this
prospectus or any supplement. We have not authorized anyone to provide you with
different information. You should not assume that the information in this
prospectus or any supplement is accurate as of any date other than the date on
the front of such document. We are not making an offer of our shares in any
state where the offer is not permitted.
3
<PAGE>
Risk Factors
Investing in our common stock involves a high degree of risk. As a
result, you should be able to sustain a complete loss of your investment. In
addition to the other information in this prospectus, you should carefully
consider the following factors before purchasing any of our common stock.
We Have a History of Operating Losses and May Never Become Profitable
We have had significant operating losses since our formation in 1982
and have not earned a profit since our inception. These operating losses and
failure to be profitable have been due mainly to the significant amount of money
that we have had to spend on research and development. As of June 30, 1999, we
had an accumulated deficit of approximately $99,100,000. We expect to continue
to experience operating losses until such time, if at all, that we are able to
generate sufficient revenues from sales of CEA-Scan(R), LeukoScan(R) and/or our
other potential products.
We May Not Be Able to Successfully Develop a Market for Our Approved Products
CEA-Scan and LeukoScan are the only products which we are licensed to
market and sell. To date, we have received only limited revenues from the sale
of these products. We cannot assure you that these products or any of our
proposed products will achieve market acceptance or generate significant sales.
We May Not Receive Approval to Sell LeukoScan in the United States in a Timely
Manner
We have not yet received approval from the FDA to market and sell
LeukoScan in the United States and cannot assure you as to when, if ever, that
we will obtain approval. In addition, the FDA could impose conditions on its
approval, which could significantly affect the commercial viability of the
product or could require us to undertake significant additional studies or
otherwise expend additional significant funds. If we do not receive approval to
market and sell LeukoScan in the United States in the near future or if the FDA
imposes significant conditions or restrictions, our business and operations
could be significantly and adversely affected.
We May Not Be Able to Bring to Market the Products We Are Currently Developing
Before any of our products that we are currently developing can be
marketed and sold, we must undertake substantial research and development. All
new products face a high degree of uncertainty, including the following:
* We may not receive regulatory approval to perform human clinical trials
for the products we currently have planned or we may be unable to
successfully complete our ongoing clinical trials.
* The results from preclinical studies and clinical trials may not be
indicative of results that will be obtained in later-stage testing.
* We may be unable to timely recruit a sufficient number of patients for
our clinical trials. Delays in planned patient enrollment may result in
increased costs and delays.
* We may be unable to obtain approval from the FDA and comparable foreign
authorities because we are unable to demonstrate that the product is
safe and effective for the intended use, or obtaining regulatory
approval may take significantly more time and cost significantly more
money than we currently anticipate.
* We may discover that the product has undesirable or unintended side
effects or other characteristics that make it impossible or
impracticable for us to continue development or which may limit the
product's commercial use.
* We do not expect that any new product which is currently in research
and development will be commercially available for at least several
years.
* We may be unable to produce the product in commercial quantities at
reasonable cost.
4
<PAGE>
* We may be unable to successfully market the product or to find an
appropriate corporate partner, if necessary, to assist us in the
marketing of the product.
* The product may not gain satisfactory market acceptance.
* The product may be superceded by another product commercialized for the
same indication or may infringe patents issued to others, which would
prevent us from marketing and selling the product.
If we are unable to continue to develop products that we can
successfully market, our business, financial condition and results of operations
will be significantly and adversely affected.
If We Do Not Obtain Additional Capital, We May Be Required to Curtail Our
Operations
Without a significant increase in product revenues or other infusion of
capital during our current fiscal year which ends June 30, 2000, we will be
required to significantly reduce our operating expenses, including the amount of
resources devoted to marketing and sales, product development and clinical
trials, which could have a significant and adverse effect on us. We cannot
assure you that any additional financing will be available to us at all or on
terms we find acceptable or that the terms of any financing will not cause
substantial dilution to our existing stockholders.
Our Limited Marketing and Sales Experience and Capability Could Impact Our
Ability to Successfully Sell Our Current Products
We are relying, in substantial part, on our own limited sales and
marketing organization to market CEA-Scan and LeukoScan. We cannot assure you
that we can successfully maintain and continue to build our sales force. If we
are unable to continue to build and maintain our sales force, our financial
condition and operating results may be significantly and adversely affected.
We May Have to Rely on Partners to Help Us Market and Sell Our Products Under
Development
The marketing and sale of our proposed products may be dependent upon
our entering into arrangements with corporate partners. We cannot assure you
that we will be successful in forming these relationships or that these
relationships, even if formed, will be successful.
We Could Be Temporarily Unable to Sell Our Products If Our Agreements with our
Distributors Were Terminated
We currently do not have the resources to internally develop and
maintain the operating procedures required by the FDA and comparable foreign
regulatory authorities to oversee distribution of our products. As a result, we
have entered into arrangements with third parties to perform this function for
the foreseeable future. If these agreements are terminated, we will be required
to enter into arrangements with other government approved third parties in order
to be able to distribute our products. We will be unable to continue to
distribute our products until an acceptable alternative is identified. If we
were even only temporarily unable to distribute our products, our business could
be significantly and adversely effected.
We Could Be Temporarily Unable to Sell Our Products If Our Agreement with our
End Stage Manufacturer Was Terminated
We rely on a single third party to perform certain end-stage portions
of the manufacturing process for CEA-Scan and LeukoScan which we are unable or
do not have the resources to perform. If this third party were to become
unavailable, we would be unable to complete the manufacturing process until we
entered into an agreement with another qualified entity. We cannot assure that
we will be able to negotiate an agreement with another entity on terms we
consider acceptable, if at all. Even if we were able to do so, any substantial
delay in our ability to manufacture our products could significantly and
adversely affect our operations.
Our Internal Manufacturing Capability May Limit What We Can Sell
5
<PAGE>
If demand for our approved product increases significantly, we cannot
assure you that we will continue to have the capacity to manufacture commercial
quantities successfully. In addition, if any of our other products are approved
for marketing and sale, we cannot assure you that we will continue to have the
capacity and expertise to manufacture commercial quantities of multiple products
successfully or with acceptable profit margins. If we were even only temporarily
unable to manufacture sufficient quantities of our products to meet demand, our
business could be significantly and adversely effected.
We May Be Unable to Continue to Use Mouse Fluids for Future Products Which Could
Require Us to Make Expensive and Time Consuming Changes to Our Products in
Development
CEA-Scan and certain of our other imaging agents are derived from
ascites fluid produced in mice. Regulatory authorities, particularly in Europe,
have expressed concerns about the use of mice fluid for the production of
monoclonal antibodies. We cannot assure you that regulatory authorities will
agree that our quality control procedures will be adequate for future products.
While we are continuing our development efforts to produce certain of our
monoclonal antibodies using cell culture methods, this process constitutes a
substantial production change, which will require additional manufacturing
equipment and new regulatory approval. We cannot assure you that we will have
the resources to acquire the additional manufacturing equipment and resources or
that we will receive the required regulatory approval on a timely basis, if at
all. We also have contracted with a third party for the development and
production of certain humanized antibodies, but we cannot assure that these
efforts will be successful.
Our Product Development Is Dependent Upon Our Continued Relationship with The
Center for Molecular Medicine and Immunology
The Center for Molecular Medicine and Immunology, a not-for-profit
cancer research center, performs pilot and pre-clinical trials in product areas
of importance to us. CMMI also conducts basic research and patient evaluations
in a number of areas of potential interest to us. If CMMI were no longer to
provide these services, we would have to make alternative arrangements with
third parties which could significantly delay and increase expenses associated
with pre-clinical testing and initial clinical trials.
Certain Potential Conflicts of Interest Exist with The Center for Molecular
Medicine and Immunology Which Could Affect Our Operations
Dr. David M. Goldenberg, our Chairman and Chief Executive Officer, is
the founder, President and a member of the Board of Trustees of CMMI. Dr.
Goldenberg devotes more of his time working for CMMI than for us. In addition,
other key personnel currently have responsibilities both to CMMI and us. As a
result, the potential for conflict of interest exists and disputes could arise
over the allocation of research projects and ownership of intellectual property
rights.
We May Not Be Able to Obtain Government Regulatory Approval in a Timely Manner
to Market and Sell Our Products
Regulation by governmental authorities in the United States and foreign
countries is a significant factor in the manufacture and marketing of our
presently marketed and proposed products as well as our research and development
activities. All of our proposed products will require regulatory approval by
governmental agencies prior to commercialization and our products must undergo
rigorous preclinical and clinical testing and other premarket approval
procedures by the FDA and comparable foreign authorities. In addition, since
certain of our potential products involve the application of new technologies,
regulatory approvals may take longer than for products produced using more
conventional methods. Once we begin clinical trials for a new diagnostic or
therapeutic product, it may take five to ten years or more to receive the
required regulatory approval to commercialize that product and begin to market
it to the public. Various federal and, in some cases, state statutes and
regulations also govern or influence the manufacturing, safety, labeling,
storage, record keeping and marketing of these products. The lengthy process of
seeking these approvals, and the subsequent compliance with applicable statutes
and regulations, will require us to expend substantial resources. If we fail to
obtain or are otherwise substantially delayed in obtaining, regulatory
approvals, our business and operations could be significantly and adversely
affected.
6
<PAGE>
In responding to a new drug application, or a biologic license
application, government regulators may grant marketing approvals, request
additional information or further research, or deny the application if it
determines that the application does not satisfy its regulatory approval
criteria. Approvals may not be granted on a timely basis, if at all, or if
granted may not cover all the clinical indications for which we are seeking
approval or may contain significant limitations in the form of warnings,
precautions or contraindications with respect to conditions of use.
Our Business Involves the Use of Hazardous Materials
In addition to laws and regulations enforced by the FDA, we are also
subject to regulation under various other foreign, federal, state or local laws
and regulations. Our research and development involve the controlled use of
hazardous materials, chemicals, viruses and various radioactive compounds. The
risk of accidental contamination or injury from these materials cannot be
completely eliminated. If an accident occurs, we could be held liable for any
damages that result and any liability could exceed our resources.
We Must Maintain Our Manufacturing Facilities in Accordance With Government
Regulatory Requirements
Our facilities are subject to inspection by the FDA and comparable
foreign authorities. A separate license is sometimes required for commercial
manufacture of any product. Failure to maintain these licenses or to meet the
regulatory inspection criteria would result in disruption to our manufacturing
processes and could have a significant and adverse effect on our business and
operations.
Changes to Health Care Reimbursement Could Adversely Affect Our Operations
Our ability to successfully commercialize our products will depend in
part on the extent to which reimbursement for the cost of our products and
related treatment will be available from government health administration
authorities, private health insurers and other organizations. These third-party
payers are increasingly challenging the price of medical products and services.
Several proposals have been made that may lead to a government-directed national
health care system. Adoption of this type of system could further limit
reimbursement for medical products, and we cannot assure you that adequate
third-party coverage will be available to enable us to maintain price levels
sufficient to realize an appropriate return on our investment in product
development. In addition, we also cannot assure you that the U.S. government or
foreign governments will not implement a system of price controls. Any system
might significantly and adversely affect our ability to market our products
profitably.
The Loss of Key Employees Could Adversely Affect our Operations
As a small biotechnology company, we are heavily dependent upon the
talents of Dr. Goldenberg and certain key scientific personnel. If Dr.
Goldenberg or any of our other key personnel leave our employ, our operations
could be significantly and adversely affected. In addition, from time to time we
have a need to expand our management and scientific personnel. Competition for
qualified personnel in the biotechnology and pharmaceutical industries is
intense and we cannot assure you that we will be successful in our recruitment
efforts. If we are unable to retain or, when needed, attract additional
qualified personnel, our operations also could be significantly and adversely
affected.
We Face Substantial Competition in the Biotechnology Field and May Not Be Able
to Successfully Compete
The biotechnology industry is highly competitive, particularly in the
area of cancer diagnostic and therapeutic products. We are likely to encounter
significant competition with respect to our existing products as well as our
products currently under development. A number of companies, including IDEC
Pharmaceuticals, Genentech, SmithKline Beecham, Nycomed Amersham, and Coulter
Pharmaceutical, are engaged in the biotechnology field, and in particular the
development of cancer diagnostic and therapeutic products. Many of these
companies have significantly greater financial, technical and marketing
resources than us. In addition, many of these companies may have more
established positions in the pharmaceutical industry and may be better equipped
than us to develop, refine and market their products.
7
<PAGE>
We also expect to face increasing competition from universities and
other non-profit research organizations. These institutions carry out a
significant amount of research and development in the field of antibody-based
technology. These institutions are becoming increasingly more aware of the
commercial value of their findings and more active in seeking patent and other
proprietary rights, as well as licensing revenues.
Our Products May Be Rendered Obsolete By Rapid Technological Change
We are pursuing an area of product development in which there is the
potential for extensive technological innovations in relatively short periods of
time. We cannot assure you that our competitors will not succeed in developing
products that are safer or more effective than our products. Rapid technological
change or developments by others may result in our current products as well as
those in development becoming noncompetitive or obsolete.
If We Are Unable to Protect Our Intellectual Property Rights, We Could Lose Our
Competitive Advantage
Our commercial success is highly dependent upon patents and other
proprietary rights that we own or license. We cannot assure you that our key
patents will not be invalidated or will provide us protection that has
commercial significance. Litigation may be necessary to protect our patent
positions, which could be costly and time consuming. If any of our key patents
that we own or license are invalidated, our business may be significantly and
adversely affected. In addition, other companies may independently develop
similar trade secrets or know-how or obtain access to our trade secrets,
know-how or proprietary technology, which could significantly and adversely
affect our business.
Our Products May Infringe Third Party Intellectual Property Rights
Other companies may have filed applications for, or have been issued,
patents and obtained other proprietary rights to technology which may be
potentially useful to us. Since we do not have the resources to maintain a staff
whose primary function is to investigate the level of protection afforded to
third parties on devices and components which we use in our products, it is
possible that a third party could successfully claim that our products infringe
on their intellectual property rights. If this were to occur, we may be subject
to substantial damages, and we may not be able to obtain appropriate licenses at
a cost we could afford and we may not have the ability to timely redesign our
products. If we are required to pay damages or are unable to obtain these
rights, our business could be significantly and adversely affected. Even if we
are successful in defeating any alleged infringement claims, litigation could
result in a substantial diversion of managerial time and resources, which could
be better and more fruitfully utilized on other activities.
Our Operations Could Suffer If We Are Unsuccessful in Our Pending Infringement
Claims Concerning Our CEA Antibodies
We are involved in certain litigation with F. Hoffmann-LaRoche and its
affiliates concerning the validity our European patents covering the antibody we
use in our CEA-Scan cancer imaging product and our CEA-Cide(TM) cancer therapy
product, as well as the use of highly specific anti-CEA antibodies for a number
of other uses. We have claimed that they have infringed our patent and they have
counterclaimed seeking to nullify the patents that were issued. If we receive an
unfavorable outcome in any of these matters, our business could be significantly
and adversely affected.
Product Liability Claims in Excess of the Amount of Our Insurance Would
Adversely Affect Our Financial Condition
The clinical testing, marketing and manufacturing of our products
necessarily involve the risk of product liability. While we currently have
product liability insurance, we cannot assure that we will be able to obtain
insurance in the future at an acceptable cost, if at all. If we cannot maintain
our existing or comparable liability insurance, our ability to test clinically
and market our products may be significantly impaired. Moreover, the amount and
scope of our insurance coverage or indemnification arrangements with any
distributor or other third party upon which we rely may be inadequate to protect
us in the event of a successful product liability claim. Any claim in excess of
the amount any insurance we then had could significantly and adversely affect
our financial condition.
8
<PAGE>
Our Principal Stockholder Can Influence Most Matters Requiring Approval By Our
Stockholders
As of November 9, 1999, Dr. Goldenberg, our Chairman and Chief
Executive Officer, controlled the right to vote over approximately 32% of our
common stock. As a result of this voting power, Dr. Goldenberg may have the
ability to determine the election of all of our directors, direct our policies
and control the outcome of substantially all matters which may be put to a vote
of our stockholders.
If We Are Required to Redeem the Series F Stock or Make Penalty Payments, Our
Financial Condition Would Be Adversely Affected
As discussed below in the section "Immunomedics - December 1998
Financing" upon the occurrence of certain circumstances, we may be required to
redeem the Series F Stock or pay significant penalties. These penalties could be
as much as 15% per year of the stated value of the Series F Stock. We also may
be required to reduce the conversion price of the Series F Stock. In addition,
if the registration statement of which this prospectus is a part is not declared
effective by the SEC on or before December 11, 1999, we may be required to pay
the holders of the Series F Stock penalties equal to $5 per day for each
outstanding share of Series F Stock, retroactive to when our original prospectus
first became insufficient to cover all the shares issuable upon conversion of
the Series F Stock. These penalties could be significant. If we are required to
redeem the Series F Stock or make the penalty payments, we may not have the
financial ability to make these payments. Even if we have the financial ability,
these payments could significantly and adversely affect our financial condition
and deplete our cash resources.
Stockholders May Experience Substantial Dilution From the Conversion of the
Series F Stock
Because the conversion price of the Series F Stock is not fixed, we may
be required to issue to the holders of the Series F Stock a significant number
of shares of our common stock. The conversion price generally will be the lower
of $2.50 and the average closing bid price of our common stock over the lowest
15 days during the 45-day period immediately prior to the applicable conversion
date. As of November 9, 1999, the conversion price would have been $1.18 per
share and we would have been required to issue approximately 8,914,266 of our
common stock had the holders converted all of their remaining outstanding Series
F Stock on this date. If our stock price decreases, we would be required to
issue an increased number of shares and the greater the decline in the market
price, the greater the number of shares we would be required to issue upon
conversion of our Series F Stock.
Given that the conversion price is based on the average of the lowest
closing price during a specified period, the market price for our common stock
may be significantly greater than the conversion price for the Series F Stock in
effect at the time of conversion. In this case, the conversion of a significant
number of Series F Stock into common stock during that period would
significantly dilute the percentage ownership interest of our existing common
stockholders.
Short Selling of Our Common Stock Could Further Depress the Market Price for Our
Common Stock
Subject to the limitations described below in "Immunomedics - December
1998 Financing," the holders of the Series F Stock are permitted to sell short
our common stock; that is sell shares of common stock that they do not own. The
selling stockholders could then convert their Series F Stock and use the shares
of common stock received upon conversion to cover their short position. The
perception that the selling stockholders may sell short our common stock may
cause others to sell their shares as well. An increase in the sales volume of
our common stock, whether short sales or not and whether the sales are by the
selling stockholders or others, could potentially cause the market price of our
common stock to decline further. Since the Series F Stock became convertible in
June 1999, the monthly reported short position in our common stock had increased
250% from 575,000 at June 15, 1999 to its high of 2,103,000 at September 15,
1999 and as of October 15, 1999, the short position was 1,740,322.
Resales of Shares Held By Our Directors and Executive Officers May Lower the
Market Price of Our Common Stock
As of November 9, 1999, we had a total of 39,938,021 shares of common
stock outstanding,
9
<PAGE>
7,130,272 of which were held by our directors and executive officers. These
shares may only be resold in limited quantities and only within the limitations
imposed by Rule 144 under the Securities Act. The mere prospect that these
shares may be publicly resold could lower the market price for our common stock.
Our Stock Price Has Been Volatile
We believe that a variety of factors have caused the market price of
our common stock to fluctuate substantially, and that it will continue to
fluctuate in the future. These factors include:
* actual or anticipated fluctuations in our operating results;
* the status of our products in development;
* new products or technical innovations by us or by our existing or
potential competitors;
* the formation or termination of our corporate alliances and
distribution arrangements;
* prolonged periods of regulatory review of new products or new uses for
existing products;
* determinations regarding our patent applications and those of others;
* trading strategies occurring in the market place with respect to our
common stock; and
* general market conditions and other factors unrelated to us or outside
our control.
Potential Loss of Our Nasdaq Listing Could Make it More Difficult to Sell our
Shares and Affect Our Liquidity
If the bid price of our common stock were to fall below $1.00 per
share, if we were to have less than $4,000,000 in net tangible assets (total
assets less total liabilities and goodwill), or if the value of our common stock
held by our stockholders (other than our directors and executive officers) were
to be less than $5,000,000, our common stock could be delisted from The Nasdaq
Stock Market. If our common stock were delisted from Nasdaq, trading if any,
would thereafter be conducted in the over-the-counter market. This would make it
more difficult for an investor to dispose of, or to obtain accurate quotations
for, our common stock. Additionally, it may become more difficult for us to
raise funds through the sale of our securities. Finally, as discussed elsewhere
in this prospectus, a delisting of our common stock would also give the holders
of the Series F Stock certain redemption rights.
Stockholders Could Be Adversely Affected By Our Anti-Takeover Provisions
Our board of directors has the authority, without any further vote by
our stockholders, to issue up to 10,000,000 shares of preferred stock in one or
more series and to determine the designations, powers, preferences and relative,
participating, optional or other rights thereof, including the dividend rate,
whether dividends are cumulative, conversion rights, voting rights, rights and
terms of redemption, redemption price and liquidation preference. Issuance of
preferred stock could have the effect of delaying, deterring or preventing a
change in control of our company, or could impose various procedural and other
requirements that could make it more difficult for holders of our common stock
to effect certain corporate actions, including the ability to replace incumbent
directors and to accomplish transactions opposed by the incumbent board of
directors. The rights of the holders of our common stock would 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.
Our Operations Could Be Affected By Year 2000 Issues
We have completed a review of our business systems, including our
computer systems and manufacturing equipment, and have sent written inquiries to
our customers, distributors and vendors as to their progress in identifying and
addressing problems that their systems may face in correctly interpreting and
processing date information as the year 2000 approaches and is reached. We could
encounter problems with supplier and/or revenue sources which could affect us.
We cannot accurately
10
<PAGE>
predict the occurrence or outcome of any these problems, nor can we estimate the
dollar amount of these problems. In addition, we cannot assure you that a
failure by a third party to ensure year 2000 compliance will not significantly
and adversely effect us.
No Expectation that We Will Pay Dividends
We have never paid any dividends on our common stock. For the
foreseeable future, we expect to retain earnings, if any, to finance the
expansion and development of our business. Any future payment of dividends will
be within the discretion of our Board of Directors and will depend upon a
variety of factors, including our earnings, capital requirements, and operating
and financial condition. In addition, we are required to obtain the approval of
the holders of the Series F Stock prior to the payment of any dividends on our
common stock.
Special Note Regarding Forward-Looking Statements
We have made statements in this prospectus, and in the documents we
incorporate by reference, that are "forward-looking statements" within the
meaning of the Securities Act and the Securities Exchange Act. Sometimes these
statements contain words like "may," "believe," "expect," "continue," "intend,"
"anticipate" or other similar words. These statements could involve known and
unknown risks, uncertainties and other factors that might significantly alter
the actual results suggested by the statements. In other words, our performance
might be quite different from what the forward-looking statements imply. The
following factors, as well as those discussed above in this "Risk Factors"
section and in the documents which we incorporate by reference, could cause our
performance to differ from the implied results:
* inherent uncertainties accompanying the marketing of CEA-Scan
and LeukoScan.
* inherent uncertainties involving new product development and
marketing.
* inability to obtain capital for continued product development
and commercialization.
* actions of regulatory authorities concerning product approval.
* actions of government and private organizations concerning
reimbursement of medical expenses.
* impact of competitive products and pricing.
* results of clinical trials.
* loss of key employees.
* changes in general economic and business conditions.
* changes in industry trends.
We have no obligation to release publicly the result of any revisions
to any of our "forward-looking statements" to reflect events or circumstances
that occur after the date of this prospectus or to reflect the occurrence of
other unanticipated events.
Where You Can Find More Information
We publicly file annual, quarterly and current reports, proxy
statements and other documents with the SEC. You may read and copy any of these
documents at the SEC's public reference rooms in Washington, D.C., New York City
and Chicago. Please call the SEC at 1-800-SEC-0330 for further information on
the public reference rooms. The SEC maintains a Internet website at
http://www.sec.gov where our publicly filed documents may be obtained.
This prospectus is part of a registration statement filed with the SEC.
Our registration statement
11
<PAGE>
contains more information than this prospectus regarding us and our common stock
and includes supplemental exhibits and schedules. You can obtain a copy of the
registration statement from the SEC at the address listed above or from its
Internet website.
The SEC allows us to "incorporate by reference" into this prospectus
the information we file with it. This means that we are deemed to be disclosing
such information to you by referring you to those documents. This information is
important and should be reviewed. The information incorporated by reference is
considered to be part of this prospectus, and later information that we file
with the SEC will automatically update and supercede the information in this
prospectus.
We incorporate by reference into this prospectus the documents listed
below and any future filings we make with the SEC under Sections 13(a), 13(c),
14 or 15(d) of the Securities Exchange Act:
* Annual Report on Form 10-K for the fiscal year ended June 30,
1999;
* Proxy Statement, dated October 18, 1999, with respect to our
1999 annual meeting of
stockholders; and
* Description of the common stock contained in Item 1 of our
Registration Statement on Form 8-A, dated May 7, 1984.
You may request a copy of these filings, at no cost, by contacting us
at the following address:
Immunomedics, Inc.
300 American Road
Morris Plains, New Jersey 07950
(973) 605-8200
Attention: Investor Relations
Immunomedics
Description of Our Business
We are a biopharmaceutical company, which develops, manufactures and
markets products for the detection and treatment of cancers and other diseases.
These products, which are based on our monoclonal antibody technology, are
designed to deliver radioisotopes, chemotherapeutic agents, toxins, dyes or
other substances to a specific disease site or organ system.
We have received approval from the respective regulatory agencies in
the United States, the 15 member countries of the European Union, Canada and
certain other countries to market and sell CEA-Scan (arcitumomab), our imaging
product for the detection of recurrent and/or metastatic colorectal cancer.
We also have received approval to market and sell LeukoScan
(sulesomab), our imaging product for detection and diagnosis of osteomyelitis
(bone infection) in long bones and in diabetic foot ulcer patients, in the 15
member countries of the European Union. We have filed an application with the
FDA in the U.S. and the comparable regulatory agency in Canada for approval to
market LeukoScan for imaging of infection in osteomyelitis as well as for the
imaging of infection in acute, atypical appendicitis. The review of the
LeukoScan submission to the FDA continues to progress. As part of the review
process, we are in discussions with the FDA to address their comments regarding
the adequacy of our data to support final approval for these indications. We are
confident that we can bring these discussions with the FDA to successful
closure. In the meantime, we are continuing to implement our plans for market
introduction, and are working diligently on preparation to bring this new
product to the U.S. market place.
Marketing, Sales and Distribution
CEA-Scan is marketed and sold in the U.S. directly by our limited
internal sales force, who are focused on new customers in major medical centers
that we hope will become colorectal cancer
12
<PAGE>
"Centers of Excellence." Our skilled nuclear medicine technicians work with this
sales force and provide technical support directly to our customers. We have
entered into a distribution arrangement in the U.S. with Integrated
Commercialization Solutions, a division of Bergen Brunswig Corporation, to
provide product support services including customer service, order management,
distribution, invoicing and collection. We also have agreement with Syncor
International, the world's leading provider of radiopharmacy services, under
which Syncor makes CEA-Scan available to its hospital and clinic accounts
throughout the U.S., supported by our sales and technical support specialists.
Our European operations, headquartered in Hillegom, The Netherlands,
include European management, sales and marketing, customer service and
invoicing, collection and other administrative functions. We also have
established sales representation in most major European markets. We service
other markets through the appointment of local distributors who provide sales
and marketing support as well as local product distribution. We have an
agreement with Eli Lilly Deutschland GmbH to package and distribute our products
throughout the 15 member countries of the European Union and other countries.
Imaging Products
Our imaging products involve injecting a patient with a radioisotope
attached to an antibody fragment. An antibody is a protein that can find and
attach itself to a specific substance called an antigen. These antigens are
present on tumor cells, white blood cells that accumulate at the sites of
infections, and other disease entities. A radioisotope attached to a
disease-targeting antibody is delivered to a disease site for imaging. A
standard nuclear medicine imaging camera is then used to detect and display
radioisotope concentrations at various sites of disease.
The antibody fragment in CEA-Scan is directed against carcinoembryonic
antigen (CEA), which is abundant at the site of virtually all cancers of the
colon or rectum, whether they are primary tumors or which have spread. CEA also
is associated with many other cancers. We are conducting phase IV clinical
trials to evaluate the product following repeated administration. We also have
been performing clinical trials using CEA-Scan for imaging lung cancer and
breast cancer. We are discussing the results of these clinical trials with
European regulatory authorities to determine whether these data will support the
submission of applications for marketing approval. In addition, we are
continuing our efforts in developing cancer detection applications with CEA-Scan
utilizing hand-held radiation-detecting probes for use in colorectal cancer
surgery.
LeukoScan is a monoclonal antibody fragment, which seeks out, and binds
to white blood cells (granulocytes) associated with a potentially wide range of
infectious and inflammatory diseases.
We are studying the following two other imaging products pursuant to
Investigational New Drug applications that we have filed or plan to file with
the FDA and we have ongoing clinical trials in Europe:
* LymphoScan(R), for non-Hodgkin's B-cell lymphomas.
* AFP-Scan(R), for liver cancer and germ-cell tumors of the ovaries and
testes.
Therapeutic Products
We are applying our expertise in antibody selection, modification and
chemistry to cancer therapeutics, using monoclonal antibodies labeled with
therapeutic radioisotopes or conjugated with drugs. We are engaged in developing
anti-cancer products, principally with a technique called radioimmunotherapy.
This technique may deliver radiolabeled therapeutic agents to tumor sites more
selectively than current radiation therapy technologies, while minimizing
debilitating side effects. In addition, we are evaluating in clinical trials the
effects of our non-radioactive lymphoma antibody in non-Hodgkin's lymphoma
patients.
Research Programs
In addition to concentrating on our products in clinical development,
we conduct ongoing research in many related areas. We conduct research in-house
and in collaboration with The Center for Molecular Medicine and Immunology also
known as the Garden State Cancer Center and other
13
<PAGE>
academic and research centers. In March 1999, we entered into a joint venture
with Beckman Coulter to develop the next generation of cancer therapeutics using
bi-specific antibodies. We believe our ongoing research efforts will identify
new and improved products and techniques for diagnosing and treating various
cancers and infectious diseases.
Our research efforts are focused in various areas related to our core
technology, including antibody engineering and the identification of other
antibody-directed approaches to cancer therapy. We have made significant
progress in humanizing certain mouse antibodies and have reengineered the
humanized antibodies with improved characteristics. We are continuing our work
on selective coupling of therapeutic site specific agents onto antibody
fragments which will offer the advantage of loading multiple therapeutic
compounds onto antibodies at a particular disease site. We also continue to
investigate pre-targeting whereby an antibody is administered first, followed by
a radionuclide or drug administration.
We also are continuing our research into the use of alternative
radioisotopes, such as Yttrium-90 in place of Iodine-131. Our research indicates
that Yttrium-90 is retained by lymphoma cells for longer periods after antibody
metabolism, and shows greater efficacy against larger tumors. We also have
developed a technology using a compound called "DOTA" to tightly bind Yttrium-90
to antibodies.
In addition, we are continuing our efforts to scale-up our proprietary
method for technetium-99m radiolabeling of peptides, using single-vial kits.
December 1998 Financing
On December 9, 1998, we completed a private placement of 1,250 shares
of Series F Convertible Preferred Stock to the selling stockholders and received
gross proceeds of $12,500,000.
Each share of Series F Stock has an initial stated value of $10,000,
which increases at the rate of 4% per annum and as of November 9, 1999 equaled
$10,367 per share. The Series F Stock became convertible on June 8, 1999. The
number of shares of common stock issuable upon conversion of each share of
Series F Stock will be determined by dividing the stated value of $10,000 plus
an accretion of 4% per annum, by the conversion price then in effect. As of
November 9, 1999, 232.5 shares of the Series F Stock had been converted into
2,049,931 shares of common stock.
The conversion price is equal to:
* the Variable Price, if the Variable Price is less than $2.50; except
that prior to December 9, 1999, subject to acceleration in certain
instances, if the Variable Price is greater than $1.80 and less than
$2.50, the conversion price will equal $2.50; or
* $2.50, if the Variable Price is equal to or greater than the $2.50 and
less than $3.75; or
* $2.50 plus one-half of the amount, if any, by which the Variable Price
exceeds $3.75, if the Variable Price is greater than $3.75.
The $2.50 conversion price was set based on 125% of the "Initial Fixed
Price" of $2.00, which was the average closing bid price of our common stock
during the 20 trading days ended June 6, 1999. The "Variable Price" is equal to
the average of the 15 lowest closing bid prices for our common stock during the
45 trading days immediately preceding a conversion date. As of November 9, 1999,
the Variable Price was $1.18 per share.
At any time during the 90-day period commencing on December 1, 1999, we
may, require the selling stockholders to purchase up to an additional $7,500,000
million (750 shares) our of Series F Stock. Our right to require the selling
stockholders to purchase this additional amount is subject to certain conditions
and limitations, including that the Variable Price has been at least equal to
the $2.00 for a specified period of time. Given the recent price at which our
common stock has traded, it is unlikely that this condition will be satisfied.
We have granted the selling stockholders certain participation rights if we
issue any future floating rate convertible securities. The holders of the Series
F Stock generally do not have the right to vote for the election of directors or
on other matters, except to the extent their rights would be adversely affected.
14
<PAGE>
Upon the occurrence of certain events, we may be required to redeem the
Series F Stock, pay certain penalties and/or adjust the conversion price. These
events include the following:
* If we consolidate, merge or otherwise combine with another entity and
as a result the stockholders of our company immediately prior to the
transaction do not retain sufficient voting power to elect a majority
of the board of directors of the new or combined entity, then the
holders of the Series F Stock may require us to redeem their shares at
a price per share equal to the greater of
(1) 125% of the stated value of $10,000 per share plus the accretion
of 4% per annum, and
(2) the value of our common stock that would be issuable upon
conversion of the Series F Stock.
However, if the consolidation, merger or other business
combination occurs as a result of a proxy solicitation which was not
approved or recommended by our Board of Directors, then, if the holders
exercise their redemption rights, we may, in lieu of redemption,
(y) readjust the Initial Fixed Price to 80% of the lower of (A) the
lowest Variable Price during the period beginning on the date the
solicitation is announced and ending on the date the solicitation
is consummated, abandoned or terminated or (B) the Initial Fixed
Price then in effect, and
(z) pay a penalty of 1% per day of the stated value of $10,000 per
share plus the accretion of 4% per annum for a maximum of 10 days
in any 365-day period.
* If at least a specified percentage of the holders of our common stock
accept a purchase, tender or exchange offer, then the holders of the
Series F Stock may require us to redeem their shares at a price per
share equal to the greater of
(1) 125% of the stated value of $10,000 per share plus the accretion
of 4% per annum, and
(2) the value of our common stock that would be issuable upon
conversion of the Series F Stock.
However, if the purchase, tender or exchange offer was not
approved or recommended by our Board of Directors; then, if the holders
exercise their redemption rights, we may, in lieu of redemption,
(y) readjust the Initial Fixed Price to 80% of the lower of (A) the
lowest Variable Price during the period beginning on the date the
offer is announced and ending on the date the offer is
consummated, abandoned or terminated or (B) the Initial Fixed
Price then in effect, and
(z) pay a penalty of 1% per day of the stated value of $10,000 per
share plus the accretion of 4% per annum for a maximum of 10 days
in any 365-day period.
* If we complete a sale of all or substantially all of our assets, then
the holders of the Series F Stock may require us to redeem their shares
at a price per share equal to the greater of
(1) 125% of the stated value of $10,000 per share plus the accretion
of 4% per annum, and
(2) the value of our common stock that would be issuable upon
conversion of the Series F Stock.
o If the registration statement ceases to be available to the selling
stockholders for the resale of their shares in accordance with the
terms of the registration rights agreement for more than 10 consecutive
days, then the holder of the Series F Stock may require us to redeem
their shares at a price per share equal to the greater of
(1) 125% of the stated value of $10,000 per share plus the accretion
of 4% per annum, and
15
<PAGE>
(2) the value of our common stock that would be issuable upon
conversion of the Series F Stock.
However, if the unavailability of the registration statement does
not result from our failure to use our best efforts, then, if the
holders exercise their redemption rights, we may, in lieu of
redemption,
(y) pay a penalty of 1% per day of the stated value of $10,000 per
share plus the accretion of 4% per annum for a maximum of 15 days
in any 365-day period, and
(z) readjust the Initial Fixed Price to 80% of the lowest Variable
Price during the period commencing on the day the registration
statement became unavailable and ending on the day the
registration statement is again available for use.
* If our common stock is delisted or suspended from the Nasdaq National
Market for a period of more than five consecutive days, then the holder
of the Series F Stock may require us to redeem their shares at a price
per share equal to the greater of
(1) 125% of the stated value of $10,000 per share plus the accretion
of 4% per annum, and
(2) the value of our common stock that would be issuable upon
conversion of the Series F Stock.
However, if our common stock is delisted from the Nasdaq National
Market then, if the holders exercise their redemption rights, we may,
in lieu of redemption,
(y) readjust the Initial Fixed Price to 68.5% of the lowest Variable
Price during the period commencing on the date of delisting and
continuing for 45 days thereafter, or
(z) pay a penalty of 1% per day of the stated value of $10,000 per
share plus the accretion of 4% per annum for a maximum of 15 days
in any 365-day period.
In certain cases, if the events described above occur more than once in
any 365-day period, there will be a further downward adjustment of the Initial
Fixed Price.
Pursuant to our agreement with the selling stockholders, in March 1999,
we held a Special Meeting of Stockholders at which meeting our stockholders
approved the issuance of any shares upon conversion of the Series F Stock in
excess of 20% of the number of shares of common stock we had outstanding on
December 9, 1998 (i.e., 7,577,617) in accordance with the rules and regulations
of The Nasdaq Stock Market, Inc.
Each selling stockholder has agreed that if it engages in short sales
transactions or other hedging activities during the 45 trading days immediately
preceding a conversion date which involve, among other things, sales of shares
of our common stock, the selling stockholder will place its sale orders for
common stock in the course of these activities so as not to complete or effect
any sale on any trading day during the period at a price which is lower than the
lowest sale effected on that day by persons other than the selling stockholder
and its affiliates.
Because the market price of our common stock is subject to fluctuation,
we had agreed, pursuant to the terms of a registration rights agreement, to
register for resale by the selling stockholders at least 200% of the number of
shares of common stock that would be issuable if all the Series F Stock were
converted as of the date of filing of the original registration statement and,
thereafter, maintain the registration of at least 150% of the number of shares
of common stock that would be issuable if all the Series F Stock were then
converted. Accordingly, when we originally filed our registration statement in
December 1998, the prospectus covered 10,000,000 shares of common stock, which
was our good faith estimate of this obligation at that time. As the registration
statement became insufficient to permit the resale by the selling stockholders
of all the common shares issuable upon conversion of the Series F Stock, the
selling stockholders, in addition to any other remedies, claimed they had the
right to require us to redeem all or any portion of the remaining outstanding
shares of Series F Stock (at a price equal to the greater of 125% of the stated
value of $10,000 per share plus the accretion of 4% per annum and the value of
the Common Stock which would have been issued upon conversion) as well as pay to
them
16
<PAGE>
a penalty of $5 per share of Series F Stock with respect to each day that the
registration statement was insufficient.
We have received a waiver, dated October 11, 1999, from the selling
stockholders with respect to the rights discussed above either to require
redemption or to receive penalties conditioned upon our (a) filing a
registration statement, on or before November 11, 1999, covering at least 200%
of the number of shares of common stock that would be issuable if all the Series
F Stock were converted as of the date of the filing of this registration
statement and (b) having this registration statement declared effective on or
before December 11, 1999. However, if failure of the registration statement to
be declared effective by December 11, 1999 does not result from our failure to
use our best efforts, then, if the holders exercise their redemption rights, we
may, in lieu of redemption, pay the penalties and adjust the Initial Fixed Price
in the manner described above under the circumstances where the unavailability
of the registration statement did not result from our failure to use our best
efforts. In addition, notwithstanding whether or not we have used our best
efforts, if the registration statement is not declared effective by December 11,
1999, the selling stockholders also will be entitled to the $5 per day penalty
(discussed above) accruing from the first day that we were in breach of this
registration obligation, which penalties would be significant.
In addition, until the registration statement is declared effective, we
will be unable to exercise certain of our rights with respect to the Series F
Stock and assuming that we had otherwise satisfied the other conditions to the
exercise of these rights, including (a) the right, upon 20 days advanced notice,
to redeem all of the outstanding shares of Series F Stock at a 20% annualized
premium, and (b) the right, upon three days advanced notice, to require the
selling stockholders to convert their Series F Stock if the closing bid price of
our common stock had exceeded $5.00 for a specified period of time. We will lose
these rights altogether if we fail to file the registration statement by
November 11, 1999 or fail to use our best efforts to have it declared effective
by December 11, 1999. We intend to use our best efforts to have the registration
statement declared effective on or before December 11, 1999 although we cannot
assure you that the registration will be declared effective by that date. We
continue to have the right, upon five days advanced notice, to redeem any or all
shares of Series F Stock presented for conversion at a conversion price of less
than $1.80 at a redemption price equal to 105% of the stated value of $10,000
per share plus the accretion of 4% per annum.
While this registration statement covers an additional 9,878,463
shares of our common stock in addition to the 7,950,069 shares of common stock
included in our prior prospectus, we would not be required to issue any shares
which are the subject of this additional registration statement unless the
Variable Price at the time of conversion on average is below $1.33 (increased
over time due to the 4% accretion to the stated value). See "Selling
Stockholders" for information concerning the number of shares that are currently
issuable.
We also plan to continue our separate discussions with each of the
selling stockholders concerning a possible restructuring of certain other terms
of the Series F Stock. However, we cannot assure you that any restructuring can
be accomplished upon terms we find acceptable, if at all.
If we were required to redeem the Series F Stock or make any of the
penalty payments, we may not have the financial ability to make these payments.
Even if we did have the financial ability to redeem the Series F Stock or pay
the required penalties, any payments could significantly and adversely affect
our financial condition and deplete its cash resources.
In connection with our agreement with the selling stockholders, we have
agreed to reimburse them for up to $50,000 of their legal expenses they had
incurred in connection with the issuance of the Series F Stock.
Use of Proceeds
We will not receive any proceeds from the sale of our common stock by
the selling stockholders. However, we did receive net proceeds of approximately
$12,330,000 from the issuance of the Series F Stock to the selling stockholders
in December 1998.
We intend to continue to use these proceeds for general corporate
purposes, including research and development, clinical trials, regulatory
filings, manufacturing, marketing and sales, general and
17
<PAGE>
administrative and other expenses, acquisitions of products and technologies,
license, milestone, royalty and similar payments, and strategic and other
acquisitions.
Selling Stockholders
The table below presents the following information: (1) the number of
shares of Series F Stock owned by each selling stockholder as of the date of
this prospectus, (2) the number of shares of common stock beneficially owned by
each selling stockholder as of the date of this prospectus, (3) the number of
shares that the selling stockholder is offering under this prospectus, and (4)
the number of shares that the selling stockholder will beneficially own after
the completion of this offering.
Except as otherwise noted in the table, the number and percentage of
shares beneficially owned by each selling stockholder is determined as of the
date of this prospectus in accordance with Rule 13d-3 of the Securities Exchange
Act, and the information is not necessarily indicative of beneficial ownership
for any other purpose. Under this rule, beneficial ownership includes any shares
as to which the selling stockholder has sole or shared voting power or
investment power and also any shares which the selling stockholder has the right
to acquire within 60 days of the date of this prospectus through the conversion
of the Series F Stock or the exercise of any stock option or other right. Unless
otherwise indicated in the footnotes, each person has sole voting and investment
power with respect to the shares shown as beneficially owned.
The number of shares of our common stock shown as beneficially owned by
each selling stockholder prior to the offering and the number of shares offered
by each selling stockholder represents shares of our common stock issuable to it
assuming conversion, as of November 9, 1999, of all shares of Series F Stock
owned by that selling stockholder with respect to the $10,000 stated value of
the Series F Stock plus an accretion of 4% per year. The number of shares was
calculated using an assumed conversion price of $1.18, which represents the
average of the 15 lowest closing bid prices for our common stock during the 45
consecutive trading days ending on November 8, 1999. As described in the section
"Immunomedics - December 1998 Financing" above, the actual number of shares of
our common stock issuable upon conversion of the Series F Stock is based upon
the market price of common stock at the time of conversion. In accordance with
the provisions of the Series F Stock, the conversion price will fluctuate from
time to time based on changes in the market price of our common stock.
Therefore, the actual number of shares of common stock may be less or greater
than the number of shares shown as beneficially owned by the selling
stockholders or the number of shares offered by this prospectus. Under the
certificate of designation for the Series F Stock, no selling stockholder can
convert Series F Stock to the extent that the conversion would cause the selling
stockholder's beneficial ownership of our common stock to exceed 4.99% of our
outstanding common stock, or 1,992,907 shares at November 9, 1999. In
calculating a selling stockholder's beneficial ownership for this purpose, the
selling stockholder would exclude any shares which it would be considered to
beneficially own through ownership of unconverted Series F Stock.
The number of shares that will ultimately be issued upon conversion of
the Series F Stock is dependent, subject to certain limitations, upon the
average of certain closing bid prices of our common stock prior to conversion as
discussed above. Accordingly, the number of shares that may be issued and the
number of shares offered hereby cannot be determined at this time. As a result,
as discussed above, we have agreed to register for resale at least 200% of the
number of shares of common stock that would be issuable if all the Series F
Stock were converted as of the date of this prospectus. As of November 9, 1999,
we would have been required to issue approximately 8,914,266 shares of our
common stock had the holders converted all of their 1,017.5 remaining
outstanding shares of Series F Stock on this date. As discussed above, we have
agreed to register 17,828,532 shares of our common stock. Accordingly, the
selling stockholders may be entitled to sell approximately 8,914,266 additional
shares pursuant to this prospectus, if these shares are issued to them in
accordance with the terms of the Series F Stock.
The number of shares shown as being beneficially owned by each selling
stockholder after the offering assumes that the selling stockholder has sold all
the shares of our common stock which may be sold pursuant to this prospectus.
None of the selling stockholders has had a material relationship with
us within the past three years, other than as a result of their purchase of
shares of our Series F Stock. As of November 9, 1999,
18
<PAGE>
no selling stockholder owned any shares of our common stock other than the
shares they may acquire upon conversion of the Series F Stock, other than Fisher
Capital Ltd. which directly owned 128,740 shares of our common stock, Wingate
Capital Ltd. which directly owned 77,269 shares of our common stock and
Leonardo, L.P. which directly owned 617 shares of common stock.
<TABLE>
<CAPTION>
Shares of Shares of
Shares of Common Stock Common Stock
Preferred Beneficially Shares of Beneficially
Stock Owned Prior to Common Stock Owned After
Selling Stockholder Owned the Offering Being Offered Offering
- -------------------- ----- ------------ ------------- --------
<S> <C> <C> <C> <C>
AG Super Fund International Partners,
L.P.(1) 20.0 175,219 175,219 0
Fisher Capital Ltd.(2) 120.0 1,180,054 1,051,314 128,740
GAM Arbitrage investments, Inc.(1) 18.0 157,697 157,697 0
HFTP Investment L.L.C.(3) 550.0 4,818,522 4,818,522 0
Leonardo, L.P.(1) 187.5 1,643,291 1,643,291 0
Ramius Fund, Ltd.(1) 38.0 332,916 332,916 0
Raphael, L.P.(1) 20.0 175,219 175,219 0
Wingate Capital Ltd.(2) 64.0 637,970 560,701 77,269
- ----------------
</TABLE>
(1) Angelo, Gordon & Co., L.P. is a general partner of Leonardo, L.P., AG
Super Fund International Partners, L.P. and Raphael, L.P., and is
investment advisor to GAM Arbitrage Investments, Inc. and Ramius Fund,
Ltd. and consequently has voting control and investment discretion over
securities held by these entities. The ownership for each of these
entities does not include the ownership information for the other
entities. Angelo, Gordon & Co., L.P. and each of the referenced
entities disclaims beneficial ownership of any of our securities held
by the other referenced entities. Mr. John M. Angelo, the Chief
Executive Officer of Angelo, Gordon & Co., L.P., and Mr. Michael R.
Gordon, the Chief Operating Officer of Angelo, Gordon & Co., L.P., are
the sole general partners of AG Partners, L.P., which is the sole
general partner of Angelo, Gordon & Co., L.P. In this capacity,
Messrs. Angelo and Gordon may be deemed to be the beneficial owner of
any our securities deemed to be beneficially owned by Angelo, Gordon &
Co., L.P. However, Messrs. Angelo and Gordon disclaim beneficial
ownership of these securities.
(2) Citadel Limited Partnership is the trading manager of Wingate Capital
Ltd. and Fisher Capital Ltd. and consequently has voting control and
investment discretion over securities held by these entities. Citadel
Limited Partnership is indirectly controlled by Mr. Kenneth C. Griffin.
The ownership for each referenced entity does not include the ownership
information for the other referenced entity. Citadel Limited
Partnership and each of the referenced entities disclaims beneficial
ownership of any of our securities held by the other entities. Mr.
Griffin may be deemed to be the beneficial ownership of any of our
securities beneficially owned by Citadel Limited Partnership or the
referenced entities. However, Mr. Griffin disclaims beneficial
ownership of these securities.
(3) Promethean Investment Group L.L.C. is the investment advisor for HFTP
Investment L.L.C. and consequently has voting control and investment
discretion over securities held by this entity. Promethean Investment
Group L.L.C. is indirectly controlled by Mr. James F. O'Brien, Jr.
Promethean Investment Group L.L.C. disclaims beneficial ownership of
any of our securities held by HFTP Investment L.L.C. Mr. O'Brien may
be deemed to be the beneficial ownership of any of our securities
beneficially owned by Promethean Investment Group L.L.C. or HFTP
Investments L.L.C. However, Mr. O'Brien disclaims beneficial ownership
of these securities. As a result of the limitation discussed above in
this section, the selling stockholder would be prevented from
converting Series F Stock to the extent that the conversion would
cause the
19
<PAGE>
selling stockholder's beneficial ownership of our common stock to
exceed 4.99% of our outstanding common stock.
Plan of Distribution
Manner of Sales; Broker-Dealer Compensation.
The selling stockholders, or any successors in interest to the selling
stockholders, may sell any shares of common stock that they acquire when they
convert shares of Series F Stock. The sale of our common stock may be effected
in one or more of the following methods:
* ordinary brokers' transactions;
* transactions involving cross or block trades or otherwise on the Nasdaq
National Market;
* purchases by brokers, dealers or underwriters as principal and resale
by these purchasers for their own accounts pursuant to this prospectus;
* "at the market" to or through market makers or into an existing market
for our common stock;
* in other ways not involving market makers or established trading
markets, including direct sales to purchases or sales effected through
agents;
* through transactions in options, swaps or other derivatives (whether
exchange-listed or otherwise);
* in privately negotiated transactions;
* to cover short sales; or
* any combination of the foregoing.
The selling stockholders also may sell the shares in reliance upon Rule
144 under the Securities Act at such times as they are eligible to do so. We
have been advised by the selling stockholders that they have not made any
arrangements for the distribution of the shares of common stock. Brokers,
dealers or underwriters who effect sales for the selling stockholders may
arrange for other brokers, dealers or underwriters to participate. Brokers,
dealers or underwriters engaged by the selling stockholders will receive
commissions or discounts from them in amounts to be negotiated prior to the
sale. These brokers, dealers or underwriters may act as agent or as principals.
From time to time, one or more of the selling stockholders may pledge,
hypothecate or grant a security interest in some or all of the shares of common
stock acquired by them upon conversion of the Series F Stock, and the pledgees,
secured parties or persons to whom these securities have been pledged shall,
upon foreclosure in the event of default, be considered a selling stockholders
hereunder. In addition, subject to the limitations discussed above, a selling
stockholder may, from time to time, sell short our common stock. In these
instances, this prospectus may be delivered in connection with these short sales
and the shares of our common stock issued upon conversion of Series F Stock may
be used to cover these short sales.
From time to time one or more of the selling stockholders may transfer,
pledge, donate or assign shares of our common stock that it acquired upon
conversion of Series F Stock to lenders or others and each of these persons will
be considered a selling stockholder for purposes of this prospectus. The number
of shares of our common stock beneficially owned by those selling stockholders
who so transfer, pledge, donate or assign shares of our common stock will
decrease as and when they take these actions. The plan of distribution for our
common stock by the selling stockholders' set forth herein will otherwise remain
unchanged, except that the transferees, pledgees, donees or other successors
will be considered selling stockholders hereunder.
Subject to the limitations discussed above, a selling stockholder may
enter into hedging
20
<PAGE>
transactions with broker-dealers and the broker-dealers may engage in short
sales of our common stock in the course of hedging the positions they assume
with this selling stockholder, including in connection with distributions of our
common stock by these broker-dealers. A selling stockholder may also enter into
option or other transactions with broker-dealers that involve the delivery of
our common stock to the broker-dealers, who may then resell or otherwise
transfer these shares. A selling stockholder also may loan or pledge our common
stock to a broker-dealer and the broker-dealer may sell our common stock so
loaned or upon a default may sell or otherwise transfer the pledged common
stock.
Filing of a Post-Effective Amendment In Certain Instances.
If any selling stockholder notifies us that it has entered into a
material arrangement (other than a customary brokerage account agreement) with a
broker or dealer for the sale of shares of common stock under this prospectus
through a block trade, purchase by a broker or dealer or similar transaction, we
will file a post-effective amendment to the registration statement under the
Securities Act. The post-effective amendment will disclose:
* The name of each broker-dealer involved in the transaction.
* The number of shares of common stock involved.
* The price at which those shares of common stock were sold.
* The commissions paid or discounts or concessions allowed to the broker-
dealer(s).
* If applicable, that these broker-dealer(s) did not conduct any
investigation to verify the information contained or incorporated by
reference in this prospectus, as supplemented.
* Any other facts material to the transaction.
Certain Persons May Be Deemed to Be Underwriters
The selling stockholders and any broker-dealers who execute sales for
them may be deemed to be "underwriters" within the meaning of the Securities Act
because of the number of shares of common stock to be sold or resold by these
persons or entities or the manner of sale of these shares, or both. If a selling
stockholder or any broker-dealer or other holders were determined to be
underwriters, any discounts, concessions or commissions received by them or by
brokers or dealers acting on their behalf and any profits received by them on
the resale of their shares of common stock might be deemed to be underwriting
discounts and commissions under the Securities Act.
Regulation M
We have informed the selling stockholders that Regulation M promulgated
under the Securities Exchange Act may be applicable to them with respect to any
purchase or sale our common stock. In general, Rule 102 under Regulation M
prohibits any person connected with a distribution of our common stock from
directly or indirectly bidding for, or purchasing for any account in which it
has a beneficial interest, any of our common stock or any right to purchase our
common stock, for a period of one business day before and after completion of
its participation in the distribution.
During any distribution period, Regulation M prohibits the selling
stockholders and any other persons engaged in the distribution from engaging in
any stabilizing bid or purchasing our common stock except for the purpose of
preventing or retarding a decline in the open market price of our common stock.
None of these persons may effect any stabilizing transaction to facilitate any
offering at the market. As the selling stockholders will be reoffering and
reselling our common stock at the market, Regulation M will prohibit them from
effecting any stabilizing transaction in contravention of Regulation M with
respect to our common stock.
Indemnification and Other Matters
We paid all of the expenses incident to the registration, offering and
sale of our common stock by the selling stockholders to the public other than
commissions or discounts of underwriters,
21
<PAGE>
broker-dealers or agents. We also have agreed to indemnify certain of the
selling stockholders and certain related persons against certain liabilities,
including liabilities under the Securities Act. Insofar as indemnification for
liabilities arising under the Securities Act may be permitted to our directors,
officers and controlling persons, we have been advised that in the opinion of
the SEC this indemnification agreement is against public policy as expressed in
the Securities Act and is, therefore, unenforceable.
This offering will terminate on the earlier of (a) the date on which
the shares are eligible for resale without restriction pursuant to Rule 144(k)
under the Securities Act or (b) the date on which all shares offered hereby have
been sold by the selling stockholders.
Legal Matters
Warshaw Burstein Cohen Schlesinger & Kuh, LLP will give its opinion on
the validity of the common stock. As of the date of this prospectus, certain
partners of this firm beneficially own an aggregate of 1,200 shares of common
stock.
Experts
Our consolidated financial statements as of June 30, 1999 and 1998, and
for each of the years in the three-year period ended June 30, 1999 have been
incorporated by reference herein and in the registration statement in reliance
upon the report of KPMG LLP, independent certified public accountants,
incorporated by reference herein, and upon the authority of said firm as experts
in accounting and auditing.
22
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following is an itemized statement of the estimated amounts of all
expenses payable by us in connection with the registration of the Shares:
SEC registration fee......................................... $ 3,261
Legal fees and expenses...................................... 15,000
Accounting fees and expenses................................. 4,000
Miscellaneous expenses....................................... 1,739
-----------------
Total............................................... $ 24,000
=================
- -------------------
Item 15. Indemnification of Directors and Officers.
The Delaware General Corporation Law provides, in substance,
that Delaware corporations shall have the power, under specified circumstances,
to indemnify their directors, officers, employees and agents in connection with
actions or suits by or in the right of the corporation, by reason of the fact
that they were or are such directors, officers, employees and agents, against
expenses (including attorneys' fees) and, in the case of actions, suits or
proceedings brought by third parties, against judgment, fines and amounts paid
in settlement actually and reasonably incurred in any such action, suit or
proceeding.
The Company's Certificate of Incorporation provides that a
director shall not be personally liable to the Company or its stockholders for
monetary damages for breach of fiduciary duty as a director except for liability
(i) for breach of the director's duty of loyalty to the Company or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174 of
the Delaware General Corporation Law, or (iv) for any transaction from which the
director derived an improper personal benefit. The Company's Bylaws also provide
that the Company may indemnify its directors, officers and legal representatives
to the fullest extent permitted by Delaware law against all awards and expenses
(including attorneys' fees).
Item 16. Exhibits.
Exhibit No. Description
4.1 - Securities Purchase Agreement, dated as of December 9 1998,
by and among the Company and the investors named therein
(incorporated by reference to Exhibit 10.1 to the Current
Report on Form 8-K, filed by the Company on December 15,
1998).
4.2 - Registration Rights Agreement, dated as of December 9, 1998,
by and among the Company and the investors named therein
(incorporated by reference to Exhibit 10.2 to the Current
Report on Form 8-K, filed by the Company on December 15,
1998).
4.3 - Certificate of Designations, Preferences and Rights of Series
F Convertible Preferred Stock (incorporated by reference to
Exhibit 3.1 to the Current Report on Form 8-K, filed by the
Company on December 15, 1998).
4.4 - Form of Waiver, dated October 11, 1999, by and among the
Company and the investors named therein.
5 - Opinion of Warshaw Burstein Cohen Schlesinger & Kuh, LLP.
<PAGE>
23.1 - Consent of KPMG LLP.
23.2 - Consent of Warshaw Burstein Cohen Schlesinger & Kuh, LLP
(included in their opinion filed as Exhibit 5).
24 - Power of Attorney (included on page II-4).
Item 17. Undertakings.
The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the Company's annual
report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act
of 1934 (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
The Company undertakes that it will:
(1) File, during any period in which it offers or sells
securities, a post-effective amendment to this registration statement
to:
(i) Include any prospectus require by section
10(a)(3) of the Securities Act;
(ii) Reflect in the prospectus any facts or events
which, individually or together, represent a fundamental
change in the information in the registration statement.
Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement.
(iii) Include any material information with respect
to the plan of distribution not previously disclosed in the
registration statement or any material changes to such
information in the registration statement.
provided, however, that the Company does not need to give the
statements in paragraph (a)(1)(i) and (a)(1)(ii) if the information
required in a post-effective amendment is incorporated by reference
from periodic reports filed by the Company under the Exchange Act.
(2) For determining liability under the Securities Act, treat
each post-effective amendment as a new registration statement of the
securities offered, and the offering of the securities at that time to
be the initial bona fide offering.
(3) File a post-effective amendment to remove from
registration any of the securities that remain unsold at the end of the
offering.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the Company pursuant to the foregoing provisions, or otherwise, the
Company has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Company of expenses incurred or paid by a
director, officer or controlling person of the Company in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
II-2
<PAGE>
controlling person in connection with the securities being registered, the
Company will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe it meets all of
the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Morris Plains, State of New Jersey, on November 9,
1999.
IMMUNOMEDICS, INC.
By: /s/ David M. Goldenberg
---------------------------
David M. Goldenberg
Chairman of the Board and
Chief Executive Officer
(Principal Executive Officer)
Each person whose signature appears below constitutes and appoints
David M. Goldenberg, Cynthia Sullivan and Shailesh R. Asher and each of them,
his or her true and lawful attorney-in-fact, with full power of substitution and
resubstitution, for him or her and in his or her 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 other documents in connection therewith, with the
Securities and Exchange Commission under the Securities Act of 1933, hereby
ratifying and confirming all that said attorneys-in-fact or substitutes, may
lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Dated:
November 9, 1999 /s/ David M. Goldenberg
-----------------------------
David M. Goldenberg, Chairman
of the Board, Chief Executive
Officer and a Director
(Principal Executive Officer)
November 9, 1999 /s/ Marvin E. Jaffe
-----------------------------
Marvin E. Jaffe, Director
November 9, 1999 /s/ Richard R. Pivirotto
-----------------------------
Richard R. Pivirotto,
Director
November 9, 1999 /s/ Richard C. Williams
-----------------------------
Richard C. Williams, Director
November 9, 1999 /s/ Shailesh R. Asher
-----------------------------
Shailesh R. Asher, Controller
and Acting Chief Financial
Officer (Principal Financial
and Accounting Officer)
II-4
<PAGE>
4.4 - Form or Waiver, dated October 11, 1999, by and among
the Company and the investors named therein.
5 - Opinion of Warshaw Burstein Cohen Schlesinger & Kuh,
LLP.
23.1 - Consent of KPMG LLP.
II-5
<PAGE>
EXHIBIT 4.4
WAIVER AGREEMENT
This Waiver Agreement (this "Waiver") is made and entered into as of
October 11, 1999, by and among Immunomedics, Inc., a Delaware corporation (the
"Company"), and the undersigned buyers (the "Buyers").
RECITAL
WHEREAS, under Section 3(b) of the Company's Amended
Certificate of Designations, Preferences and Rights of the Series F Convertible
Preferred Stock, as filed with the Secretary of State of the State of Delaware
on December 9, 1998 (the "Certificate of Designations"), the Buyers, as holders
of shares of the Company's Series F Convertible Preferred Stock (the "Preferred
Shares") have the right to require the Company to redeem all or any portion of
the Preferred Shares upon the occurrence of certain events, including if the
Registration Statement (as defined in the Certificate of Designations) is
unavailable to the holders of the Preferred Shares for sale of the Registrable
Securities (as defined in the Certificate of Designations) in accordance with
the terms of the Registration Rights Agreement, by and among the Company and the
Buyers, dated December 9, 1998 (the "Registration Rights Agreement") (such
occurrence for redemption, a "Registration Default").
WHEREAS, under Section 2(g) of the Registration Rights
Agreement, the Company is subject to certain cash penalties upon the occurrence
of a Registration Default.
NOW, THEREFORE, in consideration of the mutual promises
contained herein:
1. Waiver.
1.1 Each of the Buyers hereby waives its right
to require redemption of its Preferred Shares under Section 3(b) of the
Certificate of Designations as a result of the Registration Default which is
currently existing and which continues so long as the following proviso remains
true, provided that the Company shall (i) file a new Registration Statement with
the Securities and Exchange Commission (the "SEC") on or before November 11,
1999, which Registration Statement shall register for resale that number of
shares of the Company's Common Stock, par value $0.01per share (the "Common
Stock"), equal to the product of (x) 2.0 and (y) the number of Registrable
Securities as of the date immediately preceding the date such Registration
Statement is filed with the SEC, less that number of shares of Common Stock
which, as of the date immediately preceding the filing of such Registration
Statement, are currently registered on Registration Statements for the resale of
shares of Common Stock by the Buyers and (ii) use its best efforts to have such
Registration Statement declared effective by the SEC on or before December 11,
1999 or, if not achieved by such date, until such date as such Registration
Statement is declared effective, provided that the Company continues to use its
best efforts to have such Registration Statement declared effective by the SEC.
1.2 Each of the Buyers hereby waives its right
to receive the Registration Delay Payments (as defined in the Registration
Rights Agreement) that are currently due and any Registration Delay Payments
that shall accrue due to the Registration Default currently existing as of the
date hereof, provided that the Company shall (i) file a new Registration
Statement with the SEC on or before November 11, 1999, which Registration
Statement shall register for resale that number of shares of Common Stock equal
to the product of (x) 2.0 and (y) the number of Registrable Securities as of the
date immediately preceding the date such Registration Statement is filed with
the SEC, less that number of shares of Common Stock which, as of the date
immediately preceding the filing of such Registration Statement, are currently
registered on Registration Statements for the resale of shares of Common Stock
by the Buyers and (ii) have such Registration Statement declared effective by
the SEC on or before December 11, 1999.
1.3 If (i) a new Registration Statement is not
filed with the SEC on or before November 11, 1999, registering for resale that
number of shares of Common Stock equal to the product of (x) 2.0 and (y) the
number of Registrable Securities as of the date immediately preceding the date
such Registration Statement is filed with the SEC, less that number of shares of
Common Stock which, as of the
II-6
<PAGE>
date immediately preceding the filing of such Registration Statement, are
currently registered on Registration Statements for the resale of shares of
Common Stock by the Buyers or (ii) such new Registration Statement is not
declared effective by the SEC on or before December 11, 1999, then:
1.3.1 None of the Buyers' waivers of their
rights to receive Registration Delay Payments shall be
effective and such Registration Delay Payments shall be deemed
to have accrued from the date of the Registration Default; and
1.3.2 None of the Buyers waivers of their
rights of redemption in the event of a Registration Default
shall be effective and such Buyers shall be entitled to
exercise their right of Redemption under Sections 3(b) and
3(f) of the Certificate of Designations, provided, however, if
the Company shall have satisfied the conditions of Section
1.1, then the waiver of the Buyers' right of redemption shall
remain in effect except that an Excluded Redemption Event (as
defined in the Certificate of Designations) pursuant to
Section 3(h)(ii) of the Certificate of Designations shall be
deemed to have occurred, the Company shall be deemed to have
delivered a Company's Excluded Redemption Event Notice on
December 12, 1999 with respect to such events pursuant to
Section 3(h) of the Certificate of Designations and the Buyers
shall be entitled to exercise their rights under Sections 3(h)
and 3(i) of the Certificate of Designations accordingly.
1.4 Provided that the Company shall (i) file a
new Registration Statement with the SEC on or before November 11, 1999, which
Registration Statement shall register for resale that number of shares of Common
Stock equal to the product of (x) 2.0 and (y) the number of Registrable
Securities as of the date immediately preceding the date such Registration
Statement is filed with the SEC, less that number of shares of Common Stock
which, as of the date immediately preceding the filing of such Registration
Statement, are currently registered on Registration Statements for the resale of
shares of Common Stock by the Buyers and (ii) use its best efforts to have such
Registration Statement declared effective by the SEC on or before December 11,
1999, then (A) the Company shall be deemed not to have breached either the
Registration Rights Agreement or the Certificate of Designations due to the
Registration Default currently existing as of the date hereof and which may
continue until such time as the Company fails to use its best efforts to have
such Registration Statement declared effective by the SEC on or before December
11, 1999 or, if not achieved by such date, until such date as such Registration
Statement is declared effective, provided that the Company continues to use its
best efforts to have such Registration Statement declared effective by the SEC
and (B) a Triggering Event (as defined in the Certificate of Designations) shall
be deemed not to have occurred due to the Registration Default currently in
existence as of the date hereof and which may continue until such time as the
Company fails to use its best efforts to have such Registration Statement
declared effective by the SEC on or before December 11, 1999 or, if not achieved
by such date, until such date as such Registration Statement is declared
effective, provided that the Company continues to use its best efforts to have
such Registration Statement declared effective by the SEC.
2. Miscellaneous.
2.1 Other Provisions. All other provisions of the Certificate
of Designations and the Registration Rights Agreement shall remain in full force
and effect.
2.2 Counterparts. This Waiver may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
* * * * * * *
IN WITNESS WHEREOF, the parties have caused this Waiver to be duly
executed as of the day and year first written above.
COMPANY: BUYERS:
II-7
<PAGE>
IMMUNOMEDICS, INC. [Name of Buyer]
By:______________________ By:__________________________
Name: David M. Goldenberg Name:
Its: Chairman of the Board and Chief Its:
Executive Officer
II-8
<PAGE>
EXHIBIT 5
WARSHAW BURSTEIN COHEN
SCHLESINGER & KUH, LLP
555 Fifth Avenue
New York, New York 10017
Telephone: (212) 984-7700
Facsimile: (212) 972-9150
November 9, 1999
Immunomedics, Inc.
300 American Road
Morris Plains, New Jersey 07950
Gentlemen and Ladies:
You have requested our opinion, as counsel for Immunomedics, Inc., a
Delaware corporation (the "Company"), in connection with the Registration
Statement on Form S-3 (the "Registration Statement") under the Securities Act of
1933 (the "Act"), filed by the Company with the Securities and Exchange
Commission (the "Commission").
The Registration Statement relates to the offering by certain selling
stockholder of up to 17,828,532 shares (the "Shares") of the Company's common
stock, $.01 par value per share (the "Common Stock"), issuable from time to
time, upon conversion of the remaining outstanding shares of the Company's
Series F Convertible Preferred Stock (the "Series F Stock").
In the preparation of our opinion, we have examined (1) the Restated
Certificate of Incorporation of the Company, as amended to date, (2) the By-Laws
of the Company, in effect on the date hereof, (3) minutes of meetings of the
Company's Board of Directors, as made available to us by executive officers of
the Company, (4) a certificate from an executive officer of the Company, (5) the
Registration Statement, (6) the Securities Purchase Agreement, dated as of
December 9, 1998 (the Agreement"), including the exhibits incorporated by
reference therein and (7) the Waiver, dated October 11, 1999. In our
examinations, we have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals, the conformity to
the originals of all documents submitted to us as certified, photostatic or
conformed copies, and the authenticity of the originals of all such latter
documents.
Based upon such examination, we are of the opinion that the Shares,
when issued and delivered in accordance with the terms of the Agreement, and the
Certificate of Designations, Preferences and Rights of the Series F Stock, will
be validly issued, fully paid and non-assessable.
We hereby consent to the filing of our opinion as an exhibit to the
Registration Statement and to the reference to our firm under the caption "Legal
Matters" in the prospectus included in the Registration Statement.
Certain partners of our Firm beneficially own 1,200 shares of Common
Stock.
Sincerely yours,
/s/ Warshaw Burstein Cohen
Schlesinger & Kuh, LLP
MDS/HMC
E-1
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors
Immunomedics, Inc.
We consent to the use of our report incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the Prospectus.
KPMG LLP
Short Hills, New Jersey
November 9, 1999
E-2
<PAGE>
