As filed with the Securities and Exchange Commission on January 6, 1998
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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CYTOGEN CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 22-2322400
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
600 College Road East
Princeton, New Jersey 08540
(609) 987-8200
(Address, Including ZIP Code, and Telephone Number, Including Area
Code, of Registrant's Principal Executive Offices)
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DONALD F. CRANE, JR., ESQ.
CYTOGEN CORPORATION
600 College Road East
Princeton, New Jersey 08540
(609) 987-8200
(Name, Address, Including ZIP Code, and Telephone Number,
Including Area Code, of Agent for Service)
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Copy to:
FREDERICK W. KANNER, ESQ.
DEWEY BALLANTINE LLP
1301 Avenue of the Americas
New York, New York 10019-6092
(212) 259-8000
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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. [ ]
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
-------------------------------
<C> <C> <C> <C> <C>
Title of Shares to be Proposed Maximum Proposed Maximum Amount of
Registered Amount Registered Aggregate Price Per Aggregate Offering Registration Fee
Common stock,par 6,000,000 (2) Share (1) Price $1,884
value $.01 per share $1.61 $9,660,000
</TABLE>
(1) Estimated solely for purposes of computing the registration
fee pursuant to Rule 457(c).
(2) Pursuant to Rule 416 under the Securities Act of 1933, any
additional shares of Common Stock issued either as a result of the
anti-dilution provisions of the Certificate of Designation relating
to the Preferred Stock pursuant to which the Common Stock will be
issued or by reason of a reduction in the conversion price of the
Preferred Stock in accordance with the terms thereof are deemed to
be registered herewith.
The Registrant hereby amends this Registration Statement on such
date or dates as may be necessary to delay its effective date until
the Registrant shall file a further amendment which specifically
states that this Registration Statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of
1933 or until the Registration Statement shall become effective on
such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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SUBJECT TO COMPLETION, DATED JANUARY 6, 1998
6,000,000 Shares
CYTOGEN CORPORATION
COMMON STOCK
This Prospectus relates to up to 6,000,000 shares of Common
Stock, par value $.01 per share (the "Common Stock"), of CYTOGEN
Corporation ("CYTOGEN" or the "Company"), which have been
registered for sale from time to time by the selling stockholders
named herein or their permitted transferees or successors (the
"Selling Stockholders"). Any or all of the Common Stock being
registered hereby may be sold from time to time to purchasers
directly by the Selling Stockholders. Alternatively, the Selling
Stockholders may from time to time offer the Common Stock through
underwriters, dealers or agents who may receive compensation in the
form of underwriting discounts, concessions or commissions from the
Selling Stockholders and/or the purchasers of Common Stock for whom
they may act as agent. To the extent required, the names of the
Selling Stockholders, the number of shares of Common Stock to be
sold, purchase price, public offering price, the name of any agent,
dealer or underwriter and any applicable commission or discount or
other items constituting compensation or indemnification
arrangements with respect to a particular offering will be set
forth in an accompanying Prospectus Supplement. The Company will
receive no proceeds from sales by the Selling Stockholders of the
Common Stock offered hereby. The shares of Common Stock to which
this Prospectus relates are issuable to the Selling Stockholders
from time to time upon conversion of or as dividends on certain
securities received in the Private Placement (as defined herein).
All Registration Expenses (as defined herein) incurred in
connection with the registration of the Common Stock to which this
Prospectus relates will be borne by the Company. The Company has
agreed to indemnify the Selling Stockholders against certain
liabilities, including certain liabilities under the Securities Act
of 1933, as amended (the "Securities Act"), or to contribute to
payments which the Selling Stockholders may be required to make in
respect thereof. See "Plan of Distribution."
The Common Stock is traded on the Nasdaq National Market under
the symbol "CYTO." The last reported sale price of the Common Stock
as reported by the Nasdaq National Market on January 5, 1998 was
$1.91 per share.
The Common Stock offered hereby involves a high degree of
risk. See "Risk Factors" beginning on page 5 for a discussion of
certain factors that should be considered by prospective investors.
--------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
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OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
--------------------
The date of this Prospectus is January , 1998.
Information contained herein is subject to completion or
amendment. A registration statement relating to these Securities
has been filed with the Securities and Exchange Commission. These
Securities may not be sold nor may offers to buy be accepted prior
to the time the registration statement becomes effective. This
prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of
these Securities in any State in which such offer, solicitation or
sale would be unlawful prior to registration or qualification under
the Securities laws of any such state.
AVAILABLE INFORMATION
---------------------
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith files reports, proxy statements
and other information with the Securities and Exchange Commission
(the "Commission"). The Company has filed a Registration Statement
on Form S-3 with the Commission under the Securities Act with
respect to the Common Stock offered hereby. As permitted by the
rules and regulations of the Commission, this Prospectus omits
certain information contained in the Registration Statement. For
further information, reference is made to the Registration
Statement, including the financial schedules and exhibits
incorporated therein by reference or filed as a part thereof. Such
reports, proxy statements and other information can be inspected
and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Judiciary Plaza, Room 1024,
Washington, D.C. 20549, and at the Commission's following Regional
Offices: Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511; and Seven World Trade Center, 13th
Floor, New York, New York 10048. Copies of such material can be
obtained at prescribed rates from the Public Reference Section of
the Commission at 450 Fifth Street, N.W., Judiciary Plaza,
Washington, D.C. 20549. Reports, proxy statements and other
information filed electronically by the Company with the Commission
are available at the Commission's world wide web site at
http://www.sec.gov. The Company's Common Stock is traded on the
Nasdaq National Market under the symbol "CYTO," and reports, proxy
statements and other information concerning the Company also may be
inspected at the offices of the National Association of Securities
Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20006.
Statements made in this Prospectus as to the contents of any
contract, agreement or other document referred to are not
necessarily complete, and, in each instance, reference is made to
the copy of such document filed as an exhibit to the Registration
Statement or otherwise filed with the Commission. Each such
statement shall be deemed qualified in its entirety by such
reference.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
-----------------------------------------------
The following documents have been filed with the Commission by
the Company and are incorporated herein by reference in this
Prospectus and made a part hereof: (i) the Company's Annual Report
on Form 10-K for the year ended December 31, 1996; (ii) the
Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1997, June 30, 1997 and September 30, 1997; and (iii) the
Company's Current Reports on Form 8-K dated July 8, 1997 and
December 22, 1997; and (iv) all documents filed by the Company
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
after the date of this Prospectus and prior to the termination of
the offering of the Common Stock shall be deemed to be incorporated
by reference in this Prospectus and to be a part hereof from the
date of filing such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or
in any other subsequently filed document which also is or is deemed
to be incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part
of this Prospectus. The Company will provide without charge to
each person to whom this Prospectus is delivered, upon the request
of such person, a copy of any or all of the foregoing documents
incorporated herein by reference, other than exhibits to such
documents (unless such exhibits are specifically incorporated by
reference into such documents). Requests for such documents should
be submitted in writing to Cytogen Corporation, Attention:
Investor Relations, 600 College Road East, CN 5308, Princeton, New
Jersey 08540-5308, Telephone: (609) 987-8200.
--------------------
No person has been authorized in connection with the offering
made hereby to give any information or make any representation not
contained in this Prospectus and, if given or made, such
information or representation must not be relied upon as having
been authorized by the Company or any other person. This Prospectus
does not constitute an offer to sell or solicitation of any offer
to buy any of the Securities offered hereby in any jurisdiction in
which it is unlawful to make such offer or solicitation. Neither
the delivery of this Prospectus nor any sale made hereunder shall,
under any circumstances, create any implication that the
information contained herein is correct as of any date subsequent
to the date hereof.
RISK FACTORS
------------
Prospective investors in the Common Stock offered hereby
should carefully consider the following risk factors, in addition
to the other information contained in this Prospectus and the
documents incorporated herein. This Prospectus contains forward-looking
statements which involve risks and uncertainties. The Company's actual
results could differ materially from those anticipated in these
forward-looking statements as a result of certain factors, including those
set forth in the following risk factors and elsewhere in this Prospectus
and the documents incorporated herein by reference.
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History of Operating Losses; Accumulated Deficit; Uncertainty of
- ---------------------------------------------------------------
Profitability; Fluctuating Results of Operations
- ------------------------------------------------
The Company has incurred substantial operating losses since
inception and, as of September 30, 1997, had an accumulated deficit
of approximately $278 million. Such losses have resulted
principally from expenses incurred in the Company's research and
development activities, including, without limitation, the
acquisition of complementary products and technologies, seeking
regulatory approvals, related preclinical and clinical studies and
the preparation of submissions to the United States Food and Drug
Administration (the "FDA"), development of sales, marketing,
manufacturing and distribution channels, development of internal
manufacturing capabilities relating to ProstaScint, and general and
administrative expenses. The Company expects to incur significant
operating losses in the future primarily due to the Company's
continued research and product development efforts, costs
associated with the acquisition of complementary products and
technologies and their related development and commercialization
expenses, and the further expansion of the Company's sales,
marketing, manufacturing and distribution activities. The
Company's ability to achieve and maintain profitability is highly
dependent upon the successful commercialization of its products,
including Quadramet and ProstaScint, and the successful completion
of the research and development of, the obtaining of regulatory
approvals for, and the successful commercialization of, its product
candidates, including Autologous Lymphocyte Therapy ("ALT").
Further, the markets targeted by the Company are heavily regulated
and are characterized by an increasing number of entrants, intense
competition and a high rate of failure. There can be no assurance
that the Company will ever be able to successfully commercialize
its products or that profitability will ever be achieved. The
Company's results of operations have fluctuated in the past on an
annual and quarterly basis and may fluctuate significantly from
period to period in the future, depending upon a number of factors,
including, without limitation, the degree of market acceptance of
the Company's products, the timing of regulatory approvals and
other regulatory announcements, variations in the Company's sales,
marketing, manufacturing and distribution channels, the timing and
successful integration of acquired complementary products and
technologies, the timing of new product announcements and
introductions by the Company and its competitors, product
obsolescence resulting from new product introductions and other
factors, many of which are outside the Company's control. Due to
one or more of the aforementioned factors, in one or more future
quarters the Company's results of operations may fall below the
expectations of securities analysts and investors. In that event,
the market price of the Company's Common Stock could be materially
and adversely affected.
Future Capital Needs; Uncertainty of Additional Financing
- ---------------------------------------------------------
The Company has incurred negative cash flows from operations
since its inception, and has expended, and expects to continue to
expend in the future, substantial funds to complete its planned
product development efforts, including acquisition of products and
complementary technologies, research and development, clinical
studies and regulatory activities, and to further expand its
marketing, sales, manufacturing and distribution activities. The
Company expects that its existing capital resources will be
adequate to fund the Company's operations through at least mid-1998.
No assurance can be given that the Company will not consume
a significant amount of its available resources before that time.
In addition, the Company expects that it will have additional
requirements for debt or equity capital, irrespective of whether
and when it reaches profitability, for further development of
products, product and technology acquisition costs, and working
capital. The Company's future capital requirements and the
adequacy of available funds will depend on numerous factors,
including the successful commercialization of its products, the
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costs associated with the acquisition of complementary products and
technologies, progress in its product development efforts, the
magnitude and scope of such efforts, progress with preclinical
studies and clinical trials, progress with regulatory affairs
activities, the cost of filing, prosecuting, defending and
enforcing patent claims and other intellectual property rights,
competing technological and market developments, and the expansion
of strategic alliances for the sales, marketing, manufacturing and
distribution of its products. To the extent that funds generated
from the Company's product-related sales and license and contract
revenues, together with its existing capital resources are
insufficient to meet current or planned operating requirements, the
Company will be required to obtain additional funds through equity
or debt financing, strategic alliances with corporate partners and
others, or through other sources. The Company has a commitment
pursuant to which it may issue up to $12.5 million in additional
series of convertible preferred stock, under certain conditions,
however, there can be no assurance that such conditions will be
met. If adequate funds are not available, the Company may be
required to delay, scale back or eliminate certain aspects of its
operations or attempt to obtain funds through arrangements with
collaborative partners or others that may require the Company to
relinquish rights to certain of its technologies, product
candidates, products or potential markets. If adequate funds are
not available, the Company's business, financial condition and
results of operations will be materially and adversely effected.
Dependence on Quadramet and ProstaScint
- ---------------------------------------
No significant history of revenues exists with respect to any
of the Company's products. Quadramet and ProstaScint were
introduced to the market during the first half of 1997 and are
expected to account for a significant percentage of the Company's
product related revenues for the foreseeable future. For the
quarter ended September 30, 1997, revenues related to Quadramet and
ProstaScint accounted for over 89% of the Company's product related
revenues. There can be no assurance that Quadramet and ProstaScint
will achieve market acceptance. The Company's success will be
dependent upon the acceptance of Quadramet and ProstaScint by the
medical community, including health care providers such as
hospitals and physicians, and third-party payors, as safe,
effective and cost efficient alternatives to other available
treatment and diagnostic protocols. Accordingly, there can be no
assurance that Quadramet or ProstaScint will achieve market
acceptance on a timely basis, or at all. The failure of Quadramet
or ProstaScint to achieve market acceptance would have a material
adverse effect on the Company's business, financial condition and
results of operations. Furthermore, the use of certain of the
Company's products requires varying degrees of training by
physicians, technicians and other health care professionals prior
to usage for diagnosis or therapy. In particular, the approved
indication for ProstaScint requires the medical imaging community,
including technologists and physicians, to successfully complete
the Company's Partner's in Excellence Program ("PIE" Program), a
proprietary training program which is designed to ensure
appropriate acquisition and interpretation of ProstaScint images.
The successful completion of such program generally takes up to one
month, requires annual maintenance certification and has an
enrollment backlog of approximately eight months. The failure of
such health care professionals to devote adequate time or resources
for such education or training could delay the market acceptance of
such products, particularly ProstaScint, and could have a material
adverse effect on the Company's business, financial condition and
results of operations. The Company's rights to Quadramet are
currently limited to North, South and Central America. There can
be no assurance that Quadramet or ProstaScint will be accepted in
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any markets outside the United States due to the influence of
established medical practices, and other social and economic
factors beyond the Company's control.
Dependence on Receipt of Regulatory Approvals for, and Successful
- -----------------------------------------------------------------
Commercialization of, ALT
- -------------------------
The Company has recently completed Phase III clinical trials
relating to ALT and intends to file a Biologics License Application
("BLA") with the FDA during early 1998. The Company's success will
be dependent upon its ability to receive timely approval from the
FDA for the marketing of ALT for its proposed indications. The
FDA approval process is unpredictable and uncertain, and no
assurance can be given that the necessary approvals or clearances
for ALT will be granted in a timely manner, or at all. Delays in
the receipt of, of a failure to receive, such approvals or
clearances for ALT could have a material adverse effect on the
Company's business, financial condition and results of operations.
Further, if approved by the FDA, there can be no assurance that ALT
will achieve market acceptance by the medical community, including
health care providers, such as hospitals and physicians, and third-party
payors, as a safe, effective and cost efficient alternative to other
available treatment protocols. The failure of ALT to receive timely
approval for its proposed indications and to thereafter be successfully
commercialized would have a material adverse effect on the Company's
business, financial condition and results of operations.
Dependence on Collaborative Partners
- ------------------------------------
The Company has entered into collaborative and licensing
arrangements with large pharmaceutical companies, licensees and
third parties with respect to the manufacture, sales, marketing and
distribution of certain of the Company's products and product
candidates and technologies. In particular, the Company has
entered into a license agreement with The DuPont Merck
Pharmaceutical Company ("DuPont Merck") pursuant to which DuPont
Merck is responsible for manufacturing, marketing, selling and
distributing Quadramet throughout the Company's licensed territory.
In addition, the Company is party to a co-promotion agreement with
C.R. BARD, Inc. ("BARD"), pursuant to which BARD's Urological
Division has the exclusive right to market ProstaScint to
urologists. As a result, these aspects of the Company's sales,
marketing, manufacturing and distribution activities will be
outside the direct control of the Company. There can be no
assurance that DuPont Merck or BARD will perform all of their
obligations under their arrangements with the Company. In
addition, there can be no assurance that any such arrangements will
be renewed or any new arrangements will be available on acceptable
terms, if at all, or that any such arrangements, if entered into,
will be successful. In the event that DuPont Merck or BARD do not
successfully sell, market, manufacture and distribute Quadramet and
ProstaScint, respectively, or breach their obligations to the
Company, the successful commercialization of Quadramet and
ProstaScint would be delayed, which could have a material adverse
effect on the Company's business, financial condition and results
of operations. Accordingly, the Company's success with respect to
Quadramet and ProstaScint will depend, in significant part, upon
the subsequent success of the efforts of DuPont Merck and BARD.
Further, the Company is dependent upon the efforts of Elan
Corporation, plc ("Elan") in connection with the development of
product candidates, including a collaboration with respect to a
synthetic peptide developed with the Company's proprietary Genetic
Diversity Library ("GDL") technology and as to various products in
development by Targon Corporation ("Targon"), a subsidiary of the
Company which is managed and funded jointly by the Company and
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Elan. The failure by Elan to perform its obligations under
agreements with the Company would delay or preclude the development
of certain of the Company's product candidates, which could have a
material adverse effect on the Company's business, financial
condition and results of operations.
There can be no assurance that the Company will be able to
maintain its existing collaborative arrangements or enter into
collaborative and license arrangements in the future on acceptable
terms, if at all, that such arrangements will be successful, that
the parties with which the Company has or may establish
arrangements will perform their obligations under such
arrangements, or that potential collaborators will not compete with
the Company by seeking alternative means of developing products for
the indications targeted by the Company. There can also be no
assurance that the Company's existing or any future arrangements
will lead to the development of product candidates or technologies
with commercial potential, that the Company will be able to obtain
proprietary rights or licenses for the proprietary rights with
respect to any product candidates or technologies developed in
connection with these arrangements, or that the Company will be
able to ensure the confidentiality of any proprietary rights and
information developed in such arrangements or prevent the public
disclosure thereof.
Limited Sales, Marketing and Distribution Capabilities
- ------------------------------------------------------
The Company has limited internal sales, marketing and
distribution capabilities. With respect to the sales, marketing
and distribution of Quadramet and ProstaScint, the Company is
substantially dependent on the efforts of DuPont Merck and BARD,
respectively. Failure to successfully establish and maintain
significant sales, marketing and distribution efforts, either
internally or through arrangements with third parties, would have
a material adverse effect on the Company's business, financial
condition and results of operations.
Risks Associated with Manufacturing; Third-Party Manufacturers'
- --------------------------------------------------------------
Dependence on Single Source Suppliers
- -------------------------------------
The Company's products must be manufactured either internally
or through third-party manufacturers in compliance with regulatory
requirements and at commercially acceptable costs. Quadramet is
manufactured by DuPont Merck pursuant to an agreement with CYTOGEN.
While the Company believes that its manufacturing operations
currently address the Company's needs for its other products, there
can be no assurance that the Company will be able to continue to
manufacture such products on a commercially reasonable basis, that
the Company will have the capacity to manufacture additional
products and product candidates or successfully outsource such
manufacturing needs. The failure of the Company to successfully
manufacture or arrange for the manufacture of its products and
product candidates would have a material adverse effect on the
Company's business, financial condition and results of operations.
In addition, certain components of Quadramet, particularly
Samarium-153 ("Sm-153") and EDTMP, are provided to DuPont Merck by
sole source suppliers. Due to its radiochemical properties, Sm-153
must be produced on a weekly basis by its supplier in order to meet
DuPont Merck's manufacturing requirements. On one occasion, DuPont
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Merck was unable to manufacture Quadramet on a timely basis due to
the failure of the sole source supplier to provide an adequate
supply of Sm-153. In the event that DuPont Merck is unable to
obtain sufficient quantities of such components on commercially
reasonable terms, or in a timely manner, DuPont Merck would be
unable to manufacture Quadramet on a timely and cost-competitive
basis which could have a material adverse effect on the Company's
business, financial condition and results of operations. In
addition, alternative sources for certain of these components may
not be readily available. Thus, the loss by DuPont Merck of its
sources for such components could result in an interruption of
supply and could have a material adverse effect on the Company's
business, financial condition and results of operations.
The Company and its third party manufacturers are required to
adhere to FDA regulations setting forth requirements for current
Good Manufacturing Practices ("cGMP") and similar regulations in
other countries, which include extensive testing, control and
documentation requirements. Ongoing compliance with cGMP, labeling
and other applicable regulatory requirements is monitored through
periodic inspections and market surveillance by state and federal
agencies, including the FDA, and by comparable agencies in other
countries. Failure of the Company and its third-party
manufacturers to comply with applicable regulations could result in
sanctions being imposed on the Company, including fines,
injunctions, civil penalties, failure of the government to grant
premarket clearance or premarket approval of drugs, delays,
suspension or withdrawal of approvals, seizures or recalls of
products, operating restrictions and criminal prosecutions.
Uncertainty of Third-Party Reimbursement
- ----------------------------------------
The business, financial condition and results of operations of
biotechnology and pharmaceutical companies, including CYTOGEN, will
continue to be affected by the efforts of governments and third-party payors
to contain or reduce the costs of healthcare through various means. There
have been, and the Company expects that there will continue to be, a number
of federal and state proposals to implement government control of pricing and
profitability of therapeutic and diagnostic imaging agents. In addition, an
increasing emphasis on managed care has and will continue to
increase the pressure on pricing of these products. While the
Company cannot predict whether such legislative or regulatory
proposals will be adopted or the effects such proposals or managed
care efforts may have on its business, the announcement of such
proposals and the adoption of such proposals or efforts could have
a material adverse effect on the Company's business, financial
condition and results of operations. Further, to the extent such
proposals or efforts have a material adverse effect on other
companies that are prospective corporate partners for the Company,
the Company's ability to establish strategic alliances may be
materially and adversely affected. In addition, sales of the
Company's products will be dependent, in part, on the availability
of reimbursement to the consumer from third-party payors, including
Medicare, Medicaid, and private health insurance plans. Third-party payors
are increasingly challenging the prices charged for medical products and
services. There can be no assurance that the Company's products will be
considered cost-effective and that reimbursement to consumers will be
available, will continue to be available, or will be sufficient to allow the
Company to sell its products on a competitive basis. Reimbursement by a
third-party payor may depend on a number of factors, including the payor's
determination that the use of the Company's products are clinically
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useful and cost-effective, medically necessary and not experimental
or investigational. Since reimbursement approval is required from
each payor individually, seeking such approvals can be a time
consuming and costly process which could require the Company to
provide supporting scientific, clinical and cost-effectiveness data
for the use of the Company's products to each payor separately.
Failure of the Company to secure adequate third party reimbursement
for its products would have a material adverse effect on its
business, financial condition and results of operations.
Competition
- -----------
The biotechnology and pharmaceutical industries are subject to
intense competition, including competition from large
pharmaceutical companies, biotechnology companies and other
companies, universities and research institutions. Competition
with the Company's existing therapeutic products is posed by a wide
variety of other firms, including firms which provide products used
in more traditional treatments or therapies, such as external beam
radiation, chemotherapy agents, narcotic analgesics and
radiopharmaceuticals. In addition, the Company's existing and
potential competitors may be able to develop technologies that are
as effective as, or more effective than those offered by the
Company, which would render the Company's products noncompetitive
or obsolete. Moreover, many of the Company's existing and
potential competitors have substantially greater financial,
marketing, sales, manufacturing, distribution and technological
resources than the Company. Such existing and potential
competitors may be in the process of seeking FDA or foreign
regulatory approval for their respective products or may also enjoy
substantial advantages over the Company in terms of research and
development expertise, experience in conducting clinical trials,
experience in regulatory matters, manufacturing efficiency, name
recognition, sales and marketing expertise and distribution
channels. In addition, many of these companies may have more
experience in establishing third-party reimbursement for their
products. Accordingly, there can be no assurance that the Company
will be able to compete effectively against such existing or
potential competitors or that competition will not have a material
adverse effect on the Company's business, financial condition and
results of operations.
Uncertainty Relating to Licenses, Patents and Proprietary Rights
- ----------------------------------------------------------------
The Company is highly dependent upon its proprietary
technology and seeks to protect such technology through a
combination of patents, licenses and trade secrets. The Company
has applied for and obtained patent protection and has licensed
other patents for certain proprietary aspects of its technology and
processes in the U.S. and in other countries. In particular, the
Company is dependent upon the enforceability of its license with
Dow with respect to the technology underlying its Quadramet
product. There can be no assurance that the Company's owned and
licensed patents will prove to be enforceable or that additional
patents will be issued. Neither can assurance be given that the
technologies used by the Company do not infringe upon the
proprietary rights of others, although the Company is not aware of
any such infringement or any adverse claim. The Company could
incur substantial costs in seeking enforcement of its patents
against infringement or the unauthorized use of its trade secrets
by others or in defending itself against patent infringement claims
by others. Insofar as the Company also relies in part on trade
secrets and unpatented know-how to maintain its competitive
position, there can be no assurance that others will not
independently develop similar or superior technologies or that the
Company's trade secrets and know-how will not become known to
others.
11
<PAGE>
The Company's success will depend, in part, on its ability,
and the ability of its collaborators or licensors, to obtain
protection for its products and technologies under United States
and foreign patent laws, to preserve its trade secrets, and to
operate without infringing the proprietary rights of third parties.
Because of the substantial length of time and expense associated
with bringing new products through development to the marketplace,
the biopharmaceutical industry places considerable importance on
obtaining, and maintaining, patent and trade secret protection for
new technologies, products and processes. The Company has obtained
rights to certain patents and patent applications and may, in the
future, obtain, or seek rights from third parties to additional
patents and patent applications. There can be no assurance that
patent applications relating to the Company's products or
technologies will result in patents being issued, that any issued
patents will afford adequate protection to the Company, or that
such patents will not be challenged, invalidated, infringed or
circumvented. Furthermore, there can be no assurance that others
have not developed, or will not develop, similar products or
technologies that will compete with those of the Company without
infringing upon the Company's intellectual property rights.
Legal standards relating to the scope of claims and the
validity of patents in the biopharmaceutical industry are uncertain
and still evolving, and no assurance can be given as to the degree
of protection that will be afforded any patents issued to, or
licensed by, the Company. There can be no assurance that, if
challenged by others in litigation, any patents assigned to or
licensed by the Company will not be found invalid. Furthermore,
there can be no assurance that the Company's activities would not
infringe patents owned by others. Defense and prosecution of
patent matters can be expensive and time-consuming and, regardless
of whether the outcome is favorable to the Company, can result in
the diversion of substantial financial, management and other
resources. An adverse outcome could subject the Company to
significant liability to third parties, require the Company to
obtain licenses from third parties, or require the Company to cease
any related research and development activities and product sales.
No assurance can be given that any licenses required under any such
patents or proprietary rights would be made available on terms
acceptable to the Company, if at all. Moreover, the laws of
certain countries may not protect the Company's proprietary rights
to the same extent as United States law.
The Company's success also is dependent upon the skill,
knowledge, and experience of its scientific and technical
personnel. To help protect its rights, the Company requires all
employees, consultants, advisors and collaborators to enter into
confidentiality agreements that prohibit the disclosure of
confidential information to anyone outside the Company and require
disclosure, and in most cases, assignment to the Company, of their
ideas, developments, discoveries and inventions. There can be no
assurance, however, that these agreements will provide adequate
protection for the Company's trade secrets, know-how or other
proprietary information in the event of any unauthorized use or
disclosure.
Uncertainties Relating to Product Development
- ---------------------------------------------
Product development involves a high degree of risk. There can
be no assurance that the Company's product candidates will prove to
be safe and effective, will receive the necessary regulatory
approvals or will ultimately achieve market acceptance. These
product candidates will require substantial additional investment,
laboratory development, clinical testing and regulatory approvals
12
<PAGE>
prior to their commercialization. There can be no assurance that
the Company will not experience difficulties that could delay or
prevent the successful development, introduction and marketing of
new products. The Company's inability to successfully develop and
commercialize products on a timely basis or at all, or achieve
market acceptance of such products, could have a material adverse
effect on the Company's business, financial condition and results
of operations.
Before obtaining regulatory approvals for the commercial sale
of any of its products under development, the Company must
demonstrate through preclinical studies and clinical trials that
the product is safe and efficacious for use in each target
indication. The results from preclinical studies and early clinical
trials may not be predictive of results that will be obtained in
large-scale testing, and there can be no assurance that the
Company's clinical trials will demonstrate the safety and efficacy
of any products or will result in marketable products. A number of
companies in the biotechnology industry have suffered significant
setbacks in advanced clinical trials, even after promising results
in earlier trials. In addition, there can be no assurance that product
issues will not arise following successful clinical trials and FDA
approval.
The rate of completion of the Company's clinical trials is
dependent upon, among other factors, the rate of patient
enrollment. Patient enrollment is a function of many factors,
including the size of the patient population, the nature of the
protocol, the proximity of patients to clinical sites and the
eligibility criteria for the study. Delays in planned patient
enrollment may result in increased costs and delays, which could
have a material adverse effect on the Company.
Government Regulation
- ---------------------
Any products tested, manufactured or distributed by the
Company or on the Company's behalf pursuant to FDA clearances or
approvals are subject to pervasive and continuing regulation by
numerous regulatory authorities, including primarily the FDA.
Changes in existing requirements or adoption of new requirements or
policies could adversely affect the ability of the Company to
comply with regulatory requirements. Failure to comply with
regulatory requirements could have a material adverse effect on the
Company's business, financial condition and results of operations.
There can be no assurance that the Company will not be required to
incur significant costs to comply with laws and regulations in the
future or that laws or regulations will not have a material adverse
effect upon the Company's business, financial condition and results
of operations.
The preclinical testing, clinical trials, manufacture and
promotion of any compounds developed by the Company or its
collaborative partners and the manufacturing and marketing of any
drugs resulting therefrom are subject to regulation by numerous
federal, state and local governmental authorities in the United
States, principally the FDA, and by similar agencies in other
countries in which drugs developed by the Company or its
collaborative partners may be tested and marketed (each of such
federal, state, local and other authorities and agencies, a
"Regulatory Agency"). The drug development and regulatory approval
process is lengthy, expensive, uncertain and subject to delays. In
all circumstances, approval of the use of previously unapproved
radioisotopes in certain of the Company's products requires
approval of either the Nuclear Regulatory Commission or equivalent
state regulatory agencies. There can be no assurance that such
approvals will be obtained on a timely basis, or at all. Any
compound developed by the Company or its collaborative partners
must receive Regulatory Agency approval before it may be marketed
13
<PAGE>
as a drug in a particular country. The regulatory process, which
includes preclinical testing and clinical trials of each compound
in order to establish its safety and efficacy, varies from country
to country, can take many years and requires the expenditure of
substantial resources. Data obtained from preclinical and clinical
activities are susceptible to varying interpretations which could
delay, limit or prevent Regulatory Agency approval. In addition,
delays or rejections may be encountered based upon changes in
Regulatory Agency policy during the period of drug development
and/or the period of review of any application for Regulatory
Agency approval for a compound. Delays in obtaining Regulatory
Agency approvals could adversely affect the marketing of any
products developed by the Company or its collaborative partners,
impose costly procedures upon the Company's and its collaborative
partners' activities, diminish any competitive advantages that the
Company or its collaborative partners may attain and adversely
affect the Company's ability to receive royalties.
There can be no assurance that, even after such time and
expenditures, Regulatory Agency approvals will be obtained for any
compounds developed by or in collaboration with the Company.
Moreover, if Regulatory Agency approval for a drug is granted, such
approval may entail limitations on the indicated uses for which it
may be marketed that could limit the potential market for any such
drug. Furthermore, if and when such approval is obtained, the
marketing, manufacture, labeling, storage and record keeping
related to the Company's products would remain subject to extensive
regulatory requirements. Discovery of previously unknown problems
with a drug, its manufacture, or its manufacturer may result in
restrictions on such drug, manufacture or manufacturer, including
withdrawal of the drug from the market. Failure to comply with
regulatory requirements could, among other things, result in fines,
suspension of regulatory approvals, operating restrictions and
criminal prosecution.
Further, the U. S. Food, Drug and Cosmetics Act requires that
the Company's products be manufactured in FDA registered facilities
subject to inspection. The manufacturer must be in compliance with
cGMP which imposes certain procedural and documentation
requirements upon the Company and its manufacturing partners with
respect to manufacturing and quality assurance activities.
Noncompliance with cGMP can result in, among other things, fines,
injunctions, civil penalties, recalls or seizures of products,
total or partial suspension of production, failure of the
government to grant premarket clearance or premarket approval for
drugs, withdrawal of marketing approvals and criminal prosecution.
Any failure by the Company or its manufacturing partners to comply
with the requirements of cGMP could have a material adverse effect
on the Company's business, financial condition and results of
operations.
Attraction and Retention of Key Personnel
- -----------------------------------------
The Company is highly dependent on the principal members of
its scientific and management staff, the loss of whose services
might significantly delay or prevent the achievement of research,
development or strategic objectives. The Company's success will
depend on its ability to retain key employees and to attract
additional qualified employees. Competition for such personnel is
intense, and there can be no assurance that the Company will be
able to retain existing personnel and to attract, assimilate or
retain additional highly qualified employees in the future. If the
Company is unable to hire and retain personnel in key positions,
such inability would have a material adverse effect on the
Company's business, financial condition and results of operations.
14
<PAGE>
Management Succession
- ---------------------
The Company has announced that Dr. Thomas J. McKearn has
indicated a desire to resign as Chairman, President and Chief
Executive Officer and return to a scientific role in the Company.
Dr. McKearn has agreed to remain in his current position until a
successor is located. The Board of Directors of the Company (the
"Board of Directors") is currently engaged in a search for a
successor. No assurance can be given as to the Company's ability
to locate or secure the employment of a suitably qualified
candidate on a timely basis, or at all. In addition, Dr. John E.
Bagalay, Jr., a member of the Board of Directors, is serving as
Chief Financial Officer on an interim basis. The Board of
Directors plans to conduct a search for a permanent Chief Financial
Officer following selection of a new Chief Executive Officer,
although no assurance can be given as to the Company's ability to
locate a suitable candidate for this position on a timely basis, or
at all.
Potential Inadequacy of Product Liability Insurance
- ---------------------------------------------------
The Company's business is subject to product liability risks
inherent in the testing, manufacturing and marketing of its
products. There can be no assurance that product liability claims
will not be asserted against the Company, its collaborators or
licensees. While the Company currently maintains product liability
insurance in amounts it believes are adequate, there can be no
assurance that such coverage will be adequate to protect the
Company against future product liability claims or that product
liability insurance will be available to the Company in the future
on commercially reasonable terms, if at all. Furthermore, there
can be no assurance that the Company will be able to avoid
significant product liability claims and adverse publicity.
Consequently, a product liability claim or other claim with respect
to uninsured or underinsured liabilities could have a material
adverse effect on the Company's business, financial condition and
results of operations.
Environmental Regulation
- ------------------------
The Company is subject to a variety of local, state and
federal government regulations relating to the storage, discharge,
handling, emission, generation, manufacture and disposal of toxic,
infectious or other hazardous substances used to manufacture the
Company's products. Any failure by the Company to control the use,
disposal, removal or storage of hazardous chemicals or toxic
substances could subject the Company to significant liabilities,
which could have a material adverse effect on the Company's
business, financial condition and results of operations.
Volatility of Stock Price
- -------------------------
The market prices for securities of biotechnology and
pharmaceutical companies have historically been highly volatile,
and the market has from time to time experienced significant price
and volume fluctuations that are unrelated to the operating
performance of particular companies. The market price of the
Company's Common Stock has fluctuated over a wide range and may
continue to fluctuate. Announcements concerning the Company or its
competitors, including the results of clinical trials,
technological innovations or new commercial products, changes in
governmental regulation or the status of the Company's regulatory
approvals or applications, changes in earnings, changes in health
care policies and practices, developments or disputes concerning
proprietary rights, litigation or public concern as to safety of
the Company's potential products as well as changes in general
market conditions may have a significant effect on the market price
of the Company's Common Stock. Fluctuations or decreases in the
trading price of the Common Stock may adversely affect the
Company's ability to raise capital through future equity
financings.
15
<PAGE>
Anti-takeover Considerations
- ----------------------------
The Board of Directors has the authority, without further
action by the holders of Common Stock, to issue from time to time,
up to 5,398,250 additional shares of preferred stock (after giving
effect to the issuance of the Series B Convertible Preferred Stock
pursuant to the Private Placement) in one or more classes or
series, and to fix the rights and preferences of such preferred
stock. The Company is subject to provisions of Delaware corporate
law which, subject to certain exceptions, will prohibit the Company
from engaging in any "business combination" with a person who,
together with affiliates and associates, owns 15% or more of the
Company's Common Stock (an "Interested Stockholder") for a period
of three years following the date that such person became an
Interested Stockholder, unless the business combination is approved
in a prescribed manner. These provisions of the Company's
Certificate of Incorporation and of Delaware law may have the
effect of delaying, deterring or preventing a change in control of
the Company, may discourage bids for the Common Stock at a premium
over market price and may adversely affect the market price, and
the voting and other rights of the holders, of the Common Stock.
No Dividends
- ------------
The Company has never paid any cash dividends on the Common
Stock and anticipates that, for the foreseeable future, it will
continue to retain any earnings for use in the operation of its
business and does not intend to pay dividends on the Common Stock.
Further, the payment of dividends on the Common Stock will be
subordinate to the rights of the holders of the Company's
outstanding Series B Convertible Preferred Stock (the "Series B
Preferred Stock") to receive payment of any unpaid and accrued
dividends.
BUSINESS OF THE COMPANY
-----------------------
CYTOGEN licenses, discovers and develops site-specific
biopharmaceutical products for the treatment and diagnosis of
cancer and other diseases. The Company's product Quadramet has
been approved by the FDA and is marketed for the treatment of bone
pain arising from the spread of cancer to the bone ("bone
metastasis"). The Company's product ProstaScint has been approved
and is marketed as a diagnostic imaging agent for prostate cancer.
In addition, the Company has completed Phase III clinical trials
for ALT for the treatment of metastatic renal cell carcinoma
("mRCC") and expects to file a BLA during 1998. The Company has
formed a collaborative arrangement with Elan pursuant to which the
parties intend to focus on the rapid, cost-efficient identification
and development of therapeutic and supportive care products for
patients with cancer. CYTOGEN is also conducting research and
development relating to the use of its proprietary GDL technology,
a peptide research and development program with broad potential
applications in drug delivery and drug discovery.
Quadramet received FDA approval in March 1997 for relief of
bone pain in patients with confirmed osteoblastic bone lesions that
image on conventional bone scan. Quadramet is licensed in North
America and Latin America on an exclusive basis from Dow Chemical
("Dow"). Historically, treatments for such severe bone pain have
included external beam radiation therapy, narcotic analgesics and
16
<PAGE>
other radiopharmaceuticals. The Company believes that Quadramet
will be competitive with these alternatives based on its safety,
efficacy and ease of administration. The Company intends to expand
the use of Quadramet within the currently approved indication and
to perform clinical trials and seek regulatory approval to extend
its use to new indications such as high-dose therapy for cancer
patients, and for use in refractory rheumatoid arthritis patients.
The Company has entered into an exclusive agreement with DuPont
Merck for the manufacture and marketing of Quadramet in North,
South and Central America. CYTOGEN currently receives royalty
revenue from DuPont Merck based on a percentage of sales of
Quadramet or guaranteed minimum payments, whichever is greater.
ProstaScint has been approved by the FDA for use in
identification of prostate cancer metastases for both newly
diagnosed patients at high risk of metastases and for patients with
suspected disease recurrence following the failure of initial
therapy. In order to ensure appropriate acquisition and
interpretation of ProstaScint images, the FDA approval for
ProstaScint requires medical imaging community members to
successfully complete the Company's PIE training and certification
program. Further, to facilitate market acceptance of ProstaScint
with urologists, the Company has entered into a co-promotion
agreement with BARD.
ALT is a proprietary cellular therapy under development by
Cellcor, Inc. ("Cellcor"), a subsidiary of the Company, for the
treatment of mRCC, a life threatening kidney cancer for which
adequate therapies do not exist. Cellcor has completed pivotal
Phase III clinical trials of ALT in mRCC patients and intends to
file a BLA during 1998. Targon, a majority-owned subsidiary of
CYTOGEN, was created in September 1996 by CYTOGEN and Elan. The
two companies jointly manage Targon to leverage certain of their
core competencies. Targon draws upon Elan's expertise in drug
delivery and enhanced formulation and CYTOGEN's strength in the
development and registration of cancer products.
CYTOGEN's GDL program consists of research on long peptides
that fold to form complex three-dimensional structures, some of
which mimic important biological structures, and may therefore
mediate important biological functions. The Company believes that
the ability of these compounds to bind to predetermined sites may
mediate certain therapeutic or diagnostic effects more effectively
than other existing products. The Company has entered into a
number of collaborative arrangements for the research, development
and commercialization of various aspects of this technology.
The Company has not paid cash dividends on its Common Stock.
The Company currently intends to retain earnings for use in the
development and expansion of its business and, therefore, does not
anticipate paying cash dividends on its Common Stock in the future.
17
<PAGE>
USE OF PROCEEDS
---------------
The Company will not receive any of the proceeds from the
sale of Common Stock being offered by this Prospectus.
18
<PAGE>
SELLING STOCKHOLDERS
--------------------
The following table sets forth certain information regarding
the beneficial ownership of Common Stock by the Selling
Stockholders as of January 5, 1998, and the number of shares of
Common Stock covered by this Prospectus.
<TABLE>
<CAPTION>
Number of Shares of Number of Shares of
Common Stock Beneficially Number of Shares of Common Stock Beneficially
Name and Address Owned Common Stock Offered Owned Following the
Stockholder Prior to the Offering (1) Hereby (2) Offering (3)
- ----------- ------------------------- ---------- ------------
# of Shares % of Class # of Shares % of Class
----------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Southbrook International Investments, Ltd. 1,981,424 3.53 2,400,000 4.20 0
c/o Trippoak Advisors, Inc.
630 Fifth Avenue, Suite 2000
New York, NY 10111
Westover Investments L.P. 792,569 1.41 960,000 1.68 0
777 Main Street, Suite 2750
Fort Worth, TX 76102
Montrose Investments L.P. 1,188,854 2.12 1,440,000 2.52 0
777 Main Street, Suite 2750
Fort Worth, TX 76102
Heracles Fund 330,237 .59 400,000 .70 0
Bank of Bermuda (Cayman) Limited
P.O. Box 513
3rd Floor, British American Center
Dr. Roy's Drive
Georgetown, Grand Cayman
Cayman Islands, BWI
Themis Partners, L.P. 330,237 .59 400,000 .70 0
c/o Promethean Investment Group L.L.C.
40 West 57th Street, Suite 1520
New York, NY 10019
Brown Simpson Strategic Growth Fund, L.P. 132,095 .24 160,000 .28 0
152 West 57th Street, 40th Floor
New York, NY 10019
Brown Simpson Strategic Growth Fund, Ltd. 198,143 .35 240,000 .42 0
152 West 57th Street, 40th Floor
New York, NY 10019
</TABLE>
------------------------
19
<PAGE>
(1) Includes (i) the number of shares of Common Stock issuable
upon conversion of shares of the Company's Series B
Convertible Preferred Stock, assuming conversion at the
formula price in effect on January 5, 1998 (which price will
fluctuate from time to time based on changes in the market
price of the Common Stock and provisions in the formula for
determining the conversion price). The Series B Preferred
Stock was issued by the Company to the Selling Stockholders in
December 1997 in a transaction exempt from the registration
requirements of the Securities Act of 1933 pursuant to
Regulation D thereunder in December 1997 (the "Private
Placement").
(2) In order to provide for (i) fluctuations in the market price
of the Common Stock, (ii) provisions in the formula for
determining the conversion price of the Series B Preferred
Stock provided for in the terms thereof (see "Description of
Series B Convertible Preferred Stock") and (iii) shares of
Common Stock which may be issued in payment of dividends on
the Series B Preferred Stock, the aggregate number of shares
of Common Stock registered hereby exceeds the aggregate number
of such shares issuable upon conversion of shares of the
Series B Preferred Stock at the conversion price in effect on
the date hereof. For each Selling Stockholder, the number in
this column represents (i) such Selling Stockholder's pro rata
portion of the aggregate number of shares of Common Stock
registered hereby. No Selling Stockholder may acquire more
than 4.99% of the Common Stock unless they give the Company at
least 15 days notice of the waiver of such restrictions.
(3) Assumes sale of all shares offered hereby.
PLAN OF DISTRIBUTION
--------------------
The Selling Stockholders may, from time to time, sell all or
a portion of the shares of Common Stock (the "Shares") on the
Nasdaq National Market, in privately negotiated transactions or
otherwise, at fixed prices that may be changed, at market prices
prevailing at the time of sale, at prices related to such market
prices or at negotiated prices. The Shares may be sold by the
Selling Stockholders by one or more of the following methods,
without limitation: (a) block trades in which the broker or dealer
so engaged will attempt to sell the Shares as agent but may
position and resell a portion of the block as principal to
facilitate the transaction, (b) purchases by a broker or dealer as
principal and resale by such broker or dealer for its account
pursuant to this Prospectus, (c) an exchange distribution in
accordance with the rules of such exchange, (d) ordinary brokerage
transactions and transactions in which the broker solicits
purchasers, (e) privately negotiated transactions, (f) short sales
and (g) a combination of any such methods of sale. In effecting
sales, brokers and dealers engaged by the Selling Stockholders may
arrange for other brokers or dealers to participate. Brokers or
dealers may receive commissions or discounts from the Selling
Stockholders (or, if any such broker-dealer acts as agent for the
purchasers of such shares, from such purchaser) in amounts to be
negotiated which are not expected to exceed those customary in the
types of transactions involved. Broker-dealers may agree with the
20
<PAGE>
Selling Stockholders to sell a specified number of such Shares at
a stipulated price per share, and, to the extent such broker-dealer
is unable to do so acting as agent for a Selling Stockholder, to
purchase as principal any unsold Shares at the price required to
fulfill the broker-dealer commitment to the Selling Stockholders.
Broker-dealers who acquire Shares as principal may thereafter
resell such Shares from time to time in transactions (which may
involve block transactions and sales to and through other broker-dealers,
including transactions of the nature described above) in
the over-the-counter market or otherwise at prices and on terms
then prevailing at the time of sale, at prices then related to the
then-current market price or in negotiated transactions and, in
connection with such resales, may pay to or receive from the
purchasers of such Shares commissions as described above. The
Selling Stockholders may also sell the Shares in accordance with
Rule 144 under the Securities Act, rather than pursuant to this
Prospectus.
The Selling Stockholders and any broker-dealers or agents that
participate with the Selling Stockholders in sales of the Shares
may be deemed to be "underwriters" within the meaning of the
Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any
profit on the resale of the Shares purchased by them may be deemed
to be underwriting commissions or discounts under the Securities
Act.
From time to time the Selling Stockholders may engage in short
sales, short sales against the box, puts and calls and other
transactions in securities of the Company or derivatives thereof,
and may sell and deliver the Shares in connection therewith or in
settlement of securities loans. If the Selling Stockholders engage
in such transactions, the Conversion Price may be affected. From
time to time the Selling Stockholders may pledge their Shares
pursuant to the margin provision of its customer agreements with
their brokers. Upon a default by the Selling Stockholders, the
broker may offer and sell the pledged Shares from time to time.
The Company is required to pay all fees and expenses incident
to the registration of the Shares, including fees and disbursements
(not to exceed an aggregate of $10,000) of counsel to the Selling
Stockholders. The Company has agreed to indemnify the Selling
Stockholders against certain losses, claims, damages and
liabilities, including liabilities under the Securities Act.
DESCRIPTION OF CAPITAL STOCK
----------------------------
As of the date of this Prospectus, the Company's authorized
capital stock consists of 89,600,000 shares of Common Stock, par
value $0.01 per share, and 5,400,000 shares of preferred stock,
$0.01 per share. Pursuant to the Certificates of Designation for
the Series A Preferred Stock (as defined below) and for the Series
B Preferred Stock, 1,000 shares of Series A Preferred Stock and 750
shares of Series B Preferred Stock, respectively, have been
authorized for issuance. The description below of certain
provisions of the Company's Common Stock and preferred stock do not
purport to be complete and are subject to and qualified in their
entirety by reference to the restated Certificate of Incorporation,
as amended to date ("the Certificate of Incorporation") and the
Certificates of Designations for each of the Series A Preferred
Stock and the Series B Preferred Stock.
21
<PAGE>
Common Stock
- ------------
The holders of Common Stock are entitled to one vote per share
on all matters voted on by the stockholders, including elections of
directors. Except as otherwise required by law or as provided in
any resolutions adopted by the Board with respect to the preferred
stock of the Company, the holders of shares of Common Stock will
exclusively possess all voting power. Subject to the preferential
rights, if any, of holders of any then outstanding preferred stock,
the holders of Common Stock are entitled to receive dividends when,
as and if declared by the Board of Directors of the Company out of
funds legally available therefor. The terms of the Common Stock do
not grant to the holders thereof any preemptive, subscription,
redemption, conversion or sinking fund rights. Subject to the
preferential rights of holders of any then outstanding preferred
stock, the holders of Common Stock are entitled to share ratably in
the assets of the Company legally available for distribution to
stockholders in the event of the liquidation, dissolution or
winding up of the Company.
As of November 6, 1997, 51,169,605 shares of Common Stock were
issued and outstanding, and 1,260,000 shares of Common Stock were
reserved for issuance upon the exercise of certain outstanding
warrants and approximately 6,230,102 shares were reserved for
issuance pursuant to stock option plans and Employee Stock Purchase
Plans. The Company has issued to Dow and Elan, warrants to
purchase an aggregate of 1,260,000 shares of Common Stock at prices
ranging from $8.40 to $14.00 per share. In connection with the
Company's acquisition of an exclusive license from Dow, CYTOGEN
issued to Dow two warrants to purchase an aggregate of 260,000
shares of Common Stock at $12.50 per share. The remaining warrant
is held by Elan. See "Description of Capital Stock Preferred
Stock" for a description of the Elan warrant. In addition, CYTOGEN
has reserved up to 1,785,715 shares of Common Stock issuable in the
event of conversion of the 1,000 shares of Series A Preferred Stock
held by Elan. In the event Elan does not elect conversion but
elects to exchange the Series A Preferred Stock for an interest in
Targon, the Company will eliminate the 1,785,715 reserve. The
warrant held by Elan for 1,000,000 shares of Common stock will then
become exercisable. The warrant is void if Elan elects conversion
of its shares of Series A Preferred Stock into Common Stock.
The Certificate of Incorporation and Bylaws of the Company
contain certain provisions which may have the effect of delaying,
deferring, or preventing a change of control of the Company. See
"Risk Factors Anti-takeover Considerations". In addition, the
Board generally has the authority, without further action by
stockholders, to fix the relative powers, preferences, and rights
of the unissued shares of preferred stock of the Company.
Provisions which could discourage an unsolicited tender offer or
takeover proposal, such as extraordinary voting, dividend,
redemption, or conversion rights, could be included in such
preferred stock. For a description of certain rights which may
also affect a change-in-control transaction, see "Description of
Capital Stock Preferred Stock ."
Preferred Stock
- ---------------
Pursuant to the Certificate of Incorporation, the Company has
the authority to issue up to 5,400,000 shares of preferred stock,
$0.01 par value per share, in one or more series as determined by
22
<PAGE>
the Board of Directors of the Company. The Board of Directors of
the Company may, without further action by the stockholders of the
Company, issue one or more series of preferred stock and fix the
rights and preferences of such shares, including the dividend
rights, dividend rates, conversion rights, exchange rights, voting
rights, terms of redemption, redemption price or prices,
liquidation preferences and the number of shares constituting any
series or the designation of such series. Shares of any series of
preferred stock of the Company may be represented by depositary
shares evidenced by depositary receipts, each representing a
fractional interest in a share of preferred stock of such series
and deposited with a depository. The use of this mechanism could
increase the number of interests in preferred stock issued by the
Company. The rights of the holders of Common Stock will be subject
to, and may be adversely affected by, the rights of holders of
preferred stock issued by the Company in the future. In addition,
the issuance of preferred stock could have the effect of making it
more difficult for a third party to acquire, or of discouraging a
third party from attempting to acquire, control of the Company.
Series A Preferred Stock
- ------------------------
Pursuant to the Certificate of Designations, Powers,
Preferences and Rights of the Series A Convertible and Exchangeable
Preferred Stock (the "Series A Certificate of Designation"), 1,000
shares of Series A Preferred Stock (the "Series A Preferred
Stock"), with a liquidation preference of $5,000 per share, have
been authorized for issuance. Of these authorized shares, all have
been issued and are outstanding. All of the 1,000 shares of Series
A Preferred Stock were purchased by Elan for $15.0 million in
September 1996. The proceeds from the sale of the Series A
Preferred Stock, along with $5.0 million in proceeds from the sale
of Common Stock to Elan were used to fund the formation of Targon
Corporation, a majority-owned (99.75%) subsidiary of the Company,
and the acquisition of certain technology from Elan. Targon
focuses exclusively on the rapid development, registration,
manufacturing and commercialization of oncology products.
The Series A Preferred Stock held by Elan may, at Elan's
option be either (i) exchanged for a portion of the Company's
interest in Targon which declines from 50% to 35%, depending on the
time of the exchange, which exchange may not occur later than
September 30, 2001 or (ii) converted into shares of Common Stock of
CYTOGEN. If Elan elects to exchange the Series A Preferred Stock
for a portion of the Company's interest in Targon, then Elan will
be entitled through March 31, 2003 to exercise a warrant to
purchase up to 1 million shares of CYTOGEN Common Stock, at an
exercise price per share which escalates from $8.40 to $14 over the
life of the warrant. If Elan elects to convert the Series A
Preferred Stock into CYTOGEN Common Stock, it will receive a number
of shares which declines from 1,785,715 shares to 1,071,429 shares,
depending on the time of conversion. If Elan exercises its
conversion right, then the Company will retain its ownership
interest in Targon. Elan must elect to exchange its Series A
Preferred Stock no later than September 30, 2001. Any shares of
Series A Preferred Stock not exchanged or converted by March 31,
2003 will be automatically converted into CYTOGEN Common Stock on
that date.
The Series A Preferred Stock has no special dividend rights,
however, if dividends are declared on the CYTOGEN Common Stock, the
holders of Series A Preferred Stock will be entitled to such
dividends as they would have received had they converted their
shares of Series A Preferred Stock into Common Stock immediately
prior to the dividend. The Series A Preferred Stock has no voting
rights with respect to general corporate matters, except as
23
<PAGE>
provided by law or as set forth in the Series A Certificate of
Designation. The Series A Certificate of Designation provides that
the Company will not amend or repeal any provision of, or add any
provision to, the Certificate of Incorporation or the Bylaws if
such action would adversely affect the preferences, rights,
privileges or powers of the Series A Preferred Stock, or increase
or decrease the number of authorized shares of Series A Preferred
Stock, without the consent of 50% of the holders of the outstanding
shares of the Series A Preferred Stock.
Description of Series B Convertible Preferred Stock
- ---------------------------------------------------
The 750 outstanding shares of Series B Preferred Stock were
issued by the Company to the holders of Series B Preferred Stock
(the "Series B Holders") in the Private Placement. Each share of
Series B Preferred Stock has a par value of $.01 per share and a
stated value of $10,000 per share (the "Stated Value").
Pursuant to the Certificate of Designation relating to the
Series B Preferred Stock (the "Series B Certificate of
Designation") the Series B Holders are entitled to receive, when,
as and if declared by the Board of Directors of the Company (the
"Board of Directors"), out of funds legally available therefor,
cumulative dividends at a rate of 6% of the Stated Value per share
per annum, payable, at the option of the Company, in cash or shares
of Common Stock (subject to certain limitations). Dividends on the
Series B Preferred Stock shall be deemed to accrue from the date of
original issue of the Series B Preferred Stock, whether or not
earned or declared and whether or not there are profits, surplus or
other funds of the Company legally available for the payment of
dividends. Accrued dividends on the Series B Preferred Stock shall
be paid on the date such Series B Preferred Stock is converted, but
the Company shall have the option to pay dividends in cash or
shares of Common Stock and more frequently as and when declared by
the Board of Directors. The Series B Certificate of Designation
does not provide for a sinking fund.
The Series B Certificate of Designation prohibits the
repurchase by the Company of, or the payment or declaration of any
dividends with respect to, any securities of the Company junior to
or pari passu with the Series B Preferred Stock (with certain
exceptions).
Except as may be required by law and except with respect to
certain actions which may adversely affect the Series B Holders,
the Series B Holders are not entitled to vote on any matter
submitted to a vote of stockholders of the Company.
The Series B Preferred Stock ranks senior with respect to
rights on liquidation, winding-up and dissolution of the Company to
the Company's Common Stock. Upon any voluntary or involuntary
liquidation, dissolution or winding-up of the Company, holders of
Series B Preferred Stock will be entitled to receive $10,000 per
share, plus accrued and unpaid dividends, before any distribution
is made on the common stock or any preferred stock of the Company
ranking junior as to liquidation rights to the Series B Preferred
Stock.
The Series B Holders have the right to convert shares of
Series B Preferred Stock into common stock at a conversion price
(the "Initial Conversion Price") equal to the lesser of (a) $3.4575
24
<PAGE>
and (b) at a discount of up to 85% of the average of four closing
bid prices chosen by the Series B Holders during the twenty-five
trading days prior to notice of conversion, which discount is
initially 95% and shall increase by 5% on the first day of the two
months subsequent to the Original Issue Date of the Series B
Preferred Stock. If, however, the average per share market value
for the five day trading period immediately preceding the
conversion date exceeds the Initial Conversion Price by 180%, then
the conversion price otherwise applicable to such conversion shall
be increased by an amount equal to 50% of the difference between
the average per share market value for the five day trading period
immediately preceding the conversion date and the Initial
Conversion Price.
The Conversion Price may be adjusted under certain
circumstances, including the failure by the Company to file a
registration statement with the Securities and Exchange Commission
(the "Commission") for the underlying shares into which the Series
B Preferred Stock is convertible, the failure of such registration
statement to be declared effective by the Commission within certain
time periods, suspension of trading of the Company's common stock
or upon the occurrence of certain other events. If on the date of
conversion, the conversion price then in effect would result in the
number of shares issuable in connection with such conversion
(including the conversion shares issued in respect of payment of
dividends) equalling or exceeding 20% of the number of shares of
Common Stock outstanding on the Original Issue Date, the Company
is, under certain circumstances, required to obtain the approval of
a majority of shareholders to authorize such issuance. If such
approval is not obtained certain penalties may apply. The Series
B Holders have agreed that in no event shall any such Series B
Holder be entitled to convert any shares of Series B Preferred
Stock if the issuance of shares of Common Stock upon a proposed
conversion, when the shares to be so issued are counted together
with other shares of common stock beneficially owned by such Series
B Holder would result in a Series B Holder beneficially owning more
than 4.999% of the outstanding shares of Common Stock.
The Series B Preferred Stock is convertible at the option of
the Company three years from the Original Issue Date. All
outstanding and unconverted shares of Series B Preferred Stock are
redeemable on the third anniversary of the Original Issue Date at
a price per share equal to the product of (1) the average per share
market value for the five trading days immediately preceding (i)
the third anniversary of the original issue date or (ii) the date
of payment in full by the Company of the redemption price,
whichever is greater, and (2) the Stated Value plus accrued but
unpaid dividends not paid in Common Stock divided by the Conversion
Price for the Series B Preferred Stock calculated on the third
anniversary of the Original Issue Date.
Transfer Agent and Registrar
- ----------------------------
Chase Mellon Shareholder Services, L.L.C. is the transfer
agent and registrar for the Common Stock.
LEGAL OPINIONS
--------------
The validity of the shares of Common Stock to which this
Prospectus relates has been passed upon for the Company by Dewey
Ballantine LLP, New York, New York.
25
<PAGE>
EXPERTS
-------
The financial statements of CYTOGEN incorporated by reference
in this Prospectus and elsewhere in the Registration Statement, to
the extent and for the periods indicated in their report, have been
audited by Arthur Andersen LLP, independent public accountants, as
indicated in their report with respect thereto, and are
incorporated by reference herein in reliance upon the authority of
said firm as experts in giving said report.
26
<PAGE>
======================================================================
No dealer, salesman or other
person has been authorized to give any
information or to make representations
other than those contained in
this Prospectus, and, if given or 6,000,000 Shares
made, such information or representa-
tions must not be relied upon as having CYTOGEN Corporation
been authorized by the Company or the
Selling Stockholders. Neither the Common Stock
delivery of this Prospectus nor any
sale made hereunder shall, under any
circumstances, create an implication
that the information herein is correct
as of any time subsequent to its date. __________
This Prospectus does not constitute an
offer or solicitation by anyone in any PROSPECTUS
jurisdiction in which such offer __________
or solicitation is not authorized or in
which the person making such offer or
solicitation is not qualified to do so
or to anyone to whom it is unlawful to
make such offer or solicitation.
--------------------------------
TABLE OF CONTENTS
Page
Available Information . . . . . . . . . . . . . . . 4
Information Incorporated
by Reference. . . . . . . . . . . . . . . . . . 5
Risk Factors. . . . . . . . . . . . . . . . . . . . 5
The Company . . . . . . . . . . . . . . . . . . . . 16
Use of Proceeds . . . . . . . . . . . . . . . . . . 18
Selling Stockholders. . . . . . . . . . . . . . . . 19
Plan of Distribution. . . . . . . . . . . . . . . . 20
Description of Capital Stock. . . . . . . . . . . . 21
Description of Series A
Convertible Preferred
Stock . . . . . . . . . . . . . . . . . . . . . 23
Description of Series B
Convertible Preferred
Stock . . . . . . . . . . . . . . . . . . . . . 24
Legal Opinions. . . . . . . . . . . . . . . . . . . 25
Experts . . . . . . . . . . . . . . . . . . . . . . 26
January , 1998
======================================================================
27
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
--------------------------------------
Item 14. Other Expenses of Issuance and Distribution
The estimated expenses in connection with this offering are as
follows:
Amount
to be Paid
SEC registration fee $1,884
Nasdaq registration fee 17,500
Legal fees and expenses (including
Blue Sky fees and expenses) 5,000
Accounting fees and expenses 2,000
Miscellaneous 1,000
----------
Total $27,384
Item 15. Indemnification of Directors and Officers
The Delaware General Corporation Law (the "DGCL") provides for
indemnification of directors, officers, employees and agents,
subject to certain limitations (Delaware Code, Title 8 Section
145). Article VII of the Company's By-laws provides that expenses
incurred by an officer or director of the Company in defending a
civil or criminal action, suit or proceeding shall be paid by the
Company in advance of a final disposition of the action, suit or
proceeding upon receipt by the Company of an undertaking by the
officer or director that he or she will repay such expenses if it
is ultimately determined that he or she is not entitled to
indemnification under the DGCL.
As permitted by Section 102 of the DGCL, the Company's
Certificate of Incorporation contains provisions eliminating a
director's personal liability for monetary damages to the Company
and its stockholders arising from a breach of a director's
fiduciary duty except for liability under Section 174 of the DGCL
or liability for any breach of the director's duty of loyalty to
the Company or its stockholders, for acts or omissions not in good
faith or which involve intentional misconduct or a knowing
violation of law or for any transaction by which the director
derived an improper personal benefit. The Company has also entered
into indemnification agreements with its directors and officers
providing for indemnification and advancements of expenses to the
fullest extent permitted under Delaware law.
28
<PAGE>
Item 16. Exhibits and Financial Statement Schedules
No.
- ---
4.1 Certificate of Designation of 6% Convertible Preferred Stock,
Series B (1)
5.1 Opinion of Dewey Ballantine LLP. Filed herewith
10.1 Convertible Preferred Stock Purchase Agreement by and between
Cytogen Corporation and Southbrook International Investments,
Ltd., Westover Investments, L.P., Montrose Investments, L.P.,
Heracles Fund, Themis Partners, L.P., and Brown Simpson
Strategic Growth Fund, Ltd. (1)
10.2 Registration Rights Agreement by and between Cytogen
Corporation and Southbrook International Investments, Ltd.,
Westover Investments, L.P., Montrose Investments, L.P.,
Heracles Fund, Themis Partners, L.P., and Brown Simpson
Strategic Growth Fund, Ltd. (1)
23.1 Consent of Arthur Andersen LLP. Filed herewith
23.2 Consent of Dewey Ballantine LLP (included in Exhibit 5.1)
24.1 Power of Attorney (included on the signature page hereto)
--------------------
(1) Incorporated by reference to the Company's current report on
Form 8-K filed on December 22, 1997.
Item 17. Undertakings
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate,
represent a fundamental change in the information set
forth in the registration statement;
29
<PAGE>
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) do
not apply if the registration statement is on Form S-3 or
Form S-8, and the information required to be included in
the post-effective amendment by those paragraphs is
contained in periodic reports filed by the registrant
pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in
the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each post-effective amendment
shall be deemed to be a new registration statement relating
to the securities offered herein, and the offering of such
securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which
remain unsold at the termination of the offering.
The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant to
Section 13(a) or 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 herein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant
will, unless in the opinion of 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 of 1933
and will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes to deliver or
cause to be delivered with the prospectus, to each person to whom
the prospectus is sent or given, the latest annual report to
security holders that is incorporated by reference in the
prospectus and furnished pursuant to and meeting the requirements
of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be
presented by Article 3 of Regulation S-X is not set forth in the
prospectus, to deliver, or cause to be delivered to each person to
whom the prospectus is sent or given, the latest quarterly report
that is specifically incorporated by reference in the pospectus to
provide such interim financial information.
30
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-3 and
has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City
of Princeton, State of New Jersey, on January 6, 1998.
CYTOGEN CORPORATION
By: /s/ Thomas J. McKearn
-----------------------------
Name: Thomas J. McKearn
Title: Chairman of the Board,
President and Chief
Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Thomas J. McKearn
and Donald F. Crane, Jr., and each of them, as his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any
and all capacities, to sign any and all amendments (including
post-effective amendments) and supplements to this registration
statement or any prospectus included therein, and to file the same,
with the Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and
perform each and every act and thing requisite and necessary to be
done in connection therewith, as fully to all intents and purposes
as he might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, or
their or his substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the following
persons on behalf of the registrant and in the capacities and on
the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<C> <C> <C>
/s/ Thomas J. McKearn
___________________________ Chairman of the Board, President and Chief December 28, 1997
Thomas J. McKearn Executive Officer
31
<PAGE>
/s/ John E. Bagalay, Jr.
___________________________ Chief Financial Officer and Director December 28, 1997
John E. Bagalay, Jr.
/s/ Charles E. Austin
___________________________ Director December 28, 1997
Charles E. Austin
/s/ Ronald J. Brenner
___________________________ Director December 28, 1997
Ronald J. Brenner
/s/ James A. Grigsby
___________________________ Director December 28, 1997
James A. Grigsby
/s/ Robert F. Hendrickson
___________________________ Director December 28, 1997
Robert F. Hendrickson
/s/ William C. Mills III
___________________________ Director December 28, 1997
William C. Mills III
/s/ Donald E. O'Neill
___________________________ Director December 28, 1997
Donald E. O'Neill
</TABLE>
32
January 6, 1998
Cytogen Corporation
600 College Road East
Princeton, New Jersey 08540
Ladies and Gentlemen:
We have acted as counsel to Cytogen Corporation, a
Delaware corporation (the "Company"), in connection with the
preparation and filing by the Company of a Registration
Statement on Form S-3 (the "Registration Statement") under the
Securities Act of 1933, as amended (the "Act"), for the
registration of 6,000,000 shares of common stock, $.01 par
value per share (the "Common Stock"), of the Company which may
be issued upon the conversion of the Company's 6% Convertible
Preferred Stock, Series B (the "Series B Preferred Stock"),
plus such additional indeterminate number of shares of Common
Stock as may become issuable either as a result of the anti-dilution
provisions of the Certificate of Designation of the Series B Preferred
Stock (the "Certificate of Designation") pursuant to which the Common
Stock will be issued, or by reason of a reduction in the conversion price
of the Series B Preferred Stock in accordance with the provisions of the
Certificate of Designation.
We have examined and are familiar with originals or
copies, certified or otherwise identified to our satisfaction,
of such documents, corporate records, certificates of public
officials and officers of the Company and such other
instruments as we have deemed necessary or appropriate as a
basis for the opinions expressed below, including the
Registration Statement, the Restated Certificate of Incorporation of
the Company and the By-laws of the Company.
Based on the foregoing, we are of the opinion that
the Common Stock issuable upon conversion of the Series B
Preferred Stock (including those shares of Series B Preferred
Stock issued as dividends, if any) has been duly authorized and
reserved for issuance and, when duly issued and delivered upon
conversion of the Series B Preferred Stock in accordance with
the terms of the Convertible Preferred Stock Purchase Agreement
dated December 9, 1997 and the Certificate of Designation, will
be validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as
Exhibit 5.1 to the Registration Statement. In giving such
consent, we do not thereby admit that we come within the
category of persons whose consent is required under Section 7
of the Act or the rules and regulations of the Securities and
Exchange Commission thereunder.
We express no opinion as to the laws of any
jurisdiction other than the laws of the State of New York, the
general corporate laws of the State of Delaware and the federal
law of the United States of America. The foregoing opinion is
rendered as of the date hereof, and we assume no obligation to
update such opinion to reflect any facts or circumstances which
may hereafter come to our attention or any changes in the law
which may hereafter occur.
Very truly yours,
/s/ DEWEY BALLANTINE LLP
DEWEY BALLANTINE LLP
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this Form S-3 Registration
Statement of our report dated January 24, 1997 included in
CYTOGEN Corporation's Form 10-K for the year ended December 31,
1996, and to all references to our Firm included in this
Registration Statement.
ARTHUR ANDERSEN LLP
Philadelphia, PA
January 6, 1998
