As filed with the Securities and Exchange Commission on April 3, 1998
Registration No. 333-43809
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
AMENDMENT NO. 2
TO
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)
------------------
DONALD F. CRANE, JR., ESQ.
VICE PRESIDENT
GENERAL COUNSEL AND
CORPORATE SECRETARY
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)
------------------
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. [ ]
CALCULATION OF REGISTRATION FEE
-------------------------------
Title of Shares to Proposed Maximum Proposed Amount of
be Registered Amount Aggregate Price Per Maximum Registration
Common Registered Share (1) Aggregate Fee (3)
stock, par 6,250,000 (2) $1.61 Offering $2003
value $.01 Price
per share $10,062,500
(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 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 are deemed to be registered
herewith.
(3) Represents the sum of $1,884 originally paid in connection with the
registration of 6,000,000 shares pursuant to Rule 457(a) and $119 to
register 250,000 shares of the proposed maximum aggregate price per share.
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 APRIL 3, 1998
6,250,000 Shares
CYTOGEN CORPORATION
COMMON STOCK
This Prospectus relates to up to 6,250,000 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 March 31, 1998 was $2.16 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 OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------------------
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The date of this Prospectus is April , 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. The Company maintains a world wide web site at
http://www.cytogen.com.
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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, 1997; and (ii) 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 December 31, 1997, had an accumulated deficit of approximately
$289 million. During 1996 and 1997 the Company incurred net losses of
$28,337,000 and $32,064,000, respectively, and operating losses of
$24,862,000 and $31,278,000, respectively. 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. 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 and
other available sources of financing will be adequate to fund the Company's
operations into 1999. 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. Any additional equity financing
may result in dilution to shareholders, and any additional debt financing
may entail restrictions on the Company's right to declare dividends or on
the manner in which the Company conducts its business. 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 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,
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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 affected.
Uncertainty Regarding Ability to Continue as a Going Concern
- ------------------------------------------------------------
The Company's independent accountants, Arthur Andersen LLP, in their
report contained in the Company's Annual Report (the "Annual Report") for
the year ended December 31, 1997 (which is incorporated by reference
herein), included an explanatory paragraph indicating their view that the
Company's cash on hand was not adequate at that time to sustain operations
at current levels for a one year period, and expressed substantial doubt
about the ability of the Company to continue as a going concern. There can
be no assurance that future financial statements will not include a similar
explanatory paragraph if the Company is unable to raise sufficient funds
or generate sufficient cash flow from operations to cover the cost of its
operations. The inclusion of such an explanatory paragraph could raise
concerns about the ability of the Company to fulfill its contractual
obligations, thereby adversely affecting the Company's relationships with
third parties, and could impact the ability of the Company to complete
future financings. Accordingly, the inclusion of such a paragraph in the
Annual Report and in any future financial statements could have a material
adverse effect on the Company's business, business prospects, financial
condition or results of operations.
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 year ended December 31, 1997, revenues related to
Quadramet and ProstaScint accounted for over 86% 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 (including Medicare, Medicaid, private insurance
carriers and health maintenance organizations) as safe, effective and cost
efficient alternatives to other available treatment and diagnostic
protocols. DuPont Merck is responsible for marketing Quadramet to managed
care organizations ("MCOs"), while CYTOGEN and BARD market ProstaScint to
the MCOs. CYTOGEN's focus is to increase the MCOs awareness of and to
obtain coverage for ProstaScint while BARD is working with the MCOs to
incorporate ProstaScint in the MCOs' patient practice guidelines. The
Company believes that efforts to market ProstaScint to physicians and
hospitals have been well received, based on increasing quarterly sales,
statements by physicians to Company employees as to the benefits of
ProstaScint and presentations on ProstaScint by physicians at medical
association meetings. 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
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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 backlog for
enrollment may have had and may continue to have an impact on sales,
although the Company cannot quantify the amount of sales which could have
been or could be obtained without the backlog. The Company incurs the
costs of training physicians in the administration of and diagnosis using
ProstaScint. 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 has licensed the rights
to Quadramet from Dow Chemical pursuant to a license agreement expiring
on the later or May 13, 2013 or upon the expiration of patents covering
Quadramet. Such rights are currently limited to North, South and Central
America. There can be no assurance that Quadramet or ProstaScint will be
accepted in 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 halted its Cellcor subsidiary's Autologous
Lymphocyte Therapy ("ALT") program until it acquires a corporate partner
for the program or sells Cellcor to another healthcare company. The
Company had completed Phase III clinical trials relating to ALT and had
previously planned to file a Biologics License Application ("BLA") with the
FDA during early 1998. The Company can give no assurance that it will be
able to attract a partner for further development of the ALT program, or
to arrange a sale of the business on a timely basis or on suitable terms.
Furthermore, should the project be continued with a partner, success of the
program 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. Further, if the project were continued and
approved by the FDA, there can be no assurance that ALT would 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.
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 sub-license with The DuPont
Merck Pharmaceutical Company ("DuPont Merck") relating to the Quadramet
technology the Company licensed from Dow Chemical under the sub-license.
DuPont Merck is responsible for manufacturing, marketing, selling and
distributing Quadramet in its oncological applications in the United
States. Under the sub-license, the Company may promote Quadramet to
nuclear medicine specialists, although it has not engaged in such
co-promotion to date. This sub-license expires on the later of
December 20, 2014 or upon the expiration of the patents covering Quadramet.
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
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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 Elan. (See
"Business of the Company" for a further description of GDL technology.)
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 successfully to
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.
Limited Marketing History
- -------------------------
The Company has a limited marketing history for its principal
commercial products, ProstaScint and Quadramet. ProstaScint was approved
for marketing by the FDA in October, 1996, and commercially launched in
February, 1997. Quadramet was approved for marketing by the FDA in March
1997 and launched by DuPont Merck in June, 1997. ProstaScint sales have
experienced continued growth since product launch, with sales increases
during each successive quarter. However, there can be no assurance that
such growth will continue. Quadramet sales during the period from its
initial launch have been below the levels of minimum royalty payments.
Growth during early months was limited by the need for hospitals to obtain
license amendments under federal and state law to receive and handle this
new radioactive product. In addition, initial marketing efforts by the
Company's commercial partner, DuPont Merck, were directed to nuclear
medicine physicians who directly administer the product to patients. While
management believes this additional sales effort was necessary to generate
product awareness, the Company believes that marketing to oncologists and
urologists, the primary caregivers for likely candidates for treatment with
Quadramet, is necessary for extensive penetration into the market. The
failure of ProstaScint and Quadramet to achieve commercial success could
have a material adverse effect on the Company's business and results of
operations. In addition, the Company's GDL products are experimental and,
to the expert that such approval could be required, have not received
marketing approval by the FDA.
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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 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.
Risks Associated with Reimbursement by Third-Party Payors
- ---------------------------------------------------------
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 other 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
10
<PAGE>
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 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. ALT and GDL
technology are, at present, experimental. The GDL technology may or may
not itself be the subject of an application for FDA approval, and may be
used for the development of products for which approval is sought. None
of the Company's FDA approved products are experimental.
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
11
<PAGE>
will not independently develop similar or superior technologies or that the
Company's trade secrets and know-how will not become known to others.
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 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.
12
<PAGE>
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. A radioisotope is an unstable form of an
element which undergoes radioactive decay, thereby emitting radiation which
may be used, for example, to image or destroy harmful growths or tissue.
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 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.
13
<PAGE>
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.
None of the Company's key personnel have employment agreements with the
Company. 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.
Management Succession
- ---------------------
The Company has recently announced that Dr. John E. Bagalay, a member
of the Board of Directors, has been elected to serve as President and Chief
Executive Officer on an interim basis pending recruitment of a candidate
for the Chief Executive Officer position. Dr. Thomas J. McKearn, the
Company's previous Chairman, President and Chief Executive Officer resigned
that position and returned to a scientific role in the Company. Mr. William
C. Mills III was elected Chairman of the Board of Directors, a role he
previously occupied from January, 1995 to May, 1996. The Board of
Directors of the Company (the "Board of Directors") is currently engaged
in a search for a Chief Executive Officer. 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. Bagalay
is also 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
14
<PAGE>
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.
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.
15
<PAGE>
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. 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 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.
On March 25, 1998, the Company announced that based on an ongoing
review and prioritization of its business opportunities, it will delay
submission of a BLA for ALT. CYTOGEN is currently seeking potential
partners for future funding and development of ALT. The Company will also
consider the sale of Cellcor to another healthcare company. ALT is a
proprietary cellular therapy which has been under development by Cellcor
for the treatment of mRCC, a life threatening kidney cancer, for which
adequate therapies do not exist. Cellcor completed pivotal Phase III
clinical trials of ALT in mRCC patients in January 1997, and the Company
believes the results of the trials are favorable. Targon, a majority-owned
subsidiary of CYTOGEN, was created in September 1996 by CYTOGEN and Elan.
Targon draws upon Elan's expertise in drug delivery and enhanced
formulation and CYTOGEN's strength in the development and registration of
cancer products. Targon has entered into an agreement with Duke University
under which Targon will provide up to $3.75 million over a three year
period to support research and testing with respect to anti-cancer drugs.
In exchange, Targon will receive an option to license products from funded
programs and a right to first review as to licenses for certain other
inventions in the field of cancer during the three year term of the
agreement. Funding for contributions during 1998 will be made from
Targon's restricted cash reserve, and are not expected to have any impact
on CYTOGEN's capital needs or liquidity during 1998. On March 31, 1998,
Elan exchanged its shares of the Company's Series A Convertible Preferred
Stock and thereby acquired 50% of CYTOGEN's 99.75% ownership of Targon, as
16
<PAGE>
contemplated by the terms of such Series A. CYTOGEN is negotiating to
divide Targon assets and liabilities between the parties in keeping with
CYTOGEN's continuing review of its business opportunities and use of funds.
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. A peptide is a small protein or a piece of a protein, which is
made up of a chain of amino acids. Proteins make up cells, cellular
structures and living matter. Proteins have a variety of functions
important to life processes and physiology, including disease. Synthetic
peptides are made by laboratory procedures that assemble amino acids in
sequences, which may or may not occur naturally. Synthetic peptides can
be used to decipher and manipulate the chemical communication that occurs
at the molecular level in cells, thereby providing the opportunity to
understand and develop products or processes which, for example, may
interfere with the disease process. 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.
USE OF PROCEEDS
---------------
The Company will not receive any of the proceeds from the sale of
Common Stock being offered by this Prospectus.
17
<PAGE>
SELLING STOCKHOLDERS
--------------------
The following table sets forth certain information regarding the
beneficial ownership of Common Stock by the Selling Stockholders as of
April 2, 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. 2,499,767 4.36 2,566,237 4.47 0
c/o Trippoak Advisors, Inc.
630 Fifth Avenue, Suite 2000
New York, NY 10111
Westover Investments L.P. 914,579 1.60 927,873 1.62 0
777 Main Street, Suite 2750
Fort Worth, TX 76102
Montrose Investments L.P. 1,371,869 2.39 1,391,810 2.42 0
777 Main Street, Suite 2750
Fort Worth, TX 76102
Heracles Fund 438,076 .76 454,693 .79 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. 438,076 .76 454,693 .79 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. 175,230 .31 181,878 .32 0
152 West 57th Street, 40th Floor
New York, NY 10019
Brown Simpson Strategic Growth Fund, Ltd. 262,845 .46 272,816 .47 0
152 West 57th Street, 40th Floor
New York, NY 10019
-----------------------------
18
<PAGE>
(1) Includes (i) the number of shares of Common Stock issued or issuable
upon conversion of shares of the Company's Series B Convertible
Preferred Stock, assuming, with respect to unconverted shares,
conversion at the formula price in effect on April 2, 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 (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 set forth 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 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 65 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 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 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.
19
<PAGE>
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 their respective
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 is a summary of
all material provisions of the Company's Common Stock and preferred stock.
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 February 27, 1998, 53,831,046 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.
20
<PAGE>
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 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 $5.0 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. Targon focuses exclusively
on the rapid development, registration, manufacturing and commercialization
of oncology products.
The Series A Preferred Stock held by Elan could, 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. On March 31, 1998, Elan
exchanged the Series A Preferred Stock for a portion of the Company's
interest in Targon. Elan is 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. Elan's right to convert the Series A Preferred Stock into
shares of common stock of CYTOGEN expired on exercise of this exchange
right. The Series A Preferred Stock is no longer outstanding.
Description of Series B Convertible Preferred Stock
- ---------------------------------------------------
The 750 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").
21
<PAGE>
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 and (b) at a discount
of up to 15% 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 5% 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
22
<PAGE>
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.
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.
23
<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 6,250,000 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
Business of the Company . . . . . . . . . . . . . . . . . . . 16
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . 17
Selling Stockholders. . . . . . . . . . . . . . . . . . . . . 18
Plan of Distribution. . . . . . . . . . . . . . . . . . . . . 19
Description of Capital Stock. . . . . . . . . . . . . . . . . 20
Description of Series A
Convertible Preferred Stock . . . . . . . . . . . . . . . 21
Description of Series B
Convertible Preferred Stock . . . . . . . . . . . . . . . 21
Legal Opinions. . . . . . . . . . . . . . . . . . . . . . . . 23
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
February , 1998
24
<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 $ 2,003
Nasdaq registration fee 17,500
Legal fees and expenses (including
Blue Sky fees and expenses) 25,000
Accounting fees and expenses 2,000
Miscellaneous 3,616
----------
Total $50,119
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.
25
<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.
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.
23.2 Consent of Dewey Ballantine LLP (included in Exhibit 5.1)
--------------------
(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;
(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.
26
<PAGE>
(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.
27
<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
Amendment No. 1 to registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Princeton, State of
New Jersey, on April 3, 1998.
CYTOGEN CORPORATION
By: /s/ John E. Bagalay, Jr.
Name: John E. Bagalay, Jr.
President and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 1 to 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>
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ * Chairman of the Board April 3, 1998
- ------------------------
William C. Mills III
/s/ John E. Bagalay, Jr. President and Chief Executive Officer, April 3, 1998
- ------------------------ Chief Financial Officer and Director
John E. Bagalay, Jr.
/s/ Jane M. Maida Chief Accounting Officer April 3, 1998
- ------------------------
Jane M. Maida
/s/ * Director April 3, 1998
- ------------------------
Charles E. Austin
/s/ * Director April 3, 1998
- ------------------------
Ronald J. Brenner
/s/ * Director April 3, 1998
- ------------------------
James A. Grigsby
/s/ * Director April 3, 1998
- ------------------------
Robert F. Hendrickson
/s/ * Director April 3, 1998
- ------------------------
Thomas J. McKearn
/s/ * Director April 3,1998
- ------------------------
Donald E. O'Neill
</TABLE>
28
<PAGE>
* /s/ Donald F. Crane, Jr.
- ---------------------------
Attorney-in-fact
29
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description Page #
- ------ ----------- ------
5.1 Opinion of Dewey Ballantine LLP 31
23.1 Consent of Arthur Andersen LLP 33
23.2 Consent of Dewey Ballantine LLP (included in Exhibit 5.1) 31
24.1 Power of Attorney (included on the signature page hereto) 28
--------------------
30
Exhibit 5.1
-----------
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.
31
<PAGE>
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
32
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
33
