<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
ON MARCH 7, 1996
REGISTRATION NO. 33-_____
_________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ENZON, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 22-2372868
(State or other juris- (I.R.S. Employer
diction of incorporation Identification No.)
or organization)
20 Kingsbridge Road, Piscataway, New Jersey 08854
(908) 980-4500
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
JOHN CARUSO, ESQ.
VICE PRESIDENT, BUSINESS DEVELOPMENT,
GENERAL COUNSEL AND SECRETARY
ENZON, INC.
20 KINGSBRIDGE ROAD, PISCATAWAY, NEW JERSEY 08854
(908) 980-4500
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
KEVIN T. COLLINS, ESQ.
ROSS & HARDIES
65 EAST 55TH STREET, NEW YORK, NEW YORK 10022
(212) 421-5555
Approximate date of commencement of proposed sale to the public: As
soon as practicable after this Registration Statement becomes effective.
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 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(b) under the Securities Act, check the following box and list the
securities 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. [ ]
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Maximum Proposed Maximum
Offering Price Per Aggregate Offering
Title of Each Class of Share Price Amount of
Securities to be Registered Amount to be Registration Fee
Registered
<S> <C> <C> <C> <C>
Common Stock 1,094,890 $4.75(1) $5,200,728 $1,794
$.01 par value
per share
Common Stock 2,503,912(2) $4.75(1) $11,893,582 $4,102
$.01 par value
per share
Common Stock 638,686(3) $4.75(1) $3,033,759 $1,047
$.01 par value
per share
Common Stock 123,175(4) $4.75(1) $585,081 $202
$.01 par value
per share
Totals 4,360,663 $4.75 $20,713,150 $7,145
</TABLE>
(1) Estimated solely for the purpose of computing the amount of the
registration fee in accordance with Rule 457(c) under the
Securities Act of 1933, as amended (the "Securities Act"), based
on the average of the high and low sale price for the Common
Stock, $.01 par value per share (the "Common Stock") as reported
by the National Association of Securities Dealers Automated
Quotation National Market System ("NASDAQ-NMS") on March 4, 1996.
(2) To be offered and sold by one of the Selling Stockholders upon
conversion of 40,000 outstanding shares of Series B Convertible
Preferred Stock (the "Preferred Shares"). The conversion price
for the Preferred Shares is equal to 80% of the average of the
closing bid price of the Common Stock for the five consecutive
trading days ending one trading day prior to the date of
conversion as reported by the NASDAQ-NMS. Such conversion price
may be adjusted upon the occurrence of certain triggering events
(the "Triggering Events").
(3) To be offered and sold by the Selling Stockholders upon exercise
of outstanding Warrants. Pursuant to Rule 416 under the
Securities Act, this registration statement also relates to an
indeterminate number of additional shares of Common Stock which
may be issuable upon exercise of the Warrants to prevent dilution
resulting from stock splits, stock dividends and similar
transactions.
(4) Additional shares which may be issued to the Selling Stockholders
upon the occurrence of certain Triggering Events, to be offered
and sold by the Selling Stockholders.
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.
<PAGE>
SUBJECT TO COMPLETION - DATED MARCH 7, 1996
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.
PROSPECTUS
ENZON, INC.
_______________________________________________________________________________
4,360,663 SHARES
COMMON STOCK
($.01 PAR VALUE)
This Prospectus relates to the offer and sale of up to 4,360,663 shares
of common stock, $.01 par value (the "Common Stock") of Enzon Inc. (the
"Company" or "Enzon") by certain selling stockholders (the "Selling
Stockholder"). Of such 4,360,663 shares of Common Stock (i) 1,094,890 shares
(the "Outstanding Common Shares") are outstanding and held by one of the
Selling Stockholders; (ii) up to 2,503,912 shares (the "Common Shares
Underlying the Preferred Shares") are issuable upon conversion of 40,000
outstanding shares of the Company's Series B Convertible Preferred Stock, $.01
par value (the "Preferred Shares") held by one of the Selling Stockholders;
(iii) 638,686 shares (the "Warrant Shares") are issuable upon exercise of an
aggregate of 638,686 outstanding warrants (the "Warrants") held by the Selling
Stockholders; and (iv) up to 123,175 shares (the "Additional Shares") are
additional shares which may be issued to the Selling Stockholders upon the
occurrence of certain triggering events (the "Triggering Events"). A
Triggering Event will have occurred in the event the registration statement of
which this Prospectus forms a part becomes subject to a stop order, or the
Company fails to update such registration statement as required by the rules
and regulations of the Securities and Exchange Commission (the "Commission"),
or the Company fails to maintain a listing of the Common Stock on the National
Association of Securities Dealers Automated Quotation National Market System
("NASDAQ-NMS"), the National Association of Securities Dealers Automated
Quotation SmallCap Market ("NASDAQ-SmallCap") or certain specified national
securities exchanges. The conversion price for the Preferred Shares is equal
to 80% of the average of the closing bid price of the Common Stock for the five
consecutive trading days (the "Average Market Price") ending one trading day
prior to the date of conversion as reported by NASDAQ-NMS, which percentage may
be adjusted downward upon the occurrence of a Triggering Event (the "Conversion
Price"). Accordingly, the actual number of shares of Common Stock issued to
the Selling Stockholders and sold hereby will depend upon the Average Market
Price of the Common Stock at the time of the conversion of the Preferred
Shares, whether or not any of the Triggering Events occur and the duration of
the Triggering Events. The Company believes that the number of shares of
Common Stock to which this Prospectus relates is the maximum number of shares
of Common Stock that are likely to be issued to the Selling Stockholders and
sold hereby, and expects that the actual number of shares of Common Stock
issued to the Selling Stockholders and sold hereby will be less than such
number. See "Risk Factors - Possible Volatility of Stock Price" and "Selling
Stockholders." The Selling Stockholders purchased the Outstanding Common
Shares, the Preferred Shares and the Warrants from the Company pursuant to a
Securities Purchase Agreement (the "Securities Purchase Agreement") dated as of
January 31, 1996 and entered into by and among the Company and the Selling
Stockholders in a private placement transaction (the "January 1996 Private
Placement"). The Additional Shares are issuable pursuant to the terms of a
Registration Rights Agreement (the "Registration Rights Agreement") dated as of
January 31, 1996 and entered into by and among the Company and the Selling
Stockholders in connection with the January 1996 Private Placement. The
Preferred Shares are convertible at the Conversion Price commencing April 17,
1996 and the stated value of each Preferred Share is $100. The Preferred
Shares do not pay a dividend. The Warrants are exercisable at a per share
exercise price of $4.11 (as may be adjusted in accordance with the terms of the
Warrants) commencing on the earlier of the date of this Prospectus or April 17,
1996 and expire on February 7, 2001. The Outstanding Common Shares, the Common
Shares Underlying the Preferred Shares, the Warrant Shares and the Additional
Shares are collectively referred to herein as the "Common Shares."
The Selling Stockholders may sell the Common Shares from time to time in
transactions in the open market, in negotiated transactions, or by a
combination of these methods, at fixed prices that may be changed, at market
prices at the time of sale, at prices related to market prices or at negotiated
prices. The Selling Stockholders may effect these transactions by selling the
Common Shares to or through broker-dealers, who may receive compensation in the
form of discounts or commissions from the Selling Stockholders or from the
purchasers of the Common Shares for whom the broker-dealers may act as agent or
to whom they may sell as principal, or both. See "Plan of Distribution."
The Company will bear all expenses in connection with the registration of
the Common Shares herein which expenses are estimated to be $61,000. The
Selling Stockholders will pay any brokerage compensation in connection with its
sale of the Common Shares. The Company will not receive any of the proceeds
from the sale of the Common Shares by the Selling Stockholders. To the extent
the Warrants are exercised the Company will apply the proceeds thereof to its
general corporate purposes. The Company will receive no additional proceeds
upon the conversion of the Preferred Shares. See "Use of Proceeds."
The Company's Common Stock is traded in the over-the-counter market and
is quoted on the NASDAQ-NMS, under the symbol "ENZN." On March 4, 1996 the
reported last sale price of the Common Stock, as reported on NASDAQ-NMS, was $4
3/4 per share.
AN INVESTMENT IN THE SECURITIES OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" COMMENCING ON PAGE 6.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS MARCH __, 1996
<PAGE>
TABLE OF CONTENTS
PAGE
Available Information 1
Incorporation of Certain Documents by Reference 1
Prospectus Summary 3
Risk Factors 6
Use of Proceeds 11
Selling Stockholders................................................. 11
Plan of Distribution 14
Legal Matters 14
Experts 14
No one has been authorized to give any information or to make any
representation not contained or incorporated by reference in this Prospectus in
connection with this offering. Any information or representation not contained
or incorporated by reference herein must not be relied on as having been
authorized by the Company. This Prospectus does not constitute an offer to
sell or the solicitation of an offer to buy the securities offered hereby in
any state to any person to whom it is unlawful to make such offer or
solicitation. Except where otherwise indicated, this Prospectus speaks as of
its date and neither the delivery of this Prospectus nor any sale made
hereunder shall, under any circumstances, create an implication that there has
been no change in the affairs of the Company since the date hereof.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Commission. Such reports, proxy statements and other information filed by
the Company can be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the following Regional Offices of the Commission: New York Regional
Office, Seven World Trade Center, Suite 1300, New York, New York 10048; and
Chicago Regional Office, Northwestern Atrium Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2511. Copies of such material can be
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates.
The Company has filed with the Commission a Registration Statement on
Form S-3 (the "Registration Statement") under the Securities Act, with respect
to the shares of Common Stock offered hereby. This Prospectus does not contain
all of the information set forth in the Registration Statement and the exhibits
and schedules thereto. For further information with respect to the Company and
the shares of Common Stock offered hereby, reference is hereby made to the
Registration Statement, exhibits and schedules.
The following trademarks and service marks appear in this Prospectus:
ADAGEN and ONCASPAR are registered trademarks of the Company; PEGNOLOGY is a
registered service mark of the Company; SCA is a registered trademark of Enzon
Labs Inc., a wholly-owned subsidiary of the Company ("Enzon Labs"); Intron A is
a registered trademark of Schering Corporation.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates by reference into this Prospectus (i) its
Annual Report on Form 10-K for the Fiscal Year Ended June 30, 1995, which
contains certified financial statements for the Company's latest fiscal year
for which a Form 10-K was required to have been filed, and incorporates by
reference certain portions of the Company's definitive Proxy Statement for the
Annual Meeting of Stockholders held December 5, 1995, (ii) all other reports
filed by the Company pursuant to Section 13(a) or 15(d) of the Exchange Act
since June 30, 1995, including but not limited to, the Quarterly Reports on
Form 10-Q for the Quarters Ended September 30, 1995 and December 31, 1995 and
the Current Reports on Form 8-K filed by the Company with the Commission on
each of July 20, 1995, October 27, 1995 and February 8, 1996 and (iii) the
description of the Company's Common Stock, $.01 par value, as contained in its
registration statement on Form 8-A, filed with the Commission on October 29,
1984, as amended by a Form 8 filed with the Commission on October 15, 1990.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act, subsequent to the date hereof and prior to the
filing of a post-effective amendment to the Registration Statement which
indicates that all shares of Common Stock offered hereby have been sold or
which deregisters all shares of Common Stock then remaining unsold, shall be
deemed to be incorporated by reference into this Prospectus and to be a part
hereof from the date of filing of such documents.
Any statement contained herein or 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 such statement is
modified or superseded by a statement contained herein or in a subsequently
filed document which also is or is deemed to be incorporated by reference
herein. Any such 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 (INCLUDING ANY
BENEFICIAL OWNER) TO WHOM THIS PROSPECTUS IS DELIVERED, UPON WRITTEN OR ORAL
REQUEST OF SUCH PERSON, A COPY OF ANY AND ALL OF THE INFORMATION THAT HAS BEEN
INCORPORATED BY REFERENCE IN THIS PROSPECTUS (NOT INCLUDING EXHIBITS TO SUCH
INFORMATION UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE
INTO SUCH INFORMATION). SUCH REQUESTS SHOULD BE DIRECTED TO JOHN CARUSO, VICE
PRESIDENT, BUSINESS DEVELOPMENT, GENERAL COUNSEL AND SECRETARY, AT THE
COMPANY'S PRINCIPAL EXECUTIVE OFFICES AT 20 KINGSBRIDGE ROAD, PISCATAWAY, NEW
JERSEY 08854, TELEPHONE (908) 980-4500.
- 1 -
<PAGE>
PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE MORE
DETAILED INFORMATION AND CONSOLIDATED FINANCIAL STATEMENTS APPEARING ELSEWHERE
AND INCORPORATED BY REFERENCE IN THIS PROSPECTUS.
THE COMPANY
Enzon, Inc. ("Enzon" or the "Company") is a biopharmaceutical company
that develops, manufactures and markets enhanced therapeutics for
life-threatening diseases through the application of its proprietary
technologies, PEG Modification or the PEG Process and Single-Chain
Antigen-Binding (SCA) proteins. The Company is engaged primarily in the
research, development and commercialization of its proprietary technologies in
the areas of blood substitutes, genetic diseases and oncology.
The Company has received marketing approval from the United States Food
and Drug Administration ("FDA") for two of its products: (i) ONCASPAR, approved
in February 1994 for the indication of acute lymphoblastic leukemia ("ALL") in
patients who are hypersensitive to native forms of L-asparaginase and (ii)
ADAGEN, the first successful application of enzyme replacement therapy for an
inherited disease, approved in March 1990 to treat a rare form of Severe
Combined Immunodeficiency Disease ("SCID"), commonly known as the Bubble Boy
Disease.
The Company manufactures both ADAGEN and ONCASPAR in its South
Plainfield, New Jersey facility and markets ADAGEN on a worldwide basis.
ONCASPAR is marketed in the U.S. by Rhone-Poulenc Rorer Pharmaceuticals, Inc.
("RPR"). The Company received an aggregate of $6,000,000 from RPR related to
the granting of this license during the fiscal years ended June 30, 1995 and
1994. Under the license, which was amended in January 1995, the Company is
also entitled to royalties on the sales of ONCASPAR in the U.S. by RPR of 23.5%
to 43.5%, based on the sales level of ONCASPAR. During 1995, RPR paid the
Company $3,500,000 in advance royalties. Royalties due under the RPR agreement
will be offset against a credit in the original amount of $5,970,000, which
represents the royalty advance plus reimbursement of certain amounts due RPR
under the original agreement and interest expense. The Company has also
granted exclusive licenses to sell ONCASPAR in Canada and Mexico to RPR in
exchange for royalty payments on future sales. The Company is currently
pursuing additional licenses for marketing and distribution rights outside
North America. During November 1994, ONCASPAR was approved in Germany for use
in patients with ALL who are hypersensitive to natural forms of L-asparaginase.
ONCASPAR is the enzyme L-asparaginase modified by the PEG Process and
ADAGEN is the enzyme adenosine deaminase modified by the PEG Process. The PEG
Process involves chemically attaching polyethylene glycol ("PEG"), a relatively
non-reactive and non-toxic polymer, to proteins and certain other
pharmaceuticals for the purpose of enhancing their therapeutic value.
Attachment of PEG helps to disguise the proteins and to reduce their
recognition by the immune system, thereby generally lowering potential
immunogenicity. Both the increased molecular size and lower immunogenicity
result in extended circulating blood life, in some cases from minutes to days.
In addition to its approved products, the Company is conducting research
and developing additional drugs. In the blood substitutes area, the Company
has undertaken the development of a hemoglobin based oxygen carrier, utilizing
the protein hemoglobin modified by the PEG Process. In addition to its use as a
blood substitute, the Company's product PEG-hemoglobin may act as a
radiosensitizer in cancer therapy. Enzon has chosen to base PEG-hemoglobin on
bovine hemoglobin due to its superior oxygen-carrying properties, relative
stability, availability and low cost. The Company conducted a Phase I clinical
trial in healthy volunteers and administered PEG-hemoglobin to 28 subjects up
to a dose of approximately 45 grams or the equivalent of approximately 1.5
units of whole blood. During December 1995, the Company received clearance
from the Food and Drug Administration (the "FDA") to begin a multi-dose, multi-
center clinical trial to test PEG-hemoglobin as a radiosensitizer in cancer
patients receiving radiation therapy. The study, in patients with various
advanced solid tumors, will primarily evaluate safety related to multiple doses
of PEG-hemoglobin, and will secondarily evaluate tumor response to the
combination therapy of radiation and PEG-hemoglobin. In addition to the
testing of PEG-hemoglobin as a radiosensitizer, the Company also plans to
conduct future clinical trials utilizing PEG-hemoglobin as a blood substitute
(resuscitation fluid) for trauma patients. The Company currently manufactures
and plans to manufacture PEG-hemoglobin for future trials in a pilot plant
facility located in South Plainfield, New Jersey.
In the area of genetic diseases, the Company is developing a PEG-modified
version of the enzyme glucocerebrosidase to treat Gaucher disease, a genetic
disorder that results in the lack of beta-glucocerebrosidase, an enzyme
instrumental in the breakdown and disposal of complex fatty substances in the
bloodstream. The Company manufactures PEG-glucocerebrosidase and PEG-
hemoglobin at the same facility. The Company has suspended the manufacture of
PEG-glucocerebrosidase in order to dedicate such facility exclusively to the
production of PEG-hemoglobin for clinical trials and to complete commercial
process development for PEG-hemoglobin. The Company believes that the existing
facility at the present scale is adequate to supply all PEG-hemoglobin needed
for clinical trials up to FDA approval.
The Company has several products under development in the area of
oncology which are all in the early research stage. These products include
PEG-modified anti-cancer compounds and a novel chemical compound.
The Company is pursuing a dual strategy for commercializing its
proprietary technologies. In addition to developing, manufacturing and
marketing the Company's proprietary products, the Company has established
strategic alliances in which Enzon licenses its proprietary technologies in
exchange for milestone payments, manufacturing revenues and/or royalties.
The Company is also developing a PEG version of a Schering Corporation
("Schering") product, INTRON A (interferon alfa 2b). During the fiscal year
ended June 30, 1995, the Company amended its agreement with Schering and agreed
to transfer proprietary know-how and manufacturing rights to Schering for
$3,000,000, of which $2,000,000 was received during the fiscal year ended June
30, 1995 with the remaining $1,000,000 being paid upon completion of the know-
how transfer. The Company also sold to Schering 847,489 shares of
unregistered, newly issued Common Stock for gross proceeds of $2,000,000. The
Company is also entitled to additional payments of approximately $5,550,000,
subject to the achievement of certain milestones in the product's development,
and royalties on worldwide sales of PEG INTRON A, if any. The Company has the
option, upon FDA approval, to be Schering's exclusive manufacturer of PEG
INTRON A for the U.S. market.
The Company has an extensive licensing program for its SCA technology.
SCA proteins are genetically engineered proteins designed to overcome the
problems hampering the diagnostic and therapeutic use of conventional
monoclonal antibodies. Pre-clinical studies have shown that SCA proteins
target and penetrate tumors more readily than conventional monoclonal
antibodies. Currently, there are five SCA proteins in Phase I clinical trials
by various organizations, including a product developed by the Company, SCA-
CC49. The Company believes these organizations will have to obtain a license
from the Company under its SCA patents to commercialize these products. The
Company believes that SCA proteins may be useful in the development of
therapeutics in the area of oncology.
The Company has granted SCA licenses to seven companies, including
Bristol-Myers Squibb, Inc. ("Bristol-Myers"), Baxter Healthcare Corporation
("Baxter"), Eli Lilly & Co. ("Eli Lilly") and RPR. These licenses generally
provide for upfront payments, milestone payments and royalties on sales of FDA
approved products.
In January 1996, pursuant to the Securities Purchase Agreement, the
Company sold to the Selling Stockholders the 1,094,890 Outstanding Common
Shares, the 40,000 Preferred Shares and the Warrants to purchase an aggregate
of 638,686 Warrant Shares in a private placement transaction for aggregate
consideration of $7,000,000. See "Selling Stockholders."
Enzon, a Delaware corporation, was incorporated in 1981. The Company's
executive offices are located at 20 Kingsbridge Road, Piscataway, New Jersey
08854, telephone (908) 980-4500.
THE OFFERING
Securities Offered.........This Prospectus relates to an offering by the
Selling Stockholders of up to 4,360,663 shares of Common
Stock of the Company. Of these shares (i) 1,094,890 shares
are Outstanding Common Shares issued in the January 1996
Private Placement; (ii) up to 2,503,912 shares are Common
Shares Underlying Preferred Shares and may be issued upon
conversion of the Preferred Shares issued in the January 1996
Private Placement; (iii) 638,686 shares are Warrant Shares
and may be issued upon exercise of the Warrants issued in the
January 1996 Private Placement; and (iv) up to 123,175 shares
are Additional Shares which may be issued to the Selling
Stockholders only upon the occurrence of any Triggering
Events. The actual number of shares of Common Stock issued
to the Selling Stockholders and sold hereby will depend upon
the Average Market Price of the Common Stock at the time of
the conversion of the Preferred Shares, whether or not any of
the Triggering Events occur and the duration of the
Triggering Events. The Company believes that the number of
shares of Common Stock to which this Prospectus relates is
the maximum number of shares of Common Stock that are likely
to be issued to the Selling Stockholders and sold hereby, and
expects that the actual number of shares of Common Stock
issued to the Selling Stockholders and sold hereby will be
less than such number. See "Risk Factors - Possible
Volatility of Stock Price" and "Selling Stockholders."
Securities Outstanding.....As of February 15, 1996 the Company had 27,430,800
shares of Common Stock outstanding. Assuming that all of the
Preferred Shares are converted, all of the Warrants are
exercised, the Triggering Events occur and exist for a period
of three months, and no other shares of Common Stock are
issued subsequent to February 15, 1996, the Company would
have 31,791,463 shares of Common Stock outstanding. Assuming
all of the foregoing, except that none of the Triggering
Events occur, the Company would have 31,386,598 shares of
Common Stock outstanding. See "Selling Stockholders."
Use of Proceeds............The Company will not receive any proceeds from the
sale of the Common Shares offered by the Selling
Stockholders. To date the Company has received no proceeds
from the exercise of the Warrants. No additional proceeds
will be received in connection with the conversion of the
Preferred Shares. If all of the Warrants are exercised, the
Company will receive estimated gross proceeds of
approximately $2,625,000. The Company intends to utilize any
proceeds received from the exercise of the Warrants for
general corporate purposes. There can be no assurance that
any of the outstanding Warrants will be exercised. See "Use
of Proceeds."
Risk Factors...............See "Risk Factors" for a discussion of certain risk
factors that should be considered by prospective investors in
connection with an investment in the shares of Common Stock
offered hereby.
RISK FACTORS
An investment in the Common Shares offered hereby involves a high degree
of risk. Prospective investors should carefully consider the following risk
factors in addition to the other information set forth and incorporated by
reference in this Prospectus before making any decision to invest in the Common
Shares.
ACCUMULATED DEFICIT AND UNCERTAINTY OF FUTURE PROFITABILITY. The Company
was originally incorporated in 1981. To date, the Company's sources of cash
have been the proceeds from the sale of its stock through public and private
placements, sales of ADAGEN, sales of ONCASPAR, sales of its products for
research purposes, contract research and development fees, technology transfer
and license fees and royalty advances. At December 31, 1995 the Company had an
accumulated deficit of approximately $105,497,000. To date, ADAGEN and
ONCASPAR are the only products of the Company which have been approved for
marketing by the FDA, having been approved in March 1990 and February 1994,
respectively. In 1993 the Company granted exclusive U.S. marketing rights for
ONCASPAR to RPR in consideration for which the Company received an aggregate of
$6,000,000 of license fees during the fiscal years ended June 30, 1995 and
1994. Under the license, which was amended in January 1995, the Company is
also entitled to royalties on the sales of ONCASPAR in the U.S. by RPR of 23.5%
to 43.5%, based on the sales level of ONCASPAR. During 1995, RPR paid the
Company $3,500,000 in advance royalties. Royalties due under the RPR agreement
will be offset against a credit in the original amount of $5,970,000, which
represents the royalty advance plus reimbursement of certain amounts due RPR
under the original agreement and interest expense. The Company intends to
pursue future licensing, marketing and development arrangements that may result
in additional fees to the Company prior to its receiving revenues from
commercial sales of its products which are sufficient for the Company to earn a
profit. There can be no assurance, however, that the Company will be able to
successfully consummate any such arrangements or receive such fees in the
future. Although the Company has been receiving reimbursement from most
third-party payors for ADAGEN, there can be no assurance that reimbursement at
these levels will continue. Lifetime limits on benefits which are included in
most private health insurance policies could permit insurers to cease
reimbursement for ADAGEN. Potential investors should be aware of the
difficulties a development stage enterprise such as the Company encounters,
especially in view of the intense competition in the pharmaceutical industry in
which the Company competes. There can be no assurance that the Company's plans
will either materialize or prove successful, that its products under
development will be successfully developed or that its products will generate
revenues sufficient to enable the Company to earn a profit.
NEED FOR FINANCING. The Company's current sources of liquidity are its
cash reserves, including the $6,678,000 in net proceeds obtained in the January
1996 Private Placement, and interest earned on such cash reserves, sales of
ADAGEN, sales of ONCASPAR, sales of its products for research purposes, and
license fees. There can be no assurance as to the level of the Company's share
of profits which will be realized from the commercial sale of ONCASPAR pursuant
to the Company's license with RPR. Total cash reserves, including short term
investments, as of December 31, 1995 were approximately $5,309,000. Management
believes that the foregoing sources of liquidity, together with the net
proceeds received by the Company from the January 1996 Private Placement will
be sufficient to meet the Company's anticipated cash requirements, based on
current spending levels, until approximately January 1998. The Company's
continued operations thereafter will depend upon its ability to realize
revenues from the commercial sale of its products which are sufficient to cover
its operating and capital expense requirements, raise funds through equity or
debt financing, or obtain significant contract research and development fees or
license fees. The Company is exploring methods of meeting its anticipated cash
needs, including the sale of its securities. There can be no assurance that
any of the foregoing fund raising activities will successfully meet the
Company's anticipated cash needs. To the extent the Company is unable to
obtain funds, it may be required to curtail its activities.
RAW MATERIALS AND DEPENDENCE UPON SUPPLIERS. The Company is currently
producing many of the unmodified proteins utilized in products it has under
development, including purified bovine hemoglobin for use in its PEG-hemoglobin
product. There can be no assurance that the purified bovine hemoglobin used in
the manufacture of PEG-hemoglobin can be produced in the amounts necessary to
expand the current clinical trials. The Company may be required to obtain
supply contracts with outside suppliers for certain unmodified proteins. The
Company does not produce the unmodified adenosine deaminase used in the
manufacture of ADAGEN, the unmodified L-asparaginase used in the manufacture of
ONCASPAR and the unmodified bovine blood used in the manufacture of PEG-
hemoglobin and has a supply contract with an outside supplier for each of these
unmodified proteins. Delays in obtaining or an inability to obtain any
unmodified protein which the Company does not produce, including unmodified
adenosine deaminase, unmodified L-asparaginase or unmodified bovine blood could
have a material adverse effect on the Company. In the event the Company is
required to locate an alternate supplier for an unmodified protein utilized in
a product which is being sold commercially or which is in clinical development,
the Company will likely be required to do additional testing, which could
include chemical, pre-clinical and clinical trials, to demonstrate that the
alternate supplier's material is biologically and chemically equivalent to the
unmodified protein previously used. Such evaluations could delay development
of a product which is in clinical trials, limit commercial sales of an FDA
approved product and cause the Company to incur significant additional expense.
Requirements for such evaluations would be determined by the stage of the
product's development and the reviewing division of the FDA. If such alternate
material is not demonstrated to be chemically and biologically equivalent to
the previously used unmodified protein, the Company will likely be required to
repeat some or all of the pre-clinical and clinical trials conducted with such
protein. The marketing of an FDA approved drug could be disrupted while such
tests are conducted. Even if the alternate material is shown to be chemically
and biologically equivalent to the previously used protein, the FDA may require
the Company to conduct additional clinical trials with such alternate material.
PATENTS AND PROPRIETARY TECHNOLOGY. The Company has licensed, and been
issued, a number of patents in the United States and other countries and has
other patent applications pending to protect its proprietary technology.
Although the Company believes that its patents provide adequate protection for
the conduct of its business, there can be no assurance that such patents will
be of substantial protection or commercial benefit to the Company, will afford
the Company adequate protection from competing products, will not be challenged
or declared invalid, or that additional United States patents or foreign patent
equivalents will be issued to the Company. The degree of patent protection to
be afforded to biotechnological inventions is uncertain and the Company's
products are subject to this uncertainty. The Company is aware of certain
issued patents and patent applications, and there may be other patents and
applications, containing subject matter which the Company or its licensees or
collaborators may require in order to research, develop or commercialize at
least some of the Company's products. There can be no assurance that licenses
under such subject matter will be available on acceptable terms. One such
patent is U.S. Patent No. 5,084,558, which issued on January 28, 1992, and is
entitled "Extra Pure Semi-Synthetic Blood Substitute." It could be asserted
that this patent includes claims which would cover the Company's PEG-hemoglobin
product. In the opinion of the Company and the Company's outside patent
counsel, Lerner, David, Littenberg, Krumholz and Mentlik, the Company's
PEG-hemoglobin product does not infringe any claim of such patent which would
be held valid if litigated. However, there can be no assurance that a court
would find any of the claims of such patent to be invalid, that a court would
not hold that the Company's PEG-hemoglobin product does infringe one or more
valid claims of such patent, or that a license could be obtained under such
patent on acceptable terms. Pursuant to an opposition proceeding the European
patent application related to U.S. Patent No. 5,084,558 was revoked in November
1995. The Company expects that there may be significant litigation in the
industry regarding patents and other proprietary rights and, if Enzon were to
become involved in such litigation, it could consume a substantial amount of
the Company's resources. In addition, the Company relies heavily on its
proprietary technologies for which pending patent applications have been filed
and on unpatented know-how developed by the Company. Insofar as the Company
relies on trade secrets and unpatented know-how to maintain its competitive
technological position, there can be no assurance that others may not
independently develop the same or similar technologies. Although the Company
has taken steps to protect its trade secrets and unpatented know-how,
third-parties nonetheless may gain access to such information.
Research Corporation Technologies, Inc. ("Research Corporation") holds
the original patent upon which the PEG Process is based. Although the Company
has obtained several improvement patents in connection with the PEG Process
which it believes represent state of the art technology, there can be no
assurance that any of these patents or the patent held by Research Corporation
will enable the Company or Research Corporation to prevent infringement or that
competitors will not develop competitive products outside the protection that
may be afforded by these patents. Research Corporation's patent in the United
States expires in December 1996 and its patents in certain foreign countries
have expired. The Company is aware that others have also filed patent
applications and have been granted patents in the United States and other
countries with respect to the application of PEG to proteins.
MARKETING UNCERTAINTIES AND DEPENDENCE ON MARKETING PARTNERS. Except for
ADAGEN, which treats a small patient population, the Company does not engage in
the direct commercial marketing of any of its products and therefore does not
have an established sales force. For certain of its products, the Company has
provided exclusive marketing rights to its corporate partners in return for
royalties to be received on sales. With respect to ONCASPAR, the Company has
granted RPR exclusive marketing rights in the United States. The Company has
also granted exclusive licenses to sell ONCASPAR in Canada and Mexico to RPR in
exchange for royalty payments on future sales. The Company expects to retain
marketing partners to market ONCASPAR in other foreign markets and is currently
pursuing arrangements in this regard. There can be no assurance that such
discussions will result in the Company concluding such arrangements. Regarding
the marketing of certain of the Company's future products, the Company expects
to evaluate whether to create a sales force to market certain products in the
United States or to continue to enter into license and marketing agreements
with others for United States and foreign marketing rights. These agreements
generally provide that all or a significant portion of the marketing of these
products will be conducted by the Company's licensees or marketing partners.
In addition, under certain of these agreements, the Company's licensee or
marketing partner may have all or a significant portion of the development and
regulatory approval responsibilities. Should the licensee or marketing partner
fail to develop a marketable product (to the extent it is responsible for
product development) or fail to market a product successfully, if it is
developed, the Company's business may be adversely affected. There can be no
assurance that the Company's marketing strategy will be successful. Under the
Company's marketing and license agreements, the Company's marketing partners
and licensees may have the right to terminate the agreement and abandon the
product at any time for any reason without significant payments. The Company
is aware that certain of its marketing partners are pursuing parallel
development of products on their own and with other collaborative partners
which may compete with the licensed products and there can be no assurance that
the Company's other current or future marketing partners will not also pursue
such parallel courses.
REIMBURSEMENT FROM THIRD-PARTY PAYORS. Sales of the Company's products
will be dependent in part on the availability of reimbursement from third-party
payors, such as governmental health administration authorities, private health
insurers and other organizations. There can be no assurance that such
reimbursement will be available or will permit the Company to sell its products
at price levels sufficient for it to realize an appropriate return on its
investment in product development. In addition, lifetime limits on benefits
which are included in most private health insurance policies could permit
insurers to cease reimbursement for ADAGEN prior to patients completing
treatment.
GOVERNMENT REGULATION. The manufacturing and marketing of pharmaceutical
products in the United States is subject to stringent governmental regulation
and the sale of any of the Company's products for use in humans in the United
States will require the prior approval of the FDA. The FDA has established
mandatory procedures and safety standards which apply to the clinical testing,
manufacture and marketing of pharmaceutical products. Pharmaceutical
manufacturing facilities are also regulated by state, local and other
authorities. Obtaining FDA approval for a new therapeutic may take several
years and involve substantial expenditures. ADAGEN was approved by the FDA in
March 1990. ONCASPAR was approved by the FDA in February 1994 and in Germany
in November 1994 for patients with acute lymphoblastic leukemia who are
hypersensitive to native forms of L-asparaginase and in Russia in April 1993
for therapeutic use in a broad range of cancers. Except for these approvals,
none of the Company's products has been approved for sale for use in humans in
the United States or elsewhere. There can be no assurance that the Company
will be able to obtain FDA approval for any of its other products. Failure to
obtain requisite governmental approvals or failure to obtain approvals of the
scope requested, will delay or preclude the Company or its licensees or
marketing partners from marketing their products, or limit the commercial use
of the products, and thereby may have a material adverse affect on the
Company's liquidity and financial condition.
INTENSE COMPETITION AND RISK OF TECHNOLOGICAL OBSOLESCENCE. Many
established biotechnology and pharmaceutical companies with resources greater
than those of the Company are engaged in activities that are competitive with
Enzon's and may develop products or technologies which compete with those of
the Company's. Although Enzon is not aware of any competitor which has achieved
the same level as the Company in utilizing PEG technology in developing drug
products, it is aware of other companies which are engaged in this field and
there can be no assurance that competitors will not successfully develop such
products in the future. Although there are other companies engaged in the
development of SCA proteins, Enzon believes that these companies will be
required to obtain a license under Enzon's SCA patents in order to
commercialize any such product. There can be no assurance, however, that this
will prove to be the case. Rapid technological development by others may
result in the Company's products becoming obsolete before the Company recovers
a significant portion of the research, development and commercialization
expenses incurred with respect to those products. Enzon believes that the
experience of certain of its personnel in protein research, and its patents and
proprietary know-how may provide it with a competitive advantage in its field;
however, there can be no assurance that the Company will be able to maintain
such a competitive advantage, should it exist, in view of the greater size and
resources of many of its competitors. Other drugs or treatment modalities
which are currently available or that may be developed in the future, and which
treat the same diseases as those which the Company's products are designed to
treat, may be competitive with the Company's products.
POTENTIAL PRODUCT LIABILITY. The use of the Company's products during
testing or after regulatory approval entails an inherent risk of adverse
effects which could expose the Company to product liability claims. The
Company maintains product liability insurance coverage in the total amount of
$5,000,000 for claims arising from the use of its products in clinical trials
prior to FDA approval and for claims arising from the use of its products after
FDA approval. There can be no assurance that the Company will be able to
maintain its existing insurance coverage or obtain coverage for the use of its
other products in the future. Management believes that the Company maintains
adequate insurance coverage for the operation of its business at this time;
however, there can be no assurance that such insurance coverage and the
resources of the Company would be sufficient to satisfy any liability resulting
from product liability claims.
DIVIDEND POLICY AND RESTRICTIONS. The Company has paid no dividends on
its Common Stock since its inception and does not plan to pay dividends on its
Common Stock in the foreseeable future. Except as may be utilized to pay the
dividends payable on the Company's Series A Preferred Stock, any earnings which
the Company may realize will be retained to finance the growth of the Company.
In addition, the terms of the Series A Preferred Stock restrict the payment of
dividends on other classes and series of stock. The holders of the Series B
Preferred Stock are not entitled to dividends.
POSSIBLE VOLATILITY OF STOCK PRICE. Since the Company's initial public
offering, the market price of the Company's Common Stock has fluctuated over a
wide range and it is likely that the price of the Common Stock will fluctuate
in the future. Announcements regarding technical innovations, the development
of new products, the status of corporate collaborations and supply
arrangements, regulatory approvals, patent or proprietary rights or other
developments by the Company or its competitors could have a significant impact
on the market price of the Common Stock. Since the Conversion Price of the
Preferred Shares is based upon the Average Market Price (subject to adjustment
upon the occurrence of a Triggering Event), a significant reduction in the
Average Market Price could cause an increase in the number of shares of Common
Stock issuable upon conversion of the Preferred Shares. See "Selling
Stockholders."
REGISTRATION RIGHTS AND SALES PURSUANT TO RULE 144. The Company had
27,430,800 shares of Common Stock outstanding as of February 15, 1996. Of
these outstanding shares, approximately 3,417,379 shares are "restricted
securities" as defined in Rule 144 under the Securities Act. Of these
restricted securities, an aggregate of 1,094,890 are Outstanding Common Shares
and covered by the registration statement of which this Prospectus forms a
part, approximately 1,375,000 were eligible to be sold pursuant to Rule 144 as
of February 15, 1996, and approximately 2,042,379 (including the Outstanding
Common Shares) will become eligible to be sold pursuant to Rule 144 on various
dates commencing March 31, 1997 through June 30, 1998. The (i) 1,094,890
shares of restricted Common Stock included in this registration statement which
are the Outstanding Common Shares will, if sold pursuant to this registration
statement, and (ii) 3,265,773 shares of Common Stock included in this
registration statement which are Common Shares Underlying Preferred Shares, the
Warrant Shares and the Additional Shares will, if issued upon conversion of the
Preferred Shares, exercise of the Warrants and the occurrence of any of the
Triggering Events, respectively, and sold pursuant to this registration
statement, be freely tradeable without restriction under the Securities Act,
except that any shares held by an "affiliate," as that term is defined under
the Securities Act, will be subject to certain resale limitations of Rule 144.
The Selling Stockholders have certain registration rights pursuant to the
Registration Rights Agreement with respect to the Outstanding Common Shares,
the Common Shares underlying the Preferred Shares, the Warrant Shares and the
Additional Shares. See "Selling Stockholders." The registration statement of
which this Prospectus forms a part has been filed by the Company on behalf of
the Selling Stockholders to comply with certain of its obligations under the
Registration Rights Agreement.
As of February 15, 1996 there were outstanding: (i) the Warrants to
purchase 638,686 Warrant Shares; (ii) the Preferred Shares which are
convertible into up to 2,503,912 Common Shares Underlying Preferred Shares
(which number of shares could increase if there were a significant reduction in
the Average Market Price or if the duration of the Triggering Events exceeded
three months (See "Selling Stockholders")); (iii) the right of the Selling
Stockholders under the Registration Rights Agreement to be issued up to 123,175
Additional Shares in the event any Triggering Events occur (which number of
shares could increase if the duration of the Triggering Events exceeded three
months (See "Selling Stockholders")); (iv) additional warrants to purchase an
aggregate of 200,000 shares of Common Stock; (v) 109,000 shares of Series A
Cumulative Convertible Preferred Stock (the "Series A Preferred Stock")
convertible into an aggregate of 247,727 shares of Common Stock; and (vi)
options to purchase an aggregate of 3,815,209 shares of Common Stock. Of the
foregoing, warrants to purchase 150,000 shares of Common Stock are exercisable
through August 8, 2000 at an exercise price of $2.50 per share. Subject to
certain limitations, the holders thereof have the right to include the shares
of Common Stock underlying these warrants on registration statements filed by
the Company through November 2000. Additionally, the holders of such warrants
as to 112,500 shares of Common Stock have the right to request, on no more than
two occasions, that the Company file on their behalf a registration statement
to register such shares of Common Stock. Warrants to purchase 50,000 shares of
Common Stock were issued to the finder in the January 1996 Private Placement
and are exercisable commencing on February 7, 1997 through February 7, 2001, at
an exercise price of $4.11 per share. Subject to certain limitations, the
holders of these warrants have the right to include the shares of Common Stock
underlying these warrants on registration statements filed by the Company and
to have such registration statements kept effective until the earlier of (a) at
least three years after the date of the expiration of all of the warrants, or
(b) the date on which (A) all of the warrants have been exercised or expired,
and (B) no shares of Common Stock underlying such warrants are outstanding
which have not been sold pursuant to a registration statement or Rule 144. The
247,727 shares of Common Stock underlying the 109,000 shares of Series A
Preferred Stock are eligible for sale under Rule 144(k). Of the 3,815,209
shares underlying the options, 2,447,614 shares are covered by an effective
registration statement on Form S-8, 1,337,595 shares will be covered by a
registration statement on Form S-8 which the Company intends to file in the
near future. An additional 2,614,791 shares reserved for issuance pursuant to
options that may be granted under the Company's Non-Qualified Stock Option
Plan, as amended, will also be covered by such registration statement on Form
S-8.
For the term of the Company's outstanding options and warrants, their
holders have the opportunity to profit from a rise in the market price of the
Company's Common Stock without assuming the risks of the business. This may
have an adverse effect on the terms upon which the Company can obtain
additional capital and the market price of the Company's securities. Holders
of these options and warrants are likely to exercise them at a time when the
Company would be able to obtain any needed capital on terms more favorable than
those provided for by such options or warrants.
Pursuant to a stock purchase agreement dated as of June 30, 1995 pursuant
to which the Company sold 847,489 shares of restricted Common Stock, the
Company gave the right to the purchaser thereunder to include its shares of the
Common Stock on registration statements filed by the Company and to request
that the Company file on its behalf registration statements to register such
shares of Common Stock, each for an unlimited period of time.
In general, under Rule 144 as currently in effect, any person (or persons
whose shares are aggregated), including affiliates, who have beneficially owned
shares for at least two years is entitled to sell, within any three-month
period, a number of shares that does not exceed the greater of one percent of
the then outstanding shares of the Company's Common Stock or the weekly trading
volume in the Company's Common Stock during the four calendar weeks preceding
such sale. A person (or persons whose shares are aggregated) who is not deemed
an affiliate of the Company, and who has beneficially owned shares for at least
three years, is entitled to sell such shares under Rule 144 without regard to
the limitations described above.
The sale of shares of the Company's Common Stock upon exercise of options
or warrants, pursuant to registration statements required to be filed by the
Company on behalf of holders of its options, warrants, or other securities, or
pursuant to Rule 144, or even the potential of such sales might have an adverse
effect on the then current market price of the Company's securities.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Common
Shares offered herein by the Selling Stockholders. If all of the Warrants are
exercised, the Company will receive estimated gross proceeds of approximately
$2,625,000. The Company intends to utilize any proceeds received from the
exercise of the Warrants primarily to fund research and development activities
and for general corporate purposes. There can be no assurance that any of the
Warrants will be exercised. No additional consideration is payable in
connection with the Selling Stockholders' conversion of the Preferred Shares.
SELLING STOCKHOLDERS
GENERAL
Pursuant to the Securities Purchase Agreement the Company sold to the
Selling Stockholders the 1,094,890 Common Shares, the 40,000 Preferred Shares
and the Warrants to purchase an aggregate of 638,686 Warrant Shares in a
private placement transaction for aggregate consideration of $7,000,000.
The Preferred Shares are convertible into shares of Common Stock
commencing April 17, 1996. The Conversion Price is 80% of the Average Market
Price of the Common Stock at the time of conversion. The percentage of the
Average Market Price which determines the Conversion Price is adjustable
downward in the event that, prior to the conversion of the Preferred Shares,
the registration statement of which this Prospectus forms a part becomes
subject to a stop order, or the Company fails to update such registration
statement as required by the rules and regulations of the Commission, or the
Company fails to maintain a listing of the Common Stock on NASDAQ-NMS, NASDAQ-
SmallCap or certain specified national securities exchanges (collectively, the
"Triggering Events"). Should any of the Triggering Events occur, the
percentage of the Average Market Price which determines the Conversion Price
will be reduced by the number of percentage points equal to three times the sum
of the number of months during which a Triggering Event exists; provided that
the aggregate number of months which are the basis for such reduction may not
exceed twelve. Should any of the Triggering Events occur subsequent to
conversion of the Preferred Shares but prior to the sale of the Common Stock
obtained upon conversion, then upon the sale of such Common Stock, the Company
shall pay to such holder an amount equal to the Average Market Price of the
Common Stock received upon conversion ending one trading day prior to such
conversion, multiplied by three-hundredths (.03) times the sum of the number of
months during which a Triggering Event exists (provided that the number of
months may not exceed twelve). Such amount may be paid in Common Stock based
on the Average Market Price of the Common Stock on the day prior to sale of
such Common Stock, or cash, and the Company is required to pay such amount in
cash if the Triggering Event which occurred was the Company's failure to
maintain the listing of its Common Stock on NASDAQ-NMS, NASDAQ-SmallCap or
certain specified exchanges. The Preferred Shares are redeemable at the option
of the Company commencing May 7, 1996 at a redemption price of $127 per
Preferred Share. The Preferred Shares have no voting rights, except as
required by law and except that a majority of the outstanding Preferred Shares
is required to approve a consolidation, merger or reclassification of
outstanding shares of Common Stock (other than by way of a subdivision or
reduction of shares) and the approval of two-thirds of the outstanding
Preferred Shares is required to amend the designations, preferences and rights
of the Preferred Shares. The Preferred Shares will not pay a dividend. The
Warrants were issued for no additional consideration and are exercisable at a
price of $4.11 per share (as may be adjusted in accordance with the terms of
the Warrants) commencing on the earlier of the date hereof or April 17, 1996
and expire on February 7, 2001.
In connection with the Securities Purchase Agreement, the Company and the
Selling Stockholders entered into the Registration Rights Agreement which
provides for the issuance of the Additional Shares to the Selling Stockholders
upon the occurrence of any of the Triggering Events. The number of Additional
Shares issuable to the Selling Stockholders upon the occurrence of a Triggering
Event is equal to $3,749,998 multiplied by three-hundredths (.03) times the sum
of the number of months during which a Triggering Event exists (provided that
the aggregate number of months may not exceed twelve), divided by the Average
Market Price of the Company's Common Stock on the trading day prior to the date
sales can resume pursuant to the registration statement covering the sale of
such shares. Pursuant to the Registration Rights Agreement, the Company has
the right to pay to the Selling Stockholders cash in lieu of the Additional
Shares, however, if the Triggering Event which occurred was the Company's
failure to maintain the listing of its Common Stock on NASDAQ-NMS, NASDAQ-
SmallCap or certain specified exchanges, then the Company is required to pay
cash in lieu of the Additional Shares.
Pursuant to the Registration Rights Agreement, the Company agreed to file
a registration statement on Form S-3 covering the sale by the Selling
Stockholders of the Common Shares, the Common Shares Underlying the Preferred
Shares, the Warrant Shares and the Additional Shares. The registration
statement of which this Prospectus forms a part has been filed by the Company
to fulfill this obligation to the Selling Stockholders under the Registration
Rights Agreement. Subject to certain limitations, the Company is also required
to include the Outstanding Common Shares, the Common Shares Underlying the
Preferred Shares, the Warrant Shares and the Additional Shares on registration
statements which may be filed by the Company in the future. The Company is
required to maintain the effectiveness of the registration statement of which
this Prospectus forms a part, and any subsequent registration statements
covering the sale of the Common Shares, the Common Shares Underlying the
Preferred Shares, the Warrant Shares and the Additional Shares, until the
earlier of (i) at least three (3) years after the date of the expiration of all
the Warrants, or (ii) the date on which (a) all of the Warrants have been
exercised or have expired, (b) no securities entitled to be included on the
registration statement are held by the Selling Stockholders or any transferee
thereof, and (c) none of the Preferred Shares is outstanding.
The Selling Stockholders may not convert the Preferred Shares or exercise
the Warrants or have the Additional Shares issued to them in the event a
Triggering Event occurs if as a result of such conversion, exercise or
issuance, the shares of Common Stock beneficially owned by the Selling
Stockholders would exceed 4.9% of the outstanding shares of Common Stock.
The Company has agreed to indemnify each of the Selling Stockholders
against any liabilities, under the Securities Act or otherwise, arising out of
or based upon any untrue or alleged untrue statement of a material fact in the
registration statement or this Prospectus or by any omission of a material fact
required to be stated therein except to the extent that such liabilities arise
out of or are based upon any untrue or alleged untrue statement or omission in
any information furnished in writing to the Company by the Selling Stockholders
expressly for use in the registration statement. Insofar as indemnification
for liabilities arising under the Securities Act may be permitted to directors,
officers or persons controlling the Company pursuant to its certificate of
incorporation and by-laws, the Company has been informed that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is therefore unenforceable.
In connection with the registration of the shares of Common Stock offered
hereby, the Company will supply prospectuses to the Selling Stockholders and
use its best efforts to qualify the Common Shares for sale in states reasonably
designated by the Selling Stockholders.
Pursuant to the Securities Purchase Agreement, the Company also agreed to
use its best efforts to effect a one for two reverse split of its Common Stock
as soon as practicable, provided that it is not obligated to effect the one for
two reverse split earlier than its next annual meeting of stockholders.
STOCK OWNERSHIP
The table below sets forth the number of shares of Common Stock (i) owned
beneficially by each Selling Stockholder prior to the Offering based on the
Average Market Price of the Common Stock on March 4, 1996; (ii) being offered
by each Selling Stockholder pursuant to this Prospectus; (iii) to be owned
beneficially by each Selling Stockholder after completion of the offering,
assuming that all of the Common Shares offered hereby are sold; and (iv) the
percentage to be owned by each Selling Stockholder after completion of the
offering, assuming that all of the Common Shares offered hereby are sold.
Other than the transactions described herein, none of the Selling Stockholders
has had any material relationship with the Company during the past three years.
<TABLE>
<CAPTION>
Number of Shares to
be Owned Beneficially Percentage of
Number of After Completion Outstanding Shares to
Shares Beneficially OF OFFERING be Owned Beneficially
Owned Prior Number of After Completion
TO OFFERING Shares OF OFFERING(1)
SELLING STOCKHOLDER OFFERED
<S> <C> <C> <C> <C>
GFL Advantage Fund Ltd. 1,417,594(2) 1,417,594(2) 0 0
GFL Performance Fund Ltd. 1,368,613(3) 1,368,613(3) 0 0
</TABLE>
(1) Based upon shares of Common Stock outstanding as of March 4, 1996.
(2) Includes 1,052,631 Common Shares Underlying the Preferred Shares and
364,963 Warrant Shares. To the extent Additional Shares, if any, are
issued to the Selling Stockholder as the result of the occurrence of a
Triggering Event, the "Number of Shares Beneficially Owned Prior to the
Offering" and the "Number of Shares Offered" will be adjusted by
supplementing this Prospectus.
(3) Includes 1,094,890 Outstanding Common Shares and 273,723 Warrant Shares.
To the extent Additional Shares, if any, are issued to the Selling
Stockholder as the result of the occurrence of a Triggering Event, the
"Number of Shares Beneficially Owned Prior to the Offering" and the
"Number of Shares Offered" will be adjusted by supplementing this
Prospectus.
PLAN OF DISTRIBUTION
The Outstanding Common Shares, the Shares Underlying the Preferred
Shares, the Warrant Shares and the Additional Shares, may be sold pursuant to
this Prospectus by the Selling Stockholders. These sales may occur in
privately negotiated transactions or in the over-the-counter market through
brokers and dealers as agents or to brokers and dealers as principals, who may
receive compensation in the form of discounts or commissions from the Selling
Stockholders or from the purchasers of the Common Stock for whom the broker-
dealers may act as agent or to whom they may sell as principal, or both. The
Company has been advised by the Selling Stockholders that they have not made
any arrangements relating to the distribution of the shares of Common Stock
covered by this Prospectus. In effecting sales, broker-dealers engaged by the
Selling Stockholders may arrange for other broker-dealers to participate.
Broker-dealers will receive commissions or discounts from the Selling
Stockholders in amounts to be negotiated immediately prior to the sale.
Certain of the Selling Stockholders and any broker-dealers who execute
sales for the Selling Stockholders may be deemed to be "underwriters" within
the meaning of the Securities Act by virtue of the number of shares of Common
Stock to be sold or resold by such persons or entities or the manner of sale
thereof, or both. If any of the Selling Stockholders, broker-dealers or other
holders were determined to be underwriters, any discounts or commissions
received by them or by brokers or dealers acting on their behalf and any
profits received by them on the resale of their shares of Common Stock might be
deemed underwriting compensation under the Securities Act.
The Selling Stockholders have represented to the Company that any
purchase or sale of the Common Stock by them will be in compliance with
applicable rules and regulations of the Commission.
LEGAL MATTERS
The legality of the shares of Common Stock offered hereby has been passed
on for the Company by Ross & Hardies, New York, New York. A member of this
firm owns approximately 19,000 shares of the Company's Common Stock. Patent
law matters related to U.S. Patent No. 5,084,558 have been passed on for the
Company by Lerner, David, Littenberg, Krumholz and Mentlik, Westfield, New
Jersey.
EXPERTS
The consolidated financial statements of Enzon, Inc. and subsidiaries as
of June 30, 1995 and 1994 and for each of the years in the three year period
ended June 30, 1995, incorporated by reference herein have been incorporated by
reference herein and in the Registration Statement in reliance upon the report
of KPMG Peat Marwick LLP, independent certified public accountants,
incorporated by reference herein, and upon the authority of said firm as
experts in accounting and auditing.
- 2 -
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth an itemized estimate of fees and expenses
payable by the Registrant in connection with the offering of the securities
described in this registration statement, other than underwriting discounts and
commissions.
SEC registration fee......................................... $ 7,145
Legal fees and expenses...................................... $ 17,000
Accounting fees and expenses................................. $ 18,750
Miscellaneous................................................ $ 8,105
Printing expenses............................................ $ 10,000
Total...................................... $ 61,000
_______________
Item 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The General Corporation Law of the State of Delaware provides for
indemnification as set forth in Section 145 thereof. The Registrant's By-laws,
as amended provide for indemnification of the directors and officers of the
Registrant against all costs, expenses and amounts of liability incurred by
them in connection with any action, suit or proceeding in which they are
involved by reason of their affiliation with the Registrant, to the fullest
extent permitted by law. The Registrant's directors and officers also have
indemnification agreements with the Company, which expand the indemnification
protection provided to them under the Company's By-laws.
On January 20, 1987, the stockholders approved an amendment to the
Registrant's Certificate of Incorporation which added a new Article 10 limiting
the liability to the Registrant of individual directors for breach of their
fiduciary duty of care to the Registrant. The effect of this amendment is to
eliminate liability of directors for monetary damage arising out of negligent
or grossly negligent conduct, including such conduct in acquisition
transactions. However, liability of directors under the federal securities
laws will not be affected.
Item 16. EXHIBITS
<TABLE>
<CAPTION>
@<<Console>><<Console>>escription Page Number or
Incorporation BY
REFERENCE
<S> <C> <C>
3(i) Certificate of Incorporation, as amended ~~~
3(ii) By-laws, as amended *(4.2)
5.0 Opinion of Ross & Hardies regarding legality
10.0 Employment Agreement dated March 25, 1994 with Peter G. Tombros #(10.17)
10.1 Form of Change of Control Agreements dated as of January 20, 1995
entered into with the Company's Executive Officers ~(10.2)
10.2 Lease - 300-C Corporate Court, South Plainfield, New Jersey ***(10.3)
10.3 Modification of Lease - 300-C Corporate Court, South Plainfield New ++(10.3)
Jersey
10.4 Lease Termination Agreement dated March 31, 1995 for 20 Kingsbridge
Road and 40 Kingsbridge Road, Piscataway, New Jersey ~(10.6)
10.5 Option Agreement dated April 1, 1995 regarding 20 Kingsbridge Road,
Piscataway, New Jersey ~(10.7)
10.6 Form of Lease - 40 Cragwood Road, South Plainfield, New Jersey ****(10.9)
10.7 Lease 300A-B Corporate Court, South Plainfield, New Jersey (10.10)
10.8 Stock Purchase Agreement dated March 5, 1987 between the Company and
Eastman Kodak Company ****(10.7)
10.9 Amendment dated June 19, 1989 to Stock Purchase Agreement between the
Company and Eastman Kodak Company **(10.10)
10.10 Form of Stock Purchase Agreement between the Company and the
purchasers of the Series A Cumulative Convertible Preferred Stock +(10.11)
10.11 Amendment to License Agreement and Revised License Agreement between
the Company and RCT dated April 25, 1985 +++(10.5)
10.12 Amendment dated as of May 3, 1989 to Revised License Agreement dated
April 25, 1985 between the Company and Research Corporation **(10.14)
10.13 License Agreement dated September 7, 1989 between the Company and
Research Corporation Technologies, Inc. **(10.15)
10.14 Master Lease Agreement and Purchase Leaseback Agreement dated October
28, 1994 between the Company and Comdisco, Inc. ###(10.16)
10.15 Amendment dated as of May 15, 1995 to Employment Agreement with Peter
G. Tombros ~~(10.17)
10.16 Stock Purchase Agreement dated as of June 30, 1995 ~~~
10.17 Securities Purchase Agreement dated as of January 31, 1996 ~~~
10.18 Registration Rights Agreements dated as of January 31, 1996 ~~~
10.19 Warrants dated as of February 7, 1996 and issued pursuant to the
Securities Purchase Agreement dated as of January 31, 1996 ~~~
23.1 Consent of Ross & Hardies (contained in opinion filed as Exhibit 5.0)
23.2 Consent of KPMG Peat Marwick LLP
23.3 Consent of Lerner, David, Littenberg, Krumholz & Mentlik (patent
counsel)
23.4 Power of Attorney ~~~
</TABLE>
<diamond-suit>Filed herewith.
* Previously filed as an exhibit to the Company's Registration Statement on
Form S-2 (File No. 33-34874) and incorporated herein by reference
thereto.
** Previously filed as exhibits to the Company's Annual Report on Form 10-K
for the fiscal year ended June 30, 1989 and incorporated herein by
reference thereto.
*** Previously filed as an exhibit to the Company's Registration Statement on
Form S-18 (File No. 2-88240-NY) and incorporated herein by reference
thereto.
**** Previously filed as exhibits to the Company's Registration Statement on
Form S-1 (File No. 2-96279) filed with the Commission and incorporated
herein by reference thereto.
+ Previously filed as an exhibit to the Company's Registration Statement on
Form S-1 (File No. 33-39391) filed with the Commission and incorporated
herein by reference thereto.
++ Previously filed as an exhibit to the Company's Annual Report on Form 10-
K for the fiscal year ended June 30, 1992 and incorporated herein by
reference thereto.
+++ Previously filed as an exhibit to the Company's Annual Report on Form 10-
K for the fiscal year ended June 30, 1985 and incorporated herein by
reference thereto.
# Previously filed as an exhibit to the Company's Current Report on Form 8-
K dated April 5, 1994 and incorporated herein by reference thereto.
## Previously filed as an exhibit to the Company's Registration Statement on
Form S-3 (File No. 33-80790) and incorporated herein by reference
thereto.
### Previously filed as an exhibit to the Company's Quarterly Report on Form
10-Q for the quarter ended December 31, 1994 and incorporated herein by
reference thereto.
~ Previously filed as an exhibit to the Company's Quarterly Report on Form
10-Q for the quarter ended March 31, 1995 and incorporated herein by
reference thereto.
~~ Previously filed as an exhibit to the Company's Annual Report on Form 10-
K for the fiscal year ended June 30, 1995 and incorporated herein by
reference thereto.
~~~ Previously filed as exhibits to the Company's Quarterly Report on Form
10-Q for the quarter ended December 31, 1995 and incorporated herein by
reference thereto.
~~~ Powers of attorney are contained in signatures.
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; notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in the volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement.
(iii) 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 a post-effective amendment by those paragraphs is
contained in the periodic reports filed by the Registrant pursuant to Section
13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
BONA FIDE offering thereof.
(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.
(4) 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 (and where
applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by
reference in this Registration Statement shall be deemed to be a new
Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
(5) 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 Act 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 its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized in the City of Piscataway, State of New Jersey, on March 6,
1996.
ENZON, INC.
By /S/PETER G. TOMBROS
Peter G. Tombros,
President and Chief
Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Peter G. Tombros and Kenneth J. Zuerblis,
his true and lawful attorneys-in-fact and agents, each acting alone, with full
powers of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments to this
Registration Statement and to file the same, with all exhibits thereto, and all
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done, in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, each acting alone, or
his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE CAPACITY DATE
/S/PETER G. TOMBROS President, Chief March 6, 1996
Peter G. Tombros Executive Officer and
Director (Principal
Executive Officer)
/S/ABRAHAM ABUCHOWSKI Chairman of the Board March 6, 1996
Abraham Abuchowski
/S/KENNETH J. ZUERBLIS Vice President - March 6, 1996
Kenneth J. Zuerblis Finance and
Chief Financial
Officer (Principal
Financial Officer
and Principal
Accounting Officer)
/S/ROSINA B. DIXON Director March 6, 1996
Rosina B. Dixon
Director March __, 1996
Robert LeBuhn
/S/A.M. "DON" MACKINNON Director March 6, 1996
A.M. "Don" MacKinnon
/S/RANDY H. THURMAN Director March 6, 1996
Randy H. Thurman
<PAGE>
ENZON, INC.
EXHIBIT INDEX
<TABLE>
<CAPTION>
LOCATION OF EXHIBIT
IN SEQUENTIAL
NUMBERING SYSTEM
EXHIBIT NO. DESCRIPTION
<S> <C> <C>
5.0 Opinion of Ross & Hardies regarding legality
23.2 Consent of KPMG Peat Marwick LLP
23.3 Consent of Lerner, David, Littenberg, Krumholz &
Mentlik (patent counsel)
</TABLE>
<PAGE>
March 6, 1996
Enzon, Inc.
20 Kingsbridge Road
Piscataway, NJ 08854
Re: Enzon, Inc.
REGISTRATION STATEMENT ON FORM S-3
Ladies and Gentlemen:
You have requested our opinion with respect to the public
offering and sale by certain selling stockholders (the "Selling
Stockholders") of Enzon, Inc., a Delaware corporation (the "Company"),
pursuant to a Registration Statement on Form S-3 (the "Registration
Statement") of up to 4,360,663 shares of the Company's common stock, $.01
par value per share (the "Common Stock") of which (i) 1,094,890 shares (the
"Outstanding Common Shares") are outstanding and held by one of the Selling
Stockholders; (ii) up to 2,503,912 shares (the "Common Shares Underlying
the Preferred Shares") are issuable upon conversion of 40,000 outstanding
shares of the Company's Series B Convertible Preferred Stock, $.01 par
value per share (the "Preferred Shares") held by one of the Selling
Stockholders; (iii) 638,686 shares (the "Warrant Shares") are issuable upon
exercise of an aggregate of 638,686 warrants (the "Warrants") held by the
Selling Stockholders; and (iv) up to 123,175 shares (the "Additional
Shares") are additional shares which may be issued to the Selling
Stockholders only upon the occurrence of certain triggering events set
forth in the Registration Rights Agreement (as defined herein).
In this connection we have examined the Securities Purchase
Agreement dated as of January 31, 1996 and entered into by and among the
Company and the Selling Stockholders; the Company's Certificate of
Designations, Rights and Preferences of Series B Convertible Preferred
Stock filed with the Secretary of State of the State of Delaware (the
"Certificate of Designations"); the Registration Rights Agreement dated as
of January 31, 1996 and entered into by and among the Company and the
Selling Stockholders (the "Registration Rights Agreement"); the Warrants;
the Company's Certificate of Incorporation, as amended; the Company's By-
laws, as amended; records of applicable corporate proceedings of the
Company; and such other documents as we have deemed necessary as a basis
for the opinion herein expressed. With respect to such examination we have
assumed the legal capacity to sign and the genuineness of all signatures
appearing on all documents presented to us as originals, and the conformity
to the originals of all documents presented to us as conformed or
reproduced copies. With respect to factual matters relevant to such
opinion, we have relied, without independent verification thereof, upon
certificates of appropriate state and local officials and executive
officers and responsible employees and agents of the Company.
Based upon the foregoing, and in reliance thereon, and subject to
the limitations and qualifications set forth herein, we are of the opinion
that:
1. The Outstanding Common Shares are legally and validly
issued, fully paid, and non-assessable.
2. When issued and paid for in accordance with the Warrants,
the Warrant Shares will be legally and validly issued, fully paid and non-
assessable shares.
3. When issued upon conversion of the Preferred Shares in
accordance with the terms of the Certificate of Designations, the Common
Shares Underlying the Preferred Shares will be legally and validly issued,
fully paid and non-assessable.
4. When issued in accordance with the terms of the Registration
Rights Agreement, the Additional Shares will be legally and validly issued,
fully paid and non-assessable.
We consent to the use of our name in the Registration Statement
and the related Prospectus under the caption "Legal Matters", and we
consent to the filing of this opinion as an Exhibit to the Registration
Statement.
Very truly yours,
ROSS & HARDIES
<PAGE>
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Enzon, Inc.:
We consent to the use of our report incorporated herein by reference and to
the reference to our firm under the heading "Experts" in the prospectus.
New York, New York /S/ KPMG PEAT MARWICK LLP
March 6, 1996 KPMG Peat Marwick LLP
<PAGE>
CONSENT OF COUNSEL
We hereby consent to the reference to our firm under the caption
"Legal Matters" in the Prospectus.
March 6, 1996
/S/LERNER, DAVID, LITTENBERG, KRUMHOLZ & MENTLIK
Lerner, David, Littenberg, Krumholz & Mentlik
