<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 13, 1996
REGISTRATION NO. 333-2451
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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ONCOGENE SCIENCE, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 13-3159796
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
</TABLE>
106 CHARLES LINDBERGH BLVD., UNIONDALE, NY 11553, (516) 222-0023
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
ROBERT L. VAN NOSTRAND
ONCOGENE SCIENCE, INC.
106 CHARLES LINDBERGH BLVD.
UNIONDALE, NEW YORK 11553
(516) 222-0023
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
COPIES OF ALL COMMUNICATIONS TO:
SPENCER W. FRANCK, JR., ESQUIRE
SAUL, EWING, REMICK & SAUL
3800 CENTRE SQUARE WEST
PHILADELPHIA, PENNSYLVANIA 19102
(215) 972-7777
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. / /
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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<PAGE> 2
LOGO
416,553 SHARES
COMMON STOCK
This Prospectus relates to up to 416,553 shares (the "Shares") of common
stock, par value $.01 per share ("Common Stock"), of Oncogene Science, Inc., a
Delaware corporation ("Oncogene Science" or the "Company"), which may be offered
and sold by the selling stockholders named herein (the "Selling Stockholders")
pursuant to this Prospectus from time to time. The Selling Stockholders have
acquired 316,553 of the Shares from, and may in the future acquire 100,000 of
the Shares upon the exercise of outstanding warrants issued to them by, the
Company.
The Selling Stockholders may from time to time sell all or part of the
Shares offered hereby in ordinary brokers' transactions on the Nasdaq National
Market at prevailing market prices, or in privately negotiated transactions at
negotiated prices, or otherwise. The Company will not receive any proceeds from
the sale of the Shares.
The Common Stock is traded on the Nasdaq national market under the symbol
"ONCS." On May 8, 1996, the last sale price of the Company's Common Stock, as
reported on the Nasdaq National market, was $10.75 per share.
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THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 3.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
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 MAY 10, 1996
<PAGE> 3
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"). Reports, proxy statements
and other information filed by the Company may be inspected without charge and
copied at the public reference facilities maintained by the Commission at Room
1014, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at
the following regional offices of the Commission: 7 World Trade Center, New
York, New York 10048; and 500 West Madison Street, 14th Floor, Chicago, Illinois
60661. Copies of such material may also be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at
the prescribed rates. Oncogene Science's Common Stock is listed and traded on
the Nasdaq National Market. Reports, proxy statements and other information
filed by the Company may also be inspected at the National Association of
Securities Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20002.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which provide certain information with respect to
Oncogene Science, are incorporated by reference in this Prospectus:
1. Annual Report of the Company on Form 10-K for the fiscal year ended
September 30, 1995, as amended by Forms 10-K/A filed on January 29
and February 20, 1996;
2. Quarterly Report of the Company on Form 10-Q for the fiscal quarter
ended December 31, 1995, as amended by Form 10-Q/A filed on March 1,
1996;
3. Current Report of the Company on Form 8-K filed on April 26, 1996,
as amended by Form 8-K/A filed on May 10, 1996; and
4. The description of the Company's Common Stock, $.01 par value, which
is contained in the Company's Registration Statement on Form 8-A,
including any amendments or reports filed for the purpose of
updating such description.
All documents filed by Oncogene Science pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to
termination of the offering shall be deemed to be incorporated by reference
herein and to be a part hereof from the date of filing of such documents. Any
statement contained herein or in a document incorporated by reference 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 the statement is
modified or superseded by any other subsequently filed document which is
incorporated or is deemed to be incorporated by reference herein. Any statement
so modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
This Prospectus incorporates documents by reference which are not presented
herein or delivered herewith. Oncogene Science hereby undertakes to provide
without charge to each person, including any beneficial owner, to whom this
Prospectus has been delivered, on the written or oral request of such person, a
copy of any or all of the documents referred to above which have been or may be
incorporated into this Prospectus and deemed to be part hereof, other than
exhibits to such documents, unless such exhibits are specifically incorporated
by reference in such documents. These documents are available upon request from
Matthew Haines, Oncogene Science, Inc., 106 Charles Lindbergh Boulevard,
Uniondale, NY 11553, telephone (516) 222-0023.
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NO PERSON HAS BEEN AUTHORIZED IN CONNECTION WITH THE OFFERING MADE HEREBY
TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED
IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER
TO BUY, SECURITIES OTHER THAN THE REGISTERED SECURITIES TO WHICH IT RELATES OR
AN OFFER TO, OR A SOLICITATION OF, ANY PERSON IN ANY JURISDICTION WHERE AN OFFER
OR SOLICITATION WOULD BE UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR
ANY OFFER OR SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY
TIME SUBSEQUENT TO THE DATE HEREOF.
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RISK FACTORS
In addition to the other information in this Prospectus, the following risk
factors should be considered carefully in evaluating the Company and its
business before purchasing shares of the Common Stock offered hereby.
UNCERTAINTIES RELATED TO CLINICAL TRIALS
Oncogene Science has limited experience in conducting clinical trials and
intends to rely primarily on the pharmaceutical companies with which it
collaborates, including Ciba-Geigy, Ltd. ("Ciba"), Pfizer Inc. ("Pfizer"),
Hoechst Marion Roussel, Inc. ("HMRI") and Wyeth-Ayerst Laboratories Division of
American Home Products Corporation ("Wyeth"), for clinical development and
regulatory approval of its product candidates. Before obtaining regulatory
approvals for the commercial sale of its products, the Company or its
collaborative partners will be required to demonstrate through preclinical
studies and clinical trials that the proposed products are safe and effective
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 clinical trials
conducted by the Company or its partners will demonstrate sufficient safety and
efficacy to obtain the required regulatory approvals or will result in
marketable products. In addition, clinical trials are often conducted with
patients having the most advanced stages of disease. During the course of
treatment, these patients can die or suffer other adverse medical effects for
reasons that may not be related to the pharmaceutical agent being tested, but
which can nevertheless affect clinical trial results. Various companies in the
pharmaceutical industry have suffered significant setbacks in advanced clinical
trials, even after promising results in earlier trials.
Clinical trials for the product candidates being developed by the Company
and its collaborators may be delayed by many factors. For example, clinical
trials for TGF-Beta3, the Company's product candidate most advanced in clinical
development, have been delayed as a result of a failure on the part of Ciba's
temporary contract manufacturer's facility to fully comply with good
manufacturing practices ("GMP") in producing clinical quantities of TGF-Beta3.
No assurance can be given that the same or similar problems will not recur and
that these clinical trials or trials with respect to its diagnostic and small
molecule pharmaceutical product candidates will not be subject to additional
delays or otherwise terminated. Any delays in, or termination of, the clinical
trials of any of the Company's product candidates would have a material adverse
effect on the Company's business, financial condition and results of
operations.
In the Company's small molecule drug discovery operations, no product
candidates have entered clinical trials. Consequently, compounds discovered
using the Company's small molecule discovery technology have not yet been proven
safe or effective in humans. Furthermore, the Company's drug discovery assays
are focused on several target genes, the functions of which have not yet been
fully elucidated. As such, the safety and efficacy of drugs that alter the
transcription of these genes have not yet been established. No assurance can be
given that any lead small molecule compounds or diagnostic product candidates
emerging from the Company's discovery and development operations will
successfully enter or complete clinical trials or receive marketing approval
from the U.S. Food and Drug Administration ("FDA") or any foreign regulatory
authorities on a timely basis or at all.
DEPENDENCE ON COLLABORATIVE RELATIONSHIPS
The Company does not intend to conduct late-stage clinical trials, or
manufacturing or marketing activities with respect to any of its product
candidates in the foreseeable future. The Company has collaborations with Ciba,
Pfizer, HMRI and Wyeth for the development of potential drug candidates, and to
date, its most advanced programs are in TGF-Beta3 with Ciba for wound healing
and oral mucositis and an oncogene inhibitor with Pfizer for the treatment of
certain cancers. The Company also collaborates with Becton in the development
of cancer diagnostic products. The Company is dependent on the pharmaceutical
and diagnostic companies with which it collaborates for the preclinical
testing, clinical development, regulatory approval, manufacturing and marketing
of its products. The Company's collaborative agreements allow its collaborative
partners significant discretion in electing to pursue or not to pursue any of
these activities. The Company cannot control the amount and timing of resources
its collaborative partners devote to the Company's programs or potential
products. If any of the Company's collaborative partners were to breach
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or terminate its agreements with the Company or otherwise fail to conduct its
collaborative activities successfully in a timely manner, the preclinical or
clinical development or commercialization of product candidates or research
programs would be delayed or terminated. Any such delay or termination could
have a material adverse effect on the Company's business, financial condition
and results of operations.
The Company has a collaborative research agreement with Ciba relating to
the clinical development, manufacturing and marketing of the Company's
recombinant protein TGF-Beta3 for various indications. Under this agreement,
Ciba has the right to manufacture TGF-Beta3 for clinical development and
commercial purposes for all indications. The Company and other potential
licensees of TGF-Beta3 are, and will be, dependent on Ciba as the sole
manufacturer of TGF-Beta3. No assurance can be given that Ciba will supply
TGF-Beta3 to the Company and its licensees as needed. Ciba has experienced
delays in the production of TGF-Beta3 as a result of a failure on the part of
its temporary contract manufacturer to comply with certain FDA manufacturing
regulations which have resulted in delays in clinical trials. There can be no
assurance that the Company or its licensees will not experience problems in
obtaining a supply of TGF-Beta3 in the future. In addition, a substantial
milestone payment to the Company by Ciba under this collaboration is dependent
on Ciba accomplishing certain clinical development objectives, over which the
Company has no control. Failure of Ciba to complete clinical development and
obtain regulatory approval for TGF-Beta3 in one or more indications could have
a material adverse effect on the Company's business, financial condition and
results of operations.
The Company relies on its collaborative partners to provide funding in
support of its research operations. As of December 31, 1995, the Company had
received or accrued an aggregate of $62.7 million in research funding and
milestone payments from its collaborative partners, approximately one-half of
which has been provided by Pfizer. The Company would be required to devote
additional internal resources to product development, or scale back or terminate
certain development programs or seek alternative collaborative partners, if
funding from one or more of its collaborative programs were reduced or
terminated. For example, Becton has reduced its funding under the Company's
diagnostic products collaboration for fiscal 1996. This collaboration will
expire on September 30, 1996 and the Company is uncertain as to whether it will
be renewed at such time. The Company is negotiating with HMRI for the
consolidation of its three collaborative research agreements with each of HMRI's
predecessor companies, which expire on various dates in 1997 and 1999. There can
be no assurance that these collaborations will be renewed on acceptable terms,
if at all.
The Company owns or controls the rights to only a relatively small number
of the compounds that it tests in its drug discovery operations. The Company is
dependent on access to the compound libraries of its collaborative partners and
others in order to enhance the value of its high throughput drug screens.
Failure by the Company to gain access to the compound libraries of its
collaborative partners and others would restrict its ability to exploit fully
its high throughput screening capabilities and would have a material adverse
effect on its business, financial condition and results of operations.
Disputes may arise in the future with respect to the ownership of rights to
any technology developed with third parties. These and other possible
disagreements between collaborators and the Company could lead to delays in the
collaborative research, development or commercialization of certain product
candidates, or could require or result in litigation or arbitration, which would
be time-consuming and expensive, and would have a material adverse effect on the
Company's business, financial condition and results of operations.
Generally, in its collaborative research agreements, the Company agrees not
to conduct independently, or with any third party, any research that is
competitive with the research conducted under its collaborative programs. The
Company's collaborative relationships may have the effect of limiting the areas
of research the Company may pursue. For example, under its collaborative
research agreement with Pfizer, the Company is prohibited during the term of the
contract from pursuing or sponsoring research aimed at the discovery of drugs
for the treatment of cancer. However, the Company's collaborative partners may
develop, either alone or with others, products that are similar to or
competitive with the products or potential products that are the subject of the
Company's collaborations with such partners. Competing products, either
developed by the collaborative partners or to which the collaborative partners
have rights, may result in their withdrawal of support for the Company's product
candidates, which would have a material adverse effect on the Company's
business, financial condition and results of operations.
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All of the Company's collaborative programs with pharmaceutical companies
have terms of six or fewer years, which is generally less than the period
required for the discovery, clinical development and commercialization of most
drugs. The continuation of any of the Company's drug discovery and development
programs is dependent on the periodic renewal of the relevant collaborative
partnership. Furthermore, all of the Company's collaborative research agreements
are subject to termination under various circumstances. Certain of the Company's
collaborative research agreements provide that, upon expiration of a specified
period after commencement of the agreement, its collaborative partners have the
right to terminate the agreement on short notice without cause. For example, the
Company's collaborative research agreement with Wyeth is currently terminable by
Wyeth on four months notice. The termination or nonrenewal of this or any other
collaborative relationship could have a material adverse effect on the Company's
business, financial condition and results of operations.
There have been a significant number of recent consolidations among large
pharmaceutical and diagnostic companies. Such consolidations among these
companies with which the Company is engaged in collaborative research can result
in the diminution or termination of, or delays in, one or more of the Company's
collaborative programs. For example, in 1995, the pharmaceutical operations of
three companies with which the Company had collaborative research agreements,
Hoechst AG ("Hoechst"), Hoechst Roussel Pharmaceuticals, Inc. ("Hoechst
Roussel") and Marion Merrell Dow Inc. ("MMDI") were combined in one entity,
HMRI. This combination resulted in delays in the Company's collaborative
programs with each of the constituent companies. In addition, HMRI is conducting
a review of all of its research and development programs with a view to
determining which programs to continue or terminate. The Company and HMRI are
negotiating to consolidate all three collaborative research agreements under one
new agreement. However, HMRI's total funding commitment under the consolidated
agreement, assuming such agreement is entered into, will be less than the
aggregate historical funding provided under the separate agreements.
Notwithstanding this agreement in principle, there can be no assurance that HMRI
will not terminate or elect not to renew certain or all of its agreements with
the Company. Termination by HMRI of any of its agreements with the Company could
have a material adverse effect on the Company's business, financial condition
and results of operations. Also, Ciba has announced that it plans to merge with
Sandoz, Ltd. There can be no assurance that this merger will not result in the
diminution or termination of, or delays in, one or more of the Company's
collaborative programs with Ciba.
The Company's strategy for the discovery, development, clinical testing,
manufacturing and marketing of certain of its potential products includes
establishing additional collaborations. There can be no assurance that the
Company will be able to negotiate such collaborative arrangements on acceptable
terms, if at all, or that such collaborations will be successful.
UNCERTAINTIES RELATED TO THE EARLY STAGE OF DEVELOPMENT; TECHNOLOGICAL
UNCERTAINTIES
To date, the Company has generated no revenue from the sale of
pharmaceutical products. All of the lead compounds in the Company's small
molecule drug discovery programs are either in the discovery or the preclinical
evaluation phase. TGF-Beta3, which is the Company's product candidate most
advanced in clinical development, to date has been subject to limited clinical
evaluation. The Company has commercialized one diagnostic product, which to date
has not generated significant sales and is not expected to generate significant
sales in the future. Any products resulting from the Company's development
programs are not expected to be commercially available for several years, if at
all.
All of the Company's potential products will require significant research
and development and are subject to significant risks. Potential products that
appear to be promising at early stages of development may not reach the market
for a number of reasons. Potential products may be found ineffective or cause
harmful side effects during preclinical testing or clinical trials, fail to
receive necessary regulatory approvals, be difficult to manufacture on a large
scale, be uneconomical to produce, fail to achieve market acceptance or be
precluded from commercialization by proprietary rights of third parties. There
can be no assurance that the Company's or its collaborative partners' product
development efforts will be successfully completed, that required regulatory
approvals will be obtained or that any products, if introduced, will be
successfully marketed or achieve customer acceptance.
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The Company's transcription-based live-cell assays are novel as a drug
discovery method and have not yet been shown to be successful in the development
of any commercialized drug. Furthermore, the Company's drug discovery assays are
focused on several target genes, the functions of which have not yet been fully
elucidated. There can be no assurance that the Company's live-cell assay
technology will result in lead compounds that will be safe and efficacious.
Development of new pharmaceutical products is highly uncertain, and no assurance
can be given that the Company's drug discovery technology will result in any
commercially successful products.
UNCERTAINTY OF FUTURE PROFITABILITY
Oncogene Science has had net operating losses since its inception in 1983.
At December 31, 1995, the Company's accumulated deficit was approximately $27.9
million. The Company's losses have resulted principally from costs incurred in
research and development, and from general and administrative costs associated
with the Company's operations. These costs have exceeded the Company's revenues,
which to date have been generated principally from collaborative research
agreements, and to a lesser extent, from operation of the Company's Research
Products Business, research grants and interest income. Oncogene Science expects
to incur substantial additional operating expenses over the next several years
as a result of increases in its expenses for research and development, including
enhancements in its drug discovery technologies, and with respect to its
internal proprietary projects, its small molecule and diagnostic clinical
development activities. If the Company does not obtain additional third party
funding for such expenses, the Company expects that such expenses will result in
increased losses from operations. Oncogene Science does not expect to generate
revenues from the sale of its small molecule products for several years, if
ever. The Company currently has limited sales of only one diagnostic product.
The Company's future profitability depends, in part, on its collaborative
partners obtaining regulatory approval for products derived from its
collaborative research efforts, the Company's collaborative partners
successfully producing and marketing products derived from technology or rights
licensed from the Company, and the Company's entering into agreements for the
development, commercialization, manufacture and marketing of any products
derived from the Company's internal proprietary programs. There can be no
assurance that the Company or its collaborative partners will obtain required
regulatory approvals, or successfully develop, commercialize, manufacture and
market product candidates or that the Company will ever achieve product revenues
or profitability.
NEED FOR ADDITIONAL FUNDING; UNCERTAINTY OF ACCESS TO CAPITAL
The Company will require substantial additional funding in order to
continue its research, product development, preclinical testing and clinical
trials of its product candidates. The Company's internal proprietary programs
and operations will require a significant amount of funding that will not be
provided by the Company's existing collaborative partners. The Company's
strategy includes developing product candidates in its internal proprietary
programs through early stage clinical development, before forming collaborations
for the further development of such product candidates. In addition, the Company
has implemented a program to enhance certain aspects of its drug discovery
technology and capabilities, including investment in, and possible acquisition
of, companies with complementary technology. These activities will require
investment of significant funds by the Company. No assurance can be given that
the Company will have adequate resources to support such existing and future
activities or that the Company will be able to enter into collaborative
arrangements on acceptable terms, if at all.
The Company's future capital requirements will depend on many factors,
including continued scientific progress in its research and development
programs, the size and complexity of these programs, progress with preclinical
testing and early stage clinical trials, the time and costs involved in
obtaining regulatory approvals for its product candidates, the costs involved in
filing, prosecuting and enforcing patent claims, competing technological and
market developments, the establishment of additional collaborative arrangements,
the cost of manufacturing arrangements, commercialization activities, potential
indemnification payments to the purchaser of the Research Products Business, and
the cost of product in-licensing and strategic acquisitions, if any. The Company
evaluates on an ongoing basis potential collaborative arrangements with third
parties and acquisitions of companies or technologies that may complement its
business.
The Company intends to seek additional funding through arrangements with
corporate collaborators and through public or private sales of the Company's
securities, including equity securities. There can be no
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assurance, however, that additional funding will be available on reasonable
terms, if at all. Any additional equity financings would be dilutive to the
Company's stockholders. If adequate funds are not available, the Company may be
required to curtail significantly one or more of its research and development
programs or obtain funds through arrangements with collaborative partners or
others that may require the Company to relinquish rights to certain of its
technologies or product candidates, which could have a material adverse effect
on the Company's business, financial condition and results of operations.
Generally, the Company's funding pursuant to any particular collaborative
research agreement is subject to reduction or termination under various
circumstances. For example, as a result of the business combination in 1995 of
Hoechst, Hoechst Roussel and MMDI, all pharmaceutical companies with which the
Company had collaborative research programs, the Company expects that the total
annual research funding it will receive in the future from the combined entity
will be reduced relative to the aggregate funding it received under the three
separate programs prior to the combination. In addition, Becton reduced its
funding under the diagnostic products collaboration in fiscal 1996, and the
Company is uncertain as to Becton's ongoing support for this program. There can
be no assurance that scheduled payments will be made by third parties, that
current agreements will not be cancelled, that government research grants will
continue to be received at current levels or that unanticipated events requiring
the expenditure of funds will not occur. There can be no assurance that the
Company's cash reserves and other liquid assets, including the net proceeds of
this offering and funding that may be received from the Company's collaborative
partners and interest income earned thereon, will be adequate to satisfy its
capital and operating requirements for the foreseeable future.
NO ASSURANCE OF PROTECTION OF PATENTS AND PROPRIETARY TECHNOLOGY
The Company's success will depend in part on its ability or the ability of
its collaborative partners to obtain patent protection for product candidates,
to maintain trade secret protection and operate without infringing on the
proprietary rights of third parties.
The Company is aware of several U.S. and foreign patents owned by others
who may allege infringement by TGF-Beta3, which the Company is seeking to
develop in collaboration within Ciba. Genentech, Inc. has U.S. patents relating
to certain recombinant materials and procedures for producing members of the
TGF-Beta family, including TGF-Beta3. In addition, the Company believes that
Genentech has license rights under a U.S. Government patent relating to work
done at the National Institute of Health of the U.S. Department of Health and
Human Services involving the identification and isolation of TGF-Beta1. There
can be no assurance that the activities or products of the Company or its
collaborative partners do not or will not infringe the claims of these or other
issued patents held by third parties or any other patent issued in the future.
Furthermore, there can be no assurance that any license required under any such
patents would be made available or, if available, would be available on
acceptable terms. Failure to obtain patent protection or a required license
could prevent the Company and Ciba from commercializing TGF-Beta3 products. The
inability of the Company and Ciba to commercialize TGF-Beta3 products could
have a material adverse effect on the Company's business, financial condition
and results of operations.
In the cancer diagnostics area, the Company has a U.S. patent relating to
an assay which the Company is seeking to develop for the detection of a protein
encoded by the neu oncogene ("neu") in serum. The Company is aware that a patent
application relating to a similar assay was filed by a third party shortly after
the Company filed the application from which its U.S. patent issued. It is
possible that the Company may have to participate in an interference proceeding
with such third party to determine priority of invention, which could result in
substantial costs to the Company. The Company cannot predict whether such an
interference proceeding will occur, or if it does occur, whether the Company
will prevail. If the Company does not prevail, it may not be able to
commercialize its assay for neu in serum without a license from such third
party, which may not be available on acceptable terms or at all.
The patent positions of pharmaceutical, biopharmaceutical and biotechnology
companies, including Oncogene Science, are generally uncertain and involve
complex legal and factual questions. There can be no assurance that any of the
Company's pending patent applications will be approved, that the Company will
develop additional proprietary technologies that are patentable, that any
patents issued to the Company or its licensors will provide a basis for
commercially viable products or will provide the Company with any
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competitive advantages or will not be challenged by third parties, or that the
patents of others will not have an adverse effect on the ability of the Company
to do business. In addition, patent law relating to the scope of claims in the
technology fields in which the Company operates is still evolving. The degree of
future protection for the Company's proprietary rights, therefore, is uncertain.
Furthermore, there can be no assurance that others will not independently
develop similar or alternative technologies, duplicate any of the Company's
technologies, or, if patents are issued to the Company, design around the
patented technologies developed by the Company. In addition, the Company could
incur substantial costs in litigation if it is required to defend itself in
patent suits brought by third parties or if it initiates such suits.
The extent to which efforts by other researchers have resulted or will
result in patents and the extent to which the issuance of patents to others
would have a material adverse effect on the Company or would force the Company
or its collaborative partners or other licensees to obtain licenses from others,
if available, is currently unknown. Generally, the Company's royalties on any
commercialized products could be reduced by up to 50% if its licensees or
collaborative partners are required to obtain such licenses. There can be no
assurance that the Company's products, operations or technology will not
infringe upon the rights of any third party.
The Company relies on trade secrets to protect technology where patent
protection is not believed to be appropriate or obtainable. The Company has
entered, and will continue to enter, into confidentiality agreements with its
employees, consultants, licensors and collaborative partners. There can be no
assurance, however, that others will not independently develop substantially
equivalent proprietary information and techniques or otherwise gain access to
the Company's trade secrets, that such obligations of confidentiality will be
honored or that the Company will be able to effectively protect its rights to
proprietary information.
COMPETITION AND RISK OF TECHNOLOGICAL OBSOLESCENCE
The pharmaceutical, biotechnology and diagnostics industries are intensely
competitive, and the Company faces, and will continue to face, intense
competition from organizations such as large pharmaceutical companies,
diagnostic companies, biotechnology companies, academic and research
institutions and government agencies. The Company is subject to significant
competition from industry participants who are pursuing the same or similar
technologies as those which constitute the Company's technology platform and
from organizations that are pursuing pharmaceutical products or therapies or
diagnostic products that are competitive with the Company's potential products.
Most of the organizations competing with the Company have greater capital
resources, research and development staffs and facilities, and greater
experience in drug discovery and development, obtaining regulatory approval and
pharmaceutical product manufacturing and marketing. The Company's major
competitors include fully integrated pharmaceutical companies, such as Merck &
Co., Inc., Glaxo Wellcome Inc. and SmithKline Beecham plc, that have extensive
drug discovery efforts and are developing novel small molecule pharmaceuticals,
as well as numerous smaller companies.
The Company's technology platform consists principally of utilizing
genetically engineered live cells, gene transcription technologies and high
throughput drug screening. Pharmaceutical and biotechnology companies and others
are active in all of these areas, and there can be no assurance that other
organizations will not acquire or develop technology superior to that of the
Company. Ligand Pharmaceuticals Inc., a publicly owned company, employs
live-cell assays, gene transcription, and high throughput robotics in its drug
discovery operations. Numerous other companies use one or more of these
technologies. Several private companies, including Tularik Inc., Signal
Pharmaceuticals Inc. and Scriptgen Pharmaceuticals, Inc., pursue drug discovery
using gene transcription methods.
Companies pursuing different but related fields also present significant
competition for the Company. For example, research efforts with respect to gene
sequencing and mapping are identifying new and potentially superior target
genes. In addition, alternative drug discovery strategies, such as rational drug
design, may prove more effective than those pursued by the Company. Furthermore,
competing entities may have access to more diverse compounds for testing by
virtue of larger compound libraries or through combinatorial chemistry skills or
other means. These include Pharmacopeia, Inc., a publicly traded company,
CombiChem, Inc. and ArQule, Inc., all of which have major collaborations with
leading pharmaceutical companies. There can be no assurance that the Company's
competitors will not succeed in developing technologies or products that are
8
<PAGE> 10
more effective than those of the Company or that would render the Company's
products or technologies obsolete or noncompetitive.
With respect to the Company's small molecule drug discovery programs, other
companies have potential drugs in clinical trials to treat all the disease areas
for which the Company is seeking to discover and develop drug candidates. These
competing drug candidates are further advanced in clinical development than are
any of the Company's potential products in its small molecule programs and may
result in effective, commercially successful products. Even if the Company and
its collaborative partners are successful in developing effective drugs, there
can be no assurance that the Company's products will compete effectively with
such products. No assurance can be given that the Company's competitors will not
succeed in developing and marketing products either that are more effective than
those that may be developed by the Company and its collaborators or that are
marketed prior to any products developed by the Company or its collaborators.
With respect to its efforts to develop TGF-Beta3 for various indications,
the Company is aware of competing growth factor proteins in clinical trials,
and competing treatment regimens, for wound healing indications. Platelet
derived growth factor (PDGF) for diabetic skin ulcers, under development by
Chiron Corporation and Johnson & Johnson, has completed Phase III clinical
trials in the U.S. Chiron Corporation and Johnson & Johnson have announced that
they intend to file a Product Licensing Application ("PLA") for PDGF with the
FDA in 1996. Fibroblast growth factor (FGF) for chronic dermal ulcers, under
development by Scios Nova Inc. and Kaken Pharmaceutical Co., Ltd., is in Phase
III clinical trials in Japan. TGF-Beta2 for leg ulcers, under development by
Genzyme Corp. and Celtrix Pharmaceuticals, Inc., is in Phase II clinical trials
in the U.S. No assurance can be given that the Company and Ciba will
successfully develop TGF-Beta3 for any indication, including wound healing.
Furthermore, if any of the competing growth factor product candidates listed
above or other growth factors prove to be effective for wound healing
indications, there can be no assurance that any TGF-Beta3 product developed by
the Company will be able to compete effectively with such product or products.
Other competing approaches to the treatment of chronic wounds include
comprehensive service-based patient centers, which are dedicated to intensive
wound management. These centers may include the use of autologous growth factor
therapy, in which extracts prepared from the patient's own platelets are used to
treat the wounds. Surgical intervention is also frequently employed, which may
involve partial amputation and/or surgical revascularization. The use of skin
grafts to treat wounds, either autografts (skin from elsewhere on the same
patient) or cultured allografts, are also being investigated by several
companies, including Advanced Tissues Sciences, Inc. and Organogenesis, Inc. No
assurance can be given that TGF-Beta3 will prove to be safe and effective or
will compete successfully against current and emerging therapies for any
particular clinical indication.
The Company will, for the foreseeable future, rely on its collaborative
partners for preclinical evaluation and clinical development of its potential
products and manufacturing and marketing of any products. In addition, the
Company relies on its collaborative partners for support in its drug discovery
operations. It is likely that all of the pharmaceutical companies with which the
Company has collaborations are conducting multiple product development efforts
within each disease area. Generally, the Company's collaborative research
agreements do not restrict a party from pursuing competing internal development
efforts based on reasonable commercial judgment and other factors. Any product
candidate of the Company, therefore, may be subject to competition with a
potential product under development by the pharmaceutical company with which the
Company is collaborating in connection with such product candidate.
Biotechnology and related pharmaceutical technology have undergone rapid
and significant change. The Company expects the technology associated with the
Company's research and development will continue to develop rapidly, and the
Company's future success will depend in large part on its ability to maintain a
competitive position with respect to this technology. Rapid technological
development by the Company or others may result in compounds, products or
processes becoming obsolete before the Company recovers any expenses it incurs
in connection with developing such products.
GOVERNMENT REGULATION; NO ASSURANCE OF REGULATORY APPROVAL
Prior to marketing by a collaborative partner, any new drug discovered by
the Company must undergo an extensive regulatory approval process in the U.S.
and other countries. This regulatory process, which includes
9
<PAGE> 11
preclinical testing and clinical trials, and may include post-marketing
surveillance, of each compound to establish its safety and efficacy, can take
many years and require the expenditure of substantial resources. Data obtained
from preclinical and clinical activities are susceptible to varying
interpretations that could delay, limit or prevent regulatory approval. In
addition, delays or rejections may be encountered based upon changes in FDA
policies for drug approval during the period of product development and FDA
regulatory review of each submitted new drug application ("NDA") in the case of
new pharmaceutical agents, or PLA in the case of a biologic, such as the
Company's TGF-Beta3 product candidate. Similar delays may also be encountered in
the regulatory approval of any diagnostic product. Such delays may also be
encountered in obtaining regulatory approval in foreign countries. There can be
no assurance that regulatory approval will be obtained for any drugs discovered,
or diagnostic products developed, by the Company. Furthermore, regulatory
approval may entail limitations on the indicated use of the drug.
Even if regulatory approval is obtained, a marketed product and its
manufacturer are subject to continuing review. Discovery of previously unknown
problems with a product of the Company or its manufacturer may have adverse
effects on the Company's business, financial condition and results of
operations, including withdrawal of the product from the market. Violations of
regulatory requirements at any stage, including preclinical testing and clinical
trials, the approval process or post-approval, may result in various adverse
consequences to the Company, including the FDA's delay in approving or its
refusal to approve a product, withdrawal of an approved product from the market
and the imposition of criminal penalties against the manufacturer and NDA
holder. The Company has not submitted an IND for any product candidate, and no
product candidate has been approved for commercialization in the United States
or elsewhere. The Company intends to file INDs for product candidates in its
internal proprietary programs, but to rely on its partners to file INDs in its
collaborative programs. No assurance can be given that the Company or any of its
collaborative partners will be able to conduct clinical testing or obtain the
necessary approvals from the FDA or other regulatory authorities for any
products. Failure to obtain required governmental approvals will delay or
preclude the Company's partners from marketing drugs discovered, or diagnostic
products developed, by the Company or limit the commercial use of such products
and will have a material adverse effect on the Company's business, financial
condition and results of operations.
NO MANUFACTURING CAPACITY; RELIANCE ON THIRD-PARTY MANUFACTURING
The Company does not intend to develop or acquire facilities for the
manufacture of drug candidates or diagnostic products for clinical trials or
commercial purposes, and has been, and will remain, dependent on its
collaborative partners or third parties for the manufacture of product
candidates for preclinical, clinical and commercial purposes.
The manufacture of the Company's candidate products for clinical trials and
the manufacture of resulting products for commercial purposes is subject to
current GMP regulations promulgated by the FDA. The Company will rely on
collaborative partners or outside contractors to manufacture its products in
their FDA approved manufacturing facilities. The Company's products may be in
competition with other products for priority of access to these facilities.
Consequently, the Company's products may be subject to delays in manufacture, if
collaborative partners or outside contractors give other products greater
priority than the Company's products. For this and other reasons, there can be
no assurance that the Company's collaborative partners will manufacture such
products in an effective or timely manner. If not performed in a timely manner,
the clinical trial development of the Company's product candidates or their
submission for regulatory approval could be delayed and the Company's ability to
deliver products on a timely basis could be impaired or precluded. There can be
no assurance that the Company will be able to enter into any necessary third
party manufacturing arrangements on acceptable terms if at all. The Company's
current dependence upon others for the manufacture of its products may adversely
affect its future profit margin, if any, and its ability to commercialize
products on a timely and competitive basis.
Pursuant to the collaborative research agreement between the Company and
Ciba, Ciba has the right to manufacture TGF-Beta3 for all of the Company's
clinical and commercial requirements. As a result of the failure of its
temporary contract manufacturer's facilities to comply with GMP, Ciba has
experienced delays in manufacturing this compound, which has caused delays in
scheduled clinical trials for TGF-Beta3. There can be
10
<PAGE> 12
no assurance that these trials will proceed as planned or that the Company or
its licensees will not be adversely affected by further delays in the
manufacture of TGF-Beta3.
UNCERTAINTIES RELATED TO PHARMACEUTICAL PRICING AND REIMBURSEMENT
The Company's business, financial condition and results of operations may
be materially adversely affected by the continuing efforts of government and
third-party payors to contain or reduce the costs of health care through various
means. For example, in certain foreign markets, pricing and profitability of
prescription pharmaceuticals are subject to government control. In the United
States, the Company expects that there will continue to be a number of federal
and state proposals to implement similar government control. In addition,
increasing emphasis on managed care in the United States will continue to put
pressure on the pricing of pharmaceutical products and diagnostic tests. Cost
control initiatives could decrease the price that the Company or any of its
collaborative partners or other licensees receives for any drugs it may discover
or develop or diagnostic products it may develop in the future and have a
material adverse effect on the Company's business, financial condition and
results of operations. Further, to the extent that cost control initiatives have
a material adverse effect on the Company's collaborative partners, the Company's
ability to commercialize its products and to realize royalties may be adversely
affected.
The Company's or any collaborative partner's or licensee's ability to
commercialize pharmaceutical or diagnostic products may depend in part on the
extent to which reimbursement for the products will be available from government
and health administration authorities, private health insurers and other
third-party payors. Significant uncertainty exists as to the reimbursement
status of newly approved health care products. Third-party payors, including
Medicare, are increasingly challenging the prices charged for medical products
and services. There can be no assurance that any third-party insurance coverage
will be available to patients for any products discovered and developed by the
Company and its collaborative partners. Government and other third-party payors
are increasingly attempting to contain health care costs by limiting both
coverage and the level of reimbursement for new therapeutic products and by
refusing in some cases to provide coverage for uses of approved products for
disease indications for which the FDA has not granted labeling approval. If
adequate coverage and reimbursement levels are not provided by government and
other third-party payors for the Company's products, the market acceptance of
these products would be adversely affected, which would have a material adverse
effect on the Company's business, financial condition and results of operations.
POTENTIAL PRODUCT LIABILITY
The use of any of the Company's potential products in clinical trials and
the sale of any approved products may expose the Company to liability claims
resulting from the use of products or product candidates. These claims might be
made directly by consumers, pharmaceutical companies, including the Company's
collaborative partners or others. The Company is currently an additional named
insured under a clinical trials liability insurance policy carried by Ciba with
respect to its TGF-Beta3 clinical trials in the amount of $3 million. The
Company does not independently maintain product liability insurance coverage
for claims arising from the use of its products in clinical trials. Insurance
coverage is becoming increasingly expensive, and no assurance can be given that
the Company will continue to be a named insured with respect to trials underway
or obtain insurance in the future at a reasonable cost or in sufficient amounts
to protect the Company. The Company's inability to obtain adequate liability
insurance 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 obtain commercially reasonable product liability
insurance for any product approved for marketing in the future or that
insurance coverage and the resources of the Company would be sufficient to
satisfy any liability resulting from product liability claims. A successful
product liability claim or series of claims brought against the Company could
have a material adverse effect on its business, financial condition and results
of operations.
ATTRACTION AND RETENTION OF KEY EMPLOYEES AND CONSULTANTS
The Company is highly dependent on the principal members of its management
and scientific staff. The loss of services of any of these personnel could
impede the achievement of the Company's development objectives. Furthermore,
recruiting and retaining qualified scientific personnel to perform research and
11
<PAGE> 13
development work in the future will also be critical to the Company's success.
There can be no assurance that the Company will be able to attract and retain
personnel on acceptable terms given the competition between pharmaceutical and
health care companies, universities and nonprofit research institutions for
experienced scientists. All of Oncogene Science's consultants are employed by
employers other than the Company and may have commitments to or consulting or
advisory contracts with other entities that may limit their availability to the
Company.
RISK ASSOCIATED WITH BIOLOGICAL MATERIALS
The activities of the Company involve the controlled use of potentially
harmful biological materials as well as chemicals and various radioactive
compounds. Although the Company believes that its safety procedures for handling
and disposing of such materials comply with the standards prescribed by state
and federal laws and regulations, the risk of accidental contamination or injury
from these materials cannot be completely eliminated. Furthermore, the full
health risks associated with certain biological materials, such as DNA, viruses
and fungal organisms, are unknown. In the event of contamination or injury, the
Company could be held liable for damages that result, and any such liability
could exceed the Company's resources or otherwise have a material adverse impact
on the Company's business, financial condition and results of operations.
VOLATILITY OF COMMON STOCK PRICE; MARKET FOR THE COMMON STOCK
The market prices for securities of biotechnology and pharmaceutical
companies, including Oncogene Science, 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. Factors such as fluctuations in the Company's operating results,
announcements of technological innovations or new therapeutic products by the
Company or others, clinical trial results, developments concerning agreements
with collaborators, governmental regulation, developments in patent or other
proprietary rights, public concern as to the safety of drugs discovered or
developed by the Company or its collaborative partners or others, future sales
of substantial amounts of Common Stock by existing stockholders and general
market conditions can have an adverse effect on the market price of the Common
Stock. The realization of any of the risks described in these "Risk Factors"
could have an adverse effect on market price of the Company's Common Stock.
The Company's collaborative partners hold an aggregate of 3,837,500 shares
of the Company's Common Stock, which constituted approximately 22% of the
outstanding Common Stock at December 31, 1995. Of these shares, all but the
909,091 shares owned by Ciba are currently eligible for sale under Rule 144.
Ciba's shares become eligible for sale under Rule 144, subject to certain volume
and manner of sale limitations, on April 19, 1997. On April 19, 1998, Ciba's
shares will become freely saleable under Rule 144(k). In addition, HMRI has the
right until December 11, 1999 to purchase up to 500,000 shares of the Company's
Common Stock at a purchase price of $5.50 per share. Until April 19, 1999, Ciba
has an option to purchase $10.0 million of the Company's Common Stock at a
purchase price equal to the then current market price or $5.50 per share,
whichever is higher. In addition, if the BioChem Offering is consummated,
BioChem will acquire, simultaneously with, or within a short period after, the
closing of the Underwritten Offering, 500,000 shares of Common Stock, which will
be freely tradeable. Sales of a significant number of shares of Common Stock in
the public market could have an adverse effect on the price of the Common Stock.
NO DIVIDENDS
The Company has not paid any dividends on its Common Stock and does not
anticipate paying any dividends in the foreseeable future.
ANTITAKEOVER PROVISIONS
Certain provisions of the Delaware corporate law may have the effect of
deterring hostile takeovers or delaying or preventing changes in the control or
management of the Company, including transactions in which stockholders might
otherwise receive a premium for their shares over the then current market
prices. See "Description of Capital Stock -- Delaware Takeover Statute."
12
<PAGE> 14
THE COMPANY
The Company's principal executive offices are located at 106 Charles
Lindbergh Boulevard, Uniondale, New York, 11553, and its telephone number is
(516) 222-0023.
SELLING SECURITY HOLDERS
On April 11, 1996, the Company acquired MYCOsearch, Inc., a privately owned
North Carolina corporation ("MYCOsearch"), in a transaction in which MYCOsearch
was merged into a subsidiary of the Company (the "Merger"). Four of the Selling
Stockholders named below (Messrs. Katz, Roberts, McLaughlin and Pearce) were
shareholders of MYCOsearch (the "MYCOsearch shareholders"). The other Selling
Stockholders (Messrs. Capon and Winegar) were business advisers to the
MYCOsearch shareholders. The Company issued 316,553 of the Shares and warrants
(the "Merger Warrants") covering 100,000 of the Shares to the Selling
Stockholders in connection with the Merger. In connection with the Merger, the
Company agreed to register the Shares.
The Company and MYCOsearch have collaborated over the last three years in
the development of certain technology. Effective upon the consummation of the
Merger, Messrs. Katz and Pearce became employed by the Company as its Vice
President, Microbial Discovery, Pharmaceutical Division and Director,
Fermentation Biology, respectively.
The following table sets forth certain information as of April 11, 1995
(and as adjusted to reflect the sale of all of the Shares) with respect to the
beneficial ownership of the Company's outstanding Common Stock by the Selling
Stockholders:
<TABLE>
<CAPTION>
PERCENTAGE OF SHARES
BENEFICIALLY OWNED
SHARES SHARES ---------------------
BENEFICIALLY OFFERED PRIOR TO AFTER
OWNED(1) HEREBY(2) OFFERING OFFERING
------------ ---------- -------- --------
<S> <C> <C> <C> <C>
Barry Katz..................... 237,116 312,681(3) 1.1% 0
Barry S. Roberts............... 37,590 49,570(4) * 0
John McLaughlin................ 14,457 19,064(5) * 0
Cedric Pearce.................. 15,212 20,060(6) * 0
Robert Capon................... 7,307 9,107(7) * 0
Steven Winegar................. 4,871 6,071(8) * 0
</TABLE>
- ---------------
* Represents ownership of less than 1% of the outstanding shares of the
Company's Common Stock.
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or
investment power with respect to securities. Shares of Common Stock subject
to stock options and warrants currently exercisable or exercisable within 60
days are deemed beneficially owned by the person holding such options and
warrants.
(2) Includes shares of Common Stock that may be acquired through the exercise of
the Merger Warrants ("Warrant Shares"). The Merger Warrants will not be
exercisable until April 11, 1998.
(3) Includes 75,565 Warrant Shares.
(4) Includes 11,980 Warrant Shares.
(5) Includes 4,607 Warrant Shares.
(6) Includes 4,848 Warrant Shares.
(7) Includes 1,800 Warrant Shares.
(8) Includes 1,200 Warrant Shares.
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<PAGE> 15
PLAN OF DISTRIBUTION
The shares of Common Stock covered by this Prospectus are being registered
by the Company for the accounts of the Selling Stockholders. The Company will
pay all expenses of registering the Shares and the reasonable, ordinary
brokerage commissions and other fees and expenses of selling the Shares, but
will not receive any of the proceeds from sales of the Shares by any of the
Selling Stockholders. As of the date of this Prospectus, the Company understands
that none of the Shares will be offered through underwriters.
The Shares may be offered and sold by the Selling Stockholders pursuant to
this Prospectus from time to time through one or more brokers or dealers or
through privately negotiated transactions or otherwise, at market prices
prevailing at the time of sale or at prices otherwise negotiated. In connection
therewith, brokerage commissions may be paid or discounts allowed that will not
exceed those customary in the types of transactions involved. The Selling
Stockholders and participating brokers or dealers may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933 (the "Securities
Act"), and commissions or discounts or any profit realized on the sale of the
Shares received by a Selling Stockholder or any such broker or dealer may be
deemed to be underwriting commissions or discounts within the meaning of the
Securities Act. As of the date of this Prospectus, the Company understands that
none of the Selling Stockholders has any agreement, arrangement or understanding
with any brokers or dealers concerning the distribution of the Shares. The
Company has agreed to indemnify the Selling Stockholders against certain
liabilities under the Securities Act of 1933.
DESCRIPTION OF CAPITAL STOCK
As of the date of this Prospectus, the authorized capital stock of the
Company consists of 50,000,000 shares of Common Stock, par value $0.01 per
share.
COMMON STOCK
As of May 9, 1996, there were 21,482,353 shares of Common Stock outstanding
and held of record by 708 stockholders. The holders of Common Stock are entitled
to one vote for each share of Common Stock on matters to be voted on by the
stockholders of the Company. Holders of the Common Stock are entitled to receive
ratably such dividends as may be declared by the Board of Directors out of funds
legally available therefore. The Company has paid no cash dividends on any of
its capital stock and does not anticipate paying cash dividends in the
foreseeable future.
In the event of a liquidation, dissolution of winding up of the Company,
holders of Common Stock are entitled to share ratably and all assets remaining
after payment of liabilities and the liquidation preference of any outstanding
Preferred Stock (the issuance of which is not currently authorized by the
Company's Certificate of Incorporation). The outstanding shares of Common Stock
are, and the Common Stock to be outstanding upon completion of this Offering
will be, fully paid and nonassessable. No pre-emptive rights, conversion rights,
redemption rights or sinking fund provisions are applicable to the Common Stock.
REGISTRATION RIGHTS
Several of the Company's collaborative partners are parties to agreements
with the Company that grant these partners, as holders of shares of the
Company's Common Stock, rights to have their shares of Common Stock registered
under the Securities Act of 1933. Becton and HMRI have the right to demand
registration of their shares subject to certain conditions and limitations. If
the Company proposes to register any of its Common Stock for sale, Ciba, HMRI,
and Pfizer have "piggyback" registration rights under which they have the right
to include their shares in such registered offering initiated by the Company.
The Company will pay all registration expenses (excluding underwriting discounts
and commissions and, with certain exceptions, legal fees and costs of selling
stockholders) arising from the inclusion of the selling stockholder shares in
such registration.
DELAWARE TAKEOVER STATUTE
In February 1988, a law regulating corporate takeovers (the "Takeover Law")
took effect in Delaware. In certain circumstances, the Takeover Law prevents
certain Delaware corporations, including those whose
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<PAGE> 16
securities are listed on the Nasdaq National Market, from engaging in a
"business combination" (which includes a merger or sale of more than 10% of the
corporation's assets) with any "interested stockholder" (a stockholder who owns
15% or more of the corporation's outstanding voting stock) for three years
following the date on which such stockholder became an "interested stockholder."
A Delaware corporation may "opt out" of the Takeover Law with an express
provision either in its original Certificate of Incorporation or in its
Certificate of Incorporation or Bylaws resulting from an amendment approved by
at least a majority of the outstanding voting shares. The Company is a Delaware
corporation that is subject to the Takeover Law and has not "opted out" of its
provisions.
The foregoing provisions of Delaware law could have the effect of
discouraging others from attempting hostile takeovers of the Company and, as a
consequence, they may also inhibit temporary fluctuations in the market price of
the Common Stock that often result from actual or rumored hostile takeover
attempts. Such provisions may also have the effect of preventing changes in the
management of the Company. It is possible that such provisions could make it
more difficult to accomplish transactions which stockholders may otherwise deem
to be in their best interests.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the Common Stock of the Company is The
Bank of New York, 101 Barclay Street, New York, New York 10286.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby will be passed
upon for the Company by Saul, Ewing, Remick & Saul, Philadelphia, Pennsylvania.
EXPERTS
The consolidated financial statements incorporated by reference in this
Prospectus have been audited by KPMG Peat Marwick LLP, independent public
accountants, as indicated in their report with respect thereto, and are included
herein in reliance upon the authority of said firm as experts in giving said
reports.
ADDITIONAL INFORMATION
The Company has filed with the Commission a Registration Statement on Form
S-3 under the Securities Act, with respect to the shares of Common Stock offered
hereby. This Prospectus does not contain all the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the and regulations of the Commission. Statements contained in this Prospectus
as to the contents of any contract or any other document referred to are not
necessarily complete. For further information with respect to the Company and
such Common Stock, reference is made to the Registration Statement and the
exhibits and schedules thereto, copies of which may be obtained from the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549. Statements contained in this Prospectus as to the contents of any
contract or other document filed, or incorporated by reference, as an exhibit to
the Registration Statement are qualified in all respects by such reference.
15
<PAGE> 17
ONCOGENE LOGO
<PAGE> 18
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following expenses incurred in connection with the sale of the
securities being registered will be borne by the Company. Other than the SEC and
NASD registrations fee the amounts stated are estimates.
<TABLE>
<S> <C>
SEC registration fee...................................................... $ 1,329
Accounting fees and expenses.............................................. 7,500
Legal fees and expenses................................................... 10,000
Printing.................................................................. 7,000
Miscellaneous expenses.................................................... 1,000
--------
Total........................................................... $ 26,829
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of Delaware empowers a
corporation to indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact
that he or she is or was a director, officer, employee or agent of the
corporation or another enterprise if serving at the request of the corporation.
Depending on the character of the proceeding, a corporation may indemnify
against expenses (including attorney's fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred in connection with such action,
suit or proceeding if the person indemnified acted in good faith and in a manner
he or she reasonably believed to be in or not opposed to the best interests of
the corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful. In the case of an
action by or in the right of the corporation, no indemnification may be made in
respect to any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent that the
Court of Chancery or the court in which such action or suit was brought shall
determine that despite the adjudication of liability, but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses that the court shall deem proper. Section 145
further provides that to the extent a director or officer of a corporation has
been successful in the defense of any action, suit or proceeding referred to
above, or in defense of any claim, issue or matter therein, he or she shall be
indemnified against expenses (including attorney's fees) actually and reasonably
incurred by him or her in connection therewith.
The Registrant's Certificate of Incorporation provides that the Registrant
shall, to the fullest extent permitted by law, indemnify all directors,
officers, employees and agents of the Company. The Certificate of Incorporation
also contains a provision eliminating the liability of directors of the
Registrant to the Registrant or its stockholders for monetary damages, except
under certain circumstances. The Certificate of Incorporation also permits the
Registrant to maintain insurance to protect itself and any director, officer,
employee or agent against any liability with respect to which the Corporation
would have the power to indemnify such persons under the Delaware General
Corporation Law. The Registrant maintains an insurance policy insuring its
directors and officers against certain liabilities.
II-1
<PAGE> 19
ITEM 16. EXHIBITS.
The following is a list of exhibits filed as part of the Registration
Statement:
<TABLE>
<C> <S>
3.1 Certificate of Incorporation of Oncogene Science, Inc., as amended(1)
3.2 By-Laws of Oncogene Science, Inc., as amended(1)
5.1 Opinion of Saul, Ewing, Remick & Saul as to the legality of the securities registered
hereunder
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Saul, Ewing, Remick & Saul (included in Exhibit 5.1)
24.1 Power of Attorney (contained on signature page of initial filing)
</TABLE>
- ---------------
(1) Included as an exhibit to the Company's Registration Statement on Form S-3
(File No. 333-937) and incorporated herein by this reference.
ITEM 17. UNDERTAKINGS.
a. The undersigned Registrant hereby undertakes:
(i) to file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement: (A) to
include any prospectus required by Section 10(a)(3) of the Securities Act
of 1933; (B) 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; and (C) 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; and
(ii) that for the purpose for 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; and
(iii) to remove from registration by means of a post-effective
amendment any of the securities being registered that remain unsold at the
termination of the offering.
b. 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 therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
c. 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 liability (other than 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.
d. The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule
II-2
<PAGE> 20
430A and contained in a form of prospectus filed by the Registrant pursuant
to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed
to be part of this Registration Statement as of the time it was declared
effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus 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.
II-3
<PAGE> 21
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 Uniondale, State of New York, on May 10, 1996.
ONCOGENE SCIENCE, INC.
By: /s/ GARY E. FRASHIER
------------------------------------
Gary E. Frashier,
Chief Executive Officer
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.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------- ------------------------------------ ---------------
<S> <C> <C>
/s/ GARY E. FRASHIER Chief Executive Officer and Director May 10, 1996
- -------------------------------------
Gary E. Frashier
President, Chief Operating Officer May 10, 1996
Steve M. Peltzman* and Director
Vice President, Chief Scientific May 10, 1996
J. Gordon Foulkes* Officer and Director
Directors May 10, 1996
G. Morgan Browne, John H. French, II,
Edwin A. Gee, Ph.D., Walter M.
Lovenberg, Ph.D., Walter M Miller,
Gary Takata, John P. White*
/s/ ROBERT L. VAN NOSTRAND Vice President, Finance and May 10, 1996
- ------------------------------------- Administration (Principal Financial
*Robert L. Van Nostrand, and Accounting Officer)
individually and as attorney-in-fact
</TABLE>
II-4
<PAGE> 22
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT
- ------------ --------------------------------------------------------------------------------
<C> <S>
3.1 Certificate of Incorporation of Oncogene Science, Inc., as amended(1)
3.2 By-Laws of Oncogene Science, Inc., as amended(1)
5.1 Opinion of Saul, Ewing, Remick & Saul as to the legality of the securities
registered hereunder
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Saul, Ewing, Remick & Saul (included in Exhibit 5.1)
24.1 Power of Attorney (contained on signature page of initial filing)
</TABLE>
- ---------------
(1) Included as an exhibit to the Company's Registration Statement on Form S-3
(File No. 333-937) and incorporated herein by this reference.
<PAGE> 1
Exhibit 5.1
LAW OFFICES OF
SAUL, EWING, REMICK & SAUL
HARRISBURG, PENNSYLVANIA 3800 CENTRE SQUARE WEST PRINCETON NEW JERSEY
MALVERN, PENNSYLVANIA PHILADELPHIA, PA 19102 WESTMONT, NEW JERSEY
NEW YORK, NEW YORK WILMINGTON, DELAWARE
(215) 972-7777
Fax: (215) 972-7725
Internet Email: [email protected]
World Wide Web: http://www.saul.com
May 10, 1996
Ocogene Science, Inc.
106 Charles Lindbergh Blvd.
Uniondale, NY 11553
Gentlemen:
We refer to the Registration Statement on Form S-3 (the "Registration
Statement") of Oncogene Science, Inc., a Delaware corporation (the "Company"),
to be filed with the Securities and Exchange Commission covering the
registration under the Securities Act of 1933, as amended (the "Securities
Act"), of 416,553 shares of common stock, par value $.01 per share, of the
Company (the "Shares").
We have examined the Registration Statement, the Certificate of
Incorporation and By-laws of the Company and such records, certificates and
other documents as we have considered necessary or appropriate for the purposes
of this Opinion.
Based on the foregoing, it is our opinion that:
1. the Company is duly organized, validly existing and in good
standing under the laws of State of Delaware; and
2. the Shares to be issued in accordance with the terms described
in the Registration Statement have been duly authorized and, when issued in
accordance with the terms described in the Registration Statement, will be
validly issued, fully paid and non-assessable.
We hereby consent to use of our name in the Registration Statement
as counsel who will pass upon the legality of the Shares for the Company
and as having prepared this Opinion as an exhibit to the Registration
Statement. In giving the foregoing consent, we do not thereby admit that we are
in the category of persons whose consent is required under Section 7 of the
Securities Act or the rules and regulations of the Securities and Exchange
Commission thereunder.
Very truly yours,
SAUL, EWING, REMICK & SAUL
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Oncogene Science, Inc.
We consent to the use of our report incorporated by reference and to
the reference to our firm under the heading "Experts" in the prospectus.
KPMG PEAT MARWICK LLP
Jericho, New York
May 10, 1996
