As filed with the Securities and Exchange Commission on November 21, 2000
REGISTRATION NO. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
MACROCHEM CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 04-2744744
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
110 HARTWELL AVENUE
LEXINGTON, MASSACHUSETTS 02421-3134
(781) 862-4003
(ADDRESS, OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)
ALVIN J. KARLOFF
Chairman, President and Chief Executive Officer
MacroChem Corporation
110 Hartwell Avenue
Lexington, Massachusetts 02421-3134
(781) 862-4003
(NAME AND ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE
NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
Please send copies of all
communications to:
DWIGHT W. QUAYLE, ESQUIRE
Ropes & Gray
One International Place
Boston, Massachusetts 02110-2624
(617) 951-7000
Approximate date of commencement of proposed sale to the public: From time to
time after the effectiveness of the 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 under 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: ___
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<TABLE>
CALCULATION OF REGISTRATION FEE
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<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS AMOUNT TO OFFERING PRICE AGGGREGATE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED BE REGISTERED(1)(2) PER SHARE (3) PRICE(3) FEE
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<S> <C> <C> <C> <C>
Common Stock -- $.01 Par Value 5,322,339 Shares $4.08 $21,715,143 $5,733
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<FN>
(1) Shares of common stock which may be offered pursuant to this registration
statement include 1,816,658 shares sold by MacroChem to various purchasers in a
private placement under the terms of a securities purchase agreement dated
October 23, 2000, 363,332 shares of common stock that may be issued by MacroChem
under closing warrants issued to the purchasers in the private placement,
108,999 shares of common stock that may be issued by MacroChem under a warrant
issued to a placement agent in connection with the private placement and
3,033,350 shares of common stock that may be issued by MacroChem under
adjustable warrants issued to the purchasers in the private placement.
(2) Pursuant to Rule 416, this registration statement shall be deemed to cover
an indeterminate number of additional shares of common stock issuable pursuant
to the anti-dilution provisions of the above-mentioned warrants in the event the
number of outstanding shares of MacroChem is increased by stock split, stock
dividend and similar transactions.
(3) Estimated solely for the purpose of determining the registration fee in
accordance with Rule 457(c) under the Securities Act of 1933. The maximum price
per share information is based on the average of the high and the low sale price
on November 17, 2000.
</FN>
</TABLE>
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 THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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PROSPECTUS SUBJECT TO COMPLETION
November 21, 2000
MACROCHEM CORPORATION
COMMON STOCK
5,322,339 SHARES
These shares are offered for sale by the selling stockholders listed on
page 10.
BEFORE PURCHASING SHARES OF COMMON STOCK YOU SHOULD CAREFULLY REVIEW THE
RISK FACTORS SECTION OF THIS PROSPECTUS WHICH BEGINS ON PAGE 1.
The common stock is listed on the Nasdaq National Market with the ticker
symbol: "MCHM." On November 20, 2000, the closing price of one share of common
stock on the Nasdaq National Market was $4.06.
================================================================================
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
================================================================================
The date of this Prospectus is .
<PAGE>
TABLE OF CONTENTS
PAGE
SUMMARY.......................................................1
RISK FACTORS..................................................1
USE OF PROCEEDS...............................................8
SELLING STOCKHOLDERS..........................................8
PLAN OF DISTRIBUTION.........................................10
DESCRIPTION OF SECURITIES TO BE REGISTERED...................11
WHERE YOU CAN FIND MORE INFORMATION..........................12
LEGAL OPINION................................................12
EXPERTS......................................................13
<PAGE>
SUMMARY
MacroChem develops pharmaceutical products for commercialization by
applying SEPA(R) (Soft Enhancer of Percutaneous Absorption), our patented
topical drug delivery technology. SEPA compounds, when properly combined with
drugs, provide pharmaceutical formulations, such as creams, gels and solutions,
etc. that enhance the transdermal delivery of drugs into the skin or into the
bloodstream. We believe that SEPA compounds enhance the diffusion of drugs into
and through the skin by making the outer layer of the skin more permeable to the
drug molecule. Transdermal delivery provides an alternative to other methods of
drug administration, such as injection, oral dosage forms and inhalation, and
may allow selected drugs to be administered more effectively, at lower doses,
with fewer adverse events and with improved patient compliance.
We are developing specific SEPA formulations for use with non-proprietary
and proprietary drugs manufactured by pharmaceutical companies, and we plan to
commercialize these products through the formation of partnerships, strategic
alliances and license agreements with those companies. In order to attract
strategic partners, we are conducting clinical testing of SEPA-enhanced
pharmaceuticals. Because of the substantial costs involved in bringing a new
pharmaceutical product or a new formulation of an old drug to market, we may be
required to rely on pharmaceutical companies to conduct all or part of the
clinical trials necessary to gain regulatory approval to manufacture and to
market any resulting product.
We were organized and commenced operations as a Massachusetts corporation
in 1981 and we were reincorporated as a Delaware corporation on May 26, 1992.
Our principal executive offices are located at 110 Hartwell Avenue, Lexington,
Massachusetts 02421-3134 and our phone number is (781) 862-4003.
RISK FACTORS
INVESTING IN OUR COMMON STOCK IS RISKY. IN ADDITION TO THE OTHER INFORMATION IN
THIS PROSPECTUS, THE FOLLOWING RISK FACTORS SHOULD BE CONSIDERED CAREFULLY IN
EVALUATING US AND OUR BUSINESS. THIS PROSPECTUS CONTAINS FORWARD-LOOKING
STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES. OUR ACTUAL RESULTS MAY DIFFER
SIGNIFICANTLY FROM THE RESULTS DISCUSSED IN THE FORWARD-LOOKING STATEMENTS IN
THIS PROSPECTUS AND IN FORWARD-LOOKING STATEMENTS MADE FROM TIME TO TIME BY US
ON THE BASIS OF MANAGEMENT'S THEN-CURRENT EXPECTATIONS. FACTORS THAT MIGHT CAUSE
SUCH A DIFFERENCE INCLUDE THOSE DISCUSSED OR REFERRED TO BELOW AND OTHERS.
WE HAVE A HISTORY OF OPERATING LOSSES AND WILL CONTINUE TO NEED WORKING CAPITAL.
Since 1981, we have been engaged primarily in research and development and
have derived limited revenues from feasibility studies, the commercial sale of
our products and the licensing of certain technology. We have not generated any
revenues from the sale of any products currently under development. We have
incurred net losses every year since we began doing business and we anticipate
that losses will continue for the foreseeable future. As of December 31, 1999,
we had an accumulated deficit of approximately $33.3 million. Our ability to
continue operations after our current capital resources are exhausted depends on
our ability to secure additional financing and to become profitable, which we
cannot guarantee. However, we believe that our financial resources are
sufficient to meet planned operating activities for at least the next 12 months.
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In addition, Bay Harbor Investments, Inc. and Strong River Investments, Inc.
each have rights of first refusal with respect to our issuance of equity
securities made within 240 days of the date on which the registration statement
of which this prospectus is a part goes effective, which could make it harder
for us to attract additional financing, if required, prior to that time.
We continue to pursue the commercialization of our SEPA technology through
discussions with potential licensees. There can be no guarantee that these
discussions will lead to any licenses or that we will receive any license fees.
Until marketing approvals are obtained and/or license agreements are entered
into, if ever, we expect to generate only limited licensing revenue and no
royalties from sales of products using SEPA. In addition, we intend to continue
to make the substantial expenditures required to support our research and
development programs, including preclinical studies and clinical trials. As a
result, we expect to incur operating losses for the foreseeable future.
OUR PRODUCTS ARE IN AN EARLY STAGE OF DEVELOPMENT AND REMAIN SUBJECT TO
TECHNOLOGY UNCERTAINTY.
Various pharmaceutical companies have developed systems to enhance the
transdermal delivery of specific drugs, but relatively limited research has been
conducted about using transdermal delivery systems for a wider range of
pharmaceutical products. Although we have demonstrated in preclinical and
clinical studies that SEPA transdermal compounds may have applicability when
paired with a broad range of drugs, transdermal delivery systems are currently
marketed for only a limited number of products. In addition, some transdermal
delivery systems used to date have demonstrated adverse side effects for users,
including skin irritation and delivery difficulties.
Most of our proposed products are in the early development stage and will
require significant further research, development, testing and regulatory
clearances. Our proposed products are subject to the risks of failure inherent
in the development of products based on innovative technologies. These risks
include the possibilities that any or all of the proposed products may be found
to be ineffective or toxic, or otherwise may fail to receive necessary
regulatory clearances. In addition, even if our proposed products are effective,
they may be uneconomical to market or third parties may market superior or
equivalent products. Due to the extended testing and regulatory review process
required before we obtain marketing clearance for any of our proposed products,
we do not expect to realize royalty revenues from the sale of any drugs in the
foreseeable future.
WE WILL NEED TO MAKE SIGNIFICANT PRODUCT DEVELOPMENT EFFORTS AND RECEIVE
ADDITIONAL FINANCING TO MARKET OR LICENSE ANY PRODUCTS.
Before we or any of our potential licensees may market any products based
upon our technology, significant additional development efforts and substantial
testing will be necessary. In most cases, we will require substantial additional
financing to fund clinical studies on our proposed products. We cannot guarantee
that we will be able to secure such financing on favorable terms, if at all.
OUR PRODUCTS MAY NOT SUCCESSFULLY COMPLETE THE EXTENSIVE REGULATORY APPROVAL
PROCESS REQUIRED PRIOR TO ANY PHARMACEUTICAL PRODUCT BEING MARKETED.
Before obtaining regulatory approval for the commercial sale of any of the
pharmaceutical products we have under development, we must demonstrate that the
product is safe and efficacious for use in each proposed indication. The results
of preclinical studies and early clinical trials may not accurately predict
results that will be obtained in large-scale testing, and we cannot guarantee
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that clinical trials will prove that our products are safe and efficacious or
that any of our products will ultimately be marketable. A number of other
companies in the pharmaceutical industry have suffered significant setbacks in
advanced clinical trials, even after they achieved promising results in earlier
trials. If we are unable to demonstrate the safety and efficacy of our products,
we may be adversely affected.
WE DEPEND ON THIRD PARTIES ENTERING INTO LICENSE ARRANGEMENTS WITH US AND
HELPING US DEVELOP OUR PRODUCTS.
To the extent we rely on licensees and joint venture arrangements to fund
most of the costs relating to product development and clinical trials, licensees
may have the legal right to terminate funding for a product at any time for any
reason without significant penalty. We cannot control the resources and
attention that a licensee may devote to a product and this can result in delays
in clinical testing, regulatory filings and commercialization efforts. We also
cannot guarantee that we will be able to enter into collaborative arrangements
or that any collaborative arrangements will succeed.
OUR PRIOR DEVELOPMENT EFFORTS HAVE NOT GENERATED SUSTAINED REVENUES OR ANY
PROFITS.
Since 1981, we have engaged in research and development activities with
respect to a variety of technologies and products, including polymers for
medical and industrial use, dental adhesives, osteoporotic drugs and transdermal
drug delivery products. None of our products or technologies has ever generated
sustained revenues and we have never been profitable. We have expended
substantial resources in researching and developing technology relating to our
products as well as in connection with the research and development of
transdermal delivery systems. We cannot guarantee that our development
activities with respect to transdermal delivery systems will be successful or
that these efforts will not eventually be abandoned.
WE LACK MARKETING EXPERIENCE AND AS A RESULT WE DEPEND ON THIRD PARTIES TO
MARKET AND DISTRIBUTE OUR PRODUCTS.
We intend to market and distribute our proposed products through other
companies. We cannot guarantee that we will be able to enter into agreements
with other companies on acceptable terms, if at all. We may have to cede control
over some or all aspects of the marketing and sales of our products as a
condition to entering into such arrangements. We currently have no sales force
or marketing organization. If we decide to directly market and sell any of our
products, we will, among other things, have to develop such capabilities,
including the ability to attract and retain qualified and experienced marketing
and sales personnel. We can not guarantee that we will be able to attract and
retain qualified and experienced marketing and sales personnel or that any
efforts undertaken by such personnel will be successful.
WE DEPEND ON THIRD PARTIES TO MANUFACTURE OUR PRODUCTS.
We do not have facilities capable of manufacturing any of our proposed
products in commercial quantities and we do not have plans to obtain such
facilities. Accordingly, we will depend to a significant extent on licensees or
corporate partners for such manufacturing and for compliance with regulatory
requirements for good manufacturing practices. There can be no guarantee that
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such partners or licensees will perform their obligations in a timely fashion.
Our dependence on third parties for manufacturing may adversely affect our
ability to develop and deliver products on a timely and competitive basis. If we
decide to establish a commercial manufacturing facility, we will require
substantial additional funds. We will be required to hire and retain significant
additional personnel and we will have to comply with extensive government
regulations. We cannot guarantee that we will be able to obtain the additional
capital required to conduct manufacturing activities directly on acceptable
terms, if at all.
OUR BUSINESS WILL SUFFER IF WE LOSE KEY PERSONNEL.
The success of our business depends on our ability to attract, retain and
motivate qualified senior management personnel who are in high demand.
Currently, we depend on a number of our senior executives, including Alvin J.
Karloff, our Chief Executive Officer, President and Chairman of the Board of
Directors, Dr. Paul J. Schechter, our Vice President, Drug Development and
Regulatory Affairs and Kenneth L. Rice, our Vice President and Chief Financial
Officer.
OUR BUSINESS WILL SUFFER IF WE FAIL TO ATTRACT AND RETAIN EXPERIENCED SCIENTIFIC
PERSONNEL.
Our business also depends on our ability to attract and retain scientific
personnel. The competition for such experienced personnel is intense and can be
expected to increase. We cannot guarantee that we will be able to retain our
existing personnel or attract additional qualified employees.
OUR INDUSTRY IS HIGHLY COMPETITIVE AND MANY OF OUR COMPETITORS HAVE
SIGNIFICANTLY MORE RESOURCES THAN WE DO.
We compete with numerous firms, many of which are large, multi-national
organizations with worldwide distribution and which have substantially greater
capital resources, research and development and technical staffs, facilities and
experience in obtaining regulatory approvals, as well as in manufacturing,
marketing and distribution of products, than we do. Recent trends in this area
are toward further market consolidation of large drug companies into a smaller
number of very large entities, further concentrating financial, technical and
market strength and increasing competitive pressure in the industry. Academic
institutions, hospitals, governmental agencies and other public and private
research organizations are also conducting research and seeking patent
protection and may develop competing products or technologies through joint
ventures and other arrangements. In addition, recently developed technologies or
technologies that may be developed in the future may or could be the basis for
competitive products. In particular, a number of our competitors have already
developed or are developing products to treat erectile dysfunction that will
compete with our Topiglan product. We cannot guarantee that our competitors will
not succeed in developing technologies and products that are more effective or
less costly to use than any that we are currently developing.
We expect products approved for sale, if any, to compete primarily on the
basis of product efficacy, safety, patient compliance, reliability, price and
patent position. Generally, the first pharmaceutical product to reach the market
in a therapeutic or preventive area often has a significant advantage relative
to later entrants to the same market. Our competitive position will also depend
on our ability to attract and retain qualified scientific and other personnel,
develop effective proprietary products, implement production and marketing
plans, obtain patent protection and secure adequate capital resources.
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OUR PRODUCTS ARE SUBJECT TO RIGOROUS GOVERNMENTAL REVIEW AND SIGNIFICANT
REGULATION.
Our technologies must undergo a rigorous regulatory approval process, which
includes extensive preclinical and clinical testing, to demonstrate safety and
efficiency before any resulting product can be marketed. To date, neither the
FDA nor any of its international equivalents has approved any of our
technologies for marketing. The clinical trial and regulatory approval process
can require many years and substantial cost, and there can be no guarantee that
our efforts will result in an approved product.
Our activities are regulated by a number of government authorities in the
United States and other countries, including the FDA. The FDA regulates
pharmaceutical products, including their manufacture and labeling. Data obtained
from testing is subject to varying interpretations which can delay, limit or
prevent FDA approval. Risks associated with the regulatory approval process
include:
- Changes in existing regulatory requirements could prevent or affect our
regulatory compliance. Federal and state laws, regulations and policies may
be changed with possible retroactive effect, and how these rules actually
operate can depend heavily on administrative policies and interpretations
over which we have no control or inadequate experience to assess their full
impact upon our business.
- Obtaining FDA clearances is time-consuming and expensive and we cannot
guarantee that such clearances will be granted or, if granted, will not be
withdrawn.
- The FDA review process may prevent the marketing of our products or may
involve delays that significantly and negatively affect our products. We
may encounter similar delays in foreign countries.
- Regulatory clearances may place significant limitations on the uses for
which any approved products may be marketed.
- Any marketed product and its manufacturer are subject to periodic review.
Any discovery of previously unrecognized problems with a product or
manufacturer could result in suspension or limitation of approvals.
WE DEPEND ON PATENTS TO PROTECT OUR TECHNOLOGIES AND THE SCOPE OF SUCH
PROTECTION IS INHERENTLY UNCERTAIN.
We believe that patent protection of our technologies, processes and
products is important to our future operations. The success of our proposed
products may depend, in part, upon our ability to obtain patent protection.
Although we intend to file additional patent applications, no assurance can
be given that any additional patents will be issued or, if issued, will be of
commercial benefit to us. In addition, to anticipate the breadth or degree of
protection that any such patents may afford is impossible. There can be no
guarantee that other parties will not commence litigation challenging our
existing or future patents or that we will be successful in defending against
any such challenge. To the extent that we rely on unpatented proprietary
technology, no assurance can be given that others will not independently develop
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or obtain substantially equivalent or superior technology or otherwise gain
access to our trade secrets, that any obligation of confidentiality will be
honored or that we will be able to effectively protect our rights to proprietary
technology. Further, products we develop could infringe patents held by third
parties. In such cases, licenses from the third parties may not be available on
commercially acceptable terms, if at all.
We intend to enforce our patent position and intellectual property rights
vigorously. The cost of enforcing our patent rights in lawsuits, if necessary,
may be significant and could interfere with our operations.
WE FACE THE RISK OF PRODUCT LIABILITY CLAIMS AND WE MAY NOT HAVE SUFFICIENT
PRODUCT LIABILITY INSURANCE TO COVER SUCH CLAIMS. IT MAY BE EXPENSIVE AND
DIFFICULT TO OBTAIN ADEQUATE INSURANCE COVERAGE.
The design, development, manufacture and sale of our products involve risk
of liability claims and associated adverse publicity. We currently have
liability insurance to cover claims related to our products that may arise from
clinical trials, but we do not maintain product liability insurance and we may
need to acquire such insurance coverage prior to the commercial introduction of
our products. Such insurance is expensive, is difficult to obtain and may not be
available on acceptable terms, if at all. If we obtain such coverage, we have no
guarantee that the coverage limits of such insurance policies will be adequate.
A successful claim against us if we are uninsured, or which is in excess of our
insurance coverage, if any, could have a material adverse effect upon us and our
financial condition.
GOVERNMENT OR PRIVATE INITIATIVES TO REDUCE HEALTH CARE COSTS COULD HAVE A
MATERIAL ADVERSE EFFECT ON PHARMACEUTICAL PRICING AND ON US.
The future revenues and profitability of, and availability of capital for,
biomedical and pharmaceutical companies such as us may be affected by the
continuing efforts of governmental and third-party payers to contain or reduce
the costs of health care through various means. For example, in certain foreign
markets pricing or profitability of prescription pharmaceuticals is subject to
government control and to reform in the health care system. In the United
States, there have been, and we expect there will continue to be, a number of
federal and state proposals to impose similar government control. While we
cannot predict whether any such legislative or regulatory proposals will be
adopted, the announcement or adoption of such proposals could have a material
adverse effect on our prospects. If we or one of our partners succeeds in
bringing to market one or more of our products, there can be no assurance that
these products will be cost effective and that reimbursement to the consumer
will be available or will be sufficient to allow us or our partners to sell such
products on a profitable basis.
WE ARE CONTRACTUALLY OBLIGATED TO ISSUE SHARES IN THE FUTURE, DILUTING YOUR
INTEREST IN US.
Pursuant to adjustable warrants we have issued to Bay Harbor Investments,
Inc. and Strong River Investments, Inc., we may be required to issue to them
additional shares of our common stock at $.01 per share, the number of such
shares to be determined by a formula based on the then market price per share
compared to the $4.95 per share purchase price they paid in a private placement.
Also, Bay Harbor Investments, Inc. and Strong River Investments, Inc. were
granted antidilution protection for the closing warrants and common stock they
purchased in the private placement, so we may be required to issue additional
shares to them, further diluting your interest in us.
As of October 31, 2000 there are also outstanding and exercisable options
to purchase approximately 4,610,000 shares of common stock, at a weighted
average exercise price of $4.67 per share. Moreover, we expect to issue
additional
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options to purchase common stock to compensate employees, consultants and
directors and may issue additional shares to raise capital, acquire other
companies or technologies, to pay for services, or for other corporate purposes.
Any such issuances will have the effect of further diluting the interest of the
purchasers of the shares being sold in this offering.
IF THE HOLDERS OF OUR ADJUSTABLE WARRANTS ENGAGE IN SHORT SELLING TO INCREASE
THE NUMBER OF SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THEIR ADJUSTABLE
WARRANTS, THE MARKET PRICE OF OUR COMMON STOCK MAY DECLINE.
Bay Harbor Investments, Inc. and Strong River Investments, Inc. own
adjustable warrants that will vest on four dates determined by them over a
period of up to eight months following the effectiveness of the registration
statement of which this prospectus is a part. The number of shares that will be
issuable at each vesting date will be determined according to a formula in which
the number of shares issuable will be greater the lower the trading price of our
common stock. Since the exercise price of the adjustable warrants is only $.01
per share, the warrant holders have an incentive to sell short our common stock
prior to each vesting date in order to cause the market price of our common
stock to decline and a greater number of shares to vest under the adjustable
warrants. The warrant holders could then exercise their adjustable warrants and
use the shares of common stock received upon exercise to cover their short
positions. The selling stockholders could thereby profit by the decline in the
market price of the common stock caused by their short selling.
THE TERMS OF OUR ADJUSTABLE WARRANTS MUST COMPLY WITH THE LISTING REQUIREMENTS
OF THE NASDAQ NATIONAL MARKET OR OUR COMMON STOCK AND LIQUIDITY WOULD DECLINE.
To remain listed for trading on the Nasdaq National Market, we must abide
by Nasdaq's rules regarding the issuance of "future priced securities." These
rules apply to our adjustable warrants because additional shares of our common
stock are issuable upon exercise based on a future price of our common stock.
Nasdaq rules regarding future priced securities prohibit an issuer of
listed securities from issuing 20% or more of its outstanding capital stock at
less than the greater of book value or then current market value without
obtaining prior stockholder consent. The number of shares issuable upon exercise
of the adjustable warrants could exceed 20% of the number of our outstanding
shares if the price of our common stock is substantially lower than $4.95 per
share as of the vesting dates of the adjustable warrants. Although we did not
obtain stockholder consent prior to issuing the adjustable warrants, we believe
that Nasdaq will not delist our shares if we obtain shareholder approval before
the adjustable warrants are actually exercised for a number of shares exceeding
20% of our outstanding shares. This is because the adjustable warrants contain
provisions that (1) prohibit us from issuing a number of shares upon exercise
that would exceed 19.999% of our outstanding shares, and (2) prevent the shares
issued from being voted to approve the adjustable warrants. However, if Nasdaq
disagrees with our interpretation of its rules, Nasdaq could delist our common
stock from the Nasdaq National Market.
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If Nasdaq delisted our common stock, we would likely seek to list our
common stock for quotation on a regional stock exchange. However, if we are
unable to obtain listing or quotation on such market or exchange, trading of our
common stock would occur in the over-the-counter market on an electronic
bulletin board for unlisted securities or in what are commonly known as the
"pink sheets." As a result, an investor would find it more difficult to dispose
of, or to obtain accurate quotations for the price of, our common stock.
USE OF PROCEEDS
All net proceeds from the sale of the shares of common stock will go to the
stockholders who offer and sell them. We will not receive any proceeds from this
offering. We will receive $2,983,854 if the warrants issued to the selling
stockholders are exercised in full and the purchase price is paid in cash.
Proceeds of such exercise, if any, will be used for general corporate purposes.
SELLING STOCKHOLDERS
On October 23, 2000, we entered into a securities purchase agreement with
Strong River Investments, Inc., a British Virgin Islands corporation, and Bay
Harbor Investments, Inc., a British Virgin Islands corporation. Under that
agreement, we issued and sold the following securities for a total cash
consideration of $9.0 million:
- a total of 1,816,658 shares of our common stock;
- closing warrants to purchase 363,332 shares of common stock at an exercise
price of $5.90 per share; and
- adjustable warrants to purchase a number of shares of common stock to be
determined at four vesting dates determined by the warrant holder over a
period of up to 8 months following the effectiveness of this registration
statement at an exercise price of $0.01 per share.
The number of shares of common stock issuable at each vesting date under
the adjustable warrants, if any, will be determined by a formula in the
adjustable warrant and is based on the closing bid prices of our common stock
during the 20 consecutive trading days preceding each vesting date. A greater
number of shares of common stock is issuable the lower the trading price of our
common stock. However, if after the effective date of this registration
statement, the closing bid price of our common stock for 20 consecutive trading
days exceeds approximately $6.19 per share, then no shares will be issuable
pursuant to the adjustable warrants for any subsequent vesting dates.
Pursuant to a registration rights agreement with Bay Harbor Investments,
Inc. and Strong River Investments, Inc., we filed a registration statement, of
which this prospectus forms a part, in order to permit those stockholders to
resell to the public the shares of common stock that they purchased pursuant to
the securities purchase agreement and that they acquire upon any exercise of the
warrants. We have registered the number of shares required pursuant to such
registration rights agreement which number is based upon the actual number of
shares sold to the selling stockholders pursuant to the securities purchase
agreement, the number of shares issuable upon any exercise of the closing
warrants, and an estimate of the number of shares issuable upon exercise of the
adjustable warrants.
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The selling stockholders may sell up to 5,322,339 shares of our common
stock pursuant to this prospectus. In order to cover potential downward
movements in the market price of our common stock, that number of shares
includes an estimate of twice the number of shares issuable upon exercise of the
adjustable warrants based on a formula included in the adjustable warrant,
assuming that the adjustment price specified in the formula is $3.00, or 60% of
the closing bid price of our common stock on October 20, 2000, the trading day
immediately preceding the closing date of the securities purchase agreement. The
number of shares offered by this prospectus is not a prediction as to the future
market price of our common stock or as to the number of shares which may vest
pursuant to the adjustable warrants.
A holder of the warrants cannot exercise the warrants if the exercise would
cause the holder, together with any affiliate of the holder, to have beneficial
ownership of more than 4.999% of our outstanding shares of common stock. This
restriction in the warrants can be waived by the holder of the warrant if the
holder gives us at least 61 days notice. However, the 4.999% limitation would
not prevent the selling stockholders from acquiring and selling in excess of
4.999% of our common stock through a series of exercises and sales under the
warrants.
In addition, as long as our common stock is listed for trading on Nasdaq,
we may not issue common stock on exercise of the adjustable warrants in an
amount which exceeds 19.999% of our outstanding common stock at such time
without obtaining prior shareholder approval.
In connection with the securities purchase agreement, we issued a warrant
to purchase 108,999 shares of our common stock at an exercise price of $7.43 per
share to Leerink Swann & Company for acting as a placement agent in connection
with the sale of securities to Strong River Investments, Inc. and Bay Harbor
Investments, Inc. Leerink Swann & Company also received fees totaling
approximately $600,000 in connection with that transaction.
The following table sets forth information regarding beneficial ownership
of our common stock by the selling stockholders as of October 31, 2000. The
number of shares of common stock listed as benficially owned and potentially
offered by this prospectus represents the number of shares of common stock
actually owned as of October 31, 2000, the number of shares issuable upon
exercise of the closing warrants, and twice the number of shares issuable upon
exercise of the adjustable warrants, based on the above assumptions as to the
price of our common stock. The actual number of shares issuable upon exercise of
the adjustable warrants will be determined at each of four vesting dates.
Because the selling stockholders may offer all or some portion of the common
stock listed in the table pursuant to this prospectus or otherwise, no estimate
can be given as to the amount or percentage of common stock that will be held by
the selling stockholders upon termination of the offering. The selling
stockholders may sell all, part, or none of the shares listed. The percentage of
ownership shown in the table is based on 24,726,783 shares of common stock
issued and outstanding on October 31, 2000.
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<PAGE>
<TABLE>
<CAPTION>
SHARES OWNED AND SHARES SHARES OWNED AND
OWNERSHIP PERCENTAGE BEING OWNERSHIP PERCENTAGE
SELLING STOCKHOLDER PRIOR TO OFFERING (1)(2) OFFERED AFTER OFFERING (1)
------------------- ---------------------- ------- --------------------
<S> <C> <C> <C> <C> <C>
Bay Harbor Investments, Inc.(3) 2,606,670 9.9% 2,606,670 0 *
Strong River Investments, Inc.(3) 2,606,670 9.9% 2,606,670 0 *
Leerink Swann & Company (4) 108,999 * 108,999 0 *
<FN>
(1) Assumes that all of the shares held by the selling stockholder and being
offered under this prospectus are sold, and that the selling stockholders
acquire no additional shares of common stock before the completion of this
offering.
(2) Includes 3,505,681 shares issuable upon the exercise of warrants.
(3) Includes 181,666 shares issuable upon exercise of a closing warrant and
1,516,675 shares issuable upon exercise of an adjustable warrant.
(4) Represents 108,999 shares issuable upon exercise of a warrant. Leerink Swann
& Company acted as placement agent in connection with the private placement
which occurred October 23, 2000.
(*) Less than one percent.
</FN>
</TABLE>
PLAN OF DISTRIBUTION
The selling stockholders and any of their pledgees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of common stock on any stock exchange, market or trading facility on which the
shares are traded or in private transactions. These sales may be at fixed or
negotiated prices. The selling stockholders may use any one or more of the
following methods when selling shares:
- ordinary brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
- block trades in which the broker-dealer will attempt to sell the shares as
agent but may position and resell a portion of the block as principal to
facilitate the transaction;
- purchases by a broker-dealer as principal and resale by the broker-dealer
for its account;
- an exchange distribution in accordance with the rules of the applicable
exchange;
- privately negotiated transactions;
- short sales;
- broker-dealers may agree with the selling stockholders to sell a specified
number of such shares at a stipulated price per share;
- a combination of any such methods of sale; and
- any other method permitted pursuant to applicable law.
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<PAGE>
The selling stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.
Broker-dealers engaged by the selling stockholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the selling stockholders (or, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. The selling stockholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.
The selling stockholders and any broker-dealers or agents that are involved
in selling the shares may be deemed to be "underwriters" within the meaning of
the Securities Act in connection with such sales. In such event, any commissions
received by such broker-dealers or agents and any profit on the resale of the
shares purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act.
We are required to pay all fees and expenses incident to the registration
of the shares. We have agreed to indemnify the selling stockholders against
certain losses, claims, damages and liabilities, including liabilities under the
Securities Act.
DESCRIPTION OF SECURITIES TO BE REGISTERED
General
We are authorized to issue 60,000,000 shares of common stock and 6,000,000
shares of preferred stock, each with a par value $.01 per share. As of October
31, 2000, we have 24,726,783 shares of common stock and no shares of preferred
stock issued and outstanding. Under our certificate of incorporation, our Board
of Directors is authorized, without stockholder approval, to issue such
preferred stock into series with such voting rights, designations, preferences,
limitations and special rights as may be designated by the Board of Directors
from time to time.
Shares of our common stock are being registered under this registration
statement. The following is a summary description of our outstanding common
stock and is qualified in its entirety by reference to our certificate of
incorporation and bylaws, which are exhibits to or are incorporated by reference
in the registration statement of which this prospectus is a part.
Common Stock
Subject to the rights and preferences of our preferred stock, holders of
shares of the common stock are entitled to receive dividends, as and to the
extent dividends may be declared by our Board of Directors, out of funds legally
available therefor. In the event of a liquidation, dissolution or winding up of
us, holders of shares of the common stock are entitled to share ratably in all
assets remaining after payment of liabilities and preferences to holders of
preferred stock. Holders of shares of common stock are entitled to one vote per
share on all matters on which stockholders are entitled to vote. The holders of
a majority of the outstanding shares of common stock entitled to vote constitute
a quorum for taking action by the stockholders. Except for matters where a
higher vote is required by law, the affirmative vote of the holders of shares of
common stock present or represented and entitled to vote is required to take any
such action. Holders of shares of the common stock have no preemptive,
conversion or other subscription rights. There are no redemption, sinking fund
or call provisions applicable to the common stock.
11
<PAGE>
The holders of the common stock have rights under a stockholder rights plan
which has been adopted by the Board of Directors. Under the rights plan, the
holders of common stock received one right (the "right") to purchase a
fractional share of a new class of preferred stock for each share of common
stock owned by such holder. If a person or a group acquires twenty percent or
more of the outstanding shares of the common stock, the rights may separate from
the shares of common stock and become exercisable. Once the rights are
exercised, the rights plan may allow holders of the rights (other than the
person or group acquiring twenty percent of the common stock) to acquire
additional common stock at a substantial discount. The rights will expire in
August, 2009 unless exercised by the holders or redeemed or exchanged by us. The
rights plan could make it more difficult, and therefore discourage attempts, to
acquire control of us. This description of the rights plan is qualified by
reference to the registration statement on Form 8-A relating to the rights plan,
which is incorporated herein by reference and made a part hereof.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. Our SEC filings are also available to the public
from the SEC's Website at "http://www.sec.gov."
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and the information that we file later
with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings we
will make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934:
- Our annual report of Form 10-K for the year ended December 31, 1999;
- Our quarterly reports on Form 10-Q for the periods ended March 31, 2000,
June 30, 2000 and September 30, 2000;
- Our definitive Proxy Statement dated June 2, 2000 for our 2000 Annual
Meeting of Stockholders;
- The description of our common stock and preferred stock contained in our
registration statements on Forms 8-A filed under the Exchange Act,
including any amendment or reports filed for the purpose of updating such
descriptions; and
- Our current report on Form 8-K filed with the SEC on October 31, 2000.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
MacroChem Corporation
110 Hartwell Avenue
Lexington, MA 02421-3134
Attention: Investor Relations
(781) 862-4003
12
<PAGE>
This prospectus is part of a registration statement that we have filed with
the SEC. You should rely only on the information or representations provided in
this prospectus. We have not authorized nor have any of the selling stockholders
authorized anyone to provide you with different information. The selling
stockholders are not making an offer of these securities in any state where the
offer is not permitted. You should not assume that the information in this
prospectus is accurate as of any date other than the date on the front of the
document.
LEGAL OPINION
For the purpose of this offering, Ropes & Gray, Boston, Massachusetts, is
giving its opinion on the validity of the shares.
EXPERTS
The financial statements included in the Company's Annual Report on Form
10-K for the year ended December 31, 1999 have been audited by Deloitte & Touche
LLP, independent auditors, as stated in their report, which is incorporated
herein by reference, and have been so incorporated in reliance upon the report
of such firm given upon their authority as experts in accounting and auditing.
13
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF DISTRIBUTION
SEC registration fee................................$ 5,733
Blue Sky Fees and Expenses*......................... 0
Legal fees and expenses*............................ 25,000
Printing Expenses................................... 0
Accounting fees and expenses*....................... 25,000
Miscellaneous*...................................... 10,000
Total Expenses.............................$65,733
______________________
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law ("DGCL") provides that
a corporation may 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 or investigative (other than an action by or
in the right of the corporation) by reason of the fact that he is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorney's fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
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 conduct was unlawful. Section 145 further
provides that a corporation similarly may indemnify any such person serving in
any such capacity who was or is a party or is threatened to be made a party to
any threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor, against expenses actually and
reasonably incurred in connection with the defense or settlement of such action
or suit if he acted in good faith and in a manner he reasonably believed to be
in or not opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of 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 Delaware Court of Chancery or such other
court in which such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all the circumstances
of the case, such person is fairly and reasonably entitled to indemnify for such
expenses which the Court of Chancery or such other court shall deem proper.
Section 102(b)(7) of the DGCL permits a corporation to include in its
certificate of incorporation a provision eliminating or limiting the personal
liability of a director to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, provided that such provision
shall not eliminate or limit the liability of a director (i) for any breach of
the director's duty of loyalty to the corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or a
II-1
<PAGE>
knowing violation of law, (iii) under Section 174 of the DGCL (relating to
unlawful payment of dividends and unlawful stock purchase and redemption) or
(iv) for any transaction from which the director derived an improper personal
benefit.
The Registrant's Certificate provides that the Company's Directors shall
not be liable to the Registrant or its stockholders for monetary damages for
breach of fiduciary duty as a director except to the extent that exculpation
from liabilities is not permitted under the DGCL as in effect at the time such
liability is determined. The Registrant's Certificate further provides that the
Registrant shall indemnify its directors and officers to the fullest extent
permitted by the DGCL.
The Company has a liability insurance policy in effect which covers certain
claims against any officer or director of the Company by reason of certain
breaches of duty, neglect, errors or omissions committed by such person in his
or her capacity as an officer or director.
For the undertaking with respect to indemnification, see Item 17 herein.
ITEM 16. EXHIBITS
TITLE OF EXHIBIT
4.1 Specimen Common Stock Certificate (1)
4.2 Form of Closing Warrant (2)
4.3 Form of Adjustable Warrant (2)
4.4 Form of Warrant issued to Leerink Swann & Company dated October 23, 2000
(2)
5.1 Opinion of Company Counsel (3)
10.1 Securities Purchase Agreement by and among MacroChem, Strong River
Investments, Inc. and Bay Harbor Investments, Inc. dated October 23, 2000
(2)
10.2 Registration Rights Agreement by and among MacroChem, Strong River
Investments, Inc. and Bay Harbor Investments, Inc. dated October 23, 2000
(2)
23.1 Consent of Deloitte & Touche LLP (3)
23.2 Consent of Ropes & Gray (to be included in the opinion filed as
Exhibit 5.1)
24.1 Power of Attorney (to be included as part of signature page filed herewith)
II-2
<PAGE>
(1) Incorporated by reference to our Report on Form 10-K filed with the
SEC for the year ended December 31, 1999.
(2) Incorporated by reference to our Current Report on Form 8-K filed
with the SEC on October 31, 2000.
(3) Filed herewith.
ITEM 17. UNDERTAKINGS
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 provisions set forth in Item 15 above, 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.
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 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
The 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:
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;
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;
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<PAGE>
PROVIDED, HOWEVER, that paragraphs (1)(a) and (1)(b) 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 periodic reports filed by the
registrant pursuant to Section 13 or 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.
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<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 on Form S-3 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Lexington, State of Massachusetts, on the 21st
day of November, 2000.
MACROCHEM CORPORATION
By:/s/ Alvin J. Karloff
------------------------
Name: Alvin J. Karloff
Title: President, Chief Executive Officer
and Chairman of the Board of Directors
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<PAGE>
POWER OF ATTORNEY
We, the undersigned officers and directors of MacroChem Corporation, hereby
severally constitute Alvin J. Karloff and Kenneth L. Rice, and each of them
singly, our true and lawful attorneys with full power to them, and each of them
singly, to sign for us and in our names in the capacities indicated below, the
Registration Statement filed herewith and any and all amendments to said
Registration Statement (including post-effective amendments), and generally to
do all such things in our name and behalf in our capacities as officers and
directors to enable MacroChem Corporation to comply with the provisions of the
Securities Act of 1933, and all requirements of the Securities and Exchange
Commission, hereby ratifying and confirming our signatures as they may be signed
by our said attorneys, or any of them, to said Registration Statement and any
and all amendments thereto.
Witness our hands on the date set forth below.
Pursuant to the requirement 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 TITLE DATE
--------- ----- ----
/s/ Alvin J. Karloff President, Chief Executive November 21, 2000
Alvin J. Karloff Officerand Chairman of the
Board of Directors
(Principal Executive Officer)
/s/Kenneth L. Rice Vice President and Chief November 21, 2000
Kenneth L. Rice Financial Officer (Chief
Financial Officer and
Principal Accounting Officer)
/s/Peter G. Martin Director November 21, 2000
Peter G. Martin
/s/Michael A. Davis, M.D. Director November 21, 2000
Michael A. Davis, M.D.
/s/Robert J. DeLuccia Director November 21, 2000
Robert J. DeLuccia
/s/Paul S. Echenberg Director November 21, 2000
Paul S. Echenberg
/s/Peter G. Savas Director November 21, 2000
Peter G. Savas
/s/John L. Zabriskie Director November 21, 2000
John L. Zabriskie
II-6
<PAGE>
EXHIBIT INDEX
NUMBER TITLE OF EXHIBIT PAGE
------ ---------------- ----
4.1 Specimen Common Stock Certificate (1)
4.2 Form of Closing Warrant (2)
4.3 Form of Adjustable Warrant (2)
4.4 Form of Warrant issued to Leerink Swann & Company dated
October 23, 2000 (2)
5.1 Opinion of Company Counsel (3) II-8
10.1 Securities Purchase Agreement by and among MacroChem,
Strong River Investments, Inc. and Bay Harbor
Investments, Inc. dated October 23, 2000 (2)
10.2 Registration Rights Agreement by and among MacroChem,
Strong River Investments, Inc. and Bay Harbor
Investments, Inc. dated October 23, 2000 (2)
23.1 Consent of Deloitte & Touche LLP (3) II-10
23.2 Consent of Ropes & Gray (to be included in the opinion
filed as Exhibit 5.1)
24.1 Power of Attorney (to be included as part of signature
page filed herewith)
(1) Incorporated by reference to our Report on Form 10-K filed
with the SEC for the year ended December 31, 1999.
(2) Incorporated by reference to our Current Report on Form
8-K filed with the SEC on October 31, 2000.
(3) Filed herewith.
II-7
<PAGE>
