<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 1, 1995
REGISTRATION NO. 33-60029
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------------
NEORX CORPORATION
(Exact name of registrant as specified in its charter)
WASHINGTON 91-1261311
(State of Incorporation) (I.R.S. Employer Identification Number)
410 WEST HARRISON STREET
SEATTLE, WASHINGTON 98119
(206) 281-7001
(Address and telephone number of registrant's principal executive offices)
JEFFREY J. MILLER, PH.D., J.D.
SENIOR VICE PRESIDENT
BUSINESS DEVELOPMENT AND LEGAL AFFAIRS, AND SECRETARY
410 WEST HARRISON STREET
SEATTLE, WASHINGTON 98119
(206) 281-7001
(Name, address and telephone number of agent for service)
-------------------------
Copies to:
Stephen A. McKeon
Wm. Kenneth McGraw
Perkins Coie
1201 Third Avenue, 40th Floor
Seattle, Washington 98101-3099
(206) 583-8888
-------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
FROM TIME TO TIME AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
-------------------------
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any 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/
--------------------------
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 COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFER TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE> 3
Subject to Completion, dated August 1, 1995
PROSPECTUS
1,654,338 SHARES OF COMMON STOCK
1,323,471 WARRANTS TO PURCHASE COMMON STOCK
NEORX CORPORATION
This Prospectus relates to (i) 1,654,338 shares (the "Shares") of
common stock, $.02 par value per share (the "Common Stock"), and (ii) 1,323,471
warrants (the "Warrants") to purchase Common Stock of NeoRx Corporation (the
"Company" or "NeoRx"). Every four Warrants entitle the registered holder thereof
to purchase one share of Common Stock at a price of $5.3125. The Shares and the
Warrants collectively are referred to herein as the "Securities." The Securities
may be offered by certain shareholders of the Company (the "Selling Security
Holders") from time to time in transactions in the over-the-counter market
through Nasdaq, in privately negotiated transactions, through the writing of
options on the Securities, or through a combination of such methods of sale, at
fixed prices that may be changed, at market prices prevailing at the time of
sale, at prices relating to such prevailing market prices or at negotiated
prices. The Selling Security Holders may effect such transactions by selling the
Securities to or through broker-dealers, and such broker-dealers may receive
compensation in the form of discounts, concessions or commissions from the
Selling Security Holders and/or the purchasers of the Securities for whom such
broker-dealers may act as agents or to whom they may sell as principals, or both
(which compensation as to a particular broker-dealer might be in excess of
customary commissions). See "Selling Security Holders" and "Plan of
Distribution."
None of the proceeds from the sale of the Securities by the Selling
Security Holders will be received by the Company. The Company has agreed to bear
all expenses (other than selling commissions and fees and expenses of counsel
and other advisers to the Selling Security Holders) in connection with the
registration and sale of the Securities being offered by the Selling Security
Holders. The Company has agreed to indemnify the Selling Security Holders
against certain liabilities, including liabilities under the Securities Act of
1933, as amended (the "Securities Act").
All the Securities were "restricted securities" under the Securities
Act prior to their registration hereunder. The Company sold 1,323,471 units (the
"Units"), each Unit consisting of one share of Common Stock and one Warrant to
purchase one-quarter of one share of Common Stock, to the Selling Security
Holders in private transactions in April 1995. The Shares, including the 330,867
shares of Common Stock underlying the Warrants, and the Warrants are registered
hereunder. This Prospectus covers not only the resale of shares to be issued
upon exercise of the Warrants by the Selling Security Holders, but also the
issuance of shares upon exercise of the Warrants by subsequent purchasers of the
Warrants. This Prospectus has been prepared so that future sales of the
Securities will not be restricted under the Securities Act. In connection with
any sales, the Selling Security Holders and any brokers participating in such
sales may be deemed to be "underwriters" within the meaning of the Securities
Act. See "Selling Security Holders."
The Common Stock is quoted on the Nasdaq National Market under the
symbol "NERX." On July 31, 1995, the closing sales price for the shares of
Common Stock as reported on the Nasdaq National Market was $5.375 per share.
Prior to this offering, there has been no public market for the Warrants, and
there can be no assurance that any such market will develop. The Warrants have
been approved for quotation on the Nasdaq National Market under the symbol
"NERXW."
--------------------------
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS."
--------------------------
THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
--------------------------
The date of this Prospectus is ______, 1995.
<PAGE> 4
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"). Such reports, proxy
statements and other information filed by the Company may be inspected and
copies obtained (at prescribed rates) at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Judiciary Plaza,
Washington, D.C. 20549 and at the Commission's Regional Offices in New York (7
World Trade Center, 13th Floor, New York, New York 10048) and Chicago (Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661). Such
reports, proxy statements and other information may also be inspected at the
offices of the National Association of Securities Dealers, Inc., 1735 K Street,
N.W., Washington, D.C. 20006.
This Prospectus is part of a Registration Statement on Form S-3
(together with all amendments and exhibits thereto, the "Registration
Statement") filed with the Commission under the Securities Act with respect to
the Securities. This Prospectus does not contain all the information set forth
in the Registration Statement, certain portions of which have been omitted in
accordance with the Commission's rules and regulations. For further information
with respect to the Company and the Securities offered hereby, reference is made
to the Registration Statement and the exhibits thereto. The statements in this
Prospectus as to the contents of any agreement or other document of which a copy
is filed as an exhibit to either the Registration Statement or other filings by
the Company with the Commission incorporated herein by reference are qualified
in their entirety by reference thereto.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company will provide without charge to each person to whom a copy
of this Prospectus is delivered, upon such person's written or oral request, a
copy of any or all of the documents incorporated by reference herein (other than
exhibits to such documents, unless such exhibits are specifically incorporated
by reference into the information that this Prospectus incorporates). Requests
should be directed to: NeoRx Corporation, 410 West Harrison Street, Seattle,
Washington 98119, Attention: Investor Relations.
The following documents filed with the Commission by the Company are
incorporated by reference into this Prospectus:
(1) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994; and
(2) The Company's Quarterly Report on Form 10-Q for the three-month
period ended March 31, 1995; and
(3) The description of the capital stock contained in the Company's
Registration Statement on Form 8-A filed with the Commission on March 21, 1988.
All documents filed with the Commission by the Company pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
this Prospectus and prior to the termination of the offering of the Securities
offered hereby shall be deemed incorporated by reference into this Prospectus
and to be a part hereof from the respective dates of filing such documents. Any
statement contained in a document incorporated or deemed to be incorporated by
reference herein shall be deemed modified, superseded or replaced for purposes
of this Prospectus to the extent that a statement contained herein or in any
subsequently filed document that also is or is deemed to be incorporated by
reference herein modifies, supersedes or replaces such statement. Any statement
so modified, superseded or replaced shall not be deemed, except as so modified,
superseded or replaced, to constitute a part of this Prospectus.
--------------------------
The Company's principal offices are located at 410 West Harrison
Street, Seattle, Washington 98119, and its telephone number is (206) 281-7001.
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<PAGE> 5
RISK FACTORS
Prospective purchasers should carefully consider the risk factors set
forth below as well as the other information set forth in this Prospectus before
purchasing the Securities offered hereby.
EARLY STAGE OF PRODUCT DEVELOPMENT; TECHNOLOGICAL UNCERTAINTY
To date, substantially all of the Company's revenues have consisted of
payments received under agreements with corporate partners and from government
research contracts, none of which provide for material future funding. The
Company has received no revenues to date from product sales and does not expect
regulatory approval for commercial sales of lung cancer imaging products earlier
than late 1995 and does not expect to seek U.S. regulatory approval for sales of
its cancer and anti-restenosis treatment products before 1998. The Company's
current research and development activities are focused primarily on its
proposed therapeutic products, which are in an early stage of development.
Although in preclinical studies the Company's pretargeting technology has shown
promise for the treatment of cancer tumors in animals, the Company initiated a
Phase I dose escalation study in humans in mid-1994. Results obtained in
preclinical studies are not necessarily indicative of results that will be
obtained in human clinical trials. The Company's proposed therapeutic products
for the prevention of restenosis are also in an early stage of development. In
addition, the Company's potential products will require significant additional
research and development and extensive clinical testing prior to commercial use.
There can be no assurance that these potential products will be successfully
developed into drugs that can be administered to humans or that any such drugs
or related therapies will prove to be safe and effective in clinical trials or
cost-effective to manufacture. Further, these potential products may prove to
have undesirable and unintended side effects that may prevent or limit their
commercial use.
HISTORY OF LOSSES; NEED FOR ADDITIONAL FUNDS
The Company has been unprofitable since inception and expects to incur
additional operating losses over the next several years. These operating losses
may fluctuate from period to period. For the period from February 13, 1984 (the
Company's inception) to March 31, 1995, the Company incurred net losses
aggregating $93.6 million. The Company's existing capital resources and interest
income thereon are currently expected to be sufficient to fund the Company's
operations into 1996. The Company's actual expenditures will depend on numerous
factors, including results of research and development activities, clinical
trials, the levels of resources that the Company devotes to establishing and
expanding marketing and manufacturing capabilities, competitive and
technological developments and the timing and cost of relationships with parties
to collaborative agreements. The Company will require substantial additional
funds to complete the development of its therapeutic products. Adequate funds
for these purposes, whether through additional financings, collaborative
arrangements with corporate sponsors or other sources, may not be available when
needed or on terms favorable to the Company. If existing funds are raised by
issuing equity securities, purchasers of the securities issued hereunder may
suffer immediate and substantial dilution.
DEPENDENCE ON SUPPLIERS
The Company depends on the timely delivery from suppliers of certain
materials and services. In connection with its research, preclinical development
and clinical trials, the Company has periodically experienced interruption in
the supply of monoclonal antibodies, including the loss in 1990 of its former
sole supplier of the antibody used in the Company's cancer imaging products.
Interruptions in these and other supplies could occur in the future. The Company
will need to develop sources for commercial quantities of yttrium-90, and the
antibody used in its proposed cancer therapeutic products. The catheter used to
deliver the Company's proposed anti-restenosis products has not yet been
approved for sale by the Food and Drug Administration (the "FDA") and commercial
use of such catheter depends on receiving such approval. In addition, the
Company depends on the supply of such catheter from its manufacturer, and there
can be no assurance that such manufacturer will provide a timely and adequate
supply of such catheters to the Company. Any failure by such manufacturer to
timely and adequately supply such catheters would have a material adverse
effect on the Company's ability to commercialize these products.
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<PAGE> 6
DEPENDENCE ON OTHERS FOR COMMERCIAL MANUFACTURING AND MARKETING
The Company has no manufacturing facilities for commercial production
of its products under development. The Company also has no experience in sales,
marketing or distribution. The Company's strategy for commercialization of its
products requires entering into various arrangements with corporate
collaborators, licensors, licensees and others to manufacture, distribute and
market its products. The Company will depend on the success of these outside
parties in performing their responsibilities. Although the Company believes that
parties to its existing and any future arrangements will have an economic
motivation to successfully perform their contractual responsibilities, the
amount and timing of resources to be devoted to these activities are not within
the Company's control. There can be no assurance that such parties will perform
their obligations as expected, that the Company will derive any revenues from
such arrangements or that the Company's reliance on others for manufacturing
products will not result in unforeseen problems with product supply. The Company
entered into agreements with Boehringer Ingelheim International GmbH
("Boehringer Ingelheim") and DuPont Merck Pharmaceutical Company ("DuPont
Merck") under which Boehringer Ingelheim has worldwide manufacturing rights and
non-North American marketing rights to the Company's OncoTrac lung cancer
imaging products and DuPont Merck has exclusive North American rights to market
these products. The Company intends to seek collaborative partners to assist in
developing, manufacturing and marketing the Company's therapeutic products under
development. There can be no assurance that the Company will be able to
negotiate acceptable collaborative arrangements in the future or that its
current or future collaborative arrangements will be successful.
COMPETITION
Cancer imaging and therapy and anti-restenosis product development is
highly competitive. There are numerous competitors that are developing products
to detect, stage or treat each of the diseases for which the Company is seeking
to develop products. Some competitors have adopted product development
strategies similar to the Company's approach of targeting cancer cells by
linking radionuclides to monoclonal antibodies. Many emerging companies have
corporate partnership arrangements with large, established companies to support
research, development and commercialization efforts of products that may be
competitive with those being developed by the Company. In addition, a number of
established pharmaceutical and chemical companies are developing proprietary
technologies or have enhanced their capabilities by entering into arrangements
with, or acquiring, companies with proprietary monoclonal antibody-based
technology or other technologies applicable to the imaging or treatment of
cancer and restenosis. Many of the Company's existing or potential competitors
have or have access to substantially greater financial, research and
development, marketing and production resources than those of the Company and
may be better equipped than NeoRx to develop, manufacture and market competing
products. The Company's competitors may develop and introduce products that are
more effective than those of the Company or that would render the Company's
technology and products under development less competitive, uneconomical or
obsolete.
TECHNOLOGICAL UNCERTAINTIES REGARDING HUMAN IMMUNE RESPONSE TO FOREIGN PROTEINS
The Company's Avicidin cancer therapy product currently in Phase I/II
clinical testing uses a monoclonal antibody of murine (mouse) origin coupled to
streptavidin, a protein of bacterial origin. Murine antibodies appear as foreign
proteins to the human immune system, which develops its own antibody in response
to the murine antibody. This so-called "human anti-mouse antibody" response, or
"HAMA," or the "human anti-streptavidin antibody" response, or "HASA," may limit
the number of doses that may be safely or effectively administered to a patient,
thereby limiting a product's efficacy. The Company believes that humanized
antibodies may reduce HAMA and that chemical modification of streptavidin may
reduce HASA. Gene cloning technology permits splicing of human and murine
antibody portions together, thereby yielding humanized molecules. Although the
Company has produced a humanized version of the murine antibody used in
Avicidin, the Company has not utilized such humanized antibody in preclinical or
clinical trials to date, and there can be no assurance that such humanized
antibody would reduce the extent to which HAMA or HASA may limit the
effectiveness of the Company's cancer therapeutic products or that the Company
will successfully be able to commercialize products incorporating the
humanized antibody.
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<PAGE> 7
UNCERTAINTY REGARDING PATENTS AND PROPRIETARY RIGHTS
The patent position of biotechnology firms generally is highly
uncertain and involves complex legal and factual questions, and currently no
consistent policy has emerged regarding the breadth of claims allowed in
biotechnology patents. Products and processes important to NeoRx are subject to
this uncertainty. Accordingly, there can be no assurance that the Company's
patent applications will result in additional patents being issued or that, if
issued, patents will afford protection against competitors with similar
technology, nor can there be any assurance that any patents issued to the
Company will not be infringed by or designed around by others or that others
will not obtain patents that the Company would need to license or design around.
Moreover, the technology applicable to the Company's products is developing
rapidly. Research institutes, universities and biotechnology companies,
including the Company's competitors, have filed applications for, or have been
issued, numerous patents and may obtain additional patents and proprietary
rights relating to products or processes competitive with or relating to those
of the Company. The scope and validity of such patents, the extent to which the
Company may be required to obtain licenses thereunder or under other proprietary
rights and the cost and availability of licenses are unknown. To the extent
licenses are required, there can be no assurance that they will be available on
commercially reasonable terms, if at all. The Company also relies on unpatented
proprietary technology. There can be no assurance that others will not
independently develop substantially equivalent proprietary information and
techniques, that others will not otherwise gain access to the Company's
proprietary technology, or disclose such technology, or that the Company can
meaningfully protect its rights in such unpatented proprietary technology.
DELAYS AND COSTS RESULTING FROM GOVERNMENTAL REGULATION
The manufacture and marketing of the Company's products and its
research and development activities are subject to regulation for safety,
efficacy and quality by numerous governmental authorities in the United States
and other countries. Clinical trials, manufacturing and marketing of products
are subject to the rigorous testing and approval processes of the FDA and
equivalent foreign regulatory authorities. Clinical trials and regulatory
approval can take a number of years to accomplish and require the expenditure of
substantial resources. There can be no assurance that clinical trials will be
started or completed successfully within any specified time period. Delays in
approval can occur for a number of reasons, including the Company's failure to
obtain necessary supplies of monoclonal antibodies or other materials or to
obtain a sufficient number of available patients to support the claims necessary
for regulatory approval. There can be no assurance that requisite FDA approvals
will be obtained on a timely basis, if at all, or that any approvals granted
will cover all the clinical indications for which the Company may seek approval.
Boehringer Ingelheim filed a Product License Application ("PLA") and an
Establishment License Application with the FDA for approval to manufacture and
market the OncoTrac Small Cell Lung Cancer ("SCLC") Imaging Kit in March 1994.
The FDA completed its review of the OncoTrac SCLC Imaging Kit PLA, and, in March
1995, Boehringer Ingelheim submitted a response to the FDA's questions and
information requests resulting from this review. The Company's business would be
adversely affected by delays in FDA approval of the manufacture and marketing of
this product by Boehringer Ingelheim or by failure of the FDA to grant such
approval. Delays or failure to obtain regulatory approval would adversely affect
or prevent the marketing of products developed by the Company and its ability to
receive royalty or other product revenues. The manufacture and marketing of
drugs are subject to continuing FDA review and later discovery of previously
unknown problems with a product, manufacturer or facility may result in
restrictions, including withdrawal of the product from the market. Marketing the
Company's products abroad will require similar regulatory approvals and is
subject to similar risks. In addition, the Company is unable to predict the
extent of adverse governmental regulations that might arise from future U.S. or
foreign governmental action.
RISK OF PRODUCT LIABILITY
The testing, manufacturing, marketing and sale of human healthcare
products under development by the Company entail an inherent risk that product
liability claims will be asserted against the Company. Although the
Company is insured against such risks up to a $10 million annual aggregate
limit in connection with human clinical trials and commercial sales of its
products under development, there can be no assurance that the Company's
present product liability insurance is adequate. A successful product
liability claim in excess of the Company's insurance
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<PAGE> 8
coverage could have a material adverse effect on the Company and may
prevent the Company from obtaining adequate product liability insurance in the
future on commercially reasonable terms. In addition, there can be no assurance
that product liability coverage will continue to be available in sufficient
amounts or at an acceptable cost.
UNCERTAINTY OF PHARMACEUTICAL PRICING, HEALTHCARE REFORM AND REIMBURSEMENT
The levels of revenues and profitability of pharmaceutical companies
may be affected by the continuing efforts of governmental and third-party payors
to contain or reduce the costs of healthcare through various means. For example,
in certain foreign markets pricing or profitability of prescription
pharmaceuticals is subject to governmental control. In the United States, there
have been, and the Company expects that there will continue to be, a number of
federal and state proposals to implement similar governmental control. It is
uncertain what legislative proposals will be adopted or what actions federal,
state or private payors for healthcare goods and services may take in response
to any healthcare reform proposals or legislation. Even in the absence of
statute, market forces are changing the healthcare sector. The Company cannot
predict the effect healthcare reforms may have on its business, and there can be
no assurance that any such reforms will not have a material effect on the
Company. Further, to the extent that such proposals or reforms have a material
adverse effect on the business, financial condition and profitability of other
pharmaceutical companies that are prospective collaborators for certain of the
Company's potential products, the Company's ability to commercialize its
products under development may be adversely affected. In addition, in both the
United States and elsewhere, sales of prescription pharmaceuticals depend in
part on the availability of reimbursement to the consumer from third-party
payors, such as governmental and private insurance plans. Third-party payors are
increasingly challenging the prices charged for medical products and services.
If the Company succeeds in bringing one or more products to market, there can be
no assurance that these products will be considered cost-effective and that
reimbursement to the consumer will be available or will be sufficient to allow
the Company to sell its products on a competitive basis.
RELIANCE ON KEY PERSONNEL
The Company's success will depend in part on the efforts of certain key
scientists and management personnel. Because of the specialized nature of the
Company's business, the Company's ability to maintain its competitive position
will depend in part on its ability to attract and retain qualified personnel.
Competition for such personnel is intense. There can be no assurance that the
Company will be able to hire sufficient qualified personnel on a timely basis or
retain such personnel. The loss of key management or scientific personnel could
have an adverse effect on the Company's business.
COMPLIANCE WITH ENVIRONMENTAL REGULATIONS; HAZARDOUS MATERIALS
The Company is subject to federal, state and local laws, rules,
regulations and policies governing the use, generation, manufacture, storage,
air emission, effluent discharge, handling and disposal of certain materials and
wastes in connection with its research and development activities and its
manufacturing of clinical trial materials. Although the Company believes that it
has complied with these laws and regulations in all material respects, there can
be no assurance that the Company will not be required to incur significant costs
to comply with environmental and health and safety regulations in the future.
The Company's research and development and clinical manufacturing processes
involve the controlled use of small amounts of hazardous and radioactive
materials. Although the Company believes that its safety procedures for handling
and disposing of such materials comply with the standards prescribed by such
laws and regulations, the risk of accidental contamination or injury from these
materials cannot be completely eliminated. In the event of such an accident, the
Company could be held liable for any resulting damages, and any such liability
could exceed the Company's resources.
POSSIBLE VOLATILITY OF THE PRICE OF THE SECURITIES
The market price of the Securities following this offering may be
highly volatile. Factors such as announcements of technological innovations or
new commercial products by the Company or its competitors, governmental
regulation, results and timing of clinical trials, regulatory approvals or
developments relating to
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<PAGE> 9
corporate alliances or patent or proprietary rights may have a significant
impact on the market price of the Securities. In addition, general market price
declines, volatility or share illiquidity in the future could adversely affect
the market price of the Securities.
NO ASSURANCE OF PUBLIC MARKET FOR WARRANTS
Prior to this offering, there has been no public trading market for the
Warrants. There can be no assurance that a regular trading market will develop
after this offering or that, if developed, it will be sustained. The Company has
the right to suspend use of this Prospectus for a discrete period of time upon
the occurrence of certain events.
SHARES ELIGIBLE FOR FUTURE SALE
Future sales of shares of Common Stock by existing shareholders could
adversely affect the prevailing market price of the Common Stock. At March 31,
1995, the Company had approximately 11.9 million shares of Common Stock
outstanding. "Affiliates" of the Company, as that term is defined in the
Securities Act, hold approximately 889,272 shares of Common Stock, which shares
are subject to the resale provisions of Rule 144 promulgated under the
Securities Act. All other outstanding shares are freely tradable without
restriction under the Securities Act.
DIVIDENDS
The Company has never paid dividends on the Common Stock and does not
anticipate paying any cash dividends on the Common Stock for the foreseeable
future. In addition, under the terms of its $2.4375 Convertible Exchangeable
Preferred Stock, Series 1, cash dividends on the Common Stock may not be paid
unless full cumulative dividends on such preferred stock have been paid. To
date, full cumulative dividends have been paid on such preferred stock.
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<PAGE> 10
CAPITALIZATION
The following table sets forth the capitalization of the Company at
March 31, 1995 and as adjusted to give effect to the private sale of the
1,323,471 Units at $5.3125 per Unit and the estimated net proceeds therefrom:
<TABLE>
<CAPTION>
AT MARCH 31, 1995
-----------------------------
ACTUAL AS ADJUSTED
---------- -----------
(in thousands)
<S> <C> <C>
Noncurrent liabilities:
9 3/4% Convertible Subordinated Debentures ............................ $ 1,195 $ 1,195
Other noncurrent liabilities .......................................... 14 14
---------- ----------
Total noncurrent liabilities ...................................... 1,209 1,209
---------- ----------
Shareholders' equity:
Series Preferred Stock, $.02 par value per share, liquidation
preference $25.00 per share; 3,000,000 shares authorized; 298,000
shares of Series 1 outstanding ........................................ 6 6
Common Stock, $.02 par value per share, 60,000,000 shares authorized;
11,893,000 shares outstanding; 13,217,000 shares outstanding as
adjusted(1) ........................................................... 237 264
Additional paid-in capital ............................................ 115,729 122,163
Deferred compensation ................................................. (209) (209)
Accumulated deficit since inception ................................... (103,052) (103,052)
---------- ----------
Total Shareholders' equity ........................................ 12,711 19,172
---------- ----------
Tota1 capitalization ...................................... $ 3,920 $ 20,381
========== ==========
</TABLE>
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(1) Does not include (i) 330,867 shares of Common Stock reserved for issuance
upon exercise of the Warrants; (ii) 650,000 shares of Common Stock
reserved for issuance upon exercise of outstanding warrants; (iii)
2,985,000 shares of Common Stock reserved for issuance upon exercise of
outstanding stock options; (iv) 46,318 shares of Common Stock reserved
for issuance upon the conversion of the 9 3/4% Convertible Subordinated
Debentures; and (v) 338,909 shares of Common Stock reserved for issuance
upon conversion of the $2.4375 Convertible Exchangeable Preferred Stock,
Series 1.
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<PAGE> 11
SELLING SECURITY HOLDERS
The following table provides the names of the Selling Security Holders
and the number of Securities being offered by each of them.
<TABLE>
<CAPTION>
SECURITIES OFFERED
----------------------
SELLING SECURITY HOLDERS SHARES (1) WARRANTS
------------------------ ---------- --------
<S> <C> <C>
Ardsley Advisory Partners (2) 781,250 625,000
Sam Oracle Fund, Inc 76,838 61,471
Quasar International Partners C.V 93,750 75,000
Oracle Partners, L.P 282,500 226,000
Oracle Institutional Partners, L.P 17,500 14,000
State of Oregon Stock Growth Fund 187,500 150,000
Viking Medical Ventures Limited 62,500 50,000
Ivy Management Inc. for Ivy Emerging
Growth Fund 28,750 23,000
Ivy Management Inc. for Universal U.S
Emerging Growth Fund 96,250 23,000
Framlington Unit Management Limited A/C Health
Fund 20,000 16,000
Selina W. Hewlett 7,500 6,000
</TABLE>
---------------
(1) Includes Shares issuable upon exercise of the Warrants.
(2) Assuming the sale of all the Shares offered by Ardsley Advisory Partners
("Ardsley"), Ardsley will hold approximately 9.5% of the Company's
outstanding stock.
After completion of this offering, assuming all the Shares being
offered are sold, none of the Selling Security Holders, other than Ardsley, will
own any shares of Common Stock.
No Selling Security Holder has held any position, office or other
material relationship with the Company or any of its affiliates within the past
three years.
The Company sold 1,323,471 Units, each Unit consisting of one share of
Common Stock and one Warrant to purchase one-quarter of one share of Common
Stock, to the Selling Security Holders in private transactions in April 1995.
The Company anticipates that the net proceeds from the sale of the Units will be
used to fund research and development efforts, losses, working capital
requirements relating to the development and commercialization of the Company's
products and programs, and for other general corporate purposes. The Shares,
including the 330,867 shares of Common Stock underlying the Warrants, and the
Warrants are registered hereunder. This Prospectus covers not only the resale of
shares to be issued upon exercise of the Warrants by the Selling Security
Holders, but also the issuance of shares upon exercise of the Warrants by
subsequent purchasers of the Warrants. All the
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<PAGE> 12
Securities being offered by the Selling Security Holders were acquired by them
from NeoRx in private transactions pursuant to individual purchase agreements
dated as of April 18, 1995 at a gross purchase price per Unit of $5.3125. UBS
Securities Inc. and Vector Securities International, Inc. acted as co-placement
agents on behalf of NeoRx in connection with the sale of the Units by NeoRx to
the Selling Security Holders. In consideration of the services provided by the
co-placement agents, NeoRx paid them an aggregate fee of 7% of the gross
purchase price.
Each Selling Security Holder has represented to the Company that it
purchased the Securities for investment, with no present intention of
distribution. However, in recognition of the fact that investors, even though
purchasing the Securities for investment, may wish to be legally permitted to
sell their securities when they deem appropriate, the Company has filed with the
Commission under the Securities Act the Registration Statement with respect to
the resale of the Securities from time to time in transactions in the
over-the-counter market through Nasdaq, in privately negotiated transactions,
through the writing of options on the Securities, or through a combination of
such methods of sale and has agreed to prepare and file such amendments and
supplements to the Registration Statement as may be necessary to keep the
Registration Statement effective for three years from its effective date.
PLAN OF DISTRIBUTION
The resale of the Securities by the Selling Security Holders may be
effected from time to time in transactions in the over-the-counter market
through Nasdaq, in privately negotiated transactions, through the writing of
options on the Securities, or through a combination of such methods of sale, at
fixed prices that may be changed, at market prices prevailing at the time of
sale, at prices relating to such prevailing market prices or at negotiated
prices. The Selling Security Holders may effect such transactions by selling the
Securities to or through broker-dealers, and such broker-dealers may receive
compensation in the form of discounts, concessions or commissions from the
Selling Security Holders and/or the purchasers of the Securities for whom such
broker-dealers may act as agents or to whom they may sell as principals, or both
(which compensation as to a particular broker-dealer may be in excess of
customary commissions). Any broker-dealer may act as a broker-dealer on behalf
of one or more of the Selling Security Holders in connection with the offering
of certain of the Securities by the Selling Security Holders. None of the
proceeds from the sale of the Securities by the Selling Security Holders will be
received by the Company. In addition, any of the Securities that qualify for
sale pursuant to Rule 144 promulgated under the Securities Act may be sold in
transactions complying with such Rule, rather than pursuant to this prospectus.
The Company has the right to suspend use of this Prospectus for a
discrete period of time upon the occurrence of certain events, including pending
corporate developments.
The Selling Security Holders and any broker-dealers who act in
connection with the sale of the Securities hereunder may be deemed to be
"underwriters" within the meaning of Section 2(11) of the Securities Act, and
any commissions received by them and profit on any resale of the Securities as
principal might be deemed to be underwriting discounts and commissions under the
Securities Act. The Company has agreed to bear all expenses (other than selling
commissions and fees and expenses of counsel and other advisers to the Selling
Security Holders) in connection with the registration and sale of the Securities
being offered by the Selling Security Holders. The Company has agreed to
indemnify the Selling Security Holders against certain liabilities, including
liabilities under the Securities Act.
There can be no assurance that the Selling Security Holders will sell
any or all of the Securities offered by them hereunder.
DESCRIPTION OF THE WARRANTS
The Company sold 1,323,471 Units, each Unit consisting of one share of
Common Stock and one Warrant to purchase one-quarter of one share of Common
Stock, to the Selling Security Holders in private transactions in April 1995.
Every four Warrants entitle the registered holder thereof to purchase one share
of Common Stock at a price of $5.3125 (the "Stock Purchase Price"). The Warrants
will be exercisable from October 25, 1995 through April 25, 1998.
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<PAGE> 13
The Stock Purchase Price and, in some cases, the number of shares of
Common Stock issuable upon exercise of the Warrants will be appropriately
adjusted in the event of stock splits, stock combinations, rights offerings or
stock or other dividends involving the Common Stock. Fractional shares will not
be issued upon exercise of the Warrants and, in lieu thereof, a cash adjustment
based on the fair market value of the Common Stock as reported on the Nasdaq
National Market (or as reported on a national securities exchange, if
applicable) on the date of exercise will be made.
In case of any reclassification or capital reorganization, or in case
of any consolidation or merger of NeoRx with or into another corporation or any
sale, lease or transfer to another corporation of all or substantially all the
assets of NeoRx, the holder of each of the outstanding Warrants will have the
right, upon subsequent exercise of a Warrant, to purchase the kind and amount of
shares of stock or other securities and property receivable upon such
reclassification, capital reorganization, consolidation, merger, sale, lease or
transfer by a holder of the number of shares of Common Stock that might have
been received upon the exercise of such Warrant immediately prior thereto, and
the Stock Purchase Price will be appropriately adjusted. The Warrants do not
confer on the holder any voting or preemptive rights, or any other rights as a
stockholder of NeoRx.
The Warrants may be exercised in whole or in part by the surrender of
the Warrants to the Company at the principal office of First Interstate Bank of
Washington, N.A. in Seattle, Washington or at the principal office of the
Company in Seattle, Washington, with the form of election to exercise set forth
on the back of the Warrant certificate duly completed and signed, and
accompanied by cash or a cashier's check (or by bank wire transfer of
immediately available funds) in the amount of the Stock Purchase Price
multiplied by the number of shares of Common Stock to be acquired pursuant to
such exercise.
DESCRIPTION OF CAPITAL STOCK
The Company is authorized to issue 60,000,000 shares of Common Stock,
$.02 par value per share, and 3,000,000 shares of Series Preferred Stock, $.02
par value per share.
COMMON STOCK
The holders of Common Stock are entitled to one vote per share for each
share held of record on all matters submitted to a vote of Security Holders,
except that in elections of directors shareholders are entitled to cumulate
votes by multiplying the number of votes they are entitled to cast by the number
of directors for whom they are entitled to vote and cast the product for a
single candidate or distribute the product among two or more candidates. The
holders of Common Stock are entitled to receive ratably such dividends as are
declared by the Company's Board of Directors out of funds legally available
therefor. In the event of a liquidation, dissolution or winding up of the
Company, holders of Common Stock have the right to a ratable portion of assets
remaining after payment of liabilities and the liquidation preferences of any
outstanding shares of Series Preferred Stock. The holders of Common Stock have
no preemptive rights or rights to convert their Common Stock into any other
securities and are not subject to future calls or assessments by the Company.
All outstanding shares of Common Stock are, and the shares issuable upon
conversion of the Series Preferred Stock, upon conversion of debentures upon
issuance and exchange, and upon exercise of the Warrants will be, fully paid and
nonassessable. At March 31, 1994, there were approximately 11.9 million shares
of Common Stock outstanding held of record by approximately 1,100 holders.
TRANSFER AGENT
The transfer agent and registrar for the Common Stock is First
Interstate Bank of Washington, N.A.
SERIES PREFERRED STOCK
The Company is authorized to issue 3,000,000 shares of Series Preferred
Stock, par value $.02 per share, of which 298,000 shares of its $2.4375
Convertible Exchangeable Preferred Stock, Series 1 (the "Preferred Stock"), is
outstanding. If declared by the Company's Board of Directors, holders of
Preferred Stock are entitled to receive an
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<PAGE> 14
annual cash dividend of $2.4375 per share, payable on June 1 and December 1.
Dividends are cumulative. Each share of Preferred Stock is convertible into
approximately 1.14 shares of Common Stock, subject to adjustment in certain
events. The Preferred Stock is redeemable at the Company's option at certain
redemption prices, initially $27.44 per share, reducing to $25.00 per share by
1999. The holders of Preferred Stock have no voting rights, except in limited
circumstances. The Board of Directors may, without further action by the
Company's shareholders, issue additional Series Preferred Stock in one or more
series and fix all the rights and preferences thereof, including dividend
rights, dividend rates, conversion rights, voting rights, terms of redemption,
redemption price or prices, liquidation preferences and the number of shares
constituting any series or the designations of such series.
ANTITAKEOVER PROVISIONS
Certain provisions of the Company's Restated Articles of Incorporation
and Restated Bylaws, as well as the Washington Business Corporation Act, could
discourage a third party from attempting to acquire, or make it more difficult
for a third party to acquire, control of the Company without approval of the
Company's Board of Directors. Such provisions could also limit the price that
certain investors might be willing to pay in the future for shares of Common
Stock. Certain of such provisions allow the Board of Directors to authorize the
issuance of preferred stock with rights superior to those of the Common Stock.
The rights of the holders of Common Stock will be subject to, and may be
adversely affected by, the rights of holders of any Series Preferred Stock
issued in the future. The issuance of additional Series Preferred Stock, while
providing desirable flexibility in connection with possible acquisitions and
other corporate purposes, could make it more difficult for a party to acquire,
or discourage a party from acquiring, a majority of the outstanding voting stock
of the Company. The Company is also subject to the provisions of Chapter 23B.19
of the Washington Business Corporation Act, which generally prohibits any
"significant business transactions" within five years of the date a person
acquires 10% or more of the outstanding voting shares of a Washington
corporation unless the transaction or the acquisition is approved prior to the
acquisition date by a majority of a corporation's then board of directors. In
addition, the Company is subject to the "fair price" provisions of Chapter
23B.17 of the Washington Business Corporation Act, which generally prohibits
"interested shareholder transactions" (such as a merger, sale of assets or
liquidation) with a person who beneficially owns 20% or more of a corporation's
outstanding voting securities, unless approved by a majority vote of
disinterested directors or a two-thirds vote of disinterested shareholders.
LEGAL MATTERS
The validity of the Securities being offered hereby has been passed
upon for the Company by Perkins Coie, 1201 Third Avenue, 40th Floor, Seattle,
Washington.
EXPERTS
The audited financial statements incorporated by reference in this
Prospectus and elsewhere in the Registration Statement have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect thereto, and are incorporated by reference herein in
reliance upon the authority of said firm as experts in giving said reports.
-12-
<PAGE> 15
================================================================================
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFERING HEREIN CONTAINED AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR THE SELLING SECURITY HOLDERS. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE
SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE AN OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF.
--------------------
<TABLE>
<CAPTION>
PAGE
<S> <C>
Available Information....................... 2
Incorporation of Certain Documents
by Reference............................. 2
Risk Factors................................ 3
Dividends................................... 7
Capitalization.............................. 8
Selling Security Holders.................... 9
Plan of Distribution........................ 10
Description of the Warrants ................ 10
Description of Capital Stock ............... 11
Legal Matters............................... 12
Experts..................................... 12
</TABLE>
================================================================================
================================================================================
NEORX
CORPORATION
1,654,338 Shares of
Common Stock
1,323,471 Warrants to
Purchase Common Stock
P R O S P E C T U S
__________, 1995
===============================================================================
<PAGE> 16
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 16. EXHIBITS
4.1 Specimen Warrant Certificate*
4.2 Form of Purchase Agreement*
5.1 Opinion of Perkins Coie regarding legality of the securities*
23.1 Consent of Arthur Andersen LLP (contained on page II-3)
23.2 Consent of Perkins Coie (contained in the opinion filed as Exhibit
5.1 hereto)*
24.1 Power of Attorney (contained on signature page)*
----------------
*Previously filed.
II-1
<PAGE> 17
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this amendment to
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Seattle, State of Washington, on July 31, 1995.
NEORX CORPORATION
By /s/ Paul G. Abrams
-----------------------------------------------
Paul G. Abrams
President, Chief Executive Officer and Director
Pursuant to the requirements of the Securities Act of 1933, this
amendment to registration statement has been signed by the following persons on
the 31st day of July, 1995 in the capacities indicated.
<TABLE>
<CAPTION>
SIGNATURE Title
--------- -----
<S> <C>
/s/ Paul G. Abrams President, Chief Executive Officer and Director
---------------------------
Paul G. Abrams
/s/ Robert M. Littauer Senior Vice President, Chief Financial Officer
--------------------------- and Treasurer
Robert M. Littauer
Fred B. Craves* Chairman of the Board
---------------------------
Fred B. Craves
James G. Andress* Director
---------------------------
James G. Andress
Jack L. Bowman* Director
---------------------------
Jack L. Bowman
Lawrence H.N. Kinet* Director
---------------------------
Lawrence H.N. Kinet
Carl-Heinz Pommer* Director
---------------------------
Carl-Heinz Pommer
*By /s/ Robert M. Littauer
------------------------
Robert M. Littauer
Attorney-in-Fact
</TABLE>
<PAGE> 18
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the incorporation by
reference in this amendment to registration statement of our report dated
February 22, 1995 incorporated by reference in NeoRx Corporation's Form 10-K
for the year ended December 31, 1994 and to all references to our Firm included
in this registration statement.
July 31, 1995
Arthur Andersen LLP
II-3
