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As filed with the Securities and Exchange Commission on August 14, 2000
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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NEORX CORPORATION
(Exact name of registrant as specified in its charter)
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WASHINGTON 91-1261311
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(State or other jurisdiction of incorporation (I.R.S. Employer Identification
or organization) Number)
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410 WEST HARRISON STREET
SEATTLE, WASHINGTON 98119-4007
(206) 281-7001
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
RICHARD L. ANDERSON
PRESIDENT AND CHIEF OPERATING OFFICER
NEORX CORPORATION
410 WEST HARRISON STREET
SEATTLE, WASHINGTON 98119-4007
(206) 281-7001
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copies to:
FAITH M. WILSON
PERKINS COIE LLP
1201 THIRD AVENUE, SUITE 4800
SEATTLE, WASHINGTON 98101-3099
(206) 287-3237
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Approximate date of commencement of proposed sale to the public: AS SOON
AS PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any 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 of 1933, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act of 1933, 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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CALCULATION OF REGISTRATION FEE
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Title of Each Class Proposed Maximum Proposed Maximum
of Securities to Be Amount to be Aggregate Offering Per Share Amount of
Registered Registered (1)(2) Price (3) Offering Price (3) Registration Fee
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Common Stock, $.02 par 150,000 shares $16.91 $2,536,500 $670.00
value .................
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(1) All 150,000 shares registered pursuant to this registration statement
are to be offered by the selling shareholder.
(2) Includes an indeterminate number of additional shares of common stock
as may from time to time be issuable by reason of stock splits,
dividends and similar transactions, which shares are registered
hereunder pursuant to Rule 416 under the Securities Act of 1993, as
amended.
(3) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933 on the basis
of the average of the high and low selling prices of the Common Stock
on August 9, 2000, as reported on the Nasdaq National Market.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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150,000 SHARES
NEORX CORPORATION
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COMMON STOCK
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Redington, Inc., the selling shareholder, is offering to sell up to
150,000 shares of NeoRx Corporation common stock with this prospectus. NeoRx
Corporation will not receive any of the proceeds from sales of these shares by
the selling shareholder.
The selling shareholder acquired in a private placement transaction
exempt from the registration requirements of federal securities laws a warrant
to purchase, directly from us, 150,000 shares of NeoRx common stock. We are
required to register the shares of common stock underlying the warrant under the
terms of the Engagement Agreement dated as of October 14, 1999, between us and
the selling shareholder. The selling shareholder can use this prospectus to sell
to other purchasers some or all of the shares of common stock it will receive by
exercising the warrant.
Our common stock is traded on the Nasdaq National Market under the symbol
"NERX." On August 9, 2000, the last sale price of the common stock, as reported
on the Nasdaq National Market, was $16.75 per share.
The selling shareholder may exercise the warrant and sell its shares of
common stock from time to time on the Nasdaq National Market or otherwise. The
selling shareholder may sell the shares received upon exercise of the warrant at
prevailing market prices or at prices negotiated with purchasers. The selling
shareholder will be responsible for any commissions or discounts due to brokers
or dealers. The amount of those commissions or discounts cannot be known now
because they will be negotiated at the time of the sales. We will pay all other
offering expenses.
BEFORE BUYING ANY SHARES YOU SHOULD READ THE DISCUSSION OF MATERIAL RISKS
OF INVESTING IN COMMON STOCK IN "RISK FACTORS" BEGINNING ON PAGE 1.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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The date of this Prospectus is , 2000
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TABLE OF CONTENTS
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RISK FACTORS.......................................................................................1
FORWARD-LOOKING STATEMENTS.........................................................................6
WHERE YOU CAN FIND MORE INFORMATION................................................................7
INCORPORATION OF INFORMATION WE FILE WITH THE SEC..................................................7
USE OF PROCEEDS....................................................................................8
DIVIDEND POLICY....................................................................................8
SELLING SHAREHOLDER................................................................................8
PLAN OF DISTRIBUTION..............................................................................10
VALIDITY OF COMMON STOCK..........................................................................11
EXPERTS...........................................................................................11
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WE HAVE NOT AUTHORIZED ANY PERSON TO GIVE YOU ANY INFORMATION OR TO MAKE
ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS. YOU SHOULD
NOT RELY ON ANY INFORMATION OR REPRESENTATIONS OTHER THAN THIS PROSPECTUS. THIS
PROSPECTUS IS NOT AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY
SECURITIES OTHER THAN THE COMMON STOCK. IT IS NOT AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY SECURITIES IF THE OFFER OR SOLICITATION WOULD BE
UNLAWFUL. THE AFFAIRS OF NEORX CORPORATION MAY HAVE CHANGED SINCE THE DATE OF
THIS PROSPECTUS. YOU SHOULD NOT ASSUME THAT THE INFORMATION IN THIS PROSPECTUS
IS CORRECT AT ANY TIME SUBSEQUENT TO ITS DATE.
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RISK FACTORS
IN ADDITION TO THE OTHER INFORMATION CONTAINED IN THIS PROSPECTUS, YOU
SHOULD CAREFULLY READ AND CONSIDER THE FOLLOWING RISK FACTORS BEFORE PURCHASING
OUR COMMON STOCK. IF ANY OF THE FOLLOWING RISKS ACTUALLY OCCUR, OUR BUSINESS,
FINANCIAL CONDITION AND RESULTS OF OPERATIONS COULD BE MATERIALLY ADVERSELY
AFFECTED. IN SUCH CASE, THE TRADING PRICE OF OUR COMMON STOCK COULD DECLINE, AND
YOU MAY LOSE ALL OR PART OF YOUR INVESTMENT.
WE EXPECT TO CONTINUE TO OPERATE AT A LOSS, AND WE MAY NEVER BECOME PROFITABLE
We have not been profitable since our inception on May 11, 1984, and we
cannot be certain that we will ever achieve and sustain profitability. To date,
we have been engaged in research and development activities and have not
generated any revenues from product sales. The process of developing our
products will require significant research and development, preclinical testing
and clinical trials, as well as regulatory approvals. We expect these
activities, together with our general and administrative expenses, to result in
operating losses for the foreseeable future. Our ability to achieve
profitability will depend, in part, on our ability to successfully complete
development of our proposed products and on our ability to successfully obtain
required regulatory approvals and manufacture and market our products. We do not
expect that any proposed product which is currently in research and development
will be commercially available for at least several years, if ever.
WE MAY NEED TO RAISE ADDITIONAL CAPITAL WHICH MAY NOT BE AVAILABLE
Based on our current operating plan, we believe that our working capital
will be sufficient to satisfy our capital requirements through at least the
third quarter of 2001. This belief is based on certain assumptions which may
prove to be incorrect. Substantial additional capital will be required for our
operations. We intend to seek additional financing, which may take the form of
public or private financings, including equity financings, which would be
dilutive to existing shareholders, and through other arrangements, including
relationships with corporate partners for the development of certain of our
products. We may not be able to obtain such additional capital or enter into
relationships with corporate partners on a timely basis, on favorable terms, or
at all. If adequate funds are not available, we may be required to delay, reduce
or eliminate expenditures for certain of our programs or products or to enter
into relationships with corporate partners to develop or commercialize products
or technologies that we would otherwise seek to develop or commercialize
independently.
OUR POTENTIAL PRODUCTS MUST UNDERGO RIGOROUS CLINICAL TESTING AND REGULATORY
APPROVALS, WHICH COULD SUBSTANTIALLY DELAY OR PREVENT US FROM MARKETING ANY
PRODUCTS
Before obtaining regulatory approvals for the commercial sale of any of
our proposed products, the products will be subjected to extensive preclinical
and clinical testing to demonstrate their safety and efficacy in humans. Results
of initial preclinical and clinical testing of products under development are
not necessarily indicative of results that will be obtained from subsequent or
more extensive preclinical and clinical testing. Furthermore, we cannot be
certain that clinical trials of products under development will be completed or
will demonstrate the safety and efficacy of such products at all, or to the
extent necessary to obtain regulatory approvals. Companies in the biotechnology
industry have suffered significant setbacks in advanced clinical trials, even
after achieving promising results in earlier trials. The failure to adequately
demonstrate the safety and efficacy of a therapeutic product under development
could delay or prevent regulatory approval of such product.
The rate of completion of clinical trials depends on, among other
factors, the enrollment of patients. Patient enrollment is a function of many
factors, including the size of the patient population, the proximity of patients
to clinical sites, the eligibility criteria for the study and the existence of
competitive clinical trials. Difficulty attaining planned patient enrollment in
our current clinical trials or future clinical trials may result in increased
costs, program delays or both.
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WE MAY NOT BE ABLE TO OBTAIN GOVERNMENT APPROVAL IN A TIMELY MANNER TO MARKET
AND SELL OUR POTENTIAL PRODUCTS OR APPROVAL MAY BE WITHDRAWN
The manufacture and marketing of our proposed products and our research
and development activities are subject to regulation for safety, efficacy and
quality by numerous government authorities in the United States and other
countries. Clinical trials, manufacturing, and marketing are subject to the
rigorous testing and approval processes of the U.S. Food and Drug
Administration, commonly referred to as the FDA, and equivalent foreign
regulatory authorities. Clinical trials and regulatory approvals can take a
number of years to accomplish and require the expenditure of substantial
resources. It may not be possible to start or successfully complete clinical
trials within any specified time period. Delays in obtaining approvals can occur
for a number of reasons, including our failure to obtain necessary supplies of
finished products, monoclonal antibodies or other materials or the failure to
attract a sufficient number of available patients to support the claims
necessary for regulatory approvals.
The FDA approval process is typically lengthy and expensive, and approval
is never certain. Because of the risks and uncertainties in biochemical
development, our potential products could take a significantly longer time to
gain regulatory approvals than we expect or may never gain FDA approval. If we
do not receive these necessary approvals from the FDA, we will not be able to
generate substantial revenues and will not become profitable. We may encounter
significant delays or excessive costs in our efforts to secure regulatory
approvals. FDA approvals may not be obtained on a timely basis, if at all, and
any approvals granted may cover less than all of the clinical indications for
which we sought approval or may contain significant limitations in the form of
warnings, precautions or contraindications with respect to conditions of use.
Delays in obtaining, or the imposition of limitations upon, FDA approvals would
adversely affect or prevent the marketing of products developed by us and our
ability to receive royalty or other product revenues. The manufacture and
marketing of our products would, after approval, be subject to continuing FDA
review, and later discovery of previously unknown problems with a product,
manufacturer or facility may result in restrictions, including potential
withdrawal of the product from the market. In addition, U.S. federal and state
agencies and congressional committees have expressed interest in further
regulation of biotechnology. We are unable to estimate the extent and impact of
regulation in the biotechnology field resulting from any future federal, state
or local legislation or administrative action.
For clinical investigation and marketing outside the United States, we
and our potential collaborative partners also are subject to foreign regulatory
requirements. The requirements governing the conduct of clinical trials, product
licensing, pricing and reimbursement vary widely among countries and can involve
additional testing. The time required to obtain approval may differ from that
required to obtain FDA approvals. The foreign regulatory approval processes
include all of the risks associated with obtaining FDA approvals set forth
above, and approval by the FDA does not ensure approval by the health
authorities of any other country.
WE ARE DEPENDENT ON SUPPLIERS FOR THE TIMELY DELIVERY OF MATERIALS AND SERVICES
AND WE HAVE EXPERIENCED, AND MAY EXPERIENCE IN THE FUTURE, INTERRUPTIONS IN
SUPPLY
We depend on the timely delivery from suppliers of certain materials and
services. In connection with our research, preclinical studies and clinical
trials, we periodically have experienced interruption in the supply of
Holmium-166 and monoclonal antibodies. Interruptions in these and other supplies
could occur in the future. We, together with our potential partners, will need
to develop sources for commercial quantities of Holmium-166 and Yttrium-90, the
bone seeking agent radionuclides used in our Skeletal Targeted Radiatherapy
(STR) products, for the proposed cancer therapeutic products and for the
antibody, streptavidin and clearing agent used in our PRETARGET(R) products. We
or our potential partners may be unable to develop such sources.
In February 2000, we engaged International Isotopes, Inc. to build a
manufacturing facility for our STR product for Phase III clinical trials.
International Isotopes will be responsible for all aspects of the manufacture of
STR, including process qualification, quality control, packaging and shipping,
from its Denton, Texas radiopharmaceutical facility. Should International
Isotopes be unable to perform its contractual responsibilities effectively, it
could have a material adverse effect on our business. In addition, we currently
have an arrangement with the University of Missouri research reactor facility
group (MURR) and ABC Labs to produce Holmium-166, a critical element utilized in
our STR product for Phase III clinical trials. MURR currently is responsible for
the manufacture of Holmium-166, including process qualification, quality
control, packaging and shipping, from its Columbia, Missouri reactor facility.
Should MURR be unable to perform these
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responsibilities effectively, it could have a material adverse effect on our
business. We intend to move forward to negotiate a long-term supply contract
with MURR. If we are unable to negotiate a long-term contract in a timely
fashion upon satisfactory terms, or if MURR is unable or unwilling to perform
its services under such contract in a satisfactory manner, our business likewise
could be adversely affected.
IF WE FAIL TO NEGOTIATE AND MAINTAIN COLLABORATIVE ARRANGEMENTS WITH THIRD
PARTIES, OUR MANUFACTURING, SALES AND MARKETING ACTIVITIES MAY BE DELAYED OR
REDUCED
We have no experience in commercial manufacturing, sales, marketing or
distribution. In most cases, our strategy for commercialization of our potential
products requires entering into various arrangements with corporate
collaborators, licensors, licensees and others to manufacture, distribute and
market such products. In addition, we rely on collaborative arrangements with
third parties to conduct necessary clinical trials outside of the United States.
As a result, we depend on the successful performance of third parties. Although
we believe that parties to our existing and any future arrangements will have an
economic incentive to perform for us effectively, their activities will not be
within our control.
We cannot assure you that we will be successful in maintaining our
existing relationships or that we will be able to negotiate additional
collaborative arrangements in the future. The absence, suspension or termination
of current or future relationships with collaborative partners could have a
material adverse effect on the development of our business, financial condition
and results of operations. In the biotechnology industry, termination of
relationships, for any reason, has been known to cause material adverse impacts
on a company's share price.
UNCERTAINTIES REGARDING HUMAN IMMUNE RESPONSE TO FOREIGN PROTEINS MAY LIMIT THE
EFFECTIVENESS OF OUR PROPOSED CANCER THERAPY PRODUCTS
We plan to use monoclonal antibodies coupled to streptavidin (a protein
of bacterial origin) in our PRETARGET(R) cancer therapy products. These
molecules appear as foreign proteins to the human immune system, which develops
its own antibody in response. We plan to use humanized antibodies, where needed,
to minimize the "human anti-mouse antibody" (HAMA) response which otherwise
might restrict the number of doses that can be safely or effectively
administered, thus limiting the product's efficacy. The "human anti-streptavidin
antibody" (HASA) response may also limit the number of doses. We believe that
modifying streptavidin may reduce HASA. Although we may utilize humanized
antibodies and are modifying streptavidin, we cannot be certain that either
would reduce the extent to which HASA and HAMA may limit the effectiveness of
our cancer therapy products.
WE FACE SUBSTANTIAL COMPETITION IN THE DEVELOPMENT OF CANCER THERAPIES AND MAY
NOT BE ABLE TO SUCCESSFULLY COMPETE AND OUR POTENTIAL PRODUCTS MAY BE RENDERED
OBSOLETE BY RAPID TECHNOLOGICAL CHANGE
The competition for development of cancer therapies is intense. There are
numerous competitors developing products to treat each of the diseases for which
we are seeking to develop products. Some competitors have adopted product
development strategies targeting cancer cells with monoclonal antibodies. Many
emerging companies, including but not limited to IDEC Pharmaceuticals, Cytogen
Corp. and Coulter Pharmaceuticals, have corporate partnership arrangements with
large, established companies to support research, development and
commercialization efforts of products that may be competitive with those which
we are developing. In addition, a number of established pharmaceutical
companies, including, but not limited to SmithKline Beecham, Nycomed Amersham,
Mallinkrodt, Inc. and Bristol-Myers Squibb, 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 treatment of cancer. Many of
our existing or potential competitors have or have access to substantially
greater financial, research and development, marketing and production resources
than we do and may be better equipped than us to develop, manufacture and market
competing products. Our competitors may have, or may develop and introduce, new
products that would render our technology and products under development less
competitive, uneconomical or obsolete.
We also expect to face increasing competition from universities and other
non-profit research organizations. These instructions carry out a significant
amount of research and development in the field of antibody-based technology.
These
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institutions are becoming increasingly more aware of the commercial value of
their findings and more active in seeking patent and other proprietary rights,
as well as licensing revenues.
OUR SUCCESS IS DEPENDENT UPON OUR ABILITY TO EFFECTIVELY PROTECT OUR PATENTS AND
PROPRIETARY RIGHTS, WHICH WE MAY NOT BE ABLE TO DO
The patent position of biotechnology firms is generally highly uncertain
and involves complex legal and factual questions. Currently, no consistent
policy has emerged regarding the breadth of claims allowed in biotechnology
patents. Products and processes important to us are subject to this uncertainty.
Accordingly, we cannot be certain that our patent applications will result in
additional patents being issued or that, if issued, patents will afford
protection against competitors with similar technology. We cannot be certain
that any patents issued to us will not be infringed by or designed around by
others or that others will not obtain patents that we would need to license or
design around. Moreover, the technology applicable to our products is developing
rapidly. Research institutes, universities and biotechnology companies,
including our 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 ours. The
scope and validity of such patents, the extent to which we 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, they
may not be available on commercially reasonable terms, if at all. We also rely
on unpatented proprietary technology. Others may independently develop
substantially equivalent proprietary information and techniques or gain access
to our proprietary technology or disclose such technology. We may not be able to
meaningfully protect our rights in such unpatented proprietary technology.
PRODUCT LIABILITY CLAIMS IN EXCESS OF THE AMOUNT OF OUR INSURANCE WOULD
ADVERSELY AFFECT OUR FINANCIAL CONDITION
The testing, manufacturing, marketing and sale of the human healthcare
products which we have under development entail an inherent risk that product
liability claims will be asserted against us. Although we are insured against
such risks up to a $10 million annual aggregate limit in connection with
clinical trials and commercial sales of our products under development, we
cannot be certain that our present product liability insurance is adequate. A
product liability claim in excess of our insurance coverage could have a
material adverse effect on us and may prevent us from obtaining product
liability insurance in the future on affordable terms. In addition, we cannot be
certain that product liability coverage will continue to be available in
sufficient amounts or at an acceptable cost.
OUR USE OF RADIOACTIVE AND OTHER HAZARDOUS MATERIALS EXPOSES US TO THE RISK OF
MATERIAL ENVIRONMENTAL LIABILITIES, AND WE MAY INCUR SIGNIFICANT ADDITIONAL
COSTS TO COMPLY WITH ENVIRONMENTAL LAWS IN THE FUTURE
Our research and development and clinical manufacturing processes involve
the controlled use of small amounts of hazardous and radioactive materials. As a
result, we are subject to foreign, 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 our research and development activities and our
manufacturing of clinical trial materials. Although we believe that our safety
procedures for handling and disposing of such materials comply with the
standards prescribed by such laws and regulations, we may be required to incur
significant costs to comply with environmental and health and safety regulations
in the future. Further, the risk of accidental contamination or injury from
hazardous and radioactive materials cannot be completely eliminated. In the
event of such an accident, we could be held liable for any resulting damages,
and any such liability could exceed our resources.
EVEN IF WE BRING PRODUCTS TO MARKET, CHANGES IN HEALTH CARE REIMBURSEMENT COULD
ADVERSELY AFFECT OUR ABILITY TO EFFECTIVELY PRICE OUR PRODUCTS OR OBTAIN
ADEQUATE REIMBURSEMENT FOR SALES OF OUR PRODUCTS
The levels of revenues and profitability of pharmaceutical companies may
be affected by the continuing efforts of government 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
we expect that there will continue to be, a number of federal and state
proposals to implement similar governmental controls. It is uncertain what
legislative proposals will be adopted or what actions federal,
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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
statutory change, market forces are changing the healthcare sector. We cannot
predict the effect healthcare reforms may have on our business, and we cannot be
certain that any such reforms will not have a material adverse effect on us.
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 our
potential products, our ability to commercialize our products under development
may be adversely affected. In addition, both in 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 we succeed in bringing one
or more products to market, we cannot be certain that these products will be
considered cost-effective and that reimbursement to the consumer will be
available or will be sufficient to allow us to sell our products on a
competitive or profitable basis.
THE LOSS OF KEY EMPLOYEES COULD ADVERSELY AFFECT OUR OPERATIONS
Our success will depend in part on the efforts of certain key scientists
and management personnel. Because of the specialized nature of our business, our
ability to maintain our competitive position will depend in part on our ability
to attract and retain qualified personnel. Competition for such personnel is
intense. We cannot be certain that we 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 a material adverse effect on our business. We
do not maintain key person insurance on any of our scientists or management
personnel.
OUR STOCK PRICE IS VOLATILE AND, AS A RESULT, YOU COULD LOSE SOME OR ALL OF YOUR
INVESTMENT
There has been a history of significant volatility in the market prices
of securities of pharmaceutical and biotechnology companies, including our
common stock, and it is likely that the market price of our common stock will
continue to be highly volatile. Announcements by us or our competitors
concerning acquisitions, technological innovations or new commercial products,
results of clinical trials, developments concerning patents, proprietary rights
and potential infringement, and the expense and time associated with obtaining
government approvals for marketing of our products may have a significant effect
on our business and on the relative market price of our common stock. In
addition, public concern about the safety of the products we develop, comments
by securities analysts, and general market conditions may have a significant
effect on the market price of our common stock. The realization of any of these
risks could have a material adverse impact on the market price of our common
stock and may result in a loss of some, or even all of your investment.
In the past, securities class action litigation has often been brought
against companies following periods of volatility in their stock prices. We may
in the future be the target of similar litigation. Securities litigation could
result in substantial costs and divert our management's time and resources,
which could cause our business to suffer.
CERTAIN PROVISIONS IN OUR RESTATED ARTICLES OF INCORPORATION AND WASHINGTON
STATE LAW COULD DISCOURAGE A CHANGE OF CONTROL OF NEORX
Our restated articles of incorporation authorize our board of directors
to issue up to 3,000,000 shares of preferred stock and to determine the price,
rights, preference, privileges and restrictions, including voting rights, of
those shares without any further vote or action by our shareholders. The
issuance of preferred stock could have the effect or delaying, deferring or
preventing a change of control of NeoRx, even if this change would benefit our
shareholders. In addition, the issuance of preferred stock may adversely affect
the market price of the common stock and the voting and other rights of the
holders of common stock.
We have adopted a shareholder' rights plan intended to protect the rights
of shareholders by deterring coercive or unfair takeover tactics. The board of
directors declared a dividend to holders of our common stock of one preferred
share purchase right for each outstanding share of the common stock. The right
is exercisable 10 days following the offer to purchase or acquisition of
beneficial ownership of 20% of the outstanding common stock by a person or group
of affiliated persons. Each right entitles the registered holder, other than the
acquiring person or group, to purchase from NeoRx one-hundredth of one share of
Series A Junior Participating Preferred Stock at the price of $40, subject to
adjustment. The rights expire April 10, 2006. In lieu of exercising the right by
purchasing one one-hundredth of one share of Series A
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Preferred Stock, the holder of the right, other than the acquiring person or
group, may purchase for $40 that number of shares of our common stock having a
market value of twice that price.
Washington law imposes restrictions on some transactions between a
corporation and significant shareholders. Chapter 23B.19 of the Washington
Business Corporation Act prohibits a target corporation, with some exceptions,
from engaging in particular significant business transactions with an acquiring
person, which is defined as a person or group of persons that beneficially owns
10% or more of the voting securities of the target corporation, for a period of
five years after the acquisition, unless the transaction or acquisition of
shares is approved by a majority of the members of the target corporation's
board of directors prior to the acquisition. Prohibited transactions include,
among other things:
- a merger or consolidation with, disposition of assets to, or
issuance or redemption of stock to or from the acquiring person;
- termination of 5% or more of the employees of the target
corporation; or
- receipt by the acquiring person of any disproportionate benefit as
a shareholder.
A corporation may not opt out of this statute. This provision may have
the effect of delaying, deterring or preventing a change in control of NeoRx.
PROBLEMS RELATED TO THE YEAR 2000 ISSUE COULD ADVERSELY AFFECT OUR BUSINESS
Prior to January 1, 2000, we devoted substantial resources in an effort
to ensure that our proprietary software, the third-party software on which we
rely, and the underlying systems and protocols did not contain errors or defects
associated with Year 2000 date functions. Since January 1, 2000, we have not
experienced any disruption to our business as a result of any Year 2000 problems
or otherwise. If problems do arise, they could adversely affect our business.
FORWARD-LOOKING STATEMENTS
Any statement in this prospectus that is not a historical fact should be
considered a forward-looking statement. Forward-looking statements are based on
our current expectations, assumptions, estimates and projections about us and
our industry. When used in this prospectus, the words "expects," "anticipates,"
"estimates" and "intends" and similar expressions are intended to identify
forward-looking statements, but their absence does not mean that a statement is
not forward-looking. These forward-looking statements involve risks and
uncertainties. Our actual results could differ materially from those anticipated
in such forward-looking statements as a result of numerous factors, as more
fully described in "Risk Factors" and elsewhere in this prospectus. You should
not unduly rely on these forward-looking statements, which apply only as of the
date of this prospectus.
-6-
<PAGE> 11
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 room at 450 Fifth Street, N.W., Washington, DC 20549.
Please call the SEC at 1-800-SEC-0330 for further information on the public
reference room. The SEC maintains an Internet site at http://www.sec.gov that
contains reports, proxy and information statements, and other information,
regarding issuers, including us, that file documents with the SEC
electronically. You can also inspect our SEC filings at the offices of The
Nasdaq Stock Market, 1735 K Street, N.W., Washington DC 20006.
This prospectus is a part of a registration statement on Form S-3 that we
filed with the SEC with respect to the common stock offered by this prospectus.
This prospectus does not contain all the information that is in the registration
statement. We omitted certain parts of the registration statement as allowed by
the SEC. We refer you to the registration statement and its exhibits for further
information about us and the common stock offered by the selling shareholder.
INCORPORATION OF INFORMATION WE FILE WITH THE SEC
The SEC allows us to "incorporate by reference" the information we file
with it, which means that we can disclose important information to you by
referring to those documents. The information incorporated by reference is an
important 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 made with the SEC
under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934
until this offering is completed:
- our Annual Report on Form 10-K for the year ended December 31,
1999;
- our Quarterly Reports on Form 10-Q for the quarters ended March
31, 2000 and June 30, 2000; and
- our Proxy Statement for the 2000 Annual Meeting of Shareholders.
You may request a copy of these filings, at no cost, by writing to or
telephoning us at the address below. However, we will not provide copies of the
exhibits to these filings unless we specifically incorporated by reference the
exhibits in this prospectus.
Melinda G. Kile
Controller
NeoRx Corporation
410 West Harrison Street
Seattle, Washington 98119-4007
(206) 286-2501
-7-
<PAGE> 12
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of our common stock
offered in this prospectus.
DIVIDEND POLICY
We have never paid dividends on our common stock and do not anticipate
paying any cash dividends on our common stock in the foreseeable future.
SELLING SHAREHOLDER
We are registering all 150,000 shares covered by this prospectus on
behalf of Redington, Inc., the selling shareholder. We issued the selling
shareholder, in a private placement transaction, a warrant to purchase 150,000
shares of NeoRx Corporation common stock directly from us. We have registered
the shares to permit the selling shareholder and its pledgees, donees,
transferees or other successors in interest that receive their shares from the
selling shareholder as a gift, partnership distribution or another
nonsale-related transfer after the date of this prospectus to resell the shares
when they deem appropriate.
We issued the warrant to the selling shareholder in partial consideration
for investor relations services provided to us by the selling shareholder. The
selling shareholder has represented that it acquired the warrant, and will upon
exercise of the warrant acquire the shares, for investment and with no present
intention of distributing those shares. We agreed in the warrant to prepare and
file a registration statement to register the shares upon written demand of the
selling shareholder. Under the terms of the registration agreement between us
and the selling shareholder, we agreed to pay all expenses, other than fees and
expenses of any counsel or other experts engaged by the selling shareholder and
underwriting discounts and commissions and brokerage commissions and fees. The
selling shareholder delivered a written request for registration to us on July
11, 2000. Accordingly, in recognition of the fact that the selling shareholder,
even though it purchased the warrant and shares without a view to distribution,
may wish to exercise the warrant and be legally permitted to sell the shares
when it deems appropriate, we filed with the SEC a registration statement on
Form S-3. This prospectus is a part of that registration statement. We have also
agreed to prepare and file any amendments and supplements to the registration
statement as may be necessary to keep the registration statement effective until
the earlier of:
- October 15, 2001; or
- the date on which the shares offered in this prospectus may be
resold by the selling shareholder by reason of Rule 144 under the
Securities Act of 1933, as amended, or any other rule of similar
effect.
The following table sets forth the number of shares of common stock owned
beneficially by the selling shareholder before and after this offering and the
number of shares which may be offered pursuant to this prospectus. This
information is based on information provided by the selling shareholder. There
are currently no agreements, arrangements or understandings with respect to the
sale of any of the shares. The shares are being registered to permit public
secondary trading of the shares, and the selling shareholder may offer the
shares for resale from time to time.
-8-
<PAGE> 13
<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED PRIOR TO OFFERING OWNED AFTER OFFERING(1)
------------------------ NUMBER OF SHARES -----------------------
NAME NUMBER PERCENT(2) BEING OFFERED NUMBER PERCENT
---- ------ ---------- ------------- ------ --------
<S> <C> <C> <C> <C> <C>
Redington, Inc. 152,000 * 150,000 2,000 *
</TABLE>
----------
* Less than 1%
(1) Assumes the sale of all shares offered in this prospectus and no other
purchases or sales of our common stock.
(2) Applicable percentage of ownership is based on 23,573,579 shares of our
common stock outstanding on July 21, 2000.
-9-
<PAGE> 14
PLAN OF DISTRIBUTION
The common stock offered by this prospectus may be sold from time to time
by the selling shareholder, or by its pledgees, donees, transferees or other
successors in interest. We will pay all costs, expenses and fees in connection
with the registration of the common stock offered by this prospectus. The
selling shareholder must pay all brokerage commissions and similar selling
expenses, including fees and expenses of counsel to the selling shareholder,
relating to the sale of the shares. The selling shareholder may sell its shares
on the Nasdaq National Market or otherwise, at market prices or at negotiated
prices. It may sell shares by one or a combination of the following:
- a block trade in which a broker or dealer so engaged will attempt
to sell the shares as agent, but may position and resell a portion
of the block as principal to facilitate the transaction;
- purchases by a broker or dealer as principal and resale by the
broker or dealer for its account pursuant to this prospectus;
- an exchange distribution in accordance with the rules of an
exchange;
- ordinary brokerage transactions and transactions in which a broker
solicits purchasers; and
- in open-market transactions in reliance on Rule 144 under the
Securities Act of 1933, provided it meets the requirements of that
rule.
The selling shareholder may enter into hedging transactions with
broker-dealers in connection with distributions of the shares or otherwise. In
these transactions, broker-dealers may engage in short sales of the shares in
the course of hedging the positions they assume with the selling shareholder.
The selling shareholder also may sell shares short and redeliver the shares to
close out short positions. The selling shareholder may enter into option or
other transactions with broker-dealers which require the delivery to the
broker-dealer of the shares. The broker-dealer may then resell or otherwise
transfer the shares under this prospectus. The selling shareholder also may loan
or pledge the shares to a broker-dealer. The broker-dealer may sell the loaned
shares, or upon default the broker-dealer may sell the pledged shares under this
prospectus.
In effecting sales, brokers or dealers engaged by the selling shareholder
may arrange for other brokers or dealers to participate. Brokers or dealers will
receive commissions or discounts from the selling shareholder in amounts to be
negotiated prior to the sale. The selling shareholder and any broker-dealers
that participate in the distribution may be deemed to be "underwriters" within
the meaning of Section 2(11) of the Securities Act of 1933, and any proceeds or
commissions received by them, and any profits on the resale of shares sold by
broker-dealers, may be deemed to be underwriting discounts and commissions.
Because the selling shareholder may be deemed to be an underwriter, it will be
subject to the prospectus delivery requirements of the Securities Act of 1933.
In addition, any securities covered by this prospectus which qualify for sale
under Rule 144 promulgated under the Securities Act may be sold under Rule 144
rather than under this prospectus. The selling shareholder has advised us that
they it has not entered into any agreements, understandings or arrangements with
any underwriters or broker-dealers regarding the sale of the shares.
The selling shareholder may agree to indemnify any agent, dealer or
broker-dealer that participates in transactions involving shares of the common
stock against certain liabilities, including liabilities arising under the
Securities Act of 1933.
The shares will be sold only through registered or licensed brokers or
dealers if required under applicable state securities laws. In addition, in some
states the shares may not be sold unless they have been registered or qualified
for sale in the applicable state or an exemption from the registration or
qualification requirement is available and complied with.
-10-
<PAGE> 15
Under applicable rules and regulations under the Securities Exchange Act
of 1934, as amended, any person engaged in the distribution of the shares may
not simultaneously engage in market making activities with respect to our common
stock for a period of two business days prior to the commencement of the
distribution. In addition, the selling shareholder will be subject to applicable
provisions of the Exchange Act and the associated rules and regulations under
the Exchange Act, including Regulation M, which provisions may limit the timing
of purchases and sales of shares of our common stock by the selling shareholder.
We will make copies of this prospectus available to the selling shareholder and
have informed it of the need to deliver copies of this prospectus to purchasers
at or prior to the time of any sale of the shares.
We have the right, upon written notice to the selling shareholder, to
require the selling shareholder to suspend open market offers and sales of the
shares if our board of directors reasonably determines that there is a
significant business purpose for such suspension. We have agreed to give the
selling shareholder notice of any such suspension and to use our best efforts to
limit such suspensions to two 60-day periods in any 365-day period.
If the selling shareholder notifies us that a material arrangement has
been entered into with a broker-dealer for the sale of shares through a block
trade, special offering, exchange, distribution or secondary distribution or a
purchase by a broker or dealer, we will file a prospectus supplement, if
required by Rule 424 under the Securities Act of 1933, setting forth:
- the name of the selling shareholder and the participating
broker-dealers;
- the number of shares involved;
- the price at which the shares were sold;
- the commissions paid or discounts or concessions allowed to the
broker-dealers, where applicable;
- a statement to the effect that the broker-dealers did not conduct
any investigation to verify the information set out or
incorporated by reference in this prospectus; and
- any other facts material to the transaction.
VALIDITY OF COMMON STOCK
Certain legal matters in connection with the common stock offered by this
prospectus have been passed upon for us by Perkins Coie LLP, Seattle,
Washington.
EXPERTS
Our financial statements as of December 31, 1999 and 1998, and for each
of the years in the three-year period ended December 31, 1999 have been
incorporated by reference herein and in the registration statement in reliance
upon the report of KPMG LLP, independent certified public accountants,
incorporated by reference herein, and upon the authority of said firm as experts
in accounting and auditing.
-11-
<PAGE> 16
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses, other than
underwriting discounts payable, by the registrant in connection with the sale of
common stock being registered. All amounts are estimates except the SEC
registration fee and the Nasdaq National Market additional listing fee.
<TABLE>
<S> <C>
SEC registration fee $ 670
Legal fees and expenses $ 10,000
Accounting fees and expenses $ 5,000
Miscellaneous fees and expenses $ 2,500
----------
Total $ 18,170
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Sections 23B.08.500 through 23B.08.600 of the Washington Business
Corporation Act authorize a court to award, or a corporation's board of
directors to grant, indemnification to directors and officers on terms
sufficiently broad to permit indemnification under certain circumstances for
liabilities arising under the Securities Act of 1933, as amended (the
"Securities Act"). Article XIII of the registrant's restated articles of
incorporation and Section 12 of the registrant's bylaws provide for
indemnification of the registrant's directors, officers, employees and agents to
the maximum extent permitted by Washington law and provide the directors and
officers of the registrant also may be indemnified against liability they may
incur for serving in those capacities pursuant to a liability insurance policy
maintained by the registrant for such purpose.
Section 23B.08.320 of the Washington Business Corporation Act authorizes
a corporation to limit a director's liability to the corporation or its
shareholders for monetary damages for acts or omissions as a director, except in
certain circumstances involving intentional misconduct, knowing violations of
law or illegal corporate loans or distributions, or any transaction from which
the director personally receives a benefit in money, property or services to
which the director is not legally entitled. Article XII of the registrant's
restated articles of incorporation contains provisions implementing, to the
fullest extent permitted by Washington law, such limitations on a director's
liability to the registrant and its shareholders.
ITEM 16. EXHIBITS
4.1 Article V and Article VI of the Restated Articles of Incorporation
of NeoRx Corporation (incorporated herein by reference to Exhibit
3.1(e) of the Company's Form 10-K for the fiscal year ended
December 31, 1996)
4.2 Section 1 and Section 4 of the Restated Bylaws of NeoRx
Corporation (incorporated herein by reference to Exhibit 3.2 of
the Company's Form 10-K for the fiscal year ended December 31,
1997)
5.1 Opinion of Perkins Coie LLP, counsel to the registrant, regarding
the legality of the common stock
23.1 Consent of KPMG LLP, independent certified public accountants
23.2 Consent of Perkins Coie LLP (contained in the opinion filed as
Exhibit 5.1 hereto)
24.1 Power of attorney (contained on signature page)
<PAGE> 17
ITEM 17. UNDERTAKINGS
A. 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 to include any
material information with respect to the plan of distribution not previously
disclosed in this registration statement or any material change to such
information in this 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; and
(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.
B. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (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.
C. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such 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 of whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
D. The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
II-2
<PAGE> 18
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunder duly
authorized, in the City of Seattle, State of Washington, on the 26th day of July
2000.
NeoRx CORPORATION
/s/ Richard L. Anderson
---------------------------------------------
By: Richard L. Anderson, President and Chief
Operating Officer
POWER OF ATTORNEY
Each person whose individual signature appears below hereby authorizes
Richard L. Anderson and Paul G. Abrams, or either of them, as attorneys-in-fact
with full power of substitution, to execute in the name and on the behalf of
each person, individually and in each capacity stated below, and to file, any
and all amendments to this registration statement, including any and all
post-effective amendments, and any related Rule 462(b) registration statement
and any amendment thereto.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated below on the 26th day of July 2000.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ Fred B. Craves, Ph.D.
-------------------------------------
Fred B. Craves, Ph.D. Chairman of the Board
/s/ Paul G. Abrams, M.D., J.D.
------------------------------
Paul G. Abrams, M.D., J.D. Chief Executive Officer and Director
/s/ Jack L. Bowman
------------------------------------- Director
Jack L. Bowman
/s/ Alan A. Steigrod
------------------------------------- Director
Alan A. Steigrod
/s/ Carl S. Goldfischer, M.D.
------------------------------------- Director
Carl S. Goldfischer, M.D.
/s/ E. Rolland Dickson, M.D.
------------------------------------- Director
E. Rolland Dickson, M.D.
</TABLE>
II-3
<PAGE> 19
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number
<S> <C>
4.1 Article V and Article VI of the Restated Articles of
Incorporation of NeoRx Corporation (incorporated herein by
reference to Exhibit 3.1(e) of the Company's Form 10-K for
the fiscal year ended December 31, 1996)
4.2 Section 1 and Section 4 of the Restated Bylaws of NeoRx
Corporation (incorporated herein by reference to Exhibit 3.2
of the Company's Form 10-K for the fiscal year ended December
31, 1997)
5.1 Opinion of Perkins Coie LLP, counsel to the registrant, regarding the
legality of the common stock
23.1 Consent of KPMG LLP, independent certified public accountants
23.2 Consent of Perkins Coie LLP (contained in Exhibit 5.1)
24.1 Power of attorney (contained on signature page)
</TABLE>
II-4
