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As filed with the Securities and Exchange Commission on August 31, 2000
Registration No. 333-43712
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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NEORX CORPORATION
(Exact name of registrant as specified in its charter)
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WASHINGTON 91-1261311
(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.
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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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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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This prospectus relates to the public offering of up to 150,000 shares
of our common that will be issued to a current shareholder upon the
shareholder's exercise of a warrant.
The selling shareholder may sell the shares, when issued, from time to
time on the Nasdaq National Market at the prevailing market price or in
negotiated transactions. We will not receive any of the proceeds from the sale
of the shares.
Our common stock is traded on the Nasdaq National Market under the
symbol "NERX." On August 29, 2000, the last sales price of the common stock, as
reported on the Nasdaq National Market, was $17.50 per share.
SEE "RISK FACTORS" BEGINNING AT PAGE 3 TO READ ABOUT CERTAIN FACTORS YOU
SHOULD CONSIDER BEFORE BUYING SHARES OF OUR COMMON STOCK.
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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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WHERE YOU CAN FIND MORE INFORMATION.........................................1
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS...........................1
NEORX CORPORATION...........................................................2
RISK FACTORS................................................................3
USE OF PROCEEDS.............................................................9
SELLING SHAREHOLDER.........................................................9
PLAN OF DISTRIBUTION........................................................9
VALIDITY OF COMMON STOCK...................................................10
EXPERTS ...................................................................10
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YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. WE
HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION DIFFERENT FROM THAT
CONTAINED IN THIS PROSPECTUS. THE SELLING SHAREHOLDER IS OFFERING TO SELL, AND
IS SEEKING OFFERS TO BUY, SHARES OF OUR COMMON STOCK ONLY IN JURISDICTIONS WHERE
OFFERS AND SALES ARE PERMITTED. THE INFORMATION CONTAINED IN THIS PROSPECTUS IS
ACCURATE ONLY AS OF THE DATE OF THIS PROSPECTUS, REGARDLESS OF THE TIME OF
DELIVERY OF THIS PROSPECTUS OR OF ANY SALE OF OUR COMMON STOCK.
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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, NW, Washington, D.C. 20549.
Please call the SEC at 1-800-SEC-0330 for further information about 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, NW, Washington D.C. 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 of 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.
The SEC allows us to "incorporate by reference" the information we file
with the SEC, 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
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements. These statements
relate to future events or our future financial performance. In some cases, you
can identify forward-looking statements by terminology such as "may," "will,"
"should," "expect," "plan," "intend," "anticipate," "believe," "estimate,"
"predict," "potential," "propose" or "continue," the negative of these terms or
other terminology. These statements are only predictions. Actual events or
results may differ materially. In evaluating these statements, you should
specifically consider various factors, including the risks outlined in the Risk
Factors section below. These factors may cause our actual results to differ
materially from any forward-looking statement.
Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements. You should not place undue
reliance on our forward-looking statements, which apply only as of the date of
this prospectus. We are under no duty to update any of the forward-looking
statements after the date of this prospectus to conform these statements to
actual results or to changes in our expectations.
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NEORX CORPORATION
We are developing innovative products designed to provide improved,
cost-effective treatments for patients with cancer. We are in the process of
completing enrollment of U.S. Food and Drug Administration Phase I and Phase II
trials of our Skeletal Targeted Radiation (STR) product combined with
chemotherapy in patients with multiple myeloma. Multiple myeloma is a cancer
involving malignancy of plasma cells that are found in the bone marrow. STR uses
a targeting principle to deliver a form of radioactivity called homium-166, to
bone, where it is designed to destroy both tumor cells and normal cells in
the marrow. The patient then receives cells harvested from the patient prior to
exposure to treatment. Those reinfused cells are designed to repopulate the bone
marrow so that the patient can make normal red cells, white cells and platelets.
We believe that STR represents an important opportunity in cancer therapy to
deliver high doses of a toxic agent to the bone and marrow cavity without
simultaneously causing significant damage to organs outside the bone. We plan to
initiate a Phase III trial of our STR product for multiple myeloma later this
year. Prior to the end of 2000, we also expect to initiate Phase I trials of our
STR product for breast and prostate cancers that have spread to the bone.
We also are developing a proprietary PRETARGET(R) program to deliver
radiation therapy, and potentially other anti-cancer agents, to tumor sites.
This program uses so-called monoclonal antibody-based technology, which employs
antibodies to target cancer. Antibodies are proteins produced by certain white
blood cells in the body's immune system in response to foreign substances
(antigens), such as viruses, bacteria, toxins and specific types of cancer
cells. A monoclonal antibody is an antibody that comes from one original cell,
and its daughter cells are identical. Monoclonal antibodies, therefore, are
distinctive because each antibody molecule in a large batch is the same. Each
antibody produced to a different substance is unique and will bind only to a
single type of antigen. Cancer cells are thought to have antigens on their
surfaces in greater amounts than found on most normal tissues. Antibodies can be
made that recognize these more cancer-related antigens. We believe that
antibodies are potentially useful as "targeting vehicles" for the delivery of
therapeutic products to disease sites.
Our PRETARGET(R) technology is a means of using agents, such as
antibodies, to deliver therapeutic molecules to tumors. We believe that our
PRETARGET(R) program represents a safer and potentially more effective means of
delivering therapeutic molecules than other techniques. We believe that we have
established clinical proof-of-concept of the PRETARGET(R) technology in patients
with low-intermediate and high-grade lymphomas in a pilot Phase I trial.
Lymphomas are cancers of the lymph cells in the body. Phase I clinical trials
for patients with lymphoma are expected to begin by the end of this year.
Development of this lymphoma product is, in part, being sponsored through a peer
review Fast-Track Innovative Research Grant from the National Institutes of
Health. We also are developing PRETARGET(R) therapeutics for the treatment of
cancers of the lung, breasts, ovaries, colon, rectum and pancreas. Phase I
clinical trials for patients with pancreatic or colorectal cancers are expected
to begin in 2001.
Our principal executive offices are located at 401 West Harrison Street,
Seattle, Washington 98119-4007. Our telephone number is (206) 281-7001. We
maintain a World Wide Web site at www.neorx.com. Information contained on our
Web site does not constitute part of, nor is it incorporated by reference into,
this prospectus.
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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 formation in 1984, and we may
never achieve and sustain profitability. To date, we have been engaged only in
research and development activities and have not generated any revenues from
product sales. The process of developing our products requires significant
research and development, preclinical testing and clinical trials, as well as
numerous regulatory approvals. We do not anticipate that any of our proposed
products will be commercially available for several years, if ever. We expect to
incur operating losses for the foreseeable future.
WE WILL NEED TO RAISE ADDITIONAL CAPITAL, WHICH MAY NOT BE AVAILABLE
We will need substantial additional funds to continue our research and
development activities. We believe that our existing funds will be sufficient to
satisfy our financing requirements through at least the third quarter of 2001.
We intend to seek additional financing, which may take the form of public or
private financings, including equity financings that would be dilutive to
existing shareholders, and strategic alliances with third parties. We may not be
able to obtain such additional capital or enter into strategic relationships 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 programs or be forced to partner with third parties to develop or
commercialize products or technologies that we otherwise would have sought to
develop independently.
OUR POTENTIAL PRODUCTS MUST UNDERGO RIGOROUS CLINICAL TESTING AND REGULATORY
APPROVALS, WHICH COULD SUBSTANTIALLY DELAY OR PREVENT US FROM MARKETING ANY
PRODUCTS
Prior to securing required regulatory approvals for sale of our
potential products, we must conduct extensive preclinical and clinical tests to
demonstrate the safety and efficacy of such products in humans. Results of
initial preclinical and clinical tests are not necessarily indicative of results
that will be obtained from subsequent or more extensive preclinical and clinical
tests. Because our proposed products are based on new and unproven technologies,
we face the risk that any or all of our proposed products could prove to be
ineffective or unsafe, or be inferior to products marketed by others. Factors
such as delays in patient enrollment in our clinical trials, the discovery of
unacceptable side effects, or the development of disease resistance or other
physiological factors could cause us to interrupt, limit, delay or abort the
development or sale of our potential products. If we do not develop commercially
viable products and successfully bring them to market, we will be unable to
generate funds internally to support our operations.
WE MAY NOT BE ABLE TO OBTAIN GOVERNMENT APPROVAL IN A TIMELY MANNER TO
MANUFACTURE AND MARKET 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. The regulatory requirements governing the biotechnology industry are
uncertain and subject to change. We will not be able to market a product and
generate revenues unless we secure and retain all required regulatory approvals.
In the United States, 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. The FDA approval process is
typically lengthy and expensive, and approval is never certain. Because of the
risks and uncertainties of biochemical development, significant delays and
excessive costs in seeking FDA approvals are common. Such delays can result from
a variety of factors, including the unavailability of the products or the
inability to attract sufficient patient enrollment in clinical trials. 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. If
secured, FDA approvals may cover less than all of the clinical indications for
which such approvals initially were sought. FDA approvals also may contain
significant limitations in the form of warnings, precautions or
contraindications with respect to conditions of use. In addition, the later
discovery of previously unknown problems with a product or manufacturer may
result in restrictions, including potential withdrawal of the product from the
market. Delays in obtaining, our failure to obtain, or the imposition of
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limitations or restrictions upon, FDA approvals could adversely affect or
prevent the marketing of products developed by us and our ability to receive
royalty or other product revenues.
The requirements governing the conduct of clinical trials, manufacturing
and marketing of our proposed products outside the United States vary widely
from country to country. Foreign approvals may take longer to obtain than FDA
approvals and can involve additional testing. Foreign regulatory approval
processes include all of the risks associated with the FDA approval processes
discussed above, and the approval of a product by the FDA does not ensure
approval of the same product by the health authorities of other countries.
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 used in the PRETARGET(R) programs.
Interruptions in these and other supplies could occur in the future and would
have a material adverse affect on our operations.
To be successful, we need to develop and maintain reliable and
affordable sources of:
- commercial quantities of holmium-166 and yttrium-90, the
forms of radiation used in our Skeletal Targeted Radiotherapy (STR)
product and PRETARGET(R) program;
- the bone seeking agent used in our STR product; and
- the antibody, streptavidin and clearing agent used in our
PRETARGET(R) product.
Sources of these materials are limited, and we may be unable to obtain
these materials in amounts and at prices necessary to successfully commercialize
our proposed products.
In February 2000, we engaged International Isotopes, Inc. to build a
manufacturing facility for our STR product Phase III clinical trials.
International Isotopes is responsible for all aspects of the manufacture of STR,
including process qualification, quality control, packaging and shipping, from
its Denton, Texas radiopharmaceutical facility. International Isotopes' failure
to perform effectively under this contract could have a material adverse impact
on our business and operations. We also have entered into an arrangement with
the University of Missouri research reactor facility group (MURR) and ABC Labs
to produce holmium-166. MURR currently is responsible for the manufacture of
holmium-166, including process qualification, quality control, packaging and
shipping, from its Columbia, Missouri reactor facility. Our business and
operations could be materially adversely affected if MURR does not perform
satisfactorily under this arrangement. We are attempting to negotiate a
long-term supply contract with MURR. If we are unable to negotiate a long-term
contract in a timely fashion upon favorable terms, or if MURR is unable or
unwilling to perform its services under such contract in a satisfactory manner,
our business 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 manufacturing, selling, marketing or distributing
commercial products. In most cases, our strategy for commercialization of our
potential products requires entering into 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 required 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 negotiating additional collaborative arrangements in
the future. The absence, suspension or termination of current or future
relationships with collaborative partners could materially affect the
development of our business and results of operations. In the biotechnology
industry, termination of relationships, for any reason, has been known to
materially adversely affect stock price.
UNCERTAINTIES REGARDING HUMAN IMMUNE RESPONSE TO FOREIGN PROTEINS MAY LIMIT THE
EFFECTIVENESS OF OUR PROPOSED CANCER THERAPY PRODUCTS
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We plan to use monoclonal antibodies coupled to streptavidin, a protein
of bacterial origins, in our PRETARGET(R) cancer therapy product. These
molecules appear as foreign proteins to the human immune system that makes an
antibody to the PRETARGET(R) product. If this occurs, a second or third dose may
be less safe, less effective or both. It is now possible to replace nearly all
of the mouse segments of the antibody with human segments (humanized antibodies)
and it is possible that this will reduce the likelihood of antibody to the
PRETARGET(R) product. We may use humanized antibodies, where needed, to minimize
the "human anti-mouse antibody" (HAMA) response. The "human anti-streptavidin
antibody" (HASA) response also may limit the number of doses. We believe that
modifying streptavidin may reduce HASA. Although we may use 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 the diseases for which we
are seeking to develop products. We are initially focusing our STR product on
the treatment of multiple myeloma. Celgene Corporation's thalidomide product is
being sold for multiple myeloma, and Cell Therapeutics, Inc.'s arsenic trioxide
also is being tested in that disease. Some competitors have adopted product
development strategies targeting cancer cells with monoclonal antibodies. Many
emerging companies, including IDEC Pharmaceuticals, Cytogen Corp. and Coulter
Pharmaceuticals, have corporate partnership arrangements with large, established
companies to support the research, development and commercialization of products
that may be competitive with ours. In addition, a number of established
pharmaceutical companies, including 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 institutions carry out a
significant amount of research and development in the field of antibody-based
technology. These 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. No consistent policy has yet
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 existing or future patents will afford
us protection against competitors with similar technology. Third parties could
infringe upon or design around our patents. Third parties also could obtain
patents that we would have 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 under these patents or
under other proprietary rights, and the cost and availability of such licenses
are unknown. 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 that we have under development may subject us to product liability
claims. 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 material adversely affect out business and may prevent
us from obtaining product liability insurance on affordable terms in the future.
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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 use of these 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. In addition, 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, 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 biotechnology companies, including our common stock, and it is
likely that the market price of our common stock will continue to be highly
volatile. Our business and the relative prices of our common stock may be
influenced by a large variety of industry factors, including:
- announcements by us or our competitors concerning acquisitions,
strategic alliances, technological innovations and new commercial
products;
- the availability of critical materials used in developing our
products;
- the results of clinical trials;
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- developments concerning patents, proprietary rights and potential
infringement; and
- the expense and time associated with and the extent of our ultimate
success in securing government approvals.
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 the risks described in this prospectus, as well as other factors, could
have a material adverse impact on the market price of our common stock and may
result in a loss of some or 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 ARTICLES OF INCORPORATION AND WASHINGTON STATE LAW
COULD DISCOURAGE A CHANGE OF CONTROL OF NEORX
Our 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 our common stock and the voting and other rights of the holders of our
common stock.
We have adopted a shareholder' rights plan, which is 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 ten 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 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.
-7-
<PAGE> 11
USE OF PROCEEDS
The proceeds from the sale of the common stock offered in this
prospectus are solely for the account of the selling shareholder. We will not
receive any of the proceeds from such sale.
SELLING SHAREHOLDER
The 150,000 shares of common stock being offered and sold by the selling
shareholder are shares that we will issue to the selling shareholder upon its
exercise of an outstanding warrant.
The following table sets out the number of shares of common stock held
by the selling shareholder and the number of shares of common stock offered by
the selling shareholder.
<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(3) * 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 25,992,664 shares of our
common stock outstanding on August 29, 2000.
(3) Includes 150,000 shares issuable upon exercise of an outstanding warrant
held by the selling shareholder.
PLAN OF DISTRIBUTION
The shares covered by this prospectus may be offered and sold from time
to time by the selling shareholder or by its pledgees, donees, transferees or
other successors in interest. The selling shareholder will act independently of
us in making decisions with respect to the timing, manner and size of each sale.
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 more of the following means of distribution:
- block trades in which the 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;
- over-the-counter distributions in accordance with the rules of the
Nasdaq National Market;
- ordinary brokerage transactions and transactions in which the
broker solicits purchasers; and
- privately negotiated transactions.
To the extent required, this prospectus may be amended and supplemented
from time to time to describe a specific plan of distribution. In connection
with distributions of such shares or otherwise, the selling shareholder may
enter into hedging transactions with broker-dealers. 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 our common stock short and redeliver the shares to close out such
short positions. The selling shareholder may enter into option or other
transactions with broker-dealers that require the delivery to the broker-dealer
of the shares. The broker-dealer may then resell or otherwise transfer the
shares under this prospectus (as supplemented or amended to reflect such
transaction). The selling shareholder also may loan or pledge the shares to a
broker-dealer, and, upon default, such broker-dealer may sell the pledged shares
pursuant to this prospectus.
In effecting sales, brokers, dealers or agents engaged by the selling
shareholder may arrange for other brokers or dealers to participate. Brokers,
dealers or agents may receive commissions, discounts or concessions from the
selling
-8-
<PAGE> 12
shareholder in amounts to be negotiated prior to the sale. Such brokers
and dealers and any other participating brokers and dealers may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933 in connection
with such sales, and any commissions, discounts or concessions received by them,
and any profits on the resale of shares sold by broker-dealers, may be deemed to
be underwriting discounts and commissions under the Securities Act of 1933. We
will pay all reasonable expenses incident to the registration of the common
stock being offered by this prospectus, other than any legal fees of the selling
shareholder and any selling expenses of the selling shareholder, including any
commissions and discounts of underwriters, dealers or agents.
We have advised the selling shareholder that the anti-manipulation rules
of Regulation M under the Securities Exchange Act of 1934 may apply to sales of
shares in the market and to the activities of the selling shareholder and its
affiliates. In addition, we will make copies of this prospectus available to the
selling shareholder and have informed it of the need for delivery of copies of
this prospectus to purchasers at or prior to the time of any sale of the shares
offered in this prospectus. 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.
At the time a particular offer of shares is made a prospectus
supplement, if required, will be distributed. Such prospectus supplement will
set forth the number of shares being offered and the terms of the offering,
including the name of any underwriter, dealer or agent, the purchase price paid
by any underwriter, any discount, commission and other items constituting
compensation, any discount, commission or concession allowed or reallowed or
paid to any dealer, and the proposed sales price to the public.
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 use our best
efforts to limit such suspensions to two 60-day periods in any 365-day period.
We have agreed with the selling shareholder to keep the registration
statement of which this prospectus is a part effective until the earlier of:
- October 15, 2001; and
- the date on which the shares offered by this prospectus may be
resold under Rule 144 under the Securities Act of 1933.
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.
-9-
<PAGE> 13
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 $ 15,000
Accounting fees and expenses $ 5,000
Miscellaneous fees and expenses $ 2,500
Total $ 23,170
</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
<TABLE>
<S> <C>
4.1 Article V and Article VI of the Restated Articles of
Incorporation and Bylaws 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*
</TABLE>
--------------------
* previously filed
<PAGE> 14
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> 15
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
No. 1 to Registration Statement 333-43712 to be signed on its behalf by the
undersigned, thereunder duly authorized, in the City of Seattle, State of
Washington, on the 29th day of August, 2000.
NEORX CORPORATION
/s/ Richard L Anderson
------------------------------------------------
By: Richard L. Anderson, President and Chief
Operating Officer
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 1 to Registration Statement No. 333-43712 has been signed by the
following persons in the capacities indicated below on the 29th day of August,
2000.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
*/s/ Fred B. Craves Chairman of the Board
----------------------------------
Fred B. Craves, Ph.D.
/s/ Paul G. Abrams Chief Executive Officer and Director
----------------------------------
Paul G. Abrams, M.D., J.D.
*/s/ Jack L. Bowman Director
----------------------------------
Jack L. Bowman
*/s/ Alan A. Steigrod Director
----------------------------------
Alan A. Steigrod
*/s/ Carl S. Goldfischer Director
----------------------------------
Carl S. Goldfischer, M.D.
*/s/ E. Rolland Dickson Director
----------------------------------
E. Rolland Dickson, M.D.
/s/ Richard L. Anderson
----------------------------------
*By: Richard L. Anderson
Attorney-in-Fact
</TABLE>
II-3
<PAGE> 16
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*
</TABLE>
----------
* previously filed
II-4
