As filed with the Securities and Exchange Commission on November 13, 1998
Registration No. [ ]
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
IMCLONE SYSTEMS INCORPORATED
(Exact name of registrant as specified in its charter)
Delaware 04-2834797
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
John B. Landes, Esq.
Vice President, Business Development
and General Counsel
ImClone Systems Incorporated
180 Varick Street 180 Varick Street
New York, New York 10014 New York, New York 10014
(212) 645-1405 (212) 645-1405
(Name, address, including zip code, and (Address, including zip code, and
telephone number, including area code, telephone number, including area
of agent for service) code, of registrant's principal
executive offices)
Copies of communications to:
Lawrence A. Darby III, Esq.
Kaye, Scholer, Fierman, Hays & Handler, LLP
425 Park Avenue
New York, New York 10022-3598
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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, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_| __
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_| __
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
CALCULATION OF REGISTRATION FEE
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Title of securities to Amount to be Proposed maximum offering Proposed maximum aggregate Amount of registration
be registered registered (1) price per share (2) offering price (2) fee
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<S> <C> <C> <C> <C>
Common Stock, $.001 par
value 1,731,497 shares $8.47 $14,665,780 $4,328
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(1) Excludes such additional indeterminate number of shares as may be issuable
pursuant to the anti-dilution provisions of the Warrants (as defined).
This total represents an aggregate of 1,731,497 shares of Common Stock, in
the aggregate, issued or reserved for issuance under certain warrants to
purchase shares of Common Stock that have from time to time been granted
by ImClone Systems Incorporated to certain of its officers, directors and
a member of its Scientific Advisory Board (collectively, the "Warrants").
(2) Estimated solely for the purposes of calculating the registration fee.
Pursuant to Rule 457(c) under the Securities Act of 1933, as amended, the
proposed maximum offering price per share and the proposed maximum
aggregate offering price of shares have been determined on the basis of
the average of the high and low prices of the Common Stock on November 12,
1998, as reported by 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 Section 8(a), may determine.
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The information in this prospectus is not complete and may be changed. We may
not sell these securities until the related registration statement filed with
the Securities and Exchange Commission is effective. This prospectus is not an
offer to sell these securities and is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
Subject to completion dated November 13, 1998
PROSPECTUS
IMCLONE SYSTEMS
INCORPORATED
1,731,497 SHARES
COMMON STOCK
THE COMPANY
ImClone Systems Incorporated
180 Varick Street
New York, New York 10014
(212) 645-1405
THE SELLING STOCKHOLDERS
Certain of our officers and directors and a member of our Scientific Advisory
Board who participated in the founding of ImClone are offering to sell the
Shares which they may acquire by exercising warrants we have issued to them at
various times before the date of this prospectus.
TRADING SYMBOL:
NASDAQ NATIONAL MARKET - "IMCL"
THE OFFERING
The Selling Stockholders may sell Shares at various times and in various types
of transactions, including sales in the open market, sales in negotiated
transactions and sales by a combination of these methods. The Selling
Stockholders may sell Shares at the market price of our common stock at the time
of a sale, at prices relating to the market price of our common stock over a
period of time, or at prices negotiated with the buyers of Shares.
The Selling Stockholders will receive all proceeds from the sale of Shares, and
will pay all brokerage fees and commissions and similar sale-related expenses.
We will not receive any of the proceeds. When the Selling Stockholders exercise
their warrants to buy the Shares being sold, they will pay us the exercise
price. We are paying the expenses in connection with the registration of the
shares with the SEC.
This Investment Involves a High Degree of Risk.
See "Risk Factors" Beginning On Page 9.
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.
The date of this Prospectus is November [ ], 1998.
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TABLE OF CONTENTS
Page
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THE COMPANY....................................................................1
THE OFFERING...................................................................1
PROSPECTUS SUMMARY.............................................................1
THE OFFERING...................................................................6
WHERE YOU CAN FIND MORE INFORMATION............................................8
SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS.....................................8
RISK FACTORS...................................................................9
Early Stage of Product Development; Technological Uncertainty...............9
History of Operating Losses and Accumulated Deficit........................10
Cash Requirements; Need for Additional Funding.............................10
Dilution; Shares Available for Future Sale.................................10
Limited Manufacturing Experience...........................................12
Establishing Sales and Marketing Capability................................12
Dependence on Certain Agreements with Corporate Partners...................12
Uncertainties as to Patents and Proprietary Technologies...................13
Reliance on and Attraction and Retention of Key Personnel and Consultants..14
Technological Change and Risk of Obsolescence; Competition.................15
Extensive Government Regulation............................................15
Product Liability Exposure.................................................15
Hazardous Materials; Environmental Matters.................................16
Uncertainty of Health Care Reimbursement and Related Matters...............16
Possible Volatility of Stock Price.........................................16
Limitations on Net Operating Loss Carryforwards............................16
Dividend Policy and Restrictions...........................................17
USE OF PROCEEDS...............................................................17
SELLING STOCKHOLDERS..........................................................17
PLAN OF DISTRIBUTION..........................................................18
Manner of Sales; Broker-Dealer Compensation................................18
Filing of Supplement to Prospectus In Certain Instances....................18
Certain Persons Deemed to be Underwriters..................................19
Regulation M...............................................................19
LEGAL MATTERS.................................................................19
DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES.............................19
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PROSPECTUS SUMMARY
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THE COMPANY
The following summarizes the business and operations of ImClone Systems
Incorporated (referred to in this prospectus as "we", "us", "ImClone" or the
"Company"). This summary highlights certain information about ImClone that is
included and incorporated by reference in this prospectus. This summary is not
complete and does not contain all of the information about us or all of the
information that you should consider before investing in our common stock. You
should read the entire prospectus carefully, including the information under the
caption "Risk Factors" and the information in the financial statements and the
notes to the financial statements that are incorporated by reference in this
prospectus. The securities offered by this prospectus involve a high degree of
risk. See "Risk Factors."
Overview of ImClone's Business
We are a biopharmaceutical company, primarily engaged in the research and
development of drugs and other products for the treatment of cancer and
cancer-related disorders.
When we have successfully tested our products, we intend to sell them to
the public when and if we receive Food and Drug Administration ("FDA") and any
other required regulatory approvals. We may manufacture and market the products
by ourselves or in cooperation with others.
ImClone's Cancer-Related Products.
We currently have three cancer-related products that we are developing,
two of which we are testing in clinical trials. A clinical trial is a study in
which a product being tested is administered to patients under the supervision
of a qualified principal investigator. A clinical study is intended to
determine, among other things, the product's safety and effectiveness. We have
not yet commercialized and marketed any of these products or sold them to the
public. We are currently involved in developing the following cancer-related
products:
o C225 Cancer Therapeutic ("C225").
o BEC2 Cancer Vaccine ("BEC2").
o c-p1C11 Chimerized Monoclonal Antibody Inhibitor of Angiogenesis ("c-p1C11").
We discuss each of these products more fully below under the heading "ImClone's
Development Programs."
Licensing of Diagnostics and Infectious Disease Products.
We have also researched, developed and tested products to diagnose, and
vaccines for, infectious diseases such as the sexually transmitted diseases
gonorrhea and chlamydia. We have licensed the rights to these diagnostic and
infectious disease products and vaccines to corporate partners. We use the
licensing, research support and royalty fee revenues that we receive from these
corporate partners, in part, to fund our ongoing research and development of
cancer-related products.
Research Programs.
In addition to our development programs, we also continue to conduct
research in various areas. We conduct such research to discover new treatments
for cancer. We conduct such research in-house, as well as in cooperation with
certain corporate partners and academic institutions.
Background and Facilities.
ImClone was incorporated in Delaware in 1984 and began its principal
research and development operations in March 1986. ImClone's principal executive
offices and laboratories are located at 180 Varick Street, New York, New York,
10014, and the telephone number is (212) 645-1405.
We also operate a facility in Somerville, New Jersey where we manufacture
materials for product candidates of sufficient quality and in sufficient
quantity for human clinical trials.
ImClone's Development Programs
C225 Cancer Therapeutic.
Our main interventional therapeutic product candidate for cancer is a
chimerized (part mouse, part
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human) monoclonal antibody that blocks the Epidermal Growth Factor ("EGF")
receptor. An interventional therapeutic product for cancer is a drug that
interferes with the growth of tumors, and is used to treat people who have
developed cancer. An antibody is a protein that directly attacks foreign
substances in the body, including tumors. The "monoclonal" nature of an antibody
means that the antibody is derived from a single antibody producing cell, called
a hybridoma cell. C225 works to treat cancer in the same manner as other growth
factor receptor inhibitors, which process is discussed in greater detail under
the heading "ImClone's Research Programs -- Research on Interventional
Therapeutics."
The EGF receptor is found in excessive amounts in the cells of
approximately one-third of all solid cancers. It is also found in select normal
tissue. In vivo animal studies, which for cancer studies can be studies in which
animals have been implanted with human tumors, have shown that C225, when used
together with various agents used in chemotherapy (doxorubicin, cisplatin or
paclitaxel), helps these chemotherapeutic agents fight the tumors more
effectively. These studies showed that the human tumors established in these
animals were eliminated, and the animals survived tumor-free for a significant
period of time. We have also found that C225 used alone helps reduce tumors in
animals that have been implanted with renal cell carcinoma (kidney cancer) and
pancreatic carcinoma (pancreatic cancer).
Our C225 product is now in clinical trials. Clinical trials are typically
conducted in three sequential phases, Phase I, Phase II and Phase III, although
the phases may overlap. In Phase I, the initial introduction of the drug into
human subjects, the product is tested for safety, dosage tolerance, absorption,
metabolism, distribution and excretion. A Phase II clinical trial studies a
limited number of patients to determine (1) if the drug has any effect on the
disease, (2) the correct dosage of the drug needed to produce the desired effect
and (3) the side effects of the dosage selected.
Since December 1994, we have initiated several Phase Ib/IIa clinical
trials of C225 at Memorial Hospital (the patient care arm of Memorial
Sloan-Kettering Cancer Center) (referred to as "Sloan-Kettering"), Yale Cancer
Center, University of Virginia, MD Anderson Cancer Center and the University of
Alabama, among others. In these C225 Phase Ib/IIa studies, we have given C225
intraveneously at selected doses, both alone and in combination with
chemotherapeutic drugs, to patients with various solid cancers, such as breast,
prostate, head and neck and renal cancers. Certain of these studies are ongoing.
These studies have shown that the drug is generally well-tolerated by patients.
We expect to begin in the near future several Phase II clinical trials to
continue to determine the types of tumors on which C225 is most effective. In
these clinical trials, C225 will most likely be used in combination with
chemotherapeutic agents or immune system agents called cytokines. We also expect
in the near future to begin Phase III clinical trials to further test C225 in
head and neck cancer, in combination with radiation therapy and in combination
with chemotherapy. A "Phase III" clinical trial is conducted following a Phase
II study which has shown that a product is effective and acceptably safe. "Phase
III" trials further evaluate clinical effectiveness and further test for safety
in a greater number of patients at multiple clinical study sites.
BEC2 Cancer Vaccine.
BEC2 is our principal cancer vaccine product candidate. A cancer vaccine
is intended to be given to a patient after initial treatment of a tumor in order
to activate immune responses to protect against local spread, distant metastases
or recurrence of the cancer. It is currently in the clinical development stage.
BEC2 is a monoclonal anti-idiotypic antibody. Anti-idiotypic antibodies are
antibodies directed against the site of another antibody to which antigens bind.
An antigen is a substance in the body that stimulates the body to produce
antibodies and/or T cells to fight disease. T cells are cells that are involved
in the immune system's response to fight disease. In certain cases, the
anti-idiotypic antibody can resemble the original antigen and thus stimulate an
immune system response. Often, such an anti-idiotypic antibody produces a
stronger immune response than the immune response produced by the original
antigen which it resembles. As a result, the immune system of cancer patients
injected with an anti-idiotypic antibody that resembles an antigen on a tumor
will recognize the tumor antigen and destroy the tumor.
We have tested the BEC2 antibody since 1991 in Phase I clinical trials at
Sloan-Kettering against certain forms of cancer, including both limited disease
and extensive disease small cell lung carcinoma and melanoma (skin cancer).
Limited disease small cell lung carcinoma is limited to the lungs. Extensive
disease small cell lung carcinoma means that the disease has migrated to other
parts of the body. A statistically significant number of patients with small
cell lung carcinoma who participated in a pilot study involving BEC2 at
Sloan-Kettering had a considerably longer disease-free period after treatment
with BEC2 than would otherwise have been expected. We have begun a Phase III
multinational clinical trial for BEC2 in the treatment of limited disease small
cell lung carcinoma, and patient enrollment has begun.
We have entered into an agreement with Merck KGaA ("Merck"), formerly E.
Merck, a German-based drug company, relating to the manufacture, marketing and
sale of BEC2. Under this agreement:
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o We have granted Merck exclusive rights to manufacture and market BEC2
worldwide, except, that, in North America Merck does not have the right to
manufacture BEC2 and we have retained the right to co-market BEC2.
o The parties intend that ImClone will be the bulk product manufacturer of
BEC2 to support worldwide sales.
In return, Merck (1) is paying us research support, (2) is required to pay
us certain milestone fees, and (3) is required to pay us royalties on future
sales of BEC2 by Merck, if any.
Chimerized Monoclonal Antibody Inhibitor of Angiogenesis.
We have developed c-p1C11 as an inhibitor of angiogenesis. Angiogenesis is
the natural process of growth of new blood vessels. Vascular Endothelial Growth
Factor ("VEGF") regulates angiogenesis. VEGF is a natural growth factor which is
also produced by tumor cells. Once produced by the tumor, it stimulates the
body's endothelial cells, which are the cells that line all blood vessels, to
grow. This results in the production of new blood vessels and ensures an
adequate blood supply to the tumor. The growth of a tumor depends upon the
growth of new blood vessels in this manner. KDR is a growth factor receptor
found almost exclusively on the surface of human endothelial cells. VEGF must
recognize and bind to this KDR receptor in order to stimulate the endothelial
cells to grow.
c-p1C11 is a chimerized monoclonal antibody which specifically binds to
the KDR receptor for VEGF. By doing so, it prevents VEGF from binding to that
receptor, which, in turn, blocks endothelial cell growth and inhibits
angiogenesis. The c-p1C11 antibody, therefore, helps inhibit or eliminate cancer
by preventing the growth of new blood vessels and depriving the tumor of the
blood supply that it requires to grow. The c-p1C11 antibody is called
"chimerized" because part of the antibody is derived from a mouse, while the
other part is derived from a human. The benefit of the chimerization of this
antibody in this way is that the human part causes the antibody to be less
immunogenic. That is, it lessens the chance that the body will recognize the
antibody as foreign and reject it. An antibody such as c-p1C11 that inhibits
angiogenesis may also be useful in treating other diseases that, like cancer,
depend on the growth of new blood vessels. Such diseases include diabetic
retinopathy, macular degeneration and rheumatoid arthritis.
We are now conducting pre-clinical studies before filing an
Investigational New Drug Application with the FDA to allow us to further test
c-p1C11 as a possible cancer therapeutic. Pre-clinical studies are conducted
before the beginning of clinical trials, and include both laboratory evaluation
of the chemistry of the product and animal studies to determine the safety and
effectiveness of the product. The results of the pre-clinical studies are
submitted to the FDA as part of the Investigational New Drug Application.
We are also working with MRC Collaborative Center in England to prepare a
humanized form of c-p1C11. A "humanized" form of c-p1C11 would essentially be a
human antibody that contains only a minimal amount of mouse components that are
necessary for the antibody to have therapeutic value without resulting in the
body rejecting the antibody. The humanized form of c-p1C11 would serve as a
back-up, in the event that the chimerized c-p1C11 antibody causes an immune
response in the human body due to the presence of the mouse component.
ImClone's Research Programs
General.
In addition to concentrating on our products in development, we perform
ongoing research in a number of related areas. We conduct research in-house. We
also cooperate with corporate partners and academic institutions on research. We
hope that such research efforts will identify, among other things, additional
drugs and techniques to treat and prevent cancer which we can develop, test and
ultimately commercialize to manufacture and sell to the public.
Research on Interventional Therapeutics.
Tyrosine Kinase Receptor Inhibitors. We are conducting a research program
to develop inhibitors of tyrosine kinase receptors. Tyrosine kinase receptors
are a type of growth factor receptor. Tumor cells often depend on growth factors
to allow the tumor to continue to grow and multiply rapidly. These growth
factors act by binding to tyrosine kinase receptors, which are receptors located
on the surface of cells. When the growth factor binds to the receptor, this
activates the enzyme (kinase) part of the receptor, which initiates an "on
signal" in the cells. The kinase activity initiates the process of cell
division, which results in tumor growth. Therefore, a product that inhibits
tyrosine kinase receptors, would prevent the growth factor from binding with the
tyrosine kinase receptor. This would, in turn, prevent or inhibit the kinase
activity that would result from such binding, as well as the resulting cell
division and tumor cell growth.
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In the past, we have chosen to inhibit tyrosine kinase receptors with
antibodies that block the binding of growth factors to the receptors. More
recently, we have started a discovery program to identify small molecules that
inhibit the enzyme part of growth factor receptors. In October 1997, we entered
into an agreement with CombiChem, Inc., a combinational chemistry company. Under
our agreement, we can use CombiChem's library of structures of chemical
compounds to help us identify candidates that interfere with the function of
growth factor receptors. CombiChem will also synthesize novel and improved
molecules that act as inhibitors of the growth factor receptors. We have also
entered into an agreement with the Institute for Molecular Medicine in Freiburg,
Germany, which permits us to test small molecules as therapeutic candidates to
see if they are effective in inhibiting various tyrosine kinase receptors.
VE-cadherin. In connection with our anti-angiogenesis research program, we
are also doing research to see whether antibodies that inhibit vascular-specific
cadherin ("VE-cadherin") also inhibit angiogenesis. Cadherins are a family of
cell surface molecules that help organize tissue structures. Researchers
generally believe that VE-cadherin plays an important role in angiogenesis by
organizing the assembly of endothelial cells into vascular tubes, which is a
necessary step in the formation of new blood vessels. As we stated above,
advanced tumor growth is dependent on the formation of a capillary blood vessel
network in the tumor to ensure an adequate blood supply to the tumor. Therefore,
antibodies that inhibit VE-cadherin may inhibit such capillary formation in
tumors, and help fight cancer by cutting-off an adequate blood supply to the
tumor. We intend to test various monoclonal antibodies against VE-cadherin to
see if they are effective in inhibiting the function of the VE-cadherin, and the
growth of blood vessels.
We also intend to use our chemical analysis techniques as well as
CombiChem's libraries to identify small molecules, in addition to antibodies,
that inhibit VE-cadherin. In connection with our VE-cadherin research program,
we have been assigned the exclusive rights to VE-cadherin-2, a
recently-developed form of vascular-specific cadherin, and to antibodies that
inhibit VE-cadherin. We also collaborate with the Mario Negri Institute for
Pharmacological Research (Milan, Italy) to do pharmacological research to better
determine the role of VE-cadherin in angiogenesis.
Research of Potential Cancer Vaccines.
We are conducting research to discover possible cancer vaccines as another
route to cancer treatment. Cancer vaccines would activate immune responses to
tumors to protect against local spread, distant metastases or recurrence of
cancer. We focus our research efforts on choosing appropriate cancer cell
targets and producing effective immune responses in our cancer vaccine research
program.
For example, we are now doing research on a possible melanoma vaccine
based on the melanoma antigen gp75. A melanoma is a tumor or cancerous growth of
the skin. The gp75 antigen stimulates the body to produce antibodies and T cells
to attack the malignant melanoma. Animal studies have shown that a gp75 cancer
vaccine is very effective in creating an immune response in the body against
melanoma cells, and may prevent or inhibit growth of experimental melanoma
tumors in mice.
Research of Endothelial Stem Cell Technology.
We have developed the technology necessary to isolate endothelial stem
cells. Endothelial stem cells are cells that may originate in the bone marrow.
These stem cells contribute to the development of new blood vessels throughout
the entire body. Endothelial stem cells help produce endothelial cells. We are
exploring the use of endothelial stem cells to stimulate collateral blood
circulation in ischemias. Ischemias are disease conditions where an organ of the
body does not receive enough blood. For example, a myocardial ischemia is the
clogging of the blood vessels in the heart.
We believe that the ability to isolate endothelial stem cells could allow
us to use these cells to treat many ischemia conditions by using them to
stimulate the growth of new blood vessels to increase the supply of blood to a
targeted area of the body. We also believe that the isolated endothelial stem
cells could be used to treat other conditions where the stimulation of new blood
vessel growth is desired. These uses include the treatment of burn patients and
the healing of wounds.
We are also exploring the use of endothelial stem cells in connection with
gene therapy. Gene therapy involves inserting one or more genes into cells. The
cells may then be delivered by various mechanisms to specific parts of the body
in order to treat disease. For example, in diabetes, a condition in which the
pancreas does not produce enough insulin, a gene therapy
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technique could be used to alter cells to produce insulin and deliver such
insulin producing cells to the pancreas.
We believe that a gene therapy delivery approach could also be used with
endothelial cells in order to treat cancer. Tumors require angiogenesis to grow.
Tumors must attract endothelial stem cells in order for angiogenesis to occur.
We believe that a gene therapy technique could be used to alter endothelial stem
cells to express tumor destroying molecules and to deliver these altered
endothelial stem cells to the tumors.
Research on Hematopoiesis.
We are conducting research in hematopoiesis, which is the growth and
development of blood cell elements. Current cancer treatments such as radiation
and chemotherapy are limited because they are harmful to bone marrow, the part
of the body that manufactures the cellular elements of blood. Radiation and
chemotherapy would be less harmful and could be used more effectively if the
hematopoietic stem cells in the bone marrow (i.e., the cells which make blood
cells) could be shielded from these harmful effects. This could be accomplished
if these blood cell-making stem cells could be removed from the patient before
treatment with radiation or chemotherapy and returned to the patient afterwards.
Therefore, our research, on hematopoiesis has been aimed at discovering factors
to support these blood-making stem cells and to control their proliferation,
differentiation and functional deterioration. Our goal is to permit them to be
maintained in culture outside of the body without harming them.
Most stem cells, when they are removed from the patient's bone marrow,
quickly differentiate, that is, they become designated for a specific function
and lose their ability to make blood cells. The delta-like protein ("DLK") is a
protein which may help to maintain stem cells in their undifferentiated state
while they are outside the patient's body during radiation treatment or
chemotherapy. We have an exclusive license from The National Institutes of
Health ("NIH") to DLK for use in our studies involving stem cells. DLK may also
be useful in gene therapy using stem cells. DLK could be used to maintain the
stem cells in their undifferentiated state while they are genetically
manipulated outside the body. Then, the stem cells could be returned to the body
as functioning, rather than differentiated, stem cells.
In the course of our research on hematopoiesis, we discovered the
FLK-2/FLT-3 receptor (originally referred to by ImClone as FLK-2, by others as
FLT-3, and herein as FLK-2/FLT-3). We are the exclusive licensee of a family of
patents and patent applications covering the FLK-2/FLT-3 receptor. FLK-2/FLT-3
ligand is a protein that binds to and activates the FLK-2/FLT-3 receptor. The
FLK-2/FLT-3 ligand's role seems to be to stimulate the growth of the
hematopoietic blood making stem cells. Also, the FLK-2/FLT-3 ligand stimulates
the production of dendritic cells, which are potent cells that specialize in
processing foreign antigens and presenting these antigens to the immune system.
The addition of the FLK-2/ FLT-3 ligand to stem cells may help stem cells
reproduce themselves while outside of the body during radiation treatment or
chemotherapy. This would increase the number of stem cells, and speed up the
bone marrow recovery process after return of the stem cells to the patient's
body after treatment.
We have entered into a non-exclusive license and supply agreement with
Immunex Corporation under which we have granted Immunex a license to the
FLK-2/FLT-3 receptor for the limited use of the manufacture of the FLK-2/FLT-3
ligand. Immunex is currently testing the ligand in human trials for stem cell
stimulation and for tumor inhibition. Under this agreement, we receive royalty
and licensing fees from Immunex, and Immunex has granted us a license to use
the FLK-2/FLT-3 ligand for use in our ex vivo research on stem cells.
Corporate Partnerships for ImClone's Infectious
Disease Vaccines and Diagnostics
We have licensed our diagnostic and infectious disease vaccine products
and techniques, which are based on our earlier research, to corporate partners
for further development and commercialization.
Diagnostic Technologies.
We have a strategic alliance with Abbott Laboratories. We have licensed
some of our diagnostic products and techniques to Abbott on a worldwide basis.
In mid-1995, Abbott launched its first DNA-based diagnostic test in Europe,
using our Repair Chain Reaction ("RCR") DNA probe technology. Abbott's test is
used to diagnose the sexually transmitted disease chlamydia. The RCR DNA probe
technology uses DNA amplification techniques to detect the presence of DNA or
RNA in biological samples thereby indicating the presence of disease. Abbott has
since developed tests for other diseases, gonorrhea and mycobacteria, using the
RCR DNA probe technology, and has begun sales of those diagnostic products as
well.
In December 1996, we amended our agreement with Abbott to allow Abbott to
exclusively license our patented DNA signal amplification technology,
AMPLIPROBE, to Chiron Diagnostics. DNA signal amplification technology such as
AMPLIPROBE also
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uses DNA amplification techniques to detect the presence of DNA or RNA in
biological samples, thereby indicating the presence of disease. Abbott receives
a royalty payment from Chiron on all sales of Chiron branched DNA diagnostic
probe technology in countries covered by our patents. Abbott, in turn, pays any
such royalties it receives to us. Abbott has recently sold the Chiron branched
DNA diagnostic probe technology to Bayer Pharmaceutical Corporation.
Infectious Disease Vaccines.
We have given the Wyeth/Lederle vaccine and pediatrics division of
American Home Products Corporation a worldwide license to manufacture and market
our infectious disease vaccines. These vaccines are being developed by American
Home. In January 1998, we extended our agreement with American Home to allow
them to continue pre-clinical research on these vaccines through September 1999,
in preparation for clinical trials of possible infectious disease vaccines for
the treatment of gonorrhea. Under the modified agreement, American Home must pay
us an annual license fee of $300,000, in semi-annual installments of $150,000
each, until September 1999.
ImClone's
Research and Development Operations
In-House Research and Development.
We began our in-house research and development activities in 1986. Since
that time, we have assembled a scientific staff with complementary skills in a
variety of advanced research technologies, including oncology, immunology,
molecular and cell biology, antibody engineering, protein and synthetic
chemistry and high-throughput screening. We also have a staff of technical and
professional employees who manufacture clinical trial materials at our
Somerville, New Jersey manufacturing facility.
Research and Development with Corporate Partners.
In addition to our in-house research programs, we work with certain
corporations in areas related to our product development efforts. We obtain
funding and other assistance for the development and commercialization of our
products from major pharmaceutical companies in exchange for specific product
licensing rights.
We intend to enter into additional agreements of this nature with
pharmaceutical companies that have the resources and experience to assist us
financially to help us successfully bring our products to market, both in the
United States and abroad. It is not certain that we will be successful in
entering into any such arrangements.
Research and Development with Academic Institutions.
In addition to our research programs pursued in-house and together with
corporate partners, we work with certain academic institutions to support
research in areas related to our product development efforts. These institutions
include, but are not limited to, the National Cancer Institute, Sloan-Kettering,
the University of California, Princeton University, the University of North
Carolina, The Wistar Institute, The University of Texas Southwestern Medical
Center and The Mario Negri Institute for Pharmacological Research. Usually,
research supported at outside academic institutions is in addition to any
in-house research. We also work with various institutions to perform our
clinical trials. Such institutions include, but are not limited to,
Sloan-Kettering, Yale Cancer Center, the University of Virginia, MD Anderson
Cancer Center, and the University of Alabama.
THE OFFERING
Common Stock
Being Offered.................. 1,731,497 shares.
Selling Stockholders........... Certain officers and directors of ImClone and
a member of our Scientific Advisory Board.
Common Stock
Outstanding
as of November 12, 1998........ 24,453,647 shares.
Common Stock
Outstanding After
the Offering............... 26,185,144 shares. This assumes that (1) the
Selling Stockholders exercise all their
warrants for and sell all Shares covered by
this prospectus and (2) we do not issue any
new shares of our common stock until the
offering is complete.
Risk Factors............... Investing in our common stock is very risky.
See "Risk Factors."
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Use of Proceeds............ We will not receive any proceeds from the
sale of shares in this offering by the
Selling Stockholders.
If the Selling Stockholders exercise all of
their warrants, they will pay us a total of
$1,127,250 to buy the Shares, not including
amounts previously paid to us by Selling
Stockholders who have already exercised
warrants for Shares. We will use that money
for our development programs and for general
corporate purposes. See "Use of Proceeds."
NASDAQ National
Market Symbol.............. "IMCL"
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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 rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on these public reference rooms. Our SEC filings are also available to the
public from the SEC's web site at http://www.sec.gov. Our common stock is traded
on the NASDAQ National Market under the ticker symbol "IMCL." You may also read
and copy our SEC filings at the NASDAQ National Market offices located in
Washington, D.C.
We filed a registration statement on Form S-3 to register the shares
offered by this prospectus with the SEC. As allowed by SEC rules, this
prospectus does not contain all the information that you can find in the
registration statement or the exhibits to the registration statement. The SEC
allows us to "incorporate by reference" the information we file with them. This
means that we can disclose important information to you by referring you to
those documents. The information incorporated by reference is considered to be a
part of this prospectus, except if it is superseded by information in this
prospectus or by later information that we file with the SEC. Information that
we file with the SEC after the date of this prospectus will automatically update
and supersede the information contained or incorporated by reference in this
prospectus. We incorporate by reference the documents listed below, as well as
any future filings we may make with the SEC under Section 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934, as amended, before the time that
all of the shares offered by this prospectus have been sold or de-registered.
These documents contain important information about our company and its
financial condition.
o Our Annual Report on Form 10-K for the fiscal year ended December 31,
1997.
o Our Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31,
1998, June 30, 1998 and September 30, 1998.
o Our Current Report on Form 8-K, filed with the SEC on February 10, 1998.
o The description of our common stock contained in our registration
statement on Form 8-A filed with the SEC under the Securities Exchange Act
of 1934, as amended, and any amendment or report filed for the purpose of
updating that description.
You may request a copy of these filings, excluding all exhibits unless we have
specifically incorporated by reference an exhibit, at no cost, by writing or
telephoning us at:
ImClone Systems Incorporated
180 Varick Street
New York, New York 10014
(212) 645-1405
Attention: Catherine M. Vaczy, Associate
General Counsel
When you are deciding whether to purchase the shares being offered by this
prospectus, you should rely only on the information incorporated by reference or
provided in this prospectus or any supplement. We have not authorized anyone
else to provide you with different information. We are not making any offer of
the shares in any state where the offer is not permitted. You should not assume
that the information in this prospectus or any supplement is accurate as of any
date other than the date on the front of those documents.
----------------------------
SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS
-----------------------------
The statements incorporated by reference or contained in this prospectus
discuss our future expectations, contain projections of our results of
operations or financial condition, and include other "forward-looking"
information within the meaning of Section 27A of the Securities Act of 1933, as
amended. Our actual results may differ materially from those expressed in
forward-looking statements made or incorporated by reference in this prospectus.
Forward-looking statements that express our beliefs, plans,
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objectives, assumptions or future events or performance may involve estimates,
assumptions, risks and uncertainties. Therefore, our actual results and
performance may differ materially from those expressed in the forward-looking
statements. Forward-looking statements often, although not always, include words
or phrases such as the following:
o "will likely result"
o "are expected to"
o "will continue"
o "is anticipated"
o "estimate"
o "intends"
o "plans"
o "projection"
o "outlook"
You should not unduly rely on forward-looking statements contained or
incorporated by reference in this prospectus. Factors discussed in the following
documents describe various uncertainties, estimates, assumptions and risks which
may cause actual results or outcomes to differ materially from those expressed
in forward-looking statements. You should read and interpret any forward-looking
statements together with these documents.
o Our most recent Annual Report on Form 10-K under the captions "Business",
and "Management's Discussion and Analysis of Financial Condition and
Results of Operations."
o Our Quarterly Reports on Form 10-Q.
o The risk factors contained in this prospectus under the caption "Risk
Factors."
o Our other SEC filings.
Any forward-looking statement speaks only as of the date on which that
statement is made. We will not update any forward-looking statement to reflect
events or circumstances that occur after the date on which such statement is
made.
----------------------------
RISK FACTORS
-----------------------------
An investment in the Shares offered by this prospectus involves a high
degree of risk. You should carefully consider the following factors as well as
the other information contained and incorporated by reference in this prospectus
before deciding to invest in our common stock.
Early Stage of Product Development; Technological Uncertainty.
ImClone was founded in 1984, and we opened our laboratory in New York in
1986. Most of our products are now in research or the early stages of
development or clinical studies. They have not yet been commercialized and
marketed or sold to the public. Therefore, we do not sell or receive any
revenues from sales of these products. At this time, most of our revenues come
from payments we receive from our corporate partners under license and research
arrangements. These revenues have fluctuated significantly in the past, and we
expect them to continue to fluctuate significantly in the future. Therefore, our
results of operations, which are, in part, a function of our revenues, have also
fluctuated in the past, and we expect them to continue to fluctuate
significantly in the future. The level of our revenues and results of operations
at any given time is based primarily on the following factors:
o The status of development of our various products.
o The time at which we enter into research and license agreements with
corporate partners that provide for payments to us, and the timing of
payments to us under these agreements.
o Whether or not we achieve specified research or commercialization
milestones.
o Timely payment by our corporate partners of amounts payable to us.
o The timing of sales by Abbott, our partner in diagnostics, of products
that use our technology, and the amount for which such products are sold.
o Variations in the level of expenses related to our proprietary products
during any given period.
o The addition or termination of research programs or funding support.
Our products are only in the development stage. Before we can
commercialize our products and begin to sell them to generate revenues, they
will need substantial additional development and clinical testing, which will
cost a lot of money. Generally, to make a profit we will
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need to successfully develop, test, introduce and market our products. It is not
certain that any of our products will be successfully developed or that required
regulatory approvals to commercialize them can be obtained. Further, even if we
successfully develop a product, there is no assurance that we will be able to
successfully manufacture or market that product or that customers will buy it.
History of Operating Losses and Accumulated Deficit.
We have had significant operating losses and have not earned a profit in
each year since we formed ImClone. These operating losses and failure to be
profitable have been due mainly to the significant amount of money that we have
had to spend on research and development. As of September 30, 1998, we had an
accumulated deficit of approximately $131.0 million. We expect to have
significant additional operating losses over each of the next several years.
Cash Requirements; Need for Additional Funding.
Ongoing and Potential Cash Requirements.
Cash Required for Operations. At this time and for the foreseeable future,
we will need to spend a significant amount of money for, among others, the
following purposes:
o Ongoing pre-clinical and clinical trials of our existing products.
o Research and development of new products.
o Establishing both clinical-scale and commercial-scale manufacturing
capability in our own facilities and/or in the facilities of others.
o Marketing our products if we receive necessary regulatory approvals.
We will need to spend a lot of money to expand our operations. Planned
expansion projects include expanding clinical trials of C225. We will need to
expand and modify our facilities and/or enter into arrangements with others, to
allow us to manufacture enough materials to support these expanded clinical
trials. We also plan to spend money to develop new product candidates and expand
research and development activities. To do this, we will have to hire new
employees, acquire new equipment and enter into new outside research agreements.
Potential Obligation to Repay Industrial Development Revenue Bonds. In
1990, the New York Industrial Development Agency issued $2.2 million of
Industrial Development Revenue Bonds on which we are responsible for the debt
service. We used the proceeds from that issuance to modify our New York facility
to our specifications. These bonds have a scheduled maturity in 2004, however,
they become due earlier if and when our lease for our New York facility
terminates before that time. Our lease is scheduled to expire in March 1999. We
currently expect to be able to extend the lease. However, if we cannot extend
the lease, then we will be obligated to pay the holders of the bonds a total of
approximately $2.4 million in principal and accrued interest in March 1999. We
cannot be certain that we will be able to extend the lease.
Dividend Payment Obligations to Holders of Series A Preferred Stock. Under
the terms of our Series A Convertible Preferred Stock, the holder of those
shares is entitled to receive annual dividends of $6.00 per share. If such
dividends are not paid in any year, we remain obligated to pay any unpaid
dividends in future years. Dividends are payable in cash on any Series A
Preferred Shares outstanding on the earlier of (1) annually on December 31st of
each year beginning on December 31, 1999; or (2) at the time of conversion or
redemption of the Series A Preferred Shares on which the dividend is being paid.
Dividends on the Series A Preferred Shares began to accumulate and accrue on
December 15, 1997 (the date of original issuance). As of September 30, 1998,
approximately $1.9 million of dividends had accrued on the Series A Preferred
Shares.
No Assurance of Continued Sources of Capital.
We will only receive certain future payments from our corporate partners
if we meet specified research and development milestones. We have not yet
achieved some of those milestones and we cannot be certain that we will ever do
so. We also cannot be certain that we will continue to receive expected payments
from our corporate partners. All of the above factors may require us to seek
additional levels of capital through additional arrangements with corporate
partners, equity or debt financings or from other sources. We cannot be certain
that we will be successful in completing any such arrangements or financings. If
adequate funds are not available, then we may be required to significantly cut
back on our planned operations.
Dilution; Shares Available for Future Sale
General.
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The following securities that are convertible into shares of our common
stock were issued and outstanding as of November 12, 1998:
o Warrants. Various warrants to purchase 2,266,050 shares of our common
stock, at an average exercise price of approximately $2.78 per share
(subject to adjustment in certain circumstances).
o Options. Stock options to purchase 4,495,799 shares of our common stock at
an average exercise price of approximately $7.87 per share (subject to
adjustment in certain circumstances).
o Series A Convertible Preferred Stock. 400,000 shares of our Series A
Convertible Preferred Stock are outstanding. These shares are held by
Merck. These shares are referred to as the "Series A Preferred Shares." We
discuss below the general terms on which the Series A Preferred Shares can
be converted into shares of our common stock.
The market price of our common stock could drop as a result of sales of a
large number of shares of our common stock in the market or the public
perception that such sales could occur. This could make it more difficult for us
to raise money through future offerings of common stock. Therefore, any of the
following events could have a negative effect on our financial condition and
results of operations:
o The exercise of a significant number of options or warrants.
o The sale of a substantial number of shares of our common stock acquired
upon the exercise of options or warrants.
o The conversion of a significant number of shares of Series A Preferred
Stock into shares of our common stock.
o The registration by Merck of a significant number of shares of common
stock received upon the conversion of Series A Preferred Shares.
We do not control the timing of any of these events or the number of shares
issued or sold if any such events take place.
Warrants and Options.
The shares of our common stock which may be issued under the warrants and
options, including the shares being offered by the Selling Stockholders, are
either currently registered with the SEC, or will be registered with the SEC
before the shares are purchased by the holders of the warrants and options.
During the term of the warrants and options, their holders can take
advantage of a rise in the market price of our common stock by purchasing the
shares under the warrants and options at the exercise prices, which may be much
lower than the market price of our common stock. Therefore, the holders of the
options and warrants will most likely exercise them at times when the market
price of our common stock is high with the intention of promptly re-selling the
shares. This will allow them to take the greatest advantage of the relatively
low exercise prices of the options and warrants.
If we are required to issue shares of our common stock to exercising
holders of warrants and options at below-market prices, our other stockholders
may be negatively affected in two ways:
o Dilution. The interest of other stockholders will be diluted by the
issuance of additional shares for below-market purchase prices.
o Effect on Equity Financings. We will most likely be selling shares of our
common stock to exercising holders of warrants and options at below-market
prices (i.e., the exercise prices) at times when we would otherwise prefer
to be able to sell shares to the public ourselves at the higher market
prices.
Series A Preferred Shares.
100,000 of the Series A Preferred Shares could be immediately converted
into shares of our common stock beginning on December 15, 1997. An additional
100,000 Series A Preferred Shares will be able to be converted into shares of
our common stock on or after each of January 1, 2000, January 1, 2001 and
January 1, 2002.
Any Series A Preferred Shares converted into common stock before January
1, 2000 will be converted at a conversion price of $12.50 per share of common
stock. After that, the number of shares of common stock into which Series A
Preferred Shares are convertible is not fixed. Instead, the conversion price is
determined under a formula based upon the market price of our common stock at
specified measurement dates, which are generally one year apart. The lower the
market price of our common stock on the measurement date in question,
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<PAGE>
the greater the number of shares of common stock into which the Series A
Preferred Shares may be converted (i.e., the lower the conversion price). The
conversion price is determined as of the measurement date, and remains fixed
until adjusted on the next measurement date to reflect the market price of our
common stock. During the year 2002, the conversion price is 88% of the market
price of our common stock. This means that the common stock may be purchased at
a price that is 12% lower than the price for which it is being sold on the open
market.
Therefore, it is possible that the conversion price for the Series A
Preferred Shares may be determined as of a measurement date, and the market
price of our common stock may then increase significantly during the period of
time following that measurement date but before the next measurement date. In
such a case, the conversion of a significant number of Series A Preferred Shares
into common stock during that period would dilute our other stockholders. This
is because, in such a situation, we would be required to issue a significant
number of shares of our common stock at a relatively low price (i.e., the
conversion price determined on the most recent measurement date), as compared to
the then market price of our common stock.
The terms of the Series A Preferred Shares also give us the right, in
certain circumstances, to require the holders of the Series A Preferred Shares
to convert those shares into common stock at the conversion price then in
effect. Generally, if after the determination of the conversion price for the
Series A Preferred Shares on a measurement date, the average market price of our
common stock for any period of five trading days is greater than 150% of that
conversion price, we can require the conversion of the then convertible Series A
Preferred Shares at that conversion price.
In addition, we granted Merck certain registration rights regarding the
shares of common stock that they may acquire upon conversion of the Series A
Preferred Shares.
Limited Manufacturing Experience.
We can only be profitable if our products are manufactured in commercial
quantities in compliance with regulatory requirements and at acceptable costs.
So far, we have developed products in the laboratory and, in some cases, we have
produced enough for pre-clinical animal trials and early stage clinical trials.
However, it may be difficult for us to produce large enough quantities for late
stage clinical trials or commercial distribution. If we commercialize any of our
products, we may try to adapt our Somerville, New Jersey manufacturing facility
for such purposes. Alternatively, we may outfit a new facility for use as a
commercial-scale manufacturing facility. However, we have limited experience in
clinical-scale manufacturing and no experience in commercial-scale
manufacturing. Therefore, we cannot be certain that we will be able to
successfully make the transition to late stage clinical or commercial production
of our products.
We do not know when or if we will need to adapt our existing facility or
outfit a new facility to meet any future clinical-scale or commercial-scale
manufacturing needs. Nor do we know how much such an adaptation or new facility
will cost us. Those variables will depend on many factors beyond our control,
including how quickly our products progress through clinical trials. Therefore,
we may in the future unexpectedly need a significant amount of money to adapt
our facility or build a new facility to accommodate commercial-scale
manufacturing of our products. It is not certain that we will be able to obtain
such funds. If we were not able to do so, we may be required to delay or give up
our plans to commercialize our products and sell them to the public.
Establishing Sales and Marketing Capability.
Because we are primarily a research and development company, we do not
have a lot of experience in selling or marketing new products. We do not
necessarily plan to market our products on our own. We may decide to do so
initially through, or together with, our corporate partners. See "Risk Factors
- -- Dependence on Certain Contractual Agreements with Corporate Partners." If and
when we want to market a new product on our own, we will need expertise in sales
and marketing. We cannot be certain that we will be able to hire qualified or
experienced sales and marketing personnel or that any marketing or sales efforts
by such personnel will be successful. Under our agreement with Merck, we have
the right to co-market BEC2 in North America if it is approved for sale in North
America.
Dependence on Certain Agreements with Corporate Partners.
So far, we have earned almost all of our revenues from research and
development funding and license fees and royalties paid to us under agreements
with our corporate partners. We expect this to be the case over the next several
years as well. These agreements usually provide the corporate partner with
certain rights to manufacture and/or market in certain geographic areas
specified products which they develop using our technology. In return, the
corporate partner pays us royalties based on their future sales of those
products, if any. Certain corporate partners give us
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funding for our research and development activities. Sometimes, our corporate
partners pay us license fees under these agreements. These license fees may be
payable either when we first enter into an agreement or when and if we or they,
depending on the agreement, reach agreed-upon research, regulatory and
commercialization milestones, or both. We do not receive any of these payments
at regular intervals, and their amounts have fluctuated in the past, and are
expected to continue to fluctuate in the future.
In most cases, our corporate partners can terminate these arrangements,
including their payment obligations, on relatively short notice under specified
circumstances. In the past, some of these arrangements have in fact been
terminated. We cannot be certain that we will continue to receive revenues from
these arrangements, or that we will enter into any new similar agreements.
Under these agreements, in most cases, the corporate partner controls and
is responsible for the design and conduct of pre-clinical and clinical trials.
They are also most often also responsible for seeking and obtaining regulatory
approvals and for manufacturing and marketing the products. Therefore, the
amount and timing of funding and the investment of other resources are not
controlled by us. This means that the successful development and sale and
marketing of the products are subject to the risk of financial or other
difficulties that may be experienced by our corporate partners. The amount and
timing of payments we receive under our arrangements with these parties depend
upon all of these variables which are out of our control.
Also, these corporate partners or their affiliates may be developing their
own products or technologies which may directly compete with products that are
the subject of their arrangement with us. While we believe that our corporate
partners are or will be economically motivated to work toward a successful
arrangement with us, we cannot be certain that their corporate interests and
motivations will remain consistent with ours.
Uncertainties as to Patents and Proprietary Technologies.
Generally.
The patent position of biopharmaceutical companies is generally very
uncertain and involves complex legal and factual questions. Our success will
depend, in part, on whether we can :
o Obtain patents to protect our own products.
o Obtain licences to use the technologies of third parties which may be
protected by patents.
o Protect our trade secrets and know-how.
o Operate without infringing the intellectual property and proprietary
rights of others.
Patent Rights; Licenses. We may not be able to obtain patents that
adequately protect our own products. Also, our proprietary technologies could
conflict with the rights of others. Our ability to commercialize and market our
products using any such technologies could be materially and negatively
affected.
We have exclusive licenses or assignments of 42 issued patents worldwide.
24 of those are issued U.S. patents. We have exclusive licenses or assignments
of approximately 36 families of patent applications that relate to our
proprietary technology in the U.S. and in foreign countries. We cannot be
certain that patents will be issued as a result of any of these applications.
Nor can we be certain that any issued patents would protect or benefit us or
give us adequate protection from competing products. For example, issued patents
may be challenged and declared invalid. In addition, under many of the
agreements under which we have licenses to the patents or patent applications of
others, we are required to meet specified milestone or diligence requirements in
order to keep our license. We cannot be certain that we will satisfy any of
these requirements.
We hold rights under the patents of certain third parties that we consider
necessary for the development of our technology. We will most likely need to
obtain additional licenses to patents of others in order to commercialize
certain of the products that we are currently developing. We cannot be certain
that we will be able to obtain any such licenses or, if we can do so, how much
they will cost.
We know that others have filed patent applications in various countries
that relate to several areas in which we are developing products. Some of these
patent applications have already been issued as patents and some are still
pending. The pending patent applications may issue as patents. Issued patents
are entitled to a rebuttable presumption of validity under the laws of the U.S.
and certain other countries. These issued patents may therefore limit our
ability to develop commercial products. If we need licenses to such patents to
permit us to develop or market our products, we cannot be certain that we would
be able to get such licenses on acceptable terms.
Cost of Intellectual Property Litigation. There has been significant
litigation in the biopharmaceutical
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industry over patents and other proprietary rights. Such litigation has cost the
parties involved a lot of money. If we became involved in similar litigation
over our intellectual property rights, the cost of such litigation could be
substantial and could have a material negative effect on us.
Trade Secrets and Know-How. Certain of our proprietary trade secrets and
unpatented know-how are important to our research and development activities. We
cannot be certain that others will not develop the same or similar technologies
on their own. Although we have taken steps, including entering into
confidentiality agreements with our employees and third parties, to protect our
trade secrets and unpatented know-how and keep them secret, third parties may
still obtain such information.
Specific Intellectual Property Issues.
The following are some of the specific areas in which we may be negatively
affected by the patents and patent applications of others:
C225 Patent Issues. We have an exclusive license to an issued U.S. patent
for the murine form of C225, our EGF receptor antibody product. Our licensor of
this patent, however, did not obtain patent protection outside the U.S. for this
antibody. We have, however, sought additional patent protection for C225 and its
use with chemotherapy and radiation therapy. We have done this by filing
specific patent applications in the U.S. and elsewhere and by exclusively
licensing from a major pharmaceutical company patent applications that relate to
the use of EGF receptor antibodies together with chemotherapy. We are currently
prosecuting these applications. We cannot be certain that we will be successful
in these efforts or that patents will ever be issued.
C225 is a "chimerized" monoclonal antibody, which means that it is made of
antibody fragments derived from more than one type of animal. Patents have been
issued to other biotechnology companies that cover the chimerization of
antibodies. Therefore, we may be required to obtain licenses under these patents
before we can commercialize our own chimerized monoclonal antibodies, including
C225. We cannot be certain that we will be able to obtain such licenses in the
territories where we want to commercialize, or how much such licenses would
cost.
BEC2 Patent Issues. We know that others have been issued patents in the
U.S. and Europe covering anti-idiotypic antibodies and/or their use for the
treatment of tumors. These patents, if valid, could be interpreted to cover our
BEC2 monoclonal antibody and certain uses of BEC2. Merck, our worldwide licensee
of BEC2, has informed us that it has obtained non-exclusive, worldwide licenses
to these patents in order to market BEC2 in its territory. We are entitled to
co-promote BEC2 in the U.S., however, we cannot be certain that we could obtain
such licenses on commercially acceptable terms, if at all.
Angiogenesis Inhibitor Patent Issues. We have patents and have filed
patent applications to protect our proprietary rights to anti-angiogenic
therapeutics, as well as therapeutic methods of treating angiogenic disease. We
are aware that others have filed patent applications that could affect our
ability to commercialize some of our anti-angiogenic therapeutics or therapeutic
treatments.
Diagnostic Product Patent Issues. We are aware that third parties have
filed patent applications in areas that could affect our ability or Abbott's
ability to commercialize our diagnostic products. These areas could include
target amplification technology and signal amplification technology. Third party
patents have already been issued in the field of target amplification such as
polymerase chain reaction technology (also known as PCR).
Reliance on and Attraction and Retention of Key Personnel and Consultants.
Our ability to successfully develop marketable products and to maintain a
competitive position will
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depend in large part on our ability to attract and retain highly qualified
scientific and management personnel. We will also need to develop and maintain
relationships with leading research institutions and consultants. Our success is
also very dependent upon the principal members of our management, scientific
staff and Scientific Advisory Board. Competition for such personnel and
relationships is intense, and we cannot be certain that we will be able to
continue to attract and retain such personnel and maintain such relationships.
Technological Change and Risk of Obsolescence; Competition
The biopharmaceutical industry is subject to rapid and significant
technological change. We have many competitors, including major drug and
chemical companies, specialized biotechnology firms, universities and other
research institutions. These competitors may develop technologies and products
that are more effective than our products or which would make our technology and
products obsolete and non-competitive. Many of these competitors have much
greater financial and technical resources and production and marketing
capabilities than we do. In addition, many of our competitors have much more
experience than we do in pre-clinical testing and human clinical trials of new
or improved drugs, as well as in obtaining FDA and other regulatory approvals.
We know of various products being developed or manufactured by competitors
that are used for the prevention, diagnosis or treatment of diseases that we
have targeted for product development. Some of these competitive products use
therapeutic approaches that compete directly with certain of our product
candidates. We have little experience in conducting and managing the
pre-clinical testing necessary to enter the clinical trials that are needed to
obtain government approvals. Therefore, our competitors may succeed in obtaining
FDA approval for their competitive products sooner than we do for ours. This
could hurt our ability to further develop and market our products. Also, if we
do begin significant commercial sales of our products, we will be competing with
the established manufacturing and marketing capabilities of our competitors.
These are areas in which we have limited or no experience. See "Risk
Factors--Limited Manufacturing Experience" and "Risk Factors--Establishing Sales
and Marketing Capability."
Extensive Government Regulation.
The research, pre-clinical development, clinical trials, manufacturing and
marketing of our products are all subject to extensive regulation by U.S. and
foreign governmental authorities. The FDA and similar foreign regulatory
authorities regulate our clinical trials as well as our manufacturing and
marketing operations. They require us to comply with product-specific testing
and approval processes. It may take many years and cost a significant amount of
money to obtain the required regulatory approvals for our products. Once we
begin clinical trials for a new biologic therapeutic or vaccine product, it may
take five to ten years (or more) to receive the required FDA approval to
commercialize that product and begin to sell and market it to the public. We may
need two to six years to develop a new in vitro diagnostic product, depending
upon the clinical data requirements or approval process specified by the FDA for
the approval of the product. The FDA also has the power to request additional
data and to substantially extend these approval processes. Moreover, we cannot
even be certain that we will ultimately receive FDA approval at the end of these
approval processes. In addition, even if granted, product approvals may be
withdrawn or limited at a later time if products do not comply with regulatory
standards or if unexpected problems occur following initial marketing.
We have not sought or received regulatory approval for the commercial sale
of any of our products or for any manufacturing techniques or facilities. We and
our licensees may experience long delays or excessive costs when we do attempt
to get necessary approvals or licenses. Future federal, state, local or foreign
legislative or administrative acts could also prevent or delay regulatory
approval of our products or the products of our licensees. We cannot be certain
that we or our corporate partners will be able to get the necessary approvals
for clinical testing, manufacturing or marketing of our products, or that the
clinical data we obtain in our studies will be sufficient to establish that our
products are safe and effective. If we fail to get or maintain required
governmental approvals, we or our licensees could be delayed or prevented from
further developing particular products or from marketing our products. Such
failure could also limit the commercial use of the products and therefore have a
material negative effect on their marketability and, in turn, on our liquidity
and financial condition.
Product Liability Exposure.
Because our product candidates are new treatments for diseases, their use
during testing or after approval could expose us to product liability claims. We
cannot be certain that we would have enough money available to satisfy any
liability that might result from any such claims. We try to obtain
indemnification from our corporate partners against certain of these types of
claims. However, we cannot be certain that these parties
15
<PAGE>
would choose to honor, or have the financial resources to honor, any such
indemnity obligations. We carry product liability insurance which covers
liabilities that may arise in connection with pre-clinical and clinical testing
of our products. However, we cannot be certain that this coverage will be
adequate to protect us in the event of a successful product liability claim
against us.
Hazardous Materials; Environmental Matters.
We use hazardous materials, chemicals, viruses and various radioactive
compounds in our research and development activities. Therefore, we are subject
to federal, state and local laws and regulations governing the use, manufacture,
storage, handling and disposal of these materials and certain waste products. We
believe that our safety procedures for handling and disposing of these materials
comply with the applicable standards. However, we cannot completely eliminate
the risk of accidental contamination or injury from these materials. If such an
accident happened, we could be held liable for any resulting damages. Any such
liability could exceed our financial resources. Also, we may be required to
spend a significant amount of money to comply with environmental laws and
regulations in the future. Current or future environmental laws or regulations
may have a material negative effect on our operations, business or assets.
Uncertainty of Health Care Reimbursement and Related Matters.
Once we have commercialized our products and market them to the public,
our ability to sell them at a reasonable profit may depend, in part, on the
extent to which government health administration authorities, private health
coverage insurers and other organizations reimburse purchasers or users of our
products for the costs of such products and related treatments. If people are
not entitled to adequate healthcare reimbursement for the cost of using our
products, they may not use them or may reduce such use. The reimbursement status
of newly-approved health care products is uncertain, and there can be no
assurance that the reimbursement that will be available to purchasers and users
of our products will be enough to ensure profitable sales of our products.
Possible Volatility of Stock Price.
We believe that the following factors, among others, have caused the
market price of our common stock to fluctuate substantially, and that they will
continue to do so in the future :
o The status of our products in development.
o The formation or termination of our corporate alliances.
o Determinations regarding our patent applications and those of others.
o Variations in our quarterly operating results.
Also, the stock market has recently experienced extreme price and volume
fluctuations. These fluctuations have especially affected the market price of
the stock of many high technology and healthcare-related companies. Such
fluctuations have often been unrelated to the operating performance of these
companies. Nonetheless, these broad market fluctuations may negatively affect
the market price of our common stock.
Limitations on Net Operating Loss Carryforwards.
At December 31, 1997, we had (1) net operating loss carryforwards for
federal income tax purposes of approximately $115,000,000 which expire at
various dates from 2000 through 2012 and (2) research credit carryforwards of
approximately $2,303,000 which expire at various dates from 2001 through 2012.
These "carryforwards" are tax assets which we can use in future years to offset
our federal taxable income and reduce the amount of federal taxes that we are
required to pay in those years. There can be no assurances that the Company will
ever generate income which would enable it to utilize the net operating loss
carryforwards.
Under Section 382 of the Internal Revenue Code of 1986, as amended, a
company's annual ability to use these carryforwards to offset income and
therefore reduce income tax expense may be limited if that company experiences a
change in ownership of more than 50 percentage points within any three-year
period. Since 1986, we have experienced two such ownership changes. As a result,
we are only permitted to use in any one year $5,159,000 of our available net
operating loss carryforwards that relate to periods before these ownership
changes to offset federal taxable income. Similarly, we are limited in using our
research credit carryforwards related to years before the ownership changes to
offset future federal income tax expense. Accordingly, as a result of these
ownership changes, we may be required to pay more federal income tax in future
years than we would have been required to pay had the ownership changes not
occurred. There can be no assurance that the Company will ever generate income
which would enable it to utilize these net operating loss carryforwards.
16
<PAGE>
Dividend Policy and Restrictions.
We have never paid any cash dividends on our common stock. Our Board of
Directors will decide our future dividend policy based on our results of
operations, financial condition, capital requirements and other circumstances.
We do not anticipate that any dividends will be declared on our common stock in
the foreseeable future. Any earnings which we may earn, other than earnings
which may be used to pay dividends owed to the holder of our Series A Preferred
Stock, will be retained to finance our growth. In addition, the terms of the
Series A Preferred Stock restrict our ability to pay dividends on our stock. See
"Prospectus-Summary--The Company--BEC2 Cancer Vaccine" and "Risk
Factors--Dilution."
Year 2000.
We have completed a review of our internal computer systems, as well as
begun to make inquiries of groups with which we do business with respect to
their computer systems, to determine whether these systems will experience a
"Year 2000 problem". A Year 2000 problem would result from a computer system
recognizing the first two digits of a year after the year 1999 as "19" instead
of "20", thereby reading the wrong year. We expect to have identified and
replaced or corrected all computer systems which would cause a Year 2000 problem
by the first quarter of 1999. There is no assurance that we will be able to
successfully do this, or that the groups with which we do business will timely
identify and replace their computer systems which would cause a Year 2000
problem. The failure to identify and remedy Year 2000 problems could disrupt
important operations which could affect the development and ultimate marketing
of potential products as well as put us at a competitive disadvantage relative
to companies that have corrected such problems.
-----------------------------
USE OF PROCEEDS
-----------------------------
We will not receive any proceeds from the sale by the Selling Stockholders
of the Shares. They will receive all such proceeds. However, the Selling
Stockholders will pay us the purchase price for the Shares when they exercise
their warrants. If all Selling Stockholders exercised all of their warrants that
they have not yet exercised, we would receive total proceeds of about
$1,127,250. We expect to use any such proceeds (1) to continue to pay for and
expand our research and development programs and (2) for general corporate
purposes, including working capital. There can be no assurance that the Selling
Stockholders will exercise any of their warrants.
-----------------------------
SELLING STOCKHOLDERS
-----------------------------
The table below presents the following information about the number of
shares of our common stock owned by the Selling Stockholders: (1) the number of
shares such Selling Stockholder beneficially owns as of the date of this
prospectus, (2) the number of Shares that such Selling Stockholder is offering
under this prospectus, (3) the number of shares that such Selling Stockholder
will beneficially own after the completion of this offering and (4) the
percentage of our outstanding shares of common stock that such Selling
Stockholder will beneficially own after the completion of the offering.
Dr. Harlan W. Waksal is our Executive Vice President and Chief Operating
Officer and is a member of our Board of Directors. Dr. Samuel D. Waksal is our
President and Chief Executive Officer and a member of our Board of Directors.
Dr. Samuel D. Waksal and Dr. Harlan W. Waksal are brothers. Mr. John B. Landes
is our Vice President-Business Development and General Counsel. Dr. Zvi Fuks is
a member of our Scientific Advisory Board. Mr. Robert F. Goldhammer is the
Chairman of our Board of Directors.
<TABLE>
<CAPTION>
Percentage of
Number of Shares To Outstanding Shares To
Number of Shares Number of Shares Be Owned After Be Owned After
Selling Beneficially Offered By This Completion Completion of
Stockholder(1) Owned(1) Prospectus(2) of Offering(3) Offering(3)
- -------------- -------- ------------- -------------- -----------
<S> <C> <C> <C> <C>
Samuel D. Waksal 1,470,583(4) 431,997(4) 1,038,586 3.8%
Harlan W. Waksal 1,245,780(5) 734,500(5) 511,280 1.9%
Robert F. Goldhammer 836,576(6) 418,000(6) 418,576 1.6%
John B. Landes 337,000(7) 135,000(7) 202,000 *
Zvi Fuks 116,500(8) 12,000(8) 104,000 *
</TABLE>
17
<PAGE>
- --------
* Less than 1%.
(1) Assumes that all options or warrants to purchase shares of our common
stock held by the Selling Stockholders are exercisable within 60 days of
the date of this prospectus.
(2) Assumes that the Selling Stockholders would currently be allowed to
exercise all of their warrants to purchase all of the Shares offered by
this prospectus.
(3) Assumes that the Selling Stockholders have sold all of the Shares offered
by this prospectus and that all options or warrants to purchase shares of
our common stock held by them are exercisable within 60 days. Because the
Selling Stockholders may sell the shares offered by this prospectus from
time to time, we do not currently know the date of the completion of the
offering. Therefore, the number and percentages of shares included are
based on 24,453,647 shares, the total number of our shares of common stock
outstanding as of November 12, 1998, giving effect to the exercise of all
of the Selling Stockholders' warrants to purchase Shares offered by this
prospectus. Shares of our Series A Convertible Preferred Stock are not
included, because such shares carry no voting rights.
(4) Includes an aggregate of 431,997 Shares previously acquired by Dr. Waksal
upon the exercise of warrants.
(5) Includes (i) an aggregate of 337,500 Shares subject to warrants issued to
Dr. Waksal and (ii) an aggregate of 397,000 Shares previously acquired by
Dr. Waksal upon the exercise of warrants.
(6) Includes (i) an aggregate of 120,000 Shares previously acquired by Mr.
Goldhammer upon the exercise of warrants and (ii) an aggregate of 298,000
Shares subject to warrants issued to Mr. Goldhammer. The additional shares
of our common stock listed under the column "Number of Shares Beneficially
Owned" include 13,314 shares of our common stock held in trust, as to
which Mr. Goldhammer disclaims beneficial ownership.
(7) Includes (i) 31,000 Shares previously acquired by Mr. Landes upon the
exercise of warrants and (ii) 104,000 Shares subject to warrants issued to
Mr. Landes.
(8) Includes 12,000 Shares subject to warrants issued to Dr. Fuks.
-----------------------------
PLAN OF DISTRIBUTION
-----------------------------
Manner of Sales; Broker-Dealer Compensation.
The Selling Stockholders may sell any Shares that they acquire when they
exercise their warrants using this prospectus. The Selling Stockholders may
elect to sell any such Shares in privately negotiated transactions or in the
over-the-counter market through brokers and dealers. Such brokers and dealers
may act as agent or as principals. They may receive compensation in the form of
discounts, concessions or commissions from the Selling Stockholders or from the
purchasers of their Shares for whom the broker-dealers may act as agent or to
whom the broker-dealers may sell as principal, or both. The Selling Stockholders
may also sell the shares in reliance upon Rule 144 under the Securities Act of
1933, as amended, at such times as they are eligible to do so. We have been
advised by the Selling Stockholders that they have not made any arrangements for
the distribution of the Shares. Broker-dealers who effect sales for the Selling
Stockholders may arrange for other broker-dealers to participate. Broker-dealers
engaged by the Selling Stockholders will receive commissions or discounts from
them in amounts to be negotiated prior to the sale.
Filing of Supplement to Prospectus In Certain Instances.
If any Selling Stockholder notifies us that he or she has entered into a
material arrangement (other than a customary brokerage account agreement) with a
broker or dealer for the sale of Shares under this prospectus through a block
trade, purchase by a broker or dealer or similar transaction, we will file a
supplement to the
18
<PAGE>
prospectus under Rule 424(c) under the Securities Act of 1933, as amended. Such
a supplement will disclose:
o The name of each such broker-dealer.
o The number of Shares involved.
o The price at which those Shares were sold.
o The commissions paid or discounts or concessions allowed to such broker
dealer(s).
o If applicable, that such broker-dealer(s) did not conduct any
investigation to verify the information contained or incorporated by
reference in this prospectus, as supplemented.
o Any other facts material to the transaction.
Certain Persons Deemed to be Underwriters.
The Selling Stockholders and any broker-dealers who execute sales for them
may be deemed to be "underwriters" within the meaning of the Securities Act of
1933, as amended, because of the number of Shares to be sold or resold by such
persons or entities or the manner of sale of such Shares, or both. If a Selling
Stockholder or any broker-dealer or other holders were determined to be
underwriters, any discounts, concessions or commissions received by them or by
brokers or dealers acting on their behalf and any profits received by them on
the resale of their Shares might be deemed to be underwriting discounts and
commissions under the Securities Act of 1933, as amended.
Regulation M.
The Selling Stockholders have represented to us that any purchase or sale
of Shares by them will comply with Regulation M promulgated under the Securities
Exchange Act of 1934, as amended. In general, Rule 102 under Regulation M
prohibits any person connected with a distribution of our common stock (a
"Distribution") from directly or indirectly bidding for, or purchasing for any
account in which he or she has a beneficial interest, any of our common stock or
any right to purchase our common stock, for a period of one business day before
and after completion of his or her participation in the distribution (we refer
to that time period as the "Distribution Period").
During the Distribution Period, Rule 104 under Regulation M prohibits the
Selling Stockholders and any other persons engaged in the Distribution from
engaging in any stabilizing bid or purchasing our common stock except for the
purpose of preventing or retarding a decline in the open market price of our
common stock. No such person may effect any stabilizing transaction to
facilitate any offering at the market. Inasmuch as the Selling Stockholders will
be reoffering and reselling our common stock at the market, Rule 104 prohibits
them from effecting any stabilizing transaction in contravention of Rule 104
with respect to our common stock.
-----------------------------
LEGAL MATTERS
-----------------------------
Kaye, Scholer, Fierman, Hays & Handler, LLP will issue an opinion about
the validity of the shares for us.
-----------------------------
DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
-----------------------------
ImClone's Certificate of Incorporation and Bylaws provide for
indemnification of officers and directors in instances, among others, in which
they acted in good faith and in a manner they reasonably believed to be in, or
not opposed to, our best interests and in which, with respect to criminal
proceedings, they had no reasonable cause to believe their conduct was unlawful.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
ImClone pursuant to the foregoing provisions, or otherwise, we have been advised
that, in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Securities Act of
1933, as amended, and is, therefore, unenforceable.
19
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth all expenses payable by ImClone in
connection with the sale of the shares offered by this prospectus.
SEC Registration Fee: $ 4,328
Blue Sky Fees and Expenses*: 1,000
Legal Fees and Expenses*: $30,000
Accounting Fees and Expenses*: 5,000
Miscellaneous*: 2,672
-------
Total*: $43,000
- -----------
* Estimated.
Item 15. Indemnification of Directors and Officers.
Our Certificate of Incorporation and Bylaws set forth the extent to which
our officers and directors may be indemnified by us against any liabilities
which they may incur. The general effect of such provisions is that, on the
terms and conditions set forth in our Certificate of Incorporation and Bylaws,
any person made a party or threatened to be made a party to an action, suit or
proceeding by reason of the fact that he or she is or was a director or officer,
or is or was serving as a director, officer, employee or agent of another
corporation or other enterprise at our request, shall be indemnified by us
against expenses (including attorneys' fees, judgments, fines and amounts paid
in settlement) reasonably incurred or suffered by him or her in connection with
such action, suit or proceeding, to the full extent permitted under the laws of
the State of Delaware; provided, however, that, subject to certain limited
exceptions, we shall indemnify any such person seeking indemnification in
connection with a proceeding initiated by such person only if such proceeding
was authorized by our Board of Directors. Our Certificate of Incorporation gives
our Board of Directors the authority to extend such indemnification to our
employees and other agents as well.
The general effect of the indemnification provisions contained in Section
145 of the General Corporation Law of the State of Delaware (the "DGCL") is as
follows: A director or officer who, by reason of such directorship or
officership, is involved in any action, suit or proceeding (other than an action
by or in the right of the corporation) may be indemnified by the corporation
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him or her in connection with
such action, suit or proceeding if he or she acted in good faith and in a manner
he or she reasonably believed to be in or not opposed to the best interests of
the corporation, and, with respect to any criminal action or proceeding, has no
reasonable cause to believe that his or her conduct was unlawful. A director or
officer who, by reason of such directorship or officership, is involved in any
action or suit by or in the right of the corporation may be indemnified by the
corporation against expenses (including attorneys' fees) actually and reasonably
incurred by him or her in connection with the defense or settlement of such
action or suit if he or she acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
corporation, except that no indemnification may be made in respect of any claim,
issue or matter as to which he or she shall have been adjudged to be liable to
the corporation unless and only to the extent that a court of appropriate
jurisdiction shall approve such indemnification.
Our Certificate of Incorporation provides that, to the maximum extent
permitted under the DGCL, a director of ImClone shall not be personally liable
to us or to any of our stockholders for monetary damages for breach of fiduciary
duty as a director of ImClone. Section 102(b)(7) of the DGCL permits a
corporation to include in its certificate of incorporation a provision that
eliminates or limits the personal liability of a director to the corporation or
its stockholders for monetary damages for breach of fiduciary duty as a
director; provided, that such provision shall not eliminate or limit the
liability of a director (i) for any breach of the director's duty of loyalty to
the corporation or its stockholders, (ii) for acts or omissions
20
<PAGE>
not in good faith or which involve intentional misconduct or a knowing violation
of law, (iii) under Section 174 of the DGCL or (iv) for any transaction from
which the director derived in improper personal benefit.
Item 16. Exhibits.
Exhibit No. Description
- ----------- -----------
5.1 Opinion of Kaye, Scholer, Fierman, Hays & Handler, LLP
regarding the legality of the securities being
registered. (Filed herewith).
23.1 Consent of KPMG Peat Marwick LLP (Filed herewith).
23.2 Consent of Kaye, Scholer, Fierman, Hays & Handler, LLP.
(Included in Exhibit 5.1).
24. Powers of Attorney. (Included on signature pages).
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:
(i) to include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in this Registration Statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more
than a 20% change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
registration statement;
(iii) 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;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) above do not apply
if the registration statement is on Form S-3, Form S-8 or Form F-3 and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement;
(2) that, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
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
21
<PAGE>
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 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.
22
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on the 13th day of
November 1998.
IMCLONE SYSTEMS INCORPORATED
By: /s/ Samuel D. Waksal
----------------------------
Samuel D. Waksal
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated. Each person whose individual signature
appears below hereby authorizes Samuel D. Waksal, Harlan W. Waksal and John B.
Landes, or any of them, to execute in the name and on behalf of each such person
and to file any amendment to this Registration Statement, and appoints Samuel D.
Waksal, Harlan W. Waksal and John B. Landes, or any of them, as attorney-in-fact
to sign on his behalf individually and in each capacity stated below, and to
file any amendments to this Registration Statement, including any and all
post-effective amendments.
Signature Title Date
--------- ----- ----
/s/ Robert F. Goldhammer Chairman of the Board November 13, 1998
- ------------------------ and Director
Robert F. Goldhammer
/s/ Samuel D. Waksal President, Chief Executive November 13, 1998
- -------------------- Officer and Director
Samuel D. Waksal (Principal Executive Officer)
/s/ Harlan W. Waksal Executive Vice President, Chief November 13, 1998
- -------------------- Operating Officer and Director
Harlan W. Waksal
/s/ Carl Goldfischer Vice President of Finance and November 13, 1998
- -------------------- Chief Financial Officer
Carl Goldfischer (Principal Financial
and Accounting Officer)
/s/ Jean Carvais Director November 13, 1998
- ----------------
Jean Carvais
/s/ Vincent T. DeVita, Jr. Director November 13, 1998
- --------------------------
Vincent T. DeVita, Jr.
/s/ Paul B. Kopperl Director November 13, 1998
- ------------------
Paul B. Kopperl
/s/ William R. Miller Director November 13, 1998
- ---------------------
William R. Miller
/s/ David M. Kies Director November 13, 1998
- -----------------
David M. Kies
/s/ John Mendelsohn Director November 13, 1998
- -------------------
John Mendelsohn
/s/ Richard Barth Director November 13, 1998
- -----------------
Richard Barth
S-1
<PAGE>
EXHIBIT INDEX
Exhibit
No. Description
5.1 Opinion of Kaye, Scholer, Fierman, Hays & Handler, LLP regarding the
legality of the securities being registered. (Filed herewith).
23.1 Consent of KPMG Peat Marwick LLP (Filed herewith).
23.2 Consent of Kaye, Scholer, Fierman, Hays & Handler, LLP.
(Included in Exhibit 5.1).
24. Powers of Attorney. (Included on signature pages).
EXHIBIT 5.1
[Kaye, Scholer, Fierman, Hays & Handler, LLP Letterhead]
(212) 836-8000
November 13, 1998
ImClone Systems Incorporated
180 Varick Street
New York, New York 10014
Ladies and Gentlemen:
We have acted as special counsel to ImClone Systems Incorporated, a
Delaware corporation (the "Company"), in connection with the Company's
registration statement on Form S-3 (the "Registration Statement") to be filed
pursuant to the Securities Act of 1933, as amended. The Registration Statement
relates to an aggregate of 1,731,497 shares of the Company's Common Stock, par
value $.001 per share (the "Common Stock"), certain of which ("Warrant Shares")
may be issued upon the exercise of certain warrants granted to certain officers
and directors of the Company and a member of its Scientific Advisory Board
(collectively, the "Warrants"), and certain of which have heretofore been issued
to certain of such officers and directors upon the exercise of certain warrants
granted thereto ("Issued Shares").
In that connection, we have reviewed the Company's certificate of
incorporation and its by-laws, each as amended, resolutions adopted by its Board
of Directors and its stockholders, the Registration Statement, the Warrants and
such other documents and proceedings and certificates of the Company as we have
deemed appropriate.
On the basis of such review, and having regard to legal considerations
that we deem relevant, we are of the opinion that the shares of Common Stock to
be offered pursuant to the Registration Statement have been duly authorized and,
in the case of the Issued Shares, are and, in the case of the Warrant Shares,
when issued in accordance with the terms set forth in the Warrants, will be,
validly issued, fully paid and nonassessable.
Our opinion set forth above is based as to matters of law solely on
applicable provisions of the General Corporation Law of the State of Delaware,
and we express no opinion as to any other laws, statutes, ordinances, rules or
regulations.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving this opinion, we do not thereby admit that we
are within the category of persons whose consent is required under Section 7 of
the Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission.
Very truly yours,
/s/ Kaye, Scholer, Fierman, Hays & Handler, LLP
Exhibit 23.1
Accountants' Consent
The Board of Directors
Imclone Systems Incorporated:
We consent to the use of our report incorporated herein by reference.
Princeton, New Jersey
November 13, 1998
/s/ KPMG Peat Marwick LLP
