ORGANOGENESIS INC, S-3, 1995-06-20

ORGANOGENESIS INC
S-3, 1995-06-20
COMMERCIAL PHYSICAL & BIOLOGICAL RESEARCH

Previous: PRUDENTIAL REALTY TRUST, 8-K, 1995-06-20

Next: STATE BOND U S GOVERNMENT SECURITIES FUND INC, 497, 1995-06-20

<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 20, 1995

REGISTRATION NO. 33-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------

ORGANOGENESIS INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
------------------------

<TABLE>
<S> <C>
DELAWARE 04-2871690
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
</TABLE>

------------------------

150 DAN ROAD, CANTON, MASSACHUSETTS 02021
(617) 575-0775
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------

HERBERT M. STEIN, CHIEF EXECUTIVE OFFICER
ORGANOGENESIS INC.
150 DAN ROAD, CANTON, MASSACHUSETTS 02021
(617) 575-0775
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------

COPY TO:
STEVEN D. SINGER, ESQ.
HALE AND DORR
60 STATE STREET
BOSTON, MASSACHUSETTS 02109
(617) 526-6000

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date hereof.
------------------------

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: / /

If this form is registering additional securities 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: 33- / /

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: 33- / /

If delivery of the prospectus is expected to be made pursuant Rule 434,
please check the following box: / /

CALCULATION OF REGISTRATION FEE

<TABLE>
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1) PER UNIT OFFERING PRICE REGISTRATION FEE
- ----------------------------------------------------------------------------------------------------------------
Units (each consisting of five shares of
Common Stock, $.01 par value, and one
Redeemable Common Stock Purchase Warrant,
initially entitling the holder to
purchase one share of Common Stock....... 200,000 Units $60.31(1) $12,062,000(1) $4,159.31
- ----------------------------------------------------------------------------------------------------------------
Shares of Common Stock, $.01 par value,
underlying Common Stock Purchase
Warrants................................. 200,000 shares(2) $18.09(1) $3,618,600(1) $1,247.79
- ----------------------------------------------------------------------------------------------------------------
Total...................................... $5,407.10
</TABLE>

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

(1) Estimated for purposes of calculating registration fee pursuant to Rule
457(c) of the Securities Act of 1933, as amended, on the basis of the
average of the high and low sales price of the Registrant's Common Stock on
June 15, 1995 ($12.0625).

(2) Includes 200,000 shares of Common Stock underlying the Redeemable Common
Stock Purchase Warrants and, pursuant to Rule 416, an additional
indeterminable number of shares of Common Stock which may become issuable by
virtue of certain adjustment provisions of the Warrants, assuming a per
share exercise price of 50% over the average of the high and low sales price
of the Registrant's Common Stock on June 15, 1995.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.

PROSPECTUS (SUBJECT TO COMPLETION)
ISSUED JUNE 20, 1995
200,000 UNITS

ORGANOGENESIS INC.

EACH UNIT CONSISTING OF FIVE SHARES OF COMMON STOCK AND
ONE REDEEMABLE COMMON STOCK PURCHASE WARRANT
------------------------
Each Unit consists of five shares of Common Stock, par value $.01 per share
("Common Stock"), and one Redeemable Common Stock Purchase Warrant ("Warrant")
of Organogenesis Inc. (the "Company"). Each Warrant entitles the holder to
purchase one share of Common Stock at a price of $ per share, at any
time through , 2000, when the Warrants expire. The Warrants
are non-transferable and, subject to certain exceptions, may be redeemed by the
Company upon 30 days written notice at a price of $.01 per Warrant, if the
average last sale prices of the Common Stock (as reported by the American Stock
Exchange) exceeds $ per share for any period of thirty (30) consecutive
trading days ending within thirty (30) days of the notice of redemption. See
"Description of Warrants." The Units are immediately separable into shares of
Common Stock and Warrants, and the shares of Common Stock will be separately
transferable.

This Prospectus also relates to the issuance by the Company of Common Stock
issuable upon the exercise of the Warrants.

The Units offered hereby are being sold by the Company and the Common Stock
included in the Units and the Common Stock issuable on exercise of the Warrants
will be issued by the Company. See "Plan of Distribution." The final price of
the Units and the exercise price of the Common Stock underlying the Warrants
will be determined by negotiations between the Company and prospective
purchasers of the Units. The Common Stock of the Company is listed on the
American Stock Exchange under the symbol "ORG". On June 15, 1995, the last
reported sale price for the Common Stock as reported by the American Stock
Exchange was $12 3/8. See "Common Stock Price Range."

THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. SEE "RISK
FACTORS."
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<S> <C> <C>
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
PRICE TO PUBLIC(2) PROCEEDS TO COMPANY
- -----------------------------------------------------------------------------------------------
Per Unit(1)............................ $ $
- -----------------------------------------------------------------------------------------------
Total(2)............................... $ $
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
</TABLE>
(1) Before deduction of expenses payable by the Company in connection with the
Offering estimated at $150,000. Does not include proceeds payable to the
Company upon the exercise of the Warrants.

(2) The final price of the Units and the exercise price of the Common Stock
underlying the Warrants will be determined by negotiations between the
Company and prospective purchasers of the Units.

-----------------------------

The Units offered hereby are offered directly by the Company. The Company
has not fixed a minimum number of Units to be sold in this offering and funds
received by the Company on the sale of less than all of the Units offered hereby
will not be placed in an escrow, trust or similar arrangement. It is expected
that delivery of certificates representing the shares of Common Stock and
Warrant Agreements for the Warrants included in the Units will be made against
payment for the Units in Boston, Massachusetts on or about ,
1995.

THE DATE OF THIS PROSPECTUS IS , 1995.
<PAGE> 3

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents filed by the Company with the Commission are
incorporated herein by reference: (1) the description of the Company's capital
stock contained in Organogenesis' Registration Statement on Form 8-A filed on
April 7, 1988; (2) the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1994; and (3) the Company's Quarterly Report on Form 10-Q for
the quarter ended March 31, 1995.

All documents filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") subsequent to the date hereof and prior to the termination
of the offering of the Units registered hereby shall be deemed to be
incorporated by reference into this Prospectus and to be a part hereof from the
date of filing such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.

The Company will provide without charge to each person to whom this
Prospectus is delivered, upon written or oral request of such person, a copy of
any or all of the foregoing documents incorporated by reference into this
Prospectus (without exhibits to such documents other than exhibits specifically
incorporated by reference into such documents). Requests for such copies should
be directed to Organogenesis Inc., Curtis W. Rodenhouse, Chief Financial
Officer, 150 Dan Road, Canton, Massachusetts 02021; telephone (617) 575-0775.

AVAILABLE INFORMATION

The Company is subject to the informational requirements of the Exchange
Act and in accordance therewith files reports and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy statements
and other information filed by the Company with the Commission pursuant to the
informational requirements of the Exchange Act may be inspected and copied at
the public reference facilities maintained by the Commission at the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549 and at the Commission's regional offices located at 7 World Trade Center,
Suite 1300, New York, New York 10048, and at Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of such materials also
may be obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. The Common Stock of
the Company is traded on the American Stock Exchange. Reports and other
information concerning the Company may be inspected at the offices of the
American Stock Exchange, 86 Trinity Place, New York, NY 10006-1181.

The Company has filed with the Commission a Registration Statement on Form
S-3 under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the Units offered hereby. This Prospectus does not contain all the
information set forth in the Registration Statement and the exhibits and
schedules thereto, as certain items are omitted in accordance with the rules and
regulations of the Commission. For further information pertaining to the Company
and the shares of Common Stock offered hereby, reference is made to such
Registration Statement and the exhibits and schedules thereto, which may be
inspected without charge at the office of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549, and copies of which may be obtained from the
Commission at prescribed rates.

2
<PAGE> 4

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information, including "Risk Factors," appearing elsewhere in this Prospectus or
incorporated herein by reference. As used herein, "Organogenesis" or the
"Company" refers to Organogenesis Inc. and its subsidiaries.

THE COMPANY

Organogenesis designs, develops and manufactures innovative medical
therapeutics using living human cells and natural connective tissue components.
Organogenesis was the first company founded to develop and commercialize
therapies based on innovations in tissue engineering, a relatively new
discipline focused on developing specialized biomaterials and cellular
constructs to assist, repair, regenerate, or replace diseased or damaged tissue.
An understanding of the biology of cells, the structure and function of the
extracellular matrix, and the critical interactions between the two is needed to
fully exploit the potential of tissue engineering. The Company's leadership in
combining theses technologies has resulted in a wide variety of product
opportunities, including GRAFTSKIN, the Company's full-thickness skin
replacement product, which has completed enrollment of over 500 patients in
pivotal clinical trials.

The Company is developing its technology in the following areas: wound
care, cardiovascular, general surgery, urology and orthopedics. GRAFTSKIN is
intended to provide immediate wound closure while effectively promoting the
establishment of new skin tissue. GRAFTSKIN is currently in clinical trials for
chronic venous ulcers, wounds resulting from dermatological surgery, and burns.
Interim results appear to demonstrate GRAFTSKIN's safety, effectiveness over
standard care, improvement in patient quality of life, and excellent cosmetic
results. On June 5, 1995, the Company announced that it had received notice from
the U.S. Food and Drug Administration (the "FDA") that its GRAFTSKIN Premarket
Approval ("PMA") application to be submitted will receive expedited review. The
Company expects to submit a PMA application for GRAFTSKIN to the FDA during
1995.

Other product candidates which are intended to enable the recipient's (or
host's) body to form a fully functional replacement for diseased or damaged
tissue are in various stages of preclinical development. These products, such as
the GRAFTARTERY small diameter vascular graft, are being developed as
"off-the-shelf" repair or replacement material for applications where no graft
material is currently available, or where an "off-the-shelf" implant would
obviate the need to obtain autologous repair material (material from another
part of the host's body). The Company's product candidates are intended to
provide highly efficacious, cost-effective treatment for poorly managed diseases
and disorders.

Scientists at Organogenesis have expertise in a broad range of disciplines,
including cell biology, immunology, tissue cryopreservation, matrix
biochemistry, and vascular biology. In addition to the Company's core scientific
expertise, the Company has established capabilities in process development and
manufacturing, preclinical testing, clinical development, and regulatory
affairs.

Organogenesis' strategy is to form collaborations with larger
pharmaceutical and medical device companies with strategic interests in the
Company's product development areas, in exchange for marketing rights to the
Company's products. The Company has entered into such collaborations with Biomet
Inc. for the development of orthopedic implants, with Toyobo Ltd. for the
Company's in vitro testing kits in Japan, and has signed a letter of intent with
SCIMED Life Systems Inc. to enter into an agreement to collaboratively develop
and commercialize collagen-coated endovascular stents. As a result of the merger
between SCIMED and Boston Scientific Corporation, SCIMED management is analyzing
the collaborative program with the Company, and there can be no assurance that
the Company and SCIMED will enter into a definitive agreement.

The Company was organized as a Delaware corporation in 1985. The Company's
executive offices are located at 150 Dan Road, Canton, Massachusetts 02021 and
its telephone number is (617) 575-0775.

3
<PAGE> 5

THE OFFERING

<TABLE>
<S> <C>
Securities Offered............ 200,000 Units, each consisting of five shares of Common Stock
and one Warrant. Each Warrant initially entitles the holder
to purchase one share of Common Stock at a price of
$ (expected to be 50% higher than the fair market
value of the Company's Common Stock on the date of sale) at
any time prior to , 2000, when the Warrants expire.
The Warrants are nontransferable and, subject to certain
exceptions, may be redeemed by the Company upon 30 days
written notice at a price of $.01 per Warrant if the average
of the last sale prices of the Common Stock (as reported by
the American Stock Exchange) exceeds $ per share for any
period of thirty (30) consecutive trading days ending within
thirty days of the notice of redemption. The shares of Common
Stock issuable upon the exercise of the Warrants are issuable
upon the Company's receipt of a subscription form executed by
the holder of the Warrants, and the payment to the Company of
the aggregate exercise price of the shares of Common Stock
purchased. See "Description of Warrants."
Common Stock Outstanding after
the Offering................ 10,379,278 shares (1).
Use of Proceeds............... Preclinical and clinical programs, product research and
development, working capital and general corporate purposes.
American Stock Exchange
Symbol...................... ORG
</TABLE>

SUMMARY CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
---------------------------------------------------- ------------------
1990 1991 1992 1993 1994 1994 1995
------- ------- ------- ------- -------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues:
Contract revenues.................. $ 2,934 $ 3,244 $ 2,735 $ 375 $ 336 $ 66 $ 17
Product sales...................... 221 555 508 72 0 0 0
Interest income.................... 441 381 1,729 1,146 660 176 139
------- ------- ------- ------- -------- ------- -------
3,596 4,180 4,972 1,593 996 242 156
------- ------- ------- ------- -------- ------- -------

Cost and expenses:
Research and development........... 6,450 6,144 6,949 8,117 8,573 1,922 2,304
Cost of product sales.............. 99 250 270 65 0 0 0
Marketing, general and
administrative................... 3,171 3,604 3,983 3,347 2,864 686 798
------- ------- ------- ------- -------- ------- -------
9,720 9,998 11,202 11,529 11,437 2,608 3,102
------- ------- ------- ------- -------- ------- -------
Net loss........................... $(6,124) $(5,818) $(6,230) $(9,936) $(10,441) $(2,366) $(2,946)
Net loss per common share.......... $ (0.88) $ (0.78) $ (0.69) $ (1.09) $ (1.14) $ (.26) $ (.31)
</TABLE>

<TABLE>
<CAPTION>
MARCH 31, 1995
--------------------------
ACTUAL AS ADJUSTED(2)
------- --------------
<S> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Cash, cash equivalents and marketable securities............................. $ 6,028 $ 17,940
Working capital.............................................................. 5,701 17,613
Total assets................................................................. 12,206 24,118
Long term liabilities........................................................ 161 161
Total stockholders' equity................................................... 11,074 22,986
</TABLE>

- ---------------

(1) Based on the number of shares outstanding at June 15, 1995. Excludes 200,000
shares of Common Stock reserved for issuance upon the exercise of the
Warrants and 1,839,400 shares of Common Stock reserved for issuance pursuant
to stock options outstanding on June 15, 1995 at a weighted average exercise
price of $10.14 per share, of which options to purchase 806,410 shares were
exercisable. Also excludes 187,500 shares of Common Stock reserved for
issuance pursuant to other warrants to purchase Common Stock outstanding on
June 15, 1995 at a weighted average exercise price of $27.04.

(2) Adjusted to reflect the sale by the Company of 200,000 Units offered hereby
(assuming no exercise of the Warrants) at an assumed public offering price
of $60.31 per Unit and after deducting estimated offering expenses. See "Use
of Proceeds."

4
<PAGE> 6

RISK FACTORS

In evaluating the Company's business, prospective investors should
carefully consider the following factors, in addition to the other information
contained in this Prospectus.

UNCERTAINTY OF SUCCESSFUL COMMERCIALIZATION

The Company has not begun to market or generate revenues from the
commercialization of products. The products under development by the Company
will require significant additional research and development efforts, including
extensive clinical testing and regulatory approval, prior to commercial use. The
Company's potential products are subject to the risks of failure inherent in the
development of pharmaceutical products based on new technologies. These risks
include the possibilities that the Company's therapeutic approach will not be
successful; that any or all of the Company's potential products will be found to
be unsafe, ineffective, toxic or otherwise fail to meet applicable regulatory
standards or receive necessary regulatory clearances; that the potential
products, if safe and effective, will be difficult to develop into commercially
viable products, to manufacture on a large scale, be uneconomical to market, or
fail to obtain acceptance by the medical community; that proprietary rights of
third parties will preclude the Company from marketing such products; or that
third parties will market superior or equivalent products.

FUTURE CAPITAL NEEDS; UNCERTAINTY OF ADDITIONAL FUNDING

The Company will require substantial additional funds in order to continue
its research and development programs, preclinical and clinical testing of its
product candidates and to conduct full scale manufacturing and marketing of any
pharmaceutical products that may be developed. The Company's capital
requirements depend on numerous factors, including but not limited to the
progress of its research and development programs, the progress of preclinical
and clinical testing, the time and costs involved in obtaining regulatory
approvals, the cost of filing, prosecuting, defending and enforcing any patent
claims and other intellectual property rights, competing technological and
market developments, changes in the Company's existing research relationships,
the ability of the Company to establish collaborative arrangements, the
development of commercialization activities and arrangements, and the purchase
of additional facilities and capital equipment. Based upon its current plans,
the Company believes that the net proceeds (assuming net proceeds of at least
$11 million) of this offering, cash on hand and the interest earned therefrom
will be sufficient to meet the Company's operating expenses and capital
requirements at least through the third quarter of 1996. There can be no
assurance, however, that changes in the Company's research and development plans
or other events affecting the Company's operations will not result in
accelerated or unexpected expenditures.

Thereafter, the Company will need to raise substantial additional capital
to fund its operations. The Company intends to seek such additional funding
through public or private financings or collaborative or other arrangements with
corporate partners. If additional funds are raised by issuing equity securities,
further dilution to existing stockholders will result and future investors may
be granted rights superior to those of existing stockholders. There can be no
assurance, however, that additional financing will be available from any of
these sources, or if available, will be available on acceptable or affordable
terms. If adequate funds are not available, the Company may be required to
delay, reduce the scope of or eliminate one or more of its research and
development programs or to obtain funds through entering into arrangements with
collaborative partners or others that may require the Company to issue
additional equity or to relinquish rights to certain technologies or product
candidates that the Company would not otherwise issue or relinquish.

HISTORY OF LOSSES AND ACCUMULATED DEFICIT

The Company experienced net losses of $6.2 million, $9.9 million and $10.4
million for the years ended December 31, 1992, 1993 and 1994, respectively. The
Company's accumulated deficit at March 31, 1995 was $49.9 million. The Company
expects to incur additional losses as its research, development and clinical
trial programs continue to expand. The Company's ability to achieve a profitable
level of operations is dependent on successfully completing the development of
its products, obtaining required regulatory approvals, and manufacturing of its
products. Accordingly, the extent of future losses and the time required to
achieve profitability is highly uncertain. There can be no assurance that the
Company will achieve a profitable level of operations.

5
<PAGE> 7

RETENTION OF KEY PERSONNEL

Because of the specialized nature of the Company's business, the Company's
success will depend, in large part, on its continued ability to attract and
retain highly qualified scientific and business personnel and on its ability to
develop and maintain relationships with leading research institutions. The
competition for those relationships and for experienced scientists and
management personnel that exists among the numerous biotechnology,
pharmaceutical and healthcare companies, universities and nonprofit research
institutions is intense.

PATENTS AND PROPRIETARY TECHNOLOGY

The Company's success will depend, in part, upon its ability to develop
patentable products and technologies and obtain patent protection for its
products and technologies both in the United States and other countries. There
can be no assurance that patent applications owned or licensed by the Company
will issue as patents, that patent protection will be secured for any particular
technology, or that, if issued, such patents will be valid or that they will
provide the Company with meaningful protection against competitors or with a
competitive advantage. There can be no assurance that patents will not be
challenged or designed around by others. The Company could incur substantial
costs in proceedings before the United States Patent Office, including
interference proceedings. These proceedings could also result in adverse
decisions as to the patentability of the Company's licensed or assigned
inventions. Further, there can be no assurance that the Company will not
infringe upon prior or future patents owned by others, that the Company will not
need to acquire licenses under patents belonging to others for technology
potentially useful or necessary to the Company, or that such licenses will be
available to the Company, if at all, on terms acceptable to the Company.
Moreover, there can be no assurance that any patent issued to or licensed by the
Company will not be infringed by others. Lastly, there can be no assurance that
third parties will not bring suit against the Company for patent infringement or
for declaratory judgment to have the patents owned or licensed by the Company
declared invalid. The Company also relies on trade secrets and other unpatented
proprietary technology. No assurance can be given that the Company can
meaningfully protect its rights in such unpatented technology or that others
will not independently develop substantially equivalent products and processes
or otherwise gain access to the Company's technology.

The Company seeks to protect its trade secrets and proprietary know-how, in
part, through confidentiality agreements with its employees, consultants,
advisors and collaborators. There can be no assurance that these agreements will
not be violated by the other parties, that the Company will have adequate
remedies for any breach, or that the Company's trade secrets will not otherwise
become known or be independently developed by competitors. The Company has
relationships with a number of academic consultants who are employed by
organizations other than the Company. Accordingly, the Company has limited
control over their activities and can expect only limited amounts of their time
to be dedicated to the Company's activities. These persons may have consulting,
employment or advisory arrangements with other entities that may conflict with
or compete with their obligations to the Company. Consultants generally sign
agreements which provide for confidentiality of the Company's proprietary
information and results of studies. However, there can be no assurance that the
Company will, in connection with every relationship, be able to maintain the
confidentiality of the Company's technology, dissemination of which could have a
materially adverse effect on the Company's business. To the extent that the
Company's scientific consultants develop inventions or processes independently
that may be applicable to the Company's proposed products, disputes may arise as
to the ownership of the proprietary rights to such information. Such inventions
or processes will not necessarily become the property of the Company, but may
remain the property of such persons or their full-time employers. The Company
could be required to make payments to the owners of such inventions or
processes, either in the form of cash, equity or a combination thereof. In
addition, protracted and costly litigation may be necessary to enforce and
determine the scope and validity of the Company's proprietary rights.

COMPETITION

6
<PAGE> 8

develop competitive products for the treatment of skin wounds and organ
equivalent products. Competition from these companies and others is intense and
is expected to increase. Many of these companies have substantially greater
capital resources, research and development staffs, facilities and experience in
the marketing and distribution of products than the Company. In addition,
competitive companies are working on alternate approaches to many of the
diseases targeted by the Company.

The Company is currently aware of other companies which have or are
planning to commercialize products intended to serve as skin replacements, in
addition to several companies that concentrate on skin repair devices. The
Company's principal competitors in the wound care products market include
Johnson & Johnson, Kendall, Smith & Nephew, Advanced Tissue Sciences and Genzyme
Tissue Repair. The Company believes that its competitive position will be based
on its ability to create and maintain scientifically advanced technology and
proprietary products and processes, obtain required government approvals on a
timely basis, manufacture its products on a cost-effective basis and
successfully market its products. There can be no assurance that the Company's
products under development will be able to compete successfully with existing
products or products under development by other companies, universities and
other institutions or that they will attain regulatory approval in the United
States or elsewhere.

MANUFACTURING AND SOURCES OF SUPPLY

The Company manufactures GRAFTSKIN for use in its clinical trials at its
Canton, Massachusetts facility and intends to manufacture GRAFTSKIN for its
commercial sale at the facility. Among the fundamental raw materials needed to
fabricate GRAFTSKIN is a small number of keratinocytes and fibroblasts. In order
for products of the Company made with these initial cells to be used as a
replacement for human skin, it is critical that the cells be disease-free. The
Company has experienced no difficulty obtaining cells, and has established a
mechanism for obtaining screened cells from donors certified by blood testing to
be free of the "HIV" or "AIDS" virus and other pathogens.

The major additional material required to produce the Company's products is
collagen, a protein ordinarily obtained from cows or pigs by commercial
suppliers. The Company determined that collagen provided by the usual commercial
sources is not suitable for the Company's purposes. Accordingly, the Company has
developed a proprietary method of producing its own collagen. This process
yields collagen which the Company believes is superior in quality and strength
to collagen available from commercial sources and which provides the Company
with a continuous, high-quality source of supply.

The other raw materials required in the production of the Company's
products are primarily chemical nutrients, which are readily available from a
number of commercial sources.

The process of manufacturing the Company's products is complex, requiring
strict adherence to manufacturing protocols. Organogenesis is producing
GRAFTSKIN on a pilot-scale adherence to manufacturing protocols. Organogenesis
is producing GRAFTSKIN on a pilot-scale basis in quantities sufficient to meet
its clinical testing needs, and the Company believes that it can produce
increased quantities as needed. However, the transition from pilot-scale
manufacturing to large-scale production of the Company's products is difficult,
and there can be no assurance that the Company will be able to make this
transition successfully. As the Company undertakes the manufacture of additional
products on a commercial basis, the Company will be required to construct a
manufacturing facility in compliance with Good Manufacturing Practices
requirements.

GOVERNMENT REGULATION

The Company's present and proposed activities are subject to government
regulation in the United States and other countries. In order to clinically
test, produce and market medical devices for human use, the Company must satisfy
mandatory procedures and safety and efficacy requirements established by the FDA
and comparable state and foreign regulatory agencies. Typically, such rules
require that products be approved by the government agency as safe and effective
for their intended use prior to being marketed. The approval process is
expensive, time-consuming and subject to unanticipated delays, and no assurance
can be given that any agency will grant its approval.

7
<PAGE> 9

Testing is necessary to determine safety and efficacy before a submission
may be filed with the FDA to obtain authorization to market regulated products.
In addition, the FDA imposes various requirements on manufacturers and sellers
of products under its jurisdiction, such as labeling, good manufacturing
practices, record keeping and reporting requirements. The FDA also may require
post-marketing testing and surveillance programs to monitor a product's effects.

If the Company develops any product to a point where FDA authorization
becomes required, there can be no assurance that the appropriate authorization
will be granted, that the process to obtain such authorization will not be
excessively expensive or lengthy, or that the Company will have sufficient funds
to pursue such approvals. Moreover, the failure to receive requisite
authorization for the Company's products or processes when and if developed or
significant delays in obtaining such authorization would prevent the Company
from commercializing its products as anticipated and may have a materially
adverse effect on the business of the Company.

Additional government regulation may be established that could prevent or
delay regulatory approval of the Company's product candidates. Delays in
obtaining regulatory approvals would adversely affect the marketing of any
products developed by the Company and the Company's ability to receive product
revenues or royalties. If regulatory approval of a potential product is granted,
such approval may include significant limitations on the indicated uses for
which such product may be marketed.

Even if initial regulatory approvals for the Company's product candidates
are obtained, the Company, its products and its manufacturing facilities are
subject to continual review and periodic inspection. The regulatory standards
for manufacturing are applied stringently by the FDA. Discovery of previously
unknown problems with a product, manufacturer or facility may result in
restrictions on such product or manufacturer or facility, including warning
letters, fines, suspensions of regulatory approvals, product recalls, operating
restrictions, delays in obtaining new product approvals, withdrawal of the
product from the market, and criminal prosecution. Other violations of FDA
requirements can result in similar penalties.

PRODUCT LIABILITY AND AVAILABILITY OF INSURANCE

The Company's business exposes it to potential liability risks that are
inherent in the testing, manufacturing and marketing of medical products. The
use of the Company's product candidates in clinical trials may expose the
Company to product liability claims and possible adverse publicity. These risks
also exist with respect to the Company's product candidates, if any, that
receive regulatory approval for commercial sale. The Company currently has
limited product liability coverage for the clinical research use of its product
candidates. The Company does not have product liability insurance for the
commercial sale of its product candidates but intends to obtain such coverage if
and when its products are commercialized. However, there can be no assurance
that the Company will be able to obtain additional insurance coverage at
acceptable costs, if at all, or that a product liability claim would not
materially adversely affect the business or financial condition of the Company.

HAZARDOUS MATERIALS

Medical and biopharmaceutical research and development involves the
controlled use of hazardous materials, such as various radioactive compounds.
The Company is subject to federal, state and local laws and regulations
governing the use, manufacture, storage, handling and disposal of such materials
and certain waste products. Although the Company believes that its safety
procedures for handling and disposing of such materials comply with the
standards prescribed by state and federal regulations, the risk of accidental
contamination or injury from those materials cannot be completely eliminated. In
the event of such an accident, the Company could be held liable for any damages
that result and any such liability could exceed the resources of the Company.
Although the Company believes that it is in compliance in all material respects
with applicable environmental laws and regulations and currently does not expect
to make material capital expenditures for environment control facilities in the
near-term, there can be no assurance that the Company will not be required to
incur significant costs to comply with environmental laws and regulations, or
any assurance that the operations, business or assets of the Company will not be
materially adversely affected by current or future environmental laws or
regulations.

8
<PAGE> 10

UNCERTAINTY OF THIRD-PARTY REIMBURSEMENT

In both domestic and foreign markets, the ability of the Company to
commercialize its product candidates will depend, in part, on the availability
of reimbursement from third-party payors, such as government health
administration authorities, private health insurers and other organizations.
Third-party payors are increasingly challenging the price and cost-effectiveness
of medical products. There can be no assurance that Company-developed products
will be considered cost effective. Significant uncertainty exists as to the
reimbursement status of newly-approved healthcare products. There can be no
assurance that adequate third-party insurance coverage will be available for the
Company to establish and maintain price levels sufficient for realization of an
appropriate return on its investment in developing new therapies. Government and
other third-party payors are increasingly attempting to contain healthcare costs
by limiting both coverage and the level of reimbursement for new therapeutic
products approved for marketing by the FDA and by refusing, in some cases, to
provide any coverage for uses of approved products for disease indications for
which the FDA has not granted marketing approval. If adequate coverage and
reimbursement levels are not provided by government and third-party payors for
uses of the Company's therapeutic products, the market acceptance of these
products would be adversely affected.

UNCERTAINTY RELATED TO HEALTH CARE REFORM MEASURES

There have been a number of federal and state proposals during the last few
years to subject the pricing of pharmaceuticals to government control and to
make other changes to the health care system of the United States. It is
uncertain what legislative proposals will be adopted or what actions federal,
state or private payors for health care goods and services may take in response
to any health care reform proposals or legislation. The Company cannot predict
the effect health care reforms may have on its business, and no assurance can be
given that any such reforms will not have a material adverse effect on the
Company.

DEPENDENCE ON STRATEGIC RELATIONSHIPS

The Company has limited experience in sales, marketing and distribution.
The Company will need to develop long-term strategic relationships with
companies that have marketing and sales forces with technical expertise and
distribution capability. To the extent that the Company enters into such
relationships, any revenues received by the Company will depend upon the efforts
of third parties and there can be no assurance that such efforts will be
successful. There can be no assurance that the Company will be able to establish
such long-term relationships or that it or its collaborators will be successful
in gaining market acceptance for any products that may be developed by the
Company.

STOCK PRICE VOLATILITY

The market prices of securities of biotechnology companies have been
volatile. Factors such as announcements of technological innovations, new
commercial products by the Company or its competitors, governmental regulations,
patent or proprietary rights developments, public concern as to safety or other
implications of biotechnology products and market conditions in general may have
a significant impact on the market price of the Common Stock. Between the date
of the Company's initial public offering in December 1986 and June 15, 1995, the
Company's stock has traded at per share prices between $4.25 and $26.50. From
December 31, 1992 until June 15, 1995, the per share price range has been
between $5.50 and $25.25. There can be no assurance that this high level of
volatility will not persist in the future, and that investors in this offering
will not be adversely affected.

USE OF PROCEEDS

The net proceeds to the Company from the sale of the 200,000 Units offered
hereby (assuming no exercise of the Warrants) at an assumed price of $60.31 per
Unit will be approximately $11,912,000, after deduction of the estimated
expenses associated with the offering.

The Company expects to use the net proceeds of this offering for
preclinical and clinical programs, product research and development, working
capital and general corporate purposes.

The proceeds of this offering may also be used in part to acquire
additional rights to technology related to the Company's product development
programs, and to fund additional collaborative arrangements with other

9
<PAGE> 11

companies and universities when the Company believes such opportunities would
enhance its competitive position or complement the Company's current research
programs. The Company currently does not have any agreements or understandings
with respect to the acquisition of any such additional rights or the funding of
such other arrangements.

The Company expects to use all of the net proceeds of this offering for the
purposes described above and will require substantial additional funds in the
future. The amounts and timing of the Company's expenditures for these purposes
will depend upon a number of factors, including the progress of the Company's
research and development, the scope and results of preclinical studies and
clinical trials, the cost and timing of regulatory approvals, the need for and
availability of third party patent rights, the rate of technological advances,
determinations as to the commercial potential of the Company's products under
development, the status of competitive products and the establishment of
manufacturing capacity. In addition, expenditures will depend on the
establishment of collaborative research arrangements with other companies, the
availability of other financing and other factors.

The Company expects that the net proceeds of this offering, together with
existing capital resources and income earned on invested capital, will be
sufficient to fund its operations at least through the third quarter of 1996.
However, the Company's requirements may vary depending on numerous factors,
including those described above.

Pending application of the proceeds as described above, the Company intends
to invest the net proceeds of this offering primarily in government and
investment grade debt securities. See "Risk Factors -- Future Capital Needs;
Uncertainty of Additional Funding."

10
<PAGE> 12

COMMON STOCK PRICE RANGE

The Company's Common Stock is traded on the American Stock Exchange
("AMEX") under the symbol "ORG". The Common Stock began trading on the AMEX on
April 15, 1988. As of June 15, 1995, there were 697 holders of record of the
Company's Common Stock.

<TABLE>
<CAPTION>
HIGH LOW
-------- --------
<S> <C> <C>
FISCAL YEAR ENDED DECEMBER 31, 1992
First Quarter.................................................. 25 1/8 11 1/4
Second Quarter................................................. 14 1/8 10 1/8
Third Quarter.................................................. 10 5/8 8
Fourth Quarter................................................. 10 3/8 7 3/4

FISCAL YEAR ENDED DECEMBER 31, 1993
First Quarter.................................................. 10 3/4 8 3/8
Second Quarter................................................. 9 1/4 7 3/4
Third Quarter.................................................. 9 5 1/2
Fourth Quarter................................................. 9 6 3/8

FISCAL YEAR ENDED DECEMBER 31, 1994
First Quarter.................................................. 13 1/8 8 5/8
Second Quarter................................................. 14 3/4 9 1/8
Third Quarter.................................................. 13 1/4 10 3/4
Fourth Quarter................................................. 20 12 1/4

FISCAL YEAR ENDED DECEMBER 31, 1995
First Quarter.................................................. 20 11 1/2
Second Quarter (through June 15, 1995)......................... 17 1/8 9 3/8
</TABLE>

On June 15, 1995, the last reported sale price of the Company's Common
Stock, as reported on the AMEX Composite Tape, was $12 3/8 per share.

DIVIDEND POLICY

The Company has never declared or paid cash dividends on its capital stock
and currently intends to retain all available funds for use in the operation of
its business. Therefore, the Company does not anticipate paying any cash
dividends in the foreseeable future.

11
<PAGE> 13

CAPITALIZATION

The following table sets forth the capitalization of the Company as of
March 31, 1995, and as adjusted to give effect to the sale of Units offered
hereby at an estimated per Unit price of $60.31 (based on the average of the
high and low sales price of the Common Stock on the American Stock Exchange on
June 15, 1995), after deducting offering expenses payable by the Company.

<TABLE>
<CAPTION>
MARCH 31, 1995
-------------------
AS
ACTUAL ADJUSTED
------- -------
(IN THOUSANDS)
<S> <C> <C>
Stockholders' equity
Preferred stock, $1.00 par value; 1,000,000 shares authorized,
250,000 shares issued and outstanding(1)............................ $ 250 $ 250
Common stock, $.01 par value; 20,000,000 shares authorized,
9,376,428 and 10,376,428 shares issued and outstanding at
March 31, 1995 and as adjusted, respectively(2)..................... 94 104
Additional paid-in capital............................................. 60,619 72,521
Accumulated deficit.................................................... (49,889) (49,889)
------- -------
Total stockholders' equity..................................... 11,074 22,986
======= =======
Total capitalization........................................... $11,074 $22,986
======= =======
</TABLE>

- ---------------
(1) The Preferred Stock is presently convertible into 250,000 shares of Common
Stock; 250,000 shares of Common Stock have been reserved for such purpose.

(2) Excludes (a) an aggregate of 1,839,400 shares of Common Stock subject to
outstanding options granted under the Company's stock plans and a certain
non-plan option grant, (b) an aggregate of 187,500 shares of Common Stock
reserved but unissued as of June 15, 1995, which are issuable upon exercise
of outstanding warrants and (c) 200,000 shares of Common Stock issuable upon
exercise of the Warrants.

12
<PAGE> 14

DILUTION

The following calculations give effect to the sale of the Units offered
hereby at an assumed per Unit price of $60.31 ($12.0625 per share based on the
average sales price of the Common Stock on the American Stock Exchange on June
15, 1995), after deducting offering expenses payable by the Company and assuming
none of the Warrants are exercised. The net tangible book value of the Company
at March 31, 1995 was $11,074,000, or $1.18 per share. Net tangible book value
per share represents the amount of total tangible assets less total liabilities
divided by the number of shares of Common Stock outstanding. Based upon the
aforementioned assumptions, the net tangible book value of the Company at March
31, 1995 would have been $22,986,000, or $2.22 per share. This represents an
immediate increase in net tangible book value of $1.04 per share to existing
stockholders and an immediate dilution in net tangible book value of $9.84 per
share to new investors purchasing shares in this offering. The following table
illustrates the per share dilution:

<TABLE>
<S> <C> <C>
Price to public.............................................. $12.06
Net tangible book value per share before offering....... $1.18
Increase per share attributable to new investors(1)..... 1.04
Pro forma net tangible book value per share as adjusted after
the offering(2)............................................ 2.22
------
Dilution per share to new investors(3)....................... $ 9.84
======
</TABLE>

The following table summarizes, on a pro forma basis at March 31, 1995, the
differences between the number of shares of Common Stock purchased from the
Company, the total consideration paid to the Company, and the average price per
share paid by existing holders of Common Stock and by purchasers of the shares
of Common Stock offered hereby:

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION AVERAGE
---------------------- ----------------------- PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
---------- ------- ----------- ------- ---------
<S> <C> <C> <C> <C> <C>
Existing stockholders............ 9,376,428 90.4% $58,964,000 83.2% $ 6.29
New Investors.................... 1,000,000 9.6 11,912,000 16.8 11.91
---------- ----- ----------- -----
Total....................... 10,376,428 100.0% $70,876,000 100.0%
========== ===== =========== =====
</TABLE>

- ---------------

(1) $1.34 if all the Warrants are exercised, assuming a per share exercise price
of 50% ($18.09) over the average of the high and low sales price of the
Registrant's Common Stock on June 15, 1995 (the "Assumed Exercise Price").

(2) $2.52 if all the Warrants are exercised at the Assumed Exercise Price of
$18.09.

(3) $10.42 if all the Warrants are exercised at the Assumed Exercise Price of
$18.09.

See Notes 1 and 2 under "Capitalization" for information regarding the
number of shares of Common Stock reserved for issuance.

13
<PAGE> 15

SELECTED CONSOLIDATED FINANCIAL DATA

The following data for the five years ended December 31, 1994 have been
derived from the audited consolidated financial statements of the Company. The
Company's audited consolidated financial statements are incorporated in this
Prospectus by reference from the Company's Report on Form 10-K filed with the
Securities and Exchange Commission on March 29, 1995. The selected consolidated
financial data for the three months ended March 31, 1994 and 1995 are unaudited
but, in the opinion of the management of the Company, include all adjustments
(consisting of only normal recurring adjustments) necessary for a fair
presentation thereof. The results for the three month period ended March 31,
1995 are not necessarily indicative of the results that may be expected for the
full year or any future period.

<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
---------------------------------------------------- ------------------
1990 1991 1992 1993 1994 1994 1995
------- ------- ------- ------- -------- ------- -------
(IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues:
Contract revenues.................. $ 2,934 $ 3,244 $ 2,735 $ 375 $ 336 $ 66 $ 17
Product sales...................... 221 555 508 72 0 0 0
Interest income.................... 441 381 1,729 1,146 660 176 139
------- ------- ------- ------- -------- ------- -------
3,596 4,180 4,972 1,593 996 242 156
------- ------- ------- ------- -------- ------- -------

<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
-------------------------------------------------- ------------------
1990 1991 1992 1993 1994 1994 1995
------ ------- ------- ------- ------- ------- -------
(IN THOUSANDS) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Cash, cash equivalents, and
investments........................ $2,946 $37,360 $26,609 $17,082 $ 8,871 $14,916 $ 6,028
Working capital...................... 2,947 16,644 13,809 11,356 8,408 9,062 5,701
Total assets......................... 5,912 40,153 34,507 23,955 15,127 21,662 12,206
Total liabilities.................... 1,365 1,688 1,908 1,141 1,178 1,184 1,132
Total stockholders' equity........... 4,547 38,465 32,599 22,814 13,949 20,478 11,074
</TABLE>

14
<PAGE> 16

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

1994 COMPARED TO 1993

Contract revenues during 1994 were $336,000, compared to $375,000 in 1993.
Contract revenues in 1994 were realized by the Company under an agreement with
Biomet, Inc. ("Biomet") for the development of orthopedic implants using the
Company's proprietary dense fibrillar collagen. Contract revenues in 1993 were
realized under agreements with Eli Lilly and Company ("Lilly") relating to the
development of the Company's GRAFTARTERY product and with Biomet. The Company's
collaboration with Lilly ended in July 1993 as described below. No sale of
product occurred in 1994, as compared to $72,000 in 1993. This was due to the
Company's discontinuance of the manufacturing and selling of its Testskin
products. Interest income in 1994 was $660,000 compared to $1,146,000 in 1993.
The decrease in 1994 resulted from less cash available for investment.

Research and development expenses increased to $8,573,000 from $8,117,000
in 1993. The increase was primarily due to higher employment-related costs
resulting from staff additions and data management and statistical services
related to human clinical trials for GRAFTSKIN. Marketing, general and
administrative expenses decreased to $2,864,000 in 1994 from $3,347,000 in 1993,
primarily as a result of lower outside services rendered to the Company. The
Company's net loss for 1994 was $10,441,000, or $1.14 per share, as compared
with a net loss for 1993 of $9,936,000, or $1.09 per share.

1993 COMPARED TO 1992

Contract revenues during 1993 were $375,000, compared to $2,735,000 in
1992. Contract revenues in 1993 were realized by the Company under agreements
with Lilly relating to the development of the Company's GRAFTARTERY product and
with Biomet for the development of orthopedic implants using the Company's
proprietary dense fibrillar collagen. Contract revenue in 1992 was realized
under an agreement with Lilly. In 1992, the Company made certain product
improvements to the GRAFTARTERY, resulting in a delay in achieving a milestone
regarding extended graft patency and a deferral of funding from Lilly. In July
1993, the Company announced its collaboration with Lilly had ended and that it
intended to complete the development effort of the GRAFTARTERY project either
with its own funds or through a potential collaboration with another party. This
resulted in a decline in contract revenues in 1993. TESTSKIN product sales
amounted to $72,000 in 1993, as compared to $508,000 in 1992. In January 1993,
the Company discontinued the manufacture and sale of its TESTSKIN products. This
resulted in a decrease in product sales in 1993. Interest income in 1993 was
$1,146,000, compared to $1,729,000 in 1992. The decrease in 1993 resulted from
less cash available for investment.

Research and development expenses increased to $8,117,000 in 1993 from
$6,949,000 in 1992, primarily as a result of the increased human clinical trials
for GRAFTSKIN and expanded preclinical activities in the development of
GRAFTARTERY and several collagen products. Marketing, general and administrative
expenses decreased to $3,347,000 in 1993 from $3,983,000 in 1992, primarily as a
result of lower marketing costs associated with the discontinuance of the
manufacture and sale of TESTSKIN. The Company's net loss for 1993 was
$9,936,000, or $1.09 per share, as compared with a net loss for 1992 of
$6,230,000, or $.69 per share.

FIRST QUARTER 1995 COMPARED TO FIRST QUARTER 1994

Contract revenue was $16,900 for the three months ended March 31, 1995, as
compared to $66,000 for the same period in 1994. The contract revenue was
realized under an agreement with Biomet, Inc. for the development of orthopedic
implants using the Company's proprietary dense fibrillar collagen. Interest
income was $139,000 for the three months ended March 31, 1995 as compared to
$176,000 in the comparable period in 1994. The decrease in interest income is
attributable to less cash being available for investment.

Research and development expenses were $2,304,000 for the three months
ended March 31, 1995, compared to $1,922,000 during the comparable 1994 period.
The increase was primarily due to higher employment-related costs resulting from
staff additions. General and administrative expenses were $798,000

15
<PAGE> 17

for the three month period ended March 31, 1995 as compared to $686,000 for the
comparable 1994 period. The increase was primarily due to higher professional
fees.

As a result of the net effect described above, the Company incurred a net
loss of $2,946,000, or $.31 per share, for the three months ended March 31,
1995, as compared with a net loss of $2,366,000, or $.26 per share, for the
comparable 1994 period.

LIQUIDITY AND CAPITAL RESOURCES

From inception, the Company has financed its operations through private and
public placements of equity securities, receipt of contract revenues, sale of
products and interest income from investments. At March 31, 1995 and December
31, 1994, the Company had cash, cash equivalents and investments in the
aggregate of $6,028,000 and $8,871,000, respectively. The Company will continue
to utilize working capital in 1995 related to ongoing research and development
activities, conducting preclinical and clinical trials, enhancement of
proprietary manufacturing technologies and expansion of business development,
general and administrative resources. These activities will require substantial
additional financial resources before the Company can expect to realize revenue
from product sales.

In February 1995, the Company announced it signed a letter of intent to
collaboratively develop and commercialize collagen coated endovascular stents
with SCIMED Life Systems, Inc. ("SCIMED"). Under the proposed agreement, SCIMED
would pay the Company upfront and milestone payments totaling approximately
$11,000,000. The milestone payments would be made upon meeting certain
conditions in the proposed agreement. In addition, SCIMED would fund the related
research and development activities. As a result of the merger between SCIMED
and Boston Scientific Corporation, SCIMED management is analyzing the
collaborative program with the Company, and there can be no assurance that the
Company and SCIMED will enter into a definitive agreement.

The ultimate success of the Company is dependent upon its ability to raise
capital through equity placement, receipt of contract revenue, sale of product,
research and development funding under licensing agreements, royalty and
manufacturing payments and interest income on invested capital. However, the
Company's capital requirements may change depending upon numerous factors,
including progress of the Company's research and development programs; time
required to obtain regulatory approvals; resources the Company devotes to
self-funded projects, proprietary manufacturing methods and advanced
technologies; ability to obtain and retain continued funding from third parties
under collaborative agreements; ability to obtain licensing arrangements; and
the demand for the Company's products if, and when, approved.

While management believes that additional financing composed of equity
investments and funding provided under collaborative agreements will be
available to fund future operations, there can be no assurance that additional
funds will be available when required on terms acceptable to the Company. In
view of the Company's current financial condition, the Company plans to manage
its working capital and expenses conservatively. In the event that the Company
is unable to raise additional capital, the Company has formulated a financial
plan which should allow it to operate at reduced levels through December 31,
1995.

16
<PAGE> 18

BUSINESS

The Company designs, develops and manufactures innovative medical
therapeutics using living human cells and natural connective tissue components.
The Company's tissue engineered products, such as GRAFTSKIN and GRAFTARTERY, are
designed to promote the establishment and growth of the human body's natural
healing process by promoting the growth of new tissues that maintain, restore or
improve biological function.

CORE TECHNOLOGIES

Organogenesis was the first company founded to develop and commercialize
therapies based on innovations in tissue engineering. Tissue engineering is a
relatively new discipline focused on developing specialized biomaterials and
cellular constructs to assist, repair, regenerate, or replace diseased or
damaged organs. An understanding of the biology of cells and the structure and
function of the extracellular matrix, and the critical interactions between the
two, is needed to fully exploit the potential of tissue engineering. Because of
this, Organogenesis continually strives to broaden, develop, and utilize its
expertise in cell and connective tissue sciences.

CELL SCIENCE

The ability to work with and manipulate cells is central to fully realizing
the potential of tissue engineering. Cells are the building blocks of life. They
make up the organs of the body, serving physical, metabolic, and other
specialized functions. Organogenesis' emphasis on the significance of cell
science to tissue engineering has led not only to GRAFTSKIN, but also has
provided valuable experience for the future in such areas as:

<TABLE>
<S> <C>
- Cell sourcing - Transplantation immunology
- Specialized culture systems and media - Cell delivery and therapy design
- Human cell bank production - Cryopreservation of complex tissues
- Cell safety screening and functional
testing
</TABLE>

Organogenesis has established significant expertise in the areas of cell
biology, cryopreservation technology, and immunology.

Cell Biology. Organogenesis has significant expertise in the science of
three-dimensional organotypic cell culture -- the ability to produce living
cultures of cells with the properties and functions typical of the organ from
which they were derived. For example, GRAFTSKIN is a three-dimensional,
organotypic skin product. This and other models (cornea) have provided important
scientific findings on cell-to-cell interaction, cell and matrix interaction,
and extracellular matrix production.

By employing its cell growth and organotypic culture technologies,
Organogenesis has gained important knowledge of cell regulatory mechanisms and
factors controlling cell growth and tissue formation which will be broadly
applicable to many cell types. This expertise in cell biology should enable
Organogenesis to expand further into other cellular product opportunities.

Cryopreservation Technology. Organogenesis has also made major advances to
the state-of-the-art of cryopreservation technology -- the ability to freeze
materials such as complex tissues which contain living cells and then restore
the material to original temperature without significant loss of cell
functionality. Research to date on a variety of tissues demonstrates that
Organogenesis' proprietary method maintains over 90% cell viability.
Cryopreservation enhances the world-wide marketing and distribution potential of
GRAFTSKIN. It also has implications for future use in an array of living cell
systems.

Immunology. Immunology plays a critical role in tissue engineering both in
determining the body's reaction to a biomaterial and assisting in the transfer
of human cells between individuals (allogeneic cells). Organogenesis has a
strong in-house immunology department which supports both safety evaluation of
its products and new product development.

17
<PAGE> 19

The ability to transplant cells from one individual to another is
particularly critical to the development and commercialization of
"off-the-shelf" tissues. For example, the cells used in GRAFTSKIN are derived
from infant foreskin tissue that would normally be discarded. Using proprietary
cell culture technology, one postage stamp-sized piece of foreskin can yield
approximately four acres of GRAFTSKIN tissue.

Immunological screening of GRAFTSKIN recipients also shows no evidence of
immune response to the cell types used, indicating that allogeneic keratinocyte
and fibroblast cells can be used safely and effectively. These findings
represent an important step for the clinical validation of the GRAFTSKIN
technology. Such studies also provide critical evidence to support the general
concept of the immune compatibility of allogeneic cells and are expected to
positively impact the future of cell therapy, transplantation, and other areas
of tissue engineering.

CONNECTIVE TISSUE SCIENCES

Recognizing the importance of the extracellular matrix to cell growth and
differentiation, the Connective Tissue Sciences group also was established to
develop cell compatible collagen for the living tissue equivalent program.

Through this group, Organogenesis has developed proprietary technology
relating to the extracellular matrix, including technology enabling it to
produce an array of cell compatible collagen products. Organogenesis' collagen
has been shown to support cell growth and interaction in two very different
types of settings:

- When cells are added to the collagen in vitro, Organogenesis' collagen
supports cell growth, differentiation and interaction, allowing the
development of products with the physical and biochemical cell
functions of living organs and tissues. GRAFTSKIN is an example of
this.

- When the collagen alone is implanted in vivo, Organogenesis' collagen
helps foster and direct the ingrowth of host cells and blood vessels.
Over time, the recipient's body gradually replaces the implant's
collagen with its own tissue to form a fully functional analog of the
missing tissue using the implant as a guide. For example, when
Organogenesis' collagen constructs (e.g. replacement ligaments or
arteries) were implanted in animal models, the ingrowth of host cells
and blood vessels over time resulted in host formation of its own
fully functional replacement tissue.

Additionally, Organogenesis can produce cell compatible collagen in a range
of forms suitable for a variety of tissue engineering applications. For
applications requiring strong, cell compatible constructs, Organogenesis has
developed dense fibrillar collagen ("DFC"), which can be made in a variety of
forms, including sheets, tubes and threads. Possible uses of the DFC constructs
range from cell therapy applications (e.g. cell delivery) to use as a matrix
scaffold for host cell ingrowth and replacement (e.g. replacement ligaments) to
being a component of a medical device or implant (e.g. the luminal layer of an
arterial graft).

PRODUCTS

The Company is using its technology in the following areas: wound care,
cardiovascular, general surgery, urology and orthopedics. The Company seeks to
design, develop and manufacture products, derived from proprietary technology
and manufacturing processes, to be used as treatments in these areas.

WOUND CARE PRODUCTS

In the field of Wound Care, the Company is pursuing research and
development of products to be used in the treatment of skin wounds. These
include chronic wounds (such as venous stasis ulcers, diabetic ulcers and
pressure sores), wounds created by dermatological surgery and burn wounds.

GRAFTSKIN

The Company's bilayered skin replacement product is being developed for the
Wound Care field under the tradename GRAFTSKIN. GRAFTSKIN is intended to provide
immediate closure of the wound resulting in rapid healing. GRAFTSKIN is a
full-thickness, living skin equivalent. It consists of two layers, similar to
actual skin: a lower dermal layer and an upper epidermal layer. The Company
creates both layers with living

18
<PAGE> 20

human cells. The dermal equivalent is constructed from matrix proteins and human
dermal fibroblasts. It is then seeded with selected living human epidermal
cells. These cells grow over the dermal layer forming a fully differentiated
epidermis which has a skin-like barrier function. When human skin is used as a
graft in the treatment of wounds, it is intended to provide immediate wound
closure, act as a barrier to infection, supply growth factors and matrix
components involved in normal wound healing, and nourish the underlying and
surrounding tissue.

The Company's proprietary technology for the manufacture of GRAFTSKIN uses
cultured human cells and the collagen that normally surrounds cells to produce a
living skin equivalent. In the first step of the production of GRAFTSKIN, human
tissue is obtained from donated foreskin of newborn male infants whose mothers
have been pre-screened with an extensive protocol for the absence of pathogens.
The donor tissue is then quarantined, further screened, and dissociated to
obtain two cell types: keratinocytes and fibroblasts. The mixture of human
dermal fibroblasts and collagen develops into the first layer of the skin, the
dermal equivalent. After development of the dermis, a suspension of human
epidermal cells called keratinocytes is seeded onto the dermal layer. Through
further culturing techniques, the keratinocytes differentiate into an epidermis
complete with a stratum corneum.

Collagen is the most abundant protein found in the human body and is the
major matrix protein used in the development of GRAFTSKIN. Using proprietary
techniques of extraction and purification, the Company supplies its own high
quality collagen for research and commercial applications.

Like human skin grafts, GRAFTSKIN is multi-functional and contains many
components that can influence the wound healing process. GRAFTSKIN is composed
of four important elements found in skin: extracellular matrix, dermal
fibroblasts, epidermal keratinocytes and stratum corneum. These elements can
affect the wound in different, but related ways. More importantly, they can act
synergistically as they would in human skin. GRAFTSKIN interacts with the wound
bed in a way that provides flexibility of response and maximizes the chance for
successful healing. Therefore, the Company believes that GRAFTSKIN, as a living
"full-thickness" skin tissue, is able to achieve biological wound closure while
effectively promoting the establishment of new skin tissue.

Patient enrollment in the GRAFTSKIN clinical trials to test its safety and
efficacy as a treatment for chronic venous ulcers, wounds resulting from
dermatological surgery and burns has been completed. The data is being analyzed
and compiled. The regulatory status of GRAFTSKIN is as follows: In 1989, the FDA
granted the Company an IDE for clinical testing of GRAFTSKIN on burn patients.
In 1992, the FDA granted the Company IDE Supplements for clinical testing of
GRAFTSKIN for the treatment of chronic skin ulcers and clean excision wounds.
Discussions with the FDA on the clinical data were held on March 29, 1995. On
June 5, 1995, the Company announced that it had received notice from the FDA
that its GRAFTSKIN PMA application for GRAFTSKIN to be submitted will receive
expedited review. The Company intends to file a PMA application during 1995.
However, there can be no assurance that the Company will obtain the approvals
needed to market GRAFTSKIN or that GRAFTSKIN will be successfully
commercialized.

Venous Ulcers. Venous ulcers occur when inadequate blood flow from the
lower extremities of the body leads to blood pooling and tissue breakdown. These
ulcers are painful and very difficult to treat. There are an estimated 900,000
to 1.5 million venous ulcer patients in the United States alone.

Human clinical trials of GRAFTSKIN for venous ulcers, conducted under an
Investigational Device Exemption ("IDE") Supplement from the FDA, were performed
at fifteen centers. The IDE Supplement allows the participation of up to 300
patients in these clinical trials. During 1994, the Company completed enrollment
in its 300 patient pivotal trial. The Company expects to submit a Premarket
Approval ("PMA") application with the FDA during 1995 using data from the venous
ulcer trial as well as from studies in dermatological surgery and burn wounds.

Dermatological Surgery. GRAFTSKIN is also being developed for use in the
treatment of wounds created by dermatological surgery, such as removal of skin
cancers. These wounds are sometimes treated using the patient's skin as a graft,
necessitating a second wound site and thus increasing procedure cost and
morbidity. Today, 250,000 of these dermatological procedures are performed
annually in the United States.

19
<PAGE> 21

The Company has completed enrollment for a pivotal trial in this indication,
involving more than 100 patients at eight centers throughout the United States.
Clinical results are being compiled to determine whether GRAFTSKIN serves as an
effective biological wound dressing by providing immediate wound closure and
accelerated healing when compared to wounds left to heal without grafting. Both
graft take and improved cosmetic appearance have been observed in patients.

Burn Wounds. Another clinical indication for GRAFTSKIN is for the use in
the treatment of burn wounds. As of March 31, 1995, Organogenesis has enrolled
over 75 patients at six centers for this indication.

In burn surgery patients, effectiveness evaluations suggest that meshed
GRAFTSKIN placed over meshed autograft (meshed patient skin) functions as a skin
replacement. This combination approach seems to improve the cosmetic outcome and
may decrease the number of surgical procedures required, thereby decreasing the
time patients remain in the hospital.

MATRIX SCAFFOLD PRODUCTS

The cell compatibility and strength of Organogenesis' collagen products
make them well-suited for applications requiring an implant which can serve not
only the immediate physical function, but also can foster and direct the
ingrowth of host cells and blood vessels -- the process that enables the host to
form a fully functional replacement for the original tissue using the implant as
a scaffold. Currently, many surgical procedures require obtaining patient tissue
from elsewhere in the body (autologous material) for use as the repair material
(e.g., a graft or a patch). Harvesting autologous material creates the need for
an additional invasive procedure, thereby increasing procedure cost, duration,
and morbidity. Synthetic implants, primarily plastics, have been developed by
other companies to provide an "off-the-shelf" alternative; however, synthetics
are incapable of achieving host integration and perform poorly in many
applications. Organogenesis' cell-compatible collagen can be developed into
"off-the-shelf" implants which are intended to remodel into host tissue at least
as well as autologous material. Organogenesis has several "matrix scaffold"
implant products in development for the cardiovascular, general surgical,
urological and orthopedic markets.

CARDIOVASCULAR PRODUCTS

The Company has developed the GRAFTARTERY using its collagen technology.
The GRAFTARTERY is a 4mm diameter graft intended to function as an arterial
replacement which gradually is replaced by the patient's own tissue, resulting
in an artery which closely mimics the natural vessel.

Organogenesis is developing GRAFTARTERY for use in small diameter artery
grafting procedures, such as coronary artery bypass graft ("CABG") procedures
and below the knee surgical revascularizations for peripheral vascular disease.
Almost 300,000 CABG procedures and 175,000 surgical revascularizations for
peripheral vascular disease are performed annually in the U.S. alone. An average
of 3.5 grafts are required per CABG procedure. While one of these grafts can
generally be made using the internal mammary artery in the chest, the other
bypasses require graft material be retrieved from elsewhere in the body.
Usually, an autologous saphenous vein is taken from the patient's lower limb for
use as graft material. However, saphenous vein is often unavailable or is of
insufficient quality.

GRAFTARTERY has been engineered to provide the flexibility,
host-integration, and handling characteristics of the saphenous vein. Results
from preclinical studies indicate that GRAFTARTERY is achieving the desired
non-thrombogenicity, patency, and host integration both short and long-term. The
results of this program have led Organogenesis to explore endovascular
applications for its technology. An example of this is utilizing collagen to
enhance the performance of metal stents used in endovascular procedures such as
balloon angioplasties. This finding has led to the signing of a letter of intent
in February 1995 to collaboratively develop and commercialize collagen coated
endovascular stents with SCIMED Life Systems, Inc.

GENERAL SURGICAL PRODUCTS

The Company believes that the properties of Organogenesis' collagen fits
well with the surgical need for patches, fillers, supports, connectors and
replacements. The Company currently has two products in preclinical trial for
the surgical market: a surgical repair patch and a pericardial patch.

20
<PAGE> 22

The surgical patch is being developed for use in the reinforcement of
weakened soft tissue or the repair of body wall defects such as those associated
with hernias, trauma and surgery. The market opportunity for this patch is
substantial, as there are over 600,000 hernia repair procedures performed each
year in the U.S. alone. Preliminary evaluation of the surgical repair patch has
shown that it integrated into the body and that "patched" surgically-created
defects healed in a manner which resulted in a mechanically stable body wall.

Similarly, the pericardial patch is being developed to repair the holes
made in the pericardium (the sack surrounding the heart) during invasive cardiac
procedures such as coronary artery bypass procedures and valve replacement. Over
400,000 such procedures are performed each year in the U.S. alone.

UROLOGY PRODUCTS

The urological development program includes products for urinary
incontinence and bladder repair, all of which are in preclinical trials.
Approximately ten million women in the U.S. alone have some form of stress
urinary incontinence ("SUI"). The most effective treatment for this condition is
corrective surgery. About 100,000 surgical procedures are performed annually in
the U.S. for this condition. A major limitation of this procedure is that it
requires harvesting autologous material -- patient fascia -- for use as a sling.
As an alternative to surgery, the patient may be injected with a periurethral
bulking agent. This approach is most effective in those women with SUI due to
intrinsic sphincter deficiency, approximately two million women.

Organogenesis has two products in development for SUI. One is a bladder
sling, for use in the corrective surgery procedure. This would serve as an
"off-the-shelf" alternative to use of autologous material, thus reducing
procedure cost and morbidity, and broadening its appeal to both physicians and
patients. The second is an injectable collagen for use as a periurethral bulking
agent. Unlike current injectables, this product has the structure of native
collagen, which should foster host tissue integration and thus greater
persistence, resulting in improved clinical efficacy.

The Company is also developing a patch for use in bladder surgeries, such
as bladder repair following carcinoma removals and in bladder augmentation to
correct urge incontinence and congenital bladder anomalies. This patch is
anticipated to replace the need to obtain autologous material via bowel
resection, a lengthy and difficult procedure. Consequently, this patch may also
reduce procedure cost and morbidity.

ORTHOPEDIC PRODUCTS

Organogenesis is developing a DFC cable, made from many collagen threads,
to be used in knee ligament replacement grafts. The DFC cable is intended to
replace damaged knee ligaments and encourage ligament remodeling causing
eventual replacement of the collagen device by the patient's own tissue. The DFC
cable is designed to be strong, non-immunogenic and biodegradable in a
controlled fashion. This would enable the implant to support the patient's
weight on the joint while acting as a scaffold to promote the ingrowth of
connective tissue, which eventually replaces the graft as it is resorbed.
Preclinical trials are currently underway to evaluate the DFC cable.

Approximately 250,000 procedures are conducted each year in the U.S. for
ligament and tendon repair and replacement. Many of these injuries arise from
sports-related accidents, however, many also result from common day-to-day
mishaps. Tendon and ligament injuries are often very painful and in many cases,
never fully heal, resulting in permanent disability.

In July 1993, Organogenesis entered into a collaborative agreement with
Biomet, Inc., of Warsaw, Indiana for the development of orthopedic implants
using DFC. Upon product commercialization, Biomet will have exclusive worldwide
marketing rights. See "Collaborative Research and Development Agreements."

OTHER PRODUCTS

Biomaterials. Because of interest expressed in the Company's high quality
cell-compatible collagen, a selling and marketing effort has been initiated by
the Company to seek distribution of product to corporate and academic
laboratories. The collagen available for sale is considered a by-product of
current manufacturing

21
<PAGE> 23

efforts already in place and additional expenses incurred, specifically for
selling, marketing and distribution, are not deemed material to the Company's
current cost of operation.

Extracellular Matrix In September 1994, the Company formed a wholly owned
subsidiary, ECM Pharma, Inc. ("ECM Pharma"). ECM Pharma is an early-stage
development company whose mission is to develop and commercialize human
therapeutics based on the extracellular matrix (the "ECM"). Naturally occurring,
active molecules of the ECM are beginning to be identified which could lead to a
new family of therapeutic drugs. ECM Pharma will focus on conditions involving
defective synthesis, modification or degradation of the extracellular matrix,
such as osteoporosis, osteoarthritis and fibrotic conditions such as cirrhosis
of the liver. One potential product anticipated to be produced by ECM Pharma is
cell-produced human collagen. To supplement research, ECM Pharma signed in March
1995 a research collaboration agreement with Harvard University. In February
1995, Organogenesis announced its intent to seek equity investment in ECM Pharma
to fund the initial efforts related to research and development activities.
However, there can be no assurance that ECM Pharma will be able to raise capital
through equity investments on acceptable terms, if at all.

PATENTS AND PROPRIETARY TECHNOLOGY

The Company seeks to protect its technology through the use of patents. Key
aspects of the Company's technology are licensed under an exclusive patent
license agreement with the Massachusetts Institute of Technology ("MIT"). The
agreement with MIT (as amended, the "MIT Agreement") covers five U.S. patents
and corresponding patents in European and Far East countries. Pursuant to the
MIT Agreement, the Company has been granted an exclusive, worldwide license to
make, use and sell the products covered by the patents and to practice the
procedures covered by the patents.

The MIT Agreement requires the Company to pay to MIT a royalty on the
cumulative net sales of licensed products ranging from 3% to 4.5% of annual
sales. The royalty also applies to net sales by the Company's sublicensees.

In addition to the five patents licensed to the Company under the MIT
Agreement, the Company has five U.S. issued patents. These issued patents relate
to (1) the Company's test system incorporating skin tissue equivalents and other
organ equivalents; (2) the Company's proprietary collagen extraction process;
(3) the invention and methods of making DFC constructs; (4) the production of an
organ equivalent for the cornea and its method of production using tissue
culturing systems; and (5) a method of making collagen thread. As part of the
continuing interest in protecting its intellectual property rights, the Company
has also filed, and is prosecuting, eight patent applications in the United
States and in over forty foreign countries covering inventions resulting from
the Company's research and development activities.

There can be no assurance that any patents will be issued as a result of
the Company's patent applications, or that issued patents will provide the
Company with significant protection against competitors. Moreover, there can be
no assurance that any patents issued to or licensed by the Company will not be
infringed, or that third parties will not independently develop either the same
or similar technology.

A portion of the Company's know-how and technology are trade secrets. To
protect its rights, the Company requires key employees and consultants to
maintain the confidentiality of the Company's proprietary information, and the
Company intends to require any corporate sponsor with which the Company enters
into collaborative research and development agreement to do so as well. There
can be no assurance, however, that these agreements will provide meaningful
protection for the Company's trade secrets, know-how or other proprietary
information in the event of any unauthorized use or disclosure.

MANUFACTURING AND SOURCES OF SUPPLY

The Company manufactures GRAFTSKIN for use in its clinical trials at its
Canton, Massachusetts facility and intends to manufacture GRAFTSKIN for
commercial sale at the facility.

Among the fundamental raw materials needed to fabricate GRAFTSKIN is a
small number of keratinocyte and fibroblast cells. In order for products of the
Company made with these initial cells to be used

22
<PAGE> 24

as a replacement for human skin, it is critical that the cells be disease-free.
The Company has experienced no difficulty obtaining cells, and has established a
mechanism for obtaining screened cells from donors certified by blood testing to
be free of the "HIV" or "AIDS" virus and other pathogens.

The major additional material required to produce the Company's products is
collagen, a protein ordinarily obtained from cows or pigs by commercial
suppliers. The Company determined that the collagen provided by the usual
commercial sources is not suitable for the Company's purposes. Accordingly, the
Company has developed a proprietary method of producing its own collagen. This
process yields collagen which the Company believes is superior in quality and
strength to collagen available from commercial sources and which provides the
Company with a continuous, high-quality source of supply.

The other raw materials required in the production of the Company's
products are primarily chemical nutrients, which are readily available from a
number of commercial sources.

COLLABORATIVE RESEARCH AND DEVELOPMENT AGREEMENTS

In July 1993, the Company entered into a collaboration with Biomet, Inc.
("Biomet") for the development of orthopedic implants using DFC. Biomet and its
subsidiaries design, manufacture and market products used primarily by
orthopedic medical specialists in both surgical and non-surgical therapy. Under
the terms of the agreement, Biomet will fund preclinical and clinical
development and the Company will receive a milestone payment upon the successful
completion of the project. The agreement provides that the Company manufacture
the resulting products and that Biomet has exclusive worldwide marketing rights.

In 1987, the Company entered into an agreement with Eli Lilly and Company
("Lilly") to develop, manufacture and market a GRAFTARTERY product. In July
1993, the Company announced the termination of its relationship with Lilly. On
January 11, 1995, the Company and Lilly executed a Termination Agreement
releasing Lilly from all rights licensed or conveyed under the July 1, 1991
agreement and releasing the Company from any and all obligations and liabilities
in any way connected with the agreement. The Company intends to complete the
GRAFTARTERY project with its own funds or through a potential collaboration with
another party.

In February 1995, the Company announced it signed a letter of intent to
develop and commercialize collagen coated endovascular stents with SCIMED Life
Systems, Inc. As a result of the merger between SCIMED and Boston Scientific
Corporation, SCIMED management is analyzing the collaborative program with the
Company, and there can be no assurance that the Company and SCIMED will enter
into a definitive agreement.

In March 1995, ECM Pharma signed a collaborative research agreement with
Harvard University to supplement research for the development and
commercialization of human therapeutics based on the extra cellular matrix.

The Company also has agreements with thirty clinical sites to conduct human
clinical trials of GRAFTSKIN. Clinical trials are used to test GRAFTSKIN's
safety and effectiveness as a treatment for chronic venous ulcers, wounds
resulting from dermatological surgery and burns.

GOVERNMENT REGULATION

23
<PAGE> 25

If the Company develops any product to a point where FDA authorization
becomes required, there can be no assurance that the appropriate authorization
will be granted, that the process to obtain such authorization will not be
excessively expensive or lengthy, or that the Company will have sufficient funds
to pursue such approvals. Moreover, the failure to receive requisite
authorization for the Company's products or processes, when and if developed, or
significant delays in obtaining such authorization, would prevent the Company
from commercializing its products as anticipated and may have a materially
adverse effect on the business of the Company.

The regulatory status of GRAFTSKIN is as follows: In 1989, the FDA granted
the Company an IDE for clinical testing of GRAFTSKIN on burn patients. In 1992,
the FDA granted the Company IDE Supplements for clinical testing of GRAFTSKIN
for the treatment of chronic skin ulcers and clean excision wounds. Discussions
with the FDA on the clinical data were held on March 29, 1995. On June 5, 1995,
the Company announced that it has received notice from the FDA that its
GRAFTSKIN PMA application to be submitted will receive expedited review. The
Company intends to file a PMA application during 1995.

RESEARCH AND DEVELOPMENT

The Company plans to continue to focus its product development effort on
developing high quality wound care, cardiovascular, general surgical,
urology-related and orthopedic products.

The Company's research and development staff consists of scientists and
laboratory assistants with technical backgrounds in tissue science, orthopedics,
cell biology, matrix biology, vascular biology, clinical medicine and molecular
biology.

For 1992, 1993 and 1994, the Company's research and development expenses
were $6,949,000, $8,117,000, and $8,573,000, respectively.

COMPETITION

The Company is engaged in the rapidly evolving and competitive field of
tissue engineering. Many major pharmaceutical, biotechnology and medical product
companies in the United States and abroad are seeking to develop competitive
products for the treatment of skin wounds and organ equivalent products.
Competition from these companies and others is intense and is expected to
increase. Many of these companies have substantially greater capital resources,
research and development staffs and facilities and experience in the marketing
and distribution of products than the Company. In addition, competitive
companies are working on alternate approaches to many of the diseases targeted
by the Company.

The Company is currently aware of other companies which have or are
planning to commercialize products intended to serve as skin replacements, in
addition to several companies that concentrate on skin repair devices. The
Company's principal competitors in the wound care products market include
Johnson & Johnson, Kendall, Smith & Nephew, Advanced Tissue Sciences and Genzyme
Tissue Repair. The Company believes that its competitive position will be based
on its ability to create and maintain scientifically advanced technology and
proprietary products and processes, attract and retain qualified scientific
personnel, obtain patent or other protection for its products and processes,
obtain required government approvals on a timely basis, manufacture its products
on a cost-effective basis and successfully market its products.

EMPLOYEES

As of June 15, 1995, the Company had 95 full-time employees, of which 50
employees were devoted to research and development and 33 employees were devoted
to production and support of GRAFTSKIN and other products. The Company is
dependent upon the ability of certain of its key employees to develop and
manufacture its products and to assist in regulatory matters. None of the
Company's employees are represented by a labor union. The Company believes its
relationship with its employees is good.

SCIENTIFIC ADVISORY BOARD

The Company has a Scientific Advisory Board ("SAB") composed of seven
physicians, professors and scientists in various fields of medicine and science.
The SAB meets from time to time to advise and consult with management and the
Company's scientific staff. Each member of the SAB is expected to devote only a
portion of his time to the Company and may have consulting or other advisory
arrangements with other

24
<PAGE> 26

entities which may conflict or compete with his obligations to the Company.
Members of the SAB have no formal duties, authority or management obligations.

PROPERTIES

The Company currently leases 45,000 square feet of space in Canton,
Massachusetts, at an annual average base rent of $386,000, plus operating
expenses. The lease expires in 1999. In January 1992, the Company sublet
approximately 12,000 square feet of this space to a third party at an annual
rent of approximately $100,000 plus operating expenses. The Company took
occupancy of the subleased space in April 1995. The Company believes that its
facility is adequate for its current needs.

LEGAL PROCEEDINGS

On October 18, 1994, Thomas Tully, a former executive officer of the
Company commenced a lawsuit against the Company in Middlesex County Superior
Court. In the lawsuit, Mr. Tully claimed that the Company breached certain
severance arrangements between the Company and Mr. Tully, and also claimed
misrepresentation and violations of M.G.L. c.93A. The Company responded to Mr.
Tully's complaint with an answer and counterclaim denying Mr. Tully's
allegations and asserting counterclaims against him for breach of his
noncompetition and nondisclosure agreement with the Company. Thereafter, the
parties began settlement discussions which resulted in an agreement to settle
all claims between them on terms which the Company believes will not have a
material impact on its financial condition. Such settlement documents are
expected to be executed shortly.

25
<PAGE> 27

MANAGEMENT

The following table sets forth the name, age, and current position of each
executive officer and director of the Company.

<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------------------ ---- -----------------------------------------------
<S> <C> <C>
Herbert M. Stein.............. 67 Chairman, Chief Executive Officer and Director
Dr. David T. Rovee............ 55 President, Chief Operating Officer, Chief
Scientific Officer and Director
Curtis W. Rodenhouse.......... 41 Chief Financial Officer, Treasurer and
Secretary
Alan L. Crane................. 31 Vice President -- Business Development
Dr. Paul Kemp................. 38 Vice President -- Connective Tissue Science
Dr. Nancy L. Parenteau........ 41 Vice President -- Cell and Tissue Science
Dr. Harold B. Reisman......... 59 Vice President -- Operations
Dr. Michael L. Sabolinski..... 39 Vice President -- Medical and Regulatory
Affairs
Dr. Paul L. Termin, D.V.M..... 49 Vice President -- Vascular Products Research
and Development
Richard S. Cresse............. 67 Director
William J. Hopke.............. 39 Director
Dr. Bjorn R. Olsen............ 54 Director
Dr. Anton E. Schrafl.......... 63 Director
</TABLE>

Mr. Stein became Chairman of the Board of Directors in February 1991. He
has been a Director of the Company since October 1986 and the Chief Executive
Officer of the Company since January 1987. Mr. Stein was the Vice Chairman of
the Board of Directors of the Company from January 1987 to February 1991. Mr.
Stein is also a director of EKCO Group, Inc. and BioMedical Waste Systems, Inc.

Dr. Rovee became President, Chief Operating Officer and Chief Scientific
Officer in February 1994. He became a Director of the Company in March 1994. Dr.
Rovee joined the Company in September 1991 as a consultant and was elected Vice
President -- Research and Development of the Company in November 1991. Prior to
joining the Company, Dr. Rovee had been with Johnson & Johnson for 25 years,
most recently as Vice President of Research and Development for J&J Patient
Care, Inc.

Mr. Rodenhouse joined the Company as Chief Financial Officer, Treasurer and
Secretary in December 1994. Prior to joining the Company, Mr. Rodenhouse was
employed at Kellogg Brush Manufacturing Co. since December 1989, and served as
Executive Vice President, Chief Operating Officer and Chief Financial Officer.

Mr. Crane joined the Company as Vice President -- Business Development in
June 1994. Prior to joining the Company, Mr. Crane had been Worldwide Product
Manager Cardiovasculars, Associate Director Product Planning and Senior Manager
Product Planning at the DuPont Merck Pharmaceutical Company from 1992 until
1994. Mr. Crane was a consultant primarily to health care companies with The
Boston Consulting Group and for Arthur D. Little from 1988 to 1992.

Dr. Kemp was elected as Vice President -- Connective Tissue Science in
February 1994. Dr. Kemp was Director, Matrix Engineering from 1990 to 1994,
Director, Collagen Production from 1990 to 1992, Group Leader, Matrix
Biochemistry from 1988 to 1990 and Staff Scientist, Matrix Biochemistry from
1987 to 1988.

Dr. Parenteau was elected as Vice President -- Cell and Tissue Science in
February 1994. Dr. Parenteau was Director -- Cell Biology Research from 1989 to
1994, Project Director -- Living Skin Equivalent and Co-Director of Research
from 1987 to 1989 and Group Leader -- Cell Biology from 1986 to 1987.

Dr. Reisman joined the Company as Vice President -- Operations in February
1989. Prior to joining the Company, Dr. Reisman had been Director of
Manufacturing of the Food Ingredients Division of Stauffer Chemical Co. since
1973. From 1961 through 1973, Dr. Reisman was employed at Merck & Co., Inc.

Dr. Sabolinski was elected Vice President -- Medical and Regulatory Affairs
of the Company in February 1994. Dr. Sabolinski joined the Company in April 1992
as Director of Clinical and Regulatory

26
<PAGE> 28

Affairs. Prior to joining the Company, Dr. Sabolinski was Vice President of
Clinical Affairs at Advanced Tissue Sciences from November 1991 to March 1992.
From 1989 to November 1991, Dr. Sabolinski was Director of Cardiovascular
Products at Sandoz Pharmaceuticals Corp.

Dr. Termin was elected Vice President -- Vascular Products Research and
Development of the Company in February 1994. Dr. Termin joined the Company as
Director of the Graftartery Program in August 1992. Prior to joining the
Company, Dr. Termin served as Director, Medical and Scientific Affairs from
April 1990 and as Principal Scientist from December 1988 to March 1990 at
Schneider, a division of Pfizer Inc.

Mr. Cresse has served on the Board of Directors of the Company since 1986.
He has served as Corporate Vice President -- Sales of Arthur D. Little, Inc.
since November 1988.

Mr. Hopke has served on the Board of Directors of the Company since 1990.
He has served as Senior Vice President since June 1993 and Treasurer since June
1995 of Dominion Capital, Inc. In addition, he has served as President of
Dominion Financing, Inc. since January 1988 and Assistant Treasurer of Dominion
Resources, Inc. since 1989. He also serves as a director of Petersburg Long
Distance Inc., Caldera Environmental Corp., Wilshire Technologies, Inc., EPL
Technologies Inc., and Advanced Materials Inc.

Dr. Schrafl has served on the Board of Directors of the Company since 1987.
Dr. Schrafl has served as Deputy Chairman of "Holderbank" Financiere Glaris
Ltd., a Swiss manufacturer of cement, since July 1984.

Dr. Olsen was elected to the Board of Directors of the Company in 1994. Dr.
Olsen served as Hersey Professor of Anatomy, Department of Anatomy and Cellular
Biology, Harvard Medical School, from 1985 to 1993, and has served as Hersey
Professor of Cell Biology, Department of Cell Biology, Harvard Medical School,
since 1993.

27
<PAGE> 29

PRINCIPAL STOCKHOLDERS AND MANAGEMENT

The following table sets forth certain information as of March 31, 1995
with respect to the beneficial ownership of the Company's Common Stock by (i)
each person known to the Company to own beneficially more than 5% of the
outstanding shares of Common Stock, (ii) each director, (iii) the Company's four
most highly compensated executive officers for the year ended December 31, 1994
and (iv) all directors and executive officers of the Company as a group:

<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK PERCENT OF
NAME AND ADDRESS OF BENEFICIALLY COMMON STOCK
BENEFICIAL OWNER OWNED(1) OUTSTANDING
------------------- ------------ ------------
<S> <C> <C>
North American Management Corp. ................................ 865,350(2) 9.2%
Ten Post Office Square
Boston, MA 02109
H.M. Stein Associates........................................... 490,000(3) 5.2%
c/o Herbert M. Stein
2800 South Ocean Boulevard
Boca Raton, FL 33432
Herbert M. Stein................................................ 503,550(4) 5.4%
Richard S. Cresse............................................... 22,000(5) *
William J. Hopke................................................ 17,000(6) *
Dr. Bjorn R. Olsen.............................................. 5,000(5) *
Dr. Anton E. Schrafl............................................ 84,000(7) *
Dr. David T. Rovee.............................................. 63,600(5) *
Dr. Harold B. Reisman........................................... 65,000(5) *
Dr. Michael L. Sabolinski....................................... 27,000(5) *
All directors and officers as a group (13 persons).............. 841,950(8) 9.0%
</TABLE>

- ---------------
* Less than 1%.

(1) Except as otherwise specifically noted, the number of shares stated as being
owned beneficially includes shares believed to be held beneficially by
spouses, minor children and grandchildren. The inclusion of such shares
however does not constitute an admission that the named stockholders are
direct or indirect beneficial owners of such shares.

(2) The information reported is solely based on information provided by North
American Management Corp.

(3) Represents shares held by H.M. Stein Associates, a limited partnership owned
by members of the immediate family of Herbert M. Stein, an officer and
director of the Company. Mr. Stein owns approximately 8% of the
partnership.

(4) Includes 449,500 shares of Common Stock which are subject to outstanding
options exercisable within the 60-day period following March 31, 1995;
44,100 shares held by H.M. Stein Associates and 9,950 shares owned. Does
not include 445,900 shares of Common Stock held by H.M. Stein Associates.

(5) Represents shares of Common Stock which are subject to outstanding options
exercisable within the 60-day period following March 31, 1995.

(6) Excludes 120,000 shares of Common Stock and 250,000 shares of Preferred
Stock held by Dominion Capital, Inc. Mr. Hopke is an officer and director
of Dominion Capital, Inc. Mr. Hopke disclaims beneficial ownership of the
Common Stock and the Preferred Stock held by Dominion Capital, Inc.
Includes 17,000 shares of Common Stock which are subject to outstanding
options exercisable within the 60-day period following March 31, 1995.

(7) Includes 62,000 shares owned and 22,000 shares of Common Stock which are
subject to outstanding options exercisable within the 60-day period
following March 31, 1995.

(8) Includes 44,100 shares held by H.M. Stein Associates, 9,950 shares held by
Herbert M. Stein, 62,000 shares held by Dr. Schrafl and 725,900 shares of
Common Stock subject to outstanding stock options held by officers and
directors which are exercisable within the 60-day period following March
31, 1995. Excludes 120,000 shares of Common Stock and 250,000 shares of
Preferred Stock held by Dominion Capital, Inc. (see footnote 6 above.).

28
<PAGE> 30

DESCRIPTION OF CAPITAL STOCK

AUTHORIZED AND OUTSTANDING CAPITAL STOCK. The Company is authorized to
issue 20,000,000 shares of common stock, $.01 par value per share ("Common
Stock"), and 1,000,000 shares of Preferred Stock, $1.00 par value per share
("Preferred Stock").

As of June 15, 1995, there were issued and outstanding 9,379,278 shares of
Common Stock and 250,000 shares of Series A Convertible Preferred Stock (the
"Series A Stock"). In addition, as of June 15, 1995, the Company has reserved an
aggregate of 2,000,000 shares of Common Stock for issuance under its 1986 Stock
Option Plan, 1,200,000 shares of Common Stock for issuance under its 1995 Stock
Option Plan, 300,000 shares of Common Stock under a stock option agreement with
the Chairman of the Company, 187,500 shares of Common Stock for issuance upon
the exercise of certain warrants described below, 150,000 shares of Common Stock
for issuance upon exercise of options granted under the 1991 Employee Stock
Purchase Plan, 100,000 shares of Common Stock for issuance upon exercise of
options granted under the 1991 Directors Stock Option Plan, and 200,000 shares
of Common Stock for the issuance upon exercise of options granted or to be
granted under the 1994 Directors' Stock Option Plan.

Common Stock. The holders of Common Stock are entitled to one vote per
share for each share held of record on all matters submitted to a vote of
stockholders and are entitled to receive ratably such dividends as may be
declared by the Board of Directors out of funds legally available therefor. In
the event of a liquidation, dissolution or winding up of the Company, holders of
Common Stock have the right to a ratable portion of assets remaining after
payment of liabilities and the liquidation preferences of any outstanding
Preferred Stock. The holders of Common Stock have no preemptive rights or rights
to convert their Common Stock into any other securities and are not subject to
future calls or assessments by the Company. All outstanding shares of Common
Stock are fully paid and non-assessable.

Preferred Stock. The Board of Directors may, without further action of the
stockholders of the Company, issue Preferred Stock in one or more series and fix
the rights and preferences thereof, including dividend rights, dividend rates,
conversion rights, voting rights, terms of redemption (including sinking fund
provisions), redemption price or prices, liquidation preferences and the number
of shares constituting any series or the designation of such series.

The rights of the holders of Common Stock as described above will be
subject to, and may be adversely affected by, the rights of holders of any
Preferred Stock that may be issued in the future. Issuance of Preferred Stock,
while providing desirable flexibility in connection with possible acquisitions,
and other corporate purposes, could have the effect of making it more difficult
for a third party to acquire, or of discouraging a third party from acquiring, a
majority of the outstanding voting stock of the Company. The Company has no
present plans to issue any additional shares of Preferred Stock.

Series A Stock. On May 12, 1991, the Board of Directors authorized the
designation of 250,000 shares of Series A Stock. All of the authorized and
issued shares of Series A Stock were then purchased by a stockholder of the
Company. No dividends accrue on the Series A Stock.

The Company may redeem the Series A Stock at any time, in whole or in part,
by paying a redemption price ranging from $8.40 to $8.00 per share, depending on
when such stock is redeemed by the Company. The Series A Stock has a liquidation
preference over Common Stock equal to $8.00 per share.

Each holder of shares of Series A Stock is entitled to the number of votes
equal to the number of whole shares of Common Stock into which the shares of
Series A Stock are convertible. The Company may not (a) amend, alter or repeal
the preferences, special rights or other powers of the Series A Stock so as to
adversely affect the Series A Stock, or (b) amend, alter or modify its Restated
Certificate of Incorporation to increase the number of authorized shares of
Series A Stock, without the written consent of the holders of a majority of the
then outstanding shares of Series A Stock.

Common Stock Purchase Warrants. There are currently outstanding common
stock purchase warrants ("the Investor Warrants") issued by the Company to
certain investors to purchase an aggregate of 187,500 shares of its Common
Stock, for exercise prices ranging from $12.00 per share to $30.55 per share.
All Investor Warrants are exercisable at any time by the holders thereof. The
shares of Common Stock issuable

29
<PAGE> 31

upon exercise of such Investor Warrants (the "Registrable Shares") have not been
registered under the Securities Act. However, the Company has granted the
holders of the Investor Warrants demand registration rights to require the
Company to register the Registrable Shares under the Securities Act at the
Company's expense. The Company has also granted incidental registration rights
to each holder of Investor Warrants.

Investor Warrants to purchase an aggregate of 150,000 shares of Common
Stock expire in November, 1995; and 37,500 Investor Warrants expire on April 3,
1996. As of June 15, 1995, no Investor Warrants had been exercised.

DESCRIPTION OF WARRANTS

The following summary of the provisions of the Warrants is qualified in its
entirety by reference to the form of Warrant Certificate, a copy of which is
filed as an Exhibit to the Registration Statement of which this Prospectus is a
part.

RIGHTS TO PURCHASE COMMON STOCK

Each Warrant entitles the holder (the "Warrant Holder") to the right (the
"Warrant Right") to purchase one share of Common Stock at a price of $
per share (expected to be 50% higher than the fair market value per share of the
Company's Common Stock on the date of sale), subject to adjustment as described
below, at any time through , 2000, when the Warrants expire.
The holder of Warrants may exercise some or all of the Warrants held by such
holder by executing the appropriate subscription form attached to the Warrant
Agreement and delivering the form to the Company, together with the payment of
the exercise price for the shares of Common Stock purchased. The exercise price
may be paid by certified or bank check or by wire transfer. Warrants may be
exercised on more than one occasion prior to expiration of the Warrants. Warrant
holders will not have any voting or other rights as stockholders of the Company.

The Company has authorized and reserved for issuance a number of shares of
Common Stock sufficient to provide for the exercise of the right to purchase
shares currently represented by the Warrants. When issued against receipt of the
payment provided for in the Warrants, each share of Common Stock will be fully
paid and nonassessable.

Redemption Rights. The Warrants may, subject to certain exceptions, be
redeemed by the Company at a price of $.01 each, upon 30 days prior written
notice, if the average of the closing sale prices of the Common Stock (as
reported by the American Stock Exchange) exceeds $ per share for any
thirty (30) consecutive trading days ending within 30 days of the notice of
redemption. The Warrant Rights contained in any Warrants so called for
redemption will be forfeited unless such Warrants are exercised prior to the
date specified in the notice of redemption.

Transferability. The Warrants are nontransferable and no public market for
trading the Warrants is expected to exist.

Adjustments. The exercise price of the Warrants, the number of shares of
Common Stock issuable upon the exercise of the Warrant Rights and the price at
which the Company may redeem the Warrants are subject to adjustment in the event
of stock dividend, stock split, reverse stock split, recapitalization, merger,
consolidation or certain other events. In the event of the complete liquidation
and dissolution of the Company, the Warrants will terminate.

CERTAIN FEDERAL INCOME TAX CONSIDERATIONS

The following discussion summarizes certain United States federal income
tax considerations that prospective purchasers of the Units should take into
account. The discussion is based upon the Internal Revenue Code of 1986 as
presently in effect, Treasury Department proposed, temporary and final
regulations, judicial decisions and Internal Revenue Service rulings and
administrative practices, all of which are subject to prospective or retroactive
change. The tax consequences to prospective investors may vary based on the

30
<PAGE> 32

individual circumstances of each investor and the tax consequences to any
particular investor may be affected by matters not discussed below. PROSPECTIVE
INVESTORS ARE URGED TO CONSULT THEIR OWN ADVISORS WITH SPECIFIC REFERENCE TO
THEIR OWN FEDERAL INCOME TAX SITUATIONS, AS WELL AS ESTATE, GIFT, FOREIGN, STATE
AND LOCAL TAX ASPECTS OF AN INVESTMENT IN THE COMPANY.

DETERMINATION OF TAX BASIS

For purposes of determining a holder's adjusted tax basis in the Common
Stock and the Warrants for federal income tax purposes, the purchase price of
each Unit must be allocated between the Common Stock and the Warrant. A holder's
adjusted tax basis for the Common Stock will equal the portion of each Unit's
purchase price allocated to the Common Stock based on the relative fair market
values of the Common Stock and the Warrant on the closing date of the
transaction. A holder's adjusted tax basis for each Warrant will equal the
portion of each Unit's purchase price not allocated to the Common Stock.

SALES OF COMMON STOCK OR WARRANTS

On a sale or other taxable disposition of any Common Stock or Warrant, a
holder will recognize gain or loss in an amount equal to the difference between
the amount received on the disposition and the holder's adjusted tax basis in
any such Common Stock or Warrant. Gain or loss on the sale of the Common Stock
will generally be capital gain or loss if the Common Stock is treated as a
capital asset in the hands of the holder on the date of sale. Gain or loss on
the sale of a Warrant will be capital gain or loss if the Common Stock is or
would be treated as a capital asset in the hands of the holder of the Warrant on
the date of sale. The capital gain or loss will be long-term capital gain or
loss if the holder's holding period for such Common Stock or Warrants is more
than one year at the time of the disposition. A non-corporate holder is taxable
on long-term capital gains at a maximum federal tax rate of 28%, contrasted with
the maximum federal tax rate applicable to short-term capital gains of 39.6%
(not taking into account the phase-out of personal exemptions and certain
itemized deductions). A corporate holder is taxable on long-term capital gains
at a maximum rate of 35%.

EXERCISE OF WARRANTS

Upon the exercise of a Warrant, a holder will not recognize any gain or
loss. The holder's adjusted tax basis in the Common Stock received upon exercise
of the Warrant will be equal to the adjusted tax basis of the Warrant increased
by the amount paid on exercise of the Warrant. The holding period for the Common
Stock received upon exercise of the Warrant will commence upon exercise.

REDEMPTION OF WARRANTS

Upon the redemption by the Company of a Warrant, a holder will recognize
gain or loss in an amount equal to the difference between the amount received on
the redemption and the holder's adjusted tax basis in such Warrant. If the
Common Stock would have been a capital asset in the hands of the holder of the
Warrant, the gain or loss will generally be treated as capital gain. If the
Common Stock would not have been a capital asset in the hands of the holder of
the Warrant or if the IRS successfully asserted that the redemption of the
Warrant constituted a termination of a contractual obligation rather than the
sale or exchange of a capital asset, the gain or loss would be treated as
ordinary income or ordinary loss. Any capital gain or loss will be long-term
capital gain or loss if the holder's holding period for the Warrants is more
than one year at the time of the disposition.

EXPIRATION OF WARRANTS

Upon the expiration of a Warrant without exercise, a holder will recognize
a capital loss in an amount equal to the adjusted tax basis of the Warrant.

31
<PAGE> 33

PLAN OF DISTRIBUTION

The Units offered hereby are being offered for sale directly by the
Company. The Company does not anticipate offering the Units through
underwriters, dealers or agents. However, if the Company does offer the Units
through any of the foregoing, the net proceeds to the Company would be reduced
by any discounts or commissions which would be required to be paid by the
Company to any such underwriter, dealer or agent. The price of the Units offered
hereby and the exercise price of the Common Stock underlying the Warrants will
be determined through negotiations between the Company and prospective
purchasers of the Units.

There can be no assurance that the Company will be successful in selling
any or all of the Units offered hereby. The Company has not fixed a minimum
number of Units to be sold pursuant to this Prospectus. Therefore, the Company
may sell less than all of the Units offered hereby, which may significantly
reduce the amount of proceeds to be received by the Company. Funds received by
the Company on the sale of less than all of the Units offered hereby will not be
placed in an escrow, trust or similar account.

The Chief Executive Officer, President and Chief Financial Officer of the
Company, with the assistance of other officers as needed, will participate in
the sale of the Units to the purchasers. These participants, who will not
receive any compensation for these activities, will not be deemed to be brokers
pursuant to Rule 3a4-1 under the Securities Exchange Act of 1934, as amended.
The Company does not expect to offer or sell Units in any state whose securities
laws would require that the Units only be sold through licensed brokers or
dealers.

LEGAL MATTERS

The validity of the Units offered hereby will be passed upon for the
Company by Hale and Dorr, Boston, Massachusetts.

EXPERTS

The consolidated balance sheets of the Company as of December 31, 1994 and
1993 and the related consolidated statements of operations, stockholders'
deficit and cash flows for each of the three years in the period ended December
31, 1994 are incorporated by reference in this Prospectus and elsewhere in the
registration statement and have been incorporated herein in reliance upon the
reports of Coopers & Lybrand L.L.P., independent accountants, given on the
authority of such firm as experts in accounting and auditing.

32
<PAGE> 34

- ------------------------------------------------------
- ------------------------------------------------------
NO DEALER, SALES REPRESENTATIVE OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH THIS OFFERING
OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO BUY, ANY SECURITIES OTHER THAN THE REGISTERED
SECURITIES TO WHICH IT RELATES OR AN OFFER TO, OR SOLICITATION OF, ANY PERSON IN
ANY JURISDICTION WHERE SUCH AN OFFER OR SOLICITATION WOULD BE UNLAWFUL. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCE, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED
HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF.
------------------------
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Incorporation of Certain Documents by
Reference.......................... 2
Available Information................ 2
Prospectus Summary................... 3
Risk Factors......................... 5
Use of Proceeds...................... 9
Common Stock Price Range............. 11
Dividend Policy...................... 11
Capitalization....................... 12
Dilution............................. 13
Selected Consolidated Financial
Data............................... 14
Management's Discussion and Analysis
of Financial Condition and Results
of Operations...................... 15
Business............................. 17
Management........................... 26
Principal Stockholders and
Management......................... 28
Description of Capital Stock......... 29
Description of Warrants.............. 30
Certain Federal Income Tax
Considerations..................... 31
Plan of Distribution................. 32
Legal Matters........................ 32
Experts.............................. 32
</TABLE>

- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
ORGANOGENESIS INC.

200,000 UNITS

EACH UNIT CONSISTING OF FIVE SHARES OF
COMMON STOCK AND ONE REDEEMABLE
COMMON STOCK PURCHASE WARRANT
--------------------

PROSPECTUS
--------------------
, 1995
- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 35

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The costs of issuance and distribution will be borne by the Registrant as
follows:

<TABLE>
<S> <C>
SEC Registration Fee.............................................................. $ 5,407
AMEX Listing Fee.................................................................. 17,500
Transfer Agent and Registrar*..................................................... 3,500
Accounting Fees and Expenses*..................................................... 20,000
Legal Fees and Expenses*.......................................................... 50,000
Printing and Engraving*........................................................... 25,000
Miscellaneous*.................................................................... 28,593
--------
Total................................................................... $150,000
========
</TABLE>

- ---------------
* Estimated

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Section 145 of the General Corporation Law of the State of Delaware
provides that a corporation has the power to indemnify a director, officer,
employee or agent of the corporation and certain other persons serving at the
request of the corporation in related capacities against amounts paid and
expenses incurred in connection with an action or proceeding to which he is or
is threatened to be made a party by reason of such position, if such person
shall have acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the corporation, and, in any criminal
proceeding, if such person had no reasonable cause to believe his conduct was
unlawful, provided that, in the case of actions brought by or in the right of
the corporation, no indemnification shall be made with respect to any matter as
to which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the adjudicating court determines that such
indemnification is proper under the circumstances.

Section 102(b)(7) of the Delaware General Corporation Law, as amended,
permits a corporation to provide in its certificate of incorporation that a
director of the corporation shall not be personally liable to the corporation or
its stockholders for monetary damages for breach of fiduciary duty as a
director, except for liability (i) for any breach of the director's duty of
loyalty to the corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv)
for any transaction from which the director derived an improper personal
benefit.

The Company's Restated Certificate of Incorporation provides for
indemnification to the fullest extent permitted by law and that the Company may
advance litigation expenses to an officer or director prior to the final
disposition of an action.

The Company's Restated Certificate of Incorporation also provides, as
permitted by Delaware law, that directors shall not be personally liable to the
Company or its stockholders for monetary damages for breach of fiduciary duty as
a director, except for liability (i) for any breach of a director's duty of
loyalty to the Company or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or knowing violations of law,
(iii) under Section 174 of the Delaware General Corporation Law or (iv) for any
transaction from which the director derived an improper personal benefit.

The Company has a Directors and Officers liability insurance policy that
insures the Company's officers and directors against certain liabilities.

II-1
<PAGE> 36

ITEM 16. EXHIBITS.

See Exhibit Index included immediately preceding the Exhibits to this
Registration Statement, which is incorporated herein by reference.

ITEM 17. UNDERTAKINGS.

(a) Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended (the "Securities Act") may be permitted to directors,
officers and controlling persons of the Registrant pursuant to the provisions
described under "Item 15 -- Indemnification of Directors and Officers" above, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities 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
Securities Act and will be governed by the final adjudication of such issue.

(b) The undersigned Registrant hereby undertakes:

(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, 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.

(c) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this Registration Statement shall be deemed to be a
new registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

II-2
<PAGE> 37

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Company
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 Town of Canton, Commonwealth of Massachusetts on the 19th day
of June, 1995.

ORGANOGENESIS INC.

HERBERT M. STEIN
By:

------------------------------------
HERBERT M. STEIN
Chief Executive Officer

SIGNATURES AND POWER OF ATTORNEY

Each person whose signature appears below constitutes and appoints Herbert
M. Stein, Curtis W. Rodenhouse and Steven D. Singer, and each of them, his true
and lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution in each of them, for him and in his name, place and stead, and in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement on Form S-3 of Organogenesis Inc. (or
any other Registration Statement for the same offering that is to be effective
upon filing pursuant to Rule 462(b) under the Securities Act) and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary to be done in
and about the premises, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them or their or his substitutes or
substitute, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----

<S> <C>
/S/ HERBERT M. STEIN Chief Executive Officer, Chairman and Director
- ------------------------------------- (Principal Executive Officer)
Herbert M. Stein

/S/ DAVID T. ROVEE President, Chief Operating Officer, Chief Scientific
- ------------------------------------- Officer and Director
David T. Rovee
/S/ CURTIS W. RODENHOUSE Chief Financial Officer, Treasurer and Secretary
- ------------------------------------- (Principal Financial Officer and Principal
Curtis W. Rodenhouse Accounting Officer)

/S/ RICHARD S. CRESSE Director
- -------------------------------------
Richard S. Cresse

/S/ WILLIAM J. HOPKE Director
- -------------------------------------
William J. Hopke

/S/ ANTON E. SCHRAFL Director
- -------------------------------------
Anton E. Schrafl

/S/ BJORN R. OLSEN Director
- -------------------------------------
Bjorn R. Olsen
</TABLE>

II-3
<PAGE> 38

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION OF EXHIBIT
- -------- ----------------------------------------------------------------------------------
<C> <S>
*4.1 Restated Certificate of Incorporation, as amended, of Organogenesis Inc.
**4.2 Certificate of Stock Designation, Number, Voting Powers, Preferences and Rights of
the Series of the Preferred Stock of Organogenesis Inc. to be Designated Series A
Convertible Preferred Stock
***4.2 By-Laws, as amended, of Organogenesis Inc.
****4.3 Form of Warrant
****5 Opinion of Hale and Dorr
23.1 Consent of Coopers & Lybrand L.L.P.
****23.2 Consent of Hale and Dorr (included in Exhibit 5)
24 Powers of Attorney (contained on Page II-3 of this Registration Statement)
</TABLE>

- ---------------
* Incorporated by reference to the Company's Registration Statement on Form
S-3 (File No. 33-40287), filed with the Commission on April 30, 1991.

** Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1991 (File No. 0-15246), filed with the
Commission on August 13, 1991).

*** Incorporated by reference to the Company's Annual Report on Form 10-K, as
filed with the Commission on March 31, 1987 (File No. 0-15246).

**** To be filed by amendment.

<PAGE> 1

EXHIBIT 23.1

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in the Registration
Statement of Organogenesis Inc. on this Form S-3 and Forms S-8 (File Nos.
33-12761, 33-41862, 33-48888, 33-48890, 33-86506, 33-86508 and 33-48892) of our
report dated February 15, 1995, on our audits of the consolidated financial
statements of Organogenesis Inc. as of December 31, 1994 and 1993 and for each
of the three years in the period ended December 31, 1994 which report is
included in the Company's Report on Form 10-K filed with the Securities and
Exchange Commission on March 29, 1995. We also consent to the reference to our
Firm under the caption "Experts."

COOPERS & LYBRAND L.L.P.

Boston, Massachusetts
June 14, 1995