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As filed with the Securities and Exchange Commission on September 12, 1997
Registration No. 333- 28801
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------
AMENDMENT NO.3
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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THE LIPOSOME COMPANY, INC.
(Exact name of registrant as specified in its charter)
--------
Delaware 22-2370691
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
<TABLE>
<S> <C>
One Research Way Charles A. Baker
Princeton Forrestal Center Chairman and Chief Executive Officer
Princeton, New Jersey 08540 The Liposome Company, Inc.
(609) 452-7060 One Research Way
(Address, including zip code, and Princeton Forrestal Center
telephone number, including area code, Princeton, New Jersey 08540
of registrant's principal executive offices) 609-452-7060
(Name, address, including zip code, and telephone
-------- number, including area code, of agent for service)
--------
</TABLE>
Approximate date of commencement of proposed sale to the public: From
time to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. |X|
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- -------------------------------------------- ---------------------- -------------------- -------------------- --------------------
Title of Each Class of Securities Amount to Proposed Proposed Amount of
to be Registered be Registered Maximum Maximum Registration
Offering Price Aggregate Fee
Per Unit(1) Offering Price(1)
- -------------------------------------------- ---------------------- -------------------- -------------------- --------------------
<S> <C> <C> <C> <C>
Common Stock, par value $.01 per share 7,514,346 shares $26.063 $195,846,399.80 $59,347.39
============================================ ====================== ==================== ==================== ====================
</TABLE>
- -------------------------
(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(c) under the Securities Act of 1933 based on
the average of the high and low prices of the Common Stock on the
Nasdaq National Market on May 30, 1997.
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
===============================================================================
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any state in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.
Subject to Completion Dated September 12, 1997
Prospectus
7,514,346 Shares
The Liposome Company, Inc.
Common Stock
($.01 par value)
--------------------
This Prospectus covers the offering for resale of 7,514,346
shares (the "Shares") of common stock, par value $.01 per share (the "Common
Stock"), of The Liposome Company, Inc., a Delaware corporation (the "Company"),
which may be offered from time to time by the Selling Stockholder named herein
under "Selling Stockholder." As of the date of this Prospectus the Selling
Stockholder owns 9,353,346 shares of Common Stock, based on a Schedule 13D filed
on July 31, 1997, which represents 25% of the shares of Common Stock of the
Company outstanding on the date hereof, of which 7,514,346 are registered for
sale herein. The Company will receive no part of the proceeds of sales made
hereunder. All expenses of registration incurred in connection with an offering
of the Shares are being borne by the Company, except for the fees, expenses and
disbursements of the Selling Stockholder's counsel.
The Common Stock is quoted on the Nasdaq National Market under
the symbol "LIPO." OnSeptember 10, the last reported sale price of the Common
Stock was $7.375 per share.
The Shares may be offered by the Selling Stockholder for sale
through underwriters or dealers or from time to time on the Nasdaq National
Market, or otherwise, at prices then obtainable. The Company has agreed to
indemnify the Selling Stockholder against certain liabilities, including
liabilities under the Securities Act of 1933, as amended (the "Securities Act").
The Selling Stockholder and any broker executing selling orders on behalf of the
Selling Stockholder may be deemed to be underwriters within the meaning of the
Securities Act. Commissions received by underwriters or by any such broker may
be deemed to be underwriting commissions under the Securities Act. See "PLAN OF
DISTRIBUTION."
Prospective investors should consider carefully the matters
discussed under "RISK FACTORS" beginning on page 4.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is _______, 1997.
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AVAILABLE INFORMATION
The Company is subject to the information reporting
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith files periodic reports, proxy statements and
other information with the Securities and Exchange Commission (the
"Commission"). Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the regional offices of the Commission located at Seven World
Trade Center, 13th Floor, New York, New York 10048 and Northwestern Atrium
Center, 500 West Madison Street (Suite 1400), Chicago, Illinois 60661. Copies of
all or part of such materials may also be obtained at prescribed rates from the
public reference facilities maintained by the Commission at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. In addition, the
Commission maintains a Web site at http://www.sec.gov that contains reports,
proxy statements and other information. Such material also can be inspected at
the offices of the National Association of Securities Dealers, Inc., 1735 K
Street, N.W., Washington, D.C. 20006.
The Company has filed with the Commission a registration
statement (which term shall encompass any amendments thereto) on Form S-3 under
the Securities Act of 1933, as amended (the "Securities Act") with respect to
the securities offered hereby (the "Registration Statement"). This Prospectus,
which constitutes part of the Registration Statement, does not contain all of
the information set forth in the Registration Statement, certain items of which
are contained in exhibits to the Registration Statement as permitted by the
rules and regulations of the Commission. For further information with respect to
the Company and the securities offered by this Prospectus, reference is made to
the Registration Statement, including the exhibits thereto, and the financial
statements and notes thereto filed or incorporated by reference as a part
thereof, which are on file at the offices of the Commission and may be obtained
upon payment of the fee prescribed by the Commission, or may be examined without
charge at the offices of the Commission. Statements made in this Prospectus
concerning the contents of any document referred to herein are not necessarily
complete, and, in each such instance, are qualified in all respects by reference
to the applicable documents filed with the Commission. The Registration
Statement and the exhibits thereto filed by the Company with the Commission may
be inspected and copied at the locations described above.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the
Commission pursuant to the Exchange Act (Commission File No. 0-14887) are
incorporated herein by reference:
(a) the Company's annual report on Form 10-K for the fiscal
year ended December 29, 1996;
(b) the Company's amended annual report on Form 10-K for the
fiscal year ended December 29, 1996, filed on May 6, 1997;
(c) the Company's quarterly report on Form 10-Q for the
quarter ended March 30, 1997;
(d) the Company's report on Form 8-K dated June 25, 1997 and
filed on June 27, 1997: and
(e) the Company's quarterly report on Form 10-Q for the
quarter ended June 29, 1997.
All documents filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus
and prior to the filing of a post-effective amendment that indicates the
termination of this offering shall be deemed to be incorporated in this
Prospectus by reference and to be a part hereof from the date of filing of such
documents.
Any statements contained herein or 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 such 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 has been delivered, a copy of any or all of the documents
referred to above that have been or may be incorporated by reference herein
other than exhibits to such documents (unless such exhibits are specifically
incorporated by reference therein). Requests for such copies should be directed
to The Liposome Company, Inc., One Research Way, Princeton Forrestal Center,
Princeton, New Jersey 08540 Attention: Carol J. Gillespie, Vice President,
General Counsel and Secretary. Telephone requests may be directed to (609)
452-7060.
FORWARD LOOKING STATEMENTS
THIS PROSPECTUS CONTAINS AND INCORPORATES BY REFERENCE CERTAIN
FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995 WITH RESPECT TO THE FINANCIAL CONDITION, RESULTS
OF OPERATIONS AND BUSINESS OF THE COMPANY, INCLUDING, WITHOUT LIMITATION,
STATEMENTS UNDER THE CAPTION "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS" IN THE COMPANY'S ANNUAL AND QUARTERLY
REPORTS. THESE FORWARD LOOKING STATEMENTS INVOLVE CERTAIN RISKS AND
UNCERTAINTIES. NO ASSURANCE CAN BE GIVEN THAT ANY OF SUCH MATTERS WILL BE
REALIZED. FACTORS THAT MAY CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE
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<PAGE>
CONTEMPLATED BY SUCH FORWARD LOOKING STATEMENTS INCLUDE, AMONG OTHERS, THE
FACTORS DISCUSSED IN THE SECTION HEREIN ENTITLED "RISK FACTORS."
4
<PAGE>
RISK FACTORS
The following risk factors should be considered carefully in
addition to the other information contained in this Prospectus in evaluating an
investment in the shares of Common Stock registered hereby:
Management of Growth. The Company is currently experiencing a
period of rapid growth which has placed and could continue to place a strain on
the Company's financial, management and other resources. The Company's ability
to manage its staff and facilities growth effectively will require it to
continue to improve its operational, financial and other internal systems and to
train, motivate and manage its employees. If the Company's management is unable
to manage growth effectively and new employees are unable to achieve anticipated
performance levels, the Company's business and results of operations could be
adversely affected.
Early Stage of Commercialization. The Company's first
commercial sales of ABELCET(R) commenced in the United Kingdom in the second
quarter of 1995 and in the United States toward the end of the fourth quarter of
1995. In other countries where marketing approvals have been received, the
Company will determine on an individual country basis whether the product should
be marketed by marketing partners or distributors or by the Company. In various
additional foreign countries the Company has filed marketing applications with
respect to ABELCET(R). There can be no assurance that such applications will be
accepted or, if approved, that there will not be restrictions which might lead
the Company to refrain from marketing and selling in some or all of these
markets. The Company's long-term viability and growth will depend on successful
commercialization of products resulting from its research activities. No
assurance can be given that TLC D-99 or other products currently under
development will be successfully commercialized or that the required regulatory
approvals will be obtained.
History of Operating Losses and Accumulated Deficit. The
Company has incurred losses in each year since its inception and anticipates
that operating losses will continue for at least one year. The Company's
accumulated deficit at June 29, 1997 was approximately $175,417,000. The Company
will need to commit significant financial and other resources to the commercial
manufacturing, marketing and working capital requirements of its products in the
United States and other countries where product approvals have been obtained.
Limited Manufacturing Capabilities. In order to be successful,
the Company's current and future products, if any, must be manufactured in
commercial quantities, in compliance with regulatory requirements, at an
acceptable cost and with sufficient stability. There can be no assurance that
facilities and staff will be adequate to produce quantities of such products
sufficient to satisfy demand. The Company owns a manufacturing facility in
Indianapolis, Indiana for the manufacture of its commercial products on a scale
the Company believes to be sufficient to meet worldwide demand. During 1996, the
Company refitted this facility to manufacture ABELCET(R). However, the facility
has not yet been approved by European authorities, and there can be no assurance
that such approval will be forthcoming. In addition, should fire or other
natural disaster strike the Indianapolis manufacturing facility, the Company has
5
<PAGE>
no alternative source for the manufacture of ABELCET(R) unless it reactivates
its manufacturing facility in Princeton, New Jersey. TLC D-99, to which the
Company reacquired marketing rights from Pfizer, Inc. ("Pfizer") in July 1997,
will be manufactured by the Company, , and there can be no assurance that the
the Company's manufacturing facility for TLC D-99 would be approved to
manufacture commercial supplies of the product, that its capacity would be
adequate to supply commercial demand, or that the Company could contract with a
third party to manufacture the product on acceptable terms. A substantial
capital investment would be required in order to manufacture TLC D-99 at the
Company's Indianapolis facility, and there can be no assurance that the
necessary funds would be available or that the facility would be approved by the
relevant regulatory authorities.
Limited Marketing and Sales Experience. In the United States,
the Company has assembled an experienced hospital sales force, which was
increased from 20 representatives to 40 representatives at the end of the 1996
fiscal year. However, the experience of the marketing staff and the sales force
in marketing ABELCET(R) is limited, and there can be no assurance that revenues
from sales of this product will increase in proportion to increasing
expenditures on marketing personnel and programs. If TLC D-99 or other products
to be marketed by the Company are approved, it may be necessary to hire
additional marketing and sales staff, and there can be no assurance that
personnel with the proper qualifications can be found or that they will be
successful in gaining market acceptance for the Company's products. In addition,
significant additional expenditures, management resources and time would be
required in connection with any further sales force expansion. To the extent
that the Company determines not to, or is unable to, expand its sales force, it
will be dependent on third parties for the marketing and distribution of its
products, and there can be no assurance that the Company will be able to
contract with third party marketing partners or distributors on acceptable
terms. See also the section on "Risks Associated with International Sales."
Competition. The Company is aware of various products under
development or manufactured by competitors that are used for the prevention,
diagnosis or treatment of certain diseases the Company has targeted for product
development, some of which use therapeutic approaches that compete directly with
certain of the Company's product candidates. Some of the Company's competitors
have substantially greater financial and technical resources and production and
marketing capabilities than the Company. In addition, many of the Company's
competitors have significantly greater experience than the Company in
preclinical testing and human clinical trials of new or improved pharmaceutical
products and in obtaining FDA and other regulatory approvals on products for use
in health care. In particular, the Company is aware that other companies are
developing lipid-based or liposomal amphotericin B products and have obtained
regulatory approvals for such products in certain markets. Two competitors
received approvals for lipid-based amphotericin B products in certain markets
before ABELCET(R) was approved, which may confer a competitive advantage for
their products. In the United States, although ABELCET(R) was the first
lipid-based amphotericin B product to be approved for marketing, one
competitor's product was approved in the fourth quarter of 1996, and another
competitor's product was approved in August 1997. Although it cannot be
predicted how the existence of competing lipid-based products may affect the
U.S. antifungal market, it is possible that the Company's share of this market
will decline and that price competition will reduce the overall size of the
market. In addition, other companies are also developing liposomal anthracycline
products similar to TLC D-99, two of which have been cleared by the FDA for
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<PAGE>
treatment of Kaposi's Sarcoma. The Company is also competing with respect to
manufacturing efficiency and marketing capabilities, areas in which the Company
has limited experience.
Risk of Technological Change. The biopharmaceutical industry
is characterized by extensive research and development efforts, and is subject
to rapid and significant technological change. The Company has numerous
competitors, including major pharmaceutical and chemical companies, specialized
biotechnology firms, other companies developing liposomes or other lipid-based
products, universities and other research institutions. New developments in
lipid and liposome research as well as new pharmaceutical products and
drug-delivery systems are expected to continue at a rapid pace. Competitors may
succeed in developing technologies and products that are more effective than any
that are being developed by the Company or that would render the Company's
technology and products non-competitive.
Uncertainties Related to Clinical Trials. Before obtaining
regulatory approvals for the commercial sale of any of its products under
development, the Company must demonstrate through preclinical studies and
clinical trials that the product is safe and effective for use in each target
indication. The results from preclinical studies and early clinical trials may
not be predictive of results that will be obtained in large-scale testing, and
there can be no assurance that the Company's clinical trials will demonstrate
the safety and efficacy of any products or will result in marketable products.
Many pharmaceutical and drug delivery companies have suffered significant
setbacks in advanced clinical trials, even after obtaining promising results in
earlier trials. In some cases, products have failed to show superiority over
placebo because the results with placebo were better than could be anticipated
from past experience in the indication under study.
Uncertainty of Government Regulatory Requirements; Lengthy
Approval Process. Human therapeutic products, vaccines and in vivo diagnostic
products are subject to rigorous preclinical and clinical testing and approval
by the FDA and comparable agencies in other countries and, to a lesser extent,
by state regulatory authorities prior to marketing. The process of obtaining
such approvals, especially for human therapeutic products, is likely to take a
number of years and will involve the expenditure of substantial resources. If
the FDA requests additional data, these time periods can be materially
increased. Even after such additional data is submitted, there can be no
assurance of obtaining FDA approval. In addition, product approvals may be
withdrawn or limited for noncompliance with regulatory standards or the
occurrence of unforeseen problems following initial marketing. The Company and
its licensees may encounter significant delays or excessive costs in their
respective efforts to secure necessary approvals or licenses. Future federal,
state, local or foreign legislative or administrative acts could also prevent or
delay regulatory approval of the Company's or its licensees' products. Failure
to obtain or maintain requisite governmental approvals, or failure to obtain
approvals of the intended clinical uses requested, could delay or preclude the
Company or its licensees from further developing particular products or from
marketing their products, or limit the commercial use of the products and
thereby have a material adverse effect on the Company's liquidity and financial
condition. No assurance can be given with respect to any future NDA submitted to
the FDA by the Company that such NDA will be accepted for consideration, that it
will be promptly reviewed, that the FDA will find the data submitted adequate or
that such NDA will ultimately be approved.
The Company's Dependence on and the Uncertainty of Protection
of Patents and Proprietary Rights. The protection provided to the Company by its
patents and proprietary rights is key. The Company has a number of United States
and foreign patents and patent applications relating to various aspects of lipid
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and liposome technologies. The patent position of biopharmaceutical companies
generally is highly uncertain and involves complex legal and factual questions.
There can be no assurance that any patents will afford the Company commercially
significant protection for its proprietary technology or have commercial
application, and litigation may be necessary to determine the validity and scope
of the Company's proprietary rights. Moreover, the patent laws of foreign
countries and the enforcement of such laws may afford less protection than
comparable U.S. laws. The Company may not have adequate funds to defend or
prosecute the patents in question. In Europe, several of the Company's granted
patents are being opposed by other companies. Loss of some of these oppositions
may result in decreased patent protection for the Company's products.
Other public and private concerns, including universities, may
have filed applications for, or have been issued, patents with respect to
technology potentially useful or necessary to the Company. If any of the
Company's proprietary technology in these areas were to conflict with the rights
of others, the Company's ability to commercialize products using such
technologies could be materially adversely affected. The scope and validity of
such patents, the extent to which the Company may wish or need to acquire
licenses under such patents, and the cost or availability of such licenses, are
currently unknown.
In addition, the Company relies on unpatented proprietary
know-how, and there can be no assurance that others will not obtain access to or
independently develop such know-how. Although employees, corporate sponsors,
research partners and consultants are not given access to proprietary know-how
of the Company until they have executed confidentiality agreements, these
agreements may not provide meaningful protection for the Company's proprietary
know-how in the event of any unauthorized use or disclosure of such know-how.
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Uncertainty of Future Financial Results; Fluctuations in
Operating Results. The Company's quarterly operating results depend upon a
variety of factors, including the price, volume and timing of sales of the
Company's approved products; variations in payments under collaborative
agreements, including royalties, fees and other contract revenues; the
availability of third-party reimbursement; and the regulatory approvals of new
products, or expanded labeling of existing products. The Company's quarterly
operating results may also fluctuate significantly depending on other factors,
including the timing of approvals and the success of product launches in
international markets, the expansion of clinical trials for ABELCET(R) and TLC
D-99, changes in the level of development activity for ELL-12 and other
products, changes in the Company's level of research expenditures, and
variations in gross margins of the Company's products that may be caused by
increased costs of raw materials, competitive pricing pressures, or the mix
between product sales in the United States and sales to the Company's
international marketing partners and distributors. The Company expects
quarter-to-quarter fluctuations to continue in the future, and there can be no
assurance that the Company's revenues will not decline or that the Company will
ever achieve profitability.
Need for Additional Financing and Uncertain Access to Capital
Funding. The Company's capital requirements depend upon many factors, including
the progress of the Company's product development programs; the time required to
obtain regulatory approvals; the resources that the Company devotes to the
development, manufacturing and marketing of products; and the demand for its
products if and when approved. It is possible that the Company may require
additional financing to complete the clinical testing and to manufacture and to
market its products. There can be no assurance that such financing will be
available or will be available on acceptable terms.
Product Liability. The testing, manufacturing and marketing of
the Company's products entail an inherent risk of adverse events that could
expose the Company to product liability claims. The Company has obtained
insurance against the risk of product liability claims. However, there is no
guarantee that this insurance will be adequate, that the amount of this
insurance can be increased, or that the policies can be renewed. Moreover, the
amount and scope of any coverage obtained may be inadequate to protect the
Company in the event of a successful product liability claim.
Dependence on Key Personnel. The Company's ability to
successfully develop, manufacture and market products and to maintain a
competitive position will depend in large part on its ability to attract and
retain highly qualified scientific and management personnel and to develop and
maintain relationships with leading research institutions and consultants.
Competition for such personnel and relationships is intense, and there can be no
assurance that the Company will be able to continue to attract and retain such
personnel.
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Uncertainty of Pharmaceutical Pricing and Reimbursement. The
Company's business may be materially adversely affected by the continuing
efforts of worldwide governmental and third-party payors to contain or reduce
the costs of pharmaceutical products. An increasing emphasis on managed care and
consolidation of hospital purchasing in the United States has and will continue
to put pressure on pharmaceutical pricing, which could reduce the price that the
Company is able to charge for any current or future products. In addition, price
competition may result from competing product sales, attempts to gain market
share or introductory pricing programs, all of which could have a material
adverse effect on the Company's results of operations and financial condition.
The Company's ability to generate significant revenues from its products may
also depend in part on the extent to which reimbursement for the costs of such
products and related treatments will be available from government health
administration authorities, private health coverage insurers and other payors.
If purchasers or users of the Company's products are not entitled to adequate
reimbursement for the cost of such products, they may forego or reduce such use.
Significant uncertainty exists as to the reimbursement status of newly approved
health care products, and there can be no assurance that adequate third party
coverage will be available.
Dependence Upon Suppliers. The Company currently relies on a
limited number of suppliers to provide the materials used to manufacture its
products, certain of which materials are purchased only from one supplier. In
the event the Company could not obtain adequate quantities of necessary
materials from its existing suppliers, there can be no assurance that the
Company would be able to access alternative sources of supply within a
reasonable period of time or at commercially reasonable rates. In particular,
the Company presently acquires amphotericin B, a principal ingredient in
ABELCET(R), from one supplier on what the Company believes are favorable terms.
Although the Company has qualified an alternative supplier for amphotericin B,
the loss of the Company's current supplier could have a material adverse effect
on the Company. Similarly, the Company has only one supplier for the doxorubicin
used in TLC D-99, which is a proprietary form of the compound and is not
available from other sources. Regulatory requirements applicable to
pharmaceutical products tend to make the substitution of suppliers more costly
and, unless a substitute supplier is previously qualified as is the Company's
alternate amphotericin B supplier, more time-consuming. The unavailability of
adequate commercial quantities, the inability to develop alternative sources, a
reduction or interruption in supply or a significant increase in the price of
materials could have a material adverse effect on the Company's ability to
manufacture and market its products.
Risks Associated with International Sales. There are
significant challenges and risks to the Company associated with conducting
business in some foreign countries, including, but not limited to, disparate
governmental regulation of pharmaceutical products, uncertain intellectual
property protection, delays in establishing international distribution channels
and difficulties in collecting international accounts receivable. The Company
does not have extensive experience in international sales. In the United
Kingdom, where the Company's subsidiary markets ABELCET(R) directly, the success
of marketing and sales efforts depends on attracting qualified personnel and
managers familiar with local marketing conditions. In other countries, the sales
of ABELCET(R) depend on the efforts of local marketing partners and
distributors. If either the Company's subsidiaries or its local marketing
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partners or distributors are unable to gain product acceptance in the local
medical community, if they fail to comply with local regulations, or if they do
not commit adequate resources to promotional activities, sales could be
adversely affected. In some countries, pricing is controlled by government
authorities and may be subject to reductions that reduce the profitability of
sales or make it uneconomic to market the Company's products in certain markets.
The regulations of some health authorities require that the marketing
registration for the Company's products be issued in the name of a local
distributor, and obtaining the return or transfer of the registration in the
event of termination of the distributor could be difficult. Collection of
accounts may be less certain in some jurisdictions, and payment periods may be
longer than is usual in the United States. The Company's international business
and financial performance could also be adversely affected by such matters as
fluctuations in currency exchange rates, currency controls, tariff regulations,
foreign duties and taxes, pricing controls and regulations and difficulties in
obtaining export licenses.
Volatility of Stock Price. There has been a history of
significant volatility in the market prices for shares of companies in a similar
stage of development to that of the Company, and the market price of the shares
of the Company's Common Stock has been volatile. Factors such as announcements
of technological innovations or new commercial products by the Company or its
competitors, developments relating to regulatory approvals, governmental
regulation, decisions made by corporate sponsors under collaborative research
and development agreements regarding product development activities,
developments or disputes relating to patent or proprietary rights, as well as
period-to-period fluctuations in revenues and financial results, may have a
significant impact on the market price of the Company's Common Stock.
Possible Adverse Effect on Market Price Due to Shares
Registered Hereby. If all, or a significant number of the shares registered
hereby were sold at once or over a short period of time, there could be an
adverse effect on the market price of the Common Stock, since the shares
registered hereby represent 20.2% of the shares of Common Stock that were
outstanding as of the date of this prospectus.
Possible Adverse Effect on Market Price Due to Shares Eligible
for Future Sale. Sales of substantial amounts of Common Stock in the public
market after this offering could adversely affect the market price of the Common
Stock and the ability of the Company to raise capital through an offering of
equity securities. There are options outstanding to purchase approximately
4,227,000 shares of Common Stock, and additional shares of Common Stock may also
become available for sale in the public market from time to time in the future.
Exercise of such options and issuance of such additional shares would dilute the
percentage ownership interest of existing holders of Common Stock.
Prospective investors should carefully read the Company's
discussion of risk factors in reports the Company files pursuant to the Exchange
Act, particularly under the caption "Management's Discussion and Analysis of
Financial Condition and Results of Operations."
THE COMPANY
The Company is engaged in the discovery, development,
manufacturing and marketing of proprietary lipid- and liposome-based and other
pharmaceuticals for the treatment of life-threatening illnesses. ABELCET(R)
(Amphotericin B Lipid Complex Injection), the Company's first commercialized
product, has been approved in the United States and a number of other countries
for the treatment of various severe systemic fungal infections and is the
subject of marketing application filings in other countries.
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TLC D-99, a liposomal form of the chemotherapeutic agent
doxorubicin, is in Phase III clinical studies for metastatic breast cancer.
Furthermore, the Company recently initiated the preclinical development of TLC
ELL-12 (liposomal ether lipid), a new cancer therapeutic that may have
applications for the treatment of many different cancers including prostrate
cancer and non small-cell lung carcinoma. The Company also has a continuing
discovery research program concentrating primarily on the treatment of cancer
and inflammatory conditions.
The Company's marketed product and products in development are
based on its knowledge and understanding of lipids, the substances that comprise
the membrane of all living cells. The products developed by the Company with
this technology include drug delivery vehicles and novel pharmaceuticals
utilizing modulated cell signaling and bio-active lipids.
The Company's mission is to discover, develop, manufacture and
market pharmaceutical products emanating from its technical core that have
application as treatments for life-threatening conditions such as cancer and
infectious disease. To supplement and expand its internal discovery
capabilities, the Company may in-license pharmaceutical compounds for further
development, manufacturing and marketing.
For further information about the business and operations of
the Company, reference is made to the Company's reports incorporated herein by
reference. See "INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE."
The principal executive offices of the Company are located at
One Research Way, Princeton Forrestal Center, Princeton, New Jersey 08540 and
its telephone number is (609) 452-7060.
DESCRIPTION OF CAPITAL STOCK
The Company's authorized capital stock consists of 60,000,000
shares of Common Stock, $.01 par value per share, and 2,400,000 shares of
Preferred Stock, $.01 par value per share. As ofSeptember 10,1997, 37,415,721
shares of Common Stock were issued and outstanding. There were no shares of
Preferred Stock issued. For further information about the Company's authorized
capital stock, reference is made to the Company's reports incorporated herein by
reference. See "INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE."
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale
of the Shares by the Selling Stockholder.
12
<PAGE>
SELLING STOCKHOLDER
Ross Financial Corp. (the "Selling Stockholder"), a private
investment company owned by Kenneth B. Dart, may offer for resale from time to
time all or a portion of the shares of Common Stock of the Company that it owns.
As of the date of this Prospectus the Selling Stockholder owns 9,353,346 shares
of Common Stock, as reported in a Schedule 13D filed on July 31, 1997, which
represents 25% of the shares of Common Stock of the Company outstanding on the
date hereof, of which 7,514,346 shares are registered for sale hereby. All but
1,005,346 of these shares were previously issued shares acquired by the Selling
Stockholder from other existing stockholders in transactions executed on the
Nasdaq National Market and not in transactions with the Company.
Under the Company's Shareholder Rights Plan (the "Plan"), the
purchase by a stockholder of stock in excess of 15 percent of the Company's
Common Stock would trigger certain provisions of the Plan and the rights issued
under the Plan, absent specific Board approval. On April 23, 1997 the Board of
Directors of the Company acted under the Plan to approve the purchase by the
Selling Stockholder of up to 25 percent of the Company's outstanding Common
Stock for investment purposes without triggering the Plan and the rights.
Effective September 12, 1996, the Company entered into an
agreement (the "Standby Purchase Agreement") with the Selling Stockholder under
which the Selling Stockholder agreed to purchase the number of shares of Common
Stock that would have been issued on the conversion of shares of Series A
Cumulative Convertible Preferred Stock called for redemption on October 14,
1996. The Selling Stockholder acquired 5,346 shares of Common Stock pursuant to
the Standby Purchase Agreement, and the Company granted the Selling Stockholder
certain registration rights with respect to such shares.
On April 23, 1997, the Company and the Selling Stockholder
entered into a Stock Purchase Agreement under which the Selling Stockholder
purchased 1,000,000 shares of Common Stock at a price of $20.875, which was the
closing price of the Common Stock on the Nasdaq National Market on the previous
day. The Company granted the Selling Stockholder certain registration rights
with respect to the shares purchased under the Stock Purchase Agreement. The
shares purchased under the Standby Purchase Agreement and the Stock Purchase
Agreement are covered by this Registration Statement, together with shares
purchased by the Selling Stockholder on the open market.
PLAN OF DISTRIBUTION
The Selling Stockholder has advised the Company that,
depending on market conditions and other factors, it may sell the Shares of
Common Stock offered hereby from time to time, in one or more transactions,
which may involve block transactions, on the Nasdaq National Market, or
otherwise, at market prices prevailing at the time of sale, at negotiated
prices, or at fixed prices, which may be changed. Such sales may be effected by
the Selling Stockholder, its pledgees, donees, or other successors in interest,
directly or through agents, underwriters or dealers.
To the extent required pursuant to Rule 424 under the
Securities Act, a Prospectus Supplement will be filed with the Securities and
Exchange Commission with respect to a particular offering of all or any portion
of the Shares (the "Offered Securities") setting forth the terms of any
offering, including the name or names of any underwriters or agents, if any, any
underwriting discounts and other items constituting underwriters' compensation,
13
<PAGE>
the offering price and any discounts or concessions allowed or reallowed or paid
to dealers. Any offering price and any discounts or concessions allowed or
reallowed or paid to dealers may be changed from time to time.
If underwriters are used in a sale, the Offered Securities
will be acquired by the underwriters for their own account and may be resold
from time to time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of sale. The Offered Securities may be offered to the public either
through underwriting syndicates represented by one or more managing underwriters
or directly by one or more firms acting as underwriters. The underwriter or
underwriters with respect to a particular underwritten offering to be named in
the Prospectus Supplement relating to such offering and, if an underwriting
syndicate is used, the managing underwriter or underwriters, will be set forth
on the cover of such Prospectus Supplement. Unless otherwise set forth in the
Prospectus Supplement relating thereto, the obligations of the underwriters to
purchase the Offered Securities will be subject to conditions precedent and the
underwriters will be obligated to purchase all of the Offered Securities if any
are purchased.
If dealers are utilized in the sale of Shares in respect of
which this Prospectus is delivered, the Selling Stockholder will sell such
Shares to the dealers as principals. The dealers may then resell such Shares to
the public at varying prices to be determined by such dealers at the time of
resale. The names of the dealers and the terms of the transaction will be set
forth in a Prospectus Supplement relating thereto. The Selling Stockholder may
also loan or pledge the Shares to a broker-dealer and the broker-dealer may sell
the Shares so loaned or upon a default the broker-dealer may effect sales of the
pledged Shares pursuant to this Prospectus.
If an agent is used, the agent will be named, and the terms of
the agency and any commissions will be set forth in a Prospectus Supplement
relating thereto. Unless otherwise indicated in the Prospectus Supplement, any
such agent will be acting on a best efforts basis for the period of its
appointment.
The Shares may be sold directly by the Selling Stockholder to
institutional investors or others, who may be deemed to be underwriters within
the meaning of the Securities Act with respect to any resale thereof. The terms
of any such sales, including the terms of any bidding or auction process, will
be described in the Prospectus Supplement relating thereto.
Agents, dealers and underwriters may be entitled under
agreements entered into with the Selling Stockholder to indemnification against
certain civil liabilities, including liabilities under the Securities Act, or to
contribution with respect to payments which such agents, dealers or underwriters
may be required to make in respect thereof. Agents, dealers and underwriters may
be customers of, engage in transactions with, or perform services for the
Company or the Selling Stockholder in the ordinary course of business.
The Company will bear all costs and expenses of the
registration of the Shares under the Securities Act and certain state securities
laws, other than fees of counsel for the Selling Stockholder and any discounts
or commissions payable with respect to sales of the Shares. The Selling
Stockholder will pay any transaction costs associated with effecting any sales
that occur.
The Selling Stockholder is not restricted as to the number of
Shares that may be sold at any one time, and it is possible that a significant
number of Shares could be sold at the same time, which may have an adverse
effect on the market price of the Common Stock.
The Company has agreed to indemnify the Selling Stockholder
against certain civil liabilities, including liabilities under the Securities
Act.
14
<PAGE>
LEGAL MATTERS
The validity of the Shares offered hereby will be passed upon
for the Company by Dewey Ballantine, 1301 Ave. of the Americas, New York, N.Y.
10019.
EXPERTS
The consolidated balance sheets as of December 29, 1996 and
December 31, 1995 and the consolidated statements of operations, stockholders'
equity, and cash flows for each of the three years in the period ended December
29, 1996, incorporated by reference in this Prospectus, have been incorporated
herein in reliance on the report of Coopers & Lybrand L.L.P., independent
accountants, given upon the authority of said firm as experts in accounting and
auditing.
15
<PAGE>
<TABLE>
<S> <C>
No dealer, salesperson or other person has been authorized to 7,514,346 Shares
give any information or to make any representations other than
those contained in or incorporated by reference in this
Prospectus in connection with the offer made by this
Prospectus and, if given or made, such information or
representations must not be relied upon as having been
authorized by the Company, the Selling Stockholder, or any
underwriter. Neither the delivery of this Prospectus nor any
sale made hereunder shall, under any circumstances, create an
implication that there has been no change in the affairs of The Liposome Company, Inc.
the Company since the date as of which information is given in
this Prospectus. This Prospectus does not constitute an offer
or solicitation by anyone in any jurisdiction in which such
offer or solicitation is not authorized or in which the person
making such offer or solicitation is not qualified to do so or
to any person to whom it is unlawful to make such offer or
solicitation.
Common Stock
____________________ ($.01 par value)
Table of Contents
Page
Prospectus
Available Information......................................2
Incorporation of Certain Documents
by Reference.............................................3
Forward Looking Statements.................................3
Risk Factors...............................................4
The Company...............................................11
Description of Capital Stock..............................11
Use of Proceeds...........................................12
Selling Stockholder.......................................12
Plan of Distribution......................................13
Legal Matters.............................................14
Experts...................................................14
Prospectus
September , 1997
</TABLE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Securities and Exchange Commission registration fee............... $ 58,000
Printing expenses.................................................
Accounting fees and expenses...................................... $ 2,500
Legal fees and expenses........................................... $ 5,000
Nasdaq National Market Listing Fee................................
Miscellaneous.....................................................
Total ................................................... $ 65,500
Item 15. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law (the "DGCL")
provides for the indemnification of officers and directors under certain
circumstances against expenses (including attorneys' fees, judgments, fines
and amounts paid in settlement) actually and reasonably incurred in connection
with the defense or settlement of any threatened, pending or completed legal
proceedings in which they are involved by reason of the fact that they are or
were officers or directors of the Company if they acted in good faith and in a
manner that they reasonably believed to be in or not opposed to the best
interests of the Company, and, in respect to the criminal actions or
proceedings, if they had no reasonable cause to believe that their conduct was
unlawful. The Certificate of the Company provides for indemnification of its
officers and directors to the full extent authorized by law.
Pursuant to Section 102(b)(7) of the DGCL, the Company's Certificate
of Incorporation (the "Certificate") provides that the directors of the
Company, individually or collectively, shall not be held personally liable to
the Company or its stockholders for monetary damages for breaches of fiduciary
duty as directors, except that any director shall remain liable (i) for any
breach of the director's fiduciary duty of loyalty to the Company or its
stockholders, (ii) for acts or omissions not in good faith or involving
intentional misconduct or a knowing violation of law, (iii) for liability
under Section 174 of the DGCL or (iv) for any transaction from which the
director derived an improper personal benefit.
The Company maintains officers' and directors' liability insurance
which insures against liabilities that the officers and directors of the
Company may incur in such capacities.
Furthermore, the Company, as well as its directors and officers, may
be entitled to indemnification by any underwriters named in the Prospectus
Supplement against certain civil liabilities under the Securities Act under
agreements entered into between the Company and such underwriters.
II-1
<PAGE>
Item 16. List of Exhibits.
*4.1 - Standby Purchase Agreement between the Company and Ross
Financial Corp. dated September 12, 1996.
*4.2 - Stock Purchase Agreement between the Company and Ross
Financial Corp. dated April 23, 1997.
*5.1 - Opinion of Dewey Ballantine as to legality of the securities
being registered.
23.1 - Consent of Coopers & Lybrand L.L.P. *23.2 - Consent of Dewey
Ballantine.
*24.1 - Power of Attorney (included on signature page).
*Previously filed
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement.
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
II-2
<PAGE>
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual report pursuant
to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the provisions described in Item 15 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 Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Amendment
No. 1 to Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the Township of Plainsboro, State of New Jersey,
on June 20, 1997.
THE LIPOSOME COMPANY, INC.
By /s/ Charles A. Baker
------------------------------
Charles A. Baker
Chairman of the Board of Directors,
President, Chief Executive Officer
and Director
II-3
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 2 to Registration Statement has been signed by the following
persons in the capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Charles A. Baker Chairman of the Board, September 12, 1997
- -----------------------------------------------------
Charles A. Baker President, Chief Executive
Officer and Director
* Director September 12, 1997
- -----------------------------------------------------
James G. Andress
* Director September 12, 1997
- -----------------------------------------------------
Morton Collins, Ph.D.
* Director September 12, 1997
- -----------------------------------------------------
Stuart F. Feiner
* Director September 12, 1997
- -----------------------------------------------------
Robert F. Hendrickson
* Director September 12, 1997
- -----------------------------------------------------
Professor Bengt Samuelsson, M.D.
* Director September 12, 1997
- -----------------------------------------------------
Joseph T. Stewart, Jr.
* Director September 12, 1997
- -----------------------------------------------------
Gerald Weissman, M.D.
* Director September 12, 1997
- -----------------------------------------------------
Horst Witzel, Dr. - Ing.
*By /s/ Carol J. Gillespie
- -----------------------------------------------------
Carol J. Gillespie, Attorney-in-Fact
</TABLE>
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<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Exhibit Page
- ------- ------- --------------
<S> <C> <C>
4.1 - Standby Purchase Agreement between the Company and Ross Financial Corp. *
dated September 12, 1996.
4.2 - Stock Purchase Agreement between the Company and Ross Financial Corp. *
dated April 23, 1997.
5.1 - Opinion of Dewey Ballantine as to legality of the securities being *
registered.
23.1 - Consent of Coopers & Lybrand L.L.P. II-6
23.2 - Consent of Dewey Ballantine (contained in Exhibit 5.1). *
24.1 - Power of Attorney (included on signature page).
</TABLE>
*Previously filed.
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement on
Form S-3 of our report dated February 3, 1997, on our audits of the financial
statements of The Liposome Company, Inc. included in the company's annual report
on Form 10-K for the year ended December 29, 1996. We also consent to the
references to our firm under the caption "Experts".
Coopers & Lybrand L.L.P.
Princeton, New Jersey
September 12, 1997
