Filed pursuant to Rule 424(b)(3)
File Number 333-94907
PROSPECTUS
164,619 Shares
BIOJECT MEDICAL TECHNOLGIES INC.
Common Stock
Shares of common stock of Bioject Medical Technolgies Inc. are being
offered by this Prospectus. The shares will be sold from time to time by the
selling stockholders named in this Prospectus. We will not receive any of the
proceeds from the sale of the shares.
Our common stock is traded on the Nasdaq SmallCap Market under the symbol
"BJCT." On March 16, 2000, the last sale price of our common stock as reported
on the Nasdaq National Market was $13.0625 per share.
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Investment in the common stock involves a high degree of risk. See section
titled "Risk Factors" beginning on page 7 to read about certain factors you
should consider before buying shares of common stock.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
Prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this Prospectus is March 17, 2000.
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TABLE OF CONTENTS
About This Prospectus.................................................2
Where You Can Find More Information...................................3
About Bioject Medical Technologies Inc. ..............................4
Forward-Looking Statements............................................7
Risk Factors..........................................................7
Use of Proceeds......................................................13
Selling Shareholders.................................................13
Plan of Distribution.................................................14
Legal Matters........................................................14
Experts..............................................................14
ABOUT THIS PROSPECTUS
This Prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission (the "SEC"). The Prospectus relates to
164,619 shares (the "Shares") of our common stock which the selling stockholders
named in this Prospectus (the "Selling Stockholders") may sell from time to
time. We will not receive any of the proceeds from these sales. We have agreed
to pay the expenses incurred in registering the Shares, including legal and
accounting fees.
The Shares have not been registered under the securities laws of any state
or other jurisdiction as of the date of this Prospectus. Brokers or dealers
should confirm the existence of an exemption from registration or effectuate
such registration in connection with any offer and sale of the Shares.
This Prospectus describes certain risk factors that you should consider
before purchasing the Shares. See "Risk Factors" beginning on page 3. You should
read this Prospectus together with the additional information described under
the heading "Where You Can Find More Information."
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WHERE YOU CAN FIND MORE INFORMATION
Federal securities law requires us to file information with the SEC
concerning our business and operations. We file annual, quarterly and special
reports, proxy statements and other information with the SEC. You can read and
copy these documents at the public reference facility maintained by the SEC at
Judiciary Plaza, 450 Fifth Street, NW, Room 1024, Washington, DC 20549. You can
also copy and inspect such reports, proxy statements and other information at
the following regional offices of the SEC:
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New York Regional Office Chicago Regional Office
Seven World Trade Center Citicorp Center
Suite 1300 500 West Madison Street, Suite 1400
New York, NY 10048 Chicago, Illinois 60661
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Please call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms. Our SEC filings are also available to the public on the SEC's
web site at http://www.sec.gov. You can also inspect our reports, proxy
statements and other information at the offices of the Nasdaq Stock Market.
The SEC allows us to "incorporate by reference" the information we file
with it, which means that we can disclose important information to you by
referring you to those documents. The information that we incorporate by
reference is considered to be part of this Prospectus, and later information
that we file with the SEC will automatically update and supersede this
information. We incorporate by reference the documents listed below and any
future filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"):
1. Our Annual Report on Form 10-K for the year ended March 31, 1999.
2. Our Quarterly Reports on Form 10-Q for the periods ended June 30, 1999,
September 30, 1999 (and as amended on January 14, 2000 and March 15, 2000)
and December 31, 1999 (as amended on March 15, 2000 and March 17, 2000).
3. The Definitive Proxy Statement for the Annual Meeting of the Company on
Schedule 14A, dated August 12, 1999.
4. Our Current Reports on Form 8-K filed on April 20, 1999, June 29, 1999,
July 13, 1999 and March 3, 2000.
5. The description of our Common Stock contained in our registration statement
under Section 12 of the Exchange Act, dated January 29, 1987, and any
amendment or report updating such description, including without
limitation, Amendment No. 1 thereto dated October 5, 1987, Amendment No. 2
thereto dated October 26, 1987, Amendment No. 3 thereto dated December 23,
1987, Amendment No. 4 thereto dated January 27, 1988 and Amendment No. 5
thereto dated February 9, 1988, our Current Reports on Form 8-K dated
December 17, 1992, November 29, 1995 and December 14, 1995.
This Prospectus is part of a registration statement we filed with the SEC
(Registration No. 333-94907). You may request a free copy of any of the above
filings by writing or calling:
Chris Farrell
Secretary
7620 SW Bridgeport Road
Portland, Oregon 97224
(503) 639-7221
You should rely only on the information incorporated by reference or
provided in this Prospectus or any supplement to this Prospectus. We have not
authorized anyone else to provide you with different information. The Selling
Stockholders should not make an offer of these Shares in any state where the
offer is not permitted. You should not assume that the information in this
Prospectus or any supplement to this Prospectus is accurate as of any date other
than the date on the cover page of this Prospectus or any supplement.
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ABOUT BIOJECT MEDICAL TECHNOLOGIES INC.
We develop, manufacture and market jet injection systems for needle-free drug
delivery. We sell our products directly to healthcare providers. We also license
our technology to leading pharmaceutical and biotechnology companies for whose
products our technology provides increased medical efficacy or enhanced market
acceptance.
Our needle-free operations are conducted by Bioject Inc., an Oregon corporation,
which is our wholly owned subsidiary. Bioject Inc. commenced operations in 1985.
Bioject Medical Technologies Inc. was formed in December 1992 for the sole
purpose of acquiring all the capital stock of Bioject Medical Systems Ltd., a
company organized under the laws of British Columbia, Canada, in a
stock-for-stock exchange. This stock acquisition established Bioject Medical
Technologies Inc., a U.S. domestic corporation, as the publicly-traded parent
company of Bioject Inc. and Bioject Medical Systems Ltd. Bioject Medical Systems
Ltd. was then terminated in fiscal 1997. Our blood glucose monitoring
development operations were conducted by Marathon Medical Technologies Inc.
("Marathon Medical") (formerly Bioject JV Subsidiary Inc.), an Oregon
corporation, which is our wholly owned subsidiary. The blood glucose monitoring
development operation was discontinued in June 1999. All references to Bioject
are to Bioject Medical Technologies Inc. and its subsidiaries, unless the
context requires otherwise. Bioject's executive offices and operations are
located at 7620 SW Bridgeport Road, Portland, Oregon 97224, and our telephone
number is (503) 639-7221.
We manufacture and market a professional needle-free injection system, the
Biojector(R) 2000, which allows healthcare professionals to inject medications
through the skin, both intramuscularly and subcutaneously, without a needle.
Using this technology to administer injections virtually eliminates the risk of
contaminated needlestick injuries and the resulting blood-borne pathogen
transmission, which is a major concern throughout the healthcare industry. The
Biojector 2000 system consists of two components: a handheld, reusable
jet-injector (the "Biojector 2000" or "B-2000") and a sterile, single-use
disposable syringe (the "Biojector syringe"). We also manufacture and market a
device that allows the Biojector syringe to be filled without a needle (the
"Vial Adapter"). The Vial Adapter may be purchased either separately or as a
pre-packaged component of the B-2000 system. The B-2000 system is capable of
delivering needle-free injections in varying doses up to 1 ml. The Company has
also developed the B-2020 and B-4000 jet-injection systems. The B-2020 system is
similar in design and intended use to the B-2000 system except that it is
designed to deliver injections in varying doses up to 1.5 ml. The B-4000 system
is intended to be used by non-professionals to self-administer injections of
various medications in varying doses up to 1 ml. We have not yet received
regulatory clearance to begin selling either the B-2020 or the B-4000 systems.
We are also developing a single-use disposable and multi-use disposable
injector, the "Iject" intended to be used by both professionals and
non-professionals to either administer or self-administer medications up to 1
ml. We have not yet applied for regulatory clearance for this product.
We also market the Vitajet 3 (R),("Vitajet") a spring-powered, needle-free
self-injection device, the rights to which were acquired in a transaction with
Vitajet Corporation in March 1998. The Vitajet currently has regulatory
clearance for administering injections of insulin.
Our long-term goal is to establish our needle-free injection systems as the
preferred drug delivery method for all medications administered by intramuscular
or subcutaneous injection. Bioject focuses its current product sales efforts for
the Biojector 2000 system on: i) flu immunization clinics and providers; ii)
healthcare providers in states such as California, where legislation is in place
that favors alternatives to needle-syringes; iii) potentially high volume,
national accounts that will use or distribute Bioject's products across a large
region; and iv) the U.S. military. We are also focusing efforts to sell the
B-2000 to multiple sclerosis patients through a distributor.
We have established manufacturing capability for the Vitajet at our
manufacturing facility in Portland, Oregon, and plan to enter into agreements
with distributors to sell the Vitajet to insulin users. We are also developing
various marketing strategies to sell the Vitajet directly to end-users.
We are actively pursuing strategic partnering relationships with a number of
pharmaceutical and biotechnology companies under which we plan to grant
specified rights or licenses to some or all of our products. The strategy
anticipates that the rights or licenses will allow strategic partners to i) use
the licensed products for specific applications or purposes or ii) market the
licensed products in conjunction with certain of their products.
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Under a January 1995, agreement with Hoffman LaRoche Inc. ("Roche") Bioject
agreed to develop a needle-free injection system for Roche to use with certain
of its products. The B-2020 system was designed as a result of this agreement.
Bioject and Roche intended that Roche would be granted worldwide rights to
distribute the B-2020 for a specific class of medications. In June 1999, Roche
advised us that because of the additional time and cost required to gain
regulatory clearance to use the B-2020 in conjunction with the Roche drugs and
because of an overall change in its marketing strategy for the drugs in
question, it did not intend to pursue distributing the B-2020 and is
relinquishing its exclusive rights to the product.
In September 1997, we entered into a joint venture agreement with Elan
Corporation plc. for the development and commercialization of certain blood
glucose monitoring technology which the Company licensed from Elan. In May 1999,
rather than continue to fund the cost of its development, we entered into
negotiations to sell Marathon's blood glucose monitoring technology, and certain
fixed assets related to developing the technology, to a third party. The sale
was completed on June 30, 1999. The gross proceeds from the sale were $4
million. The gain realized on the sale was approximately $2.9 million, net of
associated expenses of the transaction and a $500,000 provision for expenses to
wind-up Marathon's operations.
The terms of the sale of the blood glucose monitoring technology also provide
for Bioject to receive a royalty on net sales of future products, if any, which
may be developed in the future from the licensed technology. The agreement calls
for royalty payments of three percent of net sales until Bioject has received
total royalty payments of $10 million. The agreement then calls for a royalty of
one percent of net sales thereafter. There can be no assurance that future
products will be successfully developed from the blood glucose monitoring
technology or that such products, if developed, will be commercially successful.
In connection with the sale of the blood glucose monitoring technology, we
entered into an agreement with Elan to purchase its 19.9% common stock interest
in Marathon. We now own 100% of Marathon's stock.
In July 1998, we entered into an agreement with Merck & Co. ("Merck") which
provided Merck limited-term rights to use the B-2000 needle-free injection
system with selected Merck vaccines. As part of the agreement, Bioject also
granted Merck exclusive rights to negotiate a long-term license to the B-2000
for certain medical indications. We received $1.5 million in non-refundable fees
under this agreement in the fiscal year ended March 31, 1999. In February 1999,
citing a refinement in its vaccine development strategy, Merck advised us that
it would not continue discussions to seek long-term license rights to our
technology. No further fees are due to us from Merck pursuant to the agreement.
In June 1999, we entered into a binding letter agreement with Amgen Inc. that
provided for an evaluation of Bioject's jet injection technology for use with
certain biopharmaceutical products. Terms of the agreement provided for up to
$500,000 in licensing and technology fees based upon meeting certain milestones.
On February 29, 2000, we entered into a development and clinical supply
agreement with Amgen for the delivery of an Amgen product with our Iject(TM)
needle-free injection system. In connection with the agreement, Amgen made a
$1.5 million investment in Bioject's common stock.
In October 1999, Bioject announced a strategic alliance with AngioSense, Inc. to
jointly develop innovative delivery systems to treat cardiovascular disease.
Bioject's needle-free drug delivery systems will be modified for delivering
bio-therapeutic solutions as a surgical instrument for minimally invasive
surgical procedures with several proprietary catheters being developed by
AngioSense for catheter-based cardiology interventions. The alliance grants
AngioSense an exclusive license to Bioject's Biojector 2000(R) and Vitajet 3(R)
jet injectors, as well as a customized version of Bioject's Iject(TM), a
single-use disposable jet injector with a self-contained, pre-filled medication
cartridge to treat or diagnose cardiac or cardiovascular diseases. According to
the terms of the agreement, Bioject received an equity position of approximately
10 percent in AngioSense upon completion of certain product development
milestones. In addition to a long-term manufacturing and supply agreement with
AngioSense, Bioject will receive royalties on future product sales, and will
receive significant funding to support the development of the disposable
injector portion of the AngioSense delivery system.
In December 1999, Bioject and Serono Laboratories, Inc., the U.S. affiliate of
Ares-Serono, S.A., a leading biotechnology company headquartered in Geneva,
Switzerland, announced an exclusive license agreement in the U.S. and Canada to
deliver Serono's Saizen(R) recombinant human growth hormone with a customized
version of Bioject's Vitajet(TM) 3 needle-free delivery system. In connection
with the agreement, Serono paid an undisclosed
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license fee to Bioject and signed a definitive supply agreement that commences
upon FDA clearance. Clinical studies evaluating the bioequivalence of Saizen(R)
when delivered with the Bioject needle-free delivery system have been completed.
A 510(k) pre-market notification has been submitted to the U.S. Food and Drug
Administration (FDA).
A primary focus of our research efforts is on clinical research in the area of
DNA-based vaccines and medications. To the best of our knowledge, our jet
injection device is being used in two clinical studies relating to development
of DNA-based medications. Currently, to the best of our knowledge, our devices
are being used in more than twenty DNA-related clinical research projects both
within and outside of the United States. These research projects are being
conducted by companies leading the development of DNA-based medications as well
as by the leading universities and governmental institutions conducting research
in this area. Included in these studies are a Phase I clinical trial of a
DNA-based lymphoma vaccine being conducted at Stanford University and a Phase I
clinical trial of a DNA-based malaria vaccine being conducted at the U.S. Naval
Medical Research Center. Preliminary data from clinical studies with animals
indicates that the use of the Biojector technology may result in better
performance of some DNA-based medications than can be achieved through use of
conventional needle-syringes. There can be no assurance that further clinical
studies will prove conclusively that our technology is more effective in
delivering DNA-based medications than alternative delivery systems that are
currently available or that may be developed in the future.
In January 2000, we filed a resale registration statement on Form S-3, to
register 169,619 shares of our common stock for resale by selling shareholders.
We will not receive any proceeds from the sale of any of the shares sold by
selling shareholders.
"Biojector," "Bioject," "Vitajet" and "Medivax" are registered trademarks of the
Company.
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FORWARD-LOOKING STATEMENTS
Certain statements in this Registration Statement and the documents incorporated
by reference to this Registration Statement constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Any statements that express or involve discussions with respect to
predictions, expectations, beliefs, plans, projections, objectives, assumptions
or future events or performance (often, but not always, using words or phrases
such as "expects" or "does not expect," "is expected," "anticipates" or "does
not anticipate," "plans," "estimates" or "intends," or stating that certain
actions, events or results "may," "could," "would," "might" or "will" be taken,
occur or be achieved) are not statements of historical fact and may be
"forward-looking statements." Such forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of Bioject, or industry results, to be
materially different from any future results, performance, or achievements
expressed or implied by such forward-looking statements. Such risks,
uncertainties and factors include, among others, those described under "Risk
Factors" and identified as risks or uncertainties in the documents incorporated
by reference.
RISK FACTORS
An investment in the Shares involves a high degree of risk. You should consider
carefully the following risk factors, together with the other information in
this Prospectus, before buying any Shares. You should also be aware that certain
statements contained in this Prospectus that are not related to historical
results are forward-looking statements. These forward-looking statements, such
as statements of our strategies, plans, objectives, expectations and intentions,
involve risks and uncertainties. Our actual results could differ materially from
those anticipated in these forward-looking statements.
If our products are not accepted by the market, our business could fail. Our
success will depend on market acceptance of our needle-free injection drug
delivery systems, the Biojector 2000 system and the Vitajet system and on market
acceptance of other products under development. If our products do not achieve
market acceptance, our business could fail. Currently, the dominant technology
used for intramuscular and subcutaneous injections is the hollow-needle syringe.
Needle-syringes, while low in cost, have limitations, particularly relating to
contaminated needlestick injuries. Use of the Biojector 2000 system for
intramuscular and subcutaneous injections eliminates the associated risk of
these injuries; however, the cost per injection is significantly higher. The
Biojector 2000, the Vitajet system or any of our products under development may
be unable to compete successfully with needle-syringes. A previous needle-free
injection system manufactured by us did not achieve market acceptance and is no
longer being marketed. The Biojector 2000 was introduced in January 1993.
Failure of the Biojector 2000 system to gain market acceptance would have a
material adverse effect on our financial condition and results of operations.
We have reduced our sales force and may be unable to penetrate targeted market
segments. In late fiscal 1998 and early fiscal 1999, we dramatically reduced our
direct product sales force from one national and five district sales managers to
one national sales manager who is focused on specifically targeted market
segments. This reduced sales force may not have sufficient resources to
adequately penetrate one or more of the targeted market segments. Further, if
the sales force is successful in penetrating one or more of the targeted market
segments, we are unable to assure you that our products will be accepted in
those segments or that product acceptance will result in product revenues which,
together with revenues from corporate licensing and supply agreements, will be
sufficient for us to operate profitably.
We may be unable to enter into Strategic Corporate Licensing and Supply
Agreements, which could cause our business to suffer. A key component of our
sales and marketing strategy is to enter into licensing and supply arrangements
with leading pharmaceutical and biotechnology companies whose products Bioject's
technology provides either increased medical effectiveness or a higher degree of
market acceptance. If we cannot enter into these agreements on terms favorable
to us or at all, our business may suffer. In January 1995, Bioject and Roche
entered into an agreement, whereby the parties anticipated that the product
development phase of the agreement would develop into a supply and distribution
agreement between Bioject and Roche. In June 1999, Roche advised us that due to
a longer and more costly than expected regulatory process to gain clearance to
use the B-2020 in conjunction with Roche's products, Roche had changed its
marketing strategy. In making that change in marketing
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strategy, Roche was abandoning its exclusive distribution rights to the B-2020
and would not be seeking a supply of the B-2020 from Bioject. In July 1998,
Bioject and Merck & Co. entered into an agreement, whereby the parties
anticipated that the initial July 1998, agreement would lead to a long-term
licensing and supply agreement between the two companies. In February 1999,
Merck & Co. advised us that it would not continue, at the present time, to
pursue exclusive license to or supply of our products. Both of these agreements
resulted in significant short-term revenue. Neither agreement developed into the
long-term revenue stream anticipated by our strategic partnering strategy. We
may be unable to enter into future licensing or supply agreements with major
pharmaceutical or biotechnology companies. Even if we enter into these
agreements, they may not result in sustainable long-term revenues which, when
combined with revenues from product sales, could be sufficient for us to operate
profitably.
An important component of our corporate licensing and supply agreement strategy
is specifically targeted at entering into agreements of this nature with
pharmaceutical and biotechnology companies developing DNA-based vaccines and
medications. The component of the strategy which focuses on companies developing
DNA-based therapies arises in great part from preliminary data from clinical
studies with animals which indicates that use of the Biojector technology may
result in better performance of some DNA-based medications than can be achieved
through the use of traditional needle-syringes. We cannot assure you that
further clinical studies will prove conclusively that our technology is more
effective in delivering DNA-based medications than alternative delivery systems
that are either currently available or that may be developed in the future.
Further, should our technology prove to be more effective in delivering
DNA-based medications, we may be unable to gain regulatory clearance to deliver
any DNA-based medications using our products. Further, even if intradermal
delivery of DNA-based medications is critical to effective delivery of those
compounds, we may be unable to gain regulatory clearance for intradermal
delivery of DNA-based medications with our products. In addition, there can be
no assurance that any company will be successful in developing one or more
DNA-based therapies or successful in bringing those therapies to market.
Further, should any companies be successful in developing and marketing
DNA-based therapies, we may be unable to enter into long-term license or supply
agreements with any such company, which could cause our financial condition and
results of operations to suffer.
We may never receive future royalties from the Blood Glucose Monitoring
Technology, which could cause our financial condition to suffer. In May 1999,
rather than continue to fund the cost of its development, we entered into
negotiations to sell Marathon's blood glucose monitoring technology, and certain
fixed assets related to developing the technology, to a third party. The sale
was completed on June 30, 1999. The terms of the sale of the blood glucose
monitoring technology provide for us to receive a royalty on net sales of future
products, if any, which may be developed in the future from the licensed
technology. The agreement calls for a royalty of three percent of net sales
until we have received total royalty payments of $10 million. The agreement then
calls for royalty payment of one percent of net sales thereafter. Future
products may never be successfully developed from the blood glucose monitoring
technology, and if products are developed, they may not be commercially
successful, which would mean that we would receive no future royalties and this
could cause our financial condition to suffer.
We have a history or losses and may never be profitable. Since our formation in
1985, we have incurred significant annual operating losses and negative cash
flow. At December 31, 1999, we had an accumulated deficit of $59 million. $47
million of the accumulated deficit relates to losses incurred in the needle-free
segment of our operations. $12 million of the accumulated deficit relates to
losses from our operations to develop the blood glucose monitoring technology.
We may never be profitable, which could have a negative effect on our stock
price. Historically, our revenues have been derived primarily from licensing and
technology fees and from limited product sales. The product sales were
principally sales to dealers in order to stock their inventories and to HMI.
More recently, we have sold our products to end-users, primarily to public
health clinics for vaccinations and to nursing organizations for flu
immunizations. We have not attained profitability at these sales levels. We may
never be able to generate significant revenues or achieve profitability. Because
of these uncertainties at March 31, 1999, our independent public accountants
qualified their opinion with respect to our ability to continue as a going
concern.
We will need additional financing in the future, and if we cannot obtain the
necessary financing our business could fail. To date, our revenues from
operations have not been sufficient to meet our cash requirements. As a result,
since our inception in 1985, we have financed our operations, working capital
needs and capital expenditures primarily from private placements of securities,
exercises of stock options, proceeds received from our initial public offering
in 1986, proceeds received from a public offering of Common Stock in November
1993, licensing and technology revenues, equity investments from Elan, proceeds
from the sale of the glucose monitoring technology
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and more recently through sales of products. We plan to fund our future cash
requirements through revenues, debt, and sales of equity securities. However, we
may be unable to obtain the financing sufficient to fund our business activities
on favorable terms or at all. Failure to obtain adequate financing would have a
material adverse impact on our business. In addition, sale of our equity
securities on unfavorable terms to meet our obligations could result in material
dilution to the existing shareholders.
We have outstanding convertible preferred stock, which is convertible into
common stock at prices which may be lower than market price at the time of
conversion which could result in dilution to existing common stock holders. Our
Common Stock is subject to the rights and preferences of the Series A and C
Convertible Preferred Stock, which may be converted into common stock at prices
which may be lower than market price at the time of conversion causing
substantial dilution to existing holders of common stock. The Series A
Convertible Preferred Stock is convertible to Common Stock at a conversion price
of $7.50 per share. The Series C Preferred Stock is convertible to Common Stock
at a conversion price of $3.0625 per share. In October, 2004, unless it is
converted earlier by the holders or redeemed by us, the shares of Series A and C
Convertible Preferred Stock and accrued but unpaid dividends convert
automatically into Common Stock.
We have limited manufacturing experience, and may be unable to produce our
products at the unit costs necessary for the products to be competitive in the
market, which could cause our financial condition to suffer. We have limited
experience manufacturing our products in commercially viable quantities. We have
increased our production capacity for the Biojector 2000 system through
automation of, and changes in, production methods, in order to achieve savings
through higher volumes of production. If we are unable to do so, then our
results of operations and financial condition could suffer. The current cost per
injection of the Biojector 2000 system is substantially higher than that of
traditional needle-syringes, our principal competition. A key element of our
business strategy has been to reduce the overall manufacturing cost through
automating production and packaging. This automation is substantially complete.
There can be no assurance that we will achieve sales and manufacturing volumes
necessary to realize cost savings from volume production at levels necessary to
result in significant unit manufacturing cost reductions. Failure to do so will
continue to make competing with needle-syringes on the basis of cost very
difficult and will adversely affect our financial condition and results of
operations. While we believe that our experience manufacturing the Biojector
enhances the probability of its success in manufacturing the Vitajet or other
devices we may develop, we have had limited experience manufacturing the Vitajet
and as of March 31, 1999, had only recently completed installing a manufacturing
line to produce the Vitajet. We may be unable to successfully manufacture the
Vitajet or other device at a unit cost that will allow the product to be sold
profitably. Failure to do so would adversely affect our financial condition and
results of operation.
We are subject to extensive government regulation and must continue to comply
with these regulations or our business could suffer. Our products and
manufacturing operations are subject to extensive government regulation in both
the U.S. and abroad. If we cannot comply with these regulations, we may be
unable to distribute our products, which could cause our business to suffer or
fail. In the U.S., the development, manufacture, marketing and promotion of
medical devices are regulated by the Food and Drug Administration ("FDA") under
the Federal Food, Drug, and Cosmetic Act ("FD&C"). In 1987, we received
clearance from the FDA under Section 510(k) of the FD&C to market a hand-held
CO2-powered needle-free injection system. The FD&C provides that new premarket
notifications under Section 510(k) of the FD&C are required to be filed when,
among other things, there is a major change or modification in the intended use
of a device or a change or modification to a legally marketed device that could
significantly affect its safety or effectiveness. A device manufacturer is
expected to make the initial determination as to whether the change to its
device or its intended use is of a kind that would necessitate the filing of a
new 510(k) notification. Although the Biojector 2000 system incorporates changes
from the system with respect to which our 1987 510(k) marketing clearance was
received and expands its intended use, we made the determination that these were
not major changes or modifications in intended use or changes in the device that
could significantly affect the safety or effectiveness of the device.
Accordingly, we further concluded that the 1987 510(k) clearance permitted us to
market the Biojector 2000 system in the U.S. In June 1994, we received clearance
from the FDA under 510(k) to market a version of its Biojector 2000 system in a
configuration targeted at high volume injection applications. In October 1996,
we received 510(k) clearance for a needle-free disposable vial access device. In
March 1997, we received additional 510(k) clearance for certain enhancements to
our Biojector 2000 system. We currently have an application pending before the
FDA for 510(k) clearance for modification to the Vitajet 3 device. The FDA may
not concur with our determination that our current and future products can be
qualified by means of a 510(k) submission.
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Future changes to manufacturing procedures could require that we file a new
510(k) notification. Also, future products, product enhancements or changes, or
changes in product use may require clearance under Section 510(k), or they may
require FDA premarket approval ("PMA") or other regulatory clearances. PMAs and
regulatory clearances other than 510(k) clearance generally involve more
extensive prefiling testing than a 510(k) clearance and a longer FDA review
process. Under current FDA policy, applications involving pre-filled syringes
would be evaluated by the FDA as drugs rather than devices, requiring FDA new
drug applications ("NDAS") or ANDAs. Depending on the circumstances, drug
regulation can be much more extensive and time consuming than device regulation.
FDA regulatory processes are time consuming and expensive. Product applications
submitted by us may not be cleared or approved by the FDA. In addition, our
products must be manufactured in compliance with Good Manufacturing Practices
("GMP") as specified in regulations under the FDA Act. The FDA has broad
discretion in enforcing the FDA Act, and noncompliance with the Act could result
in a variety of regulatory actions ranging from product detentions, device
alerts or field corrections, to mandatory recalls, seizures, injunctive actions,
and civil or criminal penalties.
If we cannot meet international product standards, we will be unable to
distribute our products outside of the United States which could cause our
business to suffer. Distribution of our products in countries other than the
U.S. may be subject to regulation in those countries. Failure to satisfy these
regulations would impact our ability to sell our products in these countries and
could cause our business to suffer. In June 1998, we received certification from
TUV Product Services for our quality system, which meets the requirements of ISO
9001 and EN 46001. In June 1999, TUV Product Services audited our quality system
and found that it still meets the requirements of ISO 9001. In November 1999, we
received certification from TUV Product Services for the applicable requirements
of EC-Directive 93/42/EEC Annex. II.3 Medical Device Directive. This
certification allows us to label our products with the CE Mark and sell them in
the European Community. We may be unable to continue to meet the standards of
ISO 9001 or CE Mark certification.
If the healthcare industry limits coverage or reimbursement levels, the
acceptance of our products could suffer. The price of our products exceeds the
price of needle-syringes and if coverage or reimbursement levels are reduced,
market acceptance of our products could be harmed. The healthcare industry is
subject to changing political, economic and regulatory influences that may
affect the procurement practices and operations of healthcare facilities. During
the past several years, the healthcare industry has been subject to increased
government regulation of reimbursement rates and capital expenditures. Among
other things, third party payers are increasingly attempting to contain or
reduce healthcare costs by limiting both coverage and levels of reimbursement
for healthcare products and procedures. Because the price of the Biojector 2000
system exceeds the price of needle-syringe, cost control policies of third party
payers, including government agencies, may adversely affect acceptance and use
of the Biojector 2000 system.
We are highly dependent on third-party relationships, and our business could
suffer if we cannot maintain these relationships. We are dependent on third
parties for distribution of the Biojector 2000 system to certain market
segments, for the manufacture of component parts, and for assistance with the
development and distribution of future application-specific systems. If we
cannot maintain these relationships, or if the third parties are unable to
provide the services we require, our business could suffer.
Our current manufacturing processes for the Biojector 2000 jet injector and
disposable syringes as well as manufacturing processes to produce the Vitajet
consist primarily of assembling component parts supplied by outside suppliers.
Some of these components are currently obtained from single sources, with some
components requiring significant production lead times. In the past, we have
experienced delays in the delivery of certain components. To date such delays
have not had a material adverse effect on our operations. We may experience
delays in the future, and these delays could have a material adverse effect on
our financial condition and results of operations.
In the past, we have entered into agreements with certain major pharmaceutical
or biotechnology companies for development and distribution of needle-free
injection systems and for use of our needle-free injection systems in
conjunction with the pharmaceutical companies' products. In all cases to date
these companies have had the right to terminate those agreements at certain
phases as defined in the agreements. In several instances, those agreements have
been terminated before yielding sustained long-term licensing or product sales
revenues. Entering into
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agreements of this nature is an important part of our overall business strategy.
We may be unable to interest any major pharmaceutical or biotechnology companies
in entering into such agreements. If interested parties are found, we may be
unsuccessful at negotiating and entering into long-term licensing and supply
agreements with the interested parties. Further, if such agreements are entered
into, there can be no assurance that the companies' interest and participation
in the agreements and projects will continue and result in long-term,
sustainable revenues as contemplated by this aspect of our overall business
strategy. Failure to enter into future licensing and product supply agreements
with major pharmaceutical or biotechnology companies and failure of those future
agreements to result in significant, sustainable long-term revenues could
adversely affect our financial condition.
If we are unable to manage our growth, our results of operations could suffer.
If our products achieve market acceptance or if we are successful in entering
into product supply agreements with major pharmaceutical or biotechnology
companies, we expect to experience rapid growth. Such growth would require
expanded customer service and support, increased personnel, expanded operational
and financial systems, and implementing new and expanded control procedures. We
may be unable to attract sufficient qualified personnel or successfully manage
expanded operations. As we expand, we may periodically experience constraints
that would adversely affect our ability to satisfy customer demand in a timely
fashion. Failure to manage growth effectively could adversely affect our
financial condition and results of operations.
We may be unable to compete in the medical equipment field, which could cause
our business to fail. The medical equipment market is highly competitive and
competition is likely to intensify. If we cannot compete, our business will
fail. Our products compete primarily with traditional needle-syringes, "safety
syringes" and also with other alternative drug delivery systems. While we
believe our products provide a superior drug delivery method, there can be no
assurance that we will be able to compete successfully with existing or newly
developed drug delivery products. Many of our competitors have longer operating
histories as well as substantially greater financial, technical, marketing and
customer support resources. One or more of these competitors may develop an
alternative drug delivery system that competes more directly with our products,
and our products may be unable to compete successfully with such a product.
We are dependent on a single technology, and if it cannot compete or find market
acceptance, our business will suffer. Our strategy has been to focus our
development and marketing efforts on our needle-free injection technology. Focus
on this single technology leaves us vulnerable to competing products and
alternative drug delivery systems. If our technology cannot find market
acceptance or cannot compete against other technologies, business will suffer.
We perceive that healthcare providers' desire to minimize the use of the
traditional needle-syringe has stimulated development of a variety of
alternative drug delivery systems such as "safety syringes," jet injection
systems, nasal delivery systems and transdermal diffusion "patches". In
addition, pharmaceutical companies frequently attempt to develop drugs for oral
delivery instead of injection. While we believes that for the foreseeable future
there will continue be a significant need for injections, alternative drug
delivery methods may be developed which are preferable to injection.
We rely on patents and proprietary rights to protect our proprietary technology.
We rely on a combination of trade secrets, confidentiality agreements and
procedures, and patents to protect our proprietary technologies. We have been
granted a number of patents in the United States and several patents in other
countries covering certain technology embodied in our current jet injection
system and certain manufacturing processes. Additional patent applications are
pending in the U.S. and certain foreign countries. The claims contained in any
patent application may not be allowed, or any patent or our patents collectively
will not provide adequate protection for our products and technology. In the
absence of patent protection, we may be vulnerable to competitors who attempt to
copy our products or gain access to its trade secrets and know-how. In addition,
the laws of foreign countries may not protect our proprietary rights to this
technology to the same extent as the laws of the U.S. We believe we have
independently developed our technology and attempt to ensure that our products
do not infringe the proprietary rights of others. We know of no such
infringement claims. However, any claims could have a material adverse affect on
our financial condition and results of operations.
If our products fail or cause harm, we could be subject to substantial product
liability which could cause our business to suffer. Producers of medical devices
may face substantial liability for damages in the event of product failure or if
it is alleged the product caused harm. We currently maintain product liability
insurance and, to date, have experienced only one product liability claim. There
can be no assurance, however, that we will not be
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subject to a number of such claims, that our products liability insurance would
cover such claims, or that adequate insurance will continue to be available to
us on acceptable terms in the future. Our business could be adversely affected
by product liability claims or by the cost of insuring against such claims.
We are highly dependent on our key employees, and our business could suffer if
they were to leave. Our success depends on the retention of our executive
officers and other key employees. Competition exists for qualified personnel and
our success will depend, in part, on attracting and retaining qualified
personnel. Failure in these efforts could have a material adverse effect on our
business, financial condition or results of operations.
There are a large number of shares eligible for sale into the public market in
the near future, which may reduce the price of our common stock. The market
price of our common stock could decline as a result of sales of a large number
of shares of our common stock in the market, or the perception that such sales
could occur. We have a large number of shares of common stock outstanding and
available for resale beginning at various points in time in the future. These
sales also might make it more difficult for us to sell equity securities in the
future at a time and at a price that we deem appropriate. The shares of our
common stock currently outstanding will become eligible for sale without
registration pursuant to Rule 144 under the Securities Act, subject to certain
conditions of Rule 144. Certain holders of our common stock also have certain
demand and piggyback registration rights enabling them to register their shares
under the Securities Act for sale. We have registered approximately 2.4 million
shares for resale on Form S-3 registration statements as well as approximately
1.03 million shares issuable upon exercise of warrants. In addition, we have
approximately 3.7 million shares of common stock reserved for issuance under our
stock option plan. As of December 31, 1999, options to purchase approximately
580,000 shares of common stock were outstanding and will be eligible for sale in
the public market from time to time subject to vesting. These stock options
generally have exercise prices significantly below the current price of our
common stock. The possible sale of a significant number of these shares may
cause the price of our common stock to fall.
We may be unable to maintain our listing on Nasdaq, which could cause our stock
price to fall and decrease the liquidity of our common stock. Our Common Stock
is quoted on the NASDAQ SmallCap Market. If we cannot comply with the continuing
requirements, we may be delisted which could cause the stock price to fall and
decrease the liquidity of our common stock for existing shareholders. There are
a number of continuing requirements that must be met in order for the Common
Stock to remain eligible for quotation on the NASDAQ National Market or the
NASDAQ SmallCap Market. The failure to meet the maintenance criteria in the
future could result in the delisting of our Common Stock from NASDAQ. In such
event, trading, if any, in the Common Stock may then continue to be conducted in
the non- NASDAQ over-the-counter market. As a result, an investor may find it
more difficult to dispose of or to obtain accurate quotations as to the market
value of our Common Stock. In addition, if the Common Stock were delisted from
trading on NASDAQ and the trading price of the Common Stock were less than $5.00
per share, trading in the Common Stock would also be subject to the requirements
of certain rules promulgated under the Exchange Act, which require additional
disclosure by broker-dealers in connection with any trades involving a stock
defined as a penny stock. The additional burdens imposed on broker-dealers may
discourage broker-dealers from effecting transactions in penny stocks, which
could reduce the liquidity of the shares of Common Stock and thereby have a
material adverse effect on the trading market for the securities.
On April 9, 1999, we were advised by NASDAQ that we were out of compliance with
the NASDAQ rule that requires companies listed on the exchange to maintain a
minimum bid price of $1.00 for their stock. On July 9, 1999, the last sale price
of our common stock as reported on the NASDAQ National Market System was $0.50
per share. On October 13, 1999, a one-for-five reverse stock split was effected.
At July 15,1999, 29,011,236 shares of Common Stock were outstanding, as well as
options, warrants and convertible preferred stock to acquire an additional
24,378,928 shares of Common Stock. The Reverse Stock Split, decreased the number
of outstanding shares of Common Stock to approximately 5.8 million shares and
approximately 4.8 million shares were reserved for issuance upon exercise of
outstanding options, warrants and the conversion of convertible preferred stock.
As of December 31, 1999, approximately 89.1 million shares are available for
future issuances.
Our stock price may be highly volatile, which increases the risk of securities
litigation. The market for our Common Stock and for the securities of other
early-stage, small market-capitalization companies has been highly volatile in
recent years. This increases the risk of securities litigation relating to such
volatility. We believe that factors such as quarter-to-quarter fluctuations in
financial results, reduction in the number of outstanding shares due to the
recent reverse stock split, new product introductions by us or our competition,
public announcements,
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changing regulatory environments, sales of Common Stock by certain existing
shareholders, substantial product orders and announcement of licensing or
product supply agreements with major pharmaceutical or biotechnology companies
could contribute to the volatility of the price of our Common Stock, causing it
to fluctuate dramatically. General economic trends such as recessionary cycles
and changing interest rates may also adversely affect the market price of our
Common Stock.
USE OF PROCEEDS
The Shares offered hereby are being registered for the account of the Selling
Shareholders and, accordingly, we will not receive any of the proceeds from the
sale of the Shares.
SELLING SHAREHOLDERS
The Shares being offered for resale by the Selling Shareholders were acquired
either in connection with the exercise by a Series "N" Warrant Holder, or will
be acquired upon exercise of warrants. The term "Selling Shareholder" includes
all persons acquiring securities and persons acquiring such securities in
permitted transfers from the original holders thereof in transactions not
requiring registration under the Securities Act.
The following table sets forth certain information regarding the beneficial
ownership of shares of Common Stock by the Selling Shareholders as of January
13, 2000, and as adjusted to reflect the sale of the Shares.
<TABLE>
Number of Shares Maximum Number of
Owned Prior to Shares to be Sold Shares Owned After
Name Offering under this Prospectus Offering (1) Number Percent
- ---- -------- --------------------- ------------------- -------
<S> <C> <C> <C> <C>
Tower Rock Partners, LLC (2) 2,326 2,326 0 *
Richard Huson (3) 3,488 3,488 0 *
Summit Fund, LP 11,628 11,628 0 *
Tiburon Fund, LP 11,628 11,628 0 *
Amy Factor (4) 500 500 0 *
Petkevich & Partners, LLC (5) 16,000 16,000 0 *
Robert Gonnelli (6) 96,049 96,049 0 *
Frederick Pierce (7) 11,000 11,000 0 *
Sergio Landau(8) 49,900 12,000 37,900 *
Total 202,519 164,619 37,900 *
- -----------------
</TABLE>
* Less than 1%.
(1) Assumes that the Selling Shareholders will sell all Shares during the
effective period.
(2) Includes 2,326 shares of Common Stock issuable upon exercise of a Series
"N" warrant.
(3) Includes 3,488 shares of Common Stock issuable upon exercise of a Series
"N" warrant.
(4) Includes 500 shares of Common Stock issuable upon exercise of a Series "N"
warrant.
(5) Includes 16,000 shares of Common Stock issuable upon exercise of a Series
"O" warrant.
(6) Includes 96,049 shares of Common Stock issuable upon exercise of Series
"H," "I," "L" and "M" warrants.
(7) Includes (i) 3000 shares of Common Stock and (ii) 8,000 shares of Common
Stock issuable upon exercise of a Series "R" warrant.
(8) Includes 3,000 shares of Common Stock held in the name of Mara Landau,
Sergio Landau's wife.
No Selling Shareholder has held any position or office, or other material
relationship with Bioject or any of its predecessors or affiliates within the
past three years with the exception of Amy Factor, Petkevich & Partners, LLC and
Robert Gonnelli, who acted as financial advisors for Bioject , and Raphael LLC,
and Frederick Pierce who are currently acting as financial advisors to Bioject .
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PLAN OF DISTRIBUTION
We are registering the Shares on behalf of the Selling Stockholders. As used in
this Prospectus, the term "Selling Stockholders" includes donees and pledgees
selling Shares received from a named Selling Stockholder after the date of this
Prospectus. The Selling Stockholders will offer and sell the Shares to which
this Prospectus relates for their own accounts. We will not receive any proceeds
from the sale of the Shares. We will bear all costs, expenses and fees in
connection with the registration of the Shares. Brokerage commissions and
similar selling expenses, if any, attributable to the sale of the Shares will be
borne by the Selling Stockholders.
The Selling Stockholders may offer and sell the Shares from time to time in one
or more types of transactions (which may include block transactions) on the
Nasdaq SmallCap Market, in transactions directly with market makers or in
privately negotiated transactions, through put or call options transactions,
through short sales, or a combination of such methods of sale, at prices
relating to prevailing market prices or at negotiated prices. Sales may be made
to or through brokers or dealers who may receive compensation in the form of
discounts, concessions or commissions from the Selling Stockholders or the
purchasers of the Shares. As of the date of this Prospectus, we are not aware of
any agreement, arrangement or understanding between any broker or dealer and the
Selling Stockholders regarding the sale of their Shares, nor are we aware of any
underwriter or coordinating broker acting in connection with the proposed sale
of Shares by the Selling Stockholders. There is no assurance that the Selling
Stockholders will sell any or all of the Shares that they offer.
The Selling Stockholders and any brokers or dealers who participate in the sale
of the Shares may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933, as amended (the "Securities Act"), and any commissions
received by them and any profits realized by them on the resale of Shares may be
deemed to be underwriting discounts or commissions under the Securities Act.
Because the Selling Stockholders may be deemed to be "underwriters" within the
meaning of the Securities Act, the Selling Stockholders will be subject to the
prospectus delivery requirements of the Securities Act. We have informed the
Selling Stockholders that the anti-manipulative provisions of Regulation M
promulgated under the Exchange Act may apply to their sales in the market.
The Selling Stockholders may also resell all or a portion of the Shares in open
market transactions in reliance upon Rule 144 under the Securities Act, provided
it meets the criteria and conforms to the requirements of such Rule.
Upon notification to us by a Selling Stockholder that any material arrangement
has been entered into with a broker or dealer for the sale of Shares through a
block trade, special offering, exchange distribution or secondary distribution
or a purchase by a broker or dealer, a supplement to this Prospectus will be
filed, if required, pursuant to Rule 424(b) under the Securities Act, disclosing
(i) the name of each such Selling Stockholder and of the participating brokers
or dealers, (ii) the number of Shares involved, (iii) the price at which such
Shares were sold, (iv) the commissions paid or discounts or concessions allowed
to such brokers or dealers, where applicable, (v) that such brokers or dealers
did not conduct any investigation to verify the information set out or
incorporated by reference in this Prospectus and (vi) other facts material to
the transaction. In addition, upon notification to us by a Selling Stockholder
that a donee or pledgee intends to sell more than 500 Shares, a supplement to
this Prospectus will be filed.
LEGAL MATTERS
The validity of the issuance of the shares of Common Stock offered hereby will
be passed upon for us by Dorsey & Whitney LLP, Seattle, Washington.
EXPERTS
The consolidated financial statements incorporated by reference in this
Prospectus and elsewhere in the Registration Statement have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect thereto, and are incorporated by reference herein in
reliance upon the authority of said firm as experts in accounting and auditing
in giving said report.
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