LIPOSOME TECHNOLOGY INC /DE/, S-3, 1995-06-26

LIPOSOME TECHNOLOGY INC /DE/
S-3, 1995-06-26
PHARMACEUTICAL PREPARATIONS

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As filed with the Securities and Exchange Commission on June 26, 1995

Registration No. 33-________________

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
_______________

SEQUUS PHARMACEUTICALS, INC.
(Exact name of registrant on Form S-3 as specified in its charter)

DELAWARE 960 Hamilton Court 94-3031934
(State or Other Jurisdiction Menlo Park, California 94025 (I.R.S. Employer
of Incorporation) (415) 323-9011 Identification Number)

(Address, including ZIP code, and telephone number, including area code,
of registrant's principal executive offices)
_______________
DONALD J. STEWART
Vice President Finance
SEQUUS Pharmaceuticals, Inc.
960 Hamilton Court
Menlo Park, California 94025
(415) 323-9011
(Name, address, including ZIP code, and telephone number,
including area code, of agent for service)
_______________
COPIES TO:

CHRISTOPHER L. KAUFMAN
Latham & Watkins
505 Montgomery Street, Suite 1900
San Francisco, California 94111-2562
(415) 391-0600
_______________

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
_______________
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective statement for the same offering. / / __________

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / __________

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
__________
CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
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Proposed
Proposed Maximum
Amount Maximum Aggregate Amount of
Title of Each Class of to be Offering Price Offering Registration
Securities to be Registered Registered Per Unit Price(1) Fee
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<S> <C> <C> <C> <C>
Common Stock, $0.0001 par value . . . . . . . . . . . . . . . 5,760,039 $7.875 $45,360,308 $15,642
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<FN>
(1) Estimated solely for purposes of calculating the registration fee, which is
calculated in accordance with Rule 457(c) based upon the average of the
high and low prices for the Company's Common Stock as reported on the
Nasdaq National Market on June 23, 1995.
</TABLE>

__________

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.

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SEQUUS PHARMACEUTICALS, INC.
5,760,039 SHARES

COMMON STOCK (PAR VALUE $0.0001)
____________________

This prospectus ("Prospectus") covers certain shares (the "Shares") of
Common Stock, $0.0001 par value (the "Common Stock"), of SEQUUS Pharmaceuticals,
Inc. (formerly Liposome Technology, Inc.) ("SEQUUS" or the "Company") held by
and acquirable by certain persons ("Selling Stockholders") named in this
Prospectus. The Shares covered hereby include 2,223,711 shares of Common Stock
held by certain Selling Stockholders, an additional 1,616,163 shares of Common
Stock issuable upon conversion of shares of the Company's Series A Convertible
Reset Preferred Stock (the "Preferred Stock") held by certain Selling
Stockholders and an additional 1,920,165 shares of Common Stock issuable upon
exercise of warrants to purchase Common Stock (the "Warrants") held by the
Selling Stockholders. See "Selling Stockholders" for information as of the date
of this Prospectus with respect to Shares held by or acquirable by the Selling
Stockholders. This Prospectus does not cover the transfer of the Preferred
Stock or the Warrants themselves. Rather, it covers dispositions of the shares
of Common Stock issuable upon conversion or exercise of the Preferred Stock and
Warrants. The Selling Stockholders, directly or through agents, dealers,
underwriters or market makers, may offer and sell from time to time all or any
part of the Shares in amounts and on terms to be determined at the time of sale,
including block trades at negotiated prices through market makers, or in the
over-the-counter market at quoted market prices then prevailing on the Nasdaq
National Market. This Prospectus may be used by the Selling Stockholders or by
any broker-dealer who may participate in sales of the Common Stock covered
hereby.

THE PURCHASE OF THE SHARES INVOLVES CERTAIN MATERIAL RISKS.
SEE "RISK FACTORS" COMMENCING ON PAGE 4.

The Shares have been or will be issued by the Company to the Selling
Stockholders pursuant to (1) unit purchase agreements dated as of March 24,
1995, or as of April 13, 1995, among the Company and certain Selling
Stockholders and (2) unit purchase agreements dated as of May 19, 1995, among
the Company and certain other Selling Stockholders. See "Selling Stockholders."

The Company has agreed to bear all expenses relating to the registration of
the Shares, except for underwriting discounts and selling commissions associated
with the sale of the Shares, all of which shall be paid by the Selling
Stockholders. The Company will not receive any of the proceeds from sales of
the Shares.

The Company's Common Stock is traded over-the-counter on the Nasdaq
National Market under the symbol SEQU (formerly LTIZ). On June 23, 1995, the
last reported sale price of the Common Stock as reported by Nasdaq was $8.0625
per share.
____________________

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A FEDERAL OFFENSE.
____________________

The date of this Prospectus is June 26, 1995.
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AVAILABLE INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 (together with all amendments
and exhibits thereto, the "Registration Statement") under the Securities Act of
1933, as amended (the "Securities Act"), with respect to the Shares offered
hereby. This Prospectus does not contain all of the information set forth in
the Registration Statement, part of which has been omitted in accordance with
the rules and regulations of the Commission. For further information about the
Company and the Shares offered hereby, reference is made to the Registration
Statement, including the exhibits filed as a part thereof and otherwise
incorporated therein. Statements made in this Prospectus as to the contents of
any document referred to herein are not necessarily complete, and in each
instance reference is made to such document for a more complete description, and
each such statement is qualified in its entirety by such reference.

The Company is subject to the informational 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 Commission. The Registration Statement, including the exhibits thereto, as
well as such reports and other information filed by the Company with the
Commission, can be inspected, without charge, and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Room 1024,
Washington D.C., 20549; 7 World Trade Center, New York, New York 10048 and 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
materials can be obtained from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. Reports
and other information concerning the Company can also be inspected at the
offices of the National Association of Securities Dealers, Inc., 1735 K Street,
N.W., Washington, D.C. 20006.

INFORMATION INCORPORATED BY REFERENCE

The following documents filed by the Company with the Commission pursuant
to the Exchange Act are incorporated by reference in this Prospectus: (1) the
Company's Annual Report on Form 10-K for the year ended December 31, 1994, as
amended by the Company's Form 10-K/A-1 filed May 1, 1995 and the Company's Form
10-K/A-2 filed May 26, 1995; (2) the Company's Quarterly Report on Form 10-Q for
the quarter ended March 31, 1995; (3) the description of the Company's Common
Stock contained in the Company's Registration Statement on Form 8-A filed on May
8, 1987 pursuant to Section 12 of the Exchange Act, including any amendment or
report filed for the purpose of updating such description; and (4) all other
documents subsequently filed pursuant to Sections 13(a), 13(c), 14 or 15(d) of
the Exchange Act after the date of this Prospectus and before the termination of
the offering, which shall be deemed to be a part hereof from the date of filing
of such documents.

Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is incorporated or 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 is delivered, upon request, a copy of any documents incorporated into
this Prospectus by reference (other than exhibits incorporated by reference into
such document). Requests for documents should be submitted to SEQUUS
Pharmaceuticals, Inc., 960 Hamilton Court, Menlo Park, California 94025,
Attention: Secretary (telephone (415) 323-9011). The information relating to
the Company contained in this Prospectus does not purport to be comprehensive
and should be read together with the information contained in the documents
incorporated or deemed to be incorporated by reference herein.

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TABLE OF CONTENTS

Available Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Information Incorporated by Reference . . . . . . . . . . . . . . . . . . . . 2
The Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Selling Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16

THE COMPANY

SEQUUS Pharmaceuticals, Inc. (formerly Liposome Technology, Inc.) is
engaged in the development, manufacture, marketing and sale of proprietary
liposome and lipid-based pharmaceutical products to treat life-threatening
illnesses, including cancer and infectious diseases. Liposome and lipid-based
drug delivery offers the potential to improve drug effectiveness and to reduce
the side effects associated with certain injectable drugs.

Liposomes are microscopic spheres formed of thin but durable lipid
membranes which regulate the passage of an entrapped drug into the bloodstream
over a period of time. The Company's current priority products use proprietary
STEALTH-Registered Trademark- liposomes or a colloidal dispersion of lipids to
entrap therapeutic agents.

SEQUUS's near-term product development strategy includes: (i) obtaining
approval from the U.S. Food and Drug Administration (the "FDA") of New Drug
Applications ("NDAs") for its key products, AMPHOCIL-TM-(1) and DOXIL-Registered
Trademark-(2), and of Marketing Authorization Application dossiers from
regulatory agencies in non-U.S. markets; (ii) completing the full clinical
development, registration and expanded labeling of these products for a range of
indications; (iii) exploring additional applications for DOXIL Technology; and
(iv) creating advanced technology for future products.

STEALTH-Registered Trademark- and DOXIL-Registered Trademark- are
trademarks of the Company and are used throughout this Prospectus to describe,
respectively, the Company's proprietary long-circulating liposomes and its
pegylated liposomal doxorubicin hydrochloride product. The Company has filed
for registration of the AMPHOCIL-TM- tradename used throughout this Prospectus
to describe the Company's proprietary amphotericin B product.

The Company, under the name Liposome Technology, Inc., was founded in 1981
and was reincorporated in Delaware in 1987. Effective June 26, 1995, the Company
changed its name to SEQUUS Pharmaceuticals, Inc. Its principal offices are
located at 960 Hamilton Court, Menlo Park, California 94025, and its telephone
number is (415) 323-9011.

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(1) Also called Amphotec-TM- and ABCD.
(2) Also called DOX-SL-TM- and S-Dox.

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RISK FACTORS

REFERENCE IS MADE TO THE COMPANY'S FILINGS ON FORMS 10-K AND 10-Q ON AND AFTER
THE DATE OF THIS PROSPECTUS FOR UPDATING AND MODIFICATIONS OF THE FOLLOWING RISK
FACTORS.

HISTORY OF OPERATING LOSSES: NEED FOR ADDITIONAL FINANCING

The Company to date has generated limited revenues. There can be no
assurance that SEQUUS' revenues from product sales will be significant or
sufficient to fund operations. The Company has incurred losses in each year
since its inception and has accumulated approximately $109 million in net losses
through March 31, 1995. Owing to expenditures associated with self-funded
research, preclinical and clinical programs, marketing expenses and other
activities related to obtaining approval and achieving commercialization of its
products, the Company expects operating losses to continue for a number of
years. Additional financing will be required to continue the clinical testing,
manufacturing and marketing on a commercial basis of the Company's products
currently under development. There can be no assurance that such financing will
be available on acceptable terms, if at all. The unavailability of such
financing could delay or prevent the development and marketing of some or all of
the Company's products.

DEVELOPING TECHNOLOGY; NO PROOF OF MARKET ACCEPTANCE

Although liposome and lipid-based products have been approved for sale in
certain European countries, no therapeutic product based on liposome or lipid-
based technology is presently commercially available in the U.S. Each of
SEQUUS' products must be clinically tested, approved for use by appropriate
government agencies and manufactured in commercial quantities before marketing
can be undertaken. Unanticipated side effects or unfavorable publicity
concerning any product incorporating liposome or lipid-based technologies could
have an adverse effect on the Company's ability to obtain physician, patient or
third-party payer acceptance and to sell products using the same or similar
technology. There can be no assurance as to the Company's ability, or the
length of time required, to achieve commercialization of the Company's products
or that physicians, patients or third-party payers will accept liposome products
as readily as traditional forms of medication or at all.

NO ASSURANCE OF REGULATORY APPROVALS

The Company's products are subject to rigorous preclinical and clinical
testing and approval by the FDA and by comparable agencies in other countries
and, to a lesser extent, by state regulatory authorities prior to marketing.
The process of conducting clinical trials and obtaining regulatory approval for
a product typically takes a number of years and involves significant
expenditures. Following the grant of any regulatory approval for a product, the
Company remains subject to continuing review from the applicable regulatory
body. Later discovery of previously unknown problems may result in restrictions
on a product's future use or withdrawal of the product from the market.

DOXIL REGULATORY STATUS

In September 1994, SEQUUS filed an NDA with the FDA seeking approval to
market DOXIL for treating AIDS-KS patients who have failed or are intolerant to
conventional combination chemotherapy. In February 1994, the FDA's Oncologic
Drugs Advisory Committee ("ODAC")

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recommended that the FDA not approve DOXIL under its regular approval procedures
but did recommend that the FDA approve DOXIL under Subpart H of 21 CRF Ch 1
Section 314.5000 et seq. Accelerated Approval of New Drugs for Serious or Life-
Threatening Illnesses ("FDA Accelerated Approval Procedures"). Under the FDA
Accelerated Approval Procedures, such approval, if granted by the FDA, will be
subject to the additional requirement that following product launch, the Company
continue to study the drug to verify and describe its clinical benefit.
Approval by the FDA of the DOXIL NDA is dependent upon numerous factors,
including approval of prescribing information, the FDA's inspection and approval
of the Company's facilities, processes and procedures related to the development
and manufacture of the drug and similar inspection and approval of the Company's
suppliers, subcontractors and contract manufacturer. Some of these activities
have been completed. Prior to product launch, which SEQUUS is in the process of
planning, the Company and the FDA must also reach agreement on the Company's
promotional materials. There can be no assurance that the DOXIL NDA will be
approved on a timely basis, if at all, and under FDA Accelerated Approval
Procedures, the FDA may withdraw approval on an expedited basis following
product launch if the Company fails to show due diligence in conducting post-
marketing studies or if these studies fail to demonstrate clinical benefit to
the FDA's satisfaction.

In December 1994, the Company submitted Marketing Authorization
Applications ("MAAs") for DOXIL in the European Union ("EU") countries seeking
approval to use DOXIL in the first-line treatment of AIDS-KS. The MAA
submissions were made in accordance with the Committee on Proprietary and
Medicinal Products ("CPMP") "High Technology List B Concertation Procedures"
procedures. Under the List B procedures, a company is allowed to file for
marketing approval simultaneously in all EU countries and one EU country acts as
so-called rapporteur to coordinate the review process. The U.K. Medicines
Control Agency will act as rapporteur for DOXIL. There can be no assurance that
the CPMP, which is composed of representatives from the respective regulatory
bodies in the EU countries, will determine that the Company's clinical data have
provided evidence of safety and efficacy in humans adequate to support approval
or that any of the MAAs will be approved on a timely basis, if at all.

AMPHOCIL REGULATORY STATUS

In June 1994, SEQUUS submitted MAAs for AMPHOCIL in Finland, Sweden and the
ten EU countries where MAAs had not previously been filed. The submissions were
made in accordance with CPMP "Multistate" procedures. In October 1994, the
Company received a list of questions raised by the member countries. The
Company is developing additional data to respond to these questions, and it
plans to file the additional data with the CPMP as soon as practicable. There
can be no assurance that the Company's responses will be filed in a timely
manner or that, if filed, the responses will adequately address the issues
raised by the member countries, that the CPMP will recommend approval based on
the responses, or that any member country will approve AMPHOCIL.

As soon as practicable, the Company intends to file an NDA for AMPHOCIL
based upon certain data from open label clinical trials. There can be no
assurance that the Company's NDA for AMPHOCIL will be accepted for filing by the
FDA, that the FDA will determine that the Company's NDA provides sufficient
evidence of safety and efficacy in humans adequate to support FDA approval or
that the NDA will be approved on a timely basis, if at all.

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OTHER PRODUCTS

Similarly, there can be no assurance that if the Company files for
regulatory approvals of other products in the U.S. or abroad, the relevant
regulatory body will accept the Company's application, approve the product for
commercial sale in the subject jurisdiction or that, if approved, it will be
economically feasible for the Company to commercialize any such product.

LIMITED FACILITIES, MANUFACTURING AND MARKETING EXPERIENCE

The Company's current facilities and staff are inadequate for the large-
scale production and marketing of its products under development. The Company
also has limited experience in clinical development of therapeutic products,
currently lacks the financial resources to commercialize and sell products and
has no experience in marketing products. There can be no assurance that the
Company will be successful in conducting additional clinical development or in
manufacturing and marketing its products.

DEPENDENCE ON THIRD-PARTY DISTRIBUTOR AND AGENTS

To date, all of the Company's product revenues have come from sales either
to a third-party distributor (Zeneca Limited ("Zeneca")) or through third-party
agents. In 1994, ninety-one percent (91%) of the Company's product revenues
came from sales of AMPHOCIL to Zeneca, and a portion of those sales represented
pipeline-filling orders. As a consequence of this current dependence on a
single customer, and unless and until the Company receives any approvals for and
begins to sell DOXIL, the Company's future product revenues are largely
dependent on Zeneca's success in selling AMPHOCIL, Zeneca's assessment of the
timing and likelihood of additional approvals for AMPHOCIL and on Zeneca's
assessment of its inventory requirements. There can be no assurance that these
or other factors could not lead to substantial fluctuations in the Company's
product revenues from period to period.

DEPENDENCE ON THIRD-PARTY MANUFACTURER; MANUFACTURING RISKS

The Company's present manufacturing capabilities are limited. The Company
is dependent on a U.S. based contract manufacturer, Ben Venue Laboratories,
Inc., to manufacture commercial-scale quantities of AMPHOCIL and DOXIL pursuant
to supply agreements. There can be no assurance, however, that the contract
manufacturer will continue to meet FDA standards for the manufacture of these
products. There are only a limited number of other manufacturers with the
capability of manufacturing AMPHOCIL and DOXIL, and any alternative manufacturer
would require regulatory qualification to manufacture the product. In the event
of any interruption of supply from the contract manufacturer due to regulatory
or other causes, there can be no assurance that the Company could make
alternative manufacturing arrangements.

To date, the Company and the contract manufacturer have manufactured twelve
commercial-scale batches of DOXIL, including the three registration batches
which are required as part of the FDA's approval process, but there can be no
assurance that DOXIL can consistently be produced in accordance with
specifications. Similarly, there can be no assurance that the Company will be
able to meet routinely its manufacturing goals in a timely manner or to the
continuing satisfaction of regulatory agencies.

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RAW MATERIALS

Although the Company has supply agreements in place with the suppliers of
its key raw materials, the number of alternative qualified suppliers of key raw
materials required for the manufacture of AMPHOCIL and DOXIL is limited. There
can be no assurance that the Company could make alternative supply arrangements
in the event of a supply interruption on commercially reasonable terms, if at
all.

COMPETITION AND TECHNOLOGICAL CHANGE

The drugs being developed by the Company compete with existing and new
drugs. Many companies, including established pharmaceutical and chemical
companies, and university-related entities both in the U.S. and abroad are
developing products based on improved drug delivery technologies. Some of these
companies are active in liposome and lipid-based research and product
development and many have financial and technical resources and production and
marketing capabilities substantially greater than those of the Company. In
addition, most such companies have had significantly greater experience than the
Company in preclinical and clinical development activities and in obtaining
regulatory approval to manufacture and market pharmaceutical products. The
Liposome Company ("TLC") is dedicated primarily to liposomal drug development,
and NeXstar Pharmaceuticals, Inc. ("NeXstar"), which incorporates a predecessor
company, Vestar, Inc. ("Vestar"), devotes a significant portion of its resources
to liposomal drug development. In certain European countries, NeXstar currently
sells a liposomal amphotericin B product from which it recorded over $40 million
in sales in 1994, and with which SEQUUS expects AMPHOCIL to compete. In
addition, TLC has submitted MAAs for a liposomal amphotericin B product in
certain of these countries and has received approval for its product in the UK.
Although the exact impact of the competition from NeXstar and TLC is uncertain,
SEQUUS believes that such competition may reduce SEQUUS's product revenues and
that competition in all pharmaceutical products and in all forms of drug
delivery will continue to be intense. There can be no assurance that other
pharmaceutical companies will not develop more effective drug delivery
technologies than, or will not produce products superior to, those of the
Company.

DEPENDENCE ON KEY PERSONNEL

The Company's success depends largely upon its ability to attract and
retain qualified scientific, engineering, manufacturing, sales and marketing and
management personnel. The Company faces competition for such personnel from
other companies, academic institutions, government entities and other
organizations. There can be no assurance that the Company will be successful in
hiring or retaining such personnel.

PATENTS AND TRADE SECRETS

There has been increasing litigation in the biomedical, biotechnology and
pharmaceutical industries with respect to the manufacture, use and sale of new
therapeutic products that are the subject of conflicting patent rights. There
can be no assurance that any patents owned or controlled by the Company will
protect SEQUUS against further infringement litigation or afford commercially
significant protection of SEQUUS' technology. The majority of the Company's
patents have not yet been tested in court to determine their validity and scope.
Moreover, the patent laws of foreign countries differ from those of the U.S. and
the degree of protection, if any, afforded by foreign patents may, therefore, be
different.

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The Company has been required to defend itself in patent litigation in the
past and the uncertainties inherent in any other lawsuits that may be commenced
in the future with respect to any alleged patent infringement by the Company
make the outcome of any such litigation difficult to predict. There can be no
assurance that the Company will be successful in any such litigation, and a
judgment adverse to the Company in any such litigation could adversely affect
the Company. Moreover, the expense of such litigation could adversely affect
the Company, whether or not the Company is successful in such litigation.

In October 1991, the Company received a letter from TLC alleging that DOXIL
infringes two TLC patents (the "TLC Patents") relating to lyophilization
(freeze-drying) of liposomes. The Company's current DOXIL formulation is not
lyophilized and therefore does not infringe the TLC Patents. In addition, the
Company had previously asked its patent counsel to review, among other things,
the TLC Patents. In September 1991, such counsel delivered an opinion to the
Company that, among other things, SEQUUS's doxorubicin products do not infringe
any valid claim under either of the TLC Patents. However, no assurance can be
given that TLC will not make a claim against SEQUUS with respect to the TLC
Patents. In December 1994 in a case involving TLC and Vestar the U.S. District
Court in Wilmington, Delaware, found one of the two TLC patents invalid and
ordered it revoked.

In November 1991, the Company received a letter from TLC bringing to
SEQUUS's attention TLC's U.S. Patent No. 5,059,591 (the "'591 Patent")
containing claims directed to amphotericin B/sterol compositions and their
method of use. Subsequently, SEQUUS's patent counsel delivered an opinion to
the Company that, among other things, AMPHOCIL does not infringe any claim of
the '591 Patent. However, no assurance can be given that TLC will not make a
claim against SEQUUS with respect to the '591 Patent.

The Company has a practice of monitoring patents and other developments in
the liposome field. To the extent that the Company becomes aware of patents of
other parties which the Company's processes or products might infringe, it is
the Company's practice to seek review of such patents by the Company's patent
counsel. In accordance with this practice, the Company's patent counsel has
reviewed a patent issued to TLC in January 1992 (the "Loading Patent") which
covers, among other things, a process related to the loading of therapeutic drug
into liposomes. The Company's patent counsel has rendered an opinion that, if
certain elements of the claims of the Loading Patent can be proved to exist in
certain of SEQUUS's products, such products may be found to infringe the Loading
Patent. The Company's patent counsel has, however, rendered an opinion that the
Loading Patent should be held invalid and/or unenforceable on a variety of
grounds. The Company continues to proceed in product development in reliance on
this opinion. Such opinion does not, however, prevent TLC from commencing
litigation to enforce the Loading Patent, and no assurance as to the outcome of
such litigation can be given.

The Company's patent counsel has also rendered advice with respect to all
other patents which have been referred to such patent counsel that the Company's
products do not infringe any valid claim under such patents. Such advice does
not, however, prevent any third party from commencing litigation to enforce such
patents.

Other public and private concerns control patents covering technology
potentially useful or necessary to the Company. 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. The Company relies on unpatented knowledge, and others may be able to
obtain access to, or independently develop, such expertise.

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PRODUCT LIABILITY

Testing, manufacturing and marketing of the Company's products will entail
risk of product liability. There can be no assurance that the amount of
insurance the Company has obtained against the risk of product liability will be
adequate, that the amount of such insurance can be renewed or that the amount
and scope of any coverage obtained will be adequate to protect the Company in
the event of a successful product liability claim. The Company's business could
be adversely affected by a successful product liability claim.

HEALTH CARE REFORM: UNCERTAINTY OF THIRD-PARTY REIMBURSEMENT

The levels of revenues and profitability of biotechnology and
pharmaceutical companies may be affected by the continuing efforts of
governmental and third-party payers to contain or reduce the costs of health
care through various means. In the United States there have been, and the
Company expects that there will continue to be, a number of federal and state
proposals to control health care costs. President Clinton and members of
Congress introduced proposals to the 103rd Congress for the comprehensive reform
of the nation's health care system. Some of the proposed legislation contained
measures intended to control public and private spending on health care as well
as to provide universal public access to the health care system. In addition,
some of the proposed legislation included limitations on Medicare and Medicaid
reimbursement for drugs and called for the creation of a committee to monitor
and evaluate the pricing of new drugs. Although no legislation was ultimately
passed by the 103rd Congress, federal, state and local officials and legislators
(and certain foreign government officials and legislators) have proposed or are
reportedly considering proposing a variety of reforms to the health care systems
in their respective jurisdictions, including reforms that may affect the
pharmaceutical industry. It is uncertain what new legislative proposals, if
any, might be adopted or what actions federal, state or third-party payers may
take in response to any health care reform proposals or legislation. The
Company cannot predict the effect health care reforms may have on its business
or the business of its collaborators.

In the United States and elsewhere, sales of therapeutic products are
dependent in part on the availability of reimbursement from third-party payers,
such as government and private insurance plans. These third-party payers are
increasingly challenging the prices charged for medical products and services.
If the Company succeeds in bringing one or more products to the market, there
can be no assurance that these products will be considered cost effective and
that reimbursement to the consumer will be available or will be sufficient to
allow the Company to sell its products on a profitable basis.

VOLATILITY OF STOCK PRICE

The market price of the Common Stock, like the stock prices of many
publicly traded biotechnology companies, has been and may continue to be highly
volatile. A variety of events, both concerning and unrelated to the Company and
the biotechnology industry, may have a significant negative impact on the market
price of the Common Stock. Although the Common Stock trades on the Nasdaq
National Market, the trading volume has fluctuated and at times has been quite
low. Any large sale of shares of the Company could have a significant adverse
effect on the market price of the Common Stock.

9
<PAGE>

SELLING STOCKHOLDERS

MARCH-APRIL 1995 PREFERRED UNIT PRIVATE PLACEMENT. Certain Selling
Stockholders acquired shares of Preferred Stock and Warrants to purchase Common
Stock pursuant to unit purchase agreements (the "Preferred Agreements"), dated
as of March 24, 1995 or as of April 13, 1995, among the Company and those
Selling Stockholders (the "Preferred Unit Purchasers"). The Preferred Unit
Purchasers purchased a total of 480,000 units (each, a "Preferred Unit," and
collectively, the "Preferred Units") at a price of $25.00 per Preferred Unit.
Each Preferred Unit consisted of one share of the Company's Series A Convertible
Reset Preferred Stock convertible into 3.367 shares of Common Stock (subject to
certain adjustments) and a Warrant to purchase 1.684 shares of Common Stock for
$7.425 per share (subject to certain adjustments). The Warrants issued as part
of the Preferred Units were not exercisable until June 1, 1995, and the
Preferred Stock issued as part of the Preferred Units were not convertible until
sixty days following the date of issuance of such shares of Preferred Stock.

Robertson, Stephens & Company, L.P., itself a Preferred Unit Purchaser,
acted as placement agent for the Company in connection with the private
placement of the Preferred Units. For the performance of such services
Robertson, Stephens & Company, L.P., was paid a fee by the Company.

The Preferred Unit Purchasers represented in the Preferred Agreements that
they were accredited investors and were purchasing the Preferred Stock, the
Warrants and the Common Stock issuable upon exercise of the Warrants and upon
conversion of the Preferred Stock for investment and not with a view to, or for
a sale in connection with, any distribution within the meaning of the Securities
Act. The Preferred Agreements require the Company to file a registration
statement under the Securities Act with respect to the resale of the applicable
Shares. The Preferred Agreements also require the Company to use its best
efforts, including the preparation and filing of appropriate amendments and
supplements to the registration statement, to keep the registration statement
effective until all of the Shares held, or acquirable by, the Preferred Unit
Purchasers are resold or until March 30, 2001, whichever is earlier.

Because the Preferred Unit Purchasers may sell all or some portion of the
Shares covered by this Prospectus, no estimate can be given as to the number of
Shares and the percentage of outstanding Common Stock that will be held by any
of them after any particular sale.

MAY 1995 COMMON STOCK AND WARRANT PRIVATE PLACEMENT. Certain other Selling
Stockholders acquired Common Stock and Warrants to purchase Common Stock
pursuant to unit purchase agreements (the "Common Agreements"), dated as of May
19, 1995, among the Company and those Selling Stockholders (the "Common Unit
Purchasers"). The Common Unit Purchasers purchased a total of 2,223,711 units
(each, a "Common Unit", and collectively, the "Common Units") at a price of
$6.7571 per Common Unit. Each Common Unit consisted of one share of Common
Stock and a Warrant to purchase one-half additional share of Common Stock for
$7.4328 per share (subject to certain adjustments). The Warrants issued as part
of the Common Units may not be exercised before May 26, 1996, and the holder of
any such Warrant may not exercise it unless such holder represents that neither
such holder nor any person controlled by, controlling or under common control
with such holder sold during the period May 25, 1995 through May 25, 1996
any securities relating to the Company including without limitation any sales of
Common Stock, purchases of puts, sales of calls, short sales, other transactions
involving derivative securities or sales of other equity securities of the
Company.

The Common Unit Purchasers represented in the Common Agreements that they
were accredited investors and were purchasing the Common Stock, the Warrants and
the Common Stock issuable upon exercise of the Warrants for investment and not
with a view to, or for a sale in connection with, any distribution within the
meaning of the Securities Act. The Common Agreements require the Company

10
<PAGE>

to file a registration statement under the Securities Act with respect to the
resale of the applicable Shares. The Common Agreements also require the Company
to use its best efforts, including the preparation and filing of appropriate
amendments and supplements to the registration statement, to keep the
registration statement effective until all of the Shares held, or acquirable by,
the Common Unit Purchasers are resold or until March 30, 2001, whichever is
earlier.

Because the Common Unit Purchasers may sell all or some portion of the
Shares covered by this Prospectus, no estimate can be given as to the number of
Shares and the percentage of outstanding Common Stock that will be held by any
of them after any particular sale.

* * *

The following table and accompanying footnotes identify each Selling
Stockholder and based upon information provided to the Company, set forth
information as of May 31, 1995 with respect to the Shares held by or acquirable
by, as the case may be, each Selling Stockholder and the shares of Common Stock
owned by the Selling Stockholders which are not covered by this Prospectus.

Number of Shares
Number of Shares Acquirable Upon Other Shares
Selling Shareholder Number of Acquirable Upon Conversion of of Common Stock Percent of
------------------- Shares Held Warrant Exercise Preferred Stock Owned(1) Class(2)
----------- ---------------- ---------------- --------------- ----------
<S> <C> <C> <C> <C> <C>
American Variable Insurance 0 40,416 80,808 0 *
Growth Fund(3)

BankInvest(4) 0 33,680 67,340 0 *

Biotechnology Value Fund, L.P. 0 11,788 23,569 0 *

BT Holdings 0 168,400 336,700 0 2.3%

Edna Cader Budde Trust U/A/D 3,699 1,849 0 0 *
04/30/86

Buttonwood Partners 0 11,451 22,896 0 *

Clark Callander(5) 0 168 337 0 *

Farah Champsi(5) 0 168 337 0 *

Nora F. Chiang U/A/D 12/02/92 5,179 2,589 0 0 *
Chiang Family Trust

Dennis Choy ("Choy Man Kin") 14,799 7,399 0 0 *

Clarion Capital Corp. 59,196 56,542 53,872 0 *

Clarion Partners 14,799 7,399 0 0 *

DHB Capital Group, Inc. 44,397 35,670 26,936 0 *

Brendan Dyson(5) 0 1,684 3,367 0 *

East Asia Asset Management 17,400 8,700 0 0 *
Company Limited

Essex Special Growth 0 16,840 33,670 0 *
Opportunities

Charles Engelberg(6) 12,579 6,289 0 0 *

Claire Engelberg 14,799 7,399 0 0 *

11
<PAGE>

Johnston Evans IRA DTD 2,000 1,000 0 593,815(7) 2.7%
4/12/91

Lisa Evans 2,000 1,000 0 0 *

William A. Fleckenstein 5,000 2,500 0 0 *

Richard Gaston, M.D. 9,471 4,735 0 1,300 *

Marc & Ingrid Gelman 3,700 1,850 0 3,000 *

Grace Brothers, Ltd. 0 16,840 33,670 0 *

John Grillos(5) 0 337 673 0 *

H&Q Healthcare Investors 0 74,096 148,148 0 1.0%

H&Q Life Sciences Investors 0 60,624 121,212 0 *

HSBC International Trustee 147,992 73,996 0 0 1.0%
Account #006-093256-407

John R. Hillsman 10,000 5,000 0 0 *

Hofung Holdings Limited 147,990 73,995 0 0 1.0%

Hollis Capital 20,718 10,359 0 10,000 *

Lee Hou-Sheng 44,395 22,197 0 0 *

Chang Jen Huang 6,748 3,374 0 0 *

Ha Lin Yip Huang 6,748 3,374 0 0 *

Agnes Hung TR U/A/D 09/07/93 10,359 5,179 0 800 *

Eugene Hung TR U/A May 2 51,797 25,898 0 0 *
91 - Eugene Yiu Sing Hung &
Pui-Ching Hung Trust

John T. S. Hung, Trustee 8,395 4,197 0 0 *
U/A 04/21/91

Hung Kwong International Ltd. 38,163 19,081 0 0 *

Siew Yoong Hung, Custodian
Edmund Hung, under the CA
Unit Transfer to Minors Act 1,000 500 0 0 *

Siew Yoong Hung, Custodian
Jeremy Hung, under the CA
Unit Transfer to Minors Act 1,000 500 0 0 *

Siew Yoong Hung, Custodian
Jonathan Hung, under the CA
Unit Transfer to Minors Act 1,000 500 0 0 *

Hungsland Holdings, Inc. 10,359 5,179 0 3,000 *

Ed Hurwitz(5) 0 337 673 0 *

12
<PAGE>

Jackson Hole Investments 3,750 1,875 0 0 *
Acquisitions, L.P.

Christopher L. Kaufman Trust(8) 0 3,368 6,734 1,570 *

Sy Kaufman 0 1,347 2,694 0 *

Victor Lee 192,390 96,195 0 60,000 1.6%

Lehman Brothers, a/c 60,000 30,000 0 0 *
Michael T. Jackson Trust a/c
# 732-20643-20

Nai-ping Leung 32,594 16,297 0 0 *

Virginia Leung 9,884 4,942 0 0 *

Leung Ping Chiu 14,797 7,398 0 0 *

Chi-Ich Tran Su Hua Li 4,439 2,219 0 1,500 *

David Ma 73,996 36,998 0 0 *

Man-In Enterprises, Inc. 10,359 5,179 0 0 *

Allen Mark 700 350 0 0 *

Alice Mark 700 350 0 0 *

Michael McCaffery(5) 0 1,347 2,694 0 *

Richard C. E. Morgan(9) 2,000 1,000 0 641,815(10) 2.9%

Anthony Ng or Cindy Ng 147,989 73,994 0 0 1.0%

Old Court Limited 147,992 73,996 0 0 1.0%

Oracle Institutional Partners, L.P. 0 2,526 5,051 0 *

Oracle Partners, L.P. 0 49,678 99,327 0 *

Sam Oracle Fund, Inc. 0 15,156 30,303 0 *

The Lewis E. and Martha E. 0 4,042 8,081 0 *
Randall Living Trust

David Reilly(5) 0 674 1,347 0 *

Robertson, Stephens & 0 36,576 73,131 0 *
Company, L.P.(11)

SBSF Biotechnology Fund, L.P. 0 33,680 67,340 0 *

Paul J. Siegel 4,000 2,000 0 3,000 *

Christopher C. H. Sin 14,799 7,399 0 0 *

SMALLCAP World Fund, Inc.(12) 0 80,832 161,616 0 1.1%

Pamela D. Smith 0 4,042 8,081 0 *

13
<PAGE>

SBC Capital Markets Inc. 0 33,680 67,340 0 *

Tung Tai Finance Ltd. 379,995 189,997 0 0 2.6%

Nina Wang 300,000 150,000 0 0 2.1%

West Highland International 0 4,042 8,081 0 *

West Highland Partners, L.P. 0 51,867 103,704 0 *

Bill Wisialowski(5) 0 135 269 0 *

Wolfensohn Partners L.P. 26,250 13,125 0 565,565(13) 2.8%

Ken Yamamoto, M.D. 7,399 3,699 0 0(14) *
------------ ------------ ------------ ------

2,223,711 1,920,165 1,616,163 23.1%
------------ ------------ ------------ ------
------------ ------------ ------------ ------
<FN>
_________________
* Less than one percent.

(1) Includes shares of Common Stock owned by the Selling Stockholders which are
not covered by this Prospectus.

(2) Includes all shares of Common Stock owned by the Selling Stockholder
whether covered by this Prospectus or not, and assumes named Selling
Stockholder has exercised all outstanding warrants and has converted all
shares of Preferred Stock and that no other person has exercised any
outstanding warrants or has converted any shares of Preferred Stock.
Percentage figures are based upon the total number of shares of Common
Stock outstanding as of May 31, 1995: 21,379,111 shares.

(3) American Variable Insurance Growth Fund's shares of Preferred Stock and
Warrants are held in the name of its nominee, Waterbath & Co.

(4) BankInvest's shares of Preferred Stock and Warrants are held in the name of
its nominee, Danske & Co.

(5) These individuals are partners of Robertson, Stephens & Company, L.P. See
note (11) below.

(6) Charles Engelberg acted as the "finder" for the May 1995 Common Stock and
Warrant Private Placement, and the Company paid him a fee for his services.

(7) Includes the 26,250 shares of Common Stock purchased by Wolfensohn Partners
L.P. pursuant to one of the Common Agreements and 565,565 shares of Common
Stock held by Wolfensohn Associates L.P. and not covered by this
Prospectus. Wolfensohn Partners L.P. is the general partner of Wolfensohn
Associates L.P. and Mr. Evans is a general partner of Wolfensohn Partners
L.P. Therefore, Mr. Evans may be deemed to beneficially own such shares.
Mr. Evans disclaims beneficial ownership of any amount of such shares that
exceeds his pecuniary interest. Mr. Evans shares voting and dispositive
control of such shares with the other general partners of Wolfensohn
Partners L.P. Mr. Evans holds the remaining 2,000 shares personally and
not in his IRA account.

(8) Christopher L. Kaufman is a partner of Latham & Watkins, which has passed
upon certain legal matters for the Company. See "Legal Matters."

(9) Mr. Morgan is a director of the Company.

(10) Includes 50,000 shares of Common Stock issuable pursuant to immediately
exercisable options. Also includes the 26,250 shares of Common Stock
purchased by Wolfensohn Partners L.P. pursuant to one of the Common
Agreements and 565,565 shares of Common Stock held by Wolfensohn Associates
L.P. and not covered by this Prospectus. Wolfensohn Partners L.P. is the
general partner of Wolfensohn Associates L.P. and Mr. Morgan is a general
partner of Wolfensohn Partners L.P. Therefore, Mr. Morgan may be deemed to
beneficially own such shares. Mr. Morgan disclaims beneficial ownership of
any amount of such shares that

14
<PAGE>

exceeds his pecuniary interest. Mr. Morgan shares voting and dispositive
control of such shares with the other general partners of Wolfensohn
Partners L.P.

(11) Robertson, Stephens & Company, L.P., acted as placement agent for the
Company's March-April 1995 Preferred Unit Private Placement of units, which
included certain of the Shares covered by this Prospectus. The Company
paid Robertson, Stephens & Company, L.P., a fee for its services. See
"Selling Stockholders -- March-April 1995 Private Placement."

(12) SMALLCAP World Fund's shares of Preferred Stock and Warrants are held in
the name of its nominee, Kane & Co.

(13) Includes 565,565 shares of Common Stock held by Wolfensohn Associates L.P.
and not covered by this Prospectus. Wolfensohn Partners L.P. is the
general partner of Wolfensohn Associates L.P. Therefore, Wolfensohn
Partners, L.P., may be deemed to beneficially own such shares. Wolfensohn
Partners L.P. disclaims beneficial ownership of any amount of such shares
that exceeds its pecuniary interest.

(14) Dr. Yamamoto is a trustee and one of the beneficiaries of the Kenneth S.
Yamamoto, M.D. Target Benefit Pension Plan (the "Pension Plan"). The
Pension Plan holds 6,000 shares of Common Stock not covered by this
Prospectus. Dr. Yamamoto disclaims beneficial ownership of any amount of
such Common Stock that exceeds his pecuniary interest in the pension plan.
</TABLE>

PLAN OF DISTRIBUTION

All or any part of the Shares may be sold from time to time by the Selling
Stockholders or by pledgees, donees, transferees or other successors in
interest, directly or through brokers, agents or dealers who may receive
compensation in the form of commissions. The Shares may be sold in the over-
the-counter market on the Nasdaq National Market, through negotiated
transactions or otherwise, at market prices prevailing at the time of sale, at
prices related to such prevailing market prices or at prices otherwise
negotiated, including block trades at negotiated prices. Any such brokers,
agents or dealers who effect a sale of the Shares may be deemed to be
"underwriters" within the meaning of the Securities Act.

The Company has advised each Selling Stockholder that he or she and any
such brokers, dealers or agents who effect a sale of the Shares are subject to
the prospectus delivery requirements under the Securities Act. The Company also
has advised each Selling Stockholder that in the event of a "distribution" of
his Shares, such Selling Stockholder and any broker, agent or dealer who
participates in such distribution may be subject to applicable provisions of the
Exchange Act and the rules and regulations thereunder, including without
limitation Rule 10b-6.

In connection with distributions of the Shares, the Selling Stockholders
may enter into hedging transactions with broker-dealers, and the broker-dealers
may engage in short sales of the Common Stock in the course of hedging the
positions they assume with the Selling Stockholders. The Selling Stockholders
also may sell the Common Stock short and deliver the Shares to close out such
short positions. The Selling Stockholders also may enter into option or other
transactions with broker-dealers that involve the delivery of the Shares to the
broker-dealers, who may then resell or otherwise transfer such Shares. The
Selling Stockholders also may loan or pledge the Shares to a broker-dealer and
the broker-dealer may sell the Shares so loaned or upon a default may sell or
otherwise transfer the pledged Shares.

The Company will pay substantially all of the expenses incident to the
registration of the Shares, estimated to be approximately $70,000.

15
<PAGE>

LEGAL MATTERS

Certain legal matters with respect to the Shares offered hereby will be
passed upon for the Company by Latham & Watkins, San Francisco, California.
Christopher L. Kaufman, a partner of Latham & Watkins, is a Selling Stockholder.
See "Selling Stockholders."

EXPERTS

The financial statements of SEQUUS Pharmaceuticals, Inc. (formerly Liposome
Technology, Inc.) appearing in SEQUUS Pharmaceuticals, Inc.'s (formerly Liposome
Technology, Inc.) Annual Report (Form 10-K) for the year ended December 31,
1994, have been audited by Ernst & Young LLP, independent auditors, as set forth
in their report thereon included therein and incorporated herein by reference.
Such financial statements are incorporated herein by reference in reliance upon
such report given upon the authority of such firm as experts in accounting and
auditing.

16
<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The expenses to be paid by the Company in connection with the distribution
of the securities being registered are as set forth in the following table:

<TABLE>

<S> <C>
Securities and Exchange Commission Fee. . . . . . . . . . . .$ 15,642
*Accounting Fees and Expenses. . . . . . . . . . . . . . . . . 5,000
*Blue Sky Fees and Expenses. . . . . . . . . . . . . . . . . . 2,000
*Legal Fees and Expenses . . . . . . . . . . . . . . . . . . . 40,000
*Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . 7,358
-------

*Total. . . . . . . . . . . . . . . . . . . . . . . . . . 70,000
-------
-------
<FN>
__________
* Estimated.
</TABLE>

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Company has the power, pursuant to Section 145 of the Delaware General
Corporation Law, to limit the liability of its directors from certain breaches
of fiduciary duty and to indemnify its directors, officers and other persons for
certain acts.

Articles NINTH and TENTH of the Company's Restated Certificate of
Incorporation provide as follows:

"NINTH: A director of the corporation shall not be personally liable to the
corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of
the director's duty of loyalty to the corporation or its stockholders, (ii)
for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the
Delaware General Corporation Law, or (iv) for any transaction from which
the director derived any improper personal benefit. If the Delaware
General Corporation Law is amended hereafter to authorize corporate action
further eliminating or limiting the personal liability of directors, then
the liability of a director of the corporation shall be eliminated or
limited to the fullest extent permitted by the Delaware General Corporation
Law, as so amended.

Any repeal or modification of the foregoing paragraph by the stockholders
of the corporation shall not adversely affect any right or protection of a
director of the corporation existing at the time of such repeal or
modification.

II-1

<PAGE>

TENTH:

A. RIGHT TO INDEMNIFICATION

Each person who was or is made a party or is threatened to be made a party
to or is involved in any action, suit or proceeding, whether civil,
criminal, administrative or investigative ("proceeding"), by reason of the
fact that he or she or a person of whom he or she is the legal
representative, is or was a director or officer, employee or agent of the
corporation or is or was serving at the request of the corporation as a
director or officer, employee or agent of another corporation, or of a
partnership, joint venture, trust or other enterprise, including service
with respect to employee benefit plans, whether the basis of such
proceeding is alleged action in an official capacity as a director,
officer, employee or agent or in any other capacity while serving as a
director, officer, employee or agent, shall be indemnified and held
harmless by the corporation to the fullest extent authorized by the
Delaware General Corporation Law, as the same exists or may hereafter be
amended, (but, in the case of any such amendment, only to the extent that
such amendment permits the corporation to provide broader indemnification
rights than said Law permitted the corporation to provide prior to such
amendment) against all expenses, liability and loss including attorneys'
fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or
to be paid in settlement reasonably incurred or suffered by such person in
connection therewith and such indemnification shall continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure
to the benefit of his or her heirs, executors and administrators; PROVIDED,
HOWEVER, that the corporation shall indemnify any such person seeking
indemnity in connection with an action, suit or proceeding (or part
thereof) initiated by such person only if such action, suit or proceeding
(or part thereof) was authorized by the board of directors of the
corporation. Such right shall be a contract right and shall include the
right to be paid by the corporation expenses incurred in defending any such
proceeding in advance of its final disposition; PROVIDED, HOWEVER, that the
payment of such expenses incurred by a director or officer of the
corporation in his or her capacity as a director or officer (and not in any
other capacity in which service was or is rendered by such person while a
director or officer, including, without limitation, service to an employee
benefit plan) in advance of the final disposition of such proceeding, shall
be made only upon delivery to the corporation of an undertaking, by or on
behalf of such director or officer, to repay all amounts so advanced if it
should be determined ultimately that such director or officer is not
entitled to be indemnified under this Section or otherwise.

B. RIGHT OF CLAIMANT TO BRING SUIT

If a claim under Paragraph A of Article TENTH is not paid in full by the
corporation within ninety (90) days after a written claim has been received
by the corporation, the claimant may at any time thereafter bring suit
against the corporation to recover the unpaid amount of the claim and, if
successful in whole or in part, the claimant shall be entitled to be paid
also the expense of prosecuting such claim. It shall be a defense to any
such action (other than an action brought to enforce a claim for expenses
incurred in defending any proceeding in advance of its final disposition
where the required undertaking, if any, has been tendered to this
corporation) that the claimant has not met the standards of conduct which
make it permissible under the Delaware General Corporation Law for the
corporation to indemnify the claimant for the amount claimed, and the
burden of proving that such standards were met shall be on the claimant.
Neither the failure of the corporation (including its board of directors,
independent legal counsel, or its stockholders) to have made a
determination prior to the commencement of such action that indemnification
of the claimant is proper in the circumstances because he or she has met
the applicable standard of conduct set forth in the Delaware General
Corporation Law, nor an actual determination by the

II-2
<PAGE>

corporation (including its board of directors, independent legal counsel,
or its stockholders) that the claimant has not met such applicable standard
of conduct, shall be a defense to the action or create a presumption that
claimant has not met the applicable standard of conduct.

C. NON-EXCLUSIVITY OF RIGHTS

The rights conferred on any person by Paragraphs A and B of Article TENTH
shall not be exclusive of any other right which such persons may have or
hereafter acquire under any statute, provision of the Certificate of
Incorporation, by-law, agreement, vote of stockholders or disinterested
directors or otherwise.

D. INSURANCE

The corporation may maintain insurance, at its expense, to protect itself
and any such director, officer, employee or agent of the corporation or
another corporation, partnership, joint venture, trust or other enterprise
against any such expense, liability or loss, whether or not the corporation
would have the power to indemnify such person against such expense,
liability or loss under the Delaware General Corporation Law."

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) EXHIBITS:

3.1 Restated Certificate of Incorporation.

3.1.1 Certificate of Ownership and Merger of SEQUUS Pharmaceuticals,
Inc. into Liposome Technology, Inc.

4.2 By-Laws, filed as Exhibit 3.2 to the Company's Registration
Statement on Form S-1 (File No. 33-43672) and incorporated
herein by reference.

5 Opinion of Latham & Watkins.

23.1 Consent of Ernst & Young LLP.

23.2 Consent of Latham & Watkins (included in Exhibit 5).

24 Powers of Attorney.

ITEM 17. UNDERTAKINGS

(a) The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:

(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;

II-3
<PAGE>

(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 the information required to be included in a post-
effective amendment by paragraphs (a)(1)(i) and (a)(1)(ii) above may be
contained in periodic reports filed by the registrant pursuant to Section 13 or
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.

(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.

(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 and (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

(h) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.

II-4
<PAGE>

SIGNATURES

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF MENLO PARK, STATE OF CALIFORNIA ON JUNE 26, 1995.

SEQUUS PHARMACEUTICALS, INC.

By /s/ Nicolaos V. Arvanitidis
-------------------------------------
Nicolaos V. Arvanitidis
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER

Pursuant to the requirements of the Securities Act of 1933, this amendment
to registration statement has been signed by each of the following persons in
the capacities and on the dates indicated.

SIGNATURE TITLE DATE
--------- ----- ----

/s/ Nicolaos V. Arvanitidis
- -------------------------------
(Nicolaos V. Arvanitidis) Chairman of the Board and Chief June 26, 1995
Executive Officer

/s/ Donald J. Stewart June 26, 1995
- ------------------------------- Vice President, Finance
(Donald J. Stewart) (Principal Accounting Officer and
acting Principal Financial Officer)

*
- -------------------------------
(Robert G. Faris) Director June 26, 1995

*
- -------------------------------
(Robert B. Shapiro) Director June 26, 1995

*
- -------------------------------
(I. Craig Henderson) Director June 26, 1995

*
- -------------------------------
(Richard C.E. Morgan) Director June 26, 1995

*
- -------------------------------
(E. Donnall Thomas) Director June 26, 1995

* By: /s/ Sally A. Davenport
------------------------------------
Sally A. Davenport, Attorney-In-Fact

II-5
<PAGE>

EXHIBIT INDEX

3.1 Restated Certificate of Incorporation.

3.1.1 Certificate of Ownership and Merger of SEQUUS Pharmaceuticals, Inc.
into Liposome Technology, Inc.

4.2 By-Laws, filed as Exhibit 3.2 to the Company's Registration
Statement on Form S-1 (File No. 33-43672) and incorporated herein
by reference.

5 Opinion of Latham & Watkins.

23.1 Consent of Ernst & Young LLP.

23.2 Consent of Latham & Watkins (included in Exhibit 5).

24 Powers of Attorney.

<PAGE>

EXHIBIT 3.1

RESTATED
CERTIFICATE OF INCORPORATION
OF
LIPOSOME TECHNOLOGY, INC.

Liposome Technology, Inc., a corporation organized and existing under
the laws of the State of Delaware, hereby certifies as follows: The original
name of the corporation was Liposome Technology (Delaware), Inc. The original
Certificate of Incorporation of this corporation was filed with the Delaware
Secretary of State on February 13, 1987.

1. This Restated Certificate of Incorporation restates and further
amends the Certificate of Incorporation of this corporation to read as set forth
herein.

2. The text of the Certificate of Incorporation, as heretofore
amended or supplemented is hereby further amended and restated to read in full
as follows:

FIRST: The name of this corporation is LIPOSOME TECHNOLOGY, INC.

SECOND: The address of its registered office in the State of
Delaware is 15 East North Street, Dover, Delaware 19901, County of Kent. The
name of its registered agent at such address is Incorporating Services, Ltd.

THIRD: The nature of the business or purposes to be conducted or
promoted is to engage in any lawful act or activity for which corporations may
be organized under the General Corporation Law of the State of Delaware.

FOURTH: The total number of shares of all classes of capital stock
which the corporation shall have authority to issue is Thirty Nine Million
(39,000,000) shares, comprised of Thirty Five Million (35,000,000) shares of
Common Stock with a par value of One One-Hundredth of One Cent ($.0001) per
share (the "Common Shares") and Four Million (4,000,000) shares of Preferred
Stock with a par value of One Cent ($.01) per share (the "Preferred Shares").

COMMON SHARES. Subject in all cases to ARTICLE FIFTH, a statement of
the designations, preferences, voting powers (or no voting powers), relative,
participating, optional or other special rights and privileges and the
qualifications, limitations and restrictions of the Common Shares is as follows:

4.1 VOTING RIGHTS. Except as otherwise provided by law, the holders
of Common Shares shall have one vote for each Common Share on all matters
submitted to a vote of the holders of this corporation's Common Shares.

4.2 DISTRIBUTIONS. The holders of Common Shares shall receive, out
of any funds legally available therefor, distributions as declared thereon by
the board of directors of this corporation. For purposes of this Restated
Certificate of Incorporation, unless the context otherwise requires,
distribution shall mean the transfer of cash or property to any holder of Common
Shares without consideration, whether by way of dividend or otherwise, payable
other than in Common Shares of this corporation; provided, however, that a
repurchase of Common Shares shall not be deemed a distribution.

1
<PAGE>

FIFTH: The Preferred Shares may be issued in one or more series at
such time or times and for such consideration or considerations as the board of
directors may determine. Each series shall be so designated as to distinguish
the shares thereof from the shares of all other series and classes. Except as
may be expressly provided in this Restated Certificate of Incorporation,
including any certificate of designations for a series of Preferred Shares,
different series of Preferred Shares shall not be construed to constitute
different classes of shares for the purpose of voting by classes.

The board of directors is expressly authorized, subject to the
limitations prescribed by law and the provisions of this Restated Certificate of
Incorporation, to provide for the issuance of all or any of the Preferred Shares
in one or more series, each with such designations, preferences, voting powers
(or no voting powers), relative, participating, optional or other special rights
and privileges and such qualifications, limitations or restrictions thereof as
shall be stated in the resolution or resolutions adopted by the board of
directors to create such series, and a certificate of designations setting forth
a copy of said resolution or resolutions shall be filed in accordance with the
General Corporation Law of the State of Delaware. The authority of the board of
directors with respect to each such series shall include without limitation of
the foregoing the right to specify the number of shares of each such series and
to authorize an increase or decrease in such number of shares and the right to
provide that the shares of each such series may be; (i) subject to redemption at
such time or times and at such price or prices; (ii) entitled to receive
dividends (which may be cumulative or non-cumulative) at such rates, on such
conditions, and at such times, and payable in preference to, or in such relation
to, the dividends payable on any other class or classes or any other series;
(iii) entitled to such rights upon the dissolution of, or upon any distribution
of the assets of, the corporation; (iv) convertible into, or exchangeable for,
shares of any other class or classes of stock, or of any other series of the
same or any other class or classes of stock of the corporation at such price or
prices or at such rates of exchange and with such adjustments, if any; (v)
entitled to the benefit of such limitations, if any, on the issuance of
additional shares of such series or shares of any other series of Preferred
Shares; or (vi) entitled to such other preference, powers, qualifications,
rights and privileges, all as the board of directors may deem advisable and as
are not inconsistent with law and the provisions of this Restated Certificate of
Incorporation.

SIXTH: The corporation is to have perpetual existence.

SEVENTH: In furtherance and not in limitation of the powers conferred
by the laws of the State of Delaware:

A. The board of directors of the corporation is expressly
authorized:

(i) To make, alter or repeal the by-laws of the corporation.

(ii) To authorize and cause to be executed mortgages and liens
upon the real and personal property of the corporation.

(iii) To set apart out of any of the funds of the corporation
available for dividends a reserve or reserves for any proper purpose and to
abolish any such reserve in the manner in which it was created.

(iv) By a majority of the whole board, to designate one or more
committees, each committee to consist of one or more of the directors of the
corporation. The board may designate one or more directors as alternate members
of any committee, who may replace any absent or disqualified member of any
committee. The by-laws may provide that in the absence or disqualification of a
member of a committee, the member or members thereof present at any meeting and
not disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member

<PAGE>

of the board of directors to act at the meeting in the place of any such absent
or disqualified member. Any such committee, to the extent provided in the
resolution of the board of directors, or in the by laws of the corporation,
shall have and may exercise all the powers and authority of the board of
directors in the management of the business and affairs of the corporation, and
may authorize the seal of the corporation to be affixed to all papers which may
require it; but no such committee shall have the power or authority in reference
to amending the Restated Certificate of Incorporation (except that a committee
may, to the extent authorized in the resolution or resolutions providing for the
issuance of shares of stock adopted by the board of directors as provided in
Section 151(a) of the General Corporation Law of the State of Delaware, fix any
of the preferences or rights of such shares relating to dividends, redemption,
dissolution, any distribution of assets of the corporation or the conversion
into, or the exchange of such shares for, shares of any other class or classes
or any other series of the same or any other class or classes of stock of the
corporation), adopting an agreement of merger or consolidation under Sections
251 or 252 of the General Corporation Law of the State of Delaware, recommending
to the stockholders the sale, lease or exchange, of all or substantially all of
the corporations property and assets, recommending to the stockholders a
dissolution of the corporation or a revocation of a dissolution, or amending the
by-laws of the corporation; and, unless the resolution or by-laws expressly so
provide, no such committee shall have the power or authority to declare a
dividend, to authorize the issuance of stock, or to adopt a certificate of
ownership and merger pursuant to Section 253 of the General Corporation Law of
the State of Delaware.

(v) When and as authorized by the stockholders in accordance
with statute, to sell, lease or exchange all or substantially all of the
property and assets of the corporation, including its good will and its
corporate franchises, upon such terms and conditions and for such consideration,
which may consist in whole or in part of money or property including shares of
stock in, and/or other securities of, any other corporation or corporations, as
its board of directors shall deem expedient and for the best interests of the
corporation.

B. Elections of directors need not be by written ballot unless the
by-laws of the corporation shall so provide.

C. The books of the corporation may be kept at such place within or
without the State of Delaware as the by-laws of the corporation may provide or
as may be designated from time to time by the board of directors of the
corporation.

EIGHTH: Whenever a compromise or arrangement is proposed between
this corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this corporation under
the provisions of Section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this corporation under the provisions of Section 279 of Title 8 of the
Delaware Code, order a meeting of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of this corporation, as the case may
be, to be summoned in such manner as the said court directs. If a majority in
number representing three-fourths in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this corporation as a consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditor's or class of creditors, and/or on all the
stockholders or class of stockholders, of this corporation, as the case may be,
and also on this corporation.

3
<PAGE>

NINTH: A director of the corporation shall not be personally liable
to the corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the Delaware General
Corporation Law, or (iv) for any transaction from which the director derived any
improper personal benefit. If the Delaware General Corporation Law is amended
hereafter to authorize corporate action further eliminating or limiting the
personal liability of directors, then the liability of a director of the
corporation shall be eliminated or limited to the fullest extent permitted by
the Delaware General Corporation Law, as so amended.

Any repeal or modification of the foregoing paragraph by the
stockholders of the corporation shall not adversely affect any right or
protection of a director of the corporation existing at the time of such repeal
or modification.

TENTH:

A. RIGHT OF INDEMNIFICATION

Each person who was or is made a party or is threatened to be made a
party to or is involved in any action, suit or proceeding, whether civil,
criminal, administrative or investigative ("proceeding"), by reason of the fact
that he or she or a person of whom he or she is the legal representative, is or
was a director or officer, employee or agent of the corporation or is or was
serving at the request of the corporation as a director or officer, employee or
agent of another corporation, or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, whether
the basis of such proceeding is alleged action in an official capacity as a
director, officer, employee or agent or in any other capacity while serving as a
director, officer, employee or agent, shall be indemnified and held harmless by
the corporation to the fullest extent authorized by the Delaware General
Corporation Law, as the same exists or may hereafter be amended, (but, in the
case of any such amendment, only to the extent that such amendment permits the
corporation to provide broader indemnification rights than said Law permitted
the corporation to provide prior to such amendment) against all expenses,
liability and loss including attorneys' fees, judgments, fines, ERISA excise
taxes or penalties and amounts paid or to be paid in settlement) reasonably
incurred or suffered by such person in connection therewith and such
indemnification shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of his or her heirs,
executors and administrators provided, however, that the corporation shall
indemnify any such person seeking indemnity in connection with an action, suit
or proceeding (or part thereof) initiated by such person only if such action,
suit or proceeding (or part thereof) was authorized by the board of directors of
the corporation. Such right shall be a contract right and shall include the
right to be paid by the corporation expenses incurred in defending any such
proceeding in advance of its final disposition; PROVIDED, HOWEVER, that the
payment of such expenses incurred by a director or officer of the corporation in
his or her capacity as a director or officer (and not in any other capacity in
which service was or is rendered by such person while a director or officer,
including, without limitation, service to an employee benefit plan) in advance
of the final disposition of such proceeding, shall be made only upon delivery to
the corporation of an undertaking, by or on behalf of such director or officer,
to repay all amounts so advanced if it should be determined ultimately that such
director or officer is not entitled to be indemnified under this Section or
otherwise.

B. RIGHT OF CLAIMANT TO BRING SUIT

4
<PAGE>

if successful in whole or in part, the claimant shall be entitled to be paid
also the expenses of prosecuting such claim. It shall be a defense to any such
action (other than an action brought to enforce a claim for expenses incurred in
defending any proceeding in advance of its final disposition where the required
undertaking, if any, has been tendered to this corporation) that the claimant
has not met the standards of conduct which make it permissible under the
Delaware General Corporation Law for the corporation to indemnify the claimant
for the amount claimed, and the burden of proving that such standards were met
shall be on the claimant. Neither the failure of the corporation (including its
board of directors, independent legal counsel, or its stockholders) to have made
a determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because he or she has met the
applicable standard of conduct set forth in the Delaware General Corporation
Law, nor an actual determination by the corporation (including its board of
directors, independent legal counsel, or its stockholders) that the claimant has
not met such applicable standard of conduct, shall be a defense to the action or
create a presumption that claimant has not met the applicable standard of
conduct.

C. NON-EXCLUSIVITY OF RIGHTS

The rights conferred on any person by Paragraphs A and B of
Article TENTH shall not be exclusive of any other right which such persons may
have or hereafter acquire under any statute, provision of the Restated
Certificate of Incorporation, by-law, agreement, vote of stockholders or
disinterested directors or otherwise.

D. INSURANCE

The corporation may maintain insurance, at its expense, to
protect itself and any such director, officer, employee or agent of the
corporation or another corporation, partnership, joint venture, trust or other
enterprise against any such expense, liability or loss, whether or not the
corporation would have the power to indemnify such person against such expense,
liability or loss under the Delaware General corporation Law.

ELEVENTH: The corporation reserves the right to amend or repeal any
provision contained in this Restated Certificate of Incorporation, in the manner
now or hereafter prescribed by statute, and all rights conferred upon a
stockholder herein are granted subject to this reservation.

3. This Restated Certificate of Incorporation was duly adopted by
the stockholders at the corporation's annual meeting of stockholders in
accordance with the applicable provisions of Sections 242 and 245 of the General
Corporation Law of the State of Delaware.

5
<PAGE>

IN WITNESS WHEREOF, said Liposome Technology, Inc. has caused this
certificate to be signed by its officer duly authorized, and attested by its
Secretary, this 28th day of June, 1991.

LIPOSOME TECHNOLOGY, INC.

By:/s/ Nicolaos V. Arvanitidis
-------------------------------------
Nicolaos V. Arvanitidis
Chairman of the Board and
Chief Executive officer

ATTEST:

By: /s/ Sally A. Davenport
----------------------------------
Sally A. Davenport
Secretary

<PAGE>

EXHIBIT 3.1.1

CERTIFICATE OF OWNERSHIP AND MERGER

SEQUUS PHARMACEUTICALS, INC.,
a Delaware corporation

INTO

LIPOSOME TECHNOLOGY, INC.,
a Delaware corporation

IT IS HEREBY CERTIFIED THAT:

1. LIPOSOME TECHNOLOGY, INC., (the "Corporation") is a business
corporation of the State of Delaware.

2. The Corporation is the owner of all of the outstanding shares of the
stock of SEQUUS PHARMACEUTICALS, INC. (the "Subsidiary"), which is also a
business corporation of the State of Delaware.

3. On June 6, 1995, the Board of Directors of the Corporation adopted
the following resolutions to merge the Subsidiary into the Corporation pursuant
to Section 253 of the General Corporation Law of the State of Delaware and in
connection with this merger to change the corporate name of the Corporation to
SEQUUS Pharmaceuticals, Inc.:

WHEREAS, the Board of Directors of Liposome Technology, Inc. (the
"Company") deems it to be in the best interest of the Company to cause the
formation of a wholly-owned subsidiary of the Company to be named SEQUUS
Pharmaceuticals, Inc. (the "Subsidiary"), as a Delaware corporation;

WHEREAS, the Board of Directors of the Company deems it to be in the
best interest of the Company to merge the Subsidiary with and into the
Company;

WHEREAS, the Board of Directors of the Company deems it to be in the
best interest of the Company to change its name to SEQUUS Pharmaceuticals,
Inc. upon the merger of the Subsidiary with and into the Company;

NOW, THEREFORE, BE IT RESOLVED, that the officers of the Company take
all actions necessary to form SEQUUS Pharmaceuticals, Inc. as a wholly-
owned subsidiary of the Company;

RESOLVED FURTHER, that after formation of the Subsidiary, the
Subsidiary be merged with and into the Company, and that all of the estate,
property, rights, privileges, powers and franchises of the Subsidiary be
vested in and held and enjoyed by the Company as fully and entirely and
without change or diminution as the same were before held and enjoyed by
the Subsidiary in its name;

1
<PAGE>

RESOLVED FURTHER, that the Company shall assume all of the
liabilities and obligations of the Subsidiary;

RESOLVED FURTHER, that, by virtue of the merger and without any
action on the part of the holder thereof, each issued and outstanding share
of capital stock of the Subsidiary shall be cancelled and no consideration
issued in respect thereof;

RESOLVED FURTHER, that, by virtue of the merger and without any
action on the part of the holders thereof, each issued and outstanding
share of capital stock of the Company shall remain unchanged and continue
to be such issued and outstanding share of capital stock of the Company;

RESOLVED FURTHER, that the Company change its name to SEQUUS
Pharmaceuticals, Inc. upon the merger of the Subsidiary with and into the
Company;

RESOLVED FURTHER, that this Company shall cause to be executed and
filed and/or recorded the documents prescribed by the laws of the State of
Delaware and by the laws of any other appropriate jurisdiction and will
cause to be performed all necessary acts within the State of Delaware and
within any other appropriate jurisdiction for the purpose of effecting the
foregoing resolutions;

RESOLVED FURTHER, that the officers of the Company be, and each of
them, singly and not jointly, hereby is, authorized and directed, in the
name and on behalf of the Company, to take any action and to execute and
deliver any instrument, document, certificate or agreement appropriate or
desirable to carry out the intent and purposes of the foregoing
resolutions, and such action, execution and delivery have been authorized
by the Board of Directors of the Company, to be conclusively evidenced by
either the taking of any such action or the execution and delivery of any
such instrument; and

RESOLVED FURTHER, that the authority and power given under the
foregoing resolutions shall be deemed retroactive and any and all acts
authorized thereunder performed prior to adoption of these resolutions be
and they hereby are, in all respects, ratified, confirmed and approved.

Executed as of June 26, 1995.

LIPOSOME TECHNOLOGY, INC.,
a Delaware corporation

By: /s/ Sally A. Davenport
---------------------------------------
Sally A. Davenport, Secretary

By: /s/ Donald J. Stewart
---------------------------------------
Donald J. Stewart, Vice President, Finance

<PAGE>

EXHIBIT 5

[LATHAM & WATKINS LETTERHEAD]

June 26, 1995

SEQUUS Pharmaceuticals, Inc.
960 Hamilton Court
Menlo Park, California 94025

Re: Form S-3 Registration Statement
-------------------------------

Ladies and Gentlemen:

We have acted as your counsel in connection with the Registration
Statement on Form S-3 (the "Registration Statement") to be filed by SEQUUS
Pharmaceuticals, Inc. (formerly Liposome Technology, Inc.), a Delaware
corporation (the "Company"), with the Securities and Exchange Commission on June
26, 1995, for the purpose of registering 5,760,039 shares (the "Shares") of the
Company's Common Stock (the "Common Stock"), $0.0001 par value, under the
Securities Act of 1933, as amended.

We understand that the Shares consist of (a) 2,223,711 shares of
Common Stock (the "Outstanding Shares") issued by the Company on May 25, 1995 to
the Common Unit Purchasers pursuant to the Common Agreements, (b) 1,111,845
shares of Common Stock issuable upon exercise of warrants (the "Common
Warrants") issued by the Company on May 25, 1995 to the Common Unit Purchasers
pursuant to the Common Agreements, (c) 1,616,163 shares of Common Stock issuable
upon exercise of warrants (the "Preferred Warrants") issued by the Company on
March 30, 1995, and April 13, 1995, to the Preferred Unit Purchasers pursuant to
the Preferred Agreements and (d) 808,320 shares of Common Stock issuable upon
conversion of shares of the Company's Series A Convertible Reset Preferred Stock
issued by the Company on March 30, 1995, and April 13, 1995, to the Preferred
Unit Purchasers pursuant to the Preferred Agreements. For the purposes of this
opinion, the shares of Common Stock identified in items (b), (c) and (d) above
shall be referred to as the "Warrant and Preferred Shares."

As such counsel, we have made such legal and factual examinations and
inquiries as we have deemed necessary or appropriate for purposes of this
opinion, except where a

<PAGE>

SEQUUS Pharmaceuticals, Inc.
June 26, 1995
Page 2

statement is qualified as to knowledge or awareness, in which case we have made
no or limited inquiry as specified below.

In our examination, we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals, and the
conformity to authentic original documents of all documents submitted to us as
copies.

We have been furnished with, and with your consent have relied upon,
certificates of officers of the Company with respect to certain factual matters.
In addition, we have obtained and relied upon such certificates and assurances
from public officials as we have deemed necessary.

We are opining herein as to the effect on the subject transaction only
of the federal laws of the United States, the internal laws of the State of
California and the General Corporation Law of the State of Delaware, and we
express no opinion with respect to the applicability thereto, or the effect
thereon, of the laws of any other jurisdiction or, in the case of Delaware, any
other laws, or as to any matters of municipal law or the laws of any local
agencies within any state.

Whenever a statement herein is qualified by "to our knowledge" or a
similar phrase, it is intended to indicate that those attorneys in this firm who
have rendered legal services in connection with the above transaction do not
have current actual knowledge of the inaccuracy of such statement. However,
except as otherwise expressly indicated, we have not undertaken any independent
investigation to determine the accuracy of any such statement, and no inference
that we have any knowledge of any matters pertaining to such statement should be
drawn from our representation of the Company.

Capitalized terms used herein without definition have the meanings
ascribed to them in the Registration Statement.

Subject to the foregoing and the other matters set forth herein, it is
our opinion that, as of the date hereof the Outstanding Shares have been validly
issued and, to our knowledge, are fully paid and nonassessable and the Warrant
and Preferred Shares, when issued and sold by the Company after payment therefor
in the manner provided in the Common Warrants, the Preferred Warrants and the
Preferred Agreements, as applicable, will be validly issued, fully paid and
nonassessable.

<PAGE>

SEQUUS Pharmaceuticals, Inc.
June 26, 1995
Page 3

We hereby consent (i) to the filing of this opinion as an exhibit to
the Registration Statement and (ii) to the reference to our firm under the
caption "Legal Matters" in the Prospectus which constitutes part of the
Registration Statement.

Very truly yours,

/s/ Latham & Watkins

<PAGE>

EXHIBIT 23.1

CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the caption "Experts" in
the Registration Statement (Form S-3) and related Prospectus of SEQUUS
Pharmaceuticals, Inc. (formerly Liposome Technology, Inc.) for the registration
of 5,760,039 shares of its common stock and to the incorporation by reference
therein of our report dated February 10, 1995, except as to Note 7, as to which
the date is March 30, 1995, with respect to the financial statements of SEQUUS
Pharmaceuticals, Inc. (formerly Liposome Technology, Inc.) included in its
Annual Report (Form 10-K) for the year ended December 31, 1994, filed with the
Securities and Exchange Commission.

Ernst & Young LLP

Palo Alto, California
June 23, 1995

<PAGE>

EXHIBIT 24

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below does hereby constitute and appoint Nicolaos V. Arvanitidis,
Donald J. Stewart and Sally A. Davenport, and each of them, with full power of
substitution and full power to act without the other, his true and lawful
attorney-in-fact and agent to act for him in his name, place and stead,
in any and all capacities, to sign a Registration Statement on Form S-3
registering the securities of Liposome Technology, Inc., and any or all
amendments thereto, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises in order to effectuate the same
as fully, to all intents and purposes, as they or he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, may lawfully do or cause to be done by virtue hereof.

/s/ Nicolaos V. Arvanitidis /s/ Robert G. Faris
- ------------------------------ ------------------------------
(Nicolaos V. Arvanitidis) (Robert G. Faris)

/s/ Robert B. Shapiro /s/ I. Craig Henderson
- ------------------------------ ------------------------------
(Robert B. Shapiro) (I. Craig Henderson)

/s/ Richard C.E. Morgan /s/ E. Donnall Thomas
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(Richard C.E. Morgan (E. Donnall Thomas)