Registration No. 333--
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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CELGENE CORPORATION
(Exact name of Registrant as specified in its charter)
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DELAWARE 8731 22-2711928
(State or other jurisdiction of (Primary Standard (I.R.S. Employer
incorporation or organization) Industrial Classification Identification No.)
Code Number)
7 Powder Horn Drive, Warren, New Jersey 07059
(908) 271-1001
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
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JOHN W. JACKSON
Chairman of the Board and Chief Executive Officer
Celgene Corporation
7 Powder Horn Drive, Warren, New Jersey 07059
(908) 271-1001
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copies of Communications to:
Arnold S. Jacobs, Esq.
Proskauer Rose LLP
1585 Broadway, New York, New York 10036-8299
(212) 969-3000
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Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest investment 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 check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
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CALCULATION OF REGISTRATION FEE
Proposed Maximum Proposed Maximum Amount of
Title of each class of Amount to be Offering Price Aggregate registration
Securities To Be Registered registered Per Share (3) Offering Price fee
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<S> <C> <C> <C> <C>
Common Stock,
par value $.01 per share 2,086,069 shares(1)(2) $7.125 14,863,242 $4,504.01
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1. Pursuant to Rule 416 of the Securities Act of 1933, as amended, this
Registration Statement also registers such additional indeterminate number
of shares of Common Stock as may be offered or issued to adjust for any
stock splits, stock dividends or similar transactions.
2. In accordance with Rule 462 under the Securities Act, 330,277 shares are
being carried forward from an earlier Registration Statement on Form S-3,
File No. 333-2517, declared effective by the Commission on June 11, 1996.
The Registrant previously paid a filing fee of $1,494.91 covering such
shares
3. Based on the average high and low trading price on the Nasdaq National
Market on July 23, 1997. Estimated pursuant to Rule 457 under the
Securities Act of 1933, as amended, solely for the purpose of calculating
the registration fee.
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Pursuant to Rule 429 under the Securities Act, the Prospectus included as a part
of this Registration Statement also relates to 330,277 shares of Common Stock of
the Registrant covered by an earlier Registration Statement on Form S-3, file
No. 333-2517, declared effective by the Commission on June 11, 1996.
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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Subject to Completion, dated July 25, 1997
CELGENE CORPORATION
2,416,346 SHARES
COMMON STOCK
(PAR VALUE $0.01 PER SHARE)
This Prospectus relates to the public offering, which is not being underwritten,
of up to 2,416,346 shares (the "Securities") of Common Stock, par value $0.01
per share (the "Common Stock") of Celgene Corporation (the "Company").
All of the 2,416,346 shares of Common Stock may be sold by certain stockholders
of the Company or by pledgees, donees, transferees or other successors in
interest that receive such shares as a gift, partnership distribution or other
non-sale related transfer (the "Selling Stockholders"). The sale of the shares
by the Selling Stockholders may be effected from time to time in transactions
(which may include block transactions by or for the account of the Selling
Stockholders) in the over-the-counter market or in negotiated transactions,
through the writing of options on such shares, short sales, a combination of
such methods of sale, or otherwise. Sales may be made at fixed prices which may
be changed, at market prices prevailing at the time of sale, or at negotiated
prices. The Company will not receive any proceeds from the sale of shares by the
Selling Stockholders. See "Selling Stockholders" and "Plan of Distribution."
SEE "RISK FACTORS" STARTING ON PAGE 4 FOR A DISCUSSION OF CERTAIN FACTORS TO BE
CONSIDERED BY PROSPECTIVE INVESTORS.
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
CRIMINAL OFFENSE.
The date of this Prospectus is _______ __, 1997.
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AVAILABLE INFORMATION
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 reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission") via EDGAR. The reports,
proxy statements and other information filed by the Company with the Commission
may be inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the Commission's regional offices at Room 3190, Northwestern
Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661; and
Seven World Trade Center, 13th Floor, New York, New York 10048. Copies of such
material may be obtained from the Public Reference Section of the Commission at
Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates or accessed electronically through the Commission's home page
on the World Wide Web at http://www.sec.gov.
The Company has filed with the Commission, via EDGAR, a Registration
Statement on Form S-3 (the "Registration Statement") under the Securities Act
with respect to the Common Stock offered hereby. This Prospectus does not
contain all of the information set forth in the Registration Statement and the
exhibits and schedules filed as a part thereof, as permitted by the Rules and
Regulations of the Commission. For further information with respect to the
Company and the Common Stock, reference is hereby made to such Registration
Statement, including the exhibits and schedules filed as a part thereof.
Statements contained in this Prospectus as to the contents of any contract or
other document referred to herein are not necessarily complete and where such
contract or other document is an exhibit to the Registration Statement, each
such statement is qualified in all respects by the provisions of such exhibit,
to which reference is hereby made for a full statement of the provisions
thereof. The Registration Statement, including the exhibits and schedules filed
as a part thereof, may be inspected without charge at the public reference
facilities maintained by the Commission as set forth in the preceding paragraph.
Copies of these documents may be obtained at prescribed rates from the
Commission or accessed electronically through the Commission's home page on the
World Wide Web at http://www.sec.gov.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated by reference in this Prospectus and made a part hereof:
(i) Annual Report on Form 10-K for the fiscal year ended December 31,
1996, as amended by an Amendment on Form 10-K/A;
(ii) Proxy Statement dated May 30, 1997, in connection with the 1997
Annual Meeting of Stockholders;
(iii) Current Report on Form 8-K dated June 10, 1997;
(iv) Quarterly Report on Form 10-Q for the period ending March 31, 1997;
and
(v) The description of the Common Stock contained in its registration
statement on Form 8-A, File No. 0-16132, including any amendment or
report filed for the purpose of updating such description.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of this offering shall be deemed to be incorporated by reference
in this Prospectus and to be a part hereof from the date of filing such
documents. Any statement contained in a document 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 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, upon request, without charge to each
person to whom a copy of this Prospectus has been delivered, a copy of any or
all of the documents which have been or may be incorporated in this Prospectus
by reference, other than certain exhibits to such documents. Requests for such
copies should be directed to: Secretary, Celgene Corporation, 7 Powder Horn
Drive, Warren, New Jersey 07059; (908) 271-1001.
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THE COMPANY
Celgene Corporation ("Celgene" or the "Company") is a biotechnology company
engaged in the development and commercialization of human pharmaceuticals and
agrochemicals. Celgene has two technology platforms: (i) targeted small molecule
synthesis and (ii) biocatalytic chiral chemistry synthesis. Celgene has applied
its expertise in small molecule chemistry to develop proprietary
immunotherapeutic pharmaceutical products, called SelCIDs TM , intended to treat
chronic inflammatory diseases and other disorders. SelCIDs are orally available
small molecules that selectively inhibit the production of Tumor Necrosis Factor
Alpha ("TNF alpha"), a protein whose overproduction has been linked to many
chronic inflammatory diseases including inflammatory bowel disease, rheumatoid
arthritis, non-insulin dependent diabetes, asthma, lupus, and multiple
sclerosis. In the near term, the Company is seeking approval by the U.S. Food &
Drug Administration (the "FDA") to market Synovir RegTM, its trademarked
formulation for thalidomide, a potent and selective inhibitor of TNF alpha. In
February 1997, the Company's New Drug Application ("NDA") for Synovir in the
treatment of an inflammatory complication of leprosy was filed by the FDA, and
the Company expects to submit an NDA in 1997 for Synovir in the treatment of
cachexia (wasting) in patients with Acquired Immune Deficiency Syndrome. The
Company is employing its biocatalytic chiral chemistry synthesis technology to
develop chirally pure chemical compounds with superior attributes and/or lower
manufacturing costs than conventional, non-chirally pure chemical compounds.
Celgene's chiral chemistry technology supports an established, growing business
in chirally pure intermediates and development programs in chirally pure human
pharmaceuticals and agrochemicals. In addition, the Company will seek to license
its biocatalytic process to agrochemical companies for the production of
chirally pure agrochemicals in exchange for royalties on sales.
The Company's principal office is located at 7 Powder Horn Drive, Warren,
New Jersey 07059, and its telephone and fax numbers are (908) 271-1001 and (908)
805-3931, respectively.
On June 9, 1997, the Company announced that it had negotiated a $20 million
financing agreement with Chancellor LGT Asset Management, Inc. ("Chancellor") on
behalf of certain Chancellor clients. The Company consummated $5 million of this
financing through the sale and issuance of 5,000 shares of Series B Convertible
Preferred Stock, par value $.01 per share (the "Series B Preferred") at a
purchase price of $1,000 per share on June 9, 1997. Subject to the satisfaction
of certain conditions, the Company may, at its option, through June 9, 1998,
issue and sell to such purchasers up to an additional $15 million of Series B
Preferred in $5 million increments.
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RISK FACTORS
Forward Looking Statements
Certain information contained in this Prospectus and the documents
incorporated by reference herein are forward-looking statements (within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934). Factors set forth in the following Risk
Factors could affect the Company's actual results and could cause the Company's
actual results to differ materially from those expressed in any forward-looking
statements made by, or on behalf of, the Company in this Prospectus and the
documents incorporated by reference herein. Prospective investors in the shares
of the Company's Common Stock offered hereby should carefully consider the
following Risk Factors, in addition to the other information appearing in or
incorporated by reference into this Prospectus.
Uncertainty of Product Development. Many of the products and processes of
the Company are in the early or mid-stages of development and will require the
commitment of substantial resources, extensive research, development,
preclinical testing, clinical trials, manufacturing scale-up, and regulatory
approval prior to commercialization. To date, the Company has produced and sold
only small quantities of chirally pure intermediates and has not yet
commercialized Synovir or any immunotherapeutic pharmaceuticals, chirally pure
pharmaceuticals, or chirally pure agrochemicals. All of the products under
development by the Company, and the products under development by other
companies in which the Company's chirally pure intermediates are being used,
will require further development, clinical testing, and regulatory approvals,
and there can be no assurance that commercially viable products will result from
these efforts.
Uncertainty Associated with Clinical Trials; Government Regulation. The
preclinical development, clinical trials, manufacturing, marketing, and labeling
of pharmaceuticals are all subject to extensive regulation by numerous
governmental authorities and agencies in the United States and other countries.
There can be no assurance that the Company will be able to obtain the necessary
approvals required to market its products in any of these markets. Substantially
all of the Company's current chirally pure intermediates may be components of
pharmaceutical and agrochemical products developed and marketed by others. The
testing, marketing, and manufacturing of such pharmaceutical and agrochemical
products, as well as of the Company's proprietary products, will require
regulatory approval, including approval from the FDA, and, in certain cases,
from the U.S. Environmental Protection Agency (the "EPA"), or governmental
authorities outside of the United States that perform roles similar to those of
the FDA and EPA. It is not possible to predict how long the approval processes
for any of the Company's products will take or whether any such approvals
ultimately will be granted. Positive results in preclinical testing and/or early
phases of clinical studies are no assurance of success in later phases of the
approval process. In general, preclinical tests and clinical trials can take
many years, and require the expenditure of substantial resources, and the data
obtained from such tests and trials can be susceptible to varying interpretation
that could delay, limit, or prevent regulatory approval. Also, delays or
rejections may be encountered during any stage of the regulatory approval
process based upon the failure of the clinical data to demonstrate compliance
with, or upon the failure of the product to meet, the regulatory agency's
requirements for safety, efficacy, and quality or, in the case of an orphan drug
indication, because another applicant received approval first; and those
requirements may become more stringent due to changes in regulatory agency
policy, or the adoption of new regulations. Even if regulatory approval is
obtained for any of the Company's pharmaceutical products or products
manufactured with the Company's chirally pure intermediates or using the
Company's biocatalytic chiral processes, the content of the approval may
significantly limit the indicated uses for which such products may be marketed.
Further, approved drugs
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and agrochemicals, as well as their manufacturers, are subject to on-going
review, and discovery of previously unknown problems with such products may
result in restrictions on their manufacture, sale or use or in their withdrawal
from the market. Delays in obtaining, or the failure to obtain and maintain,
necessary approvals from the FDA, EPA, or other regulatory agencies for the
Company's proprietary products, or the products in which the Company's products
are to be included, would have a material adverse effect on the Company's
business, financial condition, and results of operations.
No Assurance of Market Acceptance. There can be no assurance that those of
the Company's products which receive regulatory approval, or for which no
regulatory approval is required, will achieve market acceptance. A number of
factors render the degree of market acceptance of the Company's products
uncertain, including the extent to which the Company can demonstrate such
products' efficacy, safety, and advantages over competing products, as well as
the reimbursement policies of third party payors, such as government and private
insurance plans. Failure of the Company's products to achieve market acceptance
would have a material adverse effect on the Company's business, financial
condition, and results of operations.
Risks of Product Liability and Availability of Insurance. The Company may
be subject to product liability or other claims based on allegations that the
use of its technology or products has resulted in adverse effects, whether by
participants in the Company's clinical trials or by patients (if and when such
products are approved). Thalidomide, when used by pregnant women, has resulted
in serious birth defects. Therefore, necessary and strict precautions must be
taken by physicians prescribing the drug to women with childbearing potential,
and there can be no assurance that such precautions will be observed in all
cases or, if observed, will be effective. Although the Company has product
liability insurance in force, such coverage may not be adequate if and when the
Company commercializes its products. There can be no assurance that it will be
able to obtain additional coverage as required, or that such coverage will be
adequate to protect the Company in the event claims are asserted against it. The
obligation to defend against or pay any product liability claim may have a
material adverse effect on the Company's business, financial condition, and
results of operations.
Patent and Proprietary Rights. The Company's success will depend, in part,
on its ability to obtain and enforce patents, protect trade secrets, obtain
licenses to technology owned by third parties when necessary, and conduct its
business without infringing the proprietary rights of others. The patent
positions of pharmaceutical and biotechnology firms, including the Company, can
be uncertain and involve complex legal and factual questions. In addition, the
coverage sought in a patent application can be significantly reduced before the
patent is issued. Consequently, the Company does not know whether any of its
pending applications will result in the issuance of patents or, if any patents
are issued, whether they will provide significant proprietary protection or
commercial advantage, or will be circumvented by others. Since patent
applications in the United States are maintained in secrecy until patents issue,
and since publication of discoveries in the scientific or patent literature
often lag behind actual discoveries, the Company cannot be certain that it was
the first to make the inventions covered by each of its pending patent
applications, or that it was the first to file patent applications for such
inventions. In the event a third party has also filed a patent for any of its
inventions, the Company may have to participate in interference proceedings
declared by the U.S. Patent and Trademark Office to determine priority of
invention, which could result in substantial cost to the Company, even if the
eventual outcome is favorable to the Company. Protection of patent applications
and litigation to establish the validity and scope of patents, to assert patent
infringement claims against others and to defend against patent infringement
claims by others can be expensive and time-consuming. There can be no assurance
that in the event that any claims with respect to any of the Company's patents,
if issued, are challenged by one or more third parties, that any court or
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patent authority ruling on such challenge will determine that such patent claims
are valid and enforceable. An adverse outcome in such litigation could subject
the Company to significant liabilities to third parties, require disputed rights
to be licensed from third parties, or require the Company to cease using the
technology covered by the disputed rights. Also, different countries have
different procedures for obtaining patents, and patents issued by different
countries provide different degrees of protection against the use of a patented
invention by others. There can be no assurance, therefore, that the issuance to
the Company in one country of a patent covering an invention will be followed by
the issuance in other countries of patents covering the same invention, or that
any judicial interpretation of the validity, enforceability, or scope of the
claims in a patent issued in one country will be similar to the judicial
interpretation given to a corresponding patent issued in another country.
Furthermore, even if the Company's patents are determined to be valid,
enforceable, and broad in scope, there can be no assurance that competitors will
not be able to design around such patents and compete with the Company using the
resulting alternative technology. The Company also relies upon unpatented
proprietary and trade secret technology that it seeks to protect, in part, by
confidentiality agreements with its collaborative partners, employees, and
consultants. There can be no assurance that these agreements will not be
breached, that the Company would have adequate remedies for any such breach, or
that the Company's trade secrets, proprietary know-how, and technological
advances will not otherwise become known to others. In addition, there can be no
assurance that others have not developed, or will not independently develop such
proprietary technology or, despite precautions taken by the Company, obtain
access to the Company's proprietary technology.
History of Operating Losses; Capital Requirements; Uncertainty of
Additional Funding. The Company has sustained losses in each year since its
incorporation in 1986. The Company sustained a net loss of approximately $17.8
million in 1996 and approximately $5.1 million in the first quarter of 1997, and
had an accumulated deficit of approximately $97.7 million at March 31, 1997. The
Company expects to make substantial expenditures to further develop its
immunotherapeutic, Synovir and chiral products, and, based on these
expenditures, it is probable that losses will continue unless and until the
Company can achieve profitability by obtaining required regulatory approvals and
achieving commercially viable levels of sales of Synovir. In addition, the
Company expects to experience quarter-to-quarter fluctuations in revenues and
expenses thereby resulting in quarter-to-quarter fluctuations in losses. The
Company expects that its rate of spending generally will remain high as the
result of increased clinical trial costs and expenses associated with the
regulatory approval process and commercialization of products now in
development. In order to assure funding for the Company's future operations the
Company needs to seek additional capital resources. If the Company is unable to
raise additional funds the Company believes that its current financial resources
could fund operations based on reduced levels of research and development and
administrative activities through 1997. The Company's actual cash requirements
may vary materially from those now planned and will depend upon numerous
factors, including the results of the Company's development and
commercialization programs, the timing and results of preclinical and clinical
trials, the timing and costs of obtaining regulatory approvals, the level of
resources that the Company commits to the development of manufacturing,
marketing, and sales capabilities, the ability of the Company to license its
biocatalytic chiral process technology to agrochemical companies, the
technological advances and activities of competitors, and other factors.
Intense Competition and Rapid Technological Change. The pharmaceutical and
agrochemical businesses in which the Company operates are highly competitive and
subject to rapid and profound technological change. The Company's present and
potential competitors include major chemical and pharmaceutical companies, as
well as specialized biotechnology firms in the United States and in other
countries. Most of these companies have considerably greater financial,
technical, and marketing
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resources than the Company. The Company also experiences competition in the
development of its products and processes from universities and other research
institutions and, in some instances, competes with others in acquiring
technology from such sources. The pharmaceutical and agrochemical industries
have undergone, and are expected to continue to undergo, rapid and significant
technological change, and the Company expects competition to intensify as
technical advances in each field are made and become more widely known. There
can be no assurance that others will not develop products or processes with
significant advantages over the products and processes that the Company is
seeking to develop. Any such development could have a material adverse effect on
the Company's business, financial condition, and results of operations.
Sole Supplier of Raw Material and Sole Encapsulator for Synovir. The
Company obtains all of its bulk drug material for Synovir from a single source.
In addition, the Company currently relies on a single manufacturer to
encapsulate Synovir. Because the FDA requires that all suppliers of
pharmaceutical bulk material and all manufacturers of pharmaceuticals for sale
in the United States achieve and maintain compliance with current Good
Manufacturing Practice regulations and guidelines, if the operations of the sole
supplier or the sole encapsulator were to become unavailable for any reason, the
required FDA review of the operations of a new supplier or new encapsulator
could cause a delay in the manufacture of Synovir. Such a delay could have a
material adverse effect on the Company's business, financial condition, and
results of operations.
Dependence Upon Third Parties. The Company's ability to fully commercialize
its proprietary products, if developed, may depend to some extent upon the
Company's ability to enter into joint ventures or other arrangements with
established pharmaceutical companies with the requisite experience and financial
and other resources to obtain regulatory approval, and to manufacture and market
such products. In addition, the Company's chirally pure intermediates are
components of pharmaceutical or agrochemical products that are developed and
marketed by others, and therefore the success of the Company's chirally pure
intermediates is dependent upon the efforts of third parties over which the
Company has no control. Such third parties may fail to pursue or fund those
products that include the Company's chirally pure intermediates.
Lack of Manufacturing Capabilities. The manufacture of large quantities of
pharmaceuticals is a complex process, and all pharmaceutical manufacturing
facilities must comply with applicable regulations of the FDA. While the Company
has developed expertise in the production of certain of its chirally pure
intermediates in developmental quantities, the Company currently has no
experience in, or its own facilities for, manufacturing any products on a
commercial scale. The Company currently utilizes an outside manufacturer for the
production of Synovir, and currently intends to utilize outside manufacturers if
and when needed to produce the Company's other products on a commercial scale.
There can be no assurance that such manufacturers will meet the Company's
requirements for quality, quantity, or timeliness, or that these manufacturers
will achieve and maintain compliance with all applicable regulations.
Limited Marketing Capabilities. The Company has a direct sales force,
comprised of two sales persons, which markets its chirally pure intermediates,
and will continue to do so for the foreseeable future. The Company has no sales
force, either internal or external, for its immunotherapeutic products, since
none of its immunotherapeutic compounds have received FDA approval. The Company
is in the process of developing sales, marketing, and distribution resources for
Synovir, and with respect to certain other products, it may seek a corporate
partner to provide such services. Any delay in developing these resources for
Synovir may have an adverse impact on potential sales of Synovir.
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Dependence Upon Reimbursement; Uncertainty of Product Pricing. Sales of the
Company's pharmaceutical products, and sales of pharmaceutical products of other
companies of which the Company's chirally pure intermediates may be a component,
will be dependent, in part, on the extent to which the costs of such products
will be paid by health maintenance, managed care, pharmacy benefit and similar
health care management organizations, or reimbursed by government health
administration authorities, private health coverage insurers, and other third
party payors. These health care management organizations and third party payors
are increasingly challenging the prices charged for medical products and
services. Additionally, the containment of health care costs has become a
priority, and the prices of pharmaceutical and biotechnology drugs have been
targeted in this effort. If the Company succeeds in bringing any pharmaceutical
products to market, there can be no assurance that such products will be
considered cost effective by payors, that reimbursement will be available or, if
available, that the level of reimbursement will be sufficient to allow the
Company to sell its products on a profitable basis.
Dependence on Key Personnel. The success of the Company will depend, in
large part, on its ability to continue to attract and retain highly skilled
scientific and management personnel. Competition for such personnel is intense,
and there can be no assurance that the Company will be able to attract and
retain such persons. The loss of the Company's executive officers or scientific
personnel, or the failure of the Company to attract and retain other highly
skilled personnel would have a material adverse effect on the Company's
business, financial condition, and results of operations. The Company does not
maintain key man life insurance coverage on the lives of any of its officers or
key employees.
Environmental/Safety Hazards. The Company uses certain hazardous materials
in its research and development activities. While the Company believes it is
currently in substantial compliance with the federal, state, and local laws and
regulations governing such use, there can be no assurance that accidental injury
or contamination will not occur. Any such accident or contamination could result
in substantial liabilities, which could exceed the Company's resources.
Additionally, there can be no assurance that the cost of compliance with
environmental and safety laws and regulations will not be greater than currently
expected.
Market Price in Excess of Book Value. The offering price of the securities
issued in this offering is substantially higher than the book value per share of
Common Stock.
Dividends on Common Stock Unlikely. The Company has never paid a dividend
on its Common Stock and does not, in the foreseeable future, anticipate doing
so.
Shares Eligible for Future Sale. Future sales of substantial amounts of
Common Stock could adversely affect the prevailing market price of the Company's
Common Stock. If all of the shares of the Series A Convertible Preferred Stock
(the "Series A Preferred") outstanding on June 30, 1997 (including accretion
through that date) had been converted on that date at conversion prices based on
the closing price of the Common Stock for the seven trading days preceding June
30, 1997, approximately 954,680 shares of Common Stock would have been issued at
an average conversion price of $6.65 per share. If all of the shares of the
Series B Preferred outstanding on June 30, 1997 (including accretion through
that date) had been converted on that date, approximately 773,214 shares of
Common Stock would have been issued at an average conversion price of $6.50 per
share. In addition, as of June 30, 1997, there were outstanding stock options
exercisable for approximately 2,231,907 shares of Common Stock, and there were
outstanding, or issuable upon request, 903,286 warrants exercisable for shares
of Common Stock. Furthermore, should the trading price of the Common Stock
decline prior to the conversion of all shares of the Series A Preferred and
Series B Preferred or the issuance of certain warrants, the number of shares of
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Common Stock issuable upon conversion thereof will increase
proportionately. Upon effectiveness of the Registration Statement of which this
Prospectus forms a part, all shares of Common Stock referred to in this
paragraph would be freely tradeable upon issuance subject to certain lock-up
provisions. See "Description of Capital Stock" and "Selling Stockholders."
Volatility of Stock Price. There has been significant volatility in the
market prices for publicly traded shares of biotechnology companies, including
those of the Company. There can be no assurance that the price of the Common
Stock will remain at or exceed current levels. Factors such as announcements of
technical or product developments by the Company or its competitors,
governmental regulation, or patent or proprietary rights developments may have a
significant impact on the market price of the Common Stock.
Anti-Takeover Effects of Stockholder Rights Plan, Certain Charter and
By-law Provisions, and Delaware Law. The Board of Directors has adopted a
stockholder rights plan (the "Rights Plan"), the purpose of which is to protect
stockholders against unsolicited attempts to acquire control of the Company that
do not offer a fair price to all stockholders. The Plan is not intended to
prevent, and should not prevent, an offer to acquire the Company at a price and
on terms that are in the best interests of all stockholders, or a negotiated
transaction to sell the Company for a purchase price determined by the Board to
be in the Company's and its stockholders' best interests, nor should it
materially adversely affect the ability of a person or group to obtain
representation on or control of the Board through a proxy contest. Nonetheless,
the Rights Plan may have the effect of dissuading a potential acquiror from
making an offer for all the outstanding shares of Common Stock at a price that
represents a premium to the then current trading price. See "Description of
Capital Stock -- Stockholder Rights Plan."
Moreover, the Board of Directors has the authority to issue, at any time,
without further stockholder approval, up to 5,000,000 shares of preferred stock,
and to determine the price, rights, privileges and preferences of those shares.
Such issuance could adversely affect the holders of Common Stock, and could
discourage a third party from acquiring a majority of the Company's outstanding
voting stock. See "Description of Capital Stock."
Additionally, the Board of Directors of the Company has adopted certain
amendments to the Company's By-laws intended to strengthen the Board's position
in the event of a hostile takeover attempt. The By-law provisions have the
following effects: (1) they provide that only persons who are nominated in
accordance with the procedures set forth in the By-laws shall be eligible for
election as directors of the Corporation, except as may be otherwise provided in
the By-laws; (2) they provide that only business brought before the annual
meeting by the Board of Directors or by a stockholder who complies with the
procedures set forth in the By-laws may be transacted at an annual meeting of
stockholders; (3) they provide that only members of the Board of Directors may
call special meetings of the stockholders of the Company; (4) they establish a
procedure for the Board of Directors to fix the record date whenever stockholder
action by written consent is undertaken; and (5) they require a vote of holders
of two-thirds of the outstanding shares of Common Stock to amend certain By-law
provisions.
Furthermore, Section 203 of the Delaware General Corporation Law prohibits
a purchaser who acquires more than 15% of a target corporation's stock without
the approval of the corporation's board of directors from completing a business
combination with the target for three years unless the purchaser (i) increases
its stake from less than 15% to at least 85% of the corporation's outstanding
stock in a single transaction, such as a tender offer, (ii) obtains the approval
of both the target corporation's board of directors and the holders of
two-thirds of the outstanding shares it does not already own or (iii) benefits
from certain other exceptions.
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SELLING STOCKHOLDERS
The table on the following page sets forth the name of each Selling
Stockholder, the number of shares of Common Stock beneficially owned by each
Selling Stockholder, and the number of shares of Common Stock being offered
hereby by each Selling Stockholder.
The shares of common stock being offered by the Selling Stockholders were
acquired or may be acquired from the Company either (i) following conversion of
the Series A Preferred or the Series B Preferred; (ii) upon exercise of 90-Day
Lock-Up Warrants (as defined in "Description of Capital Stock--Series A
Convertible Preferred Stock;" (iii) upon exercise of warrants acquired from the
Company by persons affiliated with Swartz Investments, LLC ("Swartz
Investments"), the placement agent for the Series A Preferred; (iv) upon
exercise of warrants acquired from the Company by Swartz Investments, as
placement agent for the Company's Regulation S Offering of 8% Convertible
Debentures in July 1995, and subsequently transferred to persons affiliated with
Swartz Investments; or (v) upon exercise of warrants acquired from the Company
by a public relations firm as partial compensation for services rendered to the
Company. See "Description of Capital Stock."
The Company will not receive any of the proceeds from the sales of such
shares. The number of shares that may be actually sold by each of the Selling
Stockholders will be determined by such Selling Stockholder. Because each of the
Selling Stockholders may sell all, some or none of the shares of Common Stock
which each holds, and because the Offering contemplated by this Prospectus is
not currently being underwritten, no estimate can be given as to the number of
shares of Common Stock that will be held by the Selling Stockholders upon
termination of the Offering. See "Plan of Distribution."
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<PAGE>
Number of Shares Number of Shares
Name of Selling Stockholder Beneficially Owned Offered Hereby
Chancellor LGT
Private Capital Offshore Partners II, L.P. 307,157 307,157(1)(2)
Citiventure 96 Partnership, L.P. 624,151 624,151(1)(3)
Chancellor LGT Private Capital III, L.P 161,777 161,777(1)(4)
AG Arb Partners, L.P. 20,004 20,004(5)(6)
AG Super Fund, L.P. 20,004 20,004(5)(7)
AG Super Fund Int'l Partners, L.P. 19,134 19,134(5)(8)
Angelo, Gordon & Co., L.P. 35,657 35,657(5)(9)
Canadian Imperial Holdings, Inc 182,621 182,621(5)(10)
Capital Ventures International 173,872 173,872(5)(11)
GAM Arbitrage Investments, Inc. 20,004 20,004(5)(12)
KA Trading, L.P. 17,832 17,832(5)(13)
Michael Angelo, L.P. 18,264 18,264(5)(14)
Nelson Partners 314,838 314,838(5)(15)
Nutmeg Partners, L.P. 20,004 20,004(5)(16)
Olympus Securities, Ltd. 165,247 165,247(5)(17)
Raphael, L.P. 35,657 35,657(5)(18)
Ace Foundation, Inc. 1,740 1,740(19)
Richcourt $ Strategies, Inc. 1,740 1,740(19)
Banque Scandinave En Suisse 3,044 3,044(19)
Ramius Fund Ltd. 870 870(19)
Gershon Partners, L.P. 870 870(19)
Chaim Gross 3,914 3,914(19)
Kessler Asher Group Limited Partnership 2,175 2,175(19)
Everest Capital Fund L.P. 7,827 7,827(19)
Everest Capital International Ltd. 16,957 16,957(19)
Faisal Finance 3,479 3,479(19)
Koch Realty, Inc. 8,696 8,696(19)
Gracechurch & Co. 4,348 4,348(19)
Leonardo, L.P. 2,610 2,610(19)
Sunder Advani 1,459 1,459(20)
Lance T. Bury 3,500 3,500(20)
Dwight B. Bronnum 6,750 6,750(20)
Robert L. Hopkins 6,750 6,750(20)
Enigma Investments Ltd 8,500 8,500(20)
Global Equity, Inc. 9,375 9,375(20)
P. Bradford Hathorn 8,500 8,500(20)
Davis C. Holden 1,000 1,000(20)
Kendrick Family Partnership, L.P. 57,351 57,351(20)
Jack Kingsbury 156 156(20)
Charles Krusen 3,160 3,160(20)
David K. Peteler 8,000 8,000(20)
Swartz Family Partnership, L.P. 57,352 57,352(20)
Redington, Inc. 50,000 50,000(21)
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(1) Series B Selling Stockholder. All share amounts with respect to shares
issuable upon the conversion of shares of Series B Preferred assume a
conversion price of $5.00, which is the lowest price at which conversions
may be effected through June 1, 1999, giving effect also to the issuance of
shares of Common Stock as a result of accretion through June 9, 1998, the
first anniversary of the date of issuance of the Series B Preferred. The
actual conversion price may be higher or lower than $5.00 and the amount of
accretion will vary, depending upon the period over which the Series B
Preferred is outstanding. Thus, the number of shares actually issued
pursuant to the conversion of shares of Series B Preferred for any one
Series B Selling Stockholder may be higher or lower than the number set
forth in the table. See "Description of Capital Stock-- Series B
Convertible Preferred."
(2) Includes shares issuable upon the conversion of 1,405 shares of Series B
Preferred.
(3) Includes shares issuable upon the conversion of 2,855 shares of Series B
Preferred.
(4) Includes shares issuable upon the conversion of 740 shares of Series B
Preferred.
(5) Series A Selling Stockholder. All share amounts with respect to shares
issuable upon the conversion of shares of Series A Preferred assume a
conversion price of $6.77 per share of common stock, which is the
conversion price in effect on July 24, 1997, giving effect also to the
issuance of shares of Common Stock as a result of accretion through that
date. The actual conversion price per share of common stock may be higher
or lower than $6.77 and the amount of accretion will vary, depending upon
the period over which the Series A Preferred is outstanding. Thus, the
number of shares actually issued pursuant to the conversion of shares of
Series A Preferred for any one Series A Selling Stockholder may be higher
or lower than the number set forth in the table. See "Description of
Capital Stock -- Series A Convertible Preferred."
(6) Includes shares issuable upon the conversion of 2 shares of Series A
Preferred as well as shares issuable upon the exercise of 4,350 Lock-Up
Warrants.
(7) Includes shares issuable upon the conversion of 2 shares of Series A
Preferred as well as shares issuable upon the exercise of 4,350 Lock-Up
Warrants.
(8) Includes shares issuable upon the conversion of 2 shares of Series A
Preferred as well as shares issuable upon the exercise of 3,480 Lock-Up
Warrants.
(9) Includes shares issuable upon the conversion of 4 shares of Series A
Preferred as well as shares issuable upon the exercise of 4,350 Lock-Up
Warrants.
(10) Includes shares issuable upon the conversion of 20 shares of Series A
Preferred as well as shares issuable upon the exercise of 26,088 Lock-Up
Warrants.
(11) Includes shares issuable upon the conversion of 20 shares of Series A
Preferred as well as shares issuable upon the exercise of 17,392 Lock-Up
Warrants.
(12) Includes shares issuable upon the conversion of 2 shares of Series A
Preferred as well as shares issuable upon the exercise of 4,350 Lock-Up
Warrants.
(13) Includes shares issuable upon the conversion of 2 shares of Series A
Preferred as well as shares issuable upon the exercise of 2,175 Lock-Up
Warrants.
(14) Includes shares issuable upon the conversion of 2 shares of Series A
Preferred as well as shares issuable upon the exercise of 2,610 Lock-Up
Warrants.
(15) Includes shares issuable upon the conversion of 38 shares of Series A
Preferred as well as shares issuable upon the exercise of 17,392 Lock-Up
Warrants.
(16) Includes shares issuable upon the conversion of 2 shares of Series A
Preferred as well as shares issuable upon the exercise of 4,350 Lock-Up
Warrants.
(17) Includes shares issuable upon the conversion of 20 shares of Series A
Preferred as well as shares issuable upon the exercise of 8,696 Lock-Up
Warrants.
(18) Includes shares issuable upon conversion of 4 shares of Preferred Stock as
well as upon the exercise of 4,350 Lock-Up Warrants.
(19) Purchaser of Series A Preferred; number of shares offered reflects shares
issuable upon the exercise of an equal number of Lock-Up Warrants.
(20) Affiliated with Swartz Investments or transferee of Swartz Investments or
an affiliate of Swartz Investments; number of shares offered reflects
shares issuable upon the exercise of an equal number of warrants.
(21) Number of shares offered reflects shares issuable upon the exercise of an
equal number of warrants.
The Registration Statement also covers additional shares of Common Stock
which become issuable in connection with the shares registered for sale hereby
by reason of any stock dividend, stock split, recapitalization or other similar
transaction effected without the receipt of consideration which results in an
increase in the number of the Registrant's outstanding shares of Common Stock.
On June 9, 1997, the Company entered into a Securities Purchase Agreement
(the "Series B Purchase Agreement") with each of the Selling Stockholders who
purchased Series B Preferred (the "Series B Selling Stockholders") pursuant to
which such Series B Selling Stockholders purchased an aggregate of 5,000 shares
of Series B Preferred for a total purchase price of $5 million and agreed to
purchase, at the option of the Company and subject to the satisfaction of
certain conditions, an aggregate of up to 15,000 additional shares of Series B
Preferred Stock for an aggregate purchase price of $15
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million at subsequent closings. Each Series B Selling Stockholder represented to
the Company that it would acquire the shares for investment and with no present
intention of distributing any of such shares except pursuant to this Prospectus.
Pursuant to the Series B Purchase Agreements, the Company agreed to file, and
has filed, with the Commission, under the Act, a Registration Statement on Form
S-3, of which this Prospectus forms a part, with respect to the resale of the
shares and agreed to use its best efforts to keep such Registration Statement
effective until such date as all of the shares have been resold, or such time as
all of the shares held by the Series B Selling Stockholders can be sold
immediately without compliance with the registration requirement of the
Securities Act pursuant to Rule 144.
In connection with the offering made hereby, the Company and the Series B
Selling Stockholders have entered into an agreement that contains certain
indemnity and contribution provisions between the Company and such Selling
Stockholders against certain liabilities, including liabilities arising under
the Securities Act. The Company has agreed to bear certain expenses (other than
selling commissions) in connection with the registration of the shares of Common
Stock offered hereby
Each Series B Selling Stockholder also agreed with the Company not to
offer, sell, pledge, hypothecate or otherwise dispose of any shares of Common
Stock during the period commencing on June 9, 1997 and expiring as to 50% of the
shares of Common Stock issuable upon conversion of the Series B Preferred upon
the earlier of (A) June 1, 1998 or (B) the receipt by the Company of a letter
from the FDA granting accelerated approval of the Company's New Drug Application
to market Synovir(R) for any indication, and expiring as to 100% of such shares
of Common Stock upon the earlier of (X) June 1, 1999 or (Y) any date on which,
pursuant to the terms of the Certificate of Designation, the Closing Price for
any fifteen (15) consecutive trading days is at or above 150% of the Conversion
Price then in effect.
Each Series B Selling Stockholder also agreed (i) to enter into customary
lock-up agreements in connection with any future underwritten public offerings
of the Common Stock by the Company; (ii) that, for so long as it owns Series B
Preferred it will not enter into, directly or indirectly, any hedge, put
position, short position, or other similar instrument or position with respect
to any equity security of the Company; and (iii) not to offer, sell or otherwise
dispose of any equity securities of the Company during the ten-day period
preceding the date on which the Conversion Price for Series B Preferred may be
adjusted.
On March 11 and 12, 1996, the Company entered into Subscription Agreements
with each of the Selling Stockholders who purchased Series A Preferred ("Series
A Selling Stockholders") pursuant to which such persons purchased an aggregate
of 503 shares of Series A Preferred. Each Series A Selling Stockholder
represented to the Company that it would acquire the shares for investment and
with no present intention of distributing any of such shares except pursuant to
this Prospectus. Pursuant to the Subscription Agreements, the Company filed with
the Commission under the Act a Registration Statement on Form S-3 (File No.
333-2517, declared effective June 11, 1996) with respect to the resale of the
shares of Common Stock issuable upon conversion of the Series A Preferred. The
Company agreed to use its best efforts to keep such Registration Statement
effective until such date as all of the shares have been resold, or such time as
all of the shares held by the Series A Selling Stockholders could be sold
immediately without compliance with the registration requirement of the
Securities Act pursuant to Rule 144, and also agreed to file an additional
Registration Statement as and when necessary to register additional shares of
Common Stock. As a result of the variable conversion price feature of the Series
A Preferred and a decline in the market price of the Common Stock since the
filing of the earlier Registration Statement, the Company is including in this
Prospectus and the Registration Statement of which this Prospectus forms a
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<PAGE>
part additional shares to permit registered shares of Common Stock to be issued
upon conversion of all shares of Series A Preferred.
In February 1996, the Company engaged Swartz Investments, LLC to advise the
Company in connection with the structure, terms, and conditions of a preferred
stock offering and to introduce the Company to potential investors. In
consideration for their services, Swartz Investments was paid a placement fee of
$1,131,750 plus a non-accountable expense allowance of $188,625 for its
expenses, including legal expenses, in connection with the offering and also
issued to persons affiliated with Swartz Investments warrants to purchase 66,853
shares of Common Stock. Such warrants are exercisable for a term of five years
at $20.52 per share of Common Stock. The Company has also agreed to indemnify
the Agent against certain liabilities, including liabilities under the
Securities Act.
In July, 1995, the Company also retained Swartz Investments to represent
the Company in connection with negotiating and structuring a private placement
offering of $12 million of Convertible Debentures. In that connection, the
Company paid the agent a placement agent fee and a non-accountable expense
allowance that totaled $840,000, and also issued to Swartz Investments warrants
to purchase 105,000 shares of Common Stock. The Company also agreed to indemnify
Swartz Investments from any losses that Swartz Investments may incur arising out
of such engagement. The warrants to purchase 105,000 were subsequently
transferred to persons affiliated with Swartz Investments.
Each Selling Stockholder affiliated with Swartz Investments shared in the
compensation paid to Swartz Investments in connection with the placement of the
Series A Preferred and the placement of the 8% Convertible Debentures.
Pursuant to an agreement entered into in November, 1994, Redington, Inc.
provided investor relations services to the Company through 1995. In exchange,
Redington was paid approximately $188,000 per year and received warrants
exercisable through September 1999 to purchase 50,000 shares of the Company's
common stock at an exercise price of $6.50 per share of common stock. The
Company agreed to register the stock issuable upon the exercise of the warrants
and provided customary indemnification.
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PLAN OF DISTRIBUTION
The sale of the shares by the Selling Stockholders may be effected from
time to time in transactions (which may include block transactions by or for the
account of the Selling Stockholders) in the over-the-counter market or in
negotiated transactions, through the writing of options on such shares (whether
they be exchange listed options or otherwise), short sales, a combination of
such methods of sale, or otherwise. Sales may be made at fixed prices which may
be changed, at market prices prevailing at the time of sale, or at negotiated
prices.
Selling Stockholders may effect such transactions by selling their shares
directly to purchasers, through broker-dealers acting as agents for the Selling
Stockholders, or to broker-dealers who may purchase shares as principals and
thereafter sell the shares from time to time in the over-the-counter market, in
negotiated transactions, or otherwise. Such broker-dealers, if any, may receive
compensation in the form of discounts, concessions, or commissions from the
Selling Stockholders and/or the purchasers for whom such broker-dealers may act
as agents or to whom they may sell as principals or both (which compensation as
to a particular broker-dealer may be in excess of customary commissions).
In order to comply with the securities laws of certain states, if
applicable, the shares will be sold in such jurisdictions only through
registered or licensed brokers or dealers.
The Selling Stockholders and broker-dealers, if any, acting in connection
with such sale might be deemed to be "underwriters" within the meaning of
Section 2(11) of the Securities Act and any commission received by them and any
profit on the resale of such shares might be deemed to be underwriting discounts
and commissions under the Securities Act.
Under applicable rules and regulations under Regulation M, any person
engaged in the distribution of the shares may not simultaneously engage in
market making activities, subject to certain exceptions, with respect to the
Common Stock of the Company for a period of five business days prior to the
commencement of such distribution and until its completion. In addition and
without limiting the foregoing, each Selling Stockholder will be subject to
applicable provisions of the Securities Act and Exchange Act and the rules and
regulations thereunder, including, without limitation, Regulation M, which
provisions may limit the timing of purchases and sales of shares of the
Company's Common Stock by the Selling Stockholders.
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<PAGE>
DESCRIPTION OF CAPITAL STOCK
The Company has 25,000,000 shares of authorized capital stock, of which
20,000,000 shares are Common Stock, $0.01 par value, and 5,000,000 shares are
Preferred Stock, $0.01 par value, of which 520 shares have been designated
Series A Convertible Preferred Stock and 20,000 have been designated Series B
Convertible Preferred Stock. As of June 30, 1997 the Company had 12,094,386
shares of Common Stock outstanding, 120 shares of Series A Preferred, and 5,000
shares of Series B Preferred outstanding.
Common Stock
The Company is authorized to issue 20,000,000 shares of Common Stock, par
value $.01 per share (the "Common Stock"). The holders of Common Stock are
entitled to one vote per share on all matters to be voted upon by the
stockholders. Subject to the prior rights of the Series A Preferred, the Series
B Preferred and of such other series or classes hereafter authorized of the
Company's preferred stock having superior or pari passu dividend rights to the
Common Stock, the holders of Common Stock are entitled to receive such lawful
dividends as may be declared by the Board of Directors. In the event of the
liquidation, dissolution, or winding up of the Company, subject to the prior
rights of Series A Preferred, Series B Preferred and such other series or
classes of Preferred Stock having superior or pari passu liquidation rights to
the Common Stock, the holders of Common Stock are entitled to share ratably in
all of the assets of the Company available for distribution to its stockholders.
There are no redemption or sinking fund provisions applicable to the Common
Stock. All of the outstanding shares of Common Stock are validly issued, fully
paid, and non-assessable. Holders of Common Stock do not have preemptive rights.
Preferred Stock -- General
The Company is authorized to issue 5,000,000 shares of preferred stock, par
value $.01 per share. Subject to certain restrictions, the Board of Directors of
the Company, without further stockholder approval, has the authority to issue,
at any time and from time to time, the preferred stock as preferred stock of any
series and, in connection with the creation of each such series, to fix the
number of shares of such series and the powers, designations, preferences,
rights, qualifications, limitations, and restrictions of such series to the full
extent now or hereafter permitted by the laws of the State of Delaware.
Series A Convertible Preferred Stock
On March 13, 1996, in a private placement, the Company completed the sale
of 503 shares of Series A Preferred, par value $.01 per share, at an issue price
of $50,000 per share. As of June 30, 1997, there were 120 shares of Series A
Preferred outstanding (convertible, based on closing prices for the seven days
then ended, into 954,680 shares of Common Stock, giving effect to the Accretion
through that date).
Liquidation Rights. In the event of any liquidation, dissolution or winding
up of the Company, either voluntary or involuntary ("an Event"), the holders of
shares shall be entitled to receive, immediately after any distributions to
senior securities (including the Series B Preferred) and prior and in preference
to any distribution to junior securities but in parity with any distribution to
parity securities, an amount per share equal to the sum of (i) $50,000 for each
outstanding Share (the "Original Series A Issue Price") and (ii) an amount equal
to 4.9% of the Original Series A Issue Price per annum for the period that has
passed since the date of issuance of any Series A Preferred (such amount being
referred to herein as the
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<PAGE>
"Accretion"). If upon the occurrence of such Event and after any distributions
to senior securities, the assets and funds thus distributed among the holders of
the Series A Preferred and parity securities shall be insufficient to permit the
payment to such holders of the full preferential amounts due to the holders of
the Series A Preferred and the parity securities, respectively, then the entire
remaining assets and funds of the Company legally available for distribution
shall be distributed among the holders of the Series A Preferred and the parity
securities, pro rata, based on the respective liquidation amounts to which each
such series of stock is entitled by the Company's Certificate of Incorporation
and any Certificate(s) of Designation. Upon the completion of this distribution,
if assets remain in the Company, they shall be distributed to holders of junior
securities in accordance with the Company's Certificate of Incorporation
including any duly adopted Certificate(s) of Designation. A consolidation or
merger of the Company with or into any other corporation or corporations, or a
sale, conveyance or disposition of all or substantially all of the assets of the
Company or the effectuation by the Company of a transaction or series of related
transactions in which more than 50% of the voting power of the Company is
disposed of, shall not be deemed to be a liquidation, dissolution or winding up.
Voting Rights. The holders of the Series A Preferred have no voting rights
except as otherwise required by Delaware law.
Optional Conversion. The record holder of the Series A Preferred shall be
entitled, subject to the Company's right of redemption and the restrictions on
conversion, to convert the shares held by such holder into that number of
fully-paid and nonassessable shares of the Common Stock at the Conversion Rate
as set forth below. All conversions are also subject to the Company's right of
redemption and to the Protective Provisions, as described below. The rate at
which shares may be converted into shares of Common Stock is hereinafter
referred to as the "Conversion Rate" and is computed as follows:
Number of shares of Common Stock issued upon conversion of one share of Series A
Preferred = Principal Conversion Rate + Accretion Conversion Rate, where
"Principal Conversion Rate" = Issue Price
----------------
Conversion Price
and "Accretion Conversion Rate" = (.049)(N/365)(Issue Price)
--------------------------
Accretion Conversion Price
where
N = the number of days between (i) the date that, in connection with the
consummation of the initial purchase of the Series A Preferred from the
Company, the escrow agent first had in its possession funds representing
full payment for the Series A Preferred for which conversion is being
elected, and (ii) the Date of Conversion;
Issue Price = the Original Series A Issue Price;
Accretion Conversion Price shall be the average Closing Price for the
Common Stock as that term is defined below, for the 30 calendar days prior
to the Date of Conversion; and
Conversion Price = the lesser of (x) $18.81, or (y) 90% of the average
Closing Price, as that term is defined below, of the Company's Common Stock
for the seven (7) trading
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days immediately preceding the Date of Conversion. For purposes hereof, the
term "Closing Price" shall mean the closing price of the Company's Common
Stock as reported by Nasdaq (or, if not reported by Nasdaq, as reported by
such other exchange or market where traded).
Automatic Conversion. The shares shall automatically be converted into
Common Stock (in accordance with the conversion price provisions above but
subject to the Protective Provisions below) on March 13, 1998.
Redemption at Option of Company. In the event the average Closing Price of
the Company's Common Stock on the NASDAQ for the seven (7) trading days
immediately preceding the Date of Conversion shall be at or less than $18.81,
the Company shall have the right, in its sole discretion, upon receipt of a
Notice of Conversion, to redeem in whole or in part any Series A Preferred
submitted for conversion. If the Company elects to redeem some, but not all, of
the Series A Preferred submitted for conversion, the Company shall redeem from
among the Series A Preferred submitted for conversion on the applicable date, a
pro-rata amount from each stockholder submitting Series A Preferred for
conversion. The redemption price shall equal the sum of the Principal Redemption
Price plus the Accretion. The Accretion shall be payable, at the Company's
option, in cash or Common Stock. The Principal Redemption Price shall equal the
Issue Price divided by the Conversion Price, multiplied by the Closing Price on
Date of Conversion, and the Accretion, if paid in shares of Common Stock, shall
be calculated as Accretion divided by Accretion Conversion Price, in each case
where "N," "Issue Price," "Closing Price", "Accretion Conversion Price",
"Accretion" and "Conversion Price" have the meanings set forth above.
On any date on which the average closing price of the Company's Common
Stock for the seven (7) trading days immediately preceding the notice date is
greater than $18.81, the Company shall have the right to redeem the Series A
Preferred in increments of $1.5 million by giving 30 business days written
notice of its intention to do so. The redemption price per share of Series A
Preferred shall be as follows:
Redemption Price Elapsed Time since March 13, 1996
---------------- ---------------------------------
125% of Stated Value 12 months and 1 day - 18 months
120% of Stated Value 18 months and 1 day - 24 months
"Stated Value" shall equal the Original Series A Issue Price plus the
Accretion (calculated as of the effective date of such redemption).
Protective Provisions. In the event the Closing Price per share shall be at
or less than $11.50 for each of the five (5) trading days preceding the date of
submission of a Notice of Conversion, the Company shall have the right, in its
sole discretion, to elect, in lieu of conversion, (1) to redeem the Series A
Preferred presented for conversion in accordance with the preceding paragraph,
or (2) to declare such conversion null and void, and declare that no conversion
of any Series A Preferred that is included in the Notice of Conversion (the
"Affected Preferred Stock") shall be permitted for the subsequent ninety (90)
day period (the "90 Day Lock-Up Period").
In the event the Company declares a 90 Day Lock-Up Period, the Company
shall issue to the Holder of the Affected Preferred Stock warrants ("90 Day
Lock-Up Warrants"), to purchase Common Stock of the Company. The 90 Day Lock-Up
Warrants shall entitle the holder to purchase a number of
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shares of Common Stock equal to 10% of the number of shares of Common Stock that
would have been issued upon conversion of the Affected Preferred Stock at a
conversion price of $11.50. The strike price of the 90 Day Lock-Up Warrant shall
equal $11.50, and its terms shall be two (2) years from the date of issuance.
After any 90 Day Lock-Up Period or 180 Day Lock-Up Period (as applicable), the
holder shall again be entitled to convert the Affected Preferred Stock without
any further Lock-Up restrictions.
One holder of 20 shares was locked-up pursuant to the above provision for a
period ending on August 27, 1997; holders of 58 shares were locked-up for a
period ending on December 1, 1997, pursuant to an agreement with the Company
whereby the maximum conversion price for shares held by such holders was
permanently reduced to $8.50; a holder of 1 share was potentially subject to
lock-up pursuant to the above provision upon presentation of a notice of
conversion, and holders of the remaining 41 shares are no longer subject to
involuntary lock-up.
Series B Convertible Preferred Stock
On June 9, 1997, in a private placement, the Company completed the sale of
5,000 shares of Series B Preferred, par value $.01 per share, at an issue price
of $1,000 per share. As of June 30, 1997, there were 5,000 shares of Series B
Preferred outstanding (convertible, based on closing prices for the seven days
then ended, into 773,214 shares of Common Stock, giving effect to the Accretion
through that date).
Liquidation Preference. In the event of any liquidation, dissolution or
winding up of the Company, either voluntary or involuntary, or the sale of
substantially all of the assets of the Company (an "Event"), the holders of
Shares shall be entitled to receive out of the assets of the Company, whether
such assets constitute stated capital or surplus of any nature, an amount per
share of Series B Preferred equal to the sum of (i) $1,000 for each outstanding
Share (the "Original Series B Issue Price") and (ii) an amount equal to accrued
but unpaid dividends, accrued at a rate of 9% per annum, compounding quarterly,
on such Share (such amount being referred to herein as the "Accretion") (the
Original Series B Issue Price and Accretion collectively, the "Liquidation
Preference"), and no more, before any payment shall be made or any assets
distributed to the holders of Common Stock or any other class or series of the
Company's capital stock ranking junior as to liquidation rights to the Series B
Preferred (collectively, the "Junior Liquidation Stock"); and after any required
payments with respect to the liquidation preference of the holders of capital
stock of the Company ranking senior as to liquidation rights to the Series B
Preferred (the "Senior Liquidation Stock") are fully met. After the liquidation
preferences of the Senior Liquidation Stock are fully met, the entire assets of
the Company available for distribution shall be distributed ratably among the
holders of the Series B Preferred and any other class or series of the Company's
capital stock having parity as to liquidation rights with the Series B Preferred
(the "Parity Liquidation Stock") in proportion to the respective preferential
amounts to which each is entitled (but only to the extent of such preferential
amounts). After payment in full of the Liquidation Preference of the shares of
the Series B Preferred and the Parity Liquidation Stock, if assets remain in the
Company, they shall be distributed ratably to holders of Series B Preferred (on
an as-converted basis) and to holders of Junior Liquidation Stock in accordance
with the Company's Certificate of Incorporation including any duly adopted
Certificate(s) of Designation.
Certain Mergers. Upon consummation of a consolidation, reorganization or
merger (whether or not the Company is the surviving entity) in which the
stockholders of the Company immediately prior to the consolidation,
reorganization or merger do not continue to own more than 50% of the voting
power of the surviving entity, the holder of Shares will be entitled to cash in
the amount of the Liquidation
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Preference and the Shares will be automatically converted to the securities to
which the holders of Shares would have been entitled had the Shares been
converted immediately prior to the consummation of such consolidation,
reorganization or merger.
Conversion. The record holders of the Series B Preferred, subject to
certain restrictions, are entitled to convert the shares of Series B Preferred
into fully-paid and nonassessable shares of the Common Stock at the Conversion
Rate, as follows:
Conversion Rate = Original Series B Issue Price + Accretion
-----------------------------------------
Conversion Price
The Conversion Price shall equal $6.50 (the "Initial Conversion
Price"); provided, however, that the Conversion Price may be reset on each Reset
Date as described in the following two paragraphs.
A "Reset Date" shall mean one or more of the following dates, if on
any such date(s) the average Closing Price (as defined below) for the ten (10)
trading days ending on such Reset Date is lower than the Initial Conversion
Price (or the Conversion Price as reset in accordance with this paragraph):
(i) the dates of the Second Closing, Third Closing or Fourth Closing
(all as defined in the Securities Purchase Agreement dated June
9, 1997 between the Company and the purchasers of the Series B
Preferred (the "Series B Purchase Agreement"));
(ii) June 1, 1998; and
(iii) July 9, 2002, with respect to the Shares of Series B Preferred
that have not been redeemed.
Upon the occurrence of a Reset Date, the Conversion Price shall
thereafter equal the average Closing Price for the ten (10) trading days ending
on such Reset Date(s); provided, however, that if the Conversion Price in effect
on any Date of Conversion is lower than the Floor Price in effect on such Date
of Conversion, then the Conversion Price shall equal the Floor Price for such
Date of Conversion. For conversions occurring prior to June 2, 1998, the Floor
Price shall be $6.00; for conversions occurring on a Date of Conversion on or
after June 2, 1998 and prior to June 2, 1999, the Floor Price shall be $5.00;
for conversions occurring on a Date of Conversion on or after June 2, 1999 and
prior to June 9, 2002, the Floor Price shall be $3.575. For conversions
occurring on a Conversion Date on or after June 9, 2002, there shall be no Floor
Price.
In the event the Company does not file a Registration Statement as
required by the Registration Rights Agreement dated as of June 9, 1997, within
the period therein specified, then the Conversion Price for all outstanding
Series B Preferred shall be reset to equal the average Closing Price for the ten
trading days beginning on a date that is the first day after the date that the
Securities and Exchange Commission declares effective such Registration
Statement, if such average Closing Price is lower than the Conversion Price then
in effect. The Conversion Price, as described in this paragraph, shall remain
subject to the Floor Price as described in the preceding paragraph.
20
<PAGE>
For purposes of the preceding, "Closing Price" shall mean the closing
price of the Company's Common Stock as reported by the Nasdaq National Market
System (or, if not reported by Nasdaq, as reported by such other exchange or
market where traded).
No fractional shares of Common Stock shall be issued upon conversion
of the Series B Preferred. In lieu of any fractional share of Common Stock to
which the holder would otherwise be entitled, the Company will round up to the
nearest whole share of Common Stock.
Automatic Conversion. Each outstanding share of Series B Preferred
generally shall automatically be converted (the "Automatic Conversion") into
Common Stock on the later of (a) June 2, 1998 or (b) the date on which the
Company receives a letter from the United States Food & Drug Administration
granting accelerated approval of the Company's New Drug Application to market
Synovir for the AIDS/cachexia indication, at the Conversion Price in effect on
the date of such automatic conversion; provided, however, that Automatic
Conversion shall not occur prior to June 2, 1999 unless the average Closing
Price for the 15 trading days prior to the date of automatic conversion is equal
to or above the Floor Price then in effect. Notwithstanding any of the above,
(i) any shares of Series B Preferred outstanding on June 2, 1999 shall be
automatically converted into Common Stock on any date on or after June 2, 1999
on which the average Closing Price for the 15 preceding trading days is greater
than 200% of the Conversion Price then in effect, at the Conversion Price in
effect on the date of such automatic conversion, and (ii) no shares of Series B
Preferred shall convert automatically if, on the date conversion would otherwise
occur, the Common Stock is not listed for quotation and trading on the Nasdaq
National Market; provided, however, that such conversion shall occur on such
date thereafter, if any, as the Common Stock shall become listed for quotation
and trading on the Nasdaq National Market.
Redemption. At the option of the Company, any Shares of Series B Preferred
outstanding on June 9, 2002 may be redeemed on that date by the Company at a
redemption price equal to (i) the Original Series B Issue Price, and (ii) the
Accretion. Notice of redemption shall be given not more than 60 nor less than 30
days prior June 9, 2002.
Voting Rights. Subject to certain restrictions, each share of Series B
Preferred issued and outstanding shall have the number of votes equal to the
number of shares of Common Stock into which it shall have been convertible as of
the record date of the stockholders' meeting at which action is proposed to be
taken or for any stockholder action to be taken by written consent. Except as
otherwise provided or as otherwise required by law, the holders of Series B
Preferred and the holders of Common Stock shall vote together as one class upon
all matters submitted to stockholders for a vote.
Until such time after December 10, 1998 as there are outstanding shares of
Series B Preferred having an aggregate Original Series B Issue Price of less
than $2,000,000:
(i) The holders representing 75% or more of the outstanding shares of
Series B Preferred, voting as a single class, generally will be required: (a) to
authorize the incurrence of indebtedness (except for trade payables, lease
financing and other indebtedness incurred in the ordinary course of business),
(b) to authorize the issuance of securities having a preference over, or on a
parity with, the Series B Preferred or to increase the number of authorized
shares of Series B Preferred, (c) to reclassify any Common Stock or other
securities of the Company into shares or debt (except for trade payables, lease
financing and other indebtedness incurred in the ordinary course of business)
having a preference or priority superior to or on parity with the Series B
Preferred, or (d) alter or change the rights, preferences or privileges in its
shares of Series B Preferred or otherwise amend the Certificate of
21
<PAGE>
Incorporation of the Company in either case whether by merger, consolidation or
otherwise so as to adversely affect such shares.
(ii) The holders representing a majority of the outstanding shares of
Series B Preferred, voting as a single class, generally will be required: (a) to
effect a sale or transfer of all or substantially all of the Company's assets or
to effect a merger which results in the holders of the Company's capital stock
prior to the transaction owning less than 50% of the voting power of the
Company's capital stock after the transaction; (b) to declare any dividend or
make any other distribution other than as contemplated in the Certificate of
Incorporation of the Company; (c) to acquire for more than $5,000,000 in cash or
Celgene securities, assets or stock in any other company; or (d) to enter into
any corporate event that could be considered a "liquidation" or sale of the
Company (except for bankruptcy).
Other Securities of the Company
Warrants
As of June 30, 1997, the Company had outstanding warrants to purchase an
aggregate of 384,056 shares of the Company's Common Stock. Warrants for 50,000
shares are exercisable at a price of $6.50 per share of Common Stock until
September 1, 1999; warrants for 105,000 shares are exercisable at a price of
$9.60 per share of Common Stock until July 31, 2000; warrants for 66,853 shares
are exercisable at a price of $20.52 per share of Common Stock until March 11,
2001; and warrants for 162,203 shares are exercisable at a price of $11.50 per
share of Common Stock until various expiration dates between July 1998 and May
1999. The exercise price of all of these warrants is subject to proportional
adjustment in the event that the Company undertakes a stock split, stock
dividend, or recapitalization.
In addition, under the terms of the Series B Purchase Agreement, upon
request of the purchasers of the Series B Preferred (but no later than June 1,
1998) (in either case, the "Issuance Date"), the Company will issue warrants to
acquire a number of shares of Common Stock equal to (i) 1,500,000 divided by the
Conversion Price in effect on the Issuance Date (230,769 warrants as of June 30,
1997) plus (ii) 37.5% of the Conversion Shares issuable on such Issuance Date
upon conversion of all shares of Series B Preferred issued through the Issuance
Date (288,461 warrants as of June 30, 1997). All such warrants will have a term
of four years from the Issuance Date and an exercise price equal to 115% of the
Conversion Price in effect on the Issuance Date.
Stock Options
The Company has issued options to purchase shares of Common Stock,
restricted stock, and/or other stock-based performance awards under the 1995
Non-Employee Directors' Incentive Plan, the 1992 Long-Term Incentive Plan, the
1992 Non-Employee Directors' Stock Option Plan, and the 1986 Stock Option Plan
(collectively, the "Stock Plans"). At June 30, 1997, options to purchase an
aggregate of 2,231,907 shares of Common Stock were outstanding under the Stock
Plans (or pursuant to grants outside the Stock Plans) with exercise prices
between $5.75 and $17.75 per share.
Stockholder Rights Plan. The Board of Directors has adopted a stockholder
rights plan (the "Plan"). The Plan was adopted to give the Board increased power
to negotiate in the best interests of the Company and to discourage
appropriation of control of the Company at a price that is unfair to the
stockholders. It is not intended to prevent fair offers for acquisition of
control determined by the Board to be in the best interests of the Company and
its stockholders, nor is it intended to prevent a person or
22
<PAGE>
group from obtaining representation on or control of the Board through a proxy
contest, or to relieve the Board of its fiduciary duty to consider any proposal
for acquisition of the Company in good faith.
The Plan involved the distribution of one "Right" as a dividend on each
outstanding share of the Company's Common Stock to all holders of record on
September 26, 1996. Each Right shall entitle the holder to purchase one-tenth of
a share of Common Stock. The Rights become exercisable upon certain triggering
events involving the initiation of a tender or exchange offer, and the exercise
price is based on the estimated long-term value of the Company's Common Stock.
The exercise of these rights becomes economically attractive upon the triggering
of certain "Flip-In" or "Flip-Over" Rights which work in conjunction with the
Plan's basic provisions. The Flip-In Rights will permit their holders to
purchase shares of Common Stock at a discounted rate, resulting in substantial
dilution of an acquirer's voting and economic interests in the Company. The
Flip-Over element of the Plan involves certain mergers or significant asset
purchases, which trigger certain rights to purchase shares of the acquiring or
surviving company at a discount. The Plan contains a "Permitted Offer" exception
to allow offers determined by the Board to be in the best interests of the
Company and its stockholders to take place free of the diluting effects of the
Plan's mechanisms.
The Board of Directors retains the right (at all times prior to acquisition
of 15% of the voting common stock of the Company by an acquirer) to discontinue
the Plan through redemption of all Rights or to amend the Plan in any respect.
The Board amended the Plan on June 9, 1997 specifically to provide that no
person shall be deemed to be an "Acquiring Person" under the Plan solely as a
result of the beneficial ownership of securities issued pursuant to the Series B
Purchase Agreement or as a result of the beneficial ownership of an additional
1% or less of securities of the Corporation subsequent to June 9, 1997.
Transfer Agent and Registrar
The Transfer Agent and Registrar for the Common Stock is American Stock
Transfer & Trust Company. Its address is 40 Wall St., 46th Floor, New York, NY,
10005, and its telephone number is 718/921-8200.
LEGAL OPINION
The validity of the shares of Common Stock being offered hereby will be
passed upon for the Company by Proskauer Rose LLP, New York, New York.
EXPERTS
The financial statements of Celgene Corporation as of December 31, 1996 and
1995, and for each of the years in the three-year period ended December 31,
1996, have been incorporated by reference herein and in the Registration
Statement in reliance upon the report of KPMG Peat Marwick LLP, independent
certified public accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.
23
<PAGE>
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER
THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION
OF AN OFFER TO BUY ANY OF THE SECURITIES IN ANY JURISDICTION WHERE, OR TO ANY
PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. THE DELIVERY
OF THIS PROSPECTUS AT ANY TIME DOES NOT IMPLY THAT INFORMATION HEREIN IS CORRECT
AS OF ANY TIME SUBSEQUENT TO ITS DATE.
2,416,346 SHARES
CELGENE CORPORATION
COMMON STOCK
PROSPECTUS
_______ __, 1997
24
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
An estimate of the fees and expenses of issuance and distribution (other
than discounts and commissions) of the Common Stock offered hereby (all of which
will be paid by the Company) is as follows:
SEC registration fee............................................. $ 4,504
NASD listing fee................................................. 17,500
Printing and engraving expenses.................................. 10,000
Legal fees and expenses.......................................... 20,000
Accounting fees and expenses..................................... 12,000
Miscellaneous expenses........................................... 13,000
-------
Total................................................... $77,004
=======
Item 15. Indemnification of Directors and Officers.
The General Corporation Law of the State of Delaware ("DGCL") permits the
Company and its stockholders to limit directors' exposure to liability for
certain breaches of the directors' fiduciary duty, either in a suit on behalf of
the Company or in an action by stockholders of the Company.
The Certificate of Incorporation of the Company (the "Charter") eliminates
the liability of directors to stockholders or the Company for monetary damages
arising out of the directors' breach of their fiduciary duty of care. The
Charter also authorizes the Company to indemnify its directors, officers,
incorporators, employees, and agents with respect to certain costs, expenses,
and amounts incurred in connection with an action, suit, or proceeding by reason
of the fact that such person was serving as a director, officer, incorporator,
employee, or agent of the Company. In addition, the Charter permits the Company
to provide additional indemnification rights to its officers and directors and
to indemnify them to the greatest extent possible under the DGCL. The Company
has entered into indemnification agreements with each of its officers and
directors and intends to enter into indemnification agreements with each of its
future officers and directors. Pursuant to such indemnification agreements, the
Company has agreed to indemnify its officers and directors against certain
liabilities, including liabilities arising out of the offering made by this
Registration Statement. The Selling Stockholders have agreed to indemnify
officers, directors and controlling persons of the Company against certain
liabilities, including liabilities arising out of the offering made by this
Registration Statement, under certain circumstances.
The Company maintains a standard form of officers' and directors' liability
insurance policy which provides coverage to the officers and directors of the
Company for certain liabilities, including certain liabilities which may arise
out of this Registration Statement.
II-1
<PAGE>
Item 16. Exhibits.
The exhibits listed in the Exhibit Index as filed as part of this Registration
Statement.
(a) Exhibits
Exhibit
Number Description
- ------ -----------
5.1 -- Opinion of Proskauer Rose LLP.
23.1 -- Consent of KPMG Peat Marwick LLP.
23.2 -- Consent of Proskauer Rose LLP (incorporated by reference to
Exhibit 5.1).
24.1 -- Power of Attorney (included in Signature Page).
II-2
<PAGE>
Item 17. Undertakings.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement: (i) to include any
prospectus required by Section 10(a)(3) of the Securities Act; (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) (Section 230.424(b) of this chapter) 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; and (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 (i) and (ii) do not apply if the Registration
Statement is on Form S-3 or Form S-8, and the information required to be
included in a post-effective amendment by (i) and (ii) is contained in
periodic reports filed with or furnished to the Commission by the
Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that
are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act, 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.
Insofar as indemnification for liabilities arising under the Securities Act
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
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the Registration Statement
shall be deemed to be
II-3
<PAGE>
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
II-4
<PAGE>
SIGNATURES AND POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person or entity whose signature
appears below constitutes and appoints John W. Jackson and Sol J. Barer, and
each of them, its true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for it and in its name, place and stead, in
any and all capacities, to sign any and all amendments to this Registration
Statement on Form S-3 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, as fully to all intents and purposes as it might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents or any of them, or their or his substitute or substitutes may
lawfully do or cause to be done by virtue thereof.
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 Warren, State of New Jersey on July 24, 1997.
CELGENE CORPORATION
By: /s/ John W. Jackson
-----------------------
John W. Jackson
Chairman of the Board
and Chief Executive Officer
Pursuant to the requirements of the Securities Act, this Registration Statement
has been signed below by the persons whose signatures appear below, which
persons have signed such Registration Statement in the capacities indicated:
Signature Title Date
- --------- ----- ----
/s/ John W. Jackson Chairman of the Board and July 24, 1997
- ----------------------------- Chief Executive Officer
John W. Jackson
/s/ Sol J. Barer Director July 24, 1997
- -----------------------------
Sol J. Barer
/s/ Robert C. Butler Chief Financial Officer July 24, 1997
- ----------------------------- (Principal Financial Officer)
Robert C. Butler
/s/ Frank T. Cary Director July 24, 1997
- -----------------------------
Frank T. Cary
/s/ Arthur Hull Hayes, Jr. Director July 24, 1997
- -----------------------------
Arthur Hull Hayes, Jr.
II-5
<PAGE>
/s/ Richard C.E. Morgan Director July 24, 1997
- -----------------------------
Richard C. E. Morgan
/s/ Walter L. Robb Director July 24, 1997
- -----------------------------
Walter L. Robb
/s/ Lee J. Schroeder Director July 24, 1997
- -----------------------------
Lee J. Schroeder
/s/ Sanford Kaston Controller (Principal July 24, 1997
- ----------------------------- Accounting Officer)
Sanford Kaston
II-6
<PAGE>
INDEX TO EXHIBITS
5.1 -- Opinion of Proskauer Rose LLP.
23.1 -- Consent of KPMG Peat Marwick LLP.
23.2 -- Consent of Proskauer Rose LLP (incorporated by reference to Exhibit 5.1)
24.1 -- Power of Attorney (included in Signature Page).
EXHIBIT 5.1
July 25, 1997
Celgene Corporation
7 Powder Horn Drive
Warren, New Jersey 07059
Dear Sirs:
We are acting as counsel to Celgene Corporation, a Delaware corporation
(the "Company"), in connection with the Registration Statement on Form S-3 with
exhibits thereto (the "Registration Statement") filed by the Company under the
Securities Act of 1933 (the "Act"), relating to the registration of 2,086,069
shares (the "Shares") of Common Stock, par value $.01 per share, of the Company.
As such counsel, we have participated in the preparation of the
Registration Statement and have reviewed the corporate proceedings in connection
with the prospective issuance of the Shares. We have also examined and relied
upon originals or copies, certified or otherwise authenticated to our
satisfaction, of all such corporate records, documents, agreements, and
instruments relating to the Company, and certificates of public officials and of
representatives of the Company, and have made such investigations of law, and
have discussed with representatives of the Company and such other persons such
questions of fact, as we have deemed proper and necessary as a basis for the
rendering of this opinion.
Based upon, and subject to, the foregoing, we are of the opinion that the
Shares are duly authorized, validly issued, fully paid, and non-assessable.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement. In giving the foregoing consent, we do not admit that we
are in the category of persons whose consent is required under Section 7 of the
Act, or the rules and regulations of the Securities and Exchange Commission
promulgated thereunder.
Very truly yours,
/s/ Proskauer Rose LLP
Exhibit 23.1
Independent Auditors' Consent
The Board of Directors and Stockholders
Celgene Corporation:
We consent to incorporation by reference in the registration statement on Form
S-3 of Celgene Corporation of our report dated February 27, 1997, relating to
the balance sheets of Celgene Corporation as of December 31, 1995 and 1996, and
the related statements of operations, stockholders' equity, and cash flows for
each of the years in the three-year period ended December 31, 1996, which
report appears in the December 31, 1996 Annual Report on Form 10-K of Celgene
Corporation and to the reference to our firm under the heading "Experts" in the
prospectus.
/s/ KPMG Peat Marwick LLP
Short Hills, New Jersey
July 24, 1997
