[LETTERHEAD OF PROSKAUER ROSE LLP]
May 18, 1998
Via EDGAR
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Ladies and Gentlemen:
On behalf of our client, Celgene Corporation, (the "Company"), we herewith
transmit for filing pursuant to the Securities Act of 1933 a registration
statement on Form S-3 (the "Registration Statement"). The Registration Statement
covers the issuance of 120,000 shares of Common Stock, par value $.01 per share,
of the Company issuable by the Company pursuant to exercise of options granted
to certain former employees of the Company pursuant to the terms of the Celgene
Corporation Replacement Stock Option Plan.
In payment of the required registration fee, $283.20 was sent earlier today by
Federal Reserve Wire to the U.S. Treasury designated lockbox at Mellon Bank,
Pittsburgh, PA.
If the staff has any questions or requires additional information, please do not
hesitate to call me at 212-969-3723.
Respectfully,
/s/ Marie D. Percevault
Marie Percevault
<PAGE>
Registration No. 333--
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------------------------------------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------------------------------------------------------------
CELGENE CORPORATION
(Exact name of Registrant as specified in its charter)
-----------------------------------------------------------------------
DELAWARE 8731 22-2711928
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Identification No.)
incorporation or organization) Classification Code Number)
7 Powder Horn Drive, Warren, New Jersey 07059
(732) 271-1001
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
-----------------------------------------------------------------------
JOHN W. JACKSON
Chairman of the Board and Chief Executive Officer
Celgene Corporation
7 Powder Horn Drive, Warren, New Jersey 07059
(732) 271-1001
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
-----------------------------------------------------------------------
Copies of Communications to:
Robert A. Cantone, Esq.
Proskauer Rose LLP
1585 Broadway, New York, New York 10036-8299
(212) 969-3000
-----------------------------------------------------------------------
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. [_]
CALCULATION OF REGISTRATION FEE
<TABLE>
<S> <C> <C> <C>
==========================================================================================================================
| | 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 (2) | Offering Price | fee
- --------------------------------------------------------------------------------------------------------------------------
Common Stock, | 120,000 shares(1) | $8.00 | $960,000 | $283.20
par value $.01 per share | | | |
==========================================================================================================================
</TABLE>
1. The maximum number of shares as to which awards may be granted under
the Celgene Corporation Replacement Stock Option Plan (the "Option
Plan"). 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. Estimated pursuant to Rule 457(h) under the Securities Act of 1933, as
amended, solely for the purpose of calculating the registration fee.
-----------------------------------------------------------------------
The Registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
Subject to Completion, dated May 18, 1998
CELGENE CORPORATION
120,000 SHARES
COMMON STOCK
(PAR VALUE $0.01 PER SHARE)
This prospectus relates to the offer and sale by Celgene Corporation ("Celgene"
or the "Company") of up to 120,000 shares (the "Shares") of the Company's common
stock, issuable by the Company upon exercise of options ("Options") granted to
certain former employees of Celgene (the "Options Holders") pursuant to the
terms of the Celgene Corporation Replacement Stock Option Plan (the "Plan"). See
"Description of the Plan." This Prospectus also relates to such indeterminate
number of additional shares of Common Stock as may become subject to awards
under the Plan as a result of the antidilution provisions contained therein. The
Company will not receive any proceeds from the resale of the Common Stock by the
Options Holders other than the aggregate exercise price payable upon exercise of
the Options. The Common Stock is traded on the Nasdaq National Market under the
symbol "CELG." On May 15, 1998, the last reported sale price of the Common Stock
on the Nasdaq National Market was $10 3/8 per share.
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 May 18, 1998.
<PAGE>
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 of
1933 (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, 1997, as amended by an Amendment on Form 10-K/A.
(ii) Quarterly Report on Form 10-Q for the period ending March 31, 1997.
(iii) 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
2
<PAGE>
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; (732) 271-1001.
THE COMPANY
Celgene Corporation ("Celgene" or the "Company") is a specialty
pharmaceutical company engaged in the development and commercialization of human
pharmaceuticals and agrochemicals, and is employing two broad technology
platforms: (i) small molecule immunotherapeutic compound development and (ii)
biocatalytic chiral chemistry synthesis. The initial therapeutic focus of the
immunology program is the development of small molecule pharmaceuticals that
have the potential to selectively regulate Tumor Necrosis Factor [alpha]
("TNF[alpha]"), a protein whose overproduction has been linked to many chronic
inflammatory and immunological diseases. The Company's lead compound in
immunology is THALOMID(TM), its formulation of thalidomide, a potent yet
selective inhibitor of TNF[alpha]. On September 19, 1997, the Company received
an approvable letter from the U.S. Food and Drug Administration ("FDA") for
THALOMID for the treatment of erythema nodosum leprosum ("ENL"), an inflammatory
complication of leprosy. The Company expects to submit an additional New Drug
Application ("NDA") in 1998 for THALOMID in the treatment of cachexia (wasting)
in patients with Acquired Immune Deficiency Syndrome ("AIDS"). Celgene has
further applied its expertise in small molecule chemistry to develop a class of
novel and proprietary thalidomide analogues, called IMiDs(TM) (Immunomodulatory
Drugs), as well as a class of proprietary immunotherapeutic pharmaceutical
compounds called SelCIDs (TM) ("Selective Cytokine Inhibitory Drugs"). These two
classes of compounds are orally administered small molecules that are highly
specific for the suppression of TNF[alpha] and are intended to treat chronic
inflammatory diseases and other disorders.
The initial therapeutic focus of the biocatalytic chiral chemistry
synthesis program is the development of chirally pure pharmaceuticals designed
to have greater efficacy and fewer side effects than existing racemic versions.
The Company's lead compound in this area is a chirally pure version of
dlmethylphenidate (currently marketed under the trade name Ritalin(R)). The
Company completed a Phase I/II trial in fall 1997 and announced that its
chirally pure version demonstrated statistically significant efficacy versus a
placebo and preliminary indications of longer duration of action relative to the
racemic version. The Company is also employing its biocatalytic chiral chemistry
synthesis technology to develop chirally pure agrochemicals with superior
attributes and/or lower manufacturing costs than the conventional, nonchirally
pure equivalent.
The Company is currently developing THALOMID for the treatment of a
variety of serious disease states for which there are currently no adequate
therapies. In April 1997, the Company announced that data from its Phase II/III
trial of thalidomide for the treatment of cachexia in patients with AIDS showed
a statistically significant positive result in a primary endpoint, weight gain.
The Company expects to submit an NDA for this indication in 1998. Celgene is
also studying thalidomide in clinical trials for the treatment of Recurrent
Aphthous Stomatitis ("RAS"), in a phase II/III trial and AIDS-Chronic Diarrhea,
in a Phase II trial. In addition, the Company expects to commence clinical
trials in 1998 to study thalidomide for the treatment of Behcet's
disease/Complex Aphthosis, in a Phase II/III trial, and various oncological
3
<PAGE>
applications. Working with the FDA, Celgene has developed a comprehensive
education program and distribution system designed to support the safe and
appropriate use of thalidomide due to the drug's history of teratogenicity
(capacity to cause birth defects) and other side effects.
Celgene is employing its small molecule immunotherapeutics platform to
develop compounds with the objective of producing an array of novel, highly
potent, selective, safe, orally administered drugs that have the potential to
regulate the overproduction of TNF[alpha]. Overproduction of TNF[alpha] has been
implicated in symptoms associated with certain chronic inflammatory and
immunological diseases. Chronic inflammatory diseases collectively afflict
millions of patients, and are inadequately treated with existing therapies. The
Company has developed two classes of compounds, IMiDs and SelCIDs, which have
been demonstrated in in vitro tests using human cells to be significantly more
capable than thalidomide at suppressing TNF[alpha] production and, in
preclinical tests, have not demonstrated teratogenicity. The initial therapeutic
indications targeted for IMiDs and SelCIDs include inflammatory bowel disease,
rheumatoid arthritis and oncological applications. The Company's first SelCID
was found to be well tolerated in a completed Phase I clinical trial in the
United Kingdom and a multiple dosing trial was recently initiated. The United
States Patent and Trademark Office ("U.S. PTO") has issued composition of matter
patents to the Company relating to certain of its novel IMiDs and SelCIDs.
Celgene's core chiral technology involves a biocatalytic process.
Biocatalysis involves the identification and manipulation of enzymes to perform
specialized chemical reactions to produce chirally pure compounds. Chirality
refers to the property of many chemical compounds to exist in two or more
different conformations that are mirror images of each other. While one
conformation may have beneficial effects, the other or others may be inactive or
produce undesirable effects. Chirally pure compounds contain only one of these
conformations, and thus may have attributes superior to those of the racemic
mixture.
From 1991 until early 1998, Celgene has manufactured and sold chirally
pure intermediates to major pharmaceutical companies for use in the development
of chirally pure pharmaceuticals, and a number of these companies are conducting
advanced clinical trials of pharmaceuticals that incorporate the Company's
chirally pure intermediates. On January 9, 1998, the Company completed the sale
of its chiral intermediate business, including rights to Celgene's enzymatic
technology and the personnel associated with this line of business, to Cambrex
Corporation ("Cambrex"). The terms provided for a payment of $7.5 million at
closing, plus future royalties payments up to a present value of $7.5 million
from Cambrex's sales of chirally pure products derived from such enzymatic
technology. Celgene retains the right to use the technology in its chiral
agrochemicals and chiral pharmaceutical development business.
The Company is employing its biocatalytic chiral chemistry synthesis
technology to develop its own chirally pure versions of existing pharmaceutical
products that may demonstrate greater efficacy and/or fewer side effects than
existing racemic products. The Company filed Investigational New Drug
applications ("INDs") in the United States and Canada for a chirally pure
version of dl-methylphenidate, which has been used for decades in formulations
such as Ritalin(R), for the treatment of Attention Deficit Hyperactivity
Disorder ("ADHD") in children. The Company completed its Phase I/II clinical
trial of the drug and announced that its chirally pure version demonstrated
statistically significant efficacy versus a placebo and preliminary indications
of longer duration of action relative to the racemic version. The Company is
also developing a chirally pure formulation of mexiletine for the treatment of
neuropathic pain, a chronic pain state frequently associated with trauma, spinal
cord injury, and complications of diabetes. Celgene reported that its chirally
pure formulation of mexiletine substantially reduced severe neuropathic pain in
established animal models.
4
<PAGE>
Celgene, through its Celgro (TM) subsidiary, is also applying its
chiral technology to the production of chirally pure agrochemicals, in which the
Company's biocatalytic process can add significant value by substantially
lowering manufacturing costs and reducing environmental impact. Since 1994, the
Company has been developing a process to manufacture a chirally pure version of
a currently marketed crop protection agent under a research and development
agreement, initially with Sandoz and subsequently with BASF AG ("BASF"), which
acquired Sandoz' agrochemical business. The Company has successfully scaled up
its process technology to demonstrate ability to produce commercial quantities
of the BASF product.
Celgene has established a sales and marketing organization to
commercialize THALOMID and initially intends to employ approximately 25 persons
in this capacity. The Company intends to develop and market its own
pharmaceuticals for indications with smaller patient populations. With drugs for
indications with larger patient populations, the Company anticipates partnering
with pharmaceutical companies. The Company also anticipates partnering with
companies for the development and commercialization of the Company's chirally
pure pharmaceutical and agrochemical products. Celgene expects that these
arrangements typically will include milestone payments, reimbursement of
research and development expenses and royalty payments.
The Company was incorporated in Delaware in 1986. The Company's
principal executive offices are located at 7 Powder Horn Drive, Warren, New
Jersey 07059. Its telephone number is (732) 271-1001 and its fax number is (732)
271-4184.
The Company's principal office is located at 7 Powder Horn Drive,
Warren, New Jersey 07059, and its telephone and fax numbers are (732) 271-1001
and (908) 805-3931, respectively.
5
<PAGE>
RISK FACTORS
Uncertainty of Product Development. Many of the Company's products and
processes 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. The Company has not yet commercialized any
immunotherapeutic pharmaceuticals, chirally pure pharmaceuticals, or chirally
pure agrochemicals. All of the products under development by the Company 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; Extensive Government
Regulation; No Assurance of Regulatory Approval. 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. The testing, marketing, and
manufacturing 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 or other 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 a product seeking an orphan drug
indication, because another designee received approval first; and those
requirements may become more stringent due to changes in regulatory agency
policy, or the adoption of new regulations. Clinical trials may also be delayed
due to unanticipated side effects, the inability to locate, recruit and qualify
sufficient numbers of patients, lack of funding, the inability to locate or
recruit scientists, the redesign of clinical trial programs, the inability to
manufacture or acquire sufficient quantities of the particular product candidate
or any other components required for clinical trials, changes in focus of the
Company's or its collaborative partner's development focus, and the disclosure
of trial results by competitors. Even if regulatory approval is obtained for any
of the Company's products, the scope of the approval may significantly limit the
indicated uses for which such products may be marketed. Approved drugs 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, including THALOMID,
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
6
<PAGE>
of third party payors, such as government and private insurance plans. In
addition, there can be no assurance that the Company's Celgro subsidiary will be
able to negotiate licensing agreements with agrochemical manufacturers on terms
acceptable to the Company. 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. Use of thalidomide has also
been associated, in a limited number of cases, with other side effects,
including nerve damage. Although the Company has product liability insurance in
force that it believes to be appropriate, 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.
Dependence on 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 the loss of any opportunity to secure patent
protection for the invention and the loss of any right to use the invention, and
even if the eventual outcome is favorable to the Company, such interference
proceedings could result in substantial cost 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 patent authority ruling on such challenge
will determine that such patent claims are valid and enforceable. An adverse
outcome in such litigation could cause the Company to lose exclusivity relating
to such patent claims. If a third party is found to have rights covering
products or processes used by the Company, then the Company could be forced to
cease using the technologies covered by the disputed rights, could be subject to
significant liabilities to such third party, and could be required to license
technologies from such third party. 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
7
<PAGE>
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 does not currently have, nor does it intend to seek,
patent protection relating to the use of THALOMID to treat erythema nodosum
leprosum, an inflammatory complication of leprosy, which is the only indication
with respect to which the Company has received an approvable letter from the
U.S. Food and Drug Administration. 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,
consultants, outside scientific collaborators, sponsored researchers, and other
advisors. There can be no assurance that these agreements provide meaningful
protection or that they 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, despite precautions
taken by the Company, others have not and will not obtain access to the
Company's proprietary technology.
History of Operating Losses; Accumulated Deficit; Uncertainty of Future
Profitability; 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 $25.0 million for the year ended December 31,
1997 and $17.8 million for the year ended December 31, 1996, and had an
accumulated deficit of approximately $119.5 million at December 31, 1997. The
Company expects to make substantial expenditures to further develop its
immunotherapeutic program, to commercialize THALOMID, and to expand the chiral
crop protection business, and, based on these expenditures, it is probable that
losses will continue for at least the next 12 to 18 months. The Company is
currently utilizing its cash resources at a rate of approximately $2.0 million
per month. 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 is seeking additional capital resources. These may include the sale of
additional securities under appropriate market conditions, alliances or other
partnership agreements with entities interested in and possessing resources to
support the Company's immunotherapeutic or chiral programs, or other business
transactions which would generate sufficient resources to assure continuation of
the Company's operations and research programs in the long-term. However, no
assurances can be given that the Company will be successful in raising such
additional capital or entering into a business alliance. Further, there can be
no assurance, assuming the Company successfully raises additional funds or
enters into a business alliance, that the Company will achieve profitability or
positive cash flow.
If the Company is unable to raise additional funds, the Company
believes that its current financial resources could fund operations through
1998. 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.
8
<PAGE>
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 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.
Dependence on Sole Supplier of Raw Material and Sole Encapsulator for
THALOMID. The Company obtains all of its bulk drug material for THALOMID from a
single source. In addition, the Company currently relies on a single
manufacturer to encapsulate THALOMID. 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 ("GMP"), 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 THALOMID.
Such a delay could have a material adverse effect on the Company's business,
financial condition, and results of operations.
Dependence on Collaborations and Licenses with 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. Accordingly, the
Company's success will depend, in part, upon the subsequent success of such
third parties in performing preclinical testing and clinical trials, obtaining
the requisite regulatory approvals, scaling up manufacturing, successfully
commercializing the licensed product candidates and otherwise performing their
obligations. There can be no assurance that the Company will be able to enter
into acceptable collaborative and licensing arrangements on acceptable terms, if
at all, that such arrangements will be successful, that the parties with which
the Company may establish arrangements will perform their obligations, or that
potential collaborators will not compete with the Company by seeking alternative
means of developing therapeutics for the diseases targeted by the Company. There
can be no assurance that the Company's existing or future arrangements will lead
to the development of product candidates or compounds with commercial potential,
that the Company will be able to obtain or maintain proprietary rights or
licenses for the proprietary rights with respect to any technology or product
candidates or compounds developed in connection with these arrangements, or that
the Company will be able to ensure the confidentiality of any proprietary rights
and information developed in such arrangements or prevent the public disclosure
thereof.
Under an agreement with The Rockefeller University ("Rockefeller"), the
Company has obtained certain exclusive rights and licenses to manufacture, use,
and sell products that are based on compounds identified in research carried out
by Rockefeller and the Company that can be used for treating toxicity associated
with high concentrations of TNF[alpha] (the "Rockefeller License"). The
Rockefeller License is
9
<PAGE>
terminable by Rockefeller in the event of a material breach of the agreement's
terms by Celgene, which breach shall fail to be remedied for more than sixty
days after notice thereof.
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. 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 THALOMID, 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 established a sales and
marketing organization to commercialize THALOMID (subject to regulatory approval
of the product), and with respect to certain other products, it may seek a
corporate partner to provide such services. Any delay in developing these
resources for THALOMID may have an adverse impact on potential sales of
THALOMID. The Company has contracted with a specialty distributor to distribute
THALOMID if and when approved. Failure of such specialty distributor to properly
and continuously perform its obligations under such agreement could have a
material adverse effect on the Company.
Dependence on Third-Party Reimbursement; Uncertainty of Product
Pricing. Sales of the Company's pharmaceutical products will depend, 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.
10
<PAGE>
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. As of May 15, 1998, there were outstanding stock options for
approximately 2,612,013 shares of Common Stock, of which approximately 1,592,897
were currently exercisable, and warrants either outstanding or issuable upon
demand that are exercisable for 8,883,286 shares of Common Stock. All shares of
Common Stock referred to in this paragraph would be freely tradeable upon
issuance.
Potential Fluctuations in Quarterly Operating Results. The Company has
historically experienced, and expects to continue for the foreseeable future to
experience, significant fluctuations in its quarterly operating results. This
fluctuation is due to a number of factors, many of which are outside the
Company's control, including the timing of receipt of certain research and
development payments. Future operating results will depend on many factors,
including demand for the Company's products, regulatory approvals, the timing of
the introduction and market acceptance of new products by the Company or
competing companies, the Company's ability to control costs and its ability to
attract and retain highly qualified scientific and management personnel. Such
quarterly fluctuations in operating results may result in increased volatility
of the Company's stock price.
Volatility of Stock Price. There has been significant volatility in the
market prices for publicly traded shares of specialty pharmaceuticals 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, market conditions for specialty pharmaceuticals stocks in general,
governmental regulation, healthcare legislation, public announcements regarding
medical advances in the treatment of the disease states that the Company is
targeting, or patent or proprietary rights developments may have a significant
impact on the market price of the Common Stock.
Anti-Takeover Effects of Shareholder Rights Plan; Certain Charter and
By-law Provisions; Delaware Law. The Board of Directors has adopted a
shareholder 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 have a
material adverse affect on 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.
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.
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
11
<PAGE>
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 the Chairman of the Board, if any, the Chief Executive Officer, the
President, the Secretary, or a majority 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, the Company is subject to the provisions of Section 203 of
the Delaware General Corporation Law, an anti-takeover law. In general, the
statute prohibits a publicly held Delaware corporation from engaging in a
"business combination" with an "interested stockholder" for a period of three
years after the date of the transaction in which the person became an interested
stockholder, unless the business combination is approved in a prescribed manner.
For purposes of Section 203, a "business combination" includes a merger, asset
sale or other transaction resulting in a financial benefit to the interested
stockholder, and an "interested stockholder" is a person who, together with
affiliates and associates, owns (or within three years prior, did own) 15% or
more of the corporation's voting stock.
Absence of Cash Dividends on Common Stock. The Company has never
declared or paid cash dividends on its Common Stock, and does not anticipate
doing so in the foreseeable future.
Forward-Looking Statements
This Prospectus includes "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended (the
"Securities Act") and Section 21E of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). All statements, other than statements of
historical facts, included or incorporated by reference in this Prospectus which
address activities, events or developments which the Company expects or
anticipates will or may occur in the future, including such things as the
attainment of pharmaceutical development milestones or the receipt of regulatory
approval or the entering into of licensing or partnership arrangements and other
similar matters, are forward-looking statements. These statements are based on
certain assumptions and analyses made by the Company in light of its experience
and its perception of historical trends, current conditions and expected future
developments as well as other factors it believes are appropriate in the
circumstances. However, whether actual results and developments will conform
with the Company's expectations and predictions is subject to a number of risks
and uncertainties which could cause actual results to differ materially from the
Company's expectations, including the risk factors discussed in this Prospectus
and other factors, many of which are beyond the control of the Company.
Consequently, all of the forward-looking statements made in this Prospectus are
qualified by these cautionary statements and there can be no assurance that the
actual results or developments anticipated by the Company will be realized or,
even if substantially realized, that they will have the expected consequences to
or effects on the Company or its business or operations. The Company assumes no
obligation to update publicly any such forward-looking statements, whether as a
result of new information, future events or otherwise.
USE OF PROCEEDS
The amount of proceeds to be received by the Company upon the exercise
of the Options by the Option Holders will depend upon the extent to which the
options are exercised. The Company intends that
12
<PAGE>
the net proceeds from the sale of the Shares offered hereby will be added to its
general corporate funds and used for general corporate purposes.
DESCRIPTION OF THE PLAN
General
A copy of the Plan has been filed as an exhibit to the Registration
Statement of which this Prospectus constitutes a part. The summaries of certain
provisions of the Plan do not purport to be complete and are subject to, and are
qualified in their entirety by reference to, all of the provisions of the Plan,
including the definitions therein of certain terms. Copies of the Plan and
additional information and the Plan's administrator may be obtained by
contacting the Company. Capitalized terms not otherwise defined below or
elsewhere in this Prospectus have the meanings given to such terms in the Plan.
Purpose
On January 9, 1998, the Company completed the sale of its chiral
intermediate business, including rights to Celgene's enzymatic technology and
the personnel associated with this line of business, to Cambrex Corporation
("Cambrex"). The terms provided for a payment of $7.5 million at closing, plus
future royalties payments up to a present value of $7.5 million from Cambrex's
sales of chirally pure products derived from such enzymatic technology. The
purpose of the Plan is to give the Transferred Employees (as defined below) a
proprietary interest in the Company through the ownership of Common Stock. Such
ownership will provide such persons, whose efforts will directly benefit the
Company, with a stake in the future welfare of the Company, as well as an
incentive to remain with the chiral intermediate business of Cambrex. The term
"Transferred Employees" refers to those former employees of Celgene who became
Cambrex's employees pursuant to Celgene's sale of its chiral intermediate
business, and who were holders of options to purchase shares of Common Stock
granted under the Company's 1986 Stock Option Plan (the "1986 Plan") and/or 1992
Long-Term Incentive Plan (the "1992 Plan") that expired 30 days after the
termination of such persons' employment with the Company pursuant to the
provisions of the 1986 Plan and the 1992 Plan (the "Expired Options"). As
replacement for their Expired Options, the Transferred Employees received
options to purchase shares of Common Stock under the Plan. The Board of
Directors of the Company adopted the Plan on January 30, 1998.
Administration of the Plan
The Plan is administered by the Management Compensation and Development
Committee (the "Committee") as appointed from time to time by the Board of
Directors of the Company. Subject to the provisions of the Plan and any
guidelines established by the Board of Directors, the Committee from time to
time has authority to determine the terms and conditions of all Options,
including, but not limited to, the persons to whom, and the time or times at
which the Options shall be granted, the number of shares subject to each Option,
the duration of each Option, and other terms and provisions of each Option.
Shares covered
The aggregate number of shares that may be issued under the Plan is
120,000. As of May 15, 1998, the total number of shares of Common Stock subject
to Options granted under the Plan was 90,118.
13
<PAGE>
The shares of Common Stock available under the Plan may be authorized and
unissued shares or previously issued shares acquired or to be acquired by the
Company and held in treasury. Notwithstanding the foregoing, the Board of
Directors may provide for certain adjustments in the maximum number of shares
subject to the Plan upon certain changes in capitalization. See "Adjustments
Upon Changes of Capitalization and Change of Control Provisions."
Terms
(a) Eligibility. The Options may be granted only to the
Transferred Employees.
(b) Grant of Options. Pursuant to the Plan, all Options must be granted
on the date of expiration of the Expired Options (i.e., on the 31st day after
the date of termination of employment of the Transferred Employees with the
Company).
(c) Option Price. The purchase price under each Option may not be less
than 100% of the fair market value of the Common Stock at the time the Option is
granted and not less than the par value of such Common Stock.
(d) Medium and Time of Payment. Stock purchased pursuant to the
exercise of an Option must at the time of purchase be paid for in full in cash,
or with shares of Common Stock, or a combination of cash and Common Stock to be
valued at the fair market value on the date of such exercise; provided, however,
that any shares of Common Stock so delivered must have been beneficially owned
by the optionee for a period of not less than six months prior to the date of
exercise. The Plan also requires the optionee to pay, or make provision
satisfactory to the Company for the payment of, any taxes (other than stock
transfer taxes) which the Company is obligated to collect with respect to the
issue or transfer of Common Stock upon such exercise. At the discretion of the
Committee, such taxes may be paid in cash or by tender of the Option holder or
withholding by the Company of the number of shares of Common Stock whose fair
market value equals the amount required to be withheld. At the discretion of the
Committee, such taxes may be paid by the Company.
(e) Vesting Period. The vesting period and time for exercising an
Option is prescribed by the Committee in each particular case; provided,
however, that no Option may be exercised after 10 years from the date it is
granted.
As of May 15, 1998, the total number of shares of Common Stock subject
to Options granted under the Plan was 90,118. All such outstanding Options are
exercisable at a price of $8 per share and vest in four equal annual
installments. The first installment vested on February 9, 1998, the date of
grant of all outstanding Options.
Termination and Amendment of the Plan
The Plan terminates on December 31, 1998, or on such earlier date as
the Board of Directors of the Company may determine. Any Option outstanding at
the termination date shall remain outstanding until it has either expired or has
been exercised.
14
<PAGE>
Adjustments upon Change in Capitalizations and Change of Control Provisions
The Plan provides for certain adjustments to the maximum number of
shares issuable under the Plan, the related fair market value thereof as of the
date of grant, and the number of shares deliverable upon the exercise of any
Options, upon increase of Common Stock dividends, splits, subdivisions or
combinations in any fiscal year which exceed in the aggregate 5% of the Common
Stock issued and outstanding at the beginning of such year.
In the event of a merger, consolidation, reorganization, or liquidation
of the Company, the Board of Directors of the Company or the board of directors
of any corporation assuming the obligations of the Company, shall either (i)
make appropriate provisions for the protection of any Options by the
substitution on an equitable basis of appropriate stock or other property of the
Company or the corporation assuming the obligations of the Company, provided
that such substitution comply with Section 424 of the Internal Revenue Code of
1986, as amended (the "Code"), or (ii) give written notice to optionees that
their Options must be exercised within 30 days of the date of such notice or
they will be terminated.
In addition, the Plan provides that, following a Change in Control (as
defined in the Plan), the Committee, in its sole discretion may provide (i) that
all outstanding Options granted shall become vested and immediately exercisable
in full, or (ii) for the purchase of any Option by the Company for an amount of
cash equal to the excess of the Change in Control Price (as defined below) of
the shares of Common Stock covered by such Options, over the aggregate exercise
price of such Options. Change in Control Price means the higher of (x) the
highest price per share of Common Stock paid in any transaction related to a
Change in Control of the Company, or (y) the highest sales price as reported on
Nasdaq at any time during the sixty-day period preceding a Change in Control. In
addition, the Committee shall have the authority at any time or from time to
time to accelerate the vesting of any Option and to permit any Option to become
immediately exercisable.
Non-assignability
The Plan provides that no Option shall be assignable or transferable by
the recipient other than by will or by the laws of descent and distribution.
During the lifetime of a recipient, the Options shall be exercisable only by him
or his legal representative. No Option or interest therein shall be pledged,
attached or otherwise encumbered other than in favor of the Company.
Certain Federal Income Tax Consequences
The following summary of certain federal income tax consequences of the
grant of Options under the Plan is based on the Code, as amended to date,
applicable proposed and final Treasury Regulations, judicial authority and
current administrative rulings and practice, all of which are subject to change.
This summary does not attempt to describe all of the possible tax consequences
that could result from the acquisition, holding, exercise, transfer or
disposition of an Option or the shares of Common Stock purchasable thereunder.
Options granted under the Plan are intended to be non-qualified stock
options. An optionee will realize no taxable income at the time he or she is
granted a non-qualified stock option. Such conclusion
15
<PAGE>
is predicated on the assumption that, under existing Treasury Department
regulations, a non-qualified stock option, at the time of its grant, has no
readily ascertainable fair market value. Ordinary income will be realized when a
non-qualified stock option is exercised. The amount of such income will be equal
to the excess of the fair market value on the exercise date of the shares of
Common Stock issued to an optionee over the exercise price. The optionee's
holding period with respect to the shares acquired will begin on the date of
exercise.
The tax basis of the stock acquired upon the exercise of any Option
will be equal to the sum of (i) the exercise price of such Option and (ii) the
amount included in income with respect to such Option. Any gain or loss on a
subsequent sale of the stock will be either a long-term or short-term capital
gain or loss, depending on the optionee's holding period for the stock disposed
of. If the Common Stock is held for more than eighteen months after the date of
exercise the optionee will be taxed at a lower rate applicable to capital gains
for such optionee. Capital gains rates may be further reduced in the case of a
longer holding period. Subject to the limitation under Sections 162(m) and 280G
of the Code, the Company may be entitled to a deduction for Federal income tax
purposes at the same time and in the same amount as the optionee is considered
to have realized ordinary income in connection with the exercise of the Option.
BECAUSE THE TAX CONSEQUENCES TO A PLAN PARTICIPANT MAY VARY DEPENDING
ON HIS OR HER INDIVIDUAL CIRCUMSTANCES, EACH PLAN PARTICIPANT SHOULD CONSULT HIS
OR HER PERSONAL TAX ADVISOR REGARDING THE FEDERAL AND ANY STATE, LOCAL OR
FOREIGN TAX CONSEQUENCES TO HIM OR HER.
PLAN OF DISTRIBUTION
The Shares may be issued from time to time by the Company upon exercise
of the Options. See "Description of the Plan."
LEGAL OPINION
The validity of the shares of Common Stock being offered hereby that
are originally issued has been 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 December 31, 1997, and for each of the years in the three-year period
ended December 31, 1997, 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.
16
<PAGE>
NO PERSON 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.
120,000 SHARES
CELGENE CORPORATION
COMMON STOCK
PROSPECTUS
May 18, 1998
<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:
<TABLE>
<S> <C>
SEC registration fee...................................... $283.20
Legal fees and expenses................................... *
Accounting fees and expenses.............................. *
Miscellaneous expenses.................................... *
Total................................... $ *
</TABLE>
*To be filed by amendment
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 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).
99.1-- Celgene Corporation Replacement Stock Option Plan
99.2-- Form of Stock Option Agreement
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.
II-2
<PAGE>
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
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 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-3
<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, Sol J. Barer
and Robert Butler, 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 May 18, 1998.
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 May 18, 1998
- ------------------------------- Chief Executive Officer
John W. Jackson
/s/ Sol J. Barer Director May 18, 1998
- --------------------------------
Sol J. Barer
/s/ Robert C. Butler Chief Financial Officer May 18, 1998
- ------------------------------- (Principal Financial
Robert C. Butler Officer)
Director May 18, 1998
- -------------------------------
Jack L. Bowman
/s/ Frank T. Cary Director May 18, 1998
- -------------------------------
Frank T. Cary
II-4
<PAGE>
Director May 18, 1998
- -------------------------------
Gilla Kaplan
Director May 18, 1998
- -------------------------------
Arthur Hull Hayes, Jr.
/s/ Richard C. E. Morgan Director May 18, 1998
- -------------------------------
Richard C. E. Morgan
Director May 18, 1998
- -------------------------------
Walter L. Robb
/s/ Lee J. Schroeder Director
- -------------------------------
Lee J. Schroeder
/s/ James R. Swenson Controller (Principal May 18, 1998
- ------------------------------- Accounting Officer)
James R. Swenson
II-5
<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).
99.1-- Celgene Corporation Replacement Stock Option Plan
99.2-- Form of Stock Option Agreement
II-6
EXHIBIT 5.1
May 18, 1998
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, as amended, and the rules and regulations promulgated
thereunder, relating to the registration of 120,000 shares (the "Shares") of
Common Stock, par value $.01 per share, of the Company. The Shares are to be
issued by the Company pursuant to the Company's Replacement Stock Option Plan
(the "Plan").
As such counsel, we have participated in the preparation of the
Registration Statement and have reviewed the corporate minutes relating to the
issuance of the Shares pursuant to the Plan and 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.
Based upon, and subject to, the foregoing, we are of the opinion that
the Shares, to the extent that they constitute the original issuances, are duly
authorized and, upon issuance of the Shares in accordance with the terms of the
Plan, will be, assuming no change in the applicable law or pertinent facts,
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
Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission promulgated thereunder.
Very truly yours,
/s/ Proskauer Rose LLP
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors of Celgene Corporation:
We consent to the incorporation herein by reference in this Registration
Statement of Celgene Corporation on Form S-3 of our report dated February 13,
1998, relating to the balance sheets of Celgene Corporation as of December 31,
1996 and 1997, and the related statements of operations, stockholders' equity,
and cash flows for each of the years in the three-year period ended December 31,
1997, which report appears in the Annual Report on Form 10-K of Celgene
Corporation for the year ended December 31, 1997 and to the reference to our
firm under the heading "Experts" in this prospectus.
KPMG Peat Marwick LLP
New York, NY
May 18, 1998
EXHIBIT 99.1
CELGENE CORPORATION
REPLACEMENT STOCK OPTION PLAN
1. Purpose
Celgene Corporation (the "Company") has entered into an Asset Purchase
Agreement with Cambrex Corporation ("Cambrex") pursuant to which Cambrex has
acquired the Company's chiral intermediate business, including the personnel
associated with this line of business. Pursuant to the terms of said Asset
Purchase Agreement, the Company shall receive certain royalty payments from
Cambrex's sales of products derived from such enzymatic technology. The purpose
of this Replacement Stock Option Plan (the "Plan") is to encourage and enable
the Chiral Employees (as hereinafter defined) to acquire a proprietary interest
in the Company through the ownership of common stock, par value $.01 per share
(the "Common Stock"), of the Company. Such ownership will provide such persons,
whose efforts will directly benefit the Company, with a stake in the future
welfare of the Company, as well as an incentive to remain associated with the
chiral intermediate business. "Chiral Employees" shall mean only those former
employees of the Company who (i) became employees of Cambrex pursuant to the
Asset Purchase Agreement, and (ii) are holders of options to purchase shares of
Common Stock granted under the Company's 1986 Stock Option Plan (the "1986
Plan") and/or 1992 Long-Term Incentive Plan (the "Plans") that expire 30 days
after the termination of such persons' employment with the Company pursuant to
the provisions of the Plans (the "Expired Options"). As replacement for their
Expired Options, the Chiral Employees shall receive non-qualified stock options
to purchase shares of Common Stock under the Plan (the "Replacement Options") in
the amounts, terms and conditions as shall be determined by the Management
Compensation and Development Committee.
2. Administration of the Plan
The Plan shall be administered by the Management Compensation and
Development Committee (the "Committee") as appointed from time to time by the
Board of Directors of the Company.
In administering the Plan, the Committee shall follow any general
guidelines not inconsistent with the Plan established by the Board of Directors
and may adopt rules and regulations for carrying out the Plan. The
interpretation and decision made by the Committee with regard to any question
arising under the Plan shall be final and conclusive on all persons
participating or eligible to participate in the Plan. Subject to the provisions
of the Plan and any guidelines established by the Board of Directors, the
Committee from time to time shall determine the terms and conditions of all
Replacement Options, including, but not limited to, the persons to whom, and the
time or times at which the Replacement Options shall be granted, the number of
shares subject to each
<PAGE>
Replacement Option, the duration of each Option, and other terms and provisions
of each Replacement Option.
3. Shares of Stock Subject to the Plan
(a) General Limitation
Except as provided in Section 7, the aggregate number of shares that
may be issued or transferred pursuant to the Plan shall not exceed 120,000
shares of Common Stock. Such shares of Common Stock available under the Plan may
be authorized and unissued shares or previously issued shares acquired or to be
acquired by the Company and held in treasury.
4. Eligibility
The Replacement Options may be granted only to the Chiral Employees (as
defined in Section 1 above).
5. Granting of Replacement Options
All Replacement Options shall be granted on the 31st day after the date
of termination of employment of a Chiral Employee with the Company; provided,
however, that if such day is not a business day, the Replacement Options shall
be granted on the next succeeding business day.
6. Terms
All Replacement Options shall be evidenced by stock option agreements
in such form, not inconsistent with the Plan, as the Committee shall approve
from time to time, which agreements need not be identical, and shall be subject
to the following terms and conditions and such other terms and conditions as the
Committee may prescribe:
(a) Option Price. The purchase price under each Replacement
Option shall be not less than 100% of the fair market value of the
Common Stock at the time the Option is granted and not less than the
par value of such Common Stock. The fair market value of the Common
Stock on any date shall be determined by the Committee in a manner
consistent with the requirements of the Internal Revenue Code of 1986,
as amended (the "Code").
(b) Medium and Time of Payment. Stock purchased pursuant to
the exercise of a Replacement Option shall at the time of purchase be
paid for in full in cash, or with shares of Common Stock, or a
combination of cash and Common Stock to be valued at the fair market
value thereof on the date of such exercise; provided, however, that any
shares of
2
<PAGE>
Common Stock so delivered shall have been beneficially owned by the
optionee for a period of not less than six months prior to the date of
exercise. Upon receipt of payment and such documentation as the Company
may deem necessary to establish compliance with the Securities Act of
1933, the Company shall, without stock transfer tax to the optionee or
other person entitled to exercise the Replacement Option, deliver to
the person exercising the Replacement Option a certificate or
certificates for such shares. It shall be a condition to the
performance of the Company's obligation to issue or transfer Common
Stock upon exercise of a Replacement Option or Replacement Options that
the optionee pay, or make provision satisfactory to the Company for the
payment of, any taxes (other than stock transfer taxes) which the
Company is obligated to collect with respect to the issue or transfer
of Common Stock upon such exercise, including any Federal, state, or
local withholding taxes. At the discretion of the Committee, such taxes
may be paid in cash or by tender of the option holder or withholding by
the Company of the number of shares of Common Stock whose fair market
value equals the amount required to be withheld. At the discretion of
the Committee, such taxes may be paid by the Company.
(c) Vesting Period. The vesting period and time for exercising
a Replacement Option shall be prescribed by the Committee in each
particular case; provided, however, that no Replacement Option may be
exercised after 10 years from the date it is granted.
7. Adjustments upon Changes in Capitalization
If dividends payable in Common Stock during any fiscal year of the
Company exceed in the aggregate 5% of the Common Stock issued and outstanding at
the beginning of such fiscal year, or if there is during any fiscal year of the
Company one or more splits, subdivisions, or combinations of shares of Common
Stock resulting in an increase or decrease by more than 5% of the shares
outstanding at the beginning of the year, the number of shares available under
the Plan shall be increased or decreased proportionately, as the case may be,
and the number of shares deliverable upon the exercise thereafter of any
Replacement Options theretofore granted shall be increased or decreased
proportionately, as the case may be, without change in the aggregate purchase
price. Common Stock dividends, splits, subdivisions, or combinations during any
fiscal year which do not exceed in the aggregate 5% of the Common Stock issued
and outstanding at the beginning of such year shall be ignored for purposes of
the Plan. All adjustments shall be made as of the day such action necessitating
such adjustment becomes effective.
In case the Company is merged or consolidated with another corporation,
or in case the property or stock of the Company is acquired by another
corporation, or in case of a reorganization or liquidation of the Company, the
Board of Directors of the Company, or the board of directors of any corporation
assuming the obligations of the Company hereunder, shall either (i) make
appropriate provisions for the protection of any Replacement Options by the
substitution on an equitable basis of appropriate stock or other property of the
Company, or appropriate stock or other
3
<PAGE>
property of the merged, consolidated, or otherwise reorganized corporation,
provided only that such substitution of Options or other property shall comply
with the requirements of Section 424 of the Code, or (ii) give written notice to
optionees that their Replacement Options must be exercised within 30 days of the
date of such notice or they will be terminated.
8. Termination and Amendment of the Plan
The Board of Directors shall have the right to amend, suspend, or
terminate the Plan at any time; provided, however, that no such action shall
affect or in any way impair the rights of a recipient under any Replacement
Option theretofore granted.
10. Termination Date of the Plan
The Plan shall become effective as of January 30, 1998, the date of its
adoption by the favorable vote of the majority of the Board of Directors of the
Company. The Plan shall, in all events, terminate on December 31, 1998, or on
such earlier date as the Board of Directors of the Company may determine. Any
Replacement Option outstanding at the termination date shall remain outstanding
until it has either expired or has been exercised.
11. Death, Retirement, and Termination of Employment
(a) A Replacement Option which has not theretofore expired shall
terminate 30 days after the date of the termination for any reason, other than
for Cause (as hereinafter defined), death, or Retirement (as hereinafter
defined), of the Chiral Employee's employment with Cambrex or a parent or
subsidiary of, or successor to, Cambrex, subject to the condition that no
Replacement Option may be exercised in whole or in part after the expiration
date of the Replacement Option or more than 10 years after the date of grant of
such option.
For the purpose of this Section 11(a), "Cause" is defined as
(a) the conviction by the holder of a Replacement Option of a felony or a crime
involving moral turpitude or (b) the commission by the holder of a Replacement
Option of a public or notorious act which subjects Cambrex to public disrespect,
scandal, or ridicule and which adversely affects the value of the services to
Cambrex of the holder of the Replacement Option.
(b) Upon the termination of the employment with Cambrex of any Chiral
Employee due to retirement at age 60 or older or disability (as hereinafter
defined) (collectively, "Retirement"), the Chiral Employee may, during a period
(the "Retirement Period") which is the longer of (i) up to 10 years after the
date of grant of such Option, or (ii) three years from the date of such
termination, purchase some or all of the shares covered by the Replacement
Options which were exercisable under the Plan immediately prior to such
termination, subject to the condition that no Replacement Option may be
exercised in whole or in part after the expiration date of the Replacement
Option or more than 10 years after the date of grant of such option.
4
<PAGE>
(c) Upon the death of any Chiral Employee while in active service or of
any such disabled or retired Chiral Employee within the above-referenced
periods, the person or persons to whom the Chiral Employee's rights under a
Replacement Option are transferred by will or the laws of descent and
distribution may, within 12 months after the date of the Chiral Employee's
death, purchase some or all of the shares to which the Chiral Employee was
entitled pursuant to the exercise of a Replacement Option under the Plan, on the
date of his death, subject to the condition that no Replacement Option may be
exercised in whole or in part after the expiration date of the Replacement
Option or more than 10 years after the date of grant of such option.
(d) Leaves of absence pursuant to Section 13(c) shall not be deemed
terminations or interruptions of employment. For purposes of this Section 11,
"disability" shall have the meaning provided in Section 22(e)(3) of the Code.
12. Change of Control Provisions
(a) Following a Change in Control (as defined in Section 12(d)) of the
Company or Cambrex, the Committee, in its sole discretion, may provide that a
Replacement Option shall automatically be vested and immediately exercisable in
full.
(b) Upon a Change in Control (as defined in Section 12(d)) of the
Company, the Committee, in its sole discretion, may provide for the purchase of
any of the Replacement Options by the Company for an amount of cash equal to the
excess of the Change in Control Price (as hereinafter defined) of the shares of
Common Stock covered by such Replacement Options, over the aggregate purchase
price of such Replacement Options. Change in Control Price means the higher of
(x) the highest price per share of Common Stock paid in any transaction related
to a Change in Control of the Company, or (y) the highest sales price as
reported on Nasdaq at any time during the sixty- (60) day period preceding a
Change in Control.
(c) The Committee shall have the authority at any time or from time to
time to accelerate the vesting of any Replacement Option and to permit any
Replacement Option not theretofore exercisable to become immediately
exercisable.
(d) For purposes hereof, a change in control (a "Change in Control")
shall be deemed to occur:
(i) if any person within the meaning of Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, other than the Company or
any of its subsidiaries, has become the beneficial owner, within the
meaning of Rule 13d-3 under the Securities Exchange Act of 1934, of 30
percent or more of the combined voting power of the Company's or
Cambrex's then outstanding voting securities; or
(ii) when a majority of the directors elected at any special
or annual meeting of stockholders are not individuals nominated by the
Company's or Cambrex's incumbent Board of Directors or when individuals
who are members of the Company's or Cambrex's Board
5
<PAGE>
of Directors at any one time shall immediately thereafter cease to
constitute a majority of the Board of Directors.
13. Miscellaneous Provisions
(a) Rights as a Stockholder. A recipient of a Replacement Option shall
have no rights as a stockholder with respect to any shares issuable or
transferable upon exercise thereof until the date a stock certificate is issued
to him for such shares, and, except as otherwise expressly provided in the Plan,
no adjustment shall be made for dividends or other rights for which the record
date is prior to the date such stock certificate is issued.
(b) Non-Assignability of Replacement Options. No Replacement Option
shall be assignable or transferable by the recipient, except by will or by the
laws of descent and distribution. During the lifetime of a recipient,
Replacement Options shall be exercisable only by him or his personal
representative or guardian. No Replacement Option or interest therein may be
pledged, attached, or otherwise encumbered other than in favor of the Company.
(c) Leave of Absence. In the case of a holder of a Replacement Option
on a leave of absence approved by Cambrex, the Committee may, if it determines
that to do so would be in the best interests of the Company, provide in a
specific case for continuation of Replacement Options during such leave of
absence, such continuation to be on such terms and conditions as the Committee
determines to be appropriate, except that in no event shall a Replacement Option
be exercisable after 10 years from date of grant of such option.
(d) Other Restrictions. Each Replacement Option shall be subject to the
requirement that, if at any time the Board of Directors or the Committee shall
determine, in its discretion, that the listing, registration, or qualification
of the shares issuable or transferable upon exercise thereof upon any securities
exchange or under any state or Federal law, or the consent or approval of any
governmental regulatory body is necessary or desirable as a condition of, or in
connection with, the granting of such Replacement Option or the issue, transfer,
or purchase of shares thereunder, such Replacement Option may not be exercised
in whole or in part unless such listing, registration, qualification, consent,
or approval shall have been effected or obtained free of any conditions not
acceptable to the Board of Directors. The Company shall not be obligated to sell
or issue any shares of Common Stock in any manner in contravention of the
Securities Act of 1933 or any state securities law.
6
EXHIBIT 99.2
REPLACEMENT STOCK OPTION AGREEMENT
CELGENE CORPORATION
OPTION AGREEMENT
PURSUANT TO THE
REPLACEMENT STOCK OPTION PLAN
AGREEMENT, dated February __, 1998 by and between Celgene
Corporation (the "Company") and ___________ (the "Participant").
Preliminary Statement
The Cambrex Employee Incentive Committee of the Board of
Directors of the Company (the "Committee"), pursuant to the Company's
Replacement Stock Option Plan, annexed hereto as Exhibit A (the "Plan"), has
authorized the granting to the Participant, as a Cambrex Employee (as defined in
the Plan), of a stock option (the "Option") to purchase the number of shares of
the Company's common stock, par value $.01 per share (the "Common Stock"), set
forth below. The parties hereto desire to enter into this Agreement in order to
set forth the terms of the Option.
Accordingly, the parties hereto agree as follows:
1. Grant of Option. Subject in all respects to the Plan and
the terms and conditions set forth herein and therein, the Participant is hereby
granted the Option to purchase from the Company up to ____ Shares (as defined in
the Plan), at a price per Share of $_____. Notwithstanding the foregoing, all
references to Shares shall mean shares of the Company's Common Stock, par value
$.01 per share.
2. Vesting. The Option is exercisable in four installments as
provided below, which shall be cumulative. To the extent that the Option has
become exercisable with respect to a number of shares as provided below, the
Option may thereafter be exercised by the Participant, in whole or in part, at
any time or from time to time prior to the expiration of the Option as provided
herein. The following table indicates each date (the "Vesting Date") upon which
the Participant shall be entitled to exercise the Option with respect to the
number of Shares indicated beside that date:
Vesting Date Percentage of Shares
February __, 1998 25%
February __, 1999 25%
February __, 2000 25%
February __, 2001 25%
3. Termination. Unless terminated as provided below or
otherwise pursuant to the Plan, the Option shall expire on the tenth anniversary
of this Agreement, or earlier as provided
<PAGE>
in the Plan; whether on the 30th day following termination of the Participant's
employment with Cambrex corporation or otherwise.
4. Restriction on Transfer of Option. The Option granted
hereby is not transferable otherwise than by will or under the applicable laws
of descent and distribution and during the lifetime of the Participant may be
exercised only by the Participant or the Participant's guardian or legal
representative. In addition, the Option shall not be assigned, negotiated,
pledged or hypothecated in any way (whether by operation of law or otherwise),
and the Option shall not be subject to execution, attachment or similar process.
Upon any attempt to transfer, assign, negotiate, pledge or hypothecate the
Option, or in the event of any levy upon the Option by reason of any execution,
attachment or similar process contrary to the provisions hereof, the Option
shall immediately become null and void.
5. Rights as a Stockholder. The Participant shall have no
rights as a stockholder with respect to any Shares covered by the Option until
the Participant shall have become the holder of record of the Shares, and no
adjustments shall be made for dividends in cash or other property, distributions
or other rights in respect of any such Shares, except as otherwise specifically
provided for in the Plan.
6. Provisions of Plan Control. This Agreement is subject to
all the terms, conditions and provisions of the Plan, and to such rules,
regulations and interpretations relating to the Plan as may be adopted by the
Committee and as may be in effect from time to time. Any capitalized term used
but not defined herein shall have the meaning ascribed to such term in the Plan.
The annexed copy of the Plan is incorporated herein by reference. If and to the
extent that this Agreement conflicts or is inconsistent with the terms,
conditions and provisions of the Plan, the Plan shall control, and this
Agreement shall be deemed to be modified accordingly.
7. Notices. Any notice or communication given hereunder shall
be in writing and shall be deemed to have been duly given when delivered in
person, when dispatched by Telegram or one business day after having been
dispatched by a nationally recognized courier service or three business days
after having been mailed by United States registered or certified mail, return
receipt requested, postage prepaid, to the appropriate party at the address set
forth below:
If to the Company, to:
Celgene Corporation
7 Powder Horn Drive
Warren, New Jersey 07059
Attention: Chief Financial Officer
If to the Participant, to:
the address indicated on the signature page at the end of this Agreement.
2
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement
on the date and year first above written.
CELGENE CORPORATION
By: ______________________________
Authorized Officer
__________________________________
Name:
Address:
3
