Registration No. 333--87197
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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CELGENE CORPORATION
(Exact name of Registrant as specified in its charter)
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DELAWARE 8731 22-2711928
(State or other (Primary Standard Industrial (I.R.S. Employer
jurisdiction of Classification Code Number) Identification No.)
incorporation or
organization)
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)
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JOHN W. JACKSON
Chairman of the Board and Chief Executive Officer
Celgene Corporation
7 Powder Horn Drive, Warren, New Jersey 07059
(732) 271-1001
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copies of Communications to:
Robert A. Cantone, Esq.
Proskauer Rose LLP
1585 Broadway, New York, New York 10036-8299
(212) 969-3000
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Approximate date of commencement of proposed sale to the public: As
soon as practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest investment plans, please check the following
box. |_|
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933 check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. |_|
CALCULATION OF REGISTRATION FEE
Proposed Proposed Maximum Amount of
Title of each Amount to be Maximum Maximum registration
class of Securities registered Offering Aggregate fee (2)
To BeRegistered Price Offering Price
Per Share(1)
Common Stock,
par value $.01 per
share 1,632,495 shares $25.75 $42,036,746 $11,686
1. Based on the average high and low trading price on the Nasdaq National
Market on September 13, 1999. Estimated pursuant to Rule 457 under the
Securities Act of 1933, as amended, solely for the purpose of calculating
the registration fee.
1. $9,447 of the registration fee was previously paid with the filing of
the registration statement on Form S-3 on September 16, 1999.
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The Registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
CELGENE CORPORATION
1,632,495 SHARES
COMMON STOCK
(PAR VALUE $0.01 PER SHARE)
These shares of common stock are being sold by the stockholders listed beginning
on page 11. Celgene Corporation ("Celgene" or the "Company") will not receive
any proceeds from the sale of these shares.
Celgene's common stock is traded on the Nasdaq National Market under the symbol
"CELG." The last reported sale price on September 13, 1999 was $26.3125 per
share.
The common stock may be sold in transactions in the Nasdaq National Market at
market prices then prevailing, in negotiated transactions or otherwise. See
"Plan of Distribution."
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This offering involves material risks.
See "Risk Factors" beginning on page 4.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
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The date of this Prospectus is October 5, 1999.
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PROSPECTUS SUMMARY
You should read the following summary together with the more detailed
information, including the consolidated financial statements and the notes to
the financial statements and other information, incorporated by reference into
this prospectus.
THE COMPANY
We are a specialty pharmaceutical company that develops and
commercializes pharmaceutical products for human beings, focusing largely on the
immunology/oncology market and agrochemicals for crops. The initial therapeutic
focus of our immunology/oncology program is the development of: (i) small
molecule pharmaceuticals that have the potential to selectively regulate Tumor
Necrosis Factor ("TNF"), a protein whose overproduction has been linked to
many chronic inflammatory and immunological diseases and (ii) the development of
anti-angiogenic pharmaceuticals that can inhibit the growth of new blood vessels
in a growing tumor, making them potentially valuable anti-cancer agents. Our
lead pharmaceutical is THALOMID(R), our formulation of thalidomide, which is a
potent anti-angiogenic agent and a down regulator of TNF.
On July 16, 1998, we received approval from the U.S. Food and Drug
Administration (the "FDA") for THALOMID for the treatment of erythema nodosum
leprosum ("ENL"), an inflammatory complication of leprosy. We are working on an
additional New Drug Application ("NDA") to allow us to market THALOMID for the
treatment of certain cancers and conditions in patients with Acquired Immune
Deficiency Syndrome ("AIDS").
Working with the FDA, we have developed a comprehensive education
program and distribution system, the "System for Thalidomide Education and
Prescribing Safety," or the S.T.E.P.S.(TM) program, which is designed to support
the safe and appropriate use of thalidomide because of the drug's capacity to
cause birth defects. This program has been made a part of the THALOMID label. We
are also developing 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 suppress excess TNF production, have other
anti-angiogenic properties and are intended to treat chronic inflammatory
diseases, cancer and other disorders.
Our core chiral technology is based on biocatalysis, which involves the
identification and manipulation of enzymes to perform specialized chemical
reactions, such as the production of 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 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.
We are developing chirally pure versions of commercialized
pharmaceuticals to develop products having greater efficacy and fewer side
effects than the existing racemic versions. Our main product is a chirally pure
version of dl-methylphenidate (currently marketed under the trade name
Ritalin(R)) for the treatment of Attention Deficit Hyperactivity Disorder
("ADHD"). We initiated its Phase III pivotal trial program in the fourth quarter
of 1998. We previously completed a Phase I/II trial and announced that its
chirally pure version had demonstrated statistically significant efficacy versus
the placebo and preliminary indications of longer duration of action relative to
the racemic version.
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We are working to produce an array of novel, highly potent, selective,
safe, orally administered drugs that have the potential to regulate the
overproduction of TNF, as well as inhibiting angiogenesis. Overproduction of TNF
has been implicated in symptoms associated with certain chronic inflammatory
diseases. Chronic inflammatory and immunological diseases collectively afflict
millions of patients, and for the most part are inadequately treated with
existing therapies. We are developing two new classes of compounds, IMiDs and
SelCIDs, which have been demonstrated in in vitro tests using human cells to be
significantly more active than thalidomide in suppressing TNF production and, in
preclinical tests, have not demonstrated teratogenicity. Initially, the IMiDs
and the SelCIDs are targeted for use in treating inflammatory bowel disease,
rheumatoid arthritis and oncological applications. Our first SelCID was found to
be well tolerated in two Phase I clinical trials in the United Kingdom, and is
entering a pilot study to assess its potential for treating Crohn's disease in
the United States. The United States Patent and Trademark Office ("U.S. PTO")
has issued composition of matter patents to us relating to certain of its novel
IMiDs and SelCIDs.
We are also employing our biocatalytic chiral chemistry technology to
develop chirally pure versions of existing pharmaceutical products that may
demonstrate greater efficacy and/or fewer side effects. We 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 ADHD in children. We
completed our Phase I/II clinical trial of the drug in which our chirally pure
version demonstrated statistically significant efficacy versus placebo and
preliminary indications of longer duration of action relative to the racemic
version. We have initiated pivotal Phase III trials of that drug.
Through our Celgro(TM) subsidiary, we are also applying our 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. In 1998, Celgro
entered into agreements with two leading agrochemical companies to develop
cost-effective processes for the production of chirally pure versions of certain
products currently produced by those firms. Each agreement provides that the
customer will fund a research and development program conducted by us relating
to the customer's product, make milestone payments to us if certain benchmarks
are achieved and pay us a royalty if the program leads to commercial sales.
We have established a sales and marketing organization to commercialize
THALOMID and employ approximately 40 persons in this capacity. We intend to
develop and market our own pharmaceuticals for indications with smaller patient
populations. We anticipate partnering with larger pharmaceutical companies with
respect to drugs for indications with larger patient populations. We may create
partnerships with companies for the development and commercialization of our
chirally pure pharmaceuticals and agrochemical products. We expect that these
arrangements typically will include milestone payments, reimbursement of
research and development expenses and royalty arrangements.
We were incorporated in Delaware in 1986. Our principal executive
offices are located at 7 Powder Horn Drive, Warren, New Jersey 07059, and our
telephone and fax numbers are (732) 271-1001 and (732) 805-3931, respectively.
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RISK FACTORS
We are dependent on product development and commercialization for continued
growth and development.
Many of our 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 being ready for sale. We have not yet
sold any of our products other than THALOMID. All of the pharmaceutical products
under development will require further development, clinical testing, and
regulatory approvals, and there can be no assurance that commercially viable
products will result from these efforts. If any of our products, if and when
developed and approved, cannot be successfully commercialized, our operating
results could be materially adversely affected.
The pharmaceutical industry is subject to extensive government regulation and
there is 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 we will be able to obtain the
necessary approvals required to market our products in any of these markets. The
testing, marketing, and manufacturing of our 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 our
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. Risks
associated with this process include:
o In general, preclinical tests and clinical trials can take
many years, and require the expenditure of substantial
resources, and the data obtained from these tests and trials
can be susceptible to varying interpretation that could delay,
limit, or prevent regulatory approval.
o 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. Further, those
requirements may become more stringent due to changes in
regulatory agency policy, or the adoption of new regulations.
o 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.
o The scope of any regulatory approval, when obtained, may
significantly limit the indicated uses for which a product may
be marketed.
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o Approved drugs and agrochemicals, as well as their
manufacturers, are subject to on-going review, and discovery
of previously unknown problems with these 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 our proprietary products,
would have a material adverse effect on our business, financial condition, and
results of operations.
There is no assurance of market acceptance of our products.
There can be no assurance that those of our 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 our products uncertain, including the extent to which we
can demonstrate such products' efficacy, safety, and advantages over competing
products, as well as the reimbursement policies of third party payors, such as
government and private insurance plans. In addition, there can be no assurance
that our Celgro subsidiary will be able to negotiate a licensing agreement with
any agrochemical manufacturer on terms acceptable to us, or at all. Failure of
our products to achieve market acceptance would have a material adverse effect
on our business, financial condition, and results of operations.
We are subject to product liability risk and may not be able to obtain
insurance.
We may be subject to product liability or other claims based on
allegations that the use of our technology or products has resulted in adverse
effects, whether by participants in our clinical trials or by patients.
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 we
have product liability insurance in force that we believe is appropriate, there
can be no assurance that we will be able to obtain additional coverage as
required, or that such coverage will be adequate to protect us in the event
claims are asserted against us. Our obligation to defend against or pay any
product liability claim may have a material adverse effect on our business,
financial condition, and results of operations.
We may not be able to obtain patent coverage or otherwise protect our
proprietary technology.
Our success will depend, in part, on our ability to obtain and enforce
patents, protect trade secrets, obtain licenses to technology owned by third
parties when necessary, and conduct our business without infringing the
proprietary rights of others. The patent positions of pharmaceutical and
biotechnology firms, including us, 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, we do
not know whether any of our 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. We rely upon unpatented proprietary and trade secret technology that we
try 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 we would
have adequate remedies for any such breach, or that our trade secrets,
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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 us, others have not and will not obtain access to our
proprietary technology.
We have a history of operating losses, an accumulated deficit and will likely
need to seek additional funding.
We have sustained losses in each year since our incorporation in 1986.
We sustained a net loss of approximately $25.1 and $25.4 million for the years
ended December 31, 1998 and 1997, respectively, and had an accumulated deficit
of approximately $144.6 million at December 31, 1998. We expect to make
substantial expenditures to further develop our immunotherapeutic and chiral
products, and, based on these expenditures, it is probable that losses will
continue for at least the next 12 months . We are currently utilizing our cash
resources at a rate of approximately $1.5 million per month. We expect that our
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
our future operations, we will likely seek additional capital resources. There
can be no assurance, assuming we successfully raise additional funds or enter
into a business alliance, that we will achieve profitability or positive cash
flow.
The pharmaceutical industry is highly competitive and subject to rapid
technological change.
The pharmaceutical and agrochemical businesses in which we operate are
highly competitive and subject to rapid and profound technological change. Our
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 us. We also experience competition from
universities and other research institutions and, in some instances, we compete
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 we expect 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 those that we are seeking to develop.
Any such development could have a material adverse effect on our business,
financial condition, and results of operations.
We are dependent on one supplier for the raw material and encapsulation of
THALOMID.
We obtain all of our bulk drug material for THALOMID from a single
source. In addition, we currently rely 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 the FDA's 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 our business, financial condition, and results of
operations.
We are dependent on collaborations and licenses with third parties.
Our ability to fully commercialize our proprietary products, if
developed, may depend to some extent upon our ability to enter into joint
ventures or other arrangements with established pharmaceutical companies with
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the requisite experience and financial and other resources to obtain
regulatory approval, and to manufacture and market such products. Accordingly,
our 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 we 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 we
may establish arrangements will perform their obligations, or that potential
collaborators will not compete with us by seeking alternative means of
developing therapeutics for the diseases targeted by us. There can be no
assurance that our existing or future arrangements will lead to the development
of product candidates or compounds with commercial potential, that we 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 we will be able to
ensure the confidentiality of any proprietary rights and information developed
in such arrangements or prevent the public disclosure thereof.
We have no 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. We currently have no experience in, or our
own facilities for, manufacturing any products on a commercial scale. We
currently obtain bulk drug material for THALOMID from a third-party and utilize
another manufacturer to produce dosage form THALOMID. We intend to utilize
outside manufacturers if and when needed to produce our other products on a
commercial scale. There can be no assurance that such manufacturers will meet
our requirements for quality, quantity, or timeliness, or that these
manufacturers will achieve and maintain compliance with all applicable
regulations.
We have limited marketing capabilities.
We have a sales and marketing organization to commercialize THALOMID,
and with respect to certain other products, we may seek a corporate partner to
provide such services. Any delay in developing these resources may have a
material adverse impact on potential sales. We have contracted with a specialty
distributor to distribute THALOMID. Failure of such specialty distributor to
properly and continuously perform its obligations under such agreement could
have a material adverse effect on our business.
Product pricing is uncertain and we are dependent on third-party reimbursement.
Sales of our 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. There can be no assurance
that our 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 us to sell our products on a
profitable basis.
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We are dependent on key personnel for our continued growth and development.
Our success will depend, in large part, on our 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 we
will be able to attract and retain such persons. The loss of our executive
officers or scientific personnel, or our failure to attract and retain other
highly skilled personnel would have a material adverse effect on our business,
financial condition, and results of operations. We do not maintain key man life
insurance coverage on the lives of any of our officers or key employees.
Environmental and safety hazards are a risk.
We use certain hazardous materials in our research and development
activities. While we believe we are 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 our 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.
The number of shares of common stock eligible for future sale could adversely
affect the market price of our common stock.
Future sales of substantial amounts of common stock could adversely
affect the prevailing market price of our common stock. As of December 31, 1998,
there were outstanding stock options for approximately 2,428,113 shares of
common stock, of which approximately 1,567,534 were currently exercisable, and
warrants either outstanding or issuable upon demand that are exercisable for
639,967 shares of common stock. In addition, there is a 9.25% convertible note
that can be converted to 795,455 shares of common stock, one 9.00% convertible
note that can be converted to 833,400 shares of common stock and one 9.00%
convertible note that can be converted into 789,474 shares of common stock. All
shares of common stock referred to in this paragraph would be freely tradable
upon issuance.
We may experience fluctuations in our quarterly operating results.
We have historically experienced, and expect to continue for the
foreseeable future to experience, significant fluctuations in our quarterly
operating results. This fluctuation is due to a number of factors, many of which
are outside our control, including the timing of receipt of certain research and
development payments. Future operating results will depend on many factors,
including demand for our products, regulatory approvals, the timing of the
introduction and market acceptance of new products by us or competing companies,
our ability to control costs and our ability to attract and retain highly
qualified scientific and management personnel. Such quarterly fluctuations in
operating results may result in volatility of our stock price.
Our stock price has experienced substantial volatility.
There has been significant volatility in the market prices for publicly
traded shares of specialty pharmaceuticals companies, including ours. There can
be no assurance that the price of our common stock will remain at or exceed
current levels. Factors such as announcements of technical or product
developments by us or our competitors, market conditions for specialty
pharmaceutical stocks in general, governmental regulation, healthcare
legislation, public announcements regarding medical advances in the treatment of
the disease states that we are targeting, or patent or proprietary rights
developments may have a significant adverse impact on the market price of our
common stock.
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Our shareholder rights plan and certain charter and by-law provisions may
dissuade a potential acquiror.
Our 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 us that do not offer a fair price to
all of our stockholders. The Rights Plan is not intended to prevent, and should
not prevent, an offer to acquire Celgene at a price and on terms that are in the
best interests of all stockholders, or a negotiated transaction to sell Celgene
for a purchase price determined by our board of directors to be in our and our
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 of directors through a proxy contest. Nonetheless, the Rights Plan may
have the effect of dissuading a potential acquirer 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, our 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 our outstanding
voting stock.
Additionally, our board of directors has adopted certain amendments to
our by-laws intended to strengthen the board's position in the event of a
hostile takeover attempt. The by-law provisions provide:
o Only persons who are nominated in accordance with the
procedures set forth in the by-laws shall be eligible for
election as directors of Celgene, except as may be otherwise
provided in the by-laws.
o 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.
o 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 our
stockholders.
o A procedure for the board of directors is established to fix
the record date whenever stockholder action by written consent
is undertaken.
o A vote of holders of two-thirds of the outstanding shares of
Common Stock is required to amend certain by-law provisions.
Furthermore, Celgene 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.
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We have not paid and do not intend to pay dividends on our common stock.
We have never declared or paid cash dividends on our common stock, and
do not anticipate doing so in the foreseeable future.
The failure of governmental agencies and our vendors and customers to be Year
2000 compliant could cause a material disruption in our business.
Beginning in the Year 2000, the date fields coded in some software
products and computer systems will need to accept four digit entries in order to
distinguish 21st century dates from 20th century dates and, as a result, many
companies' software and computer systems may need to be upgraded or replaced in
order to comply with such "Year 2000" requirements.
Systems that do not properly recognize such information could generate
erroneous data or cause a system to fail. Significant uncertainty exists in the
software industry concerning the potential effects associated with such
compliance issues.
Our Chief Information Officer, in conjunction with outside consultants
has assessed our systems with regard to Year 2000 compliance and the
implementation for Year 2000 compliant systems is nearing completion. During
1998, we replaced all personal computers, with the exception of several
computers connected to laboratory analytic equipment, with Year 2000 compliant
machines. All applications other than those used in the laboratory equipment,
are Year 2000 compliant. We have completed an assessment of the laboratory
computers and have begun the replacement of non-Year 2000 compliant machines. We
have spent less than $1.0 million on the systems upgrades to date. Additional
expenditures are expected to be less than $500,000. We use outside vendors to
produce, encapsulate, package, process orders, invoice and maintain accounts
receivable records for THALOMID. We are in the process of receiving
certifications from such vendors that the systems utilized are or will be Year
2000 compliant before the end of 1999. Based on current plans and efforts to
date, we expect that there will be no material adverse effect on operations.
There can be no assurance, however, that all problems will be foreseen and
corrected, that Year 2000 problems at the Company's vendors, customers, and at
governmental agencies will not adversely affect us, or that no material
disruption of our business will occur as a result of Year 2000 problems.
Accordingly, we are developing contingency plans to address the possible
occurrence of Year 2000 problems. Such plans are expected to be in place well
before the end of 1999.
The statements contained in the foregoing Year 2000 readiness
disclosure are subject to certain protection under the Year 2000 Information and
Readiness Disclosure Act.
10
<PAGE>
REGISTERING STOCKHOLDERS
The following table sets forth certain information regarding the sale
by the registering stockholders of 1,632,495 shares of common stock in this
offering. Except as otherwise noted, each person named below has an address in
care of our principal executive offices.
Except as described in this table, none of the registering stockholders
has held any position or office or had a material relationship with Celgene or
any of its affiliates within the past three years other than as a result of the
ownership of Celgene's common stock. The address of each of the registering
stockholders is c/o Celgene Corporation, 7 Powder Horn Drive, Warren, New Jersey
07059.
<TABLE>
Shares Shares
Beneficially Number of Beneficially
Owned Prior Shares Owned After
Registering Stockholder to Offering %(1) Offered Offering %(1)
<S> <C> <C> <C> <C> <C>
Warburg Dillon Read LLC(2) 795,455 4.6 795,455 0 *
Chancellor LGT Private Capital III, 76,846 * 76,846 0 *
L.P.(3)
Citiventure 96 Partnership, L.P.(4) 296,481 1.7 296,481 0 *
Chancellor LGT Private Capital 145,904 * 145,904 0 *
Offshore Partners II, L.P.(5)
Kelbourne Financial Inc.(6) 5,000 * 5,000 0 *
Biovail Laboratories Incorporated (7) 199,688 1.2 199,688 0 *
Celgene Corporation 401(k) Plan (8) 5,000 * 5,000 0 *
- - - --------------------------------------------------------------------------------
</TABLE>
- - - --------------------
* Represents less than 1% of the outstanding shares of common stock.
(1) Applicable percentages of ownership are based on 17,129,987 shares of
common stock outstanding on September 13, 1999 adjusted as required by the
rules promulgated by the Securities and Exchange Commission (SEC). This
table is based upon information supplied by officers, directors and
principal stockholders and Schedules 13D and 35G (if any) filed with the
SEC. Unless otherwise indicated, and subject to community property laws
where applicable, we believe that each of the stockholders named in this
table has sole voting and investment power with respect to the shares
indicated as beneficially owned. Any security that any person named above
has the right to acquire within 60 days is deemed to be outstanding for
purposes of calculating the percentage ownership of such person, but is not
deemed to be outstanding for purposes of calculating the ownership
percentage of any other person.
(2) Represents 795,455 shares of common stock issuable upon conversion of a
Celgene Convertible Note, due September 16, 2003.
(3) Represents shares issuable upon exercise of warrant to purchase 76,846
shares of Celgene common stock.
(4) Represents shares issuable upon exercise of warrant to purchase 296,481
shares of Celgene common stock.
11
<PAGE>
(5) Represents shares issuable upon exercise of warrant to purchase 145,904
shares of Celgene common stock.
(6) Represents shares issuable upon exercise of warrant to purchase 5,000
shares of Celgene common stock.
(7) Represents 199,688 shares of Celgene common stock issued pursuant to
Stock Purchase Agreement dated June 23, 1998 between Celgene and Biovail
Laboratories Incorporated.
(8) Represents 113,121 shares of Celgene common stock granted by Celgene to
the Celgene Corporation 401(k) Plan (the "Plan") for sale from time-to-time
by the trustees of the Plan on behalf of certain employees of Celgene whose
participation in the Plan has terminated.
PLAN OF DISTRIBUTION
The common stock covered by this prospectus may be offered and sold
from time to time by the registering stockholders, including in one or more of
the following transactions:
o on the Nasdaq National Market;
o in transactions other than the Nasdaq National Market;
o in connection with short sales;
o by pledge to secure debts and other obligations;
o in connection with the writing of options, in hedge
transactions, and in settlement of other transactions in
standardized or over-the-counter options;
o in a combination of any of the above transactions; or
o pursuant to Rule 144, assuming the availability of an
exemption from registration.
The registering stockholders may sell their shares at market prices
prevailing at the time of sale, at prices related to prevailing market prices,
at negotiated prices, or at fixed prices.
Broker-dealers that are used to sell shares will either receive
discounts or commissions from the registering stockholders, or will receive
commissions from the purchasers for whom they acted as agents.
The sale of common stock by the registering stockholders is subject to
compliance by the registering stockholders with certain contractual restrictions
with Celgene, including certain restrictions contained in a registration rights
agreement between Celgene and the registering stockholders. There can be no
assurance that the registering stockholders will sell all or any of the common
stock.
Celgene has agreed to keep this prospectus effective until the earlier
of (i) the date on which all of the shares of common stock registered hereby
have been sold and (ii) the date on which all of the shares of common stock
registered hereby may be immediately sold without registration or other legal
restriction. Celgene intends to deregister any of the common stock not sold by
the registering stockholders immediately after the latest date it is required to
keep this prospectus effective for any of the registering stockholders.
12
<PAGE>
Celgene and the registering stockholders have agreed to customary
indemnification obligations with respect to the sale of the common stock by use
of this prospectus.
LEGAL MATTERS
Proskauer Rose LLP, New York, NY has passed on the validity of the
shares.
EXPERTS
The consolidated financial statements of Celgene Corporation and
subsidiary as of December 31, 1998 and 1997, and for each of the years in the
three-year period ended December 31, 1998, have been incorporated by reference
herein and in the registration statement in reliance upon the report of KPMG
LLP, independent certified public accountants, incorporated by reference herein
upon the authority of said firm as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
Celgene files reports with the SEC on a regular basis that contain
financial information and results of operations. You may read or copy any
document that Celgene files with the SEC at the SEC's Public Reference Room at
450 Fifth Street, N.W., Washington, D.C. 20549 and 7 World Trade Center, Suite
1300, New York, New York 10048. You may obtain information about the Public
Reference Room by calling the SEC for more information at 1-800-SEC-0330.
Celgene's SEC filings are also available at the SEC's web site at
http://www.sec.gov.
INCORPORATION BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and information that we file later
with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings that
we will make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934.
1. Annual Report on Form 10K for the fiscal year ended December 31,
1998, as amended by an Amendment on Form 10-K/A and an Amendment on Form
10-K/A-2.
2. Quarterly Report on Form 10-Q for the quarter ended March 31, 1999.
3. Quarterly Report on Form 10-Q for the quarter ended June 30, 1999.
4. The description of the common stock set forth in the registration
statement on Form 8-A, File No. 0-16132, including any amendments or reports
filed for the purpose of updating such description.
13
<PAGE>
You may request a copy of these filings, at no cost, by writing or
telephoning our Secretary at the following address:
Celgene Corporation
7 Powder Horn Drive
Warren, NJ 07059
(732) 271-1001
This prospectus is part of a registration statement we filed with the
SEC. You should rely only on the information or representations provided in this
prospectus. We have authorized no one to provide you with different information.
We are not making an offer of these securities in any state where the offer is
not permitted. You should not assume that the information in this prospectus is
accurate as of any date other than the date on the front of the document.
14
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
An estimate (other than the SEC registration fee) of the fees and
expenses of issuance and distribution (other than discounts and commissions) of
the Common Stock offered hereby (all of which will be paid by the Company) is as
follows:
SEC registration fee...................................... $11,686
NASDAQ National Market listing fee........................ 17,500
Legal fees and expenses................................... 10,000
Accounting fees and expenses.............................. 5,000
Miscellaneous expenses.................................... --
Total................................... $44,186
Item 15. Indemnification of Directors and Officers.
The General Corporation Law of the State of Delaware ("DGCL") permits
Celgene and its stockholders to limit directors' exposure to liability for
certain breaches of the directors' fiduciary duty, either in a suit on behalf of
Celgene or in an action by stockholders of Celgene.
The Certificate of Incorporation of Celgene (the "Charter") eliminates
the liability of directors to stockholders or Celgene for monetary damages
arising out of the directors' breach of their fiduciary duty of care. The
Charter also authorizes Celgene 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 Celgene. In addition, the Charter permits Celgene to
provide additional indemnification rights to its officers and directors and to
indemnify them to the greatest extent possible under the DGCL. Celgene 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, Celgene has
agreed to indemnify its officers and directors against certain liabilities,
including liabilities arising out of the offering made by this Registration
Statement.
Celgene maintains a standard form of officers' and directors' liability
insurance policy which provides coverage to the officers and directors of
Celgene 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 LLP.
23.2 -- Consent of Proskauer Rose LLP (incorporated by reference to
Exhibit 5.1).
24.1 -- Power of Attorney (included in Signature Page).
Item 17. Undertakings.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement: (i) to include any
prospectus required by Section 10(a)(3) of the Securities Act; (ii) to
reflect in the prospectus any facts or events arising after the effective
date of the Registration Statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation from
the low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission pursuant to
Rule 424(b) (Section 230.424(b) of this chapter) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and (iii)
to include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement;
provided, however, that (i) and (ii) do not apply if the Registration
Statement is on Form S-3 or Form S-8, and the information required to be
included in a post-effective amendment by (i) and (ii) is contained in
periodic reports filed with or furnished to the Commission by the
Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that
are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
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 J. Hugin, 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 October 1, 1999.
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 October 1, 1999
- - - --------------------------
John W. Jackson Chief Executive Officer
(Principal Executive Officer)
/s/ Sol J. Barer Director October 1, 1999
- - - --------------------------
Sol J. Barer
Chief Financial Officer October 1, 1999
/s/ Robert J. Hugin (Principal Accounting and
- - - --------------------------
Robert J. Hugin Financial Officer)
Director October 1, 1999
- - - --------------------------
Jack L. Bowman
II-4
<PAGE>
/s/ John W. Jackson Director October 1, 1999
- - - ---------------------------
Frank T. Cary
Director October 1, 1999
/s/ John W. Jackson
- - - ---------------------------
Gilla Kaplan
Director October 1, 1999
/s/ John W. Jackson
- - - ---------------------------
Arthur Hull Hayes, Jr.
Director October 1, 1999
/s/ John W. Jackson
- - - ---------------------------
Richard C. E. Morgan
Director October 1, 1999
/s/ John W. Jackson
- - - ---------------------------
Walter L. Robb
Director October 1, 1999
- - - ---------------------------
Lee J. Schroeder
II-5
<PAGE>
INDEX TO EXHIBITS
5.1 -- Opinion of Proskauer Rose LLP.
23.1 -- Consent of KPMG LLP.
23.2-- Consent of Proskauer Rose LLP (incorporated by reference to Exhibit 5.1)
24.1-- Power of Attorney (included in Signature Page).
II-6
<PAGE>
EXHIBIT 5.1
October 1, 1999
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 1,632,495 shares (the "Shares") of
common stock, par value $.01 per share, of the Company. All of the Shares are
issuable upon the exercise of warrants (the "Warrants") and the conversion of a
convertible note (the "Convertible Note") or have been issued to the Celgene
Corporation 401(k) Plan (the "Plan") and Biovail Laboratories Incorporated and
may be offered for sale for the benefit of the registering stockholders named in
the Registration Statement. We understand that the Shares are to be sold from
time to time as described in the section entitled "Plan of Distribution" in the
Registration Statement.
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,
assuming no change in the applicable law or pertinent facts, that (i) the
Shares, when issued in accordance with the terms of the Warrants or the
Convertible Note, as the case may be, will be duly authorized, validly issued,
fully paid, and non-assessable and (ii) the Shares issued to the Celgene
Corporation 401(k) Plan and to Biovail Laboratories Incorporated have been duly
authorized, validly issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement. In giving the foregoing consent, we do not admit that we
are in the category of persons whose consent is required under Section 7 of the
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
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<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors Celgene Corporation:
We consent to the use of our report incorporated by reference herein and to the
reference to our firm under the heading "EXPERTS" in the prospectus.
/s/KPMG LLP
Short Hills, New Jersey
October 1,1999
II-8
