<PAGE> 1
As filed with the Securities and Exchange Commission on September 20, 1995
Registration No. 33-61935
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
AMENDMENT NO 1
TO
FORM S-3
REGISTRATION STATEMENT
Under the
Securities Act of 1933
ADVANCED TISSUE SCIENCES, INC.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 14-1701513
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
10933 NORTH TORREY PINES ROAD
LA JOLLA, CALIFORNIA 92037
(619) 450-5730
(Address, Including Zip Code, and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)
ARTHUR J. BENVENUTO
CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE OFFICER
ADVANCED TISSUE SCIENCES, INC.
10933 NORTH TORREY PINES ROAD
LA JOLLA, CALIFORNIA 92037
(619) 450-5730
(Name, Address, Including Zip Code, and Telephone Number
Including Area Code, of Agent for Service)
---------------------
Copies to:
LAURA M. BROWER, ESQ.
BROBECK, PHLEGER & HARRISON
4675 MACARTHUR COURT, SUITE 1000
NEWPORT BEACH, CALIFORNIA 92660
(714) 752-7535
--------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of 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. / /
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
---------------------------------------------------------------------------------------------------------------------------
Proposed Maximum Proposed Maximum Amount of
Title of Each Class of Offering Aggregate Registration
Securities to be Registered Amount to be Registered Price Per Share(2) Offering Price Fee
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value 3,413,111 shares $12.50 $42,663,887.00 $14,711.00(3)
$.01 per share
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Includes 235,299 shares issuable upon the exercise of outstanding warrants.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) of the Securities Act of 1933, as amended, based on
the average of the high and low selling price per share of the Company's
Common Stock on August 15, 1995 as reported on the Nasdaq Stock Market.
(3) Previously paid.
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> 2
ADVANCED TISSUE SCIENCES, INC.
3,413,111 SHARES
COMMON STOCK
-----------------
THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK. SEE
"RISK FACTORS."
-----------------
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.
-----------------
This Prospectus relates to the sale of up to 3,413,111 shares (the
"Shares") of Common Stock, par value $.01 per share, of Advanced Tissue
Sciences, Inc. ("Advanced Tissue Sciences" or the "Company") by certain
stockholders of the Company, including 235,299 shares which may be issued upon
exercise of certain warrants (the "Selling Stockholders"). The Selling
Stockholders received such shares in transactions exempt from the registration
requirements of the Securities Act of 1933, as amended (the "Securities Act").
The Shares are being registered by the Company pursuant to registration rights
granted by the Company to the Selling Stockholders. The Company has agreed to
bear certain expenses (other than selling commissions and fees and expenses of
counsel and other advisers to certain of the Selling Stockholders) in connection
with the registration of the Shares.
Such sales may be made in the over-the-counter market, or otherwise at
prices and at terms then prevailing or at prices related to the then current
market price, or in negotiated transactions. The Shares may be sold by one or
more of the following: (a) a block trade in which the broker or dealer so
engaged will attempt to sell the shares as agent but may position and resell a
portion of the block as principal to facilitate the transaction; (b) purchases
by a broker or dealer as principal and resale by such broker or dealer for its
account pursuant to this Prospectus; (c) an exchange distribution in accordance
with the rules of such exchange; and (d) ordinary brokerage transactions and
transactions in which the broker solicits purchasers. In effecting sales,
brokers or dealers engaged by the Selling Stockholders may arrange for other
brokers or dealers to participate. Brokers or dealers will receive commissions
or discounts from Selling Stockholders in amounts to be negotiated immediately
prior to the sale. Such brokers or dealers and any other participating brokers
or dealers may be deemed to be "underwriters" within the meaning of the
Securities Act in connection with such sales. See "Distribution or Sale of the
Shares." In addition, any securities covered by this Prospectus which qualify
for sale pursuant to Rule 144 may be sold under Rule 144 rather than pursuant
this Prospectus. To the extent required, the specific Shares to be sold, the
names of the Selling Stockholders, the public offering price, the names of any
such agent, dealer or underwriter, and any applicable commission or discount
with respect to any particular offer will be set forth in an accompanying
Prospectus Supplement. See "Selling Stockholders" and "Distribution or Sale of
the Shares."
The Company will not receive any part of the proceeds from sales of
shares by the Selling Stockholders. See "Use of Proceeds."
The Company's Common Stock is traded on the Nasdaq Stock Market under
the symbol "ATIS." On September 15, 1995, the last reported sale price of the
Company's Common Stock on the Nasdaq Stock Market was $12.25 per share.
THE DATE OF THIS PROSPECTUS IS SEPTEMBER __, 1995
<PAGE> 3
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus in connection with
the offering made hereby, and if given or made, such information or
representations must not be relied upon as having been authorized by the
Company, any Selling Stockholder or by any other person. Neither the delivery of
this Prospectus nor any sale made thereunder shall, under any circumstances,
create any implication that information herein is correct as of any time
subsequent to the date hereof. This Prospectus does not constitute an offer to
sell or a solicitation of an offer to buy the Shares to any person or by anyone
in any jurisdiction in which such offer or solicitation may not lawfully be
made.
-----------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Available Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Information Incorporated By Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Prospectus Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Selling Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Distribution or Sale of the Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
</TABLE>
-------------------
AVAILABLE INFORMATION
The Company is subject to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files annual and quarterly reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission"). Such
reports, proxy statements and other information may be inspected, and copies of
such material may be obtained at prescribed rates, at the Commission's Public
Reference Section, Room 1024, 450 Fifth Street, N.W., Washington D.C. 20549, as
well as at the Commission's Regional Offices at 7 World Trade Center, 13th
Floor, New York, New York 10048, and Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. The Common Stock of the
Company is traded on the Nasdaq Stock Market. Reports, proxy statements and
other information concerning the Company may be inspected at the National
Association of Securities Dealers, Inc. at 1735 K Street, N.W., Washington, D.C.
20006.
Additional information regarding the Company and the Shares offered
hereby is contained in the Registration Statement on Form S-3 and the exhibits
thereto filed with the Commission under the Securities Act. For further
information pertaining to the Company and the Shares, reference is made to the
Registration Statement and the exhibits thereto, which may be inspected without
charge at, and copies thereof may be obtained at prescribed rates from, the
office of the Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington,
D.C. 20549.
Skin(R), Dermagraft(TM) and Dermagraft-TC(TM) are trademarks of
Advanced Tissue Sciences.
INFORMATION INCORPORATED BY REFERENCE
The following documents filed with the Commission are hereby
incorporated by reference in this Prospectus: (i) the Annual Report of the
Company on Form 10-K for the fiscal year ended December 31, 1994; (ii) the
Quarterly Reports of the Company on Form 10-Q for the quarters ended March 31,
1995 and June 30, 1995; (iii) the Proxy Statement of the Company dated April 21,
1995 in connection with the Annual Meeting of
2
<PAGE> 4
Stockholders held on May 25, 1995; (iv) the Current Reports of the Company on
Form 8-K dated January 5, 1995, June 26, 1995 and July 7, 1995; (v) the
Company's Registration Statement on Form 8-A dated July 28, 1992; and (vi) the
Company's Registration Statement on Form 8-A dated January 6, 1995.
All reports and other documents subsequently filed by the Company
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date
of this Prospectus and prior to the termination of this offering shall be deemed
to be incorporated by reference herein and to be a part hereof from the date of
filing of such reports and documents. Any statement incorporated herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon written or oral request of such person, a copy of
any or all of the foregoing documents incorporated herein by reference (other
than exhibits to such documents, unless such exhibits are specifically
incorporated by reference into such document). Requests for such documents
should be submitted in writing to Michael V. Swanson, Vice President, Finance
and Administration, at Advanced Tissue Sciences, Inc., 10933 North Torrey Pines
Road, La Jolla, California 92037 or by telephone at (619) 450-5730.
3
<PAGE> 5
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and the Consolidated Financial Statements and Notes thereto
appearing elsewhere, or incorporated by reference, in this Prospectus, including
the information under "Risk Factors."
Advanced Tissue Sciences, Inc. (the "Company" or "Advanced Tissue
Sciences") is a leading tissue engineering company engaged in the development of
living human tissue products for therapeutic applications. Utilizing principles
of cell biology, biochemistry and polymer science, the Company has developed and
is applying a proprietary core technology which permits living human cells to be
cultured ex vivo in a manner that allows the cells to develop and assemble into
functioning three-dimensional tissue. To date, the Company has used its
technology to replicate a variety of human tissues and is currently focusing its
efforts primarily on skin, cartilage and cardiovascular tissues.
Advanced Tissue Sciences' objective is to redefine transplantation and
tissue repair by developing, manufacturing and marketing products produced
through tissue engineering. The Company's strategy to achieve this objective is
to apply its proprietary core technology to the development of multiple products
that address unmet therapeutic needs or offer improved, cost-effective
alternatives to current treatment modalities for a variety of indications. By
building upon its base of scientific knowledge through the continued application
of its proprietary core technology, the Company believes it will be able to
achieve significant synergies in the development, clinical testing and
manufacture of successive tissue products.
Leading the Company's development efforts are therapeutic products based on
Dermagraft, a three-dimensional living human tissue designed as a replacement
for human dermis (the inner skin layer). The dermis is essential to normal skin
function and healing and, unlike epidermis (the outer skin layer), does not
regenerate into normal tissue after injury. The Dermagraft products are designed
to treat conditions where the dermis has been injured or destroyed, such as in
severe burns and chronic skin ulcers.
The Company is currently conducting pivotal clinical trials in the United
States and in France for a Dermagraft dermal replacement product
("Dermagraft-Ulcers") to treat diabetic skin ulcers, and a pivotal trial in the
United States with a product that acts as a transitional covering
("Dermagraft-TC") for severe burns when there is insufficient amounts of the
patient's own skin available for immediate grafting. In a pilot clinical trial
with diabetic foot ulcers, the Dermagraft-Ulcers patients overall had a higher
rate of complete wound healing, with one of the dosing regimens achieving a
statistically significant improvement. The pilot clinical trial of Dermagraft-TC
was also promising as the product consistently adhered to the wound sites and
allowed subsequent grafts to take as well as, or better than, on the control
sites in all patients assessed. In June 1995, the FDA notified the Company that
its premarket approval application for Dermagraft-TC will receive expedited
review upon successful completion of its pivotal clinical trial.
The Company accelerated its development efforts related to orthopedic
applications of tissue engineered cartilage in May 1994 by entering into a
fifty-fifty joint venture for the worldwide development, manufacture and
marketing of human tissue engineered cartilage for orthopedic applications with
Smith & N Nephew plc ("Smith & Nephew"). Smith & Nephew is a worldwide health
care company with extensive sales and distribution capabilities, selling
orthopedic implants, arthroscopic instruments, casting, trauma and wound
management products. Smith & Nephew has agreed to contribute the first $10
million in joint venture funding and the Company has contributed certain
technology licenses. Further joint venture revenues and expenditures will be
shared equally by the partners. Through the joint venture, Advanced Tissue
Sciences has commenced preclinical trials of three-dimensional cartilage tissues
for joint resurfacing and meniscal repair.
4
<PAGE> 6
During the first quarter of 1994, the Company initiated a series of
feasibility studies under a joint development agreement with St. Jude Medical,
Inc. ("St. Jude Medical") to evaluate applications of its tissue engineering
technology to create or improve heart valve replacements. St. Jude Medical is
the world leader in the sale of mechanical heart valves. The companies hope to
develop a series of products with enhanced biocompatibility and improved
durability through the use of engineered human tissues to reduce the likelihood
of thromboembolic events and the associated need for anticoagulant drugs. Based
on the results of the feasibility studies, St. Jude Medical has agreed to
support additional research during 1995. The Company is also performing research
on tissue engineering blood vessels and stents.
The Company also manufactures and sells Skin2 (pronounced "skin squared"),
in vitro laboratory testing kits containing living human skin tissue. Skin2 is
used by cosmetic, petrochemical, household product and pharmaceutical companies
to test products for a variety of indications such as cytotoxicity, irritancy,
corrosivity, phototoxicity, sun protection factors and sensitization. In March
1995, the Company entered into an agreement to sell certain net assets and
license the technology associated with the Company's in vitro testing business
to Stratum Laboratories International. To date, Stratum Laboratories has not
been successful in obtaining sufficient funding to complete the transaction.
The Company was incorporated under the laws of the State of Delaware in
1987. The Company maintains its executive offices at 10933 North Torrey Pines
Road, La Jolla, California 92037, and its telephone number at that address is
(619) 450-5730.
5
<PAGE> 7
RISK FACTORS
An investment in the Common Stock being offered by this Prospectus
involves a high degree of risk. In addition to the other information contained
in this Prospectus, prospective investors should carefully consider the
following risk factors before purchasing the Common Stock offered by this
Prospectus.
EARLY STAGE OF PRODUCT DEVELOPMENT. The Company's therapeutic products
under development will require significant additional research and development,
including extensive preclinical and clinical testing, and regulatory approvals
prior to commercialization. The Company is currently conducting pivotal,
multi-center human clinical trials of its Dermagraft products for severe burns
in the United States and for diabetic skin ulcers in the United States and
France. Other potential products are in earlier stages of research and
development. There can be no assurance that the scientists conducting clinical
trials for the Company will be able to initiate trials at preferred clinical
sites or recruit and retain sufficient test subjects. In addition, there can be
no assurance that the Company will not encounter problems in clinical trials
that will cause the Company to delay or suspend any clinical trials, that such
of the Company's products currently under development will be completed
successfully within any specified time period if at all, that such testing will
show such products to be safe or efficacious or that any of the Company's
products will receive regulatory approval. Moreover, if the Company's products
do receive regulatory approval, there can be no assurance that the Company will
be capable of producing such products in commercial quantities at reasonable
cost or that such products will be accepted by the marketplace.
ABSENCE OF PROFITABLE OPERATIONS. The Company has experienced
significant operating losses since its inception in 1986 and expects to continue
to incur substantial operating losses. Losses are expected to continue as a
result of substantial research and development expenses (including costs
associated with clinical trials and the development of manufacturing processes),
growing costs in anticipation of product commercialization, and additional
expenditures for capital equipment and patents. As of June 30, 1995, the Company
had an accumulated deficit of approximately $104.9 million, including a
nonrecurring charge to in-process technology of $21.4 million related to an
acquisition. The Company's ability to achieve profitability depends in part upon
its ability, alone or with others, to complete development of its technology and
proposed therapeutic products, to obtain required regulatory approvals and to
manufacture and market such products. There can be no assurance that the Company
will ever achieve a profitable level of operations or that profitability, if
achieved, can be sustained on an ongoing basis.
TECHNOLOGICAL CHANGE AND COMPETITION. The biomedical technology
industry is subject to rapid, unpredictable and significant technological
change. Competition from universities, research institutions and pharmaceutical,
chemical and biotechnology companies is intense. Many competitors or potential
competitors have greater financial resources, research and development
capabilities, and manufacturing and marketing experience than the Company.
Accordingly, these competitors may succeed in obtaining approval by the FDA for
their products more rapidly than the Company. There can be no assurance that
developments by the Company's competitors or potential competitors will not
render the Company's technology or proposed applications of its technology
obsolete. The Company is aware of several companies which are engaged in
research and development activities aimed at the creation of skin substitutes
and other products for use in the treatment of severe burns and other wound
healing applications that could compete with the Company's Dermagraft products.
The Company also knows of other companies that are undertaking research and
development of cartilage and other tissue replacement products, some of which
have patents in this field. These companies may also represent significant
long-term competition for the Company.
PATENTS AND PROTECTION OF PROPRIETARY TECHNOLOGY. The Company's ability
to compete effectively with other companies will depend, in part, on its ability
to maintain the proprietary nature of its technology and manufacturing
processes. The Company relies on patents, trade secrets and know-how to maintain
its competitive position. The Company has been issued a United States patent and
notice of allowance of a European patent covering, and four United States
patents related to, its core technology, and has filed additional United States
and foreign patent applications. The Company also has licenses or licensing
rights to certain other United States and foreign patents and patent
applications. There can be no assurance, however, that any applications will
result in issued patents or that any current or future issued or licensed
patents, trade secrets
6
<PAGE> 8
or know-how will afford protection against competitors with similar technologies
or processes, or that any patents issued will not be infringed upon or designed
around by others. In addition, there can be no assurance that others will not
independently develop proprietary technologies or processes which are the same
as or substantially equivalent to those of the Company. The Company could also
incur substantial costs in defending itself in suits brought against it on such
patents or in bringing suits to protect the Company's patents or patents
licensed by the Company against infringement. The Company protects its
proprietary technology and processes in part by confidentiality agreements with
its collaborative partners, employees and consultants. There can be no assurance
that these agreements will not be breached, that the Company will have adequate
remedies for any breach, or that the Company's trade secrets will not otherwise
become known or independently discovered by competitors.
GOVERNMENT REGULATION. Except for the Company's Skin(2) and other
proposed research and laboratory testing products, the manufacture and sale of
the Company's products is subject to extensive regulation by the FDA, as well as
by other Federal, state and foreign authorities. There is currently no
requirement of government premarket approval pertaining to the marketing of
research and laboratory testing products. However, if customers intend to use
the results of such tests for safety and efficacy data in support of final
product approval by the FDA or other regulatory agencies, they must be able to
demonstrate the validity of these tests.
The Company's Dermagraft products are subject to regulation as medical
devices. The Company does not yet know with certainty whether its other
potential therapeutic tissue replacement products currently in varying stages of
development will be subject to premarket clearance as medical devices or as
biologic products. In general, regulatory clearance of a biologic product for
marketing takes substantially more time than regulatory clearance for medical
devices. However, whether regulated by the FDA as medical devices or biologics,
or otherwise by any state or foreign authorities, the approval process for any
of the Company's products is expensive and time consuming and no assurance can
be given that any regulatory agency will grant its approval. Prior to commercial
release of the Company's Dermagraft products, premarket approval by the FDA will
be required which entails proof of safety and efficacy in human clinical trials.
This is a lengthy and expensive process and there can be no assurance that such
FDA approval will be obtained. The inability to obtain, or delays in obtaining,
such approval would adversely affect the Company's ability to commence marketing
therapeutic applications of its technology. There is no assurance that the
Company will have sufficient resources to complete the required testing and
regulatory review processes. Furthermore, the Company is unable to predict the
extent of adverse governmental regulation which might arise from future United
States or foreign legislative or administrative action.
The proper level of federal regulation of human tissues generally is
under consideration by the FDA and has been the subject of proposed federal
legislation and Congressional hearings. A federal criminal statute prohibits the
transfer of any human organ, including skin, for valuable consideration (other
than recovery of reasonable costs associated with such activities) for use in
human transplantation. Certain states have also adopted statutes requiring the
licensure of tissue and organ banks, laws governing the sale of human organs and
tissues and laws governing the safety and efficacy of drugs, devices and
biologics. The Company is unable to predict how such legislation could effect
the Company's product development efforts.
DEPENDENCE ON KEY PERSONNEL. The Company is dependent upon the services
of Arthur J. Benvenuto, its Chairman, President and Chief Executive Officer, and
Dr. Gail K. Naughton, its Executive Vice President and Chief Operating Officer,
neither of whom is subject to an employment agreement with the Company. The
Company has obtained key man life insurance on each of the lives of Mr.
Benvenuto and Dr. Naughton in the amount of $3 million, $2.5 million of which is
payable to the Company. The loss of the services of either one of these or other
key individuals may have a material adverse effect on the Company. The Company's
success may also depend on its ability to attract and retain highly qualified
scientific, marketing and management personnel. The Company faces strong
competition for such personnel and there can be no assurance that the Company
will be able to attract or retain such individuals.
LIMITED MANUFACTURING EXPERIENCE. The manufacture of the Company's
Dermagraft and other tissue replacement products is a time-consuming and complex
process. The Company believes it currently has sufficient manufacturing
capabilities to allow for production of sufficient quantities of its Dermagraft
products to support
7
<PAGE> 9
its current clinical programs. However, to be successful, the Company must be
capable of manufacturing its products in commercial quantities, in compliance
with regulatory requirements and at acceptable costs. While the Company has
pilot scale manufacturing experience, the Company has no experience in large
scale commercial manufacturing. The Company is in the process of developing
proprietary manufacturing systems and validating its facility for the commercial
production of Dermagraft and Dermagraft-TC. The facility and systems both must
undergo rigorous facility and process validation tests. This facility must
undergo rigorous facility and process validation tests. In addition, the
Company's manufacturing facility must be registered with and licensed by various
regulatory authorities and comply with the good manufacturing practice
requirements prescribed by the FDA. Any significant delays in the completion of
systems development, validation or regulatory inspection of the new facility
could have a material adverse effect on the ability of the Company to ultimately
market its products on a timely and profitable basis and on the Company's
ability to conduct its business.
The mesh framework used by the Company in its Dermagraft-Burns and
Dermagraft-Ulcers products is available from only one FDA-approved manufacturing
source. Similarly, the synthetic mesh framework used by the Company in its
Dermagraft-TC product is available from a different single FDA-approved
manufacturing source. Any significant supply interruption in a sole-sourced raw
material or obtaining FDA approval of a new supplier could adversely affect the
Company's clinical trials, product development and marketing programs. In
addition, an uncorrected impurity or supplier's variation in a raw material,
either unknown to the Company or incompatible with the Company's manufacturing
process, could have a material adverse effect on the Company's ability to
manufacture products.
THIRD PARTY REIMBURSEMENT. Successful commercialization of the
Company's therapeutic products will depend in part on the availability of
adequate reimbursement from third-party health care payors, such as government
and private health insurers and other organizations. Third party payors are
increasingly challenging the pricing of medical products and services. There can
be no assurance that reimbursement will be available to enable the Company to
achieve market acceptance of its products or to maintain price levels sufficient
to realize an appropriate return on the Company's investment in product
development. Without financial support from these sources, the market for the
Company's products may be limited. Significant reductions in medical insurance
coverage may have an adverse effect on the Company's future operations.
HEALTH CARE REFORM. Congress and various state legislatures have
periodically proposed legislation affecting the regulation of the health care
industry. While the Company cannot predict whether any such legislative or
regulatory proposals will be adopted or the effect such proposals may have on
its business, the pendency of such proposals could have a material adverse
effect on the Company. Furthermore, the Company's ability to commercialize its
potential product portfolio may be adversely affected to the extent that such
proposals have a material adverse effect on the business, financial condition or
profitability of other companies that are prospective collaborators for certain
of the Company's proposed products or on the availability of other sources of
funding.
PRODUCT LIABILITY CLAIMS AND UNINSURED RISKS. The use of any of the
Company's products, whether for commercial applications or during clinical
trials, exposes the Company to an inherent risk of product liability claims in
the event such products cause injury or result in adverse effects. Such
liability might result from claims made directly by health care institutions,
contract laboratories or others selling or using such products. The Company
currently maintains product liability insurance coverage; however, there can be
no assurance that the level or breadth of any insurance coverage will be
sufficient to fully cover potential claims. Such insurance is becoming
increasingly expensive and difficult to obtain. There can be no assurance that
adequate insurance coverage will be available in the future at an acceptable
cost, if at all, or in sufficient amounts to protect the Company against such
liability. The obligation to pay any product liability claim in excess of
whatever insurance the Company is able to acquire could have a material adverse
effect on the business, financial condition and future prospects of the Company.
UNCERTAINTY OF COLLABORATIVE ARRANGEMENTS. The Company's strategy for
the development, clinical testing, manufacture and commercialization of certain
of its proposed tissue replacement products includes entering into various
collaborations with corporate partners, licensors, licensees and others. The
Company has entered into
8
<PAGE> 10
collaborations with various institutions related to the development and
commercialization of its tissue engineered products. Although the Company
believes that its partners in these collaborations have an economic motivation
to succeed in performing their contractual responsibilities, the amount and
timing of resources to be devoted to these activities are not within the control
of the Company. Moreover, the collaboration agreements generally provide that
they may be terminated by the collaborator prior to their expiration under
circumstances that are outside the control of the Company. In addition, there
can be no assurance that these collaborators will pay any additional option or
license fees to the Company or that they will develop or market any products
under the agreements.
Furthermore, there can be no assurance that the Company will be able to
negotiate additional collaborative arrangements in the future on acceptable
terms, if at all, or that such collaborative arrangements will be successful. To
the extent that the Company chooses not to or is unable to establish such
arrangements, it would experience increased capital requirements to undertake
research, development and marketing of its proposed products at its own expense.
In addition, the Company may encounter significant delays in introducing its
proposed products into certain markets or find that the development, manufacture
or sale of its proposed products in such markets is adversely affected by the
absence of such collaborative agreements.
HAZARDOUS MATERIALS. The Company's research and development activities
and operations involve the controlled use of small quantities of radioactive
compounds, chemical solvents and other hazardous materials. In addition, the
Company's business involves the growth of human tissue samples. Although the
Company believes that its safety procedures for handling and disposing of such
materials comply with the standards prescribed by federal, state and local
regulations, the risk of accidental contamination or injury from these materials
cannot be completely eliminated. In the event of such an accident, the Company
could be held liable for any damages that result and any liability could have a
material adverse effect on the business, financial condition and future
prospects of the Company. The Company's insurance policies generally do not
include coverage against such risks. See "-- Product Liability Claims and
Uninsured Risks."
NEED FOR ADDITIONAL FUNDS. The Company's operations to date have
consumed substantial and increasing amounts of cash. The negative cash flow from
operations is expected to continue and accelerate over the next two years. The
development and commercialization of the Company's technology and proposed
products will require a commitment of substantial funds, the amount of which
will depend on many factors, including continued scientific progress in the
research and development of the Company's technology, the ability of the Company
to establish and maintain collaborative arrangements with others for product
development, progress with preclinical and clinical trials, the time and cost
involved in obtaining regulatory approvals, the cost involved in preparing,
filing, prosecuting, maintaining and enforcing patent claims and product
commercialization activities and arrangements.
While the Company believes that existing working capital will be
sufficient to meet its present operating and capital requirements for
approximately one year, the Company will seek additional funds prior to that
time to support its product development and commercialization programs. The
Company could acquire such additional funding through collaborative
arrangements, the extension of existing arrangements or other means. There can
be no assurance that adequate funds for these purposes will be available when
needed or on terms acceptable to the Company. Insufficient funds may require the
Company to delay, scale back or eliminate certain of its research and product
development programs or to license third parties to commercialize products or
technologies that the Company would otherwise develop itself.
ANTI-TAKEOVER PROVISIONS. The Company's Restated Certificate of
Incorporation includes provisions that may discourage or prevent certain types
of transactions involving an actual or potential change in control of the
Company, including transactions in which the stockholders might otherwise
receive a premium for their shares over then-current market prices, and may
limit or delay the ability of the stockholders to approve transactions that they
may deem to be in their best interests. The Board of Directors also has the
authority to fix the rights and preferences of and to issue shares of Preferred
Stock, and in January 1995 adopted a shareholder rights plan, either of which
may be used to delay or prevent certain types of transactions involving an
actual or potential change in control of the Company. In addition, Section 203
of the General Corporation Law of Delaware
9
<PAGE> 11
prohibits the Company from engaging in certain business combinations with
interested stockholders. These provisions may have the effect of delaying,
deferring or preventing a change in control of the Company without action by the
stockholders, and therefore could adversely affect the price and the voting and
other rights of the holders of the Company's Common Stock.
POSSIBLE VOLATILITY OF STOCK PRICE. The market price of the Company's
Common Stock, like that of the securities of other biotechnology companies, has
fluctuated significantly in recent years and is likely to fluctuate in the
future. Announcements by the Company or others regarding scientific discoveries,
technological innovations, commercial products, patents or proprietary rights,
the progress of clinical trials, government regulation, public concern as to the
safety of devices or drugs and general market conditions may have a significant
effect on the market price of the Common Stock. Fluctuations in financial
performance from period to period also may have a significant impact on the
market price of the Common Stock.
ABSENCE OF DIVIDENDS. No dividends have been paid on the Common Stock
to date, and the Company does not expect to pay cash dividends in the
foreseeable future.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of
Shares by the Selling Stockholders. See "Selling Stockholders."
10
<PAGE> 12
SELLING STOCKHOLDERS
The following table sets forth the number of shares of Common Stock
beneficially owned by each of the Selling Stockholders. Except as indicated,
none of the Selling Stockholders has had a material relationship with the
Company within the past three years other than as a result of the ownership of
the Shares or other securities of the Company. Because the Selling Stockholders
may offer all or some of the Shares which they hold, or have the right to
acquire, pursuant to the offering contemplated by this Prospectus, and because
there are currently no agreements, arrangements or understandings with respect
to the sale of any of the Shares, no estimate can be given as to the amount of
Shares that will be held by the Selling Stockholders after completion of this
offering. See "Distribution or Sale of the Shares." The Shares offered by this
Prospectus may be offered from time to time by the Selling Stockholders named
below:
<TABLE>
<CAPTION>
Number of
Number of Shares Percent of
Shares Beneficially Registered Outstanding
Name of Selling Stockholder Owned for Sale Hereby Shares
--------------------------- ------------------- --------------- -----------
<S> <C> <C> <C>
1995 Private Placements:
Arbco Associates, L.P. 239,796 239,796 *
Linda S. Cappello(1) 88,798 88,798 *
Gerard K. Cappello(1) 32,716 32,716 *
Lawrence K. Fleischman(1) 42,131 42,131 *
Gershon Partners L.P. 500,000 500,000 1.5%
The Kriegsman Group(1) 71,654 71,654 *
Kyneton Investments Ltd. 728,863 728,863 2.2
Offense Group Associates, L.P. 145,773 145,773 *
S.P. Investors International S.A. 500,000 500,000 1.5
Steinhardt Overseas Fund Ltd. 500,000 500,000 1.5
1994 Private Placement:
St. Jude Medical, Inc. 563,380 563,380 1.7
--------- ---------
TOTAL 3,413,111 3,413,111
========= =========
</TABLE>
---------------------
* Less than 1% as of July 31, 1995.
(1) All shares of Common Stock of the Company shown as beneficially owned
are issuable upon the exercise of outstanding warrants.
All of the Shares issued in the 1995 Private Placements and being
offered pursuant to this Prospectus were acquired by the Selling Stockholders
identified above from the Company in private placement transactions at an
initial purchase price per share of $6.86. Assuming the exercise of all the
warrants, the Shares acquired by the warrant holders will be acquired at an
initial average exercise price per share of $6.86 and the Company will receive
minimum aggregate proceeds of approximately $1.6 million upon exercise. The
price and number of shares issued in the 1995 Private Placements and upon
exercise of the warrants are subject to adjustment as set forth in those certain
Investment Agreements incorporated by reference into this Registration
Statement. A subsequent amendment or supplement to this Registration Statement
will be filed, if necessary, to increase the number of shares held by the
Selling Stockholders who acquired Shares in the 1995 Private Placements once the
11
<PAGE> 13
relevant adjustment periods have expired. The Shares issued in the 1994 Private
Placement are not subject to adjustment.
At the time of each 1994 and 1995 Private Placement, each Selling
Stockholder represented to the Company that it was acquiring such shares from
the Company without any present intention of effecting a distribution of those
shares. However, in accordance with an agreement entered into with the Selling
Stockholders at the time of each private placement, the Company agreed to effect
a shelf registration (of which this Prospectus is a part) of the Shares to
permit the Selling Stockholders to effect sales of such shares from time to time
in the market or in privately-negotiated transactions. The Company will prepare
and file such amendments and supplements to the registration statement as may be
necessary in accordance with the rules and regulations of the Securities Act to
keep it effective until all of such shares have been sold pursuant to the
registration statement or until registration of the shares is no longer required
by reason of Rule 144 under the Securities Act or other rules of similar effect.
The Company has agreed to bear certain expenses (other than broker
discounts and commissions, if any, and expenses of counsel and other advisors to
certain of the Selling Stockholders) in connection with the registration of the
Shares.
DISTRIBUTION OR SALE OF THE SHARES
The Shares offered hereby are being offered directly by the Selling
Stockholders. The Company will not receive any proceeds from the sale of any of
the Shares by the Selling Stockholders. The sale of the Shares may be effected
by the Selling Stockholders from time to time in transactions in the
over-the-counter market, on the Nasdaq Stock Market, in negotiated transactions,
or a combination of such methods of sale, at fixed prices which may be changed,
at market prices prevailing at the time of sale, at prices related to prevailing
market prices or at negotiated prices. The Selling Stockholders may effect such
transactions by selling the Shares to or through broker-dealers, and such
broker-dealers may receive compensation in the form of discounts, concessions or
commissions from the Selling Stockholders and/or the purchasers of the Shares
for whom such broker-dealers may act as agents or to whom they sell as
principals, or both (which compensation as to a particular broker-dealer might
be in excess of customary commissions).
At the time a particular offer of Shares is made, to the extent required, a
supplemental Prospectus will be distributed which will set forth the number of
Shares being offered and the terms of the offering including the name or names
of any underwriters, dealers or agents, the purchase price paid by any
underwriter for the Shares purchased from Selling Stockholders, any discounts,
commissions and other items constituting compensation from the Selling
Stockholders and any discounts, commissions or concessions allowed or reallowed
or paid to dealers.
In order to comply with the securities laws of certain states, if
applicable, the Shares will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
Shares may not be sold unless they have been registered or qualified for sale in
the applicable state or an exemption from the registration or qualification
requirement is available and is complied with by the Company and the Selling
Stockholders.
The Selling Stockholders and any broker-dealers, agents or underwriters
that participate with the Selling Stockholders in the distribution of the Shares
may be deemed to be "underwriters" within the meaning of Section 2(11) of the
Securities Act, and any commissions received by them and any profit on the
resale of the Selling Stockholder Shares purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act.
Under applicable rules and regulations under the Exchange Act, any person
engaged in the distribution of the Shares may not simultaneously engage in
market making activities with respect to the Common Stock of the Company for a
period of two business days prior to the commencement of such distribution. In
addition and without limiting the foregoing, each Selling Stockholder will be
subject to applicable provisions of the Exchange Act and the rules and
regulations thereunder, including, without limitation, Rules 10b-6 and 10b-7,
which
12
<PAGE> 14
provisions may limit the timing of purchases and sales of shares of the
Company's Common Stock by the Selling Stockholders.
The Company has agreed to register the Shares under the Securities Act and
to indemnify and hold certain Selling Stockholders harmless against certain
liabilities under the Securities Act that could arise in connection with the
sale by the Selling Stockholders of the Shares.
EXPERTS
The consolidated financial statements of Advanced Tissue Sciences, Inc.
appearing in the Company's Annual Report (Form 10-K) for the year ended December
31, 1994, have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon included therein and incorporated herein by
reference. Such financial statements are, and audited financial statements to be
included in subsequently filed documents will be, incorporated herein in
reliance upon the reports of Ernst & Young LLP pertaining to such financial
statements (to the extent covered by consents filed with the Securities and
Exchange Commission) given upon the authority of such firm as experts in
accounting and auditing.
13
<PAGE> 15
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses in connection with the
sale or the distribution of the securities being registered, other than
underwriting discounts and commissions and finder's fees. All of the amounts
shown are estimates except for the Securities and Exchange Commission
registration fee and NASD filing fee.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee . . . . . . . . . . . . . . . . . . . . . . . $14,711*
NASD filing fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,500
Accounting fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000
Legal fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,000
Blue Sky fees and expenses, including related legal fees . . . . . . . . . . . . . . . . . . . . -0-
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 789
-------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $50,000
=======
</TABLE>
---------------
* Previously paid.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Bylaws provide that the Company will indemnify its
directors and may indemnify its officers, employees and other agents to the full
extent permitted by law. The Company believes that indemnification under its
Bylaws covers at least negligence and gross negligence by indemnified parties,
and requires the Company to advance litigation expenses in the case of
stockholder derivative actions or other actions if the director agrees to repay
advances if it is ultimately determined that the director is not entitled to
indemnification.
The Company has entered into indemnification agreements with each of its
directors and officers which provide the directors and officers with
indemnification rights. One significant difference between the indemnification
rights provided under the Company's Bylaws and those provided under the
indemnification agreements is that, under the Bylaws as construed in accordance
with Delaware law, amounts may be paid as indemnity only if independent
determinations are made in each specific case that under the circumstances the
individual claiming indemnity meets certain specified standards of conduct.
Under the indemnification agreements, a determination that a director or officer
has met these standards is not required for such indemnity, although the
agreements exclude indemnity for conduct which is adjudged to be knowingly
fraudulent, deliberately dishonest or to constitute willful misconduct. The
Company also currently maintains policies of insurance under which its directors
and officers are insured, within the limits and subject to the limitations of
the policies, against certain expenses in connection with the defense of
actions, suits or proceedings, and certain liabilities which might be imposed as
a result of such actions, suits or proceedings, to which they are parties by
reason of being or having been such directors or officers.
The Company's Certificate of Incorporation provides that, pursuant to
Delaware law, its directors shall not be liable for monetary damages for breach
of the director's fiduciary duty of care to the Company and its stockholders.
This provision in the Certificate of Incorporation does not eliminate the duty
of care, and in appropriate circumstances, equitable remedies such as injunction
or other forms of non-monetary relief will remain available under Delaware law.
In addition, each director will continue to be subject to liability for breach
of the director's duty of loyalty to the Company for acts or omissions not in
good faith or involving intentional misconduct, or knowing violations of law, or
actions lending to improper personal benefit to the director, and for payment of
dividends or approval of stock repurchases or redemptions that are unlawful
under Delaware law.
II-1
<PAGE> 16
The provision does not affect a director's responsibilities under any other law,
such as the federal securities laws or state or federal environmental laws.
ITEM 16. EXHIBITS.
Exhibit No .
*4.1 Investment Agreement between Registrant and S.P. Investors
International S.A. dated June 23, 1995. Incorporated by reference as
exhibit 4.1 to the Current Report on Form 8-K dated June 26, 1995.
*4.2 Investment Agreement between Registrant and Steinhardt Overseas Fund
Ltd. dated June 23, 1995. Incorporated by reference as exhibit 4.2 to
the Current Report on Form 8-K dated June 26, 1995.
*4.3 Investment Agreement between Registrant and Gershon Partners L.P. dated
June 23, 1995. Incorporated by reference as exhibit 4.3 to the Current
Report on Form 8-K dated June 26, 1995.
*4.4 Form of Warrant Agreement between Registrant and each of Linda S.
Cappello, Gerard K. Cappello, Lawrence K. Fleischman and The Kriegsman
Group. Incorporated by reference as exhibit 4.4 to the Current Report
on Form 8-K dated July 7, 1995.
*4.5 Investment Agreement between Registrant and Kyneton Investments Ltd.
dated July 5, 1995. Incorporated by reference as exhibit 4.1 to the
Current Report on Form 8-K dated July 7, 1995.
*4.6 Investment Agreement between Registrant and Arbco Associates, L.P. and
Offense Group Associates, L.P. dated July 11, 1995. Incorporated by
reference as exhibit 4.2 to the Current Report on Form 8-K dated
July 7, 1995.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
*24.1 Power of Attorney.
-----------------------
* Previously filed and/or incorporated by reference.
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; 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, Form S-8 or Form F-3,
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 pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the Registration Statement.
II-2
<PAGE> 17
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
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.
The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Exchange Act; and, where
interim financial information required to be presented by Article 3 of
Regulation S-X is not set forth in the prospectus, to deliver, or cause to be
delivered to each person to whom the prospectus is sent or given, the latest
quarterly report that is specifically incorporated by reference in the
prospectus to provide such interim financial information.
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.
II-3
<PAGE> 18
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Amendment
No. 1 to Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of San Diego, State of California, on
September 20, 1995.
ADVANCED TISSUE SCIENCES, INC.
By: /s/ MICHAEL V. SWANSON
----------------------------------------
Michael V. Swanson
Vice President Finance and Administration
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 1 to Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ ARTHUR J. BENVENUTO* Chairman of the Board of Directors, September 20, 1995
----------------------------------- President and Chief Executive Officer
Arthur J. Benvenuto (principal executive officer)
/s/ DR. GAIL K. NAUGHTON* Director, Executive Vice President and September 20, 1995
----------------------------------- Chief Operating Officer
Dr. Gail K. Naughton
/s/ MICHAEL V. SWANSON Vice President, Finance and September 20, 1995
----------------------------------- Administration (principal financial and
Michael V. Swanson accounting officer)
/s/ JEROME E. GROOPMAN, M.D.* Director September 20, 1995
-----------------------------------
Jerome E. Groopman, M.D.
/s/ JACK L. HECKEL* Director September 20, 1995
-----------------------------------
Jack L. Heckel
/s/ DAVID S. TAPPAN, JR.* Director September 20, 1995
-----------------------------------
David S. Tappan, Jr.
/s/ WILLIAM B. WALSH, M.D.* Director September 20, 1995
-----------------------------------
William B. Walsh, M.D.
/s/ DR. GAIL R. WILENSKY* Director September 20, 1995
-----------------------------------
Dr. Gail R. Wilensky
* By MICHAEL V. SWANSON
-----------------------------
Michael V. Swanson,
Attorney-in-Fact
</TABLE>
II-5
<PAGE> 19
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<S> <C>
*4.1 Investment Agreement between Registrant and S.P. Investors
International S.A. dated June 23, 1995. Incorporated by reference as
exhibit 4.1 to the Current Report on Form 8-K dated June 26, 1995.
*4.2 Investment Agreement between Registrant and Steinhardt Overseas Fund
Ltd. dated June 23, 1995. Incorporated by reference as exhibit 4.2 to
the Current Report on Form 8-K dated June 26, 1995.
*4.3 Investment Agreement between Registrant and Gershon Partners L.P. dated
June 23, 1995. Incorporated by reference as exhibit 4.3 to the Current
Report on Form 8-K dated June 26, 1995.
*4.4 Form of Warrant Agreement between Registrant and each of Linda S.
Cappello, Gerard K. Cappello, Lawrence K. Fleischman and The Kriegsman
Group. Incorporated by reference as exhibit 4.4 to the Current Report
on Form 8-K dated July 7, 1995.
*4.5 Investment Agreement between Registrant and Kyneton Investments Ltd.
dated July 5, 1995. Incorporated by reference as exhibit 4.1 to the
Current Report on Form 8-K dated July 7, 1995.
*4.6 Investment Agreement between Registrant and Arbco Associates, L.P. and
Offense Group Associates, L.P. dated July 11, 1995. Incorporated by
reference as exhibit 4.2 to the Current Report on Form 8-K dated
July 7, 1995.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
*24.1 Power of Attorney.
</TABLE>
-----------------------
* Previously filed and/or incorporated by reference.
<PAGE> 1
Exhibit 23.1
Consent of Ernst & Young LLP, Independent Auditors
We consent to the reference to our firm under the caption "Experts" in Amendment
No. 1 to the Registration Statement (Form S-3) and related Prospectus of
Advanced Tissue Sciences, Inc. for the registration of shares of its common
stock and to the incorporation by reference therein of our report dated February
6, 1995, except for Note 13 as to which the date is March 13, 1995, with respect
to the consolidated financial statements of Advanced Tissue Sciences, Inc.
included in its Annual Report (Form 10-K) for the year ended December 31, 1994,
filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
San Diego, California
September 18, 1995
