=============
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
LIFECELL CORPORATION
(Exact name of Registrant as specified in its charter)
DELAWARE 76-0172936
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
J. DONALD PAYNE
VICE PRESIDENT AND CHIEF
FINANCIAL OFFICER
LIFECELL CORPORATION
3606 RESEARCH FOREST DRIVE 3606 RESEARCH FOREST DRIVE
THE WOODLANDS, TEXAS 773801 THE WOODLANDS, TEXAS 77381
281/367-5368 281/367-5368
(Address, including zip code, and (Name, address, including zip code,
telephone number, including area code, and telephone number, including
of Registrant's principal executive area code, of agent for service)
offices)
COPY TO:
ROBERT E. WILSON
FULBRIGHT & JAWORSKI L.L.P.
1301 MCKINNEY, SUITE 5100
HOUSTON, TEXAS 77010-3095
(713) 651-5151
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
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
<S> <C> <C> <C> <C>
TITLE OF EACH CLASS AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
OF SECURITIES TO BE REGISTERED OFFERING PRICE AGGREGATE REGISTRATION
REGISTERED PER SHARE(1) OFFERING PRICE(1) REE
Common Stock (2) 330,000 $3.97 $1,310,100 $397
- -------------------- ------------- ------------------ ----------------- -------------
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee in
accordance with rule 457 of the Securities Act of 1933, as amended on the Basis
of the average of the high and low prices of the Common Stock as reported by the
Nasdaq Market on August 31, 1998.
(2) Consist of shares issued or to be issued on exercise of certain options and
warrants to purchase shares of Common Stock.
---------------
Pursuant to Rule 416, there also are being registered such additional
shares of Common Stock as may become issuable pursuant to anti-dilution
provisions of the Options and the Warrants underlying the Common Stock being
registered.
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, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT BECOME
================================================================================
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A)
================================================================================
MAY DETERMINE.
===============
1
<PAGE>
PROSPECTUS
330,000 SHARES
---------------
LIFECELL CORPORATION
COMMON STOCK
---------------
The common stock, par value $.001 per share (the "Common Stock"), of
LifeCell Corporation, a Delaware corporation ("LifeCell" or the "Company"), is
included in The Nasdaq National Market under the symbol "LIFC", and the average
of the high and low prices of the Common Stock as reported by The Nasdaq Stock
Market on August 31, 1998 was $3.97.
---------------
THE COMMON STOCK OFFERED BY THIS PROSPECTUS INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 5 FOR A DISCUSSION OF CERTAIN MATTERS THAT
SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK.
---------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
---------------
The 330,000 shares of Common Stock offered hereby are being offered for the
account of certain security holders of the Company named under the heading
"Selling Stockholders". The Company will receive no portion of the proceeds of
the sale of the shares of Common Stock offered hereby and will bear certain of
the expenses incident to their registration.
Sales of shares of Common Stock by the Selling Stockholders may be made from
time to time in the over-the-counter market, on any stock exchange on which the
Common Stock may be listed at the time of sale, in private transactions or
pursuant to underwriting agreements at prices related to prices then prevailing
involving payment of customary commissions or discounts.
August, 1998
ADDITIONAL INFORMATION
LifeCell has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (herein, together with all
amendments, exhibits and financial statement schedules thereto, the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the shares of Common Stock offered hereby.
This Prospectus, which constitutes a part of the Registration Statement, does
not contain all of the information set forth in the Registration Statement,
certain items of which are contained in exhibits to the Registration Statement
as permitted by the rules and regulations of the Commission. For further
information with respect to the Company and the Common Stock, reference is made
to the Registration Statement, which may be inspected without charge at the
public reference facilities maintained by the Commission at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and copies of which may
be obtained from the Commission at prescribed rates. Statements made in this
Prospectus concerning the contents of any document referred to herein are not
necessarily complete. With respect to each such document filed with the
Commission as an exhibit to the Registration Statement, reference is made to the
exhibit for a more complete description of the matter involved, and each such
statement shall be deemed qualified in its entirety by such reference.
2
<PAGE>
The Company furnishes holders of Common Stock annual reports containing
financial statements audited by its independent public accountants in accordance
with generally accepted accounting principles following the end of each fiscal
year, and with quarterly reports containing unaudited financial information for
the first three quarters of each fiscal year following the end of each such
fiscal quarter. 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 reports and other information with the Commission.
Such reports and other information may be inspected and copied at prescribed
rates at the public reference facilities maintained by the Commission at Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at
the regional offices of the Commission located at 7 World Trade Center, 13th
Floor, New York, New York 10048 and at Citicorp Center, 500 West Madison Street,
14th Floor, Chicago, Illinois 60661. The Commission also maintains a World Wide
Web site on the Internet at http://www.sec.gov. which contains reports, proxy
and information statements and other information regarding registrants that file
electronically with the Commission. Such reports, proxy and information
statements and other information concerning the Company can also be inspected
and copied at the offices of the National Association of Securities Dealers,
Inc., 1735 K Street, N.W., Washington, D.C. 20006.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents have been filed by the Company with the Commission
pursuant to the Exchange Act and are incorporated herein by reference:
(i) the Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1997, filed with the Commission on March 6, 1998, as amended by Amendment
No. 1 to Form 10-K on Form 10-K/A, filed with the Commission on May 1, 1998;
(ii) the Company's Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 1998, filed with the Commission on May 12, 1998;
(iii) the Company's Quarterly Report on Form 10-Q for the quarterly period ended
June 30, 1998, filed with the Commission on August 10, 1998; and
(v) the description of the Common Stock, contained in a registration statement
on Form 8-A filed with the Commission on February 27, 1992, including any
amendment or report filed with the Commission for the purpose of updating such
description.
All documents subsequently filed by the Company with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the
termination of the offering by this Prospectus shall be deemed to be
incorporated herein by reference and to be a part hereof from the date of the
filing of such documents. Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document that 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 including any
beneficial owner, to whom a copy of this Prospectus has been delivered, upon
written or oral request of such person, a copy of any or all of the documents
incorporated by reference herein (other than certain exhibits to such documents
not specifically incorporated by reference). Requests for such copies should be
directed to Chief Financial Officer, LifeCell Corporation, 3606 Research Forest
Drive, The Woodlands, Texas 77381, telephone number 281/367-5368.
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and the Financial statements and Notes thereto appearing in the
Company's filings with the Securities and Exchange Commission pursuant to the
Exchange Act. Prospective investors should consider carefully the information
set forth under the heading "Risk Factors". Special Note: Certain statements
set forth below constitute "forward looking statements" within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act.
See "Special Note Regarding Forward Looking Statements".
3
<PAGE>
THE COMPANY
LifeCell Corporation ("LifeCell" or "the Company") is a bioengineering
company engaged in the development and commercialization of tissue regeneration
and cell preservation products. The Company's patented tissue processing and
cell preservation technologies serve as platforms for a broad range of potential
products addressing significant clinical needs in multiple markets. The
Company's first commercial product is AlloDerm acellular dermal graft
("AlloDerm"), a tissue graft consisting of an extracellular tissue matrix that
retains the essential biochemical and structural composition of human dermis.
The Company believes that AlloDerm is the only commercial tissue transplant
product that promotes the regeneration of normal human soft tissue. AlloDerm
currently is being marketed in the United States and internationally for use in
certain reconstructive plastic, dental and burn surgery applications. The
Company estimates that AlloDerm has been transplanted in over 25,000 patients.
LifeCell also is developing several additional products, including Micronized
AlloDerm (a particulate form of AlloDerm), vascular grafts, nerve connective
tissue grafts, composite skin grafts, heart valves, and ThromboSol platelet
storage solution ("ThromboSol").
LifeCell's strategy is to be a leader in the research, development, sales
and marketing of tissue regeneration and cell preservation products. The
primary elements of the Company's business strategy include (i) expanding
penetration of AlloDerm into current target markets, (ii) expanding the use of
AlloDerm into new applications and (iii) leveraging the Company's technology
platforms to develop new products.
The Company's product development programs have been generated from the
following proprietary technologies: (i) a method for producing an extracellular
tissue matrix by removing antigenic cellular elements while stabilizing the
matrix against damage; (ii) a method for cell preservation that protects cells
during prolonged storage; and (iii) a method for freeze-drying biological cells
and tissues without the damaging effects of ice crystals. LifeCell's tissue
processing technology removes cells that would be the target of rejection upon
transplantation while preserving the essential biochemical and structural
composition of the extracellular tissue matrix. This process is designed to
create an acellular tissue that is not rejected by the body and functions as a
natural template or scaffold into which a patient's own cells will migrate
following transplantation. As a result, the tissue promotes normal soft tissue
regeneration. The Company believes its tissue processing technology offers a
number of other key benefits, including multiple product applications, safety,
prolonged shelf-life and high compatibility with other technologies.
AlloDerm is an extracellular matrix tissue graft processed from donated
human skin. Following transplant, the AlloDerm graft becomes repopulated with
the patient's own cells and is revascularized (i.e., blood supply is restored),
becoming engrafted into the patient. As a result of its ability to promote the
regeneration of normal human soft tissue, AlloDerm has multiple product
applications. AlloDerm currently is used in certain reconstructive plastic,
dental and burn surgery applications.
The Company currently is evaluating the use of AlloDerm in additional
applications and is developing new products based on its technology platforms.
LifeCell is conducting research on the use of AlloDerm in urological surgery,
neurosurgery, orthopedic surgery and general surgery. In addition, LifeCell is
developing Micronized AlloDerm for use in multiple potential applications,
including urological, dermatological and reconstructive surgery. If
successfully developed, Micronized AlloDerm would allow for delivery of the
product through the use of a syringe, rather than a surgical incision, thereby
creating additional market opportunities. LifeCell also is conducting research
on the use of its technologies in other product opportunities, including
vascular grafts, nerve connective tissue grafts, composite skin grafts, heart
valves, venous valves, ThromboSol and a solution for the prolonged storage of
transfusable red blood cells.
Since its inception, LifeCell has been financed through the public and
private sales of equity securities, through product sales, through a corporate
alliance with Medtronic and through the receipt of government grants and
contracts.
LifeCell began the sale of AlloDerm as a dermal replacement in the grafting
of third-degree burns in December 1993 and commenced commercial activities in
1994. LifeCell commenced the sale of AlloDerm for periodontal surgery in
September 1995 and for reconstructive plastic surgery in November 1995. To
date, proceeds from the sale of AlloDerm products have not been sufficient to
fund in full the Company's operating activities.
LifeCell was incorporated in January 1992 under Delaware law for the
purpose of merging with its predecessor, a Delaware corporation incorporated in
January 1986. The merger of the two corporations occurred in January 1992.
LifeCell's executive offices, production facilities and research facilities are
located at 3606 Research Forest Drive, The Woodlands, Texas 77381 and its
telephone number is 281/367-5368.
4
<PAGE>
THE OFFERING
Securities Offered 330,000 shares of Common Stock.
Use of Proceeds The Company will not receive any proceeds from
sale of the shares of Common Stock offered by
the Selling Stockholders hereunder.
Nasdaq The shares of Common Stock are included in the
Nasdaq National Market under the symbol "LIFC".
See "Description of Capital Stock -- Common Stock" for a more complete
description of such securities.
RISK FACTORS
AN INVESTMENT IN THE COMMON STOCK BEING OFFERED HEREBY INVOLVES A HIGH
DEGREE OF RISK. IN ADDITION TO THE OTHER INFORMATION IN THIS PROSPECTUS THE
FOLLOWING FACTORS SHOULD BE CONSIDERED CAREFULLY BY THE POTENTIAL INVESTORS IN
EVALUATING AN INVESTMENT IN THE SHARES OF COMMON STOCK OFFERED HEREBY. SPECIAL
NOTE: CERTAIN STATEMENTS SET FORTH BELOW CONSTITUTE "FORWARD-LOOKING
STATEMENTS" WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933, AND
SECTION 21E OF THE EXCHANGE ACT. SEE SPECIAL NOTE REGARDING FORWARD-LOOKING
STATEMENTS."
History of Operating Losses; Substantial Accumulated Earnings Deficit
Since its inception in 1986, the Company has generated only limited
revenues from product sales and has incurred substantial losses, including
losses of approximately $3.9 million, $4.1 million and $6.1 million for the
years ended December 31, 1995, 1996, and 1997, respectively, and $3.3 million
for the six months ended June 30, 1998. At June 30, 1998, the Company had an
accumulated deficit of approximately $40.1 million. The Company expects to
incur additional operating losses as well as negative cash flow from operations
during the remainder of 1998 and at least through most of 1999 as it continues
to use substantial resources to expand its marketing efforts with respect to
AlloDerm and to expand its product development programs. There can be no
assurance that the Company will ever become profitable. The Company's ability
to increase revenues and achieve profitability and positive cash flows from
operations will depend on increased market acceptance and sales of AlloDerm and
commercialization of products under development. There can be no assurance that
the Company will be successful in expanding AlloDerm sales or that the Company's
development efforts will result in commercially available products, that the
Company will obtain required regulatory clearances or approvals for any new
products in a timely manner, or at all, that the Company will be successful in
introducing any new products or that any new products will achieve a significant
level of market acceptance. The development and commercialization of new
products will require additional development, sales and marketing, manufacturing
and other expenditures. The required level and timing of such expenditures will
affect the Company's ability to achieve profitability and positive cash flows
from operations. There can be no assurance that the Company will ever achieve
higher levels of revenues or a profitable level of operations or that
profitability, if achieved, can be sustained on an ongoing basis. See "-No
Assurance of Additional Necessary Capital," and "-Uncertainty of Market
Acceptance."
No Assurance of Additional Necessary Capital
The Company intends to expend substantial funds for product research and
development, expansion of sales and marketing activities, expansion of
manufacturing capacity, product education efforts, and other working capital and
general corporate purposes. Although the Company believes that its existing
resources and anticipated cash flows from operations will be sufficient to
satisfy its capital needs through at least mid 2000, there can be no assurance
that the Company will not require additional financing before that time. The
Company's actual liquidity and capital requirements will depend upon numerous
factors, including the costs and progress of the Company's research and
development efforts; the number and types of product development programs
undertaken; the costs and timing of expansion of sales and marketing activities;
the costs and timing of expansion of manufacturing capacity; the amount of
revenues from sales of the Company's existing and new products; changes in,
termination of, and the success of existing and new distribution arrangements;
the cost of maintaining, enforcing and defending patents and other intellectual
property rights; competing technological and market developments; developments
related to regulatory and third-party reimbursement matters; and other factors.
In the event that additional financing is needed, the Company may seek to raise
additional funds through public or private financing, collaborative
relationships or other
5
arrangements. Any additional equity financing may be dilutive to stockholders,
and debt financing, if available, may involve significant restrictive covenants.
Collaborative arrangements, if necessary to raise additional funds, may require
the Company to relinquish its rights to certain of its technologies, products or
marketing territories. Failure to raise capital when needed could have a
material adverse effect on the Company's business, financial condition and
results of operations. There can be no assurance that such financing, if
required, will be available on terms satisfactory to the Company, if at all. If
adequate funds are not available, the Company expects it will be required to
delay, scale back or eliminate one or more of its product development programs.
Government Regulation-AlloDerm
In July 1997, the United States Food and Drug Administration (the "FDA")
published a final rule that became effective in January 1998 regulating "human
tissue." The rule clarifies and modifies an earlier interim rule and defines
human tissue as any tissue derived from a human body which is (i) intended for
administration to another human for the diagnosis, cure, mitigation, treatment
or prevention of any condition or disease and (ii) recovered, processed, stored
or distributed by methods not intended to change tissue function or
characteristics. The FDA definition excludes, among other things, tissue that
currently is regulated as a human drug, biological product or medical device and
excludes kidney, liver, heart, lung, pancreas or any other vascularized human
organ. Unlike certain drugs, biologicals and medical devices, human tissue is
not subject to premarket notification or approval by the FDA.
In September 1996, the Company received a letter from the FDA to the effect
that AlloDerm intended for use for replacement or repair of damaged or
inadequate integumental tissue is human tissue within the meaning of the interim
final rule. This FDA position reversed the preliminary agency determination
that AlloDerm should be regulated under the medical device authorities. The
provisions of the interim rule relied upon by the FDA in the September 1996
letter were unchanged in the final rule. Consequently, AlloDerm is not subject
to premarket notification or approval by the FDA and the Company may promote and
sell AlloDerm for use in the treatment of wounds, such as third-degree burns, in
periodontal surgical procedures, such as free-gingival grafting and guided
tissue regeneration, and in reconstructive plastic surgery procedures, such as
contracture release grafting and scar revision. The agency also informed the
Company that this decision applies only to AlloDerm when it is intended for use
in transplantation, and the regulatory status of the product when it is promoted
for other uses, such as a void filler for soft tissue, for cosmetic augmentation
or as a wound healing agent (the "Additional Indications"), would need to be
determined by the FDA on a case-by-case basis.
While the Company's marketing efforts had not previously focused on the
Additional Indications, as a follow-up to its September 1996 letter, the FDA
informed the Company that AlloDerm for Additional Indications would have to be
formally presented to the FDA to determine if, with these indications, AlloDerm
would continue to fall within the scope of the interim rule for human tissue and
thus not require premarket clearance as a medical device. The Company was asked
to indicate what changes in advertisement and promotion it would make for
AlloDerm. The Company responded to the FDA letter in October 1996, and informed
the agency that the Company believes that the distinctions drawn regarding the
definition of transplantation and human tissue and between integumental tissue
and all other tissue in the September 1996 letter were fairly novel and ones for
which the Company would require clarification from the FDA as it goes forward.
The Company believes that AlloDerm, when used for cosmetic augmentation and as a
void filler, may still qualify as human tissue. Similarly, the Company advised
the FDA that since almost every replacement or repair of damaged or inadequate
tissue involves a cosmetic aspect, the Company believes that many cosmetic uses
of AlloDerm are within the purview of human tissue. Nevertheless, the Company
informed the FDA that it intends to follow the agency's decision and, until this
matter is clarified on a case-by-case basis, will not promote AlloDerm for the
Additional Indications.
During late 1997, the Company notified the FDA that it believes that AlloDerm,
when promoted for use in dura mater replacement procedures, is human tissue
within the scope of the FDA's interim and final tissue regulations. The Company
requested a meeting to discuss this matter further. In December 1997, the FDA
notified the Company that it believes that AlloDerm, when promoted for such use,
should be classified as a medical device. The Company met with the FDA during
April 1998 to discuss this matter further. Subsequent to the meeting, the FDA
reiterated its position that AlloDerm, when promoted for such use, should be
classified as a medical device.
It is unclear whether the FDA would regulate AlloDerm under its medical device
authorities for these indications: (i) graft for guided bone regeneration; (ii)
oncological reconstruction; (iii) urological applications; (iv) certain
orthopedic surgeries; and (v) general surgeries. In addition, further
discussion with the FDA is required to determine the level of regulation that
may be applied with regard to the promotion and marketing of Micronized
AlloDerm.
6
<PAGE>
There can be no assurance that the FDA will not finally conclude that use of
AlloDerm for the Additional Indications or other indications should be regulated
as a medical device and require a 510(k) premarket notification or premarket
approval application for AlloDerm for such indications. If the FDA were to
conclude definitively that the Company is required to obtain agency clearance of
a 510(k) notification or approval of a premarket approval application for
AlloDerm for the Additional Indications or for other uses, the FDA may require
the Company to conduct laboratory testing and preclinical and clinical studies
of AlloDerm to support a marketing application. Testing, preparation of
necessary applications and processing of those applications by the FDA is
expensive and any required laboratory testing or preclinical or clinical studies
that the Company would be required to conduct could take several years to
complete. There can be no assurance that any required testing could be
completed successfully, or that if successfully completed, would provide
sufficient data and information to enable the FDA to determine, on a timely
basis, if at all, that when AlloDerm is used for the Additional Indications or
for other uses, it is substantially equivalent to a legally marketed predicate
device or is safe and effective for such uses and to permit the product to be
marketed for such uses. Failure of the Company to receive any required FDA
clearance or approval of AlloDerm for such uses on a timely basis would preclude
promotion of AlloDerm for such uses and could have a material adverse effect on
the Company's business, financial condition and results of operations.
In October 1997, the FDA inspected LifeCell's facilities. No Form 483 Notice of
Observations was left with the Company, although the agency did take copies of
numerous documents relating to the AlloDerm production process and promotional
material relating to AlloDerm. Notwithstanding the fact that no Form 483 was
received, there can be no assurance that the FDA will not raise regulatory
issues with respect to the documents taken for review.
In February 1997, the FDA issued a comprehensive "proposed approach" to the
regulation of cellular and tissue-based products, other than human tissue for
transplantation. The FDA proposal sets forth a tiered approach to cell and
tissue regulation that ranges from no regulatory requirements for cells or
tissue that are removed and transplanted into the same patient in a single
surgical procedure to full premarket approval requirements for biologics and
medical devices that raise potential health, safety or efficacy concerns. In
May 1998, FDA issued a proposed rule that, if finalized in its current form,
would require certain manufacturers of human cellular and tissue-based products
to register with the agency and list their products. A tissue product
manufacturer would be subject to the proposed rule if its product is (i)
minimally manipulated (i.e., tissue processing does not alter original
characteristics relevant to the tissue's utility), (ii) not promoted or labeled
for any use other than a homologous use (i.e., tissue has the same basic
function as in its native state and, for structural tissue, has the same
location); (iii) is not combined with or modified by the addition of any
noncellular or nontissue component that is a drug or device; and (iv) does not
have a system effect, except in cases of autologous use, transplantation into a
first-degree blood relative, or reproductive use. FDA has indicated that this
proposed rule is a first step toward instituting the comprehensive "proposed
approach" set forth in February 1997. Although the FDA has notified the Company
that AlloDerm is not now subject to premarket notification or approval, there
can be no assurance that the FDA will not impose additional or different
regulatory requirements on AlloDerm after the agency finalizes its approach to
the regulation of cellular and tissue-based products.
Human tissue is regulated by the FDA in a manner the agency has deemed necessary
to protect the public health from the transmission of various infectious
diseases, including human immunodeficiency virus ("HIV") infection, syphilis and
hepatitis infection, through transplantation of tissue from donors with or at
risk of these diseases. Under the FDA regulations, all facilities engaged in
the procurement, processing, storage or distribution of human tissue intended
for transplant are required to assure that certain infectious disease testing
and donor screening is performed and that records documenting such testing for
each tissue are available for inspection by the FDA. The regulations also
provide authority for the FDA to conduct inspections of human tissue facilities
and to detain, recall or destroy tissue for which appropriate documentation is
not available. Although the Company believes that it conducts its operations in
compliance in all material respects with such requirements, no assurances may be
given in such regard. Non-compliance with applicable requirements can result in
fines, injunctions, civil penalties, recall or seizure of products, total or
partial suspension of production, refusal of the government to authorize the
marketing of new products or to allow the Company to enter into supply contracts
and criminal prosecution.
The National Organ Transplant Act ("NOTA") and some state laws prohibits the
acquisition, receipt or transfer of certain human organs, including skin, for
"valuable consideration." NOTA and some state laws permits the payment of
reasonable expenses associated with the removal, transportation, processing,
preservation, quality control and storage of human tissue and skin. NOTA and
some state laws may be interpreted to limit the prices that LifeCell may charge
for processing and transporting its human tissue products. This could result in
limited revenues which could adversely affect LifeCell's business, financial
condition and results of operations.
Government Regulation-Proposed Products
Many if not all of LifeCell's products under development will require
regulatory approval or clearance prior to commercialization. Human therapeutic
products are subject to rigorous preclinical and clinical testing as a condition
of approval by the FDA and by similar regulatory authorities in foreign
countries. The lengthy process of obtaining these approvals and clearances and
the ongoing process of compliance with applicable federal statutes and
regulations will require the expenditure of substantial resources, and there can
be no assurance that FDA or foreign approvals will be obtained for any of the
Company's proposed products.
The regulatory status of micronized forms of AlloDerm in the United States is
uncertain. Although the Company believes that this form of AlloDerm should be
classified as human tissue intended for transplantation, there can be no
assurance that the FDA would agree. The Company has not discussed the
regulation of micronized AlloDerm with the FDA at this time. Should the FDA
require medical device premarket clearance or approval, extensive clinical
data could be required to support the filing and there can be no assurance
that clearance or approval could be obtained on a timely basis, if
at all.
7
<PAGE>
LifeCell believes that its allograft tissue products in development, including
vascular grafts and nerve connective tissue, should be classified as "human
tissue" under the FDA's regulations. However, further discussion with the FDA
is required to determine the level of regulation the FDA will adopt with regard
to the promotion and marketing of these products. There can be no assurance
that the FDA will not require the submission of premarket approval application
supported by extensive clinical data for these products.
LifeCell's proposed Xenograft (animal) heart valve and other Xenograft tissue
transplantation products will be subject to regulation as medical devices. The
Company's proposed blood cell preservation products will be subject to
regulation as biologics. Such products require FDA premarket clearance or
approval prior to commercialization in the United States. To obtain FDA
approval for these products, the Company must submit proof of their safety and
efficacy. Testing, preparation of necessary applications and processing of
those applications by the FDA is expensive and time consuming. There can be no
assurance that the FDA will act favorably or quickly in making such reviews, and
significant difficulties or costs may be encountered by the Company in its
efforts to obtain FDA clearances that could delay or preclude the Company from
marketing any product it may develop. The FDA may also place conditions on
clearances that could restrict commercial applications of such products.
Product marketing approvals or clearances may be withdrawn if compliance with
regulatory standards is not maintained or if problems occur following initial
marketing. Delays imposed by the governmental clearance process may materially
reduce the period during which the Company has the exclusive right to
commercialize patented products.
Products marketed by LifeCell pursuant to FDA or foreign approval will be
subject to pervasive and continuing regulation. In the United States, devices
and biologics must be manufactured in registered establishments and must be
produced in accordance with the FDA's "Quality System" regulation for medical
devices or "Good Manufacturing Practices" ("GMP") regulations for biologics.
Manufacturing facilities and processes are subject to periodic FDA inspection.
Labeling and promotional activities are also subject to scrutiny by the FDA and,
in certain instances, by the Federal Trade Commission. The export of devices
and biologics is also subject to regulation and may require FDA approval. From
time to time, the FDA may modify such requirements, imposing additional or
different requirements. Failure to comply with any applicable FDA requirements
could result in civil and criminal enforcement actions and other penalties. In
addition, there can be no assurance that the various states in which LifeCell's
products are sold will not impose additional regulatory requirements or
marketing impediments.
The National Organ Transplant Act and some state laws prohibits the acquisition,
receipt or transfer of certain human organs, including heart valves and vascular
grafts, for "valuable consideration," which could affect the commercialization
of certain of the Company's proposed human tissue products. See "-Government
Regulation-AlloDerm."
Foreign Regulatory Status of AlloDerm
The regulation of AlloDerm outside the United States varies by country.
Certain countries regulate AlloDerm as a pharmaceutical product, requiring
extensive filings and regulatory approvals to market the product. Certain
countries classify AlloDerm as a transplant tissue but may restrict its import
or sale. Other countries have no applicable regulations regarding the import or
sale of products similar to AlloDerm, creating uncertainty regarding the import
or sale of the product. There can be no assurance that the various foreign
countries in which LifeCell's products are sold will not impose additional
regulatory requirements.
AlloDerm currently is being marketed in certain foreign countries, and LifeCell
is pursuing clearance to market AlloDerm in additional countries. There can be
no assurance that the uncertainty of regulations in each country will not delay
or impede the marketing of AlloDerm or impede the ability of LifeCell to
negotiate distribution arrangements on favorable terms. Certain foreign
countries have laws similar to the United States' National Organ Transplant Act.
These laws may restrict the amount that the Company can charge for AlloDerm and
may restrict the importation or distribution of AlloDerm to licensed
not-for-profit organizations.
Uncertainty of Market Acceptance
Much of the Company's ability to increase revenues and to achieve
profitability and positive cash flow will depend on expanding the use and market
penetration of its AlloDerm product and the successful introduction of its
products in development. Products based on the Company's technologies represent
new methods of treatment. Physicians will not use the Company's products unless
they determine that the clinical benefits to the patient are greater than those
available from competing products or therapies. Even if the advantage of the
Company's products is established as clinically significant, physicians may not
elect to use such products for any number of reasons. As such, there can be no
assurance that any of the Company's AlloDerm products or products under
development will gain any significant degree of market acceptance among
physicians, health care payors and patients. Broad market acceptance of the
Company's products may require the training of numerous physicians and
clinicians, as well as conducting or sponsoring clinical studies to demonstrate
the benefits of such
8
products. The amount of time required to complete such training and studies
could result in a delay or dampening of such market acceptance. Moreover,
health care payors' approval of reimbursement for the Company's products in
development will be an important factor in establishing market acceptance. See
"-Limited Third-Party Reimbursement."
Delayed or Unsuccessful Product Development
The Company's growth and profitability will depend, in part, upon its
ability to complete development of and successfully introduce new products. The
Company may be required to undertake time-consuming and costly development
activities and seek regulatory clearance or approval for new products. Although
the Company has conducted animal studies on many of its products under
development which indicate that the product may be feasible for a particular
application, there can be no assurance that the results obtained from expanded
studies will be consistent with earlier trial results or be sufficient for the
Company to obtain any required regulatory approvals or clearances. There can be
no assurance that the Company will not experience difficulties that could delay
or prevent the successful development, introduction and marketing of new
products, that regulatory clearance or approval of these or any new products
will be granted on a timely basis, if ever, or that the new products will
adequately meet the requirements of the applicable market or achieve market
acceptance. The completion of the development of any of the Company's products
under development remains subject to all the risks associated with the
commercialization of new products based on innovative technologies, including
unanticipated technical or other problems, manufacturing difficulties and the
possible insufficiency of the funds allocated for the completion of such
development, which could result in a change in the design, delay in the
development or the abandonment of such products. Consequently, there can be no
assurance that any of the Company's products under development will be
successfully developed or manufactured or, if developed and manufactured, that
such products will meet price or performance objectives, be developed on a
timely basis or prove to be as effective as competing products. The inability
to complete successfully the development of a product or application, or a
determination by the Company, for financial, technical or other reasons, not to
complete development of any product or application, particularly in instances in
which the Company has made significant capital expenditures, could have a
material adverse effect on the Company's business, financial condition and
results of operations.
Dependence on Key Management and Personnel
The success of LifeCell will be dependent largely on the efforts of its
executive officers. The loss of the services of one or more of these officers
could have a material adverse effect on LifeCell's business, financial condition
and results of operations. LifeCell has obtained "keyman" life insurance on Mr.
Paul M. Frison, Chairman of the Board, President and Chief Executive Officer of
the Company, and Dr. Stephen A. Livesey, M.D., Ph.D., Executive Vice President
and Chief Science Officer and a director of the Company, of $1.0 million and
$3.0 million, respectively. Dr. Livesey, a citizen of Australia, has applied
for permanent residence status in the United States. There can be no assurance
that he will be able to obtain such status. Further, the success of LifeCell is
also dependent upon its ability to hire and retain qualified operating,
marketing and technical personnel. The competition for qualified personnel in
the biomedical industry is intense and, accordingly, there can be no assurance
that LifeCell will be able to hire or retain such personnel. The Company does
not have employment agreements with any of its employees.
Dependence on Corporate Collaborators
The Company expects to rely in the future on corporate collaborative
partners for the development and commercialization of certain products and to
conduct certain clinical trials, obtain regulatory approvals and manufacture and
market any resulting products. In addition, the Company may rely in the future
on corporate collaborative partners for the development and commercialization of
certain applications of AlloDerm. Although the Company believes that any such
collaborative partners would have an economic motivation to commercialize any
products that might result from such arrangements, the amount and timing of
resources devoted to these activities by such parties could depend on the
achievement of technical and research goals by the Company and generally would
be controlled by such partners. Moreover, collaborative arrangements generally
provide that they may be terminated by the collaborator prior to their
expiration under circumstances that also may be outside the control of the
Company. Any eventual sale of products may depend further on the successful
completion of arrangements with other partners, licensees or distributors in
each territory. There can be no assurance that the Company will be successful
in establishing any such collaborative arrangements on acceptable terms, if at
all, or that any such future collaborator would be successful in commercializing
any resulting products. In 1994, LifeCell entered into a license and
development agreement with Medtronic, Inc. ("Medtronic") to develop jointly the
Company's heart valve products. Pursuant to the agreement, Medtronic paid
LifeCell an initial $1.5 million license fee, funds to a limited extent certain
costs of research and development under a mutually agreed upon budget, including
clinical trials, if any, and will pay royalties of up to an aggregate of $25.0
million on sales of products covered by the agreement. There can be no
assurance that Medtronic will perform its obligations under the agreement, will
provide material funding for the Company's heart valve development program, will
not terminate the agreement, that Medtronic or LifeCell will successfully
develop or market any products under the agreement or that LifeCell will ever
receive royalties under the agreement. Furthermore, there can be no assurance
that Medtronic or future collaborators will not pursue existing or alternative
technologies in preference to potential products being developed in
collaboration with the Company.
9
Dependence on Distributor Sales
Sales to distributors constitute a significant portion of the Company's
revenues. The Company has only recently entered into certain of its current
distribution arrangements. The Company may be required to enter into additional
distribution arrangements to achieve broad distribution of AlloDerm or any
future products. There can be no assurance that the Company will be able to
maintain its current distributor arrangements or, in the event of termination of
any of these arrangements, that a new distributor will be found, or that the
Company will be able to enter into and maintain arrangements with additional
distributors on acceptable terms, or on a timely basis, if ever. The Company's
distributors generally purchase and maintain inventories of AlloDerm in
anticipation of future sales to dentists, surgeons and hospitals. The
termination of the distributor's relationship with the Company may have an
adverse effect on LifeCell's sales until such inventories are sold. The Company
may elect or be required to repurchase inventory held by any terminated
distributor, and such repurchase may adversely affect the results of operations
or financial condition of the Company. In addition, there can be no assurance
that the Company's distributors will devote the resources necessary to provide
effective sales and marketing support to the Company or market the Company's
products at prices that can achieve market acceptance. The Company's
distributors may give higher priority to the products of other medical suppliers
or their own products, thus reducing their efforts to sell the Company's
products. If any of the Company's distributors becomes unwilling or unable to
promote, market and sell the Company's products, the Company's business,
financial condition and results of operations could be materially adversely
affected. The Company has engaged Lifecore Biomedical, Inc. as the exclusive
distributor for AlloDerm for dental applications in the United States, and other
distributors also may be granted exclusive distribution rights. To the extent
any exclusive distributor fails adequately to promote, market and sell the
Company's products, the Company may not be able to secure a replacement
distributor until after the term of the distribution contract is complete or
until such contract can otherwise be terminated.
Dependence on Certain Sources of Materials
The Company's business will be dependent on the availability of donated human
skin, cardiovascular tissue and other tissues. A finite supply of donated
tissue is available. Although the Company has established what it believes to
be adequate sources of donated human skin to satisfy the expected demand for
AlloDerm during 1998, LifeCell has not yet developed a supply of other tissues
and there can be no assurance that the availability of donated human skin and
other tissues will be sufficient to meet LifeCell's demand for such materials.
Any significant interruption in supply of such tissue would likely have a
material adverse effect on the Company's business, financial condition and
results of operations.
The Company acquires donated human skin from various non-profit
organizations which procure skin and other donated human tissue. The
procurement of skin generally constitutes a small portion of the operating funds
for such non-profit organizations. The development of products that replace the
need for donated tissue, such as the development of synthetic bone substitutes
to replace allograft bone procured by the organizations, could threaten the
existence of the non-profit organizations and, therefore, adversely affect the
supply of donated human skin to LifeCell or increase the required payments from
LifeCell.
The Company has performed limited activities to develop products using porcine
dermis and other animal tissues as a substitute for donated human skin. If
successfully developed, animal tissue could replace the need for human tissue as
a raw material. There can be no assurance that such animal tissue products can
be successfully developed, that such development and required regulatory
approvals could result in timely replacement of human tissue used by LifeCell in
the event of a reduced supply of human tissue or that the cost of such animal
tissue would not materially adversely affect the business, financial condition
and results of operations of the Company.
Donors of organs and tissues, including donated human skin, have various
motivations. Although LifeCell does not promote the use of AlloDerm for
cosmetic applications, AlloDerm has been used by surgeons in a variety of
applications that may be considered "cosmetic." Knowledge of such use by
potential donors could impact their willingness to donate skin for such uses.
See "-Product Liability and Insurance."
Technological Change and Competition
The biomedical field is undergoing rapid and significant technological
change. LifeCell's success depends upon its ability to develop and
commercialize efficient and effective products based on its technology. There
are many companies and academic institutions that are capable of developing
products based on similar technology, and that have developed and are capable of
developing products based on other technologies, which are or may be competitive
with LifeCell's products. Many of these companies and academic institutions are
well-established, have substantially greater financial and other resources,
research and development capabilities and more experience in conducting clinical
trials, obtaining regulatory approvals, manufacturing and marketing than
LifeCell. These companies and academic institutions may succeed in developing
competing products that are more effective than LifeCell's products, or that
receive government approvals more quickly than LifeCell's products, which may
render the Company's products or technology uncompetitive, uneconomical or
obsolete.
10
Limited Third-Party Reimbursement
Generally, hospitals, physicians and other health care providers purchase
products, such as the products being sold or developed by LifeCell, for use in
providing care to their patients. These parties typically rely on third-party
payors, including Medicare, Medicaid, private health insurance and managed care
plans, to reimburse all or part of the costs of acquiring those products and
costs associated with the medical procedures performed with those products.
Cost control measures adopted by third-party payors in recent years have had and
may continue to have a significant effect on the purchasing practices of many
health care providers, generally causing them to be more selective in the
purchase of medical products. Significant uncertainty exists as to the
reimbursement status of newly approved health care products. The Company
believes that certain third-party payors provide reimbursement for medical
procedures at a specified rate without additional reimbursement for products,
such as those being sold or developed by LifeCell, used in such procedures.
There can be no assurance that adequate third-party payor reimbursement will be
available for the Company to maintain price levels sufficient for realization of
an appropriate return on its investment in developing new products. In
addition, government and other third-party payors continue to refuse, in some
cases, to provide any coverage for uses of approved products for indications for
which the FDA has not granted marketing approval. Many uses of AlloDerm have
not been granted such marketing approval and there can be no assurance that any
such uses will be approved. Further, certain of the Company's products are used
in medical procedures that typically are not covered by third-party payors, such
as "cosmetic" procedures, or for which patients sometimes do not obtain
coverage, such as dental procedures. These and future changes in third-party
payor reimbursement practices regarding the procedures performed with LifeCell's
products could adversely affect the market acceptance of LifeCell's products.
Dependence on Patents and Proprietary Rights
LifeCell's ability to compete effectively with other companies is
materially dependent upon the proprietary nature of its technologies. LifeCell
relies primarily on patents and trade secrets to protect its technologies.
LifeCell currently licenses the exclusive right to nine United States patents
and related foreign patents and non-exclusive rights to 14 patents. In
addition, LifeCell has been issued three United States utility patents, one
United States design patent and has seven pending United States patent
applications. There can be no assurance that LifeCell will obtain any
additional patents or other protection, that the patents currently applied for
will be granted, that, if the patents currently applied for are granted, the
claims allowed will be sufficient to protect LifeCell's technology, or that
existing patents or proprietary rights owned by or licensed to LifeCell will
provide significant commercial benefits. Further, there can be no assurance
that any patents or proprietary rights owned by or licensed to LifeCell will not
be challenged, invalidated, circumvented, or rendered unenforceable based on,
among other things, subsequently discovered prior art, lack of entitlement to
the priority of an earlier, related application or failure to comply with the
written description, best mode, enablement or other applicable requirements.
The invalidation, circumvention or unenforceability of key patents or
proprietary rights owned by or licensed to LifeCell could have a material
adverse effect on LifeCell and on its business, financial condition and results
of operations.
LifeCell's success will depend in part on its ability to maintain and obtain
patent protection for its technology both in the United States and other
countries. Other companies and research and academic institutions may have
developed technologies, filed patent applications or received patents on various
technologies that may be related to LifeCell's business. Some of these patent
applications, patents or technologies may conflict with LifeCell's patent
applications, patents or technologies. Any such conflict could invalidate or
limit the scope of LifeCell's patents or could result in denial of LifeCell's
patent applications.
In general, the patent position of biotechnology and medical product firms is
highly uncertain and involves complex legal, scientific and factual questions.
There can be no assurance that any other patents will be granted with respect to
the patent applications filed by the Company. Furthermore, there can be no
assurance that any patents issued or licensed to the Company will provide
commercial benefit to the Company or will not be infringed, invalidated or
circumvented by others. The United States Patent and Trademark Office currently
has a significant backlog of patent applications, and the approval or rejection
of patents may take several years. Prior to actual issuance, the contents of
United States patent applications are generally not made public. Once issued,
such a patent would constitute prior art from its filing date, which might
predate the date of a patent application on which the Company relies.
Conceivably, the issuance of such a patent, or the discovery of "prior art" of
which the Company is currently unaware, could invalidate a patent of the Company
or its licensor or prevent commercialization of a product disclosed therein.
The Company generally does not conduct an extensive review of issued patents
prior to engaging in research or development activities. Accordingly, the
Company may be required to obtain a license from others to commercialize any of
its products under development. There can be no assurance that any such license
that may be required could be obtained on favorable terms or at all.
11
<PAGE>
In addition, if patents that cover LifeCell's existing activities are issued to
other companies, there can be no assurance that LifeCell would be able to obtain
licenses to such patents at a reasonable cost, if at all, or be able to develop
or obtain alternative technology. Any of the foregoing matters could have a
material adverse effect on LifeCell and on its business prospects. In addition,
the Company may be required to obtain a license under one or more patents prior
to commercializing any heart valve or vascular product, if developed. There can
be no assurance that such a license will be available, or if available, that a
license will be granted on terms which are commercially acceptable to the
Company.
There can be no assurance that LifeCell will not be required to resort to
litigation to protect its patented technologies or other proprietary rights or
that the Company will not be the subject of patent litigation to defend its
existing or proposed products or processes against claims of patent infringement
or other intellectual property claims. Any of such litigation could result in
substantial costs and diversion of resources and could have a material adverse
effect on the Company's business, financial condition and results of operations.
LifeCell also has applied for patent protection in several foreign countries.
Because of the differences in patent laws and laws concerning proprietary
rights, the extent of protection provided by United States patents or
proprietary rights owned by or licensed to LifeCell may differ from that of
their foreign counterparts.
LifeCell may decide for business reasons to retain certain knowledge that it
considers proprietary as confidential and elect to protect such information as a
trade secret, as business confidential information or as know-how. In that
event, LifeCell must rely upon trade secrets, know-how and continuing
technological innovation to maintain its competitive position. There can be no
assurance that others will not independently develop substantially equivalent
proprietary information or otherwise gain access to or disclose such
information. The independent development or disclosure of LifeCell's trade
secrets could have a material adverse effect on LifeCell and on its business
prospects.
Product Liability and Insurance
The Company's business exposes it to potential product liability risks
which are inherent in the testing, manufacturing and marketing of medical
products. Although the Company has product liability insurance coverage with an
aggregate limit of $8.0 million and a per occurrence limit of $6.0 million,
there can be no assurance that such insurance will provide adequate coverage
against potential liabilities, that adequate product liability insurance will
continue to be available in the future or that it can be maintained on
acceptable terms. 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 results of operations of
the Company. The Company uses donated human skin as the raw material for
AlloDerm. The non-profit organizations that supply such skin are required to
follow FDA regulations and guidelines published by the American Association of
Tissue Banks to screen donors for potential disease transmission. Such
procedures include donor testing for certain viruses, including HIV. The
Company's manufacturing process also has been demonstrated to inactivate
concentrated suspensions of HIV in tissue. While the Company believes such
procedures are adequate to reduce the threat of disease transmission, there can
be no assurance that its AlloDerm product will not be associated with
transmission of disease or that a patient otherwise infected with disease would
not erroneously assert a claim that the use of AlloDerm resulted in the disease
transmission. Any such transmission or alleged transmission could have a
material adverse effect on the Company's ability to manufacture or market its
products or could otherwise have a material adverse effect on the Company's
business, financial condition or results of operations. See "-Dependence on
Certain Sources of Materials."
Limitation on the Use of Net Operating Losses and Research and Development
Tax Credits
As of December 31, 1997, LifeCell had accumulated net operating loss
("NOL") carryforwards for federal income tax purposes of approximately $32.1
million and research and development tax credits of approximately $395,000 since
its inception, and may continue to incur NOL carryforwards. United States tax
laws provide for an annual limitation on the use of NOL carryforwards following
certain ownership changes and also limit the time during which NOL and tax
credit carryforwards may be applied against future taxable income and tax
liabilities. The sale of Common Stock in a public offering completed in
December 1997 resulted in an ownership change for federal income tax purposes.
The Company estimates that the amount of its NOL carryforwards and the credits
available to offset taxable income subsequent to the offering will be
approximately $2.6 million per year on a cumulative basis. Accordingly, if
LifeCell generates taxable income in any year in excess of the then cumulative
limitation, the Company may be required to pay federal income taxes even though
it has unexpired NOL carryforwards.
12
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Disposal of Hazardous Materials
LifeCell's research and development and processing techniques generate
waste that is classified as hazardous by the United States Environmental
Protection Agency and the Texas Natural Resources Commission. LifeCell
segregates such waste and disposes of it through a licensed hazardous waste
transporter. Although LifeCell believes it is currently in compliance in all
material respects with applicable environmental regulations, its failure to
comply fully with any such regulations could result in the imposition of
penalties, fines or sanctions that could have a material adverse effect on
LifeCell's business, financial condition and results of operations.
The market price of the shares of Common Stock, like that of the common stock of
many other medical products and high technology companies, has in the past been,
and is likely in the future to continue to be, highly volatile. Factors such as
fluctuations in the Company's operating results, announcements of technological
innovations or new commercial products by the Company or competitors,
collaborative relationships, government regulation, developments in or disputes
regarding patent or other proprietary rights, economic and other external
factors and general market conditions may have a significant effect on the
market price of the Common Stock. Moreover, the stock market has from time to
time experienced extreme price and volume fluctuations which have particularly
affected the market prices for medical products and high technology companies
and which have often been unrelated to the operating performance of such
companies. These broad market fluctuations, as well as general economic,
political and market conditions, may adversely affect the market price of Common
Stock.
Possible Anti-Takeover Effects
Certain provisions of LifeCell's Restated Certificate of Incorporation, as
amended (the "Restated Certificate of Incorporation") and Amended and Restated
By-laws (the "By-laws") and Section 203 of the Delaware General Corporation Law
may have the effect of deterring hostile takeovers or delaying or preventing
changes in control or management of the Company, including transactions in which
stockholders might otherwise receive a premium for their shares over the current
market prices. In addition, these provisions may limit the ability of
stockholders to approve transactions that they may deem to be in their best
interests. For example, provisions contained in the Restated Certificate of
Incorporation and By-laws include authorized blank check preferred stock, the
denial of cumulative voting, limitation of the persons who may call a special
meeting of the stockholders and an advance notice requirement for election to
the Board of Directors.
Rights of Holders of Series B Preferred Stock
As of July 31, 1998, there were 120,908 shares of the Company's Series B
Preferred Stock, par value $.001 per share, (the "Series B Preferred Stock")
outstanding. Such shares are convertible at any time at the option of the
holders thereof and automatically under certain circumstances into approximately
3,900,258 shares of Common Stock. On all matters submitted to a vote of the
stockholders of the Company, each share of Series B Preferred Stock entitles the
holder thereof to one vote for each share of Common Stock into which such share
of Series B Preferred Stock is then convertible. The holders of the shares of
Series B Preferred Stock have the right to elect up to two directors of the
Company. In the event of any liquidation, dissolution or winding up of the
Company, whether voluntary or involuntary, the holders of shares of Series B
Preferred Stock will be entitled to receive out of the assets of the Company
available for distribution to stockholders, before any distribution of assets is
made to holders of Common Stock, an amount equal to $100.00 per share of Series
B Preferred Stock. After payment of the full amount of any liquidating
distribution to which they are entitled, the holders of shares of Series B
Preferred Stock will be entitled to share ratably (treating all then issued and
outstanding shares of Series B Preferred Stock as if such shares had been
converted into Common Stock) in any further distribution of assets by the
Company to the holders of Common Stock. Holders of the Series B Preferred Stock
are entitled to receive dividends through September 30, 2001. The Company may
at its option pay such dividends in additional shares of Series B Preferred
Stock.
Shares Available for Future Sale
As of the date of this Prospectus the Company has 11,242,244 shares of
Common Stock outstanding. Substantially all of these shares are available for
immediate sale in the public market pursuant to effective registration
statements or exemptions from registration under the Securities Act. As of July
31, 1998, an additional approximately 3,900,258 shares of Common Stock are
issuable upon conversion of the Series B Preferred Stock (the "Series B
Conversion Shares"). The resale of the Series B Conversion Shares is covered by
an effective registration statement under the Securities Act and the Series B
Conversion Shares are, therefore, available for immediate resale in the public
market upon conversion. There are also outstanding stock options and warrants to
purchase an aggregate of 4,979,858 shares of Common Stock, including the 330,000
shares of Common Stock being sold pursuant to this Prospectus, at various
exercise prices per share. Substantially all of such shares are available for
immediate sale in the public market upon exercise pursuant to effective
registration statements under the Securities Act. In addition, in the event that
Medtronic terminates funding of the Company's heart valve program, Medtronic may
convert its $1.5 million license fee into newly issued shares of Common Stock at
the then-current market price (333,333 shares, assuming a market price of $4.50
per share), subject to certain limitations and conditions. No prediction can be
made as to the effect, if any, that sales of shares of Common Stock or the
availability of such shares for sale will have on the market prices prevailing
from time to time.
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The possibility that substantial amounts of Common Stock may be sold in the
public market may adversely affect prevailing market prices for the Common
Stock, and could impair the Company's ability to raise capital through the sale
of its equity securities.
Limited Public Market for Common Stock; Possible Volatility of Securities
Prices
Historically, the Common Stock has experienced low trading volumes. The
market price of the Common Stock also has been highly volatile and it may
continue to be highly volatile as has been the case with the securities of other
public biotechnology companies. Factors such as announcements by LifeCell or its
competitors concerning technological innovations, new commercial products or
procedures, proposed government regulations and developments or disputes
relating to patents or proprietary rights may substantially affect the market
price of LifeCell's securities. Changes in the market price of the Common Stock
may bear no relation to LifeCell's actual operational or financial results.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Prospectus includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act. All
statements other than statements of historical facts included in or incorporated
by reference into this Prospectus, including, without limitation, statements
regarding the Company's financial position, business strategy, products,
products under development, markets, budgets and plans and objectives of
management for future operations, are forward-looking statements. Although the
Company believes that the expectations reflected in such forward-looking
statements are reasonable, it can give no assurance that such expectations will
prove to have been correct. Important factors that could cause actual results to
differ materially from the Company's expectations ("Cautionary Statements") are
disclosed under "Risk Factors" and elsewhere in this Prospectus. All subsequent
written and oral forward-looking statements attributable to the Company, or
persons acting on its behalf, are expressly qualified in their entirety by the
Cautionary Statements.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the shares of
Common Stock offered by the Selling Stockholders hereunder.
SELLING STOCKHOLDERS
Of the 330,000 shares of the Company's Common Stock offered hereby, 220,000
shares are issuable upon exercise of stock options granted to certain former
directors of the Company in connection with their agreement to resign from such
office upon the closing of the Company's sale of Series B Preferred Stock in
1996 and in exchange for options previously granted under the Company's Second
Amended and Restated 1993 Non-Employee Director Stock Option Plan. The
remaining 110,000 shares of Common Stock include the shares of Common stock
issuable upon the exercise of various warrants granted by the Company to certain
consultants in exchange for investment banking and other services.
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The following table sets forth the names of the Selling Stockholders, together
with the number of shares of Common Stock of the Company that may be offered and
sold hereby.
<TABLE>
BENEFICIAL BENEFICIAL
OWNERSHIP(1) OWNERSHIP (1)
PRIOR TO SUBSEQUENT TO
OFFERING OFFERING
--------- --------
<S> <C> <C> <C> <C> <C>
NUMBER
OF
SHARES
TO BE
NAME SHARES PERCENT SOLD SHARES PERCENT
- ---------------------------------------- ------- ------- ------ ------ -------
P. William Curreri (2) 110,080 * 70,000 40,080 *
Christopher Kraft, Jr. (3) 106,609 * 75,000 31,609 *
Martin Sutter (4) 88,363 * 75,000 13,363 *
Consulting for Strategic Growth, LTD (5) 50,000 * 50,000 -- *
The Rennaissance Group, Limited (6) 50,000 * 50,000 -- *
Donald P. Callan, D.D.S. (7) 13,500 * 10,000 3,500 *
- --------------
*Less than 1%.
</TABLE>
(1) Each beneficial owner's percentage ownership is determined by assuming that
options and warrants that are held by such person (but not those held by any
other person) and that are exercisable or convertible within 60 days of August
1, 1998 have been exercised or converted. Unless otherwise noted, the Company
believes that all persons named in the above table have sole voting and
investment power with respect to all shares of Common Stock beneficially owned
by them.
(2) Includes 70,000 shares of Common Stock issuable upon exercise of options,
13,709 shares of Common Stock issuable upon conversion of Series B Preferred
Stock, and 9,032 shares of Common Stock issuable upon the exercise of a warrant.
From October 1992 to November, 1996 P. William Curreri, M.D. was a director of
the Company.
(3) Includes 75,000 shares of Common Stock issuable upon exercise of options,
8,516 shares issuable upon the conversion of Series B Preferred Stock held by a
Keogh Profit Sharing Plan of which Mr. Kraft is a beneficiary, and 5,645 shares
issuable upon the exercise of a warrant held by a Keogh profit sharing plan of
which Mr. Kraft is a beneficiary. From January 1987 to November, 1996
Christopher C. Kraft, Jr. was a director of the Company.
(4) Includes 75,000 shares of Common Stock issuable upon exercise of options.
From June 1986 to November, 1996 Martin Sutter was a director of the Company.
(5) Includes 50,000 shares of Common Stock issuable upon exercise of various
warrants.
(6) Includes 50,000 shares of Common Stock issuable upon exercise of various
warrants.
(7) Includes 10,000 shares of Common Stock issuable upon exercise of a warrant
and 2,500 shares of Common Stock issuable upon exercise of an option granted
under the Company's Amended and Restated 1992 Employee Stock Option Plan, as
amended.
15
<PAGE>
DESCRIPTION OF COMMON STOCK
AUTHORIZED AND OUTSTANDING CAPITAL STOCK
LifeCell is authorized by the Restated Certificate of Incorporation, as
amended to issue 48,000,000 shares of Common Stock and 2,000,000 shares of
preferred stock, $.001 par value per share ("Preferred Stock"), 182,205 shares
of which are designated "Series B Preferred Stock". At the date of this
Prospectus, there were 11,242,244 shares of Common Stock issued and outstanding,
and 120,908 shares of Series B Preferred Stock, issued and outstanding. In
addition, there was an aggregate of approximately 11,651,844 shares of Common
Stock reserved for issuance upon conversion of the Series B Preferred Stock,
upon exercise of outstanding warrants and options, under director and employee
benefit plans, and an additional number of shares of Common Stock as may be
issued upon conversion of shares of Series B Preferred Stock that may be issued
as dividends on the Series B Preferred Stock and pursuant to other rights to
acquire Common Stock.
Holders of Common Stock are entitled to receive such dividends as are
declared by the Board of Directors and to share ratably in assets available for
distribution to holders of the Common Stock upon any liquidation. Each share of
Common Stock entitles the holder thereof to one vote on all matters submitted to
a vote of the stockholders of the Company. Holders of Common Stock have no
preemptive rights and no right to cumulate votes. Except as otherwise required
by law or the provisions of the Restated Certificate of Incorporation, the
holders of shares of Common Stock are not entitled to vote separately as a class
on any matter submitted to a vote of the stockholders of the Company.
CERTAIN ANTI-TAKEOVER EFFECTS OF CERTAIN PROVISIONS OF THE RESTATED CERTIFICATE
OF INCORPORATION, BY-LAWS AND DELAWARE GENERAL CORPORATION LAW
The Restated Certificate of Incorporation and By-laws contain certain
provisions that could make more difficult the acquisition of the Company by
means of a tender or exchange offer, a proxy contest or otherwise. The
description of such provisions set forth below is intended only as a summary and
is qualified in its entirety by reference to the Restated Certificate of
Incorporation and the By-laws, each of which is filed as an exhibit to the
Registration Statement of which this Prospectus forms a part. See "Risk
Factors--Possible Anti-Takeover Effects".
PREFERRED STOCK. The Restated Certificate of Incorporation authorizes the
Board of Directors to establish one or more series of Preferred Stock and to
determine, with respect to any series of Preferred Stock, the terms and rights
of such series. The Company believes that the ability of the Board of Directors
to issue one or more series of Preferred Stock will provide the Company with
flexibility in structuring possible future financing and acquisitions and in
meeting other corporate needs that may arise. The authorized shares of Preferred
Stock, as well as shares of Common Stock, will be available for issuance without
further action by the Company's stockholders, unless such action is required by
the Restated Certificate of Incorporation, applicable laws or the rules of any
stock exchange or automated quotation system on which the Company's securities
may be listed or traded.
Although the Board of Directors has no intention at the present time of
doing so, it could issue a series of Preferred Stock that could, depending on
the terms of such series, impede the completion of a merger, tender offer or
other takeover attempt. The Board of Directors will make any determination to
issue such shares based on its judgment as to the best interests of the Company
and its stockholders. The Board of Directors, in so acting, could issue
Preferred Stock having terms that could discourage an acquisition attempt
through which an acquiror may be otherwise able to change the composition of the
Board of Directors, including a tender or exchange offer or other transaction
that some, or a majority, of the Company's stockholders might believe to be in
their best interests or in which stockholders might receive a premium for their
stock over the then current market price of such stock.
SPECIAL MEETING OF STOCKHOLDERS. The By-laws provide that special meetings
of stockholders may be called only by the President or the Board of Directors.
Such provisions, together with the other anti-takeover provisions described
herein, also could have the effect of discouraging a third party from initiating
a proxy contest, making a tender or exchange offer or otherwise attempting to
obtain control of the Company.
NOTICE PROCEDURES. The By-Laws provide that stockholder election of
directors may be conducted only at annual meetings of stockholders and establish
advance notice procedures with regard to stockholder proposals relating to the
nomination of candidates for election as director. These procedures provide that
notice of such stockholder proposals must be timely, notice must be received at
the principal executive offices of the Company not less than 60 days nor more
than 90 days prior to an annual meeting. The notice must contain certain
information specified in the By-Laws.
16
<PAGE>
DELAWARE ANTI-TAKEOVER LAW. Under Section 203 of the Delaware General
Corporation Law (the "Delaware anti-takeover law"), certain "business
combinations" between a Delaware corporation whose stock generally is publicly
traded or held of record by more than 2,000 stockholders and an "interested
stockholder" are prohibited for a three-year period following the date that such
stockholder became an interested stockholder, unless (i) the corporation has
elected in its certificate of incorporation or bylaws not to be governed by the
Delaware anti-takeover law (the Company has not made such an election), (ii)
either the business combination or the transaction that resulted in the
stockholder becoming an interested stockholder was approved by the board of
directors of the corporation before the other party to the business combination
became an interested stockholder, (iii) upon consummation of the transaction
that made it an interested stockholder, the interested stockholder owned at
least 85% of the voting stock of the corporation outstanding at the commencement
of the transaction (excluding voting stock owned by directors who are also
officers or held in employee stock plans in which the employees do not have a
right to determine confidentially whether to tender or vote stock held by the
plan), or (iv) the business combination was approved by the board of directors
of the corporation and ratified by 66 2/3% of the voting stock which the
interested stockholder did not own. The three-year prohibition does not apply to
certain business combinations proposed by an interested stockholder following
the announcement or notification of certain extraordinary transactions involving
the corporation and a person who had not been an interested stockholder during
the previous three years or who became an interested stockholder with the
approval of a majority of the corporation's directors. The term "business
combination" is defined generally to include mergers or consolidations between a
Delaware corporation and an interested stockholder, transactions with an
interested stockholder involving the assets or stock of the corporations or its
majority-owned subsidiaries and transactions which increase an interested
stockholder's percentage ownership of stock. The term "interested stockholder"
is defined generally as a stockholder who becomes the beneficial owner of 15% or
more of a Delaware corporation's voting stock. Section 203 could have the effect
of delaying, deferring or preventing a change in control of the Company.
LIMITATION ON DIRECTORS' LIABILITY AND INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Restated Certificate of Incorporation provides that a director of the
Company shall not be personally liable to the Company or its stockholders for
monetary damages for breach of fiduciary duty as a director, except for
liability (i) for any breach of the director's duty of loyalty to the Company or
its stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174 of
the Delaware General Corporation Law, or (iv) for any transaction from which the
director derived an improper personal benefit. The Company is required to
indemnify any director who, as the result of his acting as a director of the
Company, was or is a party or is threatened to be made a party to any
threatened, pending or contemplated action, suit or proceeding, whether civil,
criminal, administrative or investigative, to the full extent permitted by
Delaware law.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the Company
pursuant to the foregoing provisions, or otherwise, the Company 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.
PLAN OF DISTRIBUTION
The 330,000 shares of Common Stock offered hereby are being offered for the
account of certain stockholders of the Company named under the heading "Selling
Stockholders".
Sales of shares of Common Stock by the Selling Stockholders may be made
from time to time in the over-the-counter market, on any stock exchange on which
the Common Stock may be listed at the time of sale, in private transactions or
pursuant to underwriting agreements at prices related to prices then prevailing
involving payment of customary commissions or discounts. On August 31, 1998, the
average of the high and low prices of the Common Stock, as reported by The
Nasdaq Stock Market was $3.97 per share.
LEGAL MATTERS
Certain legal matters with respect to the Common Stock are being passed upon
for the Company by Fulbright & Jaworski L.L.P., Houston, Texas, counsel to the
Company.
EXPERTS
The financial statements incorporated by reference in this Prospectus have
been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their report with respect thereto, and are incorporated by
reference herein in reliance upon the authority of said firm as experts in
giving said report.
17
<PAGE>
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION
OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN
OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION IN SUCH JURISDICTION. THE DELIVERY OF THIS PROSPECTUS AT ANY TIME
DOES NOT IMPLY THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO ITS DATE.
---------------
TABLE OF CONTENTS
PAGE
Additional Information 2
Prospectus Summary 3
Risk Factors 5
Special Note Regarding Forward-Looking Statements 14
Use of Proceeds 14
Selling Stockholders 14
Description of Capital Stock 16
Plan of Distribution 17
Legal Matters 17
Experts 17
330,000 SHARES
LIFECELL CORPORATION
COMMON STOCK
PROSPECTUS
AUGUST , 1998
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses solely in connection with the proposed sale of the
330,000 shares of Common Stock offered by the Selling Stockholders hereby are:
Securities and Exchange Commission Registration Fee $ 444
Nasdaq Listing Fees 6,600
Accounting Fees and Expenses 2,000
Legal Fees and Expenses 3,000
Printing Expenses 100
Miscellaneous 100
------
TOTAL $ 12,244
---------
All of such expenses are being paid by the Company.
18
<PAGE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article X of the By-laws provides for mandatory indemnification to at least
the extent specifically allowed by Section 145 of the General Corporation Law of
the State of Delaware (the "GCL").
Pursuant to Section 145 of the GCL, the Registrant generally has the power
to indemnify its current and former directors, officers, employees and agents
against expenses and liabilities incurred by them in connection with any suit to
which they are, or are threatened to be made, a party by reason of their serving
in such positions so long as they acted in good faith and in a manner in which
they reasonably believed to be, or not opposed to, the best interest of the
Registrant, and with respect to any criminal action, they had no reasonable
cause to believe their conduct was unlawful. With respect to suits by or in the
right of the Registrant, however, indemnification is generally limited to
attorneys' fees and other expenses and is not available if such person is
adjudged to be liable to the Registrant unless the court determines that
indemnification is appropriate. The statute expressly provides that the power to
indemnify authorized thereby is not exclusive of any rights granted under any
bylaw, agreement, vote of stockholders or disinterested directors, or otherwise.
The Registrant also has the power to purchase and maintain insurance for such
persons.
The above discussion of the Registrant's By-laws and Section 145 of the GCL
is not intended to be exhaustive and is qualified in its entirety by such
document and statute.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(A) EXHIBITS:
EXHIBIT NO. DESCRIPTION
4.1 Restated Certificate of Incorporation, as amended (incorporated by
reference to Exhibit 4.1 to the Registrant's Quarterly Report on Form 10-Q for
the period ended June 30, 1998.)
4.2 Amended and Restated By-laws (incorporated by reference to Exhibit 3.2
to the Registrant's Quarterly Report on Form 10-Q for the period ended June 30,
1996.)
5.1* Opinion of Fulbright & Jaworski L.L.P.
23.1* Consent of Arthur Andersen LLP.
23.2* Consent of Fulbright & Jaworski L.L.P. (included in Exhibit 5.1
hereto).
24.1* Power of Attorney (contained on page 21 hereto).
--------------
* Filed herewith.
As permitted by Item 601(b)(4)(iii)(A) of Regulation S-K, the Company has
not filed with this Registration Statement certain instruments defining the
rights of holders of long-term debt of the Company and its subsidiaries because
the total amount of securities authorized under any of such instruments does not
exceed 10% of the total assets of the Company and its subsidiaries on a
consolidated basis. The Company agrees to furnish a copy of any such agreement
to the Commission upon request.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes that:
(1) For the purposes of determining any liability under the Act, the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4), or 497(h)
under the Act shall be deemed to be part of this registration statement as of
the time it was declared effective.
(2) For the purpose of determining any liability under the Act, each
post-effective amendment that contains a form of prospectus 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.
19
<PAGE>
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 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) if, in the aggregate, the
changes in volume and price represent no more than a 20% change and 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 paragraphs (i) and (ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs as 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 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 Act, each filing of the registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of any employee benefit plan's annual report
pursuant to 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.
Insofar as indemnification for liabilities arising under the 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 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 Act and will be governed by the final adjudication of
such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of The Woodlands, State of Texas, on August 31, 1998.
LIFECELL CORPORATION
By: /s/ PAUL M. FRISON
---------------------
PAUL M. FRISON
CHAIRMAN OF THE BOARD, PRESIDENT
AND CHIEF EXECUTIVE OFFICER
20
<PAGE>
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Paul M. Frison his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign any
and all amendments (including post-effective amendments) to this Registration
Statement, and to file the same and all exhibits thereto, and all documents in
connection therewith, with the Securities and Exchange Commission, granting said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intends and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or his substitute, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on the 31th day of August, 1998.
SIGNATURE TITLE
- ----------------- ---------
/s/ PAUL M. FRISON
- ------------------------------
PAUL M. FRISON Chairman of the Board, President and
Chief Executive Officer
(Principal Executive Officer)
/s/ J. DONALD PAYNE
- ------------------------------
J. DONALD PAYNE Vice President and
Chief Financial Officer
(Principal Financial Officer)
/s/ LYNNE P. HOHLFELD
- ------------------------------
LYNNE P. HOHLFELD Controller
(Principal Accounting Officer)
/s/ MICHAEL E. CAHR
- ------------------------------
MICHAEL E. CAHR Director
/s/ JAMES G. FOSTER
- ------------------------------
JAMES G. FOSTER Director
/s/ LORI G. KOFFMAN
- ------------------------------
LORI G. KOFFMAN Director
/s/ STEPHEN A. LIVESEY
- ------------------------------
STEPHEN A. LIVESEY Director
/s/ K. FLYNN MCDONALD
- ------------------------------
K. FLYNN MCDONALD Director
/s/ DAVID A. THOMPSON
- ------------------------------
DAVID A. THOMPSON Director
21
Exhibit 5.1
Fulbright & Jaworski L.L.P.
A Registered Limited Liability Partnership
(Company Letterhead)
August 28, 1998
LifeCell Corporation
3606 Research Forest Drive
The Woodlands, Texas 77381
Ladies and Gentlemen:
We have acted as counsel for LifeCell Corporation, a Delaware corporation
(the "Company"), in connection with the proposed offering by certain
stockholders of the Company (the "Selling Stockholders") of an aggregate of
330,000 shares (the "Shares") of common stock, $.001 par value per share (the
"Common Stock"), of the Company, which Shares are issuable upon the exercise of
certain options or warrants to purchase shares of Common Stock (the "Options").
In connection therewith, we have examined, among other things, the Restated
Certificate of Incorporation, as amended, of the Company and the Amended and
Restated By-laws of the Company, the corporate proceedings with respect to the
proposed offering of the Shares and the Registration Statement on Form S-3 to be
filed by the Company with the Securities and Exchange Commission for the
registration of the Shares under the Securities Act of 1933 (the Registration
Statement, as amended at the time when it becomes effective, being herein
referred to as the "Registration Statement").
Based on the foregoing, and having regard for such legal considerations as
we have deemed relevant, we are of the opinion that, subject to the exercise of
the applicable Options in accordance with the terms of such Options, the Shares
proposed to be sold that may be issued upon exercise of the Options will be
legally issued, fully paid and nonassessable shares of Common Stock.
We hereby consent to the filing of this opinion as in exhibit to the
Registration Statement and to the reference to us under the heading "Legal
Matters" in the Prospectus forming a part of the Registration Statement.
Very truly yours,
Fulbright & Jaworski L.L.P.
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated February 18, 1998
(except with respect to the matter discussed in Note 10, as to which the date is
April 9, 1998) included in LifeCell Corporation's Form 10-K/A for the year ended
December, 31 1997 and to all references to our Firm included in this
registration statement.
ARTHUR ANDERSEN LLP
Houston, Texas
August 28, 1998
