Filed Pursuant to Rule 424 (b)(1) Registration File No.333-45180
PROSPECTUS
LIFECELL CORPORATION
2,810,771 SHARES
COMMON STOCK
The selling stockholders listed on page 20 are offering for resale
2,810,771 shares of our common stock under this prospectus.
Our common stock is listed on the Nasdaq National Market under the symbol
"LIFC". On October 30, 2000, the closing price of the common stock on the
Nasdaq National Market was $3.6875 per share.
_____________________
THE SHARES OF COMMON STOCK OFFERED OR SOLD UNDER THIS PROSPECTUS INVOLVE A
HIGH DEGREE OF RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 4.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is
a criminal offense.
_____________________
The date of this prospectus is October 31, 2000.
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TABLE OF CONTENTS
PAGE
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The Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Special Note Regarding Forward-Looking Statements. . . . . . . . . . . . . 16
Where You Can Find More Information. . . . . . . . . . . . . . . . . . . . 17
Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Selling Stockholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Plan of Distribution. . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
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THE COMPANY
LifeCell Corporation develops and markets biologic solutions for the
repair, replacement and preservation of human tissue. Our core technology
removes all cells from the tissue and preserves the tissue without damaging the
essential biochemical and structural components necessary for normal tissue
regeneration. We currently market three products based on this technology:
AlloDerm(R) for the plastic reconstructive, burn and dental markets; Cymetra a
version of AlloDerm(R) for the plastic reconstructive and dermatology markets;
and Repliform for the urology and gynecology markets. Our product development
programs include the use of small diameter blood vessel grafts produced by us as
an alternative to blood vessel grafts taken from the patient, orthopedic
applications of our technology, and ThromboSol , a formulation for extended
storage of platelets.
We were incorporated in the State of Delaware in 1992 as the successor to a
Delaware corporation that was incorporated in 1986. Our address is 1 Millennium
Way, Branchburg, New Jersey 08876 and our phone number is (908) 947-1100.
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RISK FACTORS
You should carefully consider these risk factors in addition to our
financial statements. In addition to the following risks, there may also be
risks that we do not yet know of or that we currently think are immaterial that
may also impair our business operations. If any of the following risks occur,
our business, financial condition or operating results could be adversely
affected. In that case, the trading price of our common stock could decline,
and you may lose all or part of your investment.
WE HAVE A HISTORY OF OPERATING LOSSES AND A SUBSTANTIAL ACCUMULATED EARNINGS
DEFICIT AND WE MAY CONTINUE TO INCUR LOSSES.
Since our inception in 1986, we have generated only limited revenues from
product sales and have incurred substantial net losses of approximately:
- $6.1 million for the year ended December 31, 1997;
- $7.3 million for the year ended December 31, 1998;
- $9.2 million for the year ended December 31, 1999;
- $4.2 million for the six months ended June 30, 1999; and
- $3.3 million for the six months ended June 30, 2000.
At June 30, 2000, we had an accumulated deficit of approximately $58.0 million.
We expect to incur additional operating losses as well as negative cash flow
from operations in the short term as we continue to expand our marketing efforts
with respect to our current products and to continue our product development
programs. Our ability to increase revenues and achieve profitability and
positive cash flows from operations will depend on:
- increased market acceptance and sales of AlloDerm, Repliform and
Cymetra; and
- commercialization of products under development.
We may not achieve profitability and positive cash flows from operations.
WE MAY NEED ADDITIONAL CAPITAL TO MARKET OUR CURRENT PRODUCTS AND TO DEVELOP AND
COMMERCIALIZE NEW PRODUCTS AND IT IS UNCERTAIN WHETHER SUCH CAPITAL WILL BE
AVAILABLE.
We intend to expend funds for:
- product research and development;
- expansion of sales and marketing activities;
- product education efforts; and
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- other working capital and general corporate purposes, including
potential acquisitions of complementary technologies or products.
We may need additional capital, depending on:
- the costs and progress of our 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 our 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; and
- developments related to regulatory and third-party reimbursement
matters.
We expect that our current resources, including the funds received in our
private placement in October 2000, will satisfy our cash needs for at least the
next 12 months. We are currently incurring negative cash flow from operations,
but such amounts are less than in prior quarters and we expect such amounts to
continue to decrease in the near future. However, operating and other expenses
incurred by us could increase because of the factors set forth above. As a
result, we may need additional capital to operate our business sooner than
expected. We have no commitments for any future funding and there can be no
assurance that we will be able to obtain additional financing in the future from
either debt or equity financings, bank loans, collaborative arrangements or
other sources on terms acceptable to us, or at all. If adequate funds are not
available, we expect that we will be required to delay, scale back or eliminate
one or more of our product development programs. 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 us to relinquish our rights to
certain of our technologies, products or marketing territories.
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IF THE FDA IMPOSES MEDICAL DEVICE OR OTHER REGULATIONS THAT AFFECT OUR PRODUCTS,
THE COSTS OF DEVELOPING, MANUFACTURING AND MARKETING OUR PRODUCTS WILL BE
INCREASED.
The FDA generally permits transplanted human tissue to be commercially
distributed without obtaining prior FDA approval of the product. In contrast,
products regulated as medical devices usually require such approval. In 1996,
the FDA determined that AlloDerm used for the repair or replacement of damaged
or inadequate integumental tissue, tissue that lines or covers the body and its
compartments or cavities, would be regulated as transplanted human tissue. On
that basis, we began commercial distribution of this product for the treatment
of burns, periodontal surgery and plastic reconstructive surgery procedures,
without prior FDA approval. In its decision with respect to the regulation of
AlloDerm, the FDA stated that the regulatory status of any different uses, such
as a void filler for soft tissue, for cosmetic augmentation procedures or as a
wound healing agent, would need to be determined on a case-by-case basis.
In recent months, we began marketing:
- Cymetra, a version of AlloDerm in a particulate form, for non-surgical
plastic reconstructive procedures; and
- Repliform, a version of AlloDerm, for urological and gynecological
surgical procedures.
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Cymetra is used for the correction of soft tissue deficits, such as acne or
other depressed scars, and to restore tissue loss from disease. Repliform is
used as a bladder sling for the treatment of urinary incontinence and for the
repair of pelvic floor defects. We believe that both Cymetra and Repliform are
forms of AlloDerm that are used for the repair or replacement of damaged or
inadequate integumental tissue and that these products meet the regulatory
definition of human tissue. We also believe that Cymetra and Repliform have not
been manipulated in such a way that would require regulation as a medical
device. As a result, we have not sought a determination from the FDA as to
whether these products are medical devices. There is a risk that the FDA could
determine that AlloDerm, Repliform or Cymetra should be regulated as a medical
device. If so, the FDA could require us to:
- cease marketing and/or recall product already sold; and/or
- seek FDA approval for these products.
The process of obtaining FDA approval may be expensive, lengthy and
unpredictable. We anticipate that it could take from one to three years to
obtain such approval. We do not know if such approval could be obtained in a
timely fashion, or at all, or if the FDA would require extensive supporting
clinical data. In addition, the FDA also could seek to impose enforcement
sanctions for marketing these products without FDA approval and could require us
to cease marketing and/or recall products already sold.
In the United States, devices and biologics, such as ThromboSol, our
proposed blood cell preservation product, must be:
- manufactured in registered establishments; and
- produced in accordance with the Quality System Regulation for medical
devices or Good Manufacturing Practice regulation for biologics.
If any of our products are regulated as devices or biologics, we will be
required to comply with Quality System Regulation or Good Manufacturing Practice
regulation. We anticipate that it could take us up to one year, or longer, to
achieve compliance with these regulations during which time the FDA could
require us to cease marketing and/or recall product already sold. In addition,
our manufacturing facility:
- would need to be registered as a medical device manufacturing site
with the FDA; and
- would be subject to inspection by the FDA.
As a result, our manufacturing and compliance costs would increase and our
products would be subject to more comprehensive development, testing, monitoring
and validation standards.
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The FDA requires producers of biologic products to obtain FDA licensing
prior to commercialization in the United States. To obtain licensing approval
for these products, we must submit proof of their safety, purity and potency.
Testing, preparation of necessary applications and the processing of those
applications by the FDA is expensive and time consuming. We do not know if the
FDA will act favorably or quickly in making such reviews, and significant
difficulties or costs may be encountered by us in our efforts to obtain FDA
licenses. The FDA may also place conditions on licenses that could restrict
commercial applications of such products. Product approvals may be withdrawn if
compliance with regulatory standards is not maintained or if problems occur
following initial marketing. Delays imposed by the FDA licensing process may
materially reduce the period during which we have the exclusive right to
commercialize patented products.
In addition, there can be no assurance that the various states in which our
products are sold will not impose additional regulatory requirements or
marketing impediments on our products.
THE FDA CAN IMPOSE CIVIL AND CRIMINAL ENFORCEMENT ACTIONS AND OTHER PENALTIES ON
US IF WE FAIL TO COMPLY WITH STRINGENT FDA REGULATIONS AT OUR TISSUE FACILITIES.
Failure to comply with any applicable FDA requirements could result in
civil and criminal enforcement actions and other fines and penalties that would
increase our expenses and adversely affect our cash flows. Tissue
establishments must engage in:
- donor screening;
- infectious disease testing; and
- stringent record keeping.
As a result, our involvement in the processing and distribution of human tissue
requires us to ensure that proper donor screening and infectious disease testing
are done appropriately and conducted under strict procedures. In addition, we
must maintain records, which are available for FDA inspectors documenting that
the procedures were followed. The FDA has authority to conduct inspections of
tissue establishments and to detain, recall, or destroy tissue if the procedures
were not followed or appropriate documentation is not available. Labeling and
promotional activities are also subject to scrutiny by the FDA and, in certain
instances, by the Federal Trade Commission. From time to time, the FDA may
modify such requirements, imposing additional or different requirements which
may require us to alter our business methods.
THE NATIONAL ORGAN TRANSPLANT ACT COULD BE INTERPRETED IN A WAY THAT COULD
REDUCE OUR REVENUES AND PROFITABILITY.
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The National Organ Transplant Act prohibits the acquisition, receipt or
transfer of certain human organs, including skin and heart valves and blood
vessel grafts, for valuable consideration, but permits the payment of reasonable
expenses associated with the removal, transportation, processing, preservation,
quality control and storage of human tissue and skin. We include in our
AlloDerm, Repliform and Cymetra pricing structure certain of the educational
costs and reasonable processing expenses. The National Organ Transplant Act
payment allowances may be interpreted to exclude recovery of educational costs
and processing expenses.
WE ARE SUBJECT TO VARYING AND EXTENSIVE REGULATION BY FOREIGN GOVERNMENTS WHICH
CAN BE COSTLY, TIME CONSUMING AND SUBJECT US TO UNANTICIPATED DELAYS.
The regulation of our products outside the United States varies by country.
Certain countries regulate our products as a pharmaceutical product, requiring
us to make extensive filings and obtain regulatory approvals before selling our
product. Certain countries classify our products as transplant tissue but may
restrict its import or sale. Other countries have no applicable regulations
regarding the import or sale of products similar to our products, creating
uncertainty as to what standards we may be required to meet.
AlloDerm currently is being distributed in Brazil, Italy, Korea, Mexico,
Taiwan, the Netherlands and the United Kingdom and we are pursuing clearance to
distribute Cymetra in Brazil and Korea. The uncertainty of the regulations in
each country may delay or impede the marketing of AlloDerm or Cymetra and other
products in the future or impede our ability to negotiate distribution
arrangements on favorable terms. Certain foreign countries have laws similar to
the National Organ Transplant Act. These laws may restrict the amount that we
can charge for our products and may restrict our ability to export or distribute
our products to licensed not-for-profit organizations in those countries.
Noncompliance with foreign country requirements may include some or all of the
risks associated with noncompliance with FDA regulation as well as other risks.
INCREASING OUR REVENUES AND ACHIEVING PROFITABILITY WILL DEPEND ON OUR ABILITY
TO INCREASE MARKET PENETRATION OF OUR CURRENT PRODUCTS AND TO DEVELOP AND
COMMERCIALIZE NEW PRODUCTS.
Much of our ability to increase revenues and to achieve profitability and
positive cash flows from operations will depend on:
- expanding the use and market penetration of our current products; and
- the successful introduction of our products in development.
Products based on our technologies represent new methods of treatment.
Physicians will not use our 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 our products is established as
clinically significant, physicians may not elect to use such products for any
number of reasons. Consequently, physicians, health care payers and patients
may not accept our current products or products under development. Broad market
acceptance of our products may require the training of numerous physicians and
clinicians, as well as conducting or sponsoring clinical studies to demonstrate
the benefits of such products. The amount of time required to complete such
training and studies could result in a delay or dampening of such market
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acceptance. Moreover, health care payers' approval of reimbursement for our
products in development may be an important factor in establishing market
acceptance.
We may be required to undertake time-consuming and costly development
activities and seek regulatory clearance or approval for new products. Although
we have conducted animal studies on many of our products under development which
indicate that the product may be feasible for a particular application, results
obtained from expanded studies may not be consistent with earlier trial results
or be sufficient for us to obtain any required regulatory approvals or
clearances. The completion of the development of any of our 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.
WE ARE HIGHLY DEPENDENT UPON SALES OF OUR PRODUCTS THROUGH BOSTON SCIENTIFIC,
OBAGI MEDICAL PRODUCTS AND OUR OTHER INDEPENDENT AGENTS TO GENERATE OUR
REVENUES.
We have engaged:
- Boston Scientific Corporation as our exclusive worldwide sales and
marketing representative for Repliform for use in the urology and
gynecology markets; and
- Obagi Medical Products, Inc. as the exclusive sales and marketing
representative of Cymetra for office-based dermatologists and plastic
surgeons.
We have granted other distributors exclusive distribution rights and may grant
additional exclusive distribution rights in the future. During the year ended
December 31, 1999 and six months ended June 30, 2000, sales of our products
through independent agents and distributors represented approximately 18% and
46%, respectively, of our total product revenues. During such periods, sales of
our products through Boston Scientific and Obagi represented approximately 4%
and 33%, respectively, of our total product revenues. We expect sales of our
products through such independent agents to continue to increase as a percentage
of total revenues. If an exclusive agent, especially Boston Scientific or
Obagi, fails adequately to promote, market and sell our products, our revenues
could be adversely affected until a replacement agent or distributor could be
retained by us. Finding replacement agents and distributors could be a time
consuming process during which our revenues could be negatively impacted.
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WE DEPEND HEAVILY UPON A LIMITED NUMBER OF SOURCES OF HUMAN TISSUE AND ANY
INTERRUPTION IN THE AVAILABILITY OF HUMAN TISSUE WOULD INTERFERE WITH OUR
ABILITY TO PROCESS AND DISTRIBUTE OUR PRODUCTS.
Our business is dependent on the availability of donated human tissue. In
1999, we received all of our human tissue from 19 United States tissue banks.
We estimate that there are at least 100 tissue banks in the United States.
Although we have established what we believe to be adequate sources of donated
human tissue to satisfy the expected demand for our products in the foreseeable
future, we cannot be sure that donated human tissue will continue to be
available at current levels or will be sufficient to meet our needs. If our
current sources can no longer supply human tissue or our requirements for human
tissue exceed their current capacity, we may not be able to locate other
sources. Any significant interruption in the availability of human tissue would
likely cause us to slow down the processing and distribution of our products.
We have performed limited activities to develop products using animal
tissue as a substitute for donated human tissue. If successfully developed,
animal tissue could replace the need for human tissue as a raw material. There
can be no assurance that:
- animal tissue products can be successfully developed;
- development and required regulatory approvals could result in timely
replacement of human tissue used by us in the event of a reduced
supply of human tissue; or
- the cost of such animal tissue would not increase our expenses.
NEGATIVE PUBLICITY CONCERNING THE USE OF DONATED HUMAN TISSUE IN COSMETIC
PROCEDURES COULD REDUCE THE DEMAND FOR OUR PRODUCTS AND MAY NEGATIVELY IMPACT
THE SUPPLY OF AVAILABLE DONOR TISSUE.
Although we do not promote the use of Cymetra or AlloDerm for cosmetic
applications, clinicians may use our products in applications or procedures that
may be considered "cosmetic." Negative publicity concerning the use of donated
human tissue in cosmetic procedures could reduce the demand for our products or
negatively impact the willingness of families of potential donors to agree to
donate tissue.
THE BIOMEDICAL FIELD WHICH WE ARE IN IS HIGHLY COMPETITIVE AND SUSCEPTIBLE TO
RAPID CHANGE AND SUCH CHANGES COULD RENDER OUR PRODUCTS OBSOLETE.
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The biomedical field is undergoing rapid and significant technological
change. Our success depends upon our ability to develop and commercialize
efficient and effective products based on our technologies. There are many
companies, including Regeneration Technologies, Inc., Collagenesis, Inc., Cook,
Inc., and its affiliates, Organogenesis, Inc., Advance Tissue Sciences, Inc.
and Integra Life Sciences Holdings Corporation, and academic institutions,
including Rice University, The University of Pittsburgh and Georgia Institute of
Technology, 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 our products. Many of these
companies and academic institutions are well-established, and 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 we do. These companies and academic
institutions may succeed in developing competing products that are more
effective than our products, or that receive government approvals more quickly
than our products, which may render our products or technology uncompetitive,
uneconomical or obsolete.
THE ABILITY TO OBTAIN THIRD-PARTY REIMBURSEMENT FOR THE COSTS OF NEW MEDICAL
TECHNOLOGIES IS LIMITED.
Generally, hospitals, physicians and other health care providers purchase
products, such as the products being sold or developed by us, for use in
providing care to their patients. These parties typically rely on third-party
payers, 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.
Third-party payers have adopted cost control measures in recent years that 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. We believe that
certain third-party payers provide reimbursement for medical procedures at a
specified rate without additional reimbursement for products, such as those
being sold or developed by us, used in such procedures. Adequate third-party
payer reimbursement may not be available for us to maintain price levels
sufficient for realization of an appropriate return on our investment in
developing new products. In addition, government and other third-party payers
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.
The FDA has not granted marketing approval for many uses of AlloDerm and there
can be no assurance that the FDA will approve such uses. Further, certain of
our products are used in medical procedures that typically are not covered by
third-party payers or for which patients sometimes do not obtain coverage.
These and future changes in third-party payer reimbursement practices regarding
the procedures performed with our products could adversely affect the market
acceptance of our products.
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OUR SUCCESS DEPENDS ON THE SCOPE OF OUR INTELLECTUAL PROPERTY RIGHTS AND NOT
INFRINGING THE INTELLECTUAL PROPERTY RIGHTS OF OTHERS. THE VALIDITY,
ENFORCEABILITY AND COMMERCIAL VALUE OF THESE RIGHTS ARE HIGHLY UNCERTAIN.
Our ability to compete effectively with other companies is materially
dependent upon the proprietary nature of our technologies. We rely primarily on
patents and trade secrets to protect our technologies. We currently license:
- the exclusive right to nine United States patents and related foreign
patents; and
- non-exclusive rights to 14 patents.
In addition, we:
- have been issued one United States design patent and five United
States utility patents, and
- have seven United States patent applications pending.
Third parties may seek to challenge, invalidate, circumvent or render
unenforceable any patents or proprietary rights owned by or licensed to us 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.
In general, the patent position of biotechnology and medical product firms
is highly uncertain, still evolving and involves complex legal, scientific and
factual questions. We are at risk that:
- other patents may be granted with respect to the patent applications
filed by us; and
- any patents issued or licensed to us may not provide commercial
benefit to us or will be infringed, invalidated or circumvented by
others.
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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 we rely. Conceivably, the issuance of such a
prior art patent, or the discovery of "prior art" of which we are currently
unaware, could invalidate a patent of ours or our licensor or prevent
commercialization of a product claimed thereby.
Although we generally conduct a cursory review of issued patents prior to
engaging in research or development activities, we may be required to obtain a
license from others to commercialize any of our new products under development.
If patents that cover our existing or new products are issued to other
companies, there can be no assurance that any necessary license could be
obtained on favorable terms or at all.
There can be no assurance that we will not be required to resort to
litigation to protect our patented technologies or other proprietary rights or
that we will not be the subject of additional patent litigation to defend our
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 our resources.
We also have 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 us may differ from that of their
foreign counterparts.
We may decide for business reasons to retain certain knowledge that we
consider proprietary as confidential and elect to protect such information as a
trade secret, as business confidential information or as know-how. In that
event, we must rely upon trade secrets, know-how and continuing technological
innovation to maintain our 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.
WE ARE EXPOSED TO PRODUCT LIABILITY CLAIMS FOR WHICH OUR PRODUCT LIABILITY
INSURANCE MAY BE INADEQUATE.
Our business exposes us to potential product liability risks which are
inherent in the testing, manufacturing and marketing of medical products. We
cannot assure that:
- our insurance will provide adequate coverage against potential
liabilities;
- adequate product liability insurance will continue to be available in
the future; or
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- our insurance can be maintained on acceptable terms.
The obligation to pay any product liability claim in excess of whatever
insurance we are able to acquire would increase our expenses.
We use donated human tissue as the raw material for some of our products.
The non-profit organizations that supply such tissue 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. Our manufacturing process
also has been demonstrated to inactivate concentrated suspensions of HIV in
tissue. While we believe such procedures are adequate to reduce the threat of
disease transmission, there can be no assurance that:
- our products will not be associated with transmission of disease; or
- a patient otherwise infected with disease would not erroneously assert
a claim that the use of our products resulted in the disease
transmission.
Any such transmission or alleged transmission could have a material adverse
effect on our ability to manufacture or market our products and could result
in litigation.
OUR FAILURE TO COMPLY WITH REGULATIONS REGARDING DISPOSAL OF HAZARDOUS MATERIALS
COULD RESULT IN THE IMPOSITION OF PENALTIES, FINES OR SANCTIONS.
Our research and development and processing techniques generate waste that
is classified as hazardous by the United States Environmental Protection Agency,
the Texas Natural Resources Commission and the New Jersey Natural Resources
Commission. We segregate such waste and dispose of it through licensed
hazardous waste transporters. Although we believe we are currently in
compliance in all material respects with applicable environmental regulations,
our failure to comply fully with any such regulations could result in the
imposition of penalties, fines or sanctions.
WE ARE A PARTY TO PENDING LITIGATION AND ADVERSE RESULTS OF SUCH LITIGATION
MATTER COULD NEGATIVELY IMPACT OUR FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
We were a party to litigation in the Superior Court of California, San
Bernardino County, Central District, captioned Ann Regner, et al., on behalf of
themselves and others similarly situated, v. Inland Eye & Tissue Bank of
Redlands, et al. The complaint was brought as a class action on behalf of all
close family members of deceased persons whose tissues were collected,
processed, stored or distributed in California. The complaint alleged that
tissue banks routinely fail to obtain proper informed consent from family
members when soliciting the donation of human tissue for transplant. The
complaint also alleged that the defendants, including us, make profits from the
storing, processing, and distribution of human tissue in contravention of
California law. Plaintiffs' application for a preliminary injunction seeking to
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enjoin the defendants, including us, from doing business in California was
denied in June 2000 and the complaint was voluntarily dismissed in September
2000. Later that month, a new complaint, with substantially similar allegations
about profiting from the storing, processing and distribution of human tissue,
but without the class action allegations was filed in Los Angeles County. The
plaintiff seeks injunctive relief, disgorgement of illegal profits, restitution,
statutory penalties, fines and attorney's fees. We have not yet been served
with that complaint.
If served, we intend to vigorously defend such action, which we believe is
without merit. Our defense of such action could result in substantial costs and
diversion of our resources.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements typically are identified by use of terms such as
"may," "will," "should," "plan," "expect," "anticipate," "estimate" and similar
words, although some forward-looking statements are expressed differently.
Forward-looking statements represent our management's judgment regarding future
events. Although we believe that the expectations reflected in such
forward-looking statements are reasonable, we can give no assurance that such
expectations will prove to be correct. All statements other than statements of
historical fact included in this prospectus regarding our financial position,
business strategy, products, products under development and clinical trials,
markets, budgets, plans, or objectives for future operations are forward-looking
statements. We cannot guarantee the accuracy of the forward-looking statements,
and you should be aware that our actual results could differ materially from
those contained in the forward-looking statements due to a number of factors,
including the statements under "Risk Factors" set forth above.
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WHERE YOU CAN FIND MORE INFORMATION
We are subject to the information requirements of the Exchange Act. We
file annual, quarterly, and current reports, proxy statements, and other
documents with the SEC. You may read and copy any document we file at the SEC's
public reference rooms at the following locations:
- Main Public Reference Room
Judiciary Plaza Building
450 Fifth Street, N.W.
Washington, D.C. 20549
- Regional Public Reference Room
75 Park Place, 14th Floor
New York, New York 10007
You may obtain information on the operation of the SEC's public reference
rooms by calling 1-800-SEC-0330. We are required to file these documents with
the SEC electronically. You can access the electronic versions of these filings
at the SEC's website, located at www.sec.gov.
------------
This prospectus is part of a registration statement that we filed with the
SEC. The registration statement contains more information than this prospectus
regarding LifeCell and its common stock, including certain exhibits. You can
get a copy of the registration statement from the SEC at the address listed
above or from its web site.
The SEC allows us to "incorporate" into this prospectus information we file
with it in other documents. This means that we can disclose important
information to you by referring to other documents that contain that
information. The information incorporated by reference is considered to be part
of this prospectus, and information we file later with the SEC will
automatically update and supersede this information. For further information
about the Company and our common stock, you should refer to the registration
statement and the following documents which we are incorporating by reference
except to the extent information in those documents is different from the
information contained in this prospectus:
- Our Annual Report on Form 10-K for the year ended December 31, 1999,
filed with the SEC on March 29, 2000;
- Our Quarterly Report on Form 10-Q for the quarter ended March 31,
2000, filed with the SEC on May 12, 2000;
- Our Quarterly Report on Form 10-Q for the quarter ended June 30,
2000, filed with the SEC on July 31, 2000 as amended on a Quarterly
Report on Form 10-Q/A filed with the SEC on October 27, 2000;
- Our Current Reports on Form 8-K filed with the SEC on July 7, 2000,
September 6, 2000 and September 26, 2000;
- Our definitive Proxy Statement for our 2000 Annual Meeting of
Stockholders filed on Schedule 14A filed with the SEC on April 28,
2000;
- The description of our common stock set forth in our registration
statement on Form 8-A filed pursuant to Section 12 of the Exchange Act
and declared effective by the SEC on February 27, 1992 and any
amendment or report filed for the purpose of updating such
description; and
- All documents we file pursuant to Sections 13(a), 13(c), 14 and 15(d)
of the Securities Exchange Act after the date of this prospectus until
we terminate the offering of these shares.
We will provide without charge to each person, including any beneficial
owner of common stock to whom this prospectus is delivered, upon written or oral
request of such person, a copy of any and all of the documents that have been
incorporated by reference in this prospectus (not including exhibits to such
documents unless such exhibits are specifically incorporated by reference
therein). Requests for such copies should be directed to: LifeCell Corporation,
1 Millennium Way, Branchburg, NJ 08876, Attention: Secretary (telephone (908)
947-1106).
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You should rely only on the information contained or incorporated by
reference in this document. We have not authorized anyone to provide you with
information that is different. The common stock is not being offered in any
state where the offer is not permitted. You should not assume that the
information in this prospectus is accurate as of any date other than the date on
the front of this prospectus.
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of the common stock
by the selling stockholders named in this prospectus. All proceeds from the
sale of the common stock will be paid directly to the selling stockholders.
SELLING STOCKHOLDERS
The shares are being registered to permit public secondary trading of the
shares, and the selling stockholders, or their pledgees, donees, transferees or
other successors-in interest, may offer all or any portion of the shares for
resale from time to time. See "Plan of Distribution."
We have filed with the Commission under the Securities Act a registration
statement on Form S-3, of which this prospectus forms a part, relating to the
resale of the shares. We have agreed to pay expenses in connection with the
registration and sale of the shares being offered by the selling stockholders.
See "Plan of Distribution."
Agreements with the Selling Stockholders
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On September 1, 2000, we and the selling stockholders, other than
Medtronic, Inc., entered into a series of purchase agreements under which we
sold 2,500,000 shares of our common stock to such selling stockholders in a
private placement. In consideration for the issuance of the common stock, such
selling stockholders paid us an aggregate of $10,000,000 in cash. We are
registering the shares of common stock purchased by such selling stockholders as
a condition to the purchase of such shares of common stock.
In March 1994, we entered into a License and Development Agreement with
Medtronic, Inc. to jointly develop our heart valve products. Under the
agreement, Medtronic paid us an initial $1.5 million license fee. Under the
agreement, Medtronic funded a part of our cost of research and development, had
the exclusive right to market any resulting commercial products and agreed to
pay us royalties on sales of products covered by the agreement. During 1996,
1997 and 1998, Medtronic funded $546,460, $217,854 and $59,519 of our research
and development costs. In December 1998, we and Medtronic mutually agreed to
terminate the agreement and we regained all rights to our cardiovascular
technology. As a result of the termination, we issued 310,771 shares of our
common stock to Medtronic and granted Medtronic registration rights with respect
to such shares of our common stock. James G. Foster, one of our directors,
serves as a Vice President of Medtronic. Medtronic has exercised its right to
require us to include these shares of common stock owned by Medtronic for resale
in this offering.
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Based on information provided by the selling stockholders, the following
table lists:
- the name of the selling stockholders;
- the number of shares of common stock beneficially owned before the
commencement of the offering;
- the number of shares of common stock offered for resale in this
offering; and
- the number of shares and percentage of common stock owned after this
offering, assuming the sale of all shares offered in this offering by
each selling stockholder.
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<TABLE>
<CAPTION>
Number of
Shares of Common stock beneficially
Common owned after the offering
Stock ------------------------
Selling Beneficially Shares Being Number Percent of
Stockholders Owned Offered of Shares Outstanding
--------------------------- ------------- ------------ --------- ------------
<S> <C> <C> <C> <C>
Special Situations Fund
III, L.P. 625,000 625,000 0 0
Special Situations Private
Equity Fund, L.P. 412,500 412,500 0 0
Special Situations
Cayman Fund, L.P. 212,500 212,500 0 0
HSBC Global Investor
Services, as Trustee for
Framlington Health Fund 512,500 512,500 0 0
Bay Star Capital, LP 300,000 300,000 0 0
Bay Star International,
Ltd. 75,000 75,000 0 0
Foundation Partners, L.P. 137,500 137,500 0 0
Active Site Partners, L.P. 67,500 50,000 17,500 *
Meriken Nominees Ltd. 40,000 40,000 0 0
Ashton Partners 35,000 35,000 0 0
Narragansett Offshore, Ltd. 28,500 28,500 0 0
Narragansett I, LP
21,500 21,500 0 0
Lawrence S. Doyle 25,000 25,000 0 0
Carl Goldfischer 25,000 25,000 0 0
Medtronic, Inc. 655,962(1) 310,771 345,191 2.1%
<FN>
_____________________
* Less than 1%
(1) Includes 345,191 shares of common stock registered in the name of Bank of
America. Medtronic has sole voting power with respect to these shares of
common stock.
</TABLE>
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PLAN OF DISTRIBUTION
The selling stockholders, their pledgees, donees, transferees or other
successors-in-interest may from time to time, sell all or a portion of the
shares in privately negotiated transactions or otherwise, at fixed prices that
may be changed, at market prices prevailing at the time of sale, at prices
related to these market prices or at negotiated prices.
The selling stockholders may sell the shares by one or more of the
following methods:
- a block trade in which the broker or dealer so engaged will attempt to
sell the shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction;
- purchases by a broker or dealer as principal and resale by such broker
or dealer for its account pursuant to this prospectus;
- an exchange distribution in accordance with the rules of the
applicable exchange;
- ordinary brokerage transactions and transactions in which the broker
solicits purchasers;
- privately negotiated transactions;
- short sales;
- a combination of any such methods of sale; and
- any other method permitted pursuant to applicable law.
The selling stockholders are not restricted as to the price or prices at
which they may sell their shares. Sales of shares by the selling stockholders
may depress the market price of our common stock since the number of shares
which may be sold by the selling stockholders is relatively large compared to
the historical average weekly trading of our common stock. Accordingly, if the
selling stockholders were to sell, or attempt to sell, all of such shares at
once or during a short time period, we believe such transactions could adversely
affect the market price of our common stock.
From time to time the selling stockholders may engage in short sales, short
sales against the box, puts and calls and other transactions in our securities
or derivatives of our securities, and can sell and deliver the shares in
connection with any of these transactions or in settlement of securities loans.
From time to time the selling stockholders may pledge their shares under margin
provisions of their customer agreements with their brokers. Upon a default by
the selling stockholders, the broker may offer and sell the pledged shares from
time to time.
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In effecting sales, brokers and dealers engaged by the selling stockholders
may arrange for other brokers or dealers to participate in the sale. Brokers or
dealers may receive commissions or discounts from the selling stockholders or,
if the broker-dealer acts as agent for the purchaser of such shares, from the
purchaser in amounts to be negotiated. Broker-dealers may agree with the selling
stockholders to sell a specified number of such shares at a stipulated price per
share, and to the extent the broker-dealer is unable to do so acting as agent
for the selling stockholders, to purchase as principal any unsold shares at the
price required to fulfill the broker-dealer commitment to the selling
stockholders. Broker-dealers who acquire shares as principal may then resell
those shares from time to time in transactions:
- in the over-the counter market or otherwise;
- at prices and on terms then prevailing at the time of sale;
- at prices then related to the then-current market price; or
- in negotiated transactions.
These resales may involve block transactions or sales to and through other
broker-dealers, including any of the transactions described above. In connection
with these sales, these broker-dealers may pay to or receive from the purchasers
of those shares commissions as described above. The selling stockholders may
also sell the shares under Rule 144 under the Securities Act, rather than under
this prospectus.
The selling stockholders and any broker-dealers or agents that participate
with the selling stockholders in sales of the shares may be deemed to be
"underwriters" within the meaning of the Securities Act in connection with these
sales. In this event, any commissions received by these broker-dealers or agents
and any profit on the resale of the shares purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act. Because selling
stockholders may be deemed to be "underwriters" within the meaning of the
Securities Act, the selling stockholders will be subject to the prospectus
delivery requirements of the Securities Act.
We are required to pay all fees and expenses incident to the registration
of the shares. We have agreed to indemnify the selling stockholders against
certain losses, claims, damages and liabilities, including liabilities under the
Securities Act. The selling stockholders may agree to indemnify any agent,
dealer or broker-dealer that participates in transactions involving sales of the
shares against certain liabilities, including liabilities arising under the
Securities Act. The selling stockholders will be required to pay commissions
and brokerage expenses on their sales, if any.
At the time a particular offer of shares is made, to the extent required, a
supplement to this prospectus will be distributed which will identify and set
forth the following:
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- the names of the selling stockholders;
- the number of shares being sold;
- the price;
- commissions being paid;
- that there has been no investigation by broker-dealer; and
- any other facts material to the transaction.
The selling stockholders are subject to applicable provisions of the
Exchange Act and the Commission's rules and regulations, including Regulation M,
which provisions may limit the timing of purchases and sales of the shares by
the selling stockholders. We will make copies of this prospectus available to
the selling stockholders and have informed them of the need to deliver copies of
this prospectus to purchasers at or prior to the time of any sale of the shares.
In order to comply with certain states' securities laws, if applicable, the
selling stockholders may sell the shares in those jurisdictions only through
registered or licensed brokers or dealers. In certain states the selling
stockholders may not sell the shares unless the shares have been registered or
qualified for sale in such state, or unless an exemption from registration or
qualification is available and is obtained.
LEGAL MATTERS
The validity of the securities offered hereby have been passed upon for us
by Lowenstein Sandler PC, Roseland, New Jersey.
EXPERTS
The audited financial statements incorporated by reference in this
prospectus and elsewhere in the registration statement, to the extent and for
the periods indicated in their report, have been audited by Arthur Andersen LLP,
independent certified public accountants, and are incorporated herein in
reliance upon the authority of said firm as experts in accounting and auditing
in giving said report.
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Prospective investors may rely only on the information contained in this
prospectus. LifeCell Corporation has not authorized anyone to provide
prospective investors with information different from that contained in this
prospectus. This prospectus is not an offer to sell nor is it seeking an offer
to buy these securities in any jurisdiction where the offer or sale is not
permitted. The information contained in this prospectus is correct only as of
the date of this prospectus, regardless of the time of the delivery of this
prospectus or any sale of these securities.
LIFECELL CORPORATION
2,810,771 SHARES OF COMMON STOCK
PROSPECTUS
OCTOBER 31, 2000
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