As filed with the Securities and Exchange Commission on February 28, 1996
Registration No. 333-_____
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------
REGISTRATION STATEMENT ON
FORM S-3
UNDER
THE SECURITIES ACT OF 1933
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INTERNEURON PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
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DELAWARE 04-3047911
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(State or other jurisdiction of (I.R.S. Employer I.D.
Incorporation) number)
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INTERNEURON PHARMACEUTICALS, INC.
99 Hayden Avenue
Lexington, MA 02173
(617) 861-8444
(Address and telephone number of Registrant's principal executive offices)
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Glenn L. Cooper, M.D., President
and Chief Executive
Officer INTERNEURON
PHARMACEUTICALS, INC.
99 Hayden Avenue
Lexington, MA 02173
(617) 861-8444
(Address and telephone number of agent for service)
------------------------------------
Copies to:
Jill M. Cohen, Esq.
Bachner, Tally, Polevoy & Misher, LLP
380 Madison Avenue
New York, New York 10017
(212) 687-7000
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Approximate date of proposed commencement of sale to 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, please check the following box. |X|
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier 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, check
the following box. [ ]
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<TABLE>
CALCULATION OF REGISTRATION FEE
<S> <C> <C> <C> <C>
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE OFFER- REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PER UNIT (1) ING PRICE (1) FEE
- --------------------------- -------------- ------------------ ------------------ --------------
Common Stock, $.001 par 3,518,466(2) $29.625(3) $104,234,555 $35,942.95
value.......................
Class B Warrants............ 11,100 $24.375(4) $270,562.50 $93.30
Common Stock, $.001 par 11,100 $4.75 $52,725 $18.18
value..................(5)
Total....................... $36,054.43
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(a) under the Securities Act.
(2) To be sold by the Selling Securityholders; includes 410,179 shares
issuable upon exercise of warrants (including Class B Warrants) held by
the Selling Securityholders.
(3) Fee for Common Stock to be sold by Selling Securityholders is based on the
average of the high and low price of the Common Stock as of February 27,
1996.
(4) Fee for Class B Warrants to be sold by the Selling Securityholders is
based on the average of the high and low price of the Class B Warrants as
of February 27, 1996.
(5) Issuable upon exercise of the Class B Warrants.
Pursuant to Rule 416, there are also being registered for resale such
additional shares of Common Stock as may become issuable pursuant to
"anti-dilution" provisions of the warrants.
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The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
Preliminary Prospectus dated February 28, 1996
PROSPECTUS
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INTERNEURON PHARMACEUTICALS, INC.
3,518,466 shares of Common Stock
11,100 Class B Warrants
This Prospectus relates to (i) 3,518,466 shares (the "Shares")
of Common Stock, par value $.001 per share (the "Common Stock") of Interneuron
Pharmaceuticals, Inc. (the "Company"), of which 3,108,287 Shares are
outstanding, 11,100 Shares are issuable (and offered) by the Company upon
exercise of the Class B Warrants also offered hereby and 399,079 Shares are
issuable upon exercise of other warrants, and (ii) 11,100 Class B Warrants. Each
Class B Warrant entitles the holder to purchase one share of Common Stock at
$4.75 per share, subject to adjustment, on or prior to March 15, 1996. The
Shares and the Class B Warrants may be offered and sold by certain stockholders
of the Company named herein (the "Selling Securityholders") from time to time in
transactions on the Nasdaq National Market or other exchanges or markets on
which the Shares or Class B Warrants may be traded, in the over-the-counter
market, in negotiated transactions, through the writing of options on the Shares
or a combination of such methods of sale or through other means. Sales may be
effected at fixed prices that may be changed, at market prices prevailing at the
time of sale, at prices related to such prevailing market prices or at
negotiated prices.
The Selling Securityholders may effect such transactions by
selling the Shares or the Class B Warrants to or through broker-dealers
(including broker-dealers which may be affiliated with any such Selling
Securityholder) and such broker-dealers may receive compensation in the form of
discounts, concessions or commissions from the Selling Securityholders or the
purchasers of the Shares or Class B Warrants for whom such broker-dealers may
act as agent or to whom they sell as principal or both (which compensation to a
particular broker-dealer might be in excess of customary commissions). See
"Selling Securityholders" and "Plan of Distribution."
None of the proceeds from the sale of the Shares or the Class B
Warrants by the Selling Securityholders will be received by the Company although
the Company will receive proceeds from any exercise of the Class B Warrants or
other warrants. The Company has agreed to bear certain expenses in connection
with the registration and sale of the Shares and Class B Warrants being offered
by the Selling Securityholders. The Company has agreed to indemnify certain of
the Selling Securityholders against certain liabilities, including certain
liabilities under the Securities Act of 1933, as amended.
The Common Stock and Class B Warrants trade on the Nasdaq
National Market under the symbols IPIC and IPICZ, respectively. On February 27,
1996, the last sale prices of the Shares and Warrants were $29 5/8 and $24 1/4,
respectively.
------------------------------------
THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 8 OF THIS PROSPECTUS.
------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------------------
The date of this Prospectus is ________ __, 1996
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AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange
Commission (the "Commission"), Washington, D.C. a Registration Statement on Form
S-3 under the Act covering the securities offered by this Prospectus. This
Prospectus does not contain all of the information set forth in the Registration
Statement and the exhibits thereto. Statements contained in this Prospectus as
to the contents of any contract or other document referred to are not
necessarily complete and in each instance such statement is qualified by
reference to each such contract or document. The Company is subject to the
informational requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and in accordance therewith files reports and other
information with the Commission. Reports and other information filed by the
Company with the Commission can be inspected and copies at the public reference
facilities maintained by the Commission at the following addresses: New York
Regional Office, Seven World Trade Center, New York, New York 10048; and Chicago
Regional Office, Northwestern Atrium Center, 500 West Madison Street, Chicago,
Illinois 60661-2511. Copies of such material can be obtained from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549 at prescribed rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission (File No.
0-18728) pursuant to the Exchange Act are incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for the fiscal year
ended September 30, 1995, including any documents or portions thereof
incorporated by reference therein and all amendments thereto;
2. The Company's definitive proxy statement dated January 26,
1996, except the Compensation Committee Report on executive compensation and the
performance graph included in the proxy statement, filed pursuant to Section 14
of the Exchange Act;.
3. The Company's Reports on Form 8-K dated January 18, 1996 and
February 7, 1996 and Form 8-K/A dated February 20, 1996;
4. The Company's Quarterly Report on Form 10-Q for the quarter
ended December 31, 1995;
5. The Company's Registration Statement on Form 8-A declared
effective on March 8, 1990, as amended, registering the Common Stock under the
Exchange Act; and
6. All documents filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus
and prior to the termination of this offering, except the Compensation Committee
Report on Executive Compensation and the performance graph included in the Proxy
Statement filed pursuant to Section 14 of the Exchange Act.
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Any statement contained in any 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 subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as modified or superseded, to constitute a part of this Prospectus. The
Company will provide without charge to each person to whom this Prospectus is
delivered, upon written or oral request of any such person, a copy of any or all
of the documents incorporated herein by reference (other than exhibits to such
documents which are not specifically incorporated by reference into such
documents). Requests for such documents should be directed to the Company, 99
Hayden Avenue, Lexington, Massachusetts 02173, Attention:
Chief Financial Officer, telephone (617) 861-8444.
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PROSPECTUS SUMMARY
The Company
Interneuron Pharmaceuticals, Inc. ("Interneuron") is a
diversified biopharmaceutical company engaged in the development and
commercialization of a portfolio of products primarily for the treatment or
management of central nervous system disorders. Interneuron is also developing
diverse technologies and products through four subsidiaries, Intercardia, Inc.
("Intercardia") Progenitor, Inc. ("Progenitor"), Transcell Technologies, Inc.
("Transcell"), and InterNutria, Inc. ("InterNutria"). The technology or product
areas of the subsidiaries include: cardiovascular and pulmonary disease through
Intercardia; gene therapy, growth factors and stem cell production through
Progenitor; combinatorial chemistry, drug discovery and drug transport through
Transcell; and dietary supplements and related products through InterNutria.
Interneuron's strategy emphasizes the development of
pharmaceutical products with significant clinical data or international market
experience and which may provide treatments for disorders or diseases which are
not adequately addressed by available therapies. Interneuron focuses on
developing products that mimic or affect neurotransmitters, which are chemicals
carrying messages between nerve cells of the brain and within the peripheral
nervous system and which are believed to influence behavior and neurological
disturbances. A drug or other treatment that either increases or decreases the
amount of a neurotransmitter released into or taken up by a synapse, or mimics
the neurotransmitter, will thereby usually affect certain behaviors which depend
on the nerve cells that release the neurotransmitter. Many neurological and
psychiatric disorders are believed to be related to the level or functioning of
neurotransmitters. The Company believes that treatments for many of these
disorders are unavailable, ineffective or inadequate. Accordingly, the Company
has developed and is developing products tailored to treat many such disorders,
including with the aim of developing treatments which are more effective or
which have an improved side effect profile compared to available treatments.
In addition, Interneuron is pursuing a strategy of
diversification within the healthcare field by acquisition, in-licensing and
establishing and providing initial funding to its Subsidiaries to conduct
research and development in specialized areas. The Company's goal is for its
subsidiaries to establish independent operations and financing through corporate
alliances, equity or third party financings, mergers or other business
combinations, with Interneuron generally retaining an ongoing equity interest.
The nature of any such transaction is expected to vary depending on the business
and capital needs of each Subsidiary and the stage of development of their
respective technologies or products.
The Company's lead pharmaceutical product is dexfenfluramine, a
prescription drug intended for use in the treatment of obesity. In November
1995, an advisory committee of the Food and Drug Administration ("FDA") voted
6-to-5 to recommend the approval of dexfenfluramine as a prescription treatment
for obesity. The advisory committee also recommended that Phase IV, or post
marketing, studies be conducted and that certain labeling guidelines be
implemented. The
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Company obtained exclusive U.S. rights to dexfenfluramine for this use from Les
Laboratoires Servier, a French pharmaceutical company ("Servier"). If FDA
approval is obtained, the drug is expected to be marketed under the tradename
Redux(TM) by American Home Products Corp. (formerly American Cyanamid Company)
("AHP"), which licensed from the Company exclusive rights to market
dexfenfluramine in the U.S. in exchange for royalties on product sales and a
series of milestone-related cash payments and equity investments. The Company
retained certain co-promotion rights. The Company also has a contract
manufacturing agreement with Boehringer Ingelheim Pharmaceuticals, Inc.
("Boehringer") relating to the manufacture of dexfenfluramine capsules.
Dexfenfluramine is currently marketed by Servier in over 40 countries outside
the U.S.
Interneuron may continue to establish collaborations with
leading pharmaceutical companies to develop and commercialize certain products,
while directly marketing other products, depending upon, among other factors,
the extent and cost of clinical development required and the nature of the
target market.
Other principal products or products under development by the
Company include:
CITICOLINE - a product under development for the treatment of
memory and motor impairment associated with ischemic stroke. This product is
currently marketed by third parties in several countries outside the U.S. and
the Company has rights for certain applications in the U.S. and Canada. A Phase
II/III clinical trial for this product with patients suffering from ischemic
stroke was recently completed, and another clinical trial has commenced. See
"Recent Developments."
BUCINDOLOL - a drug under development by Intercardia and
currently in a Phase III clinical trial (the "BEST Study") for treatment of
congestive heart failure. The BEST Study is being conducted by a division of the
National Institutes of Health ("NIH") and by the Department of Veterans Affairs
("VA"). Intercardia licensed exclusive worldwide rights to bucindolol and
entered into an agreement with Astra-Merck, Inc. ("Astra-Merck") for the
development, commercialization and marketing of a twice-daily formulation of
bucindolol for congestive heart failure in the U.S.
LOW-DOSE MELATONIN - The Company is developing a low-dose form
of melatonin, a naturally occurring hormone regulating the body's circadian
rhythm, expected to be marketed under the name Melzone(TM). This product may be
useful as a sleeping aid. The Company expects to conduct a regional test launch
of Melzone in 1996.
PMS ESCAPE(TM) - a dietary supplement for women during their
pre-menstrual period which InterNutria expects to test launch on a regional
basis in 1996.
PAGOCLONE - a drug under development as an anti-anxiety drug. A
Phase I trial in the United Kingdom has been completed and the Company expects
to begin a Phase II trial in the United Kingdom in 1996.
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The Company was originally incorporated in New York in October
1988 and in March 1990 was reincorporated in Delaware. The Company's executive
offices are located at One Ledgemont Center, 99 Hayden Avenue, Suite 340,
Lexington, Massachusetts 02173, and its telephone number is (617) 861-8444.
Unless the context indicates otherwise, all references to the Company include
Interneuron and its subsidiaries, Intercardia, Progenitor, Transcell, and
InterNutria (the "Subsidiaries").
Recent Developments
In February 1996, the Company announced preliminary results of
a recently completed clinical trial with citicoline. The preliminary results
indicated a statistically significant improvement in the recovery of patients
who suffered an ischemic stroke and were treated with citicoline compared to
patients who received placebo. Once the results are finalized, the Company
intends to review the findings with the FDA and to define with them the nature
and extent of any additional studies that may be required.
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RISK FACTORS
An investment in the securities offered hereby is speculative
in nature and involves a high degree of risk. Each prospective investor should
carefully consider the following risk factors, as well as others described
elsewhere or incorporated by reference in this Prospectus, associated with this
offering, before making an investment.
HISTORY OF LOSSES; ACCUMULATED DEFICIT AND ANTICIPATED FUTURE
LOSSES; POTENTIAL FLUCTUATIONS IN REVENUES. The Company is engaged primarily in
research and development activities and its only revenues from operations have
been license fees or expense reimbursements. At December 31, 1995, the Company
had accumulated net losses of approximately $82 million and significant losses
and decreases in working capital are continuing. The Company will be required to
conduct significant development and pre-clinical or clinical testing activities
and establish regulatory, marketing, sales and administrative capabilities for
many of its proposed products, which are expected to result in operating losses
for the foreseeable future. The extent of future losses and time required to
achieve profitability are highly uncertain. There can be no assurance that the
Company will be able to achieve profitability on a sustained basis, if at all.
The Company has experienced, and may continue to experience, fluctuations in
revenues as a result of the timing of license fees or milestone payments.
RISK RELATING TO COMMERCIALIZATION OF DEXFENFLURAMINE. The
Company's future success may depend in large part on whether dexfenfluramine
ultimately receives FDA approval and is marketed successfully. Various factors
will affect the Company's ability to commercialize dexfenfluramine, including
the following:
REGULATORY REQUIREMENTS. FDA approval is required
before marketing of dexfenfluramine can commence in the United
States. In November 1995, an advisory committee of the FDA
voted 6-to-5 to recommend approval of dexfenfluramine as a
prescription treatment for obesity. However, there can be no
assurance that dexfenfluramine will receive FDA approval or as
to the timing of such approval, if obtained. The advisory
committee also recommended that if the drug is approved, Phase
IV, or post marketing, studies be conducted and certain
labeling guidelines be implemented. The precise nature of these
studies and labeling guidelines has not yet been determined.
However, Interneuron expects that the studies may be designed
to address two principal safety issues, i.e., whether
dexfenfluramine is associated with certain neurochemical
changes in the brain or with the development of primary
pulmonary hypertension, a rare but serious lung disease. These
safety issues and other factors may also affect the labeling
for the drug, which may limit the market for and the claims
that may be made in marketing the drug.
DEPENDENCE ON AHP FOR MARKETING. The ability to
commercialize Redux, assuming FDA approval is obtained, will
depend to a significant extent on the marketing and sales
efforts of AHP, over which the Company has minimal control. The
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Company's agreements with Servier require launch of the product
within six months after an approval letter from the FDA is
obtained. There can be no assurance that AHP will devote
resources to dexfenfluramine sufficient to achieve successful
market penetration and acceptance, that the Company will
generate significant revenues from royalties, or that such
royalties will be sufficient to offset the Company's
significant investment in research and development and other
costs associated with dexfenfluramine. AHP has the right to
terminate the Sublicense Agreements at any time prior to
commercial introduction of dexfenfluramine or at any time after
commercial introduction on 12 months notice. Any such
cancellation would materially adversely affect the Company's
ability to commercialize dexfenfluramine.
EFFECT OF CONTROLLED SUBSTANCES ACT AND SIMILAR STATE
REGULATIONS. Fenfluramine and its isomers, including
dexfenfluramine, are currently designated as Schedule IV
substances under the Controlled Substances Act. This act
imposes various registration and record keeping requirements
and restricts the number of prescription refills. In September
1995, an advisory committee of the FDA recommended the removal
of fenfluramine and its isomers from these controls. However,
there can be no assurance as to whether descheduling will occur
or as to the timing of such descheduling. Further, state
descheduling actions are required by many states even after
federal descheduling. Assuming FDA approval to market
dexfenfluramine is obtained, the continued status of
dexfenfluramine as a controlled substance would adversely
affect the marketability of the drug and would result in
reduced and/or delayed milestone payments, equity investments
and royalties to the Company under its agreements with AHP (the
"Sublicense Agreements").
DEPENDENCE ON SUPPLIERS. The Company is required to
purchase for five years from commercial introduction all
requirements of dexfenfluramine bulk chemical from an affiliate
of Servier at a fixed price, subject to annual adjustments
based on Servier's cost. The Company is also required to
purchase until December 1998 all requirements of
dexfenfluramine capsules from Boehringer. The Company is
responsible for supplying AHP with its requirements for
dexfenfluramine in bulk chemical or finished product form, as
required by AHP. Accordingly, the Company will be materially
dependent on the ability of each of Servier and Boehringer to
have manufactured and delivered, on a timely basis, sufficient
quantities of bulk chemical and capsules, respectively. In the
event the Company is unable to deliver to AHP sufficient
quantities of dexfenfluramine capsules, the Company's business
and results of operations would be materially adversely
affected.
COMPETITION. Redux may be subject to substantial
competition from established pharmaceutical companies. The
Company is aware of drugs under development for the treatment
of obesity including sibutramine, for which BASF AG has filed
an NDA to treat obesity, a drug under development by Roche
Holdings Ltd. that is in clinical trials, and a drug for which
Neurogen Corporation has filed an IND.
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In addition, dexfenfluramine is an isomer of fenfluramine,
which is sold under the brand name Pondimin by AHP and which is
available in the United States for approximately the same use
as dexfenfluramine. Although dexfenfluramine is distinguishable
from fenfluramine, there can be no assurance that
dexfenfluramine, which is expected to be higher priced then
fenfluramine, will ultimately achieve greater market acceptance
than fenfluramine or any other prescription drug used to treat
obesity. In addition, other drugs and technologies relating to
the treatment of obesity are in earlier stages of development.
PATENT EXPIRATION. The composition of matter patent on
dexfenfluramine in the United States has expired and
competitors, including generic drug manufacturers, may market
dexfenfluramine claiming uses other than obesity related to
abnormal carbohydrate craving, assuming FDA approval can be
obtained. The use patent on dexfenfluramine for the treatment
of abnormal carbohydrate craving, which has been licensed to
the Company, expires in 2000. There can be no assurance that
this patent will afford any competitive advantage or will not
be challenged or circumvented by third parties. The Company's
minimum royalty obligations to Servier for the license of the
know-how and trademark extend beyond the patent expiration
date. This royalty payment obligation may adversely affect the
Company's ability to compete against any then available generic
drugs that are offered at lower prices.
TERMINATION OF AGREEMENTS. The Company's agreements
with Servier (the "Servier Agreements") may be terminated by
Servier under certain conditions, including an acquisition by a
new party (other than existing stockholders or their affiliates
as of the date of the Servier Agreements) of a 20% beneficial
ownership interest in the Company without Servier's consent.
The Servier Agreements also require Servier's consent to a
Company sublicense, which consent was obtained in connection
with the Sublicense Agreements. However, Servier has the right
to withdraw its consent to the Sublicense Agreements in the
event of a change in control of AHP or unless certain minimum
net sales are achieved or payments are made as if such minimum
sales were achieved. In the event of a breach of the Servier
Agreements by the Company which is not caused by AHP, or of
other specified events which result in the termination of the
Servier Agreements, AHP may succeed to the Company's position
under the Servier Agreements. AHP has the right to terminate
its sublicense at any time prior to its first commercial sale
of dexfenfluramine or, upon 12 months notice, after such first
commercial sale. The termination of either agreement would
likely have a material adverse effect on the Company.
NEED FOR SIGNIFICANT ADDITIONAL FUNDS AND COLLABORATIVE
ARRANGEMENTS. The Company has expended and will continue to expend substantial
funds to conduct research and development activities and pre-clinical and
clinical testing on products under development. In addition, the Company does
not have the resources or capability to manufacture or market by itself, on a
commercial scale, its proposed products. Accordingly, the Company will require
significant
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additional funds, either through additional equity or debt financings or
collaborative agreements with corporate sponsors or from other sources to
complete development or commence commercial scale manufacturing and marketing of
its proposed products. In addition, additional funds will be required to finance
the research and development projects of certain of the Company's subsidiaries.
The Company may ultimately establish its own manufacturing or marketing
capabilities for certain of its products, in which case it will require
substantial additional funds and personnel. In particular, the Company will seek
to co-promote Redux and currently intends to market directly citicoline,
Melzone(TM) and PMS Escape(TM), assuming applicable regulatory approvals are
obtained and test launches are successful. The Company will therefore be
required to establish and maintain appropriate internal sales forces. The
Company currently does not have any commitments for additional financing and
there can be no assurance that such financing will be available on acceptable
terms, if at all. If adequate funds are not available on acceptable terms, the
Company may be required to delay, scale back or eliminate one or more of its
product development programs.
EARLY STAGE OF PRODUCT DEVELOPMENT. The Company is engaged in
investigating a variety of technologies, pharmaceutical compounds and other
products or processes for therapeutic potential. There has been only limited
research in many areas of the Company's focus and results obtained in research
and testing conducted to date are not conclusive as to whether certain products
being investigated by the Company will be safe and effective for their proposed
use. Certain of the Company's proposed products are in the early developmental
stage, require significant further research and development, as well as testing
and regulatory clearances, and are subject to the risks of failure inherent in
the development of products or therapeutic procedures based on innovative
technologies. These risks include the possibilities that any or all of these
proposed products are found to be ineffective or toxic, or otherwise fail to
receive necessary regulatory clearances; that the proposed products or
procedures are uneconomical to market or do not achieve broad market acceptance;
that third parties hold proprietary rights that preclude the Company from
marketing them; or that third parties market a superior or equivalent product.
The Company is unable to predict whether any of its products will be
successfully manufactured or marketed . Further, due to the extended testing and
regulatory review process required before marketing clearance can be obtained,
the time frames for commercialization of any products or procedures are long and
uncertain.
UNCERTAINTIES RELATED TO CLINICAL TRIALS. Before obtaining
regulatory approval for the commercial sale of any of its pharmaceutical
products under development, the Company must demonstrate that the product is
safe and efficacious for use in each target indication. The results of
preclinical studies and early clinical trials may not be predictive of results
that will be obtained in large-scale testing, and there can be no assurance that
clinical trials of the Company's products will demonstrate the safety and
efficacy of its products or will result in marketable products. A number of
companies in the pharmaceutical industry have suffered significant setbacks in
advanced clinical trials, even after promising results in earlier trials. If the
Company were unable to demonstrate the safety and efficacy of certain of its
products, the Company may be adversely affected. The Company also expects to
conduct clinical evaluation on certain dietary supplement products under
development by InterNutria, which are subject to similar risks.
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<PAGE>
RISKS RELATING TO TEST LAUNCHES OF PRODUCTS. The Company
intends to conduct regional test launches of certain non-pharmaceutical products
during 1996, including PMS Escape, a dietary supplement for women with
pre-menstrual syndrome which is continuing to be clinically evaluated, and
Melzone, a low-dose formulation of melatonin. Based on the results of these test
launches, the Company may determine not to market the product, to conduct
additional testing of the product or to market the product on a broader scale.
There can be no assurance either of these test launches will be successful, or
if successful, be predictive of the commercial viability of either product if
marketed more broadly.
UNCERTAINTY OF GOVERNMENT REGULATION. The Company's research,
development and pre-clinical and clinical trials and the manufacturing and
marketing of most of its products are subject to an extensive regulatory
approval process by the FDA and other regulatory agencies in the U.S. and other
countries. The process of obtaining FDA and other required regulatory approvals
for drug and biologic products, including required pre-clinical and clinical
testing, is lengthy, expensive and uncertain. There can be no assurance that,
even after such time and expenditures, the Company will be able to obtain
necessary regulatory approvals for clinical testing or for the manufacturing or
marketing of any products. Even if regulatory clearance is obtained, post-market
evaluation of the products, if required, could result in restrictions on a
product's marketing or withdrawal of the product from the market as well as
possible civil or criminal sanctions. Certain products are proposed to be
marketed by the Company as dietary supplements, such as Melzone and PMS Escape.
There can be no assurance, however, that the FDA will not attempt to regulate
the products as drugs, which would require the filing of NDAs and review and
approval by the FDA prior to marketing, or otherwise restrict the marketing of
these products. In addition, classification of these products as dietary
supplements limits the types of claims that can be made in marketing.
In addition to the regulatory framework for product approvals,
the Company and its collaborative partners may be subject to regulation under
state and federal laws, including requirements regarding occupational safety,
laboratory practices, environmental protection and hazardous substance control,
and may be subject to other present and possible future local, state, federal
and foreign regulation. The impact of such regulation upon the Company cannot be
predicted and could be material and adverse.
DEPENDENCE ON OTHERS FOR CLINICAL DEVELOPMENT, REGULATORY
APPROVALS, MANUFACTURING AND MARKETING. The Company expects to rely upon
collaborative partners for the development, manufacturing and marketing of
certain of its products. The Company is therefore dependent on the efforts of
these collaborative partners and the Company may have limited control over the
manufacture and commercialization of such products. For example, with respect to
bucindolol, the Company does not control the BEST Study, which is being
conducted by the NIH and the VA, and will be substantially dependent upon
Astra-Merck for the commercial success of the twice-daily formulation of
bucindolol. In the event certain of the Company's collaborative partners
terminate the related agreements or fail to manufacture or commercialize
products, the Company would be materially adversely affected. Because the
Company will generally retain a royalty interest in sales of products licensed
to third parties, its revenues may be less than if it retained commercialization
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rights and marketed products directly. Although the Company believes that its
collaborative partners will have an economic motivation to commercialize the
products which they may license, the amount and timing of resources devoted to
these activities generally will be controlled by each partner. There can be no
assurance that the Company will be successful in establishing any additional
collaborative arrangements, or that any such collaborative partners will be
successful in commercializing products or not terminate their collaborative
agreements with the Company.
RISKS RELATING TO MANAGING GROWTH. Assuming proposed product
launches occur, the Company anticipates experiencing a period of rapid growth,
which is likely to place significant demands on the Company's management,
operational, financial and accounting resources. The Company's intention to
market certain products directly will further strain these resources. The
Company's future success will depend in part on whether it can expand its
operational, financial and accounting systems and expand, train and manage its
employee base. The Company's inability to manage growth effectively could have a
material adverse effect on the Company's business, financial condition and
results of operations.
COMPETITION. Competition from other pharmaceutical companies,
biotechnology companies, dietary supplement companies and other research and
academic institutions is intense and expected to increase. The Company is aware
of products and technologies under development by its competitors that address
diseases being targeted by the Company. For example, if regulatory approval is
obtained, bucindolol is expected to compete with carvedilol, which is expected
to be marketed in the U.S. by Smithkline Beecham, for the treatment of
congestive heart failure, and the patient enrollment rate of the BEST Study will
be adversely affected if carvedilol is approved by the FDA as a treatment for
congestive heart failure. In addition, Melzone will compete with a substantial
number of available melatonin products. The Company is aware of a number of
products in clinical development pursuing an indication for stroke which could
compete with citicoline. Many companies in this industry have substantially
greater financial resources and development capabilities than the Company and
have substantially greater experience in undertaking pre-clinical and clinical
testing of products, obtaining regulatory approvals and manufacturing and
marketing products. In addition to competing with universities and other
research institutions in the development of products, technologies and
processes, the Company may compete with other companies in acquiring rights to
products or technologies from universities. Competitors of the Company have
developed or are in the process of developing products or technologies that are,
or in the future may be, the basis for competitive products. There can be no
assurance that the Company will develop products that are more effective or
achieve greater market acceptance than competitive products, or that the
Company's competitors will not succeed in developing products and technologies
that are more effective than those being developed by the Company or that would
render the Company's products and technologies less competitive or obsolete.
UNCERTAINTY OF PATENT POSITION AND PROPRIETARY RIGHTS. The
Company's success will depend to a significant extent on its ability, or the
ability of its licensors, to obtain patent protection on technologies and
products and preserve trade secrets and to operate without infringing the
proprietary rights of others. The Company and its subsidiaries have rights to a
number of patents and
\J:\DOCS\BTPM_NY_\46\0043541.01
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<PAGE>
patent applications. Certain of these patents and patent applications include
biotechnology claims, the patentability of which generally is highly uncertain
and involves complex legal and factual questions. There can be no assurance that
any pending patent applications will result in the issuance of a patent or that
any patents issued will afford any competitive advantages or will not be
challenged or circumvented by third parties. Because of the extensive time
required for development, testing and regulatory review of a potential product,
it is possible that before a potential product can be commercialized, any
related patent may expire, or remain in existence for only a short period
following commercialization, thus reducing any advantage of the patent. For
example, the U.S. composition of matter patent on bucindolol expires in November
1997, before anticipated completion of clinical trials of the product. In
addition, the Company's licensed United States patent covering the
administration of citicoline to treat patients afflicted with conditions
associated with the inadequate release of brain acetylcholine expires in 2003.
As described in the licensed patent, such conditions may include the
neurological syndromes associated with brain traumas and stroke, but the claims
of the licensed patent do not specifically include the use of citicoline for the
indications for which the IND has been filed.
The Company may conduct research on pharmaceutical or chemical
compounds or technologies, the patents or other rights to which may be held by
third parties. If products based on such technologies are commercialized, they
may infringe such patents or other rights, licenses to which may not be
available to the Company. Failure to obtain needed patents, licenses or
proprietary information held by others may have a material adverse effect on the
Company's business. There can be no assurance that others will not independently
develop similar technologies or duplicate any technology developed by the
Company or, if patents are issued, design around the patented aspects of any
technology developed by the Company. Furthermore, litigation may be necessary to
enforce any patents issued to the Company or to determine the scope and validity
of the proprietary rights of others.
To the extent that consultants, key employees or other third
parties apply technological information independently developed by them or by
others to the Company's proposed projects, disputes may arise as to the
proprietary rights to such information which may not be resolved in favor of the
Company. The Company's Scientific Advisors and certain other consultants are
employed by or have consulting agreements with third parties and any inventions
discovered by such individuals generally will not become property of the
Company. There can be no assurance that Company confidentiality agreements will
not be breached or that the Company's trade secrets will not otherwise become
known or be independently discovered by competitors.
UNCERTAINTY REGARDING WAXMAN-HATCH ACT. The Drug Price
Competition and Patent Term Restoration Act of 1984 (the "Waxman-Hatch Act")
provides that a patent which claims a product, use or method of manufacture
covering certain drugs and certain other products may be extended for up to five
years to compensate the patent holder for a portion of the time required for
research and FDA review of the product. Although the Company expects to apply
for such protection for the use patent covering dexfenfluramine, there can be no
assurance that it will receive an extension. The Waxman-Hatch Act also
establishes a period of time from the date of FDA
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approval of certain new drug applications during which the FDA may not accept or
approve short-term applications for generic versions of the drug from other
sponsors, although it may accept or approve long-form applications (that is,
other complete NDAs) for such drug. There can be no assurance that any of the
benefits of the Waxman-Hatch Act or similar foreign laws will be available to
the Company or that such laws will not be amended or repealed.
DEPENDENCE UPON KEY PERSONNEL AND CONSULTANTS. The Company is
dependent on certain executive officers and scientific personnel, including
Glenn L. Cooper, M.D., the Company's President and Chief Executive Officer,
Richard Wurtman, M.D., a principal stockholder, director and Chairman of the
Scientific Advisors and Lindsay Rosenwald, M.D., the Chairman of the Board of
the Company. The Company has key person life insurance policies on the lives of
Drs. Wurtman, Rosenwald and Cooper. Drs. Wurtman and Rosenwald devote only a
portion of their time to the Company's business. In addition, the Company is
dependent upon certain executive officers or scientific personnel of the
Subsidiaries, each of which has separate management who are responsible, to a
large extent, for the day-to-day operations of the respective Subsidiary. In
addition, the Company relies on independent consultants to design and supervise
clinical trials and prepare FDA submissions.
Competition for qualified employees among pharmaceutical and
biotechnology companies is intense, and the loss of any of such persons, or an
inability to attract, retain and motivate additional highly skilled employees,
could adversely affect the Company's business and prospects. There can be no
assurance that the Company will be able to retain its existing personnel or to
attract additional qualified employees.
RISK OF PRODUCT LIABILITY. The use of the Company's products in
clinical trials and the marketing of any products may expose the Company to
substantial product liability claims. Certain of the Company's agreements
require the Company to obtain specified levels of insurance coverage, naming the
other party thereto as an additional insured. There can be no assurance that the
Company will be able to obtain such insurance coverage with respect to
dexfenfluramine or any other products, or if obtained, that such insurance can
be acquired in sufficient amounts to protect the Company or other named parties
against such liability or at a reasonable cost. The Company is required to
indemnify Servier, Boehringer and AHP against any claims, damages or liabilities
incurred by any of them in connection with the marketing of dexfenfluramine
under certain circumstances. The Company may also be required to indemnify other
licensors against product liability claims incurred by them as a result of
products developed by the Company under licenses from such entities. In the
event of an uninsured or inadequately insured product liability claim, or in the
event an indemnification claim was made against the Company, the Company's
business and financial condition could be materially adversely affected.
UNCERTAINTY REGARDING PHARMACEUTICAL PRICING AND REIMBURSEMENT.
The Company's business and financial condition will be affected by the efforts
of governmental and third-party payors to contain or reduce the cost of health
care. There have been, and the Company expects that there will continue to be, a
number of federal and state proposals to implement government control over
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the pricing or profitability of prescription pharmaceuticals, as is currently
the case in many foreign markets. While the Company cannot predict whether any
such legislative or regulatory proposals will be adopted or the effect such
proposals may have on its business, the announcement or adoption of such
proposals could have an adverse effect on the Company. Furthermore, the
Company's ability to commercialize its potential products may be adversely
affected to the extent that such proposals have a material adverse effect on the
business, financial condition and profitability of companies that are
prospective collaborative partners of the Company. Successful commercialization
of many of the Company's products may depend on the availability of
reimbursement for the cost of such products and related treatment from
third-party health care payors, such as the government, private insurance plans
and managed care organizations. There can be no assurance that such
reimbursement will be available. Such third-party payors are increasingly
challenging the price of medical products and services. Significant uncertainty
exists as to the reimbursement status of certain newly approved health care
products, and there can be no assurance that adequate third-party coverage will
be available with respect to any of the Company's products.
CONTROL BY PRESENT STOCKHOLDERS; ANTI-TAKEOVER PROVISIONS. The
officers, directors and principal stockholders of the Company (including
individuals or entities related to such stockholders) beneficially own
approximately 50% of the Company's outstanding Common Stock. Accordingly, these
officers, directors and stockholders may have the ability to exert significant
influence over the election of the Company's Board of Directors and to determine
corporate actions requiring shareholder approval.
The Board of Directors has the authority, without further
approval of the Company's stockholders, to fix the rights and preferences of and
to issue shares of preferred stock. Further, the Servier Agreements may be
terminated in the event of any acquisition by a new party (other than existing
stockholders or their affiliates as of the date of the Servier Agreements) of a
20% beneficial interest in the Company. In addition, Delaware corporate law
imposes limitations on certain business combinations. These provisions could,
under certain circumstances, have the effect of delaying or preventing a change
in control of the Company and, accordingly, could adversely affect the price of
the Company's Common Stock.
NO DIVIDENDS. The Company has not paid any cash dividends on
its Common Stock since inception and does not expect to do so in the foreseeable
future. Any dividends will be subject to the preferential cumulative dividend of
$.1253 per share and $1.00 per share payable on the outstanding Series B
Preferred Stock and Series C Preferred Stock, respectively, and dividends
payable on any other preferred stock issued by the Company.
POSSIBLE VOLATILITY OF STOCK PRICE. The market prices for
securities of emerging growth companies have historically been highly volatile.
Future announcements concerning the Company or its Subsidiaries, including
Intercardia, which is publicly-traded, or the Company's competitors, including
the results of testing and clinical trials, technological innovations or
commercial products, government regulations, developments concerning proprietary
rights, litigation or public concern as
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to the safety or commercial value of the Company's products, may have a
significant impact on the market price of the Company's Common Stock or Class B
Warrants.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the
Shares or the Class B Warrants by the Selling Securityholders. In the event that
all of the Class B Warrants and other warrants exercisable for Shares offered
hereby are exercised, the Company would receive additional proceeds of
approximately $2,781,000. Holders of warrants are not obligated to exercise
their warrants and there can be no assurance that warrantholders will choose to
exercise all or any of the warrants.
The Company will use proceeds received upon exercise of
warrants, if any, for working capital. The Company may also use proceeds to
acquire rights to new products and technologies.
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<PAGE>
SELLING SECURITYHOLDERS
The following table sets forth the names of each Selling Securityholder
and for each, the number of Shares and/or Class B Warrants beneficially owned at
the commencement of the offering, and the number of Shares and/or Class B
Warrants offered for sale, based on information provided to the Company by such
Selling Securityholders. The Shares and Class B Warrants are being registered to
permit public secondary trading of the Shares and/or Class B Warrants, and the
Selling Securityholders may offer the Shares and Class B Warrants for resale
from time to time. See "Plan of Distribution."
The Company has filed with the Commission under the Act a Registration
Statement on Form S-3, of which this Prospectus forms a part, with respect to
the resale of the Shares and/or Class B Warrants. The Company has agreed, among
other things, to bear certain expenses in connection with the registration and
sale of the Shares and Class B Warrants being offered by the Selling
Securityholders. See "Plan of Distribution."
Certain of the Selling Securityholders hold warrants (other than the Class
B Warrants) issued by the Company which, upon exercise, allow such Selling
Securityholder to purchase shares of Common Stock. Such Selling Securityholders
are expected to exercise their warrants and pay for their shares of Common Stock
immediately prior to offering such Shares pursuant to this Prospectus.
None of the Selling Securityholders are officers or directors of the
Company except that Alexander M. Haig, Jr. is a director of the Company. Each of
the Selling Securityholders listed below with a reference to footnote (9) is
employed by either Paramount Capital, Inc. ("Paramount"), an investment banking
firm which acted as placement agent for private placements of securities by
Company subsidiaries in fiscal 1995 or D.H. Blair & Co., Inc. ("Blair"), which
was a selected dealer in these private placements. Lindsay Rosenwald, M.D., the
Company's Chairman of the Board and a principal stockholder of the Company, is
the Chairman and sole stockholder of Paramount. Certain stockholders of Blair
(and individuals related to such stockholders) are principal stockholders of the
Company.
During fiscal 1995 Paramount and Blair received cash commissions
aggregating $657,433 and $112,586 respectively, from these private placements.
In addition, designees of Paramount received warrants to purchase an aggregate
of (i) 22,201 shares of preferred stock of Progenitor, (ii) 22,201 shares of
preferred stock of Transcell, (iii) 46,767 shares of preferred stock of
Intercardia and (iv) 13,875 Shares (and a designee of Paramount, Peter Kash,
received warrants to purchase an additional 25,000 Shares). Of these warrants,
12,274, 12,274, 30,092 and 7,671, respectively, were received by Dr. Rosenwald.
Designees of Blair received warrants to purchase an aggregate of (i) 12,700
shares of preferred stock of Progenitor, (ii) 12,700 shares of preferred stock
of Transcell, (iii) 4,266 shares of preferred stock of Intercardia and (iv)
7,938 Shares. Certain of the Shares listed under "Placement Agent and other
Warrant Shares" are issuable upon exercise of the warrants to purchase Shares
issued in one of these private placements, as noted. Blair was the underwriter
of the Company's initial public offering in March 1990 and all of the
individuals listed under "Unit Purchase
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<PAGE>
Option Securities" received the securities listed under "Amount Being Offered"
in connection with such initial public offering.
During fiscal 1995, the Company entered into a consulting agreement with
Paramount pursuant to which it paid a fee to Paramount of $5,000 a month until
February 1995, for an aggregate of $15,000, and granted to Timothy McInerny, a
designee and officer of Paramount, warrants to purchase 25,000 Shares. The
Shares issuable upon exercise of these warrants are being offered hereby.
During fiscal 1995, in connection with a private placement of the
Company's securities to Reliance Insurance Company for which Paramount acted as
placement agent, the Company paid Paramount cash compensation of $300,000 and
granted to Peter Kash, a designee and officer of Paramount warrants to purchase
an additional 50,000 Shares. All of the Shares issuable upon exercise of
warrants held by Mr. Kash are being offered hereby.
Elan Corporation, plc, an affiliate of Elan International Services Ltd.,
is a licensee of the Company and, during the fiscal years ended September 30,
1993 and 1995, paid the Company $5.4 million and $31,366, respectively, in
license fees and royalties.
Certain of the stockholders listed under "Former CPEC Stockholders" are
also stockholders of Myocor, Inc. which, pursuant to consulting and research
agreements with subsidiaries of the Company, received fees of $10,417 and
$157,600 in fiscal 1994 and 1995, respectively, and is entitled to fees of
approximately $141,000 and $75,000 in fiscal 1996 and 1997, respectively. In
addition, one of such stockholders, Robert Ginsburg, through an affiliate, has
an option and consulting agreement with Intercardia relating to certain patents.
In connection with several private placements of Company securities in
fiscal 1995, Capello Capital Corp. received placement agent fees aggregating
approximately $507,000 and designees of Capello Capital Corp. (Linda S. Capello,
Gerard K. Capello and Lawrence K. Fleischman, each of whom are Selling
Securityholders) received warrants to purchase an aggregate of 16,000 Shares,
all of which Shares are being offered hereby.
M&G Equities, a Selling Securityholder, is owned by two executive officers
and controlling stockholders of American Stock Transfer & Trust Company, the
transfer agent and warrant agent for the Company's Common Stock and Class B
Warrants.
Except as noted below, each Selling Securityholder beneficially owns less
than one percent of the outstanding Common Stock.
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<PAGE>
<TABLE>
AMOUNT
BENEFICIALLY OWNED AMOUNT
SELLING SECURITYHOLDERS PRIOR TO OFFERING BEING OFFERED
- ----------------------- ---------------------------- --------------------
<S> <C> <C> <C> <C>
CLASS B CLASS B
IPI PRIVATE PLACEMENTS SHARES WARRANTS SHARES WARRANTS
- ---------------------- ------ -------- ------ --------
BT Holdings (New York), Inc. 312,500(1) 312,500(1)
DFA Group Trust Small Company Subtrust(2) 257,368 257,368
DFA Group Trust-6-10 Subtrust(2) 218,406 218,406
DFA Group Trust-6-7-8 Subtrust(2) 49,898 49,898
U.S. 9-10 Small Company Portfolio(2) 139,948 139,948
U.S. 6-10 Small Company Series(2) 17,166 17,166
GFL Advantage Fund Limited 569,609(3) 569,609(3)
Paresco, Inc. 200,000 200,000(4)
Silverton International Fund Ltd. 400,000(5) 400,000(5)
FORMER CPEC STOCKHOLDERS
- ------------------------
W. Bruce Bercovich 22,554 22,554
Arthur M. Feldman 31,576 31,576
Robert Ginsburg 226,773(6) 225,543(6)
Phillip Goodman 22,554 22,554
Michael Juliano 25,627 25,627
Milton Levin 112,772 112,772
Wayne Minobe 4,510 4,510
Maje Benjamin Perryman 9,020 9,020
Jonathan David Port 4,510 4,510
David Profitt 4,510 4,510
Randy P. Rasmussen 4,510 4,510
Mary V. Reynolds 9,020 9,020
Cornelis Van Breemen 15,788 15,788
Maud Van Breemen 15,788 15,788
Pauline Zera 4,510 4,510
SUBSIDIARY PRIVATE PLACEMENT WARRANT SHARES(7)
- ---------------------------------------------
Delbert Allen Jr. & Pat Allen,
JTWROS 5,000 5,000
Jerome V. Ansel 58,800 25,000
Bershad Investment Group, L.P. 5,000 5,000
Benjamin Bollag 5,000 5,000
Michael Cantor 5,000 5,000
Jose F. Colon 1,250 1,250
</TABLE>
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<PAGE>
<TABLE>
AMOUNT
BENEFICIALLY OWNED AMOUNT
SELLING SECURITYHOLDERS PRIOR TO OFFERING BEING OFFERED
- ----------------------- --------------------- ---------------------
<S> <C> <C> <C> <C>
CLASS B CLASS B
SHARES WARRANTS SHARES WARRANTS
------ -------- ------ --------
Robert J. Conrads 2,500 2,500
F&T Planning Centers, Inc. 5,000 5,000
Robert A. Foisie 7,500 7,500
Sandy Frank 2,500 2,500
Marc Gelman 21,500 10,000
Mildred Goldberger 1,250 1,250
Robert P. Gordon 2,500 2,500
Jeffrey S. Gutfreund 3,750 3,750
Andrew Holder 1,250 1,250
James Katz, M.D. 625 625
Donald R. Kendall, Jr. &
Diane S. Kendall JTWROS 1,250 1,250
Keys Foundation 25,000 25,000
Momentum Enterprises Inc.
Money Purchase Trust 2,500 2,500
M&G Equities 10,000 10,000
David H. Meyrowitz 1,250 1,250
Palmetto Partners, Ltd. 5,000 5,000
Thomas L. Parks &
Easter C. Parks, JTWROS 1,250 1,250
Gordon Rausser 2,500 2,500
Marc Roberts &
Ron Cantor, Esq.,
Tenants in Common 1,250 1,250
Elaine Rubin 12,500 12,500
M.D. Sabbah 25,000 25,000
Roslyn Seftel 1,250 1,250
E. Donald Shapiro 9,250 1,250
J.F. Shea Co., Inc. as
Nominee 1995-3 7,500 7,500
Eugene Silverman 1,250 1,250
Celia Sirotkin 1,250 1,250
Martin Sirotkin 1,250 1,250
Gary J. Strauss 1,250 1,250
Sidney Todres 5,000 5,000
Melvyn I. Weiss 12,500 12,500
Frederick Winston 2,500 2,500
</TABLE>
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<TABLE>
AMOUNT
BENEFICIALLY OWNED AMOUNT
SELLING SECURITYHOLDERS PRIOR TO OFFERING BEING OFFERED
- ----------------------- ---------------------- -----------------
<S> <C> <C> <C> <C>
CLASS B CLASS B
SHARES WARRANTS SHARES WARRANTS
------ -------- ------ --------
James D. Wolfensohn 5,000 5,000
Gary Wood 1,250 1,250
Wayne T. Young &
Karen J. Young, JTWROS 1,250 1,250
Zapco Holdings, Inc. Deferred 5,000 5,000
Compensation Plan Trust;
Nancy Heinrich, Trustee
UNIT PURCHASE OPTION SECURITIES(7)(8)
- ------------------------------------
Allison Brown(9) 2,300 600 1,800 600
Sylvia Coakley(9) 5,000 1,500 4,500 1,500
Stevens R. Monte 1,800 1,800
David Nachamie(9) 7,000 1,500 4,500 1,500
Michael Siciliano(9) 6,000 1,500 4,500 1,500
Kenton Wood(9) 19,500 6,000 18,000 6,000
PLACEMENT AGENT AND OTHER WARRANT SHARES (7)
- --------------------------------------------
Mark Abeshouse(9) 125 125
Axion Research Foundation 20,000 20,000
Linda N. Capello 6,480 6,480
Gerard K. Capello 4,320 4,320
Lawrence K. Fleischman 5,200 5,200
Scott Katzmann(9) 1,906 1,906
Peter Kash(9) 109,594(10) 76,344
Martin Kratchmann(9) 375 375
Richard Maio(9) 1,750 1,250
Timothy McInerny(9) 25,000 25,000
Wayne L. Rubin(9) 818 818
Michael S. Weiss(9) 1,636 1,636
OTHER STOCKHOLDERS
- ------------------
Elan International Services Ltd. 100,000 100,000
Alexander M. Haig, Jr. 202,750(11) 202,500
Leon Finley 22,500 22,500
</TABLE>
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<TABLE>
AMOUNT
BENEFICIALLY OWNED AMOUNT
SELLING SECURITYHOLDERS PRIOR TO OFFERING BEING OFFERED
- ----------------------- ---------------------- -----------------
<S> <C> <C> <C> <C>
CLASS B CLASS B
SHARES WARRANTS SHARES WARRANTS
------ -------- ------ --------
Yuichi Iwaki 50,000 50,000
Peter Kash(9) 109,594(10) 52,000
Donna Lozito(9) 3,000 3,000
Francine Tarnowsky(9) 3,000 3,000
</TABLE>
- ---------------
(1) Includes 62,500 Shares underlying warrants but excludes an aggregate
of 97,900 Shares owned by affiliated entities as of February 6, 1996.
The Shares owned directly and by affiliated entities represent an
aggregate of approximately 1.2% of the outstanding Common Stock.
(2) Each stockholder is a fund managed by Dimensional Fund Advisors, Inc.
("DFA"). The aggregate percentage of outstanding shares of Common
Stock owned by funds managed by DFA is approximately 2%.
(3) Excludes additional shares of Common Stock issuable if the
registration statement relating to this offering is not declared
effective prior to specified dates. Represents approximately 1.6% of
the outstanding Common Stock.
(4) Such stockholder has agreed not to sell any Shares prior to May 23,
1996.
(5) Represents approximately 1.2% of the outstanding Common Stock. Such
stockholder has agreed not to sell any Shares prior to March 31, 1996.
(6) Includes 117,282 Shares owned and being offered by Savacor Trust, of
which Mr. Ginsburg is Trustee.
(7) The amount owned prior to the offering includes Shares outstanding and
Shares issuable upon exercise of warrants; the amount being offered
represents only Shares issuable upon exercise of warrants.
(8) For each person listed under "Unit Purchase Option Securities" other
than Mr. Monte, the number of Shares owned prior to the Offering and
the number of Shares being offered includes the Shares issuable upon
exercise of the Class B Warrants owned by such individual. Each
individual other than Mr. Monte is registering for resale their Class
B Warrants and the Shares issuable upon exercise of their Class B
Warrants. Accordingly, they may either sell
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<PAGE>
the Class B Warrants or exercise the Class B Warrants and sell the
Shares issued upon such exercise, or a combination of these methods.
(9) Each individual is an employee of Paramount or Blair.
(10) Excludes 18,750 Shares issuable upon exercise of warrants not
exercisable within 60 days.
(11) Includes 250 Shares issuable upon exercise of options exercisable
within 60 days but excludes 1,750 Shares issuable upon exercise of
options not exercisable within 60 days.
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<PAGE>
PLAN OF DISTRIBUTION
The Company has been advised that the Selling Securityholders may sell
Shares or the Class B Warrants from time to time in transactions on the Nasdaq
National Market or on other exchanges on which the Shares and/or Class B
Warrants may be traded, in the over-the-counter market, in negotiated
transactions, through the writing of options on the Shares or a combination of
such methods of sale, or through other means. Sales may be effected at fixed
prices which may be changed, at market prices prevailing at the time of sale, at
prices related to such prevailing market prices or at negotiated prices.
The Selling Securityholders may effect such transactions by selling the
Shares or Class B Warrants to or through broker-dealers, and such broker-dealers
may receive compensation in the form of discounts, concessions or commissions
from the Selling Securityholders or the purchasers of the Shares or Class B
Warrants for whom such broker-dealers may act as agent or to whom they sell as
principal, or both (which compensation to a particular broker-dealer might be in
excess of customary commissions). The Selling Securityholders and any
broker-dealers or agents who participate in the distribution of Shares or Class
B Warrants hereunder may be deemed to be "underwriters" as that term is defined
in the Act, and any commissions received by them and profit on any resale of the
Shares as principal might be deemed to be underwriting discounts and commissions
under the Act.
The Company has agreed to pay the expenses of registration in
connection with this Offering and to indemnify certain of the Selling
Securityholders against certain liabilities, including certain liabilities under
the Act.
At the time a particular offer of Shares or Class B Warrants is made,
to the extent required, a supplement to this Prospectus will be distributed
which will identify and set forth the aggregate amount of Shares or Class B
Warrants being offered and the terms of the offering.
The Selling Securityholders are not restricted as to the price or
prices at which they may sell their Shares or Class B Warrants. Sales of Shares
or Class B Warrants may depress the market price of the Company's Common Stock
or Class B Warrants. The Selling Securityholders are subject to applicable
provisions of the Exchange Act and the rules and regulations thereunder,
including without limitation rules 10b-6 and 10b-7, which provisions may limit
the timing of purchases and sales of the Shares or Class B Warrants by the
Selling Securityholders.
In order to comply with certain states' securities laws, if applicable,
the Shares or Class B Warrants may be sold in such jurisdictions only through
registered or licensed brokers or dealers. In certain states the Shares or Class
B Warrants may not be sold unless the Shares or Class B Warrants have been
registered or qualified for sale in such state, or unless an exemption from
registration or qualification is available and is obtained.
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<PAGE>
DESCRIPTION OF SECURITIES
COMMON STOCK
- ------------
The Company is authorized to issue up to 60,000,000 shares of Common
Stock, $.001 par value. At February 27, 1996, there were 35,020,277 shares of
Common Stock outstanding. Holders of Common Stock are entitled to one vote at
all meetings of shareholders for each share held by them. Common Stock have no
preemptive rights and have no other rights to subscribe for additional shares or
any conversion right or right of redemption. Holders of Common Stock are
entitled to receive such dividends as may be declared by the Board of Directors
out of funds legally available therefor. Subject to the rights of holders of
Preferred Stock, if any, upon liquidation, all such holders are entitled to
participate pro rata in the assets of the Company available for distribution.
All of the outstanding shares of Common Stock are, and the shares to be issued
hereby will be, when issued, fully paid and nonassessable.
CLASS B WARRANTS
- ----------------
The Class B Warrants were issued pursuant to a warrant agreement (the
"Warrant Agreement") among the Company, Blair and American Stock Transfer &
Trust Company, the warrant agent and, with respect to the Class B Warrants
offered hereby, Unit Purchase Options issued to Blair's designees in connection
with the Company's initial public offering.
At February 27, 1996, the Company had 1,959,772 Class B Warrants
outstanding including the Class B Warrants offered hereby. Each Class B Warrant
entitles the registered holder thereof to purchase one share of Common Stock at
a price of $4.75 subject to adjustment, at any time after the date of issuance
until the close of business on March 15, 1996, subject to earlier redemption as
follows: If the average of the closing prices of the Common Stock exceeds $5.50
for any period of 20 consecutive business days, then upon at least 30 days'
prior written notice, given within 15 days, the Company will be able to call all
(but not less than all) of the Class B Warrants for redemption at a price of
$.05 per Class B Warrant. The Class B Warrants underlying the Unit Purchase
Options (including the Class A Warrants) are not subject to redemption.
The exercise prices of the Class B Warrants were determined by
negotiation between the Company and Blair. The exercise price of the Class B
Warrants and the number and kind of shares of Common Stock or other securities
and property to be obtained upon exercise of the Class B Warrants are subject to
adjustment in certain circumstances.
The Class B Warrants do not confer upon the holder any voting or any
other rights of a shareholder of the Company. Upon notice to the Class B
Warrantholders, the Company has the right to reduce the exercise price or extend
the expiration date of the Class B Warrants. Although this right is intended to
benefit Class B Warrantholders to the extent the Company exercises this right
when the Class B Warrants would otherwise be exercisable at a price higher than
the prevailing market price of the Common Stock, the likelihood of exercise, and
resultant increase in the number
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<PAGE>
of shares outstanding, may result in making more costly or impeding a change in
control in the Company.
The Class B Warrants may be exercised upon surrender of the Class B
Warrant certificate on or prior to the respective expiration date (or earlier
redemption date) of such Class B Warrants at the offices of American Stock
Transfer & Trust Company (the "Warrant Agent"), with the form of "Election to
Purchase" on the reverse side of the Class B Warrant certificate completed and
executed as indicated, accompanied by payment of the full exercise price (by
certified check payable to the order of the Class B Warrant Agent) for the
number of Class B Warrants being exercised.
TRANSFER AGENT AND WARRANT AGENT
- --------------------------------
American Stock Transfer & Trust Company, 40 Wall Street, New York, New
York, 10005 serves as transfer and warrant agent for the Common Stock and Class
B Warrants.
PREFERRED STOCK
- ---------------
The Certificate of Incorporation of the Company authorizes the issuance
of 5,000,000 shares of Preferred Stock. The Board of Directors, within the
limitations and restrictions contained in the Certificate of Incorporation and
without further action by the Company's stockholders, has the authority to issue
Preferred Stock from time to time in one or more series and to fix the number of
shares and the relative rights, conversion rights, voting rights, rights and
terms of redemption, liquidation preferences and any other preferences, special
rights and qualifications of any such series. To the extent shares of Preferred
Stock with voting rights are issued, such issuance affects the voting rights of
the holders of the Company's Common Stock by increasing the number of
outstanding shares entitled to vote and, if applicable, by the creation of class
or series voting rights. In addition, while the issuance of Preferred Stock can
provide flexibility in connection with acquisitions and other corporate
purposes, any issuance of Preferred Stock could, under certain circumstances,
have the effect of delaying or preventing a change in control of the Company and
may adversely affect the rights of holders of Common Stock. Other than the
Series B and Series C Preferred Stock issued and additional shares of preferred
stock which may be issued to AHP, the Company has no agreements or arrangements
to issue any shares of Preferred Stock or to establish or designate any series
of Preferred Stock.
In November 1992, the Company sold 239,425 shares of Series B Preferred
Stock to AHP pursuant to the Sublicense Agreements for an aggregate purchase
price of $3,000,000. In June 1993, the Company sold 5,000 shares of Series C
Preferred Stock to AHP for an aggregate purchase price of $500,000. Holders of
the Series B and Series C Preferred Stock are entitled to vote on all matters
submitted to a vote of stockholders generally, other than the election of
directors, holding the number of votes equal to the number of shares of Common
Stock into which the Preferred Stock is then convertible. The shares of Series B
Preferred Stock and the Series C Preferred Stock are convertible into an
aggregate of 622,221 shares of Common Stock, subject to further adjustment.
Holders of the Series B and Series C Preferred Stock are entitled to receive out
of funds legally available
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<PAGE>
therefor, mandatory dividends of $.1253 and $1.00 per share, respectively,
payable at the election of the Company in cash or Common Stock. Such dividends
are payable annually on April 1 of each year, accrue on a daily basis and are
cumulative. In the event of any liquidation, distribution or sale of all or
substantially all of the assets, dissolution or winding up of the Company, the
holders of Series B and Series C Preferred Stock shall be entitled to receive a
preference of $12.53 and $100 per share, respectively, plus cumulated and unpaid
dividends, over the holders of Common Shares and any other shares, other than
any other series of Preferred Stock which may be issued to AHP under the
Agreement which rank on a parity with the Series B and C Preferred Stock.
The Equity Agreement provides for the potential sale to AHP of up to
$3,500,000 (35,000 shares) of Series D or E Preferred Stock ( the "Additional
Series"), depending upon whether and when specified milestones are achieved.
Each of the Additional Series will contain terms substantially similar to those
of the Series C Preferred Stock except that each share of any Additional Series
will be convertible into the number of shares of Common Stock obtained by
dividing $100 by the then conversion price. The initial conversion price for the
Series D and Series E Preferred Stock will be 150% of the market price of the
Common Stock for 10 days preceding the effectiveness of the NDA or descheduling
of dexfenfluramine, respectively, subject to the antidilution adjustments.
Holders of the Additional Series are entitled to dividends of $1.00 per share
and a liquidation preference of $100 per share on the terms described above.
Until the date AHP ceases to be the registered holder of all of the
outstanding Preferred Stock of at least one series, the Company will not,
without the approval of the majority of the outstanding shares of all series of
Preferred Stock issued to AHP, (i) issue shares of stock having a preference or,
except shares issued to AHP, ranking pari passu with the outstanding series;
(ii) reclassify any shares of stock to shares having a preference over any such
series; (iii) make any amendment to its Certificate of Incorporation or by-laws
adversely affecting the rights of holders of such series; (iv) merge or
consolidate with any entity or sell or otherwise dispose of all or substantially
all of its assets or liquidate, dissolve, recapitalize or reorganize; (v)
repurchase or redeem any shares of its Common Stock; (vi) pay dividends or make
any other distribution on any Common Stock, except a distribution payable
entirely in Common Stock, unless at the same time, a payment is made to the
holder of such series equal to the amount the holder would have been entitled to
had such holder converted its Series B and Series C Preferred Stock into Common
Stock; or (vii) guarantee any indebtedness of any third party, except a
subsidiary.
BUSINESS COMBINATION PROVISIONS
- -------------------------------
The Business Combination provision contained in Section 203 of
Delaware's General Corporation Law ("Section 203") defines an interested
shareholder as any person that (i) owns, directly or indirectly 15% or more of
the outstanding voting stock of the corporation or (ii) is an affiliate or
associate of the corporation and was the owner of 15% or more of the outstanding
voting stock at any time within the three-year period immediately prior to the
date on which it is sought to be determined whether such person is an interested
shareholder; and the affiliates and the associates of such person. Under Section
203, a resident domestic corporation may not engage in any business
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<PAGE>
combination with any interested shareholder for a period of three years
following the date such shareholder became an interested shareholder, unless (i)
prior to such date the board of directors of the corporation approved either the
business combination or the transaction which resulted in the shareholder
becoming an interested shareholder or (ii) upon consummation of the transaction
which resulted in the shareholder becoming an interested shareholder, the
interested shareholder owned at least 85% of the voting stock of the corporation
outstanding at the time the transaction commenced (excluding for determining the
number of shares outstanding (a) shares owned by persons who are directors and
officers and (b) employee stock plans, in certain instances, or (iii) on or
subsequent to such date the business combination is approved by the board of
directors and authorized at an annual or special meeting of shareholders by at
least 66% of the affirmative voting stock which is not owned by the interested
shareholder. The Company did not "elect-out" of the statute and, therefore, the
restrictions imposed by Section 203 apply to the Company.
REGISTRATION RIGHTS
- -------------------
Substantially all of the Shares offered hereby had certain demand and
piggy-back registration rights. In addition to these registration rights, one
stockholder of the Company has demand and piggy-back registration rights
relating to a minimum of 1,000,000 shares of Common Stock commencing in June
1996, one stockholder of the Company has demand and piggy-back registration
rights, which have been waived in connection with this offering, relating to
622,221 shares of Common Stock, holders of shares of Common Stock to be issued
in each of November 1996 and 1997 with a market value of $1,200,000 at the time
of each issuance have registration rights in January 1997 and 1998 relating to
the resale of those shares and, in the event up to a maximum of 2,181,638 shares
of Common Stock are issued in June 1998 pursuant to Put Protection Rights issued
in connection with certain financings of Subsidiaries, holders of such shares
will have registration rights at that time.
SHARES ELIGIBLE FOR FUTURE SALE
- -------------------------------
At February 27, 1996, the Company had 35,020,277 shares of Common Stock
outstanding. Of these shares, and excluding the shares offered hereby,
approximately 17,000,000 are owned by affiliates of the Company or are
"restricted securities" within the meaning of Rule and are or will be eligible
for sale under Rule 144.
In general under Rule 144 as currently in effect, a person (or persons
whose shares are aggregated), including persons who may be deemed to be
"affiliates" of the Company as that term is defined under the Act, is entitled
to sell within any three-month period a number of restricted shares beneficially
owned for at least two years that does not exceed the greater of (i) one percent
of the then outstanding shares of Common Stock, or (ii) the average weekly
trading volume in the Common Stock during the four calendar weeks preceding such
sale. Sales under Rule 144 are also subject to certain requirements as to the
manner of sale, notice and the availability of current public information about
the Company. However, a person who is not an affiliate and has beneficially
owned such
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<PAGE>
shares for at least three years is entitled to sell such shares without regard
to the volume of other resale requirements.
The Company also has registration statements on Form S-8 relating to
its Stock Option Plans and Stock Purchase Plan in order to permit holders of
options issued pursuant to the Plans, other than affiliates of the Company, to
sell, without restriction, shares of Common Stock issued upon exercise of
options.
LEGAL MATTERS
The validity of the securities offered hereby have been passed upon for
the Company by Bachner, Tally, Polevoy & Misher LLP, New York, New York. Certain
members of Bachner, Tally, Polevoy & Misher LLP, including the secretary of the
Company, own approximately 19,000 shares of Common Stock of the Company.
EXPERTS
The consolidated balance sheets as of September 30, 1995 and 1994 and
the consolidated statements of operations, cash flows and stockholders' equity
for each of the three years in the period ended September 30, 1995, incorporated
by reference in this registration statement, have been incorporated herein in
reliance on the report of Coopers & Lybrand L.L.P. independent accountants,
given on the authority of that firm as experts in accounting and auditing.
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<PAGE>
No dealer, salesman or any other person has been authorized to give any
information or to make any representation not contained in this Prospectus in
connection with the Offering herein contained, and, if given or made, such
information or representation must not be relied upon as having been authorized
by the Company or any underwriter. This Prospectus does not constitute an offer
to sell or a solicitation of any offer to buy any of the securities offered
hereby in any jurisdiction to any person to whom it is unlawful to make such an
offer or solicitation in such jurisdiction. Neither the delivery of this
Prospectus nor any sale hereunder shall under any circumstances create any
implication that there has been no change in the affairs of the Company since
any of the dates as of which information is furnished herein or since the date
hereof.
TABLE OF CONTENTS
PAGE
Available Information....................................................3
Incorporation of Certain Documents by Reference..........................3
Prospectus Summary.......................................................5
Risk Factors.............................................................8
Use of Proceeds.........................................................17
Selling Securityholders.................................................18
Plan of Distribution....................................................25
Description of Securities...............................................26
Legal Matters...........................................................30
Experts.................................................................30
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<PAGE>
PART II
Information Not Required in Prospectus
Item 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses payable by the Registrant in connection
with the issuance and distribution of the securities being registered are as
follows:
SEC Registration Fee................................. $38,946.45
Accounting Fees and Expenses......................... *
Legal Fees and Expenses.............................. *
Miscellaneous Expenses............................... *
Total................................................ *
* To be completed by amendment.
Item 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Certificate of Incorporation and By-Laws of the Company
provide that the Company shall indemnify any person to the full extent permitted
by the Delaware General Corporation Law.
Reference is hereby made to Section 145 of the Delaware
General Corporation Law relating to the indemnification of officers and
directors which Section is hereby incorporated herein by reference.
The Registrant also has Indemnification Agreements with each
of its directors.
Item 16. EXHIBITS.
(a) EXHIBITS
4.2 - Form of Warrant Agreement (1)
4.4 - Certificate of Designation establishing Series C Preferred Stock (17)
4.6 - Form of Registrant Warrant issued in subsidiary private placement (25)
4.7 - Form of Registrant Warrant issued to designees of Paramount Capital,Inc.
and D.H. Blair & Co., Inc. (25)
5.1 - Opinion of Bachner, Tally, Polevoy & Misher LLP as to legality*
23.1 - Consent of Coopers & Lybrand L.L.P. - Included on II - 6
23.2 - Consent of Bachner, Tally, Polevoy & Misher LLP*
24 - Power of Attorney - Included on II - 4
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II-1
<PAGE>
- ---------------------------
* To be filed by amendment.
(1) Incorporated by reference to the Registrant's registration statement on
Form S-1 (File No. 33- 32408) declared effective on March 8, 1990.
(17) Incorporated by reference to the Registrant's Quarterly Report on Form
10-Q for the nine months ended June 30, 1993
(25) Incorporated by reference to the Registrant's Annual Report on Form
10-K for the fiscal year ended September 30, 1994
Item 17. UNDERTAKINGS
Undertaking Required by Regulation S-K, Item 512(a).
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
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;
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering 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.
Undertaking Required by Regulation S-K, Item 512(b).
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing
of the registrant's annual report pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act of 1934 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 initial bona fide
offering thereof.
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II-2
<PAGE>
Undertaking required by Regulation S-K, Item 512(h).
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or controlling
persons 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.
Undertakings required by Regulation S-K, Item 512(i).
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, as amended, the information omitted from the form of
prospectus filed as part of this Registration Statement in reliance
upon Rule 430A and contained in the form of prospectus filed by the
Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the
Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(2) For purposes of determining any liability under the Securities Act
of 1933, 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.
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II-3
<PAGE>
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 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 Lexington, County of Middlesex on the 28th day
of February, 1996.
INTERNEURON PHARMACEUTICALS, INC.
By: /S/ GLENN L. COOPER
---------------------------------
Glenn L. Cooper, M.D.
President and Chief Executive Officer
The undersigned hereby constitute and appoint Glenn L. Cooper,
M.D. and Thomas F. Farb, and each of them the true and lawful agents and
attorneys-in-fact of the undersigned with full power and authority in said
agents and attorneys-in-fact, and in any one or more of them, to sign for the
undersigned any and all amendments to this Registration Statement on Form S-3
(including post-effective amendments) and file the same, with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, and with full power of substitution, hereby ratifying and
confirming all that each of said attorneys-in-fact, or his substitute or
substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement or amendment thereto has been signed by the
following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/S/ GLENN L. COOPER President, Chief Executive
- -------------------------- Officer and Director
Glenn L. Cooper, M.D. (Principal Executive Officer) February 28, 1996
/S/ LINDSAY ROSENWALD
- --------------------------
Lindsay Rosenwald, M.D. Chairman of the Board of
Directors February 28, 1996
Harry J. Gray Director February , 1996
Alexander M. Haig, Jr. Director February , 1996
/S/ PETER BARTON HUTT
- --------------------------
Peter Barton Hutt Director February 28, 1996
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II-4
<PAGE>
/S/ MALCOLM MORVILLE
- --------------------------
Malcolm Morville, Ph.D. Director February 28, 1996
/S/ ROBERT K. MUELLER
- --------------------------
Robert K. Mueller Director February 28, 1996
/S/ LEE J. SCHROEDER
- --------------------------
Lee J. Schroeder Director February 28, 1996
/S/ DAVID SHARROCK
- --------------------------
David Sharrock Director February 28, 1996
/S/ RICHARD WURTMAN
- --------------------------
Richard Wurtman, M.D. Director February 28, 1996
/S/ THOMAS F. FARB
- --------------------------
Thomas F. Farb Executive Vice President, Finance,
Treasurer and Chief Financial Officer
(Principal Financial and
Accounting Officer) February 28, 1996
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II-5
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this
registration statement on Form S-3 of our report dated November 13, 1995, on our
audits of the consolidated financial statements of Interneuron Pharmaceuticals,
Inc. as of September 30, 1994 and 1995, and for each of the three years in the
period ended September 30, 1995, which report is included in the Annual Report
on Form 10-K of Interneuron Pharmaceuticals, Inc. for the fiscal year ended
September 30, 1995. We also consent to the references to our firm under the
caption "Experts".
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
February 28, 1996
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II-6
<PAGE>
EXHIBIT INDEX
4.2 - Form of Warrant Agreement (1)
4.4 - Certificate of Designation establishing Series C Preferred Stock (17)
4.6 - Form of Registrant Warrant issued in subsidiary private placement (25)
4.7 - Form of Registrant Warrant issued to designees of Paramount Capital,Inc.
and D.H. Blair & Co., Inc. (25)
5.1 - Opinion of Bachner, Tally, Polevoy & Misher LLP as to legality*
23.1 - Consent of Coopers & Lybrand L.L.P. - Included on II - 6
23.2 - Consent of Bachner, Tally, Polevoy & Misher LLP*
24 - Power of Attorney - Included on II - 4
- ---------------------------
* To be filed by amendment.
(1) Incorporated by reference to the Registrant's registration statement on
Form S-1 (File No. 33- 32408) declared effective on March 8, 1990.
(17) Incorporated by reference to the Registrant's Quarterly Report on Form
10-Q for the nine months ended June 30, 1993
(25) Incorporated by reference to the Registrant's Annual Report on Form
10-K for the fiscal year ended September 30, 1994
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II-7
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this
registration statement on Form S-3 of our report dated November 13, 1995, on our
audits of the consolidated financial statements of Interneuron Pharmaceuticals,
Inc. as of September 30, 1994 and 1995, and for each of the three years in the
period ended September 30, 1995, which report is included in the Annual Report
on Form 10-K of Interneuron Pharmaceuticals, Inc. for the fiscal year ended
September 30, 1995. We also consent to the references to our firm under the
caption "Experts".
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
February 28, 1996
