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As filed with the Securities and Exchange Commission on May 7, 1998
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________________
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_____________________
PROCYTE CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
WASHINGTON 91-1307460
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
8511-154TH AVENUE N.E.
BUILDING A
REDMOND, WASHINGTON 98052-3557
(425) 869-1239
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
JOHN F. CLIFFORD
PRESIDENT AND
CHIEF EXECUTIVE OFFICER
PROCYTE CORPORATION
8511-154TH AVENUE N.E.
BUILDING A
REDMOND, WASHINGTON 98052-3557
(425) 869-1239
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
_____________________
Copies to:
STEPHEN M. GRAHAM
PERKINS COIE LLP
1201 THIRD AVENUE, 40TH FLOOR
SEATTLE, WASHINGTON 98101-3099
(206) 583-8888
_____________________
Approximate date of commencement of proposed sale to the public: FROM TIME TO
TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT AS DETERMINED BY
THE SELLING SHAREHOLDERS.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act of 1933, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
_____________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
TITLE OF EACH CLASS PROPOSED MAXIMUM AMOUNT OF
OF SECURITIES TO BE REGISTERED AGGREGATE OFFERING PRICE REGISTRATION FEE
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<S> <C> <C>
Common Stock, par value $.01 per share.......................... $900,000 $265.50
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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 THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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PROSPECTUS
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653,061 SHARES
PROCYTE CORPORATION
_____________________
COMMON STOCK
_____________________
This Prospectus relates to up to 653,061 shares of Common Stock, par value
$0.01 per share (the "Common Stock") of ProCyte Corporation ("ProCyte" or the
"Company"). The Common Stock is traded on the Nasdaq National Market under the
symbol "PRCY." On April 27, 1998, the last reported sales price of the Common
Stock on the Nasdaq National Market was $1.3125 per share.
The shares of Common Stock of ProCyte offered hereby (the "Shares") may be
sold from time to time by certain Shareholders of the Company (the "Selling
Shareholders") in transactions in the over-the-counter market through the Nasdaq
National Market ("Nasdaq"), or on one or more other securities markets and
exchanges, in privately negotiated transactions, or otherwise, at fixed prices
that may be changed, at market prices prevailing at the time of sale, at prices
relating to such prevailing market prices or at negotiated prices. The Selling
Shareholders may effect such transactions by selling the Shares to or through
broker-dealers, and such broker-dealers may receive compensation in the form of
discounts, concessions, or commissions from the Selling Shareholders or the
purchasers of the Shares for whom such broker-dealers may act as agents or to
whom they may sell as principals, or both. The Company will not receive any of
the proceeds from the sale of the Shares. The expenses incurred in registering
the Shares, including legal and accounting fees, will be paid by the Company.
The Shares offered hereby were acquired by the Selling Shareholders from
the Company on April 27, 1998 (the "Closing Date"), in connection with the
acquisition of all of the assets (the "Acquisition") of HumaTech Corp., a
Florida corporation ("HumaTech") by ProCyte in consideration of $1,500,000 in
cash and 1,088,435 Shares of the Common Stock valued at $1,500,000 as of the
consummation of the Acquisition, and are "restricted securities" under the
Securities Act of 1933, as amended (the "Act"), prior to their sale hereunder.
This Prospectus has been prepared for the purpose of registering the Shares
under the Act to allow for future sales by the Selling Shareholders to the
public without restriction. In connection with any sales, the Selling
Shareholders and any brokers participating in such sales may be deemed to be
"underwriters" within the meaning of the Act. See "Plan of Distribution."
THE SHARES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. SEE
"RISK FACTORS" BEGINNING ON PAGE 4.
_____________________
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 May __, 1998.
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TABLE OF CONTENTS
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Forward-Looking Information.......................................... 2
Available Information................................................ 2
Incorporation of Certain Documents by Reference...................... 3
The Company.......................................................... 3
Risk Factors......................................................... 4
Selling Shareholders................................................. 10
Use of Proceeds...................................................... 11
Plan of Distribution................................................. 11
Experts.............................................................. 12
Legal Matters........................................................ 12
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FORWARD-LOOKING INFORMATION
This Prospectus includes "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995 (the "PSLRA"). The PSLRA
provides a "safe harbor" for such statements to encourage companies to provide
prospective information about themselves so long as such information is
identified as forward-looking and is accompanied by meaningful cautionary
statements identifying important factors that could cause actual results to
differ materially from those projected in the information. All statements other
than statements of historical fact made in this Prospectus or incorporated by
reference are forward-looking. In particular, the statements herein regarding
industry prospects and the Company's future results of operations or financial
position are forward-looking statements. Forward-looking statements represent
management's current expectations and are inherently uncertain. Investors are
warned that the Company's actual results may differ significantly from
management's expectations and, therefore, from the results discussed in such
forward-looking statements. Factors that might cause such differences include,
but are not limited to, the "Risk Factors" described herein.
AVAILABLE INFORMATION
ProCyte is subject to the information and reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information may be inspected at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at certain regional offices of the Commission
located at Northwest Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661, and 7 World Trade Center, 13th Floor, New York, New
York 10048. Copies of such materials can be obtained at prescribed rates from
the Public Reference Section of the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549. In addition, the Commission maintains a web site
(http://www.sec.gov) that contains certain reports, proxy statements and other
information regarding ProCyte. Material filed by ProCyte can also be inspected
at the offices of the National Association of Securities Dealers, Inc., Reports
Section, 1735 K Street, N.W., Washington, D.C. 20006.
The Company has filed with the Commission a registration statement on Form
S-3 (together with all amendments and exhibits, the "Registration Statement")
under the Securities Act. This Prospectus does not contain all of the
information set forth in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Commission. The
Registration Statement and any amendments thereto, including exhibits filed as a
part thereof, also are available for inspection and copying as set forth above.
Statements contained in this Prospectus as to the contents of any contract or
other document referred to herein are not necessarily complete, and in each
instance reference is made to the copy of such contract or other document filed
as an exhibit to the Registration Statement, each such statement being qualified
in all respects by such reference.
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THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE THAT ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH
PERSON, INCLUDING ANY BENEFICIAL OWNER, TO WHOM THIS PROSPECTUS IS DELIVERED,
UPON SUCH PERSON'S WRITTEN OR ORAL REQUEST, COPIES OF ANY SUCH DOCUMENTS, OTHER
THAN EXHIBITS TO SUCH DOCUMENTS THAT ARE NOT SPECIFICALLY INCORPORATED BY
REFERENCE THEREIN. REQUESTS SHOULD BE DIRECTED TO THE PRESIDENT, PROCYTE
CORPORATION, 8511 154TH AVENUE, N.E., BUILDING A, REDMOND, WASHINGTON 98052-
3557, TELEPHONE NUMBER (425) 869-1239.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission (File No. 0-18044)
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
December 31, 1997; and
2. The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A filed with the Commission on
October 19, 1989, including any amendment or report filed for the
purpose of updating such description.
All documents subsequently filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and
prior to the termination of any offering of securities made by this Prospectus
shall be deemed to be incorporated by reference into this Prospectus and to be a
part hereof from their respective dates of filing.
Any statement contained in a document all or a portion of which is
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified shall not be deemed to
constitute a part of this Prospectus except as so modified, and any statement so
superseded shall not be deemed to constitute part of this Prospectus.
THE COMPANY
ProCyte is a healthcare company that develops, manufactures and markets
products for wound care, skin health and hair care. The Company's products
incorporate its patented copper-peptide technology and absorbent polymer
technology. The Company's products are targeted for use in medical market
sectors that provide healthcare solutions for tissue repair, skin health and
hair care conditions, and also for the consumer markets that address skin and
hair care. The Company's business currently focuses on three target markets:
chronic wound care; plastic and cosmetic surgery and dermatology; and skin and
hair care. ProCyte is a Washington corporation organized in 1986. The
Company's headquarters are located at 8511 - 154th Avenue N.E., Building A,
Redmond, Washington 98052. Its telephone number is (425) 869-1239.
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RISK FACTORS
THIS PROSPECTUS AND THE DOCUMENTS INCORPORATED HEREIN BY REFERENCE CONTAIN
FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES. THE STATEMENTS
CONTAINED IN THIS PROSPECTUS THAT ARE NOT PURELY HISTORICAL ARE FORWARD-LOOKING
STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT AND SECTION
21E OF THE EXCHANGE ACT, INCLUDING, WITHOUT LIMITATION, STATEMENTS REGARDING THE
COMPANY'S EXPECTATIONS, BELIEFS, ESTIMATES, INTENTIONS, AND STRATEGIES ABOUT THE
FUTURE. WORDS SUCH AS "ANTICIPATES," "EXPECTS," "INTENDS," "PLANS," "BELIEVES,"
"SEEKS," "ESTIMATES," VARIATIONS OF SUCH WORDS AND SIMILAR EXPRESSIONS ARE
INTENDED TO IDENTIFY SUCH FORWARD- LOOKING STATEMENTS, BUT THEIR ABSENCE DOES
NOT MEAN THE STATEMENT IS NOT FORWARD-LOOKING. THESE STATEMENTS ARE NOT
GUARANTIES OF FUTURE PERFORMANCE AND ARE SUBJECT TO CERTAIN RISKS, UNCERTAINTIES
AND ASSUMPTIONS THAT ARE DIFFICULT TO PREDICT; THEREFORE, ACTUAL RESULTS MAY
DIFFER MATERIALLY FROM THOSE EXPRESSED OR FORECASTED IN ANY SUCH FORWARD-LOOKING
STATEMENTS AS A RESULT OF CERTAIN FACTORS, INCLUDING THOSE SET FORTH IN THE
FOLLOWING RISK FACTORS, ELSEWHERE IN THIS PROSPECTUS AND IN THE DOCUMENTS
INCORPORATED HEREIN BY REFERENCE. THE COMPANY UNDERTAKES NO OBLIGATION TO
UPDATE PUBLICLY ANY FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW
INFORMATION, FUTURE EVENTS OR OTHERWISE. POTENTIAL INVESTORS SHOULD CONSIDER
CAREFULLY THE FOLLOWING FACTORS, AS WELL AS THE MORE DETAILED INFORMATION
CONTAINED ELSEWHERE IN THIS PROSPECTUS AND IN THE DOCUMENTS INCORPORATED BY
REFERENCE, BEFORE MAKING A DECISION TO INVEST IN THE SHARES OFFERED HEREBY.
HISTORY OF OPERATING LOSSES; ACCUMULATED DEFICIT; FLUCTUATIONS IN FUTURE
EARNINGS
ProCyte is a development stage company and has generated minimal revenues
since inception. The Company launched its first product in 1996, launched
additional wound care product lines in 1997 and expects further product launches
in 1998; however, to date, the Company has generated only minimal revenues from
product sales and there can be no assurance that the Company will be able to
generate sufficient product sales to achieve a profitable level of operations.
As of December 31, 1997, the Company's accumulated deficit was approximately
$62.3 million. The Company expects to incur substantial additional operating
losses over at least the next several years and expects cumulative losses to
increase substantially as it continues to expand its marketing and research and
development activities. The Company's revenues have principally been from
interest income, research fees, license fees and fees for performance of
contract manufacturing services. The Company's ability to achieve a consistent,
profitable level of operations is dependent in large part upon obtaining
regulatory approvals for its products, successfully manufacturing and marketing
its products, entering into agreements with corporate partners for distribution
and commercialization of the Company's products and out-licensing of the
Company's technology, of which there can be no assurance. In addition, payments
under corporate partnerships and licensing arrangements, if any, will be subject
to significant fluctuations in both timing and amounts. The time required to
reach sustained profitability is highly uncertain, and there can be no assurance
that the Company will be able to achieve profitability on a sustained basis, if
at all. Moreover, if profitability is achieved, the level of profitability
cannot be predicted and it may vary significantly from quarter to quarter.
NEED FOR ADDITIONAL CAPITAL
The Company expects negative cash flow from operations to continue for the
foreseeable future. The Company will require substantial additional funds to
conduct its marketing activities; to continue research and development; to
conduct further preclinical studies and clinical trials; and to expand or
enhance quality-control, regulatory, marketing, sales and administrative
capabilities. The Company's future capital requirements will depend on numerous
factors, including its efforts, and the efforts of its collaborative partners,
to commercialize its products; continued scientific progress in the Company's
research and development programs; the results of research and development
activities; preclinical studies and clinical trials; relationships with existing
and future corporate collaborators, if any; competing technological and market
developments; the time and costs involved in obtaining regulatory approvals; the
costs involved in filing, prosecuting and
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enforcing patent claims; the time and costs of commercialization activities; and
other factors. As of December 31, 1997, the Company had cash, cash equivalents
and securities available for sale of $12.9 million. The Company estimates that
at its planned rate of spending, its existing cash, cash equivalents and
securities available for sale and the interest income thereon will be sufficient
to meet its capital requirements at least through 1998. There can be no
assurance that the underlying assumed levels of revenue and expense will prove
accurate. Whether or not these assumptions prove to be accurate, the Company
will need to raise substantial capital to fund operations. The Company intends
to seek additional funding through public or private financing, including equity
financing, and through collaborative arrangements. Adequate funds for these
purposes, whether obtained through financial markets or form collaborative or
other arrangements with corporate partners or other sources, may not be
available when needed or may not be available of terms favorable to the Company,
if at all. If additional funds are raised by issuing equity securities, dilution
to existing shareholders will result. In addition, in the event that additional
funds are obtained through arrangements with collaborative partners, such
arrangements may require the Company to relinquish rights to certain of its
technologies or potential products that it would otherwise seek to develop or
commercialize itself. If funding is insufficient at any time in the future, the
Company may be required to delay, scale back or eliminate some or all of its
marketing and research and development programs or to license third parties to
commercialize products or technologies that the Company would otherwise seek to
develop itself. Furthermore, the terms of any such license agreements might be
less favorable than if the Company were negotiating from a stronger position.
Moreover, if funding is insufficient at any time in the future, and the
Company's existing funds are depleted, the Company may be required to cease
operations.
UNCERTAINTIES RELATED TO CONTRACT MANUFACTURING OPERATIONS
Since inception, a substantial portion of the Company's revenues have been
derived from its contract manufacturing operations as the Company has sought to
more fully utilize its existing facility's capacity while its own products were
under development. For the foreseeable future, ProCyte expects to continue to
have excess manufacturing capacity as it works to complete development, and
begin commercialization, of its potential products. Accordingly, the Company
will continue to seek contract manufacturing opportunities. Contract
manufacturing revenues will be adversely affected to the extent the Company's
customers decide to manufacture their products themselves or choose to have them
manufactured elsewhere. In addition, the Company's contract manufacturing
revenues may be adversely affected to the extent its customers experience
regulatory delays, product recalls, or competitive pressures in the marketplace.
The Company expects that revenues from contract manufacturing will significantly
decline in 1998 as a result of the loss of two of its most significant contract
manufacturing customers, one of whom faces an indefinite delay in receiving FDA
clearance. There can be no assurance that contract revenues in the future will
be significant.
UNCERTAINTIES RELATED TO EARLY STAGE OF DEVELOPMENT
From the Company's inception in 1986 until it launched its first commercial
product in June 1996, substantially all of its resources were dedicated to the
research and development of wound healing and tissue repair applications of its
topically administered copper-peptide compounds. Although the Company launched
additional wound care product lines in 1997 and expects further product launches
in 1998, to date Company has generated only minimal revenues from product sales.
The Company's revenues have principally been from fees for performance of
contract manufacturing services, interest income, research fees and license
fees. There can be no assurance that the Company's current products or its
potential products, if successfully developed, can be produced in commercial
quantities at reasonable costs, nor can there be any assurance that any such
products will be successfully marketed at prices that would permit the Company
to operate profitably. The failure of the Company to successfully develop its
potential products or it failure to successfully commercialize its existing or
potential products will have a material adverse effect on the Company's
business, financial condition and results of operations.
UNCERTAINTIES RELATED TO CLINICAL TRIALS AND PRODUCT DEVELOPMENT
The Company is dependent upon the successful development of its potential
products. There can be no assurance that the Company will be permitted to
undertake additional or complete ongoing clinical trials of its potential
products within reasonable time periods or otherwise, that sufficient numbers of
patients can be accrued for such trials or that clinical trials
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will demonstrate that the products tested are safe and effective. Development of
the Company's potential products is highly uncertain and unanticipated
developments, clinical and regulatory delays, adverse or unexpected side effects
or inadequate therapeutic efficacy could slow or prevent the successful
completion of the Company's product and technology development. Even if clinical
trials are successful, there can be no assurance that the Company will obtain
regulatory approval for any indication, that an approved product can be produced
in commercial quantities at reasonable costs or gain acceptance for use by
physicians, healthcare providers and consumers or that any potential products
will be successfully marketed at prices that would permit the Company to operate
profitably, the failure of any of which would have a material adverse effect on
the Company's business, financial condition and results of operations.
DEPENDENCE ON AND MANAGEMENT OF EXISTING AND FUTURE CORPORATE ALLIANCES
The successful commercialization of the Company's existing and future
products will depend upon ProCyte's ability to enter into and effectively
manage numerous corporate partnerships. ProCyte currently promotes certain of
its products through specialty distributors. Other products and technology are
licensed for incorporation into products sold by others. In November 1997, the
Company entered into an exclusive worldwide supply and marketing agreement with
Osmotics Corporation ("Osmotics"), pursuant to which the Company granted
Osmotics the right to introduce the Company's copper-peptide-containing products
to the prestige skin care market. In December 1997, the Company entered into an
exclusive distribution agreement with the Bard Medical Division ("Bard") of C.R.
Bard, Inc. Pursuant to this agreement, Bard will be the exclusive supplier of
the Company's wound care products into the hospital, nursing home, and extended
care markets in the United States and Canada. Subsequent to the Bard agreement,
ProCyte entered into exclusive distribution agreements for the registration and
distribution of certain of its wound care products in certain foreign countries.
ProCyte plans to seek similar distribution partnerships in additional countries.
There can be no assurance that any of the Company's collaborators will perform
their obligations under their agreements with the Company or that the Company's
products or the products of others that incorporate the Company's products or
technology, will be successfully commercialized, any of which could have a
material adverse effect on the Company's business, financial condition and
results of operations.
There can be no assurance that the Company will be successful in
establishing corporate alliances in the future, or that it will be successful in
maintaining existing or any future corporate alliances. Moreover, there can be
no assurance that the interests and motivations of any corporate partner,
distributor or licensee would be or remain consistent with those of the Company,
or that such partners, distributors or licensees would successfully perform the
necessary technology transfer, clinical development, regulatory compliance,
manufacturing, marketing or other obligations. Failure of any of the foregoing
could have a material adverse effect on the Company's business, financial
condition and results of operations.
UNCERTAINTY OF PATENT POSITION AND PROPRIETARY RIGHTS
The patent positions of healthcare products companies are often uncertain
and involve complex legal and factual questions, and the breadth of claims
allowed in medical devices and healthcare patents cannot be predicted. In
addition, there is a substantial backlog of patents at the U.S. Patent and
Trademark Office that may delay the review and the potential issuance of
patents. The Company's success will depend to a significant degree on its
ability to obtain patents and licenses to patent rights, to maintain trade
secrets and to operate without infringing on the proprietary rights of others,
both in the United States and in other countries. The failure of the Company or
its licensors to obtain and maintain patent protection for the Company's
technology could have a material adverse effect on the Company.
ProCyte's success depends in part upon its ability to protect its products
and technology under intellectual property laws in the United States and abroad.
As of December 31, 1997, the Company had 18 issued United States patents
expiring between 2005 and 2014, and 132 issued foreign patents and patent
registrations. The patents relate to use of the Company's copper-based
technology for a variety of healthcare applications, and to the composition of
certain biologically active, synthesized compounds. The Company's strategy has
been to apply for patent protection for certain compounds and their discovered
uses that are believed to have potential commercial value in countries that
offer significant market potential. There can be no assurance that patent
applications relating to the technology used by the Company will result in
patents being issued. There can be no assurance that any patent issued to the
Company will not be subjected to further proceedings limiting the scope of the
rights under the patent or that such patent will provide a competitive advantage
or will afford protection against competitors with similar technology, or will
not be successfully challenged, invalidated or circumvented by competitors.
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The Company's processes and potential products may conflict with patents
that have been or may be granted to competitors and others. As the
biotechnology and healthcare industries expand and more patents are issued, the
risk increases that the Company's processes and potential products may give rise
to claims that they infringe the patents of others. Such other persons could
bring legal actions against the Company claiming damages and seeking to enjoin
clinical testing, manufacturing and marketing of the affected product or use of
the affected process. Litigation may be necessary to enforce patents issued to
the Company, to protect trade secrets or know-how owned by the Company or to
determine the enforceability, scope and validity of proprietary rights of
others. If the Company becomes involved in such litigation, it could result in
substantial expense to the Company and significant diversion of effort by the
Company's technical and management personnel. In addition to any potential
liability for significant damages, the Company could be required to obtain a
license to continue to manufacture or market the affected product or use the
affected process. Costs associated with any licensing arrangement may be
substantial and could include ongoing royalties. There can be no assurance that
any license required under any such patent would be made available to the
Company on acceptable terms, if at all. If such licenses could not be obtained
on acceptable terms, the Company could be prevented from manufacturing and
marketing potential products. Accordingly, an adverse determination in such
litigation could have a material adverse effect on the Company's business,
financial condition and results of operations.
The Company also relies upon unpatented proprietary technology. There can
be no assurance that the Company can meaningfully protect its rights in such
unpatented technology, that any obligation to maintain the confidentiality of
such proprietary technology will not be breached by employees, consultants,
collaborators or others, or that others will not independently develop or
acquire substantially equivalent technology. To the extent that corporate
partners or consultants apply Company technological information independently
developed by them or by others to Company projects or apply Company technology
or know-how to other projects, disputes may arise as to the ownership of
proprietary rights to such information. Any failure to protect unpatented
proprietary technology, any the breach of obligations designed to protect such
technology or development of equivalent technology may have a material adverse
effect on the Company's business, financial condition and results of operations.
UNCERTAINTY OF GOVERNMENT REGULATORY REQUIREMENTS
The manufacture and marketing of ProCyte's products and its research and
development activities in general, are subject to extensive regulation in the
United States by the federal government, principally by the FDA, and in other
countries by similar health and regulatory authorities. The Federal Food, Drug
and Cosmetic Act and the regulations promulgated thereunder, and other federal
and state statutes govern, among other things, the testing, manufacture, safety,
labeling, storage, record-keeping, advertising and promotion of pharmaceutical
products and medical devices. Product development and approval or clearance
within the regulatory framework requires a number of years and involves the
expenditure of substantial resources.
In order to obtain FDA clearance to market a new drug or device in the
United States for use in humans, it is necessary to proceed through several
stages of product testing, including research and development, clinical trials,
and the filing of a product registration dossier such as a new drug application
or 510(k) medical device application with the FDA to obtain authorization to
market a product. The Company's products and product candidates may be
regulated by any of a number of divisions of the FDA. The process of obtaining
and maintaining regulatory approvals for clinical trials or for the
manufacturing or marketing of the Company's existing and potential products is
costly and time-consuming and is subject to unanticipated delays. There can be
no assurance as to the length of the clinical trial period or the number of
patients required to be enrolled in clinical trials in order to establish the
safety, efficacy and potency of therapeutic products. Accordingly, delays,
rejections or unexpected costs may be encountered based on changes in the policy
or regulations of the FDA or foreign governmental authorities during the period
of product development and regulatory review, which changes may result in
limitations or restrictions on the Company's ability to utilize its technology
or develop product candidates. Regulatory requirements ultimately imposed could
also adversely affect the ability of the Company to clinically test, manufacture
or market products. Furthermore, the Company or governmental authorities may
suspend clinical trials at any time if it is determined that the subjects
participating in such trials are exposed to unacceptable health risks. There
can be no assurance that the Company will not encounter these or other problems
in clinical trials that will cause the Company or governmental authorities to
delay or suspend such trials. Even if regulatory approval of a potential
product is obtained,
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such approval may entail limitations on the indicated uses
for which such product may be marketed, which may restrict the patient
population for which any product may be prescribed. In addition, a marketed
product is subject to continual FDA review. Later discovery of previously
unknown problems or failure to comply with the applicable regulatory
requirements may result in restrictions on marketing a product or withdrawal of
the product from the market, as well as possible criminal or civil sanctions.
In the United States, products that do not seek to make effectiveness
claims based on human clinical evaluation may be subject to review and
regulation under the FDA's cosmetic or 510(k) medical device guidelines.
Similar guidelines exist for such products in other countries. Such products,
which include wound care dressings, ointments and gels, must show safety and
substantial equivalency with predicate products already cleared to be marketed
by the FDA. There can be no assurance that such product pre-market notification
applications submitted to the FDA or similar agencies in other countries will
receive clearance to be marketed, or that the labeling claims sought will be
approved, or that, if cleared, such products will be commercially successful.
In addition to obtaining FDA or other countries' approval or clearance to
market a product, the prospective manufacturer's quality control and
manufacturing procedures must conform to current good manufacturing practices
("cGMPs") guidelines, or ISO 9000 standards, when appropriate. In complying
with these regulations, which are subject to change at any time without notice
to the Company, ProCyte must continue to expend time, effort and financial
resources in production and quality control. In addition, ProCyte's
manufacturing plant is subject to regulations from and inspections by other
foreign, federal, state or local agencies, such as the Drug Enforcement Agency,
the city water and waste treatment agencies, and state and federal safety and
health agencies. There can be no assurance that the Company's manufacturing
facility or its manufacturing operations will meet or continue to meet all
appropriate guidelines or to pass inspections by any government agency.
The Company also is or may become subject to various other federal, state,
local and foreign laws, regulations and policies relating to, among other
things, safe working conditions, good laboratory practices, animal welfare, and
the use and disposal of hazardous or potentially hazardous substances used in
connection with research, development and/or manufacturing.
Failure to obtain regulatory approvals for its product candidates or to
either attain or maintain compliance with cGMP or other manufacturing
requirements would have a material adverse effect on the Company's business,
financial condition and results of operations.
INTENSE COMPETITION
Competition in the wound care, skin health and hair care markets is
intense. The Company's competitors include well-established pharmaceutical,
cosmetic and healthcare companies such as Bristol Myers Squibb's ConvaTec
division, Kendall Healthcare Company, Johnson and Johnson, L'Oreal and Revlon.
These competitors have substantially more financial and other resources, larger
research and development staffs, and more experience and capabilities in
researching, developing and testing products in clinical trials, in obtaining
FDA and other regulatory approvals, and in manufacturing, marketing and
distribution than the Company. In addition, a number of smaller companies are
developing or marketing competitive products, some of which may have an entirely
different approach than products being marketed or developed by the Company.
The Company's competitors may succeed in developing, obtaining patent protection
for, receiving FDA and other regulatory approvals for, or commercializing
products more rapidly than the Company. If the Company is successful in
commercializing its products, it will be required to compete with respect to
manufacturing efficiency and marketing capabilities, areas in which it has very
limited experience. The Company's competitors may develop new technologies and
products that are available for sale prior to the Company's potential products
or that are more effective that the Company's existing or potential products.
In addition, competitive products may be manufactured and marketed more
successfully than the Company's potential products. Such developments could
render the Company's existing or potential products less competitive or
obsolete, and could have a material adverse effect on the Company's business,
financial condition and results of operations.
8
<PAGE>
The contract manufacturing service business is also highly competitive.
Competitors include major chemical and pharmaceutical companies, as well as
specialized biotechnology firms, smaller contract chemical manufacturers and
some universities. Many of these companies or institutions have greater
financial, technical and marketing resources than the Company.
POTENTIAL VOLATILITY OF STOCK PRICE
The market prices for securities of healthcare, medical dressings,
pharmaceutical and biotechnology companies are subject to volatility, and the
market has from time to time experienced significant fluctuations that are
unrelated to the operations of the Company. ProCyte's market price has
fluctuated over a wide range since the Company's initial public offering in
1989. Announcements concerning the Company or its competitors, including
fluctuations in operating results, research and development program direction,
results of clinical trials, addition or termination of corporate alliances,
technology licenses, clearance or approval to market products, announcements of
technological innovations or new products by the Company or its competitors,
changes in government regulations, healthcare reform, developments in patent or
other proprietary rights of the Company or its competitors, litigation
concerning business operations or intellectual property, or public concern as to
safety of products, as well as changes in general market conditions and mergers
and acquisitions, may have a significant effect on the market price of ProCyte's
common stock.
9
<PAGE>
SELLING SHAREHOLDERS
The following table provides certain information regarding the Selling
Shareholders and the number of Shares being offered by them.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
SHARES THAT MAY BE SOLD OWNED AFTER OFFERING
------------------------- -----------------------
SHARES BENEFICIALLY PERCENTAGE OF PERCENTAGE OF
OWNED PRIOR TO COMMON STOCK COMMON STOCK
NAME AND ADDRESS OFFERING(1) AMOUNT(4) OUTSTANDING AMOUNT OUTSTANDING
---------------- -------------------- --------- ------------- ------ -------------
<S> <C> <C> <C> <C> <C>
HUMATECH CORP. 48,979(2) -0- -- 0 --
4800 N. FEDERAL HIGHWAY
SUITE 204D
BOCA RATON, FLORIDA 33431
SUSAN BROWNER(5) 212,137 127,283 0.88% 84,854 0.59%
1519 S.W. 6TH TERRACE
BOCA RATON, FL 33486
JAMES COHEN 212,137 127,283 0.88% 84,854 0.59%
798 PELICAN POINT COVE
BOCA RATON, FL 33431
DANA FOX 9,795 5,877 0.04% 3,918 0.03%
530 HEMLOCK WAY
EDMONDS, WA 98020
JAMES AND JUNE IRELAN 0(3) 29,387 0.20% 19,592 0.13%
56 W. CHRISTY TRAIL
SAPPHIRE, NC 28774
DR. WILLIAM KATZ 48,979 29,387 0.20% 19,592 0.13%
548 GYPSY LANE
YOUNGSTOWN, OH 44505
EILEEN MCPHILLIPS 9,795 5,877 0.04% 3,918 0.03%
3641 N. HILLSBORO BOULEVARD, APT. F1
COCONUT CREEK, FL 33073
J. SCHIMMEL TRUST 97,959 58,775 0.40% 39,184 0.27%
10251 GRANADA LANE
SHAWNEE MISSION, KS 66207
MARILYN SHAPERA 212,028 127,217 0.88% 84,811 0.59%
5890 N.W. 21ST AVENUE
BOCA RATON, FL 33496
WILLIAM SPATH 12,299 7,379 0.05% 4,920 0.03%
101 ROCKLEDGE DRIVE
PERRYSBURG, OH 43551
FRED SPRENGER 12,299 7,379 0.05% 4,920 0.03%
2142 COLLINWAY, APT. #1
TOLEDO, OH 43606
KENNETH TAPMAN(6) 212,028 127,217 0.88% 84,811 0.59%
1519 S.W. 6th Terrace
BOCA RATON, FL 33486
</TABLE>
___________________________________________
(1) 10% of the shares of Common Stock owned by each former HumaTech
shareholder are subject to a one-year holdback to secure indemnification
obligations in connection with the Acquisition.
(2) HumaTech received 1,088,435 shares of the Common Stock in the
Acquisition, which it will distribute to its shareholders in accordance with
their respective percentage ownership interests in HumaTech. The distribution
of Common Stock to certain HumaTech shareholders is pending the completion of
necessary documentation but is expected to occur prior to the effectiveness of
this Registration Statement, at which time HumaTech will no longer hold any
shares of the Common Stock.
(3) Upon completion of the necessary documentation, HumaTech will transfer
ownership of 48,979 shares of Common Stock to Mr. and Mrs. Irelan.
10
<PAGE>
(4) Pursuant to an agreement between the shareholder and the Company, each
former HumaTech shareholder has agreed to sell, transfer or otherwise dispose of
only one-third of his or her Shares during the six-month period commencing after
the Closing Date and to sell, transfer or otherwise dispose of only an
additional one-third of his or her Shares during the subsequent six-month
period.
(5) In connection with the Acquisition, on April 27, 1998, Ms. Browner was
appointed a Director of ProCyte and President of ProCyte's newly-formed HumaTech
Division. Ms. Browner is married to Mr. Tapman.
(6) In connection with the Acquisition, on April 27, 1998, Mr. Tapman was
appointed as Vice President of Operations for ProCyte. Mr. Tapman is married to
Ms. Browner.
The securities offered hereby are for the account of the Selling
Shareholders. Prior to the offering contemplated hereby, the Selling
Shareholders beneficially owned 1,088,435 shares, 108,844 shares of which are
subject to a one-year holdback for indemnification obligations related to the
Acquisition. Up to 653,061 Shares may be sold in the offering.
The Shares offered hereby were acquired by the Selling Shareholders from
the Company on April 27, 1998, as consideration for the purchase of all of the
assets of HumaTech by ProCyte. The Common Stock was valued at $1,500,000 as of
the consummation of the Acquisition.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Common Stock
offered hereby.
PLAN OF DISTRIBUTION
The Shares of Common Stock of ProCyte are traded on the Nasdaq National
Market. The Shares may be sold from time to time by the Selling Shareholders in
transactions in the over-the-counter market through Nasdaq, or on one or more
other securities markets and exchanges, in privately negotiated transactions, or
otherwise, at fixed prices that may be changed, at market prices prevailing at
the time of sale, at prices relating to such prevailing market prices or at
negotiated prices. The Selling Shareholders may effect such transactions by
selling the Shares to or through broker-dealers, and such broker-dealers may
receive compensation in the form of discounts, concessions, or commissions from
the Selling Shareholders and/or the purchasers of the Shares for whom such
broker-dealers may act as agents or to whom they may sell as principals, or
both. In connection with any sales, the Selling Shareholders and any broker-
dealers who participate in a sale of shares of Common Stock may be deemed to be
"underwriters" as defined in the Securities Act. Any commissions paid or any
discounts or concessions allowed to any such broker-dealers, and, if any such
broker-dealers purchase shares of Common Stock as principal, any profits
received on the resale of such shares of Common Stock, may be deemed to be
underwriting discounts and commissions under the Securities Act.
The rules of the Commission generally prohibit underwriters, brokers,
dealers and certain other persons engaged or participating in the distribution
of the Shares from making a market in such Shares during the "cooling off"
period preceding the commencement of such distribution.
In order to comply with the securities laws of certain states, if
applicable, the Shares will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
Shares may not be sold unless they have been registered or qualified for sale in
the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.
Pursuant to a Registration Rights Agreement with the Selling Shareholders,
ProCyte has agreed to bear all expenses of registering the shares.
Additionally, ProCyte has agreed to indemnify the Selling Shareholders, and any
underwriters offering securities on behalf of the Selling Shareholders, against
certain liabilities, including liabilities under the Act.
There can be no assurance that the Selling Shareholders will sell any or
all of the shares of Common Stock offered hereunder. It is anticipated that
this offering will remain in effect for 12 months following the Closing Date of
the Acquisition or until the shares offered hereunder have been sold, whichever
is earlier.
11
<PAGE>
EXPERTS
The financial statements incorporated in this prospectus by reference from
ProCyte Corporation's Annual Report on Form 10-K for the year ended December 31,
1997, have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their report, which is incorporated herein by reference, and have been
so incorporated in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
LEGAL MATTERS
The validity of the Common Stock offered hereby has been passed upon for
the Company by Perkins Coie LLP, Seattle, Washington.
12
<PAGE>
===============================================================================
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO
WHICH IT RELATES OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED
HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
____________________
===============================================================================
===============================================================================
653,061 SHARES
PROCYTE CORPORATION
COMMON STOCK
(PAR VALUE $0.01 PER SHARE)
______________
PROSPECTUS
______________
MAY __, 1998
===============================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses, other than
underwriting discounts payable, by the Registrant in connection with the sale of
Common Stock being registered. All amounts are estimates except the Commission
registration fee and the Nasdaq National Market listing fee.
<TABLE>
<S> <C>
Commission registration fee....................... $ 265.50
Nasdaq National Market listing fee................ 17,500.00
Printing and engraving expenses................... 5,000.00
Legal fees and expenses........................... 10,000.00
Accounting fees and expenses...................... 3,000.00
Miscellaneous fees and expenses................... 234.50
----------
Total........................................... $36,000.00
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Sections 23B.08.500 through 23B.08.600 of the Washington Business
Corporation Act authorize a court to award, or a corporation's board of
directors to grant, indemnification to directors and officers on terms
sufficiently broad to permit indemnification under certain circumstances for
liabilities arising under the Securities Act of 1933, as amended (the
"Securities Act"). Section 10 of the registrant's Bylaws provides for
indemnification of the registrant's directors, officers, employees and agents to
the maximum extent permitted by Washington law. Certain of the directors of the
registrant, who are affiliated with principal shareholders of the registrant,
also may be indemnified by such shareholders against liability they may incur in
their capacities as directors of the registrant, including pursuant to a
liability insurance policy to be maintained by the registrant for such purpose.
Section 23B.08.320 of the Washington Business Corporation Act authorizes a
corporation to limit a director's liability to the corporation or its
shareholders for monetary damages for acts or omissions as a director, except in
certain circumstances involving intentional misconduct, knowing violations of
law or illegal corporate loans or distributions, or any transaction from which
the director personally receives a benefit in money, property or services to
which the director is not legally entitled. Article 11 of the registrant's
Articles of Incorporation contains provisions implementing, to the fullest
extent permitted by Washington law, such limitations on a director's liability
to the registrant and its shareholders.
ITEM 16. EXHIBITS
<TABLE>
<C> <S>
5.1 Opinion of Perkins Coie LLP, counsel to the Registrant
23.1 Consent of Deloitte & Touche LLP, independent auditors
23.3 Consent of Perkins Coie LLP (contained in Exhibit 5.1)
24.1 Power of attorney (contained on Page II-3)
</TABLE>
ITEM 17. UNDERTAKINGS
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 this Registration Statement or any material change to such
information in this Registration Statement;
II-1
<PAGE>
(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 of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and
(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.
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 section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 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 herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
D. The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the 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.
II-2
<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 on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Redmond, State of Washington, on the 24th day of
April, 1998.
PROCYTE CORPORATION
/s/ John F. Clifford
__________________________________________
By: John F. Clifford
President and Chief Executive Officer
Each person whose individual signature appears below hereby authorizes John
F. Clifford and Jon Sortland or either of them, as attorneys-in-fact with full
power of substitution, to execute in the name and on the behalf of each person,
individually and in each capacity stated below, and to file, any and all
amendments to this Registration Statement, including any and all post-effective
amendments, and any related Rule 462(b) Registration Statement and any amendment
thereto.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated below on the 24th day of April, 1998.
SIGNATURE TITLE
--------- -----
/s/ Jules Blake Director
_______________________________________
Jules Blake
/s/ Susan Browner Director
_______________________________________
Susan Browner
/s/ John F. Clifford President and Chief Executive Officer
_______________________________________ (Principal Executive Officer and
John F. Clifford Principal Financial Officer) and
Director
/s/ Matt L. Leavitt Director
_______________________________________
Dr. Matt L. Leavitt
/s/ Robert E. Patterson Director
_______________________________________
Robert E. Patterson
/s/ William M. Sullivan Director
_______________________________________
William M. Sullivan
/s/ Thomas E. Tierney Director
_______________________________________
Thomas E. Tierney
/s/ Jon Sortland Manager of Finance
_______________________________________ (Principal Accounting Officer)
Jon Sortland
II-3
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number
-------
<C> <S>
5.1 Opinion of Perkins Coie LLP, counsel to the Registrant
23.1 Consent of Deloitte & Touche LLP, independent auditors
23.3 Consent of Perkins Coie LLP (contained in Exhibit 5.1)
24.1 Power of attorney (contained on Page II-3)
</TABLE>
<PAGE>
EXHIBIT 5.1
May 1, 1998
ProCyte Corporation
8511 154th Avenue N.E.
Building A
Redmond, WA 98052-3557
Gentlemen and Ladies:
We have acted as counsel to you in connection with the registration under
the Securities Act of 1933, as amended, by ProCyte Corporation (the "Company")
of approximately 653,061 shares of Common Stock (the "Shares"). The Shares are
to be offered and sold by certain securityholders of the Company. In this
regard, we have participated in the preparation of a Registration Statement on
Form S-3 relating to the Shares (the "Registration Statement") which you are
filing with the Securities and Exchange Commission.
We have examined the Registration Statement and such documents and records
of the Company and other documents as we have deemed necessary for the purpose
of this opinion. Based upon the foregoing, we are of the opinion that the
Shares have been duly authorized and validly issued and are fully paid and
nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and any amendment thereto, including any and all post-
effective amendments, and to the reference to our firm in the Prospectus of the
Registration Statement under the heading "Legal Matters." In giving such
consent, we do not thereby admit that we are in the category of persons whose
consent is required under Section 7 of the Securities Act.
Very truly yours,
/s/ Perkins Coie LLP
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS; CONSENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement on
Form S-3 of our report dated March 25, 1998, on our audits of the financial
statements of ProCyte Corporation as of December 31, 1997 and 1996 and for each
of the three years in the period ended December 31, 1997. We also consent to
the reference to our firm under the caption "Experts." We consent to the
incorporation by reference in this Registration Statement of ProCyte Corporation
on Form S-3 of our report dated March 25, 1998, appearing in the Annual Report
on Form 10-K of ProCyte Corporation for the year ended December 31, 1997, and to
the reference to us under the heading "Experts" in the Prospectus, which is part
of this Registration Statement.
DELOITTE & TOUCHE LLP
/s/ Deloitte & Touche LLP
Seattle, Washington
May 1, 1998
