<PAGE>
As filed with the Securities and Exchange Commission on July 10, 1996
Registration No. 33-..................
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
PROTEIN POLYMER TECHNOLOGIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 33-0311631
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
10655 SORRENTO VALLEY ROAD
SAN DIEGO, CALIFORNIA 92121
(619) 558-6064
(ADDRESS, INCLUDING ZIP CODE AND
TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
J. THOMAS PARMETER COPIES TO:
CHAIRMAN & CHIEF EXECUTIVE OFFICER ROBERT A. MILLER, JR., ESQ.
PROTEIN POLYMER TECHNOLOGIES, INC. PAUL, HASTINGS, JANOFSKY & WALKER
10655 SORRENTO VALLEY ROAD 555 S. FLOWER STREET
SAN DIEGO, CALIFORNIA 92121 LOS ANGELES, CALIFORNIA 90071
(619) 558-6064 (213) 683-6254
(NAME, ADDRESS, INCLUDING ZIP CODE, AND
TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: From time to
time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
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TITLE OF EACH PROPOSED PROPOSED
CLASS OF MAXIMUM MAXIMUM
SECURITIES TO AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
BE REGISTERED REGISTERED PER SHARE (1) OFFERING PRICE (1) REGISTRATION FEE
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COMMON STOCK, $.01 par value 322,663 SHARES $4.125 $1,330,984.80 $458.96
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</TABLE>
(1) Estimate based on last sales price of the Registrant's Common Stock as
reported on NASDAQ on July 5, 1996 pursuant to Rule 457(c) promulgated under
the Securities Act of 1933, as amended.
___________________________________________________
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
<PAGE>
PROTEIN POLYMER TECHNOLOGIES, INC.
Cross Reference Sheet
Furnished Pursuant to Item 501(b) of Regulation S-K
PART I INFORMATION REQUIRED IN PROSPECTUS
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Item Number and Caption in Form S-3 Location in Prospectus
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Item 1. Forepart of Registration Statement and Outside Front Cover Page of Prospectus.
Outside Front Cover Page of Prospectus.
Item 2. Inside Front and Outside Back Cover Inside Front and Outside Back Cover
Pages of Prospectus. Pages of Prospectus.
Item 3. Summary Information, Risk Factors and The Company; Risk Factors.
Ratio of Earnings to Fixed Charges.
Item 4. Use of Proceeds. Use of Proceeds.
Item 5. Determination of Offering Price. Plan of Distribution.
Item 6. Dilution. Not Applicable.
Item 7. Selling Securityholders. Selling Securityholders.
Item 8. Plan of Distribution. Outside Front Cover Page; Plan of
Distribution.
Item 9. Description of Securities to be Registered. Incorporation by Reference.
Item 10. Interests of Named Experts and Counsel. Not Applicable.
Item 11. Material Changes. Not Applicable.
Item 12. Incorporation of Certain Information by Incorporation by Reference.
Reference.
Item 13. Disclosure of Commission Position on Not Applicable.
Indemnification for Securities Act
Liabilities.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
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 STATE.
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Subject to Completion, Dated July 10, 1996
PROSPECTUS
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PROTEIN POLYMER TECHNOLOGIES, INC.
_______________
322,663 Shares of Common Stock
_______________
This Prospectus relates to the offering of up to an aggregate of 324,163
shares (the "Shares") of Common Stock, $.01 par value (the "Common Stock"), of
Protein Polymer Technologies, Inc., a Delaware corporation ("Protein" or the
"Company") which may be offered from time to time by the persons named in this
Prospectus under the caption "Selling Securityholders."
The Shares may be offered for sale from time to time by the Selling
Securityholders in brokerage transactions at prevailing market prices or in
transactions at negotiated prices. No representation is made that any Shares
will or will not be offered for sale. The Shares are being offered for the
accounts of the Selling Securityholders. The Company will not receive any
proceeds from the sale of the Shares. It is not possible at the present time to
determine the price to the public in any sale of the Shares by the Selling
Securityholders and each Selling Securityholder reserves the right to accept or
reject, in whole or in part, any proposed purchase of Shares. Accordingly, the
public offering price and the amount of any applicable underwriting discounts
and commissions will be determined at the time of such sale by the Selling
Securityholders. All costs, expenses and fees incurred in connection with the
registration of the Shares, estimated to be approximately $20,463, are being
borne by the Company, but all selling and other expenses incurred by the Selling
Securityholders will be borne by such Selling Securityholders. See "Plan of
Distribution."
The Selling Securityholders, and the brokers through whom sales of the
Shares are made, may be deemed to be "underwriters" within the meaning of
Section 2(11) of the Securities Act of 1933, as amended. In addition, any
profits realized by the Selling Securityholders or such brokers on the sale of
the Shares may be deemed to be underwriting commissions.
The shares of Common Stock of the Company are traded on NASDAQ ("NASDAQ")
under the symbol "PPTI." The last reported sales price per share of the Common
Stock as reported by NASDAQ on July 5, 1996 was $4.125.
THE OFFERING INVOLVES A HIGH DEGREE OF RISK. FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE
SHARES, SEE "RISK FACTORS."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
_______________
The date of this Prospectus is July ___, 1996.
<PAGE>
AVAILABLE INFORMATION
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 Securities and Exchange
Commission (the "Commission"). Copies of such reports, proxy and information
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Room 1024, Washington, D.C. 20549 and at the Commission's regional offices at
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.
The Company's Common Stock is listed on NASDAQ and reports, proxy and
information statements and other information concerning the Company may be
inspected at the offices of the National Association of Securities Dealers,
Inc., 9513 Key West Avenue, Rockville, Maryland 20850.
The Company also has filed with the Commission a Registration Statement on
Form S-3 (together with any amendments and exhibits thereto, the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities Act"),
with respect to the Shares offered hereby. This Prospectus does not contain all
of the information set forth in the Registration Statement, certain portions of
which have been omitted pursuant to the rules and regulations of the Commission.
For further information with respect to the Company and the offering, reference
is made to such Registration Statement, which may be inspected without charge at
the Commission's office in Washington, D.C., and copies of all or any part
thereof may be obtained from such office after payment of fees prescribed by the
Commission.
TABLE OF CONTENTS
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Page
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Available Information................................. 2
Incorporation by Reference............................ 3
The Company........................................... 4
Risk Factors.......................................... 4
Selling Securityholders............................... 9
Plan of Distribution.................................. 11
Use of Proceeds....................................... 11
Legal Matters......................................... 11
Experts............................................... 11
</TABLE>
NO DEALER, SALESMAN OR OTHER PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR
TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS. IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS SHOULD NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY PROTEIN
OR ANY SELLING SECURITYHOLDER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY
TO ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH AN OFFER
OR SOLICITATION IN SUCH JURISDICTION. 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 PROTEIN SINCE THE DATE HEREOF.
_______________
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INCORPORATION BY REFERENCE
This Prospectus incorporates by reference certain documents which are not
presented herein or delivered herewith. These documents are available upon
request from Gwen Como, Director, Investor Relations, Protein Polymer
Technologies, Inc., 10655 Sorrento Valley Road, San Diego, California 92121,
telephone (619) 558-6064.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus has been
delivered, upon the written or oral request of any such person, a copy of any
and all of the information that has been incorporated herein by reference, other
than exhibits to such information, unless such exhibits are specifically
incorporated herein by reference into the information that this Prospectus
incorporates. Requests for such documents should be directed to the person
indicated in the immediately preceding paragraph.
The following documents, which have been filed with the SEC pursuant to the
Exchange Act, are hereby incorporated by reference herein:
(a) Protein's Annual Report on Form 10-KSB for the year ended December 31,
1995, as filed with the Commission on March 29, 1996;
(b) Protein's Quarterly Report on Form 10-QSB for the quarter ended March
31, 1996, as filed with the Commission on May 15, 1996;
(c) Protein's Proxy Statement for its annual meeting of stockholders held
on April 26, 1996, as filed with the Commission on April 2, 1996 (other than the
portions thereof identified as not deemed filed with the Commission); and
(d) The description of the Common Stock contained in Protein's Registration
Statement under the Exchange Act on Form 8-A, filed with the Commission on
December 11, 1991, as amended by Form 8 filed on January 17, 1992.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date hereof and prior to the termination of
this offering shall be deemed to be incorporated herein by reference and to be a
part hereof from the date of filing of such documents. All information appearing
in this Prospectus or in any document incorporated herein by reference is not
necessarily complete and is qualified in its entirety by the information and
financial statements (including notes thereto) appearing in the documents
incorporated by reference herein and should be read together with such
information and documents. Any statement contained in a document incorporated or
deemed to be incorporated herein by reference shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document that is deemed to
be incorporated herein by reference modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
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<PAGE>
THE COMPANY
Protein Polymer Technologies, Inc., a Delaware corporation ("Protein" or the
"Company") is a development-stage biotechnology company engaged in the research,
development and production of proprietary protein-based biomaterial with
targeted applications in biomedical and specialty use markets. Since 1992, the
Company has primarily focused on developing materials technology and products to
be used in the surgical repair of tissue: tissue adhesives and sealants; wound
healing materials; and surgical adhesion barriers. Since 1994, the Company has
concentrated predominately on the development of its surgical tissue adhesive
and sealant technology and drug delivery technology. In September 1995, the
Company established a strategic alliance with Ethicon, Inc. ("Ethicon"), a
subsidiary of the Johnson & Johnson Company, as part of its effort to develop
surgical tissue adhesive and sealant technology. The Company's current products
include SmartPlastic (TM) and ProNectin (R) F Cell Attachment Factor for growing
human and animal cells.
The Company was incorporated in Delaware on July 6, 1988. The Company's
principal executive offices are located at 10655 Sorrento Valley Road, San
Diego, California 92121; its telephone number is 619-558-6064.
RISK FACTORS
An investment in the Shares offered hereby involves a high degree of risk.
The following risk factors should be considered carefully in evaluating an
investment in the Shares offered hereby.
TECHNOLOGICAL AND COMMERCIAL UNCERTAINTIES
The Company's technological strategy of designing and producing unique
biocompatible materials based on genetically engineered proteins is commercially
unproven. The process of developing products and achieving regulatory approvals
is time consuming and prone to delays. Except for limited sales of ProNectin F,
the Company has not completed the development of any product or generated any
revenues from product sales. The Company's success will depend upon its ability
to allocate sufficient resources to products with the most commercial potential,
and to design and produce biocompatible materials with the intended chemical,
biological and functional properties needed for commercial acceptance.
The commercial viability of the Company's products will also depend on the
success of its research and development activities; its ability to secure
strategic alliances appropriate to a product's development, marketing and
distribution requirements; and its ability to manufacture its products in
sufficient quantity under regulated conditions to meet product demand. The
product candidates Protein is currently pursuing will require substantial
further development, testing and regulatory approvals; there can be no assurance
that these efforts will result in commercially acceptable products. Further,
there can be no assurance that such products can be produced in commercial
quantities at reasonable costs, can be effectively marketed in a timely fashion,
will have significant benefits compared to competitive products on the market at
the time of product introduction, or will be accepted for use by the target
markets.
HISTORY OF OPERATING LOSSES; FUTURE CAPITAL REQUIREMENTS
The Company has incurred operating losses since its inception in 1988, and
will continue to do so for at least several more years. As of March 31, 1996,
the Company's accumulated deficit was approximately $17,086,000. Any currently
anticipated contract revenues derived from collaborative agreements with
strategic partners will, alone, be insufficient for the Company to offset
operating losses. Unless the Company realizes significant revenues from the
commercial sale of products, it will continue to incur operating losses, which
will need to be funded from additional public or private securities offerings.
Further, the costs of research and development activities, establishment and
scale-up of appropriate manufacturing capabilities, product testing, regulatory
compliance, establishment of marketing activities, patent prosecution and other
factors may result in increased
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operating losses over the next several years. The timing of these increased
costs, and possible offsetting contract revenues, is highly uncertain and may
produce financial results that fluctuate significantly from period to period.
The Company believes that its current capital resources will be sufficient
to fund its operating losses for approximately the next nine months. There can
be no assurance that the Company will be able to raise sufficient additional
funds before the end of this period, if at all, or that such financing will be
available on acceptable terms. If adequate funds are not available, the Company
will be required to significantly curtail its operating plans and relinquish
rights to major portions of the Company's technology or products.
DEPENDENCE ON STRATEGIC PARTNERS
In order to reduce the time and costs for developing and commercializing its
potential products, the Company's strategy is to enter into arrangements with
major medical or pharmaceutical companies with broad distribution capabilities
in appropriate markets. There can be no assurance that the Company will be able
to establish such strategic partnerships or licensing arrangements at all, or
upon favorable terms and conditions. Additionally, these arrangements generally
may be subject to termination under various circumstances, or solely at the
discretion of the strategic partner without prior notice. Termination of such
arrangements would have a material adverse effect on the Company's business and
financial condition. Furthermore, this strategy may lead to multiple alliances
regarding different product opportunities that are active at the same time.
There can be no assurance that the Company will be able to successfully manage
such multiple arrangements in various stages of development.
In September 1995, Protein entered into a licensing and development
agreement, and a supply agreement, with Ethicon with respect to its tissue
adhesives and sealants program. Under these agreements, Ethicon receives
exclusive worldwide development, marketing and distribution rights to products
produced under Protein's proprietary technology rights. In exchange, the Company
receives research and development payments and milestone payments, as well as
potential manufacturing and royalty payments. However, there can be no assurance
that Ethicon or Protein will continue to meet their obligations under the terms
of the agreements, that a product will be successfully developed for commercial
use or, if having been so developed, that Ethicon will successfully market the
resulting product. Furthermore, Ethicon has the right to terminate the
agreements at any time.
Currently, the product development efforts in the Company's agreements with
Ethicon are behind the schedule anticipated in such agreements due to delays in
meeting a certain milestone. Although a tentative understanding has been reached
with Ethicon regarding a revised schedule, a delay beyond August 14, 1996 would
cause an automatic termination of the relationship. Although it is the belief of
the Company at this time that its relationship with Ethicon is good, and
continued scientific progress is being made sufficient to justify an amendment
to this termination clause, no assurances can be made that a termination will
not occur. If a termination did occur, the Company would be materially adversely
affected.
COMPETITION AND TECHNOLOGICAL CHANGE
The areas of business in which the Company engages and proposes to engage
are characterized by rapidly evolving technology and intense competition. The
anticipated commercial uses of Protein's biomaterials are primarily end-use
products for medical applications that require other components as part of a
system. End-use products using or incorporating the Company's biomaterials would
compete with other products that rely on the use of alternative materials or
components. Technologies which compete with those of the Company are, therefore,
diverse, complex and numerous.
Competition in the biomedical and surgical repair markets is particularly
significant. The Company's competitors in those markets include major
pharmaceutical, surgical product, chemical and specialized biopolymer companies,
many of which have financial, technical, research and development and marketing
resources significantly greater than those of the Company. Academic institutions
and other public and private research organizations are
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also conducting research and seeking patent protection, and may commercialize
products on their own or through joint ventures. The Company believes that
research into similar types of protein engineering technology is currently being
conducted by DuPont and several university laboratories.
The primary competitive factors in the biomedical and surgical repair
products market are performance, cost, safety, reliability, convenience and
commercial production capabilities. The Company believes that its ability to
compete in this market will be enhanced by its issued patent claims, the breadth
of its other pending patent applications, its early entry into its field and its
experience in protein engineering. However, the Company currently does not have
production capabilities or resources to compete commercially without the use of
collaborative agreements with third parties. The Company's product technology
will compete for corporate development and marketing partnership opportunities
with numerous other biotechnology companies, research institutes, academic
institutions and established pharmaceutical companies. There can be no assurance
that the Company's competitors will not succeed in developing products based on
the Company's technology or other technologies that are more effective than any
which are being developed by the Company, or which would render the Company's
technology and products obsolete and non-competitive.
MANUFACTURING UNCERTAINTIES
To date, Protein has manufactured limited amounts of its biomedical products
for internal testing and, in certain cases, evaluation and testing by corporate
partners and other third parties. The development and commercialization of
certain biomedical products will require the Company, pursuant to applicable
governmental regulations, to upgrade its manufacturing facilities and to obtain
manufacturing approvals from the United States Food and Drug Administration (the
"FDA"). The Company is currently upgrading its production methods to achieve
"Good Laboratory Practice" compliance necessary for producing materials used to
generate preclinical data that is reviewed by the FDA.
The Company is currently considering alternative methods for increased
production of its biomedical and other product candidates for clinical
requirements under Good Manufacturing Practice ("GMP") conditions. For example,
the Company may upgrade and expand its existing facility; however, there can be
no assurance that, if desired, the Company could adequately develop, fund,
implement and manage such a manufacturing facility. Alternatively, the Company
may establish external contract manufacturing arrangements; however, there can
be no assurance that such arrangements, if desired, could be entered into or
maintained on acceptable terms, if at all, or would comply with applicable
governmental regulations.
The Company has not yet developed a process to manufacture its product
candidates on a commercial scale. There can be no assurance that a process can
be developed by the Company or any other party at a cost or in quantities
necessary to become commercially viable. Alternative methods may be needed for
producing commercial quantities of products, if any. The actual method, or
combination of methods, that the Company may ultimately pursue will depend on a
number of factors, including availability, needed quantities, cost and
governmental regulations. There is no assurance that the Company will
successfully assess the ability of such production methods or establish contract
manufacturing arrangements to meet its commercial objectives, or that such
methods and arrangements would not adversely affect the Company's margins or its
ability to compete in the marketplace.
UNCERTAINTY OF REGULATORY COMPLIANCE AND APPROVALS
Regulation by governmental authorities in the United States and other
countries is a significant factor affecting the success of products resulting
from biotechnological research. The Company's current operations and products
are, and anticipated products and operations will be, subject to substantial
regulation by a variety of local, state, federal and foreign agencies,
particularly those products and operations related to biomedical applications.
Currently, the Company's activities are subject to regulation primarily under
the Occupational Safety and Health Act, which requires the Company to provide a
"material data safety sheet" to its customers setting forth certain information
regarding the Company's products.
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Pre-market approval from the FDA is required for new medical devices, drugs
or vaccines, a generally costly and time-consuming process. If the Company does
not directly produce and sell medical devices, drugs or vaccines, it will not be
directly affected by these regulations. However, the Company's anticipated
customers and corporate partners would be required to obtain such approvals.
Additionally, the Company may be required to file and maintain with the FDA a
"Master File" containing information regarding the Company's products. There can
be no assurance that the Company's customers and corporate partners will be able
to obtain or maintain the necessary approvals from the FDA or that the Company
will be able to maintain a Master File in accordance with FDA regulations. In
either case, the Company's anticipated business could be adversely affected.
Because Protein intends for its biomaterials to be used as medical devices,
it may be required to conform its operations to the FDA's GMP regulations. GMP
regulatory requirements are rigorous, and there can be no assurance that GMP
status could be obtained in a timely manner and without the expenditure of
substantial resources, if at all. The Company may also be required to register
its facility with the FDA as an establishment involved in the manufacture of
medical devices.
The Company's research, development and production activities are, or may
be, subject to various federal and state laws and regulations relating to
environmental quality and the use, discharge, storage, transportation and
disposal of toxic and hazardous substances. The Company's future activities are
expected to be subject to regulation under the Toxic Substances Control Act,
which requires the Company to obtain pre-manufacturing approval for any new
"chemical material" the Company produces for commercial use that does not fall
within the FDA's regulatory jurisdiction.
The Company believes it is currently in compliance with such laws and
regulations applicable to its current operations. Although the Company intends
to use its best efforts to comply with all laws and regulations in the future,
there can be no assurance that the Company will be able to fully comply with
such laws, or that full compliance will not require substantial capital
expenditures. There can be no assurance that future approvals will be sought or
obtained, and the failure to obtain or maintain these approvals, or any
substantial delay in obtaining these approvals, would likely have an adverse
effect on the Company's operations.
DEPENDENCE ON KEY EMPLOYEES
As of June 30, 1996, Protein had 23 full-time and one part-time employee, of
whom four hold Ph.D. degrees in the chemical or biological sciences. The success
of the Company will depend largely upon the efforts of its scientists and
certain of its executive officers. The loss of services of any one of these
individuals would have a material adverse effect on the Company's business
opportunities and prospects. The recruitment and retention of additional
qualified management and scientific personnel is also critical to the Company's
success. There can be no assurance that the Company will be able to attract and
retain required personnel on acceptable terms, due to the competition for such
experienced personnel from other biotechnology, pharmaceutical and chemical
companies, universities and non-profit research institutions. The Company does
not maintain "key-man" or similar life insurance policies with respect to such
persons to compensate the Company in event of their deaths.
PRODUCT LIABILITY
Product liability claims may be asserted with respect to the Company's
technology or products either directly or through Protein's strategic partners.
The Company currently has no product liability insurance. Although the Company
may seek insurance against the risk of product liability in the future, there
can be no assurance that acceptable levels of insurance coverage with
appropriate terms will be obtainable, or that the assertion of a product
liability claim would not materially adversely affect the business or financial
condition of the Company.
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PATENTS AND TRADE SECRETS
The Company's success will depend, in part, on its ability to obtain patent
or other protection for its technology and product candidates. The Company seeks
to obtain such protection through patents, maintenance of trade secrets and
contractual agreements. The success of the Company will also depend in part on
the Company not infringing patents issued to competitors or other proprietary
rights of third parties.
To date, four United States patents have been issued to the Company; two
additional patents have been allowed and twelve additional patent applications
are pending. The patent position of biotechnology companies is highly uncertain
and involves complex legal, scientific and factual questions. There can be no
assurance that patents will issue from any of the Company's pending patent
applications or that, if patents do issue, the claims allowed will be
sufficiently broad to protect the Company's technology and product candidates.
In addition, there can be no assurance that any patents previously or
subsequently issued to the Company will not be challenged, invalidated or
circumvented, or that the rights granted thereunder will provide any proprietary
protection or competitive advantage to the Company.
Competitors may have filed patent applications or may have obtained patents
and other proprietary rights relating to products or processes similar to and
competitive with those of the Company. The scope and validity of such patents,
the extent to which the Company may be required to obtain licenses under these
patents or other proprietary rights, and the cost and availability of such
licenses are presently unknown. No assurance can be made that any licenses
required under any patents or proprietary rights will be made available to the
Company on acceptable terms, if at all. Further, the Company may enter into
collaborative research and development arrangements with strategic partners
which may result in the development of new technologies or products. There is no
assurance that disputes will not arise in the future with respect to the
ownership of rights to any technology or products that may be so developed.
The Company also seeks to protect its intellectual property in part by
confidentiality agreements with its employees and consultants. There can be no
assurance that these agreements will not be breached, that the Company will have
an adequate remedy for any breach, or that the Company's trade secrets will not
otherwise become known or independently discovered by competitors.
DIVIDEND POLICY
The Company has never paid dividends on its common stock, and given its
continuing loss situation, does not anticipate paying any cash dividends on the
common stock in the foreseeable future. Additionally, the holders of the
Company's Series D Preferred stock have certain preferences which entitle them
to cumulative dividends prior to the payment of any cash dividends on the
Company's common stock.
VOLATILITY OF TRADING PRICE
There has been significant volatility in market prices of securities of
biotechnology companies, and the trading price of the Shares could be subject to
wide fluctuations. Factors such as announcements of technological innovations
and new commercial products by the Company's competitors, adverse results in
product testing, litigation, governmental regulation or adverse patent or
proprietary rights developments could have a significant adverse impact on the
market price of the Company's common stock.
INVESTMENT COMPANY ACT CONSIDERATIONS
The Company believes that it is primarily engaged in business other than
investing, reinvesting, owning, holding or trading in securities. The Company
invests its cash in cash equivalents and short-term investments of high quality,
following the investment guidelines approved by the Board of Directors. However,
there can be no
-8-
<PAGE>
assurance that the Company may not be required to comply with the registration
requirements of the Investment Company Act of 1940. Such registration
requirements would have a material adverse effect upon the Company.
SELLING SECURITYHOLDERS
The Shares offered hereby were issued to the Selling Securityholders
pursuant to their exercise of certain warrants in July 1996 for an exercise
price of $2.50 per share. Such warrants constituted approximately 95% of the
339,163 warrants (the "Warrants") which were originally issued and sold by the
Company to the Selling Securityholders and other investors, along with the
Company's previously outstanding Series B Convertible Preferred Stock, in 1991.
The Warrants, to the extent not exercised, expire on July 31, 1996. In light of
its requirement for additional capital, the Company, in June 1996, offered the
holders of the Warrants an opportunity to register the resale of the shares of
Common Stock underlying the Warrants to the extent that the holders of 50% or
more of the Warrants agreed to exercise their Warrants. Since the requisite
number of Warrants were so exercised, the Company and the Selling
Securityholders entered into a Registration Rights Agreement pursuant to which
the Registration Statement, of which this Prospectus is a part, was filed.
The following table sets forth as of June 30, 1996, and upon completion of
the offering described in this Prospectus, information with regard to the
beneficial ownership of the Company's Common Stock by the Selling
Securityholders. The Selling Securityholders may not have a present intention of
selling the Shares and may offer no Shares for sale or less than the number of
the Shares indicated. Messrs. Davis, Parmeter and Stern are officers or
directors of the Company, as indicated by footnote. The address of each Selling
Securityholder is, care of the Company, 10655 Sorrento Valley Road, San Diego,
California 92121.
-9-
<PAGE>
<TABLE>
<CAPTION>
Shares Beneficially Shares to Shares Beneficially
Owned Before Offering/1/2/ be Offered/3/ Owned After Offering/4/
--------------------- ---------- --------------------
Name and Address Number Percentage Number Percentage
- ---------------- ------ ---------- ------ ----------
<S> <C> <C> <C> <C> <C>
Leslie L. Alexander/5/ 125,000 1.81% 125,000 0 *
-
Henry E. Allen 5,000 * 5,000 0 *
Charles Antell 6,250 * 6,250 0 *
Philip J. Davis/6/ 366,345 5.29% 12,686 353,659 5.11%
-
Roger and Iris Fried/5/ 11,000 * 11,000 0 *
-
Steven M. Lamon 164,967 2.39% 24,989 139,978 2.03%
Richard J. Neuman 5,000 * 5,000 0 *
J. Thomas Parmeter/5/7/ 481,777 6.98% 12,686 469,091 6.79%
- -
Estate of Paul A. Schmid/8/ 25,186 * 25,186 0 *
-
Russell T. Stern, Jr./9/ 305,805 4.42% 12,686 293,119 4.24%
-
David Thalheim 18,750 * 18,750 0 *
Transitions Three, L.P./10/ 151,779 2.20% 63,430 88,349 1.28%
--
</TABLE>
- -----------------------------
* Amount represents less than 1% of the Common Stock.
/1/ The persons named in the above table have sole voting and investment power
-
with respect to all shares beneficially owned by them, subject to community
property laws where applicable, unless otherwise noted. Information with respect
to beneficial ownership is based upon the Company's stock records and data
supplied to the Company by the Selling Securityholders.
/2/ Beneficial ownership is determined in accordance with rules of the
-
Securities and Exchange Commission, and includes, generally, voting power and/or
investment power with respect to securities. Shares of Common Stock subject to
options or warrants exercisable within 60 days are deemed outstanding for
computing the percentage of the person holding such options or warrants but are
not deemed outstanding for computing the percentage of any other person. Except
as indicated by footnote, and subject to joint ownership with spouses and
community property laws where applicable, the persons named in the table above
have sole voting and investment power with respect to all shares of Common Stock
shown as beneficially owned by them.
/3/ The Selling Securityholders may offer less than the amount of Shares
-
indicated. No representation is made that any Shares will or will not be offered
for sale.
/4/ This assumes that all Shares owned by the Selling Securityholders which are
-
offered hereby are sold. The Selling Securityholders reserve the right to accept
or reject, in whole or in part, any proposed purchase of Shares.
/5/ Shares held by this Selling Securityholder may be held or sold in the name
-
of, or for the benefit of, his or her individual retirement account.
/6/ Mr. Davis is a Director and the Corporate Secretary of the Company. Common
-
Stock owned beneficially by Mr. Davis includes 16,000 shares subject to options
exercisable within 60 days.
/7/ Mr. Parmeter is the Chairman of the Company's Board of Directors, as well
-
as its President and Chief Executive Officer.
/8/ Mr. Paul A. Schmid was the original holder of Warrants which were exercised
-
by his estate.
/9/ Mr. Stern is a Director of the Company. Common Stock shown as beneficially
-
owned by Mr. Stern includes (i) 10,000 shares held by Mr. Stern's spouse, which
Mr. Stern may be deemed to beneficially own, and (ii) 8,000 shares subject to
options exercisable within 60 days.
/10/ Mr. Brent R. Nicklas, a Director of the Company, became a general partner
--
of this investment fund in December 1988, and may be deemed to be the beneficial
owner of its shares. Mr. Nicklas disclaims such beneficial ownership. Mr.
Nicklas beneficially owns 90,148 shares of Common Stock (excluding shares held
by Transitions Three, L.P.), including 8,000 shares subject to options
exercisable within 60 days.
-10-
<PAGE>
PLAN OF DISTRIBUTION
The Shares offered hereby may be sold from time to time by the Selling
Securityholders, or by pledgees, donees, transferees, agents or other successors
in interest. Such sales may be made on one or more exchanges or in the over-the-
counter market (including NASDAQ) or otherwise, at prices and at terms then
prevailing or at prices related to the then current market price, or in
negotiated transactions. The Shares may be sold by one or more of the following:
(a) a block trade in which the broker-dealer so engaged will attempt to sell the
Shares as agent but may position and resell a portion of the block as principal
to facilitate the transaction; (b) purchases by a broker-dealer as principal and
resale by such broker-dealer for its account pursuant to this Prospectus; (c)
certain distributions in accordance with the rules of such exchange; and (d)
ordinary brokerage transactions and transactions in which the broker solicits
purchasers. In effecting sales, broker-dealers engaged by the Selling
Securityholders may arrange for other broker-dealers to participate in the
resales.
Broker-dealers or agents may receive compensation in the form of
commissions, discounts or concessions from Selling Securityholders in amounts to
be negotiated in connection with the sale. Such broker-dealers and any other
participating broker-dealers may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales, and any such
commission, discount or concession may be deemed to be underwriting discounts or
commissions under the Securities Act. In addition, any securities covered by
this Prospectus which qualify for sale pursuant to Rule 144 may be sold under
Rule 144 rather than pursuant to this Prospectus.
The Selling Securityholders may agree to indemnify any broker-dealer or
agent that participates in transactions involving sales of the Shares against
certain liabilities, including liabilities arising under the Securities Act. The
Company has agreed to indemnify the Selling Securityholders against certain
liabilities in connection with the offering of the Shares, including liabilities
arising under the Securities Act.
It is not possible at the present time to determine the price to the public
in any sale of the Common Stock by the Selling Securityholders. Accordingly, the
public offering price and the amount of any applicable underwriting discounts
and commissions will be determined at the time of such sale by the Selling
Securityholders. The aggregate proceeds to the Selling Securityholders from the
sale of the Common Stock will be the purchase price of the Common Stock sold
less all applicable commissions and underwriters' discounts, if any. The Company
will pay substantially all the expenses incident to the registration, offering
and sale of the Common Stock to the public by Selling Securityholders, other
than fees, discounts and commissions of underwriters, dealers or agents, if any,
and transfer taxes.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Shares
offered by the Selling Securityholders pursuant to this Prospectus.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby has been passed
upon by Paul, Hastings, Janofsky & Walker, Los Angeles, California.
EXPERTS
The financial statements of the Company appearing in its Annual Report (Form
10-KSB) for the year ended December 31, 1995, have been audited by Ernst & Young
LLP, independent auditors, as set forth in their report thereon included therein
and incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
-11-
<PAGE>
PART II INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
- --------
The fees and expenses payable by the Company in connection with the sale of
the shares of Common Stock being registered are estimated as follows:
<TABLE>
<CAPTION>
Amount
-------
<S> <C>
SEC Filing Fee.......................................... $ 463
Legal Fees and Expenses................................. 10,000
Accounting Fees......................................... 5,000
Printing Expenses....................................... 5,000
-------
Total......................................... $20,463
=======
</TABLE>
Item 15. Indemnification of Directors and Officers.
- --------
The Bylaws of the Company provide generally for indemnification of officers,
directors, agents and employees of the Company to the extent authorized by the
Delaware General Corporation Law. Pursuant to Section 145 of the Delaware
General Corporation Law, a corporation generally has the power to indemnify its
present and former directors, officers, employees and agents against expenses
incurred by them in connection with any suit to which they are, or are
threatened to be made, a party by reason of their serving in such positions so
long as they acted in good faith and in a manner they reasonably believed to be
in, or not opposed to, the best interests of the corporation, and with respect
to any criminal action, they had no reasonable cause to believe their conduct
was unlawful. With respect to suits by or in the right of a corporation,
however, indemnification is not available if such person is adjudged to be
liable for negligence or misconduct in the performance of his duty to the
corporation unless the court determines that indemnification is appropriate. In
addition, a corporation has the power to purchase and maintain insurance for
such persons. The statute also expressly provides that the power to indemnify
authorized thereby is not exclusive of any rights granted under any bylaw,
agreement, vote of stockholders or disinterested directors, or otherwise.
As permitted by Section 102 of the Delaware General Corporation Law, the
Company's stockholders have approved and incorporated provisions into the
Company's Certificate of Incorporation eliminating a director's personal
liability for monetary damages to the Company and its stockholders arising from
a breach of a director's fiduciary duty, except for liability under Section 174
of the Delaware General Corporation Law or liability for any breach of the
director's duty of loyalty to the Company or its stockholders, for acts or
omissions not in good faith or that involve intentional misconduct or a knowing
violation of law or for any transaction in which the director derived an
improper personal benefit.
The Company has entered into supplemental indemnification agreements with
each of its directors and executive officers. These agreements provide
substantially broader indemnity rights than those provided under the Delaware
General Corporation Law and the Company's Bylaws. The indemnification agreements
are not intended to deny or otherwise limit third-party or derivative suits
against the Company or its directors or officers, but to the extent a director
or officer were entitled to indemnity or contribution under the indemnification
agreement, the financial burden of a third-party suit would be borne by the
Company, and the Company would not benefit from derivative recoveries against
the director or officer. Such recoveries would accrue to the benefit of the
Company but would be offset by the Company's obligations to the director or
officer under the indemnification agreement.
II-1
<PAGE>
The above discussion of the Company's Bylaws, Certificate of Incorporation
and indemnification agreements and of Section 145 of the Delaware General
Corporation Law is not intended to be exhaustive and is qualified in its
entirety by such Bylaws, Certificate of Incorporation, indemnification
agreements and statute.
Item 16. Exhibits.
- --------
5 Opinion of counsel as to legality of securities being registered.
23.1 Consent of independent public accountants.
23.2 Consent of counsel (included in Exhibit 5).
24.1 Power of Attorney (included herein on the signature page).
Item 17. Undertakings.
- --------
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the Prospectus any facts or events
arising after the effective date of this registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
this registration statement;
(iii) 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;
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
-------- -------
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant
to Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof; and
(3) To remove from registration by means of post-effective
amendment any of the securities which remain unsold at the termination of
the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
securities Exchange Act that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
II-2
<PAGE>
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions or otherwise, the registrant
has been advised that in the opinion of the 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.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the
Securities Act, the information omitted from the form of prospectus filed as
part of this Registration Statement in reliance upon Rule 430A and contained
in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1)
or (4) or 497(h) under the 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, 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-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 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 San Diego, State of California, on July 3, 1996.
PROTEIN POLYMER TECHNOLOGIES, INC.,
a Delaware corporation
By: /s/ J. Thomas Parmeter
----------------------------------------
J. Thomas Parmeter
President & Chief Executive Officer
II-4
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature appears
below constitutes and appoints J. Thomas Parmeter and Aron P. Stern, and each of
them, his true and lawful attorney-in-fact and agent, each acting alone, with
full power of substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities, to sign this Registration Statement and
any and all amendments (including post-effective amendments) to this
Registration Statement, and to file the same with all exhibits thereto, and all
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorney-in-fact and agent, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said attorney-in-
fact and agent or his substitute or substitutes, may lawfully do or cause to be
done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ J. Thomas Parmeter Chairman of the Board, President and July 2, 1996
- ------------------------- Chief Executive Officer
J. Thomas Parmeter (Principal Executive Officer)
/s/ Aron P. Stern Vice President-Finance and Chief
- ------------------------- Financial Officer (Principal July 2, 1996
Aron P. Stern Financial and
Accounting Officer)
/s/ Edward E. David Director July 2, 1996
- -------------------------
Edward E. David
/s/ George R. Walker Director July 2, 1996
- -------------------------
George R. Walker
Director July , 1996
- -------------------------
Brent R. Nicklas
/s/ Russell T. Stern Director July 2, 1996
- -------------------------
Russell T. Stern
/s/ Bertram I. Rowland Director July 2, 1996
- -------------------------
Bertram I. Rowland
/s/ Philip J. Davis Director July 2, 1996
- -------------------------
Philip J. Davis
/s/ Edward J. Hartnett Director July 2, 1996
- -------------------------
Edward J. Hartnett
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description Sequential Page No.
- ----------- ----------- -------------------
<S> <C> <C>
5 Opinion of counsel as to legality of securities
being registered. 20
23.1 Consent of independent public accountants. 22
23.2 Consent of counsel (included in Exhibit 5). --
24.1 Power of Attorney (included herein on
the signature page). --
</TABLE>
<PAGE>
EXHIBIT 5
---------
Paul, Hastings, Janofsky & Walker
555 S. Flower Street
Twenty-Third Floor
Los Angeles, California 90071
Telephone (213) 683-6000
Facsimile (213) 627-0705
July 8, 1996
Protein Polymer Technologies, Inc.
10655 Sorrento Valley Road
San Diego, California 92121
Ladies and Gentlemen:
We are furnishing this opinion of counsel to Protein Polymer Technologies,
Inc., a Delaware corporation (the "Company"), for filing as Exhibit 5 to the
Registration Statement on Form S-3 (the "Registration Statement") to be filed by
the Company with the Securities and Exchange Commission under the Securities Act
of 1933, as amended, relating to the resale of up to 324,163 shares (the
"Shares") of its Common Stock, $.01 par value.
We have examined the Certificate of Incorporation and Bylaws, each as
amended to date, of the Company, and the originals, or copies certified or
otherwise identified, of records of corporate action of the Company as furnished
to us by the Company, certificates of public officials and of representatives of
the Company, and such other instruments and documents as we deemed necessary, as
a basis for the opinions hereinafter expressed. In such examination we have
assumed the genuineness of all signatures, the authenticity of all corporate
records and other documents submitted to us and the conformity to original
documents submitted to us as certified or photostatic copies.
Based upon our examination as aforesaid, and in reliance upon our
examination of such questions of law as we deem relevant under the
circumstances, we are of the opinion that the Shares, when purchased as
described in the Registration Statement, will be validly issued, fully paid and
nonassessable.
<PAGE>
Protein Polymer Technologies, Inc.
July 8, 1996
Page 2
We express no opinion with respect to the applicability or effect of the
laws of any jurisdiction other than the Delaware General Corporation Law as in
effect on the date hereof.
We hereby consent to the filing of this opinion of counsel as Exhibit 5 to
the Registration Statement.
Very truly yours,
/s/ Paul, Hastings, Janofsky & Walker
<PAGE>
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Protein Polymer
Technologies, Inc. for the registration of shares of its common stock and to the
incorporation by reference therein of our report dated February 1, 1996, with
respect to the financial statements of Protein Polymer Technologies, Inc.
included in its Annual Report (Form 10-KSB) for the year ended December 31,
1995, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
San Diego, California
July 8, 1996
