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As filed with the Securities and Exchange Commission on February 12, 1999
Registration No. 33-43875
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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POST EFFECTIVE AMENDMENT NO. 1 /(1)/
ON
FORM S-3
TO
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
PROTEIN POLYMER TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
33-0311631
(I.R.S. Employer 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 Copy to:
Chairman & Chief Executive Officer Robert A. Miller, Jr., Esq.
Protein Polymer Technologies, Inc. Paul, Hastings, Janofsky & Walker LLP
10655 Sorrento Valley Road 555 S. Flower Street
San Diego, California 92121 Twenty-Third Floor
(619) 558-6064 Los Angeles, California 90071
(213) 683-6000
(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. [_]
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Calculation of Registration Fee
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Proposed
Title of each class Proposed maximum maximum
of securities to be Amount to be offering aggregate offering Amount of
registered registered (1)(2) price per unit (3) price (3) registration fee
<S> <C> <C> <C> <C>
Common Stock, $.01 par value, 1,667,500 Shares $1.00 $1,667,500 (1)
issuable upon exercise of Redeemable
Warrants (1)
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(1) The Registrant previously registered 1,667,500 shares of Common Stock, par
value $.01 per share, issuable upon exercise of Redeemable Warrants and paid the
applicable fee on such securities. This Amendment to Registration Statement and
Prospectus is being filed for the purpose of meeting the requirements of Section
10(a)(3) of the Securities Act of 1933 with respect to the exercise of the
Redeemable Warrants. No additional securities are being registered and no
additional filing fee is required pursuant to Rule 457(a) promulgated under the
Securities Act of 1933, as amended. The amount of registration fee previously
paid in connection with the shares of Common Stock issuable upon exercise of the
Redeemable Warrants was $4,168.75.
(2) Pursuant to Rule 416 promulgated under the Securities Act, there are also
registered hereunder such indeterminate number of additional shares as may be
issuable to prevent dilution resulting from stock splits, stock dividends, or
similar transactions pursuant to the terms of the Redeemable Warrants.
(3) Estimate based on sales price of the Registrant's Common Stock as reported
on NASDAQ on February 9, 1999 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.
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The information in this prospectus is not complete and may be changed. We
may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an
offer to sell these securities and it is not soliciting an offer to buy these
securities in any State where the offer or sale is not permitted.
Subject to Completion, Dated February 12, 1999
PROSPECTUS
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PROTEIN POLYMER TECHNOLOGIES, INC.
_______________
1,667,500 Shares of Common Stock
_______________
We are offering 1,667,500 shares of our common stock issuable upon the
exercise of publicly-traded Redeemable Warrants we sold in our initial public
offering. We have reduced the exercise price of each Redeemable Warrant to $___
per share, subject to adjustment, and have extended the warrant expiration date
through March 31, 1999.
We will receive proceeds upon the exercise of the Redeemable Warrants. In
the event that all the Redeemable Warrants are exercised prior to March 31,
1999, the gross proceeds we would receive would be $________, before deduction
of expenses, including legal, accounting and miscellaneous expenses payable by
us, which are estimated to be $_______. In addition, and subject to certain
conditions, a solicitation fee of 3.5% may be payable by us to the underwriter
of our initial public offering in connection with any exercise of the Redeemable
Warrants.
Our Common Stock is traded on the Nasdaq SmallCap Market System under the
symbol "PPTI." The last reported sales price per share of our Common Stock as
reported by Nasdaq on February 9, 1999 was $1.00.
Consider Carefully the Risk Factors Beginning on Page 4 of this
Prospectus.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of the disclosures in the prospectus. Any representation
to the contrary is a criminal offense.
_______________
Prospectus dated February __, 1999.
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TABLE OF CONTENTS
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Page
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<S> <C>
Available Information....................... 2
Incorporation by Reference.................. 2
Forward Looking Statements.................. 3
The Company................................. 3
Risk Factors................................ 4
Plan of Distribution........................ 11
Use of Proceeds............................. 12
Legal Matters............................... 12
Experts..................................... 12
Indemnification of Directors and Officers... 13
</TABLE>
We have not authorized any dealer, salesman or other person to give any
information or represent anything not contained in this prospectus or
incorporated by reference. You should not rely on any unauthorized information.
We are offering to sell, and seeking offers to buy, the securities only in
jurisdictions where offers and sales are permitted. The information in this
prospectus is accurate as of the date on the cover. Delivery of this prospectus
or any sale of the securities does not indicate that there has been no change in
our affairs since the date of this prospectus.
AVAILABLE INFORMATION
We are a public company and file annual, quarterly and special reports,
proxy statements and other information with the Securities and Exchange
Commission. Copies of such reports, proxy and other information may be read and
copied at the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington,
D.C. 20549. You can request copies of such documents by writing to the SEC and
paying a fee for the copying cost. You may obtain information on the operation
of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC
maintains a web site at (http://www.sec.gov) that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the SEC. Our common stock is quoted on The Nasdaq SmallCap
Market. You can also read a copy of our reports, proxy and information
statements and other information filed with the SEC at the offices of the
National Association of Securities Dealers, Inc., 1735 K Street, N.W.,
Washington, D.C. 20006.
This prospectus is part of a Registration Statement on Form S-3 that we
filed with the SEC. Certain information in the Registration Statement has been
omitted from this prospectus in accordance with the rules and regulations of the
SEC. We have also filed exhibits and schedules with the Registration Statement
that are excluded from this prospectus. For further information you may:
- read a copy of the Registration Statement, including the exhibits
and schedules, without charge at the SEC's Public Reference Room;
or
- obtain a copy from the SEC upon payment of the fees prescribed by
the SEC.
INCORPORATION BY REFERENCE
The SEC allows us to "incorporate by reference" certain of our publicly
filed documents into this prospectus, which means that information included in
these documents is considered part of this prospectus. Information that we file
with the SEC subsequent to the date of this prospectus will automatically update
and supersede this information. We incorporate by reference in this prospectus:
- Our Annual Report on Form 10-KSB for the year ended December 31,
1997;
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- Our Quarterly Reports on Form 10-QSB for the quarters ended March
31, 1998, June 30, 1998 and September 30, 1998;
- Our Current Report on Form 8-K, filed with the SEC on May 1, 1998;
- Our Current Report on Form 8-K, filed with the SEC on October 13,
1998; and
- The description of our common stock contained in our Registration
Statement under the Exchange Act on Form 8-A, filed with the SEC on
December 11, 1991, as amended by Form 8 filed with the SEC on
January 17, 1992 and by Form 8-A, filed with the SEC on September
5, 1997.
We will provide any person to whom a copy of this prospectus is delivered,
on written or oral request, a copy of any or all of the documents incorporated
by reference, other than exhibits to such documents unless specifically
incorporated by reference therein. You should direct any requests for documents
to Lisa Swan, Director, Investor Relations, Protein Polymer Technologies, Inc.,
10655 Sorrento Valley Road, San Diego, California 92121, telephone (619) 558-
6064.
FORWARD-LOOKING STATEMENTS
Certain statements contained or incorporated by reference in this
prospectus constitute "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause our actual results, performance or achievements, or industry
results, to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. Such
factors include those set forth in this prospectus, including under the caption
"Risk Factors." Given these uncertainties, prospective investors are cautioned
not to place undue reliance on such forward-looking statements. We disclaim any
obligation to update any such statements or to publicly announce any updates or
revisions to any of the forward-looking statements contained in this prospectus
to reflect any change in our expectations or any change in events, conditions,
circumstances or assumptions underlying such statements.
THE COMPANY
Protein Polymer Technologies, Inc. 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. We were incorporated in Delaware on July 6, 1988. Since 1992 we
have focused on medical uses for our materials, primarily for:
- surgical repair markets;
- surgical adhesives and sealants;
- soft tissues augmentation;
- wound healing and tissue engineering;
- surgical adhesion barriers; and
- drug delivery devices.
We have also developed coating technology that can efficiently modify and
improve the surface properties of containers used to grow cells outside the
body. Our current products include SmartPlastic (R) and ProNectin (R) F Cell
Attachment Factor for growing human and animal cells outside the body.
Our address is Protein Polymer Technologies, Inc., 10655 Sorrento Valley
Road, San Diego, California 92121, and our telephone number is (619) 558-6064.
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RISK FACTORS
An investment in the securities involves a high degree of risk. You should
carefully consider the following risk factors in addition to the remainder of
the prospectus before making an investment decision.
Dependence on Strategic Partners
Our strategy is to enter into partnerships or licensing arrangements with
major medical or pharmaceutical companies with broad distribution capabilities
in appropriate markets in order to reduce the time and costs for developing and
commercializing our potential products. There can be no assurance that we will
be able to establish such strategic partnerships or licensing arrangements, or,
if available, that they will be on acceptable 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 our business and financial condition. Furthermore, our
strategy may lead to multiple alliances regarding different product
opportunities that are active at the same time. There can be no assurance that
we will be able to successfully manage such multiple arrangements in various
stages of development.
In October 1991, we entered into a sublicense agreement with Telios
Pharmaceuticals, Inc. with respect to our use of certain patents. We are
obligated to pay certain royalty payments in immaterial amounts until we achieve
net revenues derived from sales of products formulated using such patents, at
which time the royalty payments will be a small percentage of such revenues. We
are not currently a party to any other alliances.
We have entered into certain materials evaluation agreements and
preliminary negotiations with other entities regarding additional biomedical and
specialty use applications of our polymers and technology, including
applications in areas other than those identified above as product candidates.
These agreements provide, or are intended to provide, for the evaluation of
product feasibility. There can be no assurance that we will be able to
establish such agreements, or, if available, do so in a timely manner and on
reasonable terms, or that such agreements will lead to joint product development
and commercialization agreements.
Technological and Commercial Uncertainties
Our 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 averaging less than
$100,000 per year of ProNectin(R) F and SmartPlastic (R), we have not completed
the development of any product or generated any significant revenues from
product sales. We have terminated our promotional expenditures for SmartPlastic
(R) due to continuing disappointing market interest and for ProNectin(R) F due
to a reallocation of our internal resources to other research and development.
Our success will depend upon:
- our ability to identify products with the most commercial
potential;
- our ability to allocate sufficient resources to such products;
- our ability to design and produce biocompatible materials with the
intended chemical, biological and functional properties needed for
commercial acceptance;
- our ability to secure strategic alliances appropriate to a
product's development, marketing and distribution requirements; and
- our ability to manufacture our products in sufficient quantity at
reasonable costs under regulated conditions to meet product demand.
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The product candidates we are 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.
Currently none of our product candidates are in human clinical testing. 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.
There can be no assurance that our research and development activities will
be successful or that any of our future products will ultimately be commercially
successful.
History of Operating Losses; Continued Expectation of Losses; Funding Until
April of 1999; Future Capital Requirements; Going Concern Opinion
We have incurred operating losses since our inception in 1988, and will
continue to do so for at least several more years. As of September 30, 1998,
our accumulated deficit was approximately $31.5 million, and we have continued
to incur losses since that date. Such losses have resulted principally from
expenses of research and development and to a lesser extent, from general and
administrative expenses. Any potential contract revenues derived from
collaborative agreements with possible strategic partners will, alone, be
insufficient for us to become profitable. The timing of our losses, and
possible offsetting contract revenues, is highly uncertain and may produce
financial results that fluctuate significantly from period to period.
Substantial additional capital resources will be required to fund our
continuing operating expenditures and activities including:
- increasing expenditures related to our research and development
activities;
- establishment and scale-up of appropriate manufacturing
capabilities;
- preclinical and clinical testing;
- regulatory compliance;
- business development activities; and
- patent prosecution.
We believe that our current capital resources will be sufficient to fund
our operating losses through the April of 1999. In their report for the year
ended December 31, 1997, our independent auditors stated that without additional
financing, there is substantial doubt about our ability to continue as a going
concern. We believe there are a number of alternatives available to meet our
continuing capital requirements. We are actively pursuing a number of potential
approaches to meet the continuing capital requirements of our operations, such
as initiating and engaging in preliminary negotiations with a number of
potential collaborative partners and ongoing negotiations with potential
investors regarding private financings. There can be no assurance that we will
be able to raise sufficient additional capital 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, we will be required to significantly
curtail our operations and relinquish rights to major portions of our technology
or products, including rights to manufacture and sale of protein polymers and
rights with respect to our tissue repair technology.
Intense Competition and Rapid Technological Change
The areas of business in which we engage and proposes to engage are
characterized by rapidly evolving technology and intense competition. The
anticipated commercial uses of our biomaterials are primarily end-use
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products for medical applications that require other components as part of a
system. End-use products using or incorporating our biomaterials would compete
with other products that rely on the use of alternative materials or components.
Technologies which compete with ours are, therefore, diverse, complex and
numerous.
Competition in the biomedical and surgical repair markets is particularly
significant. Our 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 ours. Academic institutions and other public and
private research organizations are also conducting research and seeking patent
protection, and may commercialize products on their own or through joint
ventures. Most of our competitors depend on technology other than protein
engineering for developing products, for example Focal, Inc. and Closure Medical
Corp. We believe that DuPont and several university laboratories are currently
conducting research into similar protein engineering technology.
The primary competitive factors in the biomedical and surgical repair
products market are:
- performance;
- cost;
- safety;
- reliability;
- ease of use; and
- commercial production capabilities.
We believe that our ability to compete in this market will be enhanced by
our issued patent claims, the breadth of our other pending patent applications
and our experience in protein engineering. However, we currently do not have
the resources to compete commercially without the use of collaborative
agreements with third parties. Our product technology competes 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 our
competitors will not succeed in developing products based on our technology or
other technologies that are more effective than any which are being developed by
us, or which would render our technology and products obsolete and non-
competitive.
Manufacturing Uncertainties
To date, we have manufactured only limited amounts of our 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 us, pursuant to
applicable governmental regulations, to upgrade our manufacturing facilities and
to obtain manufacturing approvals from the United States Food and Drug
Administration. We have recently upgraded our production methods to achieve
"Good Laboratory Practice" compliance necessary for producing materials used to
generate preclinical data that is reviewed by the FDA.
We are currently considering alternative methods for increased production
of our biomedical and other product candidates for clinical requirements under
Good Manufacturing Practice conditions. For example, we may upgrade and expand
our existing facility; however, there can be no assurance that, if desired, we
could adequately develop, fund, implement and manage such a manufacturing
facility. Alternatively, we 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.
We have not yet developed a process to manufacture our product candidates
on a commercial scale. There can be no assurance that a process can be
developed by us 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 we may ultimately pursue will depend on a number of
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factors, including availability, needed quantities, cost and governmental
regulations. There is no assurance that we will successfully assess the ability
of such production methods or establish contract manufacturing arrangements to
meet our commercial objectives, or that such methods and arrangements would not
adversely affect our margins or our 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. Our 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. Our activities are
subject to regulation primarily under the Occupational Safety and Health Act,
which requires us to provide a "material data safety sheet" to our customers
setting forth certain information regarding our products.
Pre-clinical and clinical testing and pre-market approval from the FDA is
required for new medical devices, drugs or vaccines, a generally costly and
time-consuming process. The failure to demonstrate adequately to the FDA the
safety and efficacy of a product under development could prevent regulatory
approval. Alternatively, the FDA may require additional preclinical or clinical
testing, which would result in increased costs and significant development
delays. Many companies have experienced these types of setbacks during later
stage clinical trials, despite promising results in earlier trials. If we do
not directly produce and sell medical devices, drugs or vaccines, we may not be
directly affected by these regulations. However, our anticipated customers and
strategic partners would be required to obtain such approvals. Additionally, we
may be required to file and maintain with the FDA a "Master File" containing
information regarding our products. There can be no assurance that we or our
customers and strategic partners will be able to obtain or maintain the
necessary approvals from the FDA or that we will be able to maintain a Master
File in accordance with FDA regulations. In either case, our anticipated
business could be adversely affected.
We have manufactured limited amounts of our biomedical materials and
products for internal testing, and, in certain cases, evaluation and testing by
strategic partners and other third parties. Preclinical and clinical testing of
potential medical device products, where the results will be submitted to the
FDA, requires compliance with the FDA's Good Laboratory Practices. We have
implemented polymer production and quality control procedures, have made certain
facilities renovations, and believe we are in compliance with Good Laboratory
Practice requirements. In addition, because we intends for our biomaterials to
be used as medical devices that meet clinical and commercial requirements,
before pursuing clinical testing and commercial production, we may be required
to conform our operations to the FDA's Good Manufacturing Practice regulations.
Good Manufacturing Practice regulatory requirements are rigorous, and there can
be no assurance that Good Manufacturing Practice status could be obtained in a
timely manner and without the expenditure of substantial resources, if at all.
We may also be required to register our facility with the FDA as an
establishment involved in the manufacture of medical devices. We believe that
our products SmartPlastic (R) and ProNectin (R) F designed for use for in vitro
cell culture are not used for internal testing and are therefore not subject to
FDA approvals.
Our 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. Our future activities are expected to be subject to
regulation under the Toxic Substances Control Act, which requires us to obtain
pre-manufacturing approval for any new "chemical material" we produce for
commercial use that does not fall within the FDA's regulatory jurisdiction.
We believe we are currently in compliance with such laws and regulations
applicable to our current operations. Although we intend to use our best
efforts to comply with all laws and regulations in the future, there can be no
assurance that we 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
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failure to obtain or maintain these approvals, or any substantial delay in
obtaining these approvals, would likely have a material adverse effect on our
operations.
Dependence on Key Employees
As of February 9, 1999, we had thirty-two full-time employees and two part-
time employees, of whom six have employment contracts with us and seven hold
Ph.D. degrees in the chemical or biological sciences. Our success will depend
largely upon the efforts of our scientists and certain of our executive
officers. The loss of services of any one of these individuals would have a
material adverse effect on our business opportunities and prospects. The
recruitment and retention of additional qualified management and scientific
personnel is also critical to our success. There can be no assurance that we
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. We do not maintain "key-man" or similar life insurance policies
with respect to such persons to compensate us in the event of their deaths.
Product Liability; Absence of Insurance
Product liability claims may be asserted with respect to our technology or
products either directly or through our strategic partners. We may be exposed
to potential product liability risks whenever human clinical testing is
performed or medical device product sales occur. We believe that our current
preclinical testing, production activities and sales of SmartPlastic (R) and
ProNectin (R) F products do not pose any material product liability risk. We
therefore currently have no product liability insurance. To our knowledge no
product liability claims have ever been made against us. Although we 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 our business or financial condition.
Patents and Trade Secrets
Our success will depend, in part, on our ability to obtain patent or other
protection for our technology and product candidates. We seek to obtain such
protection through patents, maintenance of trade secrets and contractual
agreements. Our success will also depend in part on not infringing patents
issued to competitors or other proprietary rights of third parties.
To date, we have been issued fourteen United States patents and nine
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 our pending patent applications or that, if patents do issue,
the claims allowed will be sufficiently broad to protect our technology and
product candidates. In addition, there can be no assurance that any patents
previously or subsequently issued to us will not be challenged, invalidated or
circumvented, or that the rights granted thereunder will provide us with any
proprietary protection or competitive advantage.
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 ours. The scope and validity of such patents, the extent to
which we may be required to obtain licenses under these patents or other
proprietary rights, and the cost and availability of such licenses are presently
unknown. There can be no assurance that any licenses required under any patents
or proprietary rights will be made available to us on acceptable terms, if at
all. Further, we may enter into collaborative research and development
arrangements with strategic partners that may result in the development of new
technologies or products. There can be 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.
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We have also applied for patent protection with respect to certain of our
patents in foreign countries, including Japan, Australia, Europe and India. We
have not yet marketed, sold or developed our products outside the United
States. There can be no assurance that patents will issue from any of our
pending foreign patent applications or that, if patents do issue, the claims
allowed will be sufficiently broad to protect our technology and product
candidates. In addition, there can be no assurance that any foreign patents
issued to us will not be challenged, invalidated or circumvented, or that the
rights granted thereunder will provide us with any proprietary protection or
competitive advantage. Furthermore, certain foreign intellectual properties
laws may not be as protective as those of the United States.
We also seek to protect our intellectual property in part by
confidentiality agreements with our employees and consultants. There can be no
assurance that these agreements will not be breached, that we will have an
adequate remedy for any breach, or that our trade secrets will not otherwise
become known or independently discovered by competitors.
Dividend Policy; No Payment of Dividends
We have never paid dividends on our common stock, and given our continuing
loss situation, we do not anticipate paying any cash dividends on the common
stock in the foreseeable future. Additionally, the holders of our Series D
Preferred stock and Series F Preferred stock have certain preferences that
entitle them to cumulative dividends prior to the payment of any cash dividends
on our common stock. Our Series E Preferred stock do not have any preference
with respect to cash dividends and share ratably, after payment of preferred
dividends on our Series D Preferred stock and Series F Preferred stock, with the
holders of our common stock, Series D Preferred stock and Series F Preferred
stock in any cash dividends declared on our 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 securities could be
subject to wide fluctuations. Factors that could have a significant adverse
impact on the market price of our common stock include:
- announcements of technological innovations by our competitors;
- announcements of new commercial products by our competitors;
- adverse results in product testing;
- litigation;
- governmental regulation; or
- adverse patent or proprietary rights developments.
Investment Company Act Considerations
We believe that we are primarily engaged in business other than investing,
reinvesting, owning, holding or trading in securities. We invest our cash in
cash equivalents and short-term investments of high quality, following the
investment guidelines approved by our Board of Directors. However, there can be
no assurance that we 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 us.
Possible Nasdaq Delisting; Potential Regulation as a Penny Stock
Our common stock is currently listed for trading on the Nasdaq SmallCap
Market. The continued trading of our common stock on the Nasdaq SmallCap Market
is conditioned upon us meeting certain quantitative and qualitative
requirements regarding assets, capital, earnings surplus, stock price and
corporate governance features. The National Association of Securities Dealers
standards for continued listing include:
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- maintenance of any of
$2,000,000 of net tangible assets,
$35,000,000 of market capitalization, or
$500,000 of net income for two of the last three years;
- at least 500,000 shares in public float valued at $1,000,000 or
more;
- a minimum common stock bid price of $1.00;
- at least two market makers; and
- at least 300 holders of the common stock.
We believe we are currently in compliance with the new requirements for
continued listing. There can be no assurance that we will be successful in
continuing to meet the Nasdaq SmallCap Market maintenance criteria. From time to
time our common stock has traded below the $1.00 minimum bid price requirement.
To the extent we are unable to satisfy the maintenance criteria, our common
stock may be delisted. Trading in the common stock thereafter, if any, will
likely be conducted in the over-the-counter markets in the so-called "pink
sheets" or the National Association of Securities Dealers' Electronic Bulletin
Board and could also be subject to additional restrictions. As a consequence of
any such delisting, it is expected that our stockholders would find it more
difficult to dispose of, or to obtain accurate quotations as to the market value
of, the common stock. In addition, any such delisting will make the common
stock substantially less attractive as collateral for margin and purpose loans,
for investment by financial institutions under their internal policies or state
legal investment laws, or as consideration in future capital raising
transactions.
If our securities were delisted from the Nasdaq SmallCap Market, the common
stock may become subject to regulation as a "penny stock." The Securities and
Exchange Commission has adopted regulations which generally define "penny stock"
to be any equity security that has a market price or exercise price less than
$5.00 per share, subject to certain exceptions, including listing on the Nasdaq
SmallCap Market. If the common stock is delisted from the Nasdaq SmallCap
Market and no other exception applies, our common stock may become subject to
the SEC's Penny Stock Rules, Rule 15g-1 through Rule 15g-9 under the Exchange
Act. For transactions covered by these rules, the broker-dealer must make a
special suitability determination for the purchase of such securities and have
received the purchaser's written consent to the transaction prior to the
purchase. Additionally, for any transaction involving a penny stock, unless
exempt, the rules require the delivery, prior to the transaction, of a risk
disclosure document mandated by the SEC relating to the penny stock market. The
broker-dealer must also disclose the commission payable to both the broker-
dealer and the registered representative, current quotations for the securities
and, if the broker-dealer is the sole market maker, the broker-dealer must
disclose this fact and the broker-dealer's presumed control over the market.
Finally, monthly statements must be sent disclosing recent price information for
the penny stock held in the account and information on the limited market in
penny stocks. Consequently, the penny stock rules may restrict the ability of
broker-dealers to sell our securities and may affect the ability of holders to
sell our securities in the secondary market and the price at which such holders
can sell any such securities. Rule 15g-9 under the Exchange Act imposes
additional sales practice requirements on broker-dealers who sell such
securities except in transactions exempted from such rule. Such exempt
transactions include those meeting the requirements of Rule 505 or 506 of
Regulation D promulgated under the Securities Act and transactions in which the
purchaser is an institutional accredited investor or an established customer of
the broker-dealer.
Information Technology and Year 2000 Issues
The "Year 2000" issue concerns potential exposure related to the
interruption of business practice and financial misinformation resulting from
the application of computer programs which have been written using two digits,
rather than four, to define the applicable year of business transactions. We
have undertaken initiatives to ensure that our computer systems are Year 2000
compliant. To date we have not incurred any material costs in connection with
our Year 2000 plan. Based on our assessments to date, we do not expect to incur
any further significant costs, or anticipate any significant problems or
uncertainties associated with becoming Year 2000 compliant.
10
<PAGE>
The following is a breakdown by phase of the progress we have made to date
on our Year 2000 plan:
<TABLE>
<CAPTION>
Phase Time Frame Percent Complete
----- ---------- -----------------
<S> <C> <C>
Initial identification and assessment Q-4 1998 95%
Remediation Q-4 1998 95%
Testing Q-2 1999 70%
Contingency planning Q-2 1999 50%
</TABLE>
We are reliant on our vendors and suppliers and may be reliant on strategic
partners to provide Year 2000 compliant systems prior to December 31, 1999. We
are in the process of surveying all of our major vendors and suppliers to
determine whether their systems are Year 2000 compliant. At this time the
impact on us of significant vendors and suppliers not being in full compliance
cannot be reasonably estimated. However, we believe that any of our vendors and
suppliers can be replaced with minimal cost impact. We are developing a plan to
mitigate the impact of vendors and suppliers who are not in compliance with
issues related to the Year 2000.
PLAN OF DISTRIBUTION
The shares of common stock covered by this prospectus are issuable upon
exercise of currently publicly traded Redeemable Warrants the Company sold in
its initial public offering. The Company has, in its discretion and in
accordance with the Warrant Agreement dated as of January 21, 1992 between the
Company and Continental Stock Transfer & Trust Company, the Company's warrant
agent, reduced the warrant exercise price of the Redeemable Warrants to $____
and has extended the expiration date of the Redeemable Warrants until March 31,
1999. The Company reserves the right to make further changes in the warrant
exercise price and warrant expiration date in accordance with the Warrant
Agreement.
Warrant Exercise Procedure.
In order to effectively exercise the Redeemable Warrants and purchase the
shares of common stock underlying the Redeemable Warrants, a Warrantholder must
comply with the procedure described below. Failure to follow this procedure may
result in either a delay in the Warrantholder's receipt of a stock certificate
or an ineffective exercise and return to the Warrantholder of the materials
submitted for exercise. Each Warrant Certificate contains additional terms and
conditions, described below, that may affect the exercisability of the
Redeemable Warrant.
The Warrantholder must use the "Purchase Form" section of the Warrant
Certificate. The Warrantholder must specify the number of shares of common
stock being purchased and whether and by whom the exercise of the Redeemable
Warrant was solicited. The Warrantholder must sign the Purchase Form section
where indicated, and the signature must conform with the manner in which the
Warrant Certificate is held as it appears on the face of the Warrant Certificate
in every particular, without alteration or enlargement or any change whatever,
with the signature guaranteed.
The Warrant Certificate, including the completed Purchase Form, and either
cash or check drawn to the order of "Protein Polymer Technologies, Inc." for the
exact amount of the exercise price for the shares of common stock being
purchased must be delivered to the Warrant Agent, Continental Stock Transfer &
Trust Company, 2 Broadway, New York, New York 10004. In addition, to satisfy
Internal Revenue Service requirements, the exercising Warrantholder must provide
the Warrant Agent with its social security number or taxpayer identification
number. Also, an exercising Warrantholder should provide the Warrant Agent with
the address to which he or she wants the share certificate delivered. Any
questions concerning exercise may be addressed to the Warrant Agent at the
address listed above.
Upon receipt of the Warrant Certificate, including the completed Purchase
Form, appropriate payment for the shares of common stock being purchased, and
the exercising Warrantholder's social security or taxpayer
11
<PAGE>
identification number, the Warrant Agent will issue a share certificate in the
Warrantholder's name (or other name if so designated) for the shares exercised.
The share certificate will be sent to the exercising Warrantholder at the
address indicated at the time of exercise; otherwise the certificate will be
sent to the address listed on the Warrant Register maintained by the Warrant
Agent. Unless otherwise agreed to by the Warrant Agent, all share certificates
will be sent by first class mail.
Upon the Warrant Agent's receipt of the Warrant Certificate, including the
completed Purchase Form, appropriate payment for the shares of common stock
being purchased, and the exercising Warrantholder's social security or taxpayer
identification number, the Warrantholder will become the holder of record of
those shares being purchased and shall have all of the rights of a stockholder,
including the right to vote the shares.
Partial Exercise.
A Warrant Certificate may be exercised for all or a portion of the shares
it represents. If a Warrantholder exercises a portion of the shares represented
by a Warrant Certificate, then in addition to the share certificate for the
exercised shares, he or she will receive a new Warrant Certificate, dated the
date of the original Warrant Certificate, representing those shares still
subject to exercise.
Possible Obligations to Underwriter
Subject to certain conditions, the Company may pay to the underwriter of
its initial public offering a fee of 3.5% of the aggregate exercise price of
each Redeemable Warrant being exercised. The Underwriting Agreement dated
January 21, 1992 between the Company and the underwriter provided for reciprocal
indemnifications by the underwriter and the Company against certain liabilities,
including liabilities under the Securities Act.
USE OF PROCEEDS
In the event that all of the Redeemable Warrants are exercised on or prior
to March 31, 1999, the gross proceeds to the Company are estimated to be
$________ before deduction of expenses, including legal, accounting and
miscellaneous expenses payable by us, which are estimated to be $_______. In
addition, and subject to certain conditions, a solicitation fee of 3.5% may be
payable by the Company to the underwriter of the Company's initial public
offering in connection with any exercise of the Redeemable Warrants.
The Company intends to use net proceeds for working capital purposes. To
the extent that the net proceeds are not immediately required for such purposes,
they may be invested principally in either U.S. government securities, short-
term certificates of deposit, money market funds or other short-term interest
bearing investments.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby has been passed
upon by Paul, Hastings, Janofsky & Walker LLP, Los Angeles, California.
EXPERTS
The financial statements of Protein Polymer Technologies, Inc. appearing in
Protein Polymer Technologies, Inc.'s Annual Report (Form 10-KSB) for the year
ended December 31, 1997 have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon (which contains an explanatory
paragraph describing conditions that raise substantial doubt about the Company's
ability to continue as a going concern as described in Note 1 to the financial
statements) included therein and incorporated herein by reference.
12
<PAGE>
Such financial statements are incorporated herein by reference in reliance upon
such report given upon the authority of such firm as experts in accounting and
auditing.
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 Company currently maintains such directors' and
officers' insurance. 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 indemnification agreements with each of its
directors and executive officers. These agreements contractually obligate the
Company to indemnify its directors and executive officers to the fullest extent
permitted by applicable law, including mandatory indemnification unless
prohibited by statute, mandatory advancement of expenses, accelerated procedures
for the authorization of indemnification and litigation "appeal" rights of an
indemnitee in the event of an unfavorable determination or where the board fails
or refuses to act. 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.
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.
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.
13
<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.................................. *
NASDAQ Listing Fees............................. 7,500
Legal Fees and Expenses**....................... 20,000
Accounting Fees**............................... 5,000
Solicitation Fees***........................... _______
Printing Expenses**............................. 5,000
Miscellaneous**................................. 3,000
-------
Total........................................... $
=======
</TABLE>
_________
* Paid with original filing.
** Estimated.
*** Represents potential maximum solicitation fee which may be paid to the
underwriter of the Company's initial public offering.
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
<PAGE>
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 indemnification agreements with each of its
directors and executive officers. These agreements contractually obligate the
Company to indemnify its directors and executive officers to the fullest extent
permitted by applicable law, including mandatory indemnification unless
prohibited by statute, mandatory advancement of expenses, accelerated procedures
for the authorization of indemnification and litigation "appeal" rights of an
indemnitee in the event of an unfavorable determination or where the board fails
or refuses to act. 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.
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 Ernst & Young LLP, independent auditors.
23.2 Consent of counsel (included in Exhibit 5).*
24.1 Power of Attorney (included herein on the signature page).
_________
* Included in Amendment No. 4 to Registration Statement filed with the SEC
on January 21, 1992 (Registration No. 33-43875)
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;
<PAGE>
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 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.
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 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.
<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 Post Effective
Amendment No. 1 to Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of San Diego, State of
California, on February 12, 1999.
PROTEIN POLYMER TECHNOLOGIES, INC.,
a Delaware corporation
By: /s/ J. THOMAS PARMETER
---------------------------------
J. Thomas Parmeter, Chairman of the Board,
President & Chief Executive Officer
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints J. Thomas Parmeter and Janis Neves, 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 February 12, 1999
- ------------------------- and Chief Executive Officer
J. Thomas Parmeter (Principal Executive Officer)
/s/ JANIS NEVES Director of Finance and Assistant February 11, 1999
- ------------------------- Secretary
Janis Neves
- ------------------------- Director February __, 1999
Edward E. David
/s/ GEORGE R. WALKER
- ------------------------- Director February 12, 1999
George R. Walker
/s/ BRENT R. NICKLAS Director February 11, 1999
- -------------------------
Brent R. Nicklas
/s/ PATRICIA J. CORNELL Director February 12, 1999
- -------------------------
Patricia J. Cornell
- ------------------------- Director February __, 1999
J. Paul Jones
/s/ PHILIP J. DAVIS
- ------------------------- Director February 12, 1999
Philip J. Davis
/s/ EDWARD J. HARTNETT
- ------------------------- Director February 11, 1999
Edward J. Hartnett
/s/ PATRICK GERSCHEL Director February 11, 1999
- -------------------------
Patrick Gerschel
</TABLE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<C> <S>
5 Opinion of counsel as to legality of securities
being registered.*
23.1 Consent of Ernst & Young LLP, independent auditors.
23.2 Consent of counsel (included in Exhibit 5).*
24.1 Power of Attorney (included herein on
the signature page).
</TABLE>
_________
* Included in Amendment No. 4 to Registration Statement filed with the SEC on
January 21, 1992 (Registration No. 33-43875)
<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 Post
Effective Amendment No. 1 to Registration Statement (Form S-3 No. 33-43875) and
related Prospectus of Protein Polymer Technologies, Inc. for the registration of
1,667,500 shares of its common stock and to the incorporation by reference
therein of our report dated January 30, 1998, except for Note 9, as to which the
date is April 13, 1998, 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, 1997, filed with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
San Diego, California
February 11, 1999
