File No. 333-25469
Rule 424(b)(3)
PROSPECTUS
- ----------
VIMRx PHARMACEUTICALS INC.
5,999,991 Shares of Common Stock
($.001 par value)
2,399,993 Warrants to Purchase Common Stock
2,399,993 Shares of Common Stock
($.001 par value)
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The 5,999,991 shares of Common Stock (the "Placement Shares"),
2,399,993 warrants (the "Warrants") and/or the 2,399,993 shares of Common Stock
issuable to the holders of the Warrants upon exercise thereof (the "Warrant
Shares" and, together with the Placement Shares, the "Shares") to which this
Prospectus relates may be sold by the selling securityholders named herein (the
"Selling Securityholders") from time to time in transactions on The Nasdaq Stock
Market at prices then prevailing or in negotiated transactions at negotiated
prices, or a combination thereof. See "Selling Securityholders" and "Plan of
Distribution." The Warrants entitle the holders thereof to purchase an aggregate
of 2,399,993 shares of Common Stock at $1.50 per share through June 20, 2006,
the expiration date of the Warrants. See "Description of Securities - Warrants."
The Company will not receive any proceeds from the sale by the Selling
Securityholders of the Shares and/or the Warrants. The cost of registering the
Shares and the Warrants under the Securities Act will be paid by the Company.
The Common Stock is traded on The Nasdaq Stock Market's
National Market under the symbol "VMRX". On May 27, 1997, the closing sale price
of the Common Stock, as reported by The Nasdaq Stock Market, was $2.75 per
share. Prior to this offering, there has been no public market for the Warrants;
application is being made for the listing of the Warrants on The Nasdaq Stock
Market's SmallCap Market.
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THE SHARES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK.
SEE "RISK FACTORS."
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
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The date of this Prospectus is May 28, 1997.
<PAGE>
No dealer, salesman, or any other person has been authorized
to give any information or to make any representations other than those
contained in this Prospectus in connection with the offering herein contained
and, if given or made, such information or representations must not be relied
upon as having been authorized by the Company or the Selling Securityholders.
This Prospectus does not constitute an offer to sell, or a solicitation of an
offer to buy, the securities offered hereby in any jurisdiction to any person to
whom it is unlawful to make an offer or solicitation. Neither the delivery of
this Prospectus nor any sale made hereunder shall, under any circumstances,
create an implication that there has been no change in the facts herein set
forth since the date hereof.
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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, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such material may be
inspected and copied at the regional offices of the Commission at 7 World Trade
Center, Suite 1300, New York, New York 10048, and at Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago Illinois 60661-2511. This material may also
be inspected and copied at and, upon written request, copies obtained at
prescribed rates from, the Public Reference Section of the Commission at Room
1024 at its principal office, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549. This material may also be accessed through the EDGAR
terminals in the Commission's Public Reference Rooms in Washington. Chicago and
New York or through the World Wide Web at http://www.sec.gov.
DOCUMENTS INCORPORATED BY REFERENCE
The Company's (i) Annual Report on Form 10-K for the fiscal
year ended December 31, 1996, (ii) Quarterly Report on Form 10-Q for the three
months ended March 31, 1997 and (iii) Current Reports on Form 8-K filed on
January 4, 1997 (as amended on Form 8-K/A filed on March 10, 1997), March 24,
1997 and May 21, 1997 are incorporated in and made a constituent part of this
Prospectus by reference. All reports and proxy statements filed by the Company
with the Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Exchange Act after the date of this Prospectus and prior to termination of the
offering of the Shares and the Warrants to which this Prospectus relates shall
likewise be deemed incorporated herein and made a constituent part hereof by
reference from their respective dates of filing.
Any statement contained in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any subsequently filed document that is also incorporated
by reference herein modifies or replaces such statement. Any statements 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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Upon oral or written request, the Company will provide without
charge a copy of any document incorporated in this Prospectus by reference,
exclusive of exhibits, to each person to whom this Prospectus is delivered.
Requests for such documents should be directed to the Chief Financial Officer of
the Company, 2751 Centerville Road, Suite 210, Wilmington, Delaware 19808
(telephone no. 302-998-1734).
2
<PAGE>
THE COMPANY
VIMRx Pharmaceuticals Inc. ("VIMRx" or the "Company") is a
development stage company focused on identifying, evaluating, acquiring and
commercializing scientific technologies to be developed by the Company in
partnership with others. Therapeutic and related products from synthetic
hypericin, principally for the treatment of viral and retroviral diseases,
currently are under development. The Company also owns approximately 68% of the
capital stock of Innovir Laboratories, Inc. ("Innovir", Nasdaq: INVR) which,
together with its subsidiaries, is engaged in the research and development of
Oligozymes, a new class of biopharmaceutical agents for the treatment of a wide
array of human diseases. To further diversify its potential product line, the
Company has entered into two research agreements with Columbia University, one
relating to products developed by the Columbia Genomic Center, and the second
relating to a cardiovascular anticoagulant compound, and is actively seeking to
acquire rights to emerging innovative technologies.
Hypericin
The Company's principal product, VIMRxyn(R), is comprised of
chemically synthesized hypericin and, in laboratory tests, has inhibited the
infection of normal cells by targeted viruses. Hypericin is an aromatic
polycyclic dione found in the stem and petals of the common Saint John's wort, a
plant which has been used as a folk remedy since the Middle Ages. Hypericin
plant extracts continue to be used as lay treatments for various disorders. The
Company is investigating utilizing VIMRxyn as a treatment for viral and
retroviral diseases, including the human immune deficiency virus ("HIV"), which
is the retrovirus responsible for Acquired Immune Deficiency Syndrome ("AIDS"),
and also is investigating utilizing VIMRxyn as a treatment for hepatitis C, as a
therapeutic for brain cancer (glioma), and as a means of inactivating HIV and
other lipid-enveloped viruses in blood collected for transfusions. The Company
has a worldwide exclusive license to commercialize and exploit synthetic
hypericin compounds for enumerated purposes from New York University and Yeda
Research and Development Co., Ltd., an Israeli corporation engaged in the
commercial exploitation of scientific developments by scientists at a Weizmann
Institute of Science in Israel (New York University and YEDA, collectively, the
"Hypericin Licensors").
The Company has not established the efficacy of VIMRxyn in
human clinical trials for the treatment of AIDS. In 1994, the Company completed
data analysis of Phase I/Phase II human clinical trials sponsored by the
National Institutes of Health to determine the maximum tolerated dose and any
side effects of VIMRxyn as a treatment for AIDS. From the data collected, the
results showed a favorable pharmacological profile with no major organ or
hematological toxicity, and with skin photosensitivity as the primary
dose-limiting side effect. All of the patients enrolled in the trials
experienced varying levels of skin photosensitivity and several experienced
non-life threatening acute skin photosensitivity which required medical
treatment.
Between January and September 1996, human clinical trials were
conducted in Thailand by a Dutch company retained by the Company under a
protocol submitted to the U.S. Food and Drug Administration (the "FDA") under
the Company's existing investigational new drug application to identify a
potentially efficacious lower dose of VIMRxyn, having minimal skin
photosensitivity, as a treatment for AIDS. The dosage administered was
well-tolerated by the patients and did not result in untoward toxicity or skin
photosensitivity and, based on the measurement criteria used, produced evidence
of anti-HIV activity. The Company is currently conducting in vitro interaction
studies to determine how VIMRxyn may be used in combination with other
anti-retroviral agents.
The Company is continuing to explore developing hypericin as a
means of inactivating lipid-enveloped viruses in blood collected for
transfusions and is conducting initial clinical studies to evaluate hypericin's
potential antiviral effect with respect to hepatitis C virus and its potential
anticancer activity in recurrent malignant brain glioma. The Company is also
conducting preclinical laboratory studies to evaluate the effectiveness of
VIMRxyn against a variety of human cell lines, including non-Hodgkins B-cell
lymphoma, endometrial carcinoma and cutaneous T-cell lymphoma.
3
<PAGE>
Oligozymes; Affiliation with Innovir
In December 1996, the Company acquired an approximately 68%
ownership interest in Innovir, a biotechnology company engaged in the research
and development of a new class of biopharmaceutical therapeutic agents,
collectively termed "Oligozymes" by Innovir, for the treatment of a wide array
of human diseases. An Oligozyme is a chemically modified oligomer, not composed
of RNA, that participates in an essential manner in the sequence-specific,
catalytic cleavage of a targeted RNA molecule. The management of the Company and
Innovir believe that therapeutic agents based upon Innovir's proprietary core
technologies have the potential to be cost-effective and highly specific
therapeutics for designated disease targets as well as to identify and validate
targets for drug discovery. VIMRx's management also believes that its
collaboration with Columbia University may provide synergistic opportunities for
the Oligozyme technology owned by Innovir. See " - Research Agreements with
Columbia University."
One of Innovir's two core technologies, its External Guide
Sequence ("EGS") Oligozyme technology, directs a naturally occurring cellular
ribozyme (RNase P) to disease-causing RNA so that the RNase P will cleave the
disease-causing RNA and render it inactive. An EGS Oligozyme is a small,
chemically-modified oligonucleotide segment that binds to a disease-causing RNA
to create a structure resembling a type of RNA which is cleaved by RNase P,
which thereby destroys the disease-causing RNA molecules before they create
disease-causing proteins. Innovir's EGS Oligozyme technology, to which Innovir
has an exclusive worldwide license for commercialization from Yale University,
is based upon Nobel Prize-winning research by Sidney Altman, Ph.D., Sterling
Professor of Biology at Yale University, a consultant to and member of the
Science Advisory Board of Innovir. Innovir is investigating the use of EGS
Oligozymes as a therapeutic to combat target viral and other diseases, and
currently is focussing on hepatitis B, hepatitis C, cancer, psoriasis and
bacterial infections caused by drug-resistant microorganisms.
Innovir's second core technology is its RILON(TM) Oligozyme
technology, which it acquired through its acquisition of VIMRx Holdings, Ltd.
("Holdings") from the Company in December 1996. RILON Oligozymes are composed of
certain types of chemically modified oligoribonucleotides, which are proprietary
to Innovir through Holdings' worldwide exclusive license from the European
Molecular Biology Laboratory and patents held by Innovir and Holdings. RILON
Oligozymes consist of two classes: type 1 RILON Oligozymes, which cut specific
targeted RNA molecules in a manner intrinsic to the RILON Oligozyme, and type 2
RILON Oligozymes, which are shorter in length than Type 1 RILON Oligozymes and
participate with the substrate of the targeted RNA molecule to form a structure
that results in the sequence-specific catalytic cleavage of the target RNA
molecule. Innovir is evaluating the potential use of RILON Oligozymes to combat
viral and other diseases, including cancer, central nervous system diseases and
psoriasis.
Innovir also is investigating the use of its Oligozyme
technologies to identify and validate disease targets for new drugs. Oligozymes
can be used in drug target identification and validation as substitutes for the
difficult-to-find selective inhibitors which otherwise are required in the drug
target identification and validation process. Such substitution is possible
because Oligozymes mimic the effect of select inhibitors at an earlier stage of
the disease-causing process than inhibitors. While inhibitors inhibit the
production of disease-causing proteins, Oligozymes inhibit the production of the
disease-causing messenger RNA molecules that produce such disease-causing
proteins and, in both cases, the pharmacological effect is the same.
4
<PAGE>
Management of the Company and Innovir do not anticipate that
any of Innovir's proposed products will be available for commercial sale for
several years, if at all. Innovir's current capital is insufficient to enable
Innovir to complete the development of any of its products.
Research Agreements with Columbia University
In March 1997, VIMRx entered into a research agreement with
Columbia University ("Columbia") pursuant to which VIMRx Genomics, Inc.
("Genomics"), 90%-owned by the Company and 10%-owned by Columbia, was
established. Genomics will provide $30 million in funding to the Columbia Genome
Center established by Columbia, with $4.7 million to be paid during the first
year in quarterly installments. In exchange, Genomics will receive an exclusive
license to develop, manufacture, use, sell or market products resulting from any
invention or research product developed by the Columbia Genome Center and funded
under the agreement relating to the discovery, mapping, sequencing or validation
of disease-related genes. Following an initial five-year term, the agreement
automatically will renew for successive two-year terms, with the amount of
funding to be increased at a rate of 9% for every additional year. The agreement
is terminable by either Columbia or Genomics during the initial five-year term
upon six months notice, but in no event earlier than September 7, 1999. Under
the agreement, VIMRx agreed to issue 200,000 shares of Common Stock to Columbia,
and granted Columbia "piggyback" registration rights with respect thereto during
the period April 1, 1997 to April 1, 1999. VIMRx intends to solicit equity
investments in Genomics for the funding requirements from potential technology
partners and other investors.
Investigators at the Center have been involved in localizing
and identifying novel human genes associated with genetically based diseases,
including cancer, late-onset Alzheimer's Disease, epilepsy, manic-depressive
disorder and glaucoma. VIMRx's management believes the collaboration with
Columbia may also provide synergistic opportunities for the Oligozyme technology
owned by Innovir: the Center provides access to proprietary gene sequences
implicated in disease processes and the Oligozyme technology may aid in
understanding the function of such genes and potentially lead to the development
of new diagnostic and therapeutic compounds.
In March 1997, VIMRx acquired an exclusive, worldwide license
from Columbia to develop, manufacture, use and sell products based on a patented
cardiovascular compound which, in pre-clinical studies, has demonstrated the
ability to selectively prevent blood clots that can lead to stroke during
surgery while reducing the potential for bleeding complications associated with
currently available anticoagulation therapies. VIMRx concurrently entered into a
research agreement with Columbia pursuant to which VIMRx will fund research and
development of such compound during a three-year period in the amount of
$2,700,000.
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VIMRx is in the development stage, has earned no revenues from
operations and has incurred a cumulative loss of $42,371,000 from its inception
through December 31, 1996 in its research and development activities and in
conducting its operations. Its executive offices are located at 2751 Centerville
Road, Suite 210, Wilmington, Delaware 19808 (telephone no. 302-998-1734).
5
<PAGE>
RISK FACTORS
An investment in the Shares and/or the Warrants involves a
high degree of risk. Prospective investors should give careful consideration,
among other items, to the following factors:
1. Development Stage Company; Accumulated Deficit. The Company
is in the development stage and has not realized any operating revenues. From
commencement of its operations in January 1987 through December 31, 1996, the
Company incurred a cumulative loss of $42,371,000 in funding its research and
development programs and in conducting its operations. Potential investors
should be aware of the problems, delays, expense and difficulties encountered by
any company in the development stage, many of which may be beyond the Company's
control. These include, but are not limited to, unanticipated problems and
additional costs relating to development, testing, regulatory compliance,
production, marketing and competition. The Company expects to continue to incur
losses for the foreseeable future and there can be no assurance that the Company
will successfully complete the transition from a development stage company to
profitability.
2. Dependence on Limited Potential Product Line. The Company's
development efforts relate principally to (i) VIMRxyn as a treatment for AIDS
and AIDS-related conditions, as a means of inactivating HIV and other
lipid-enveloped viruses in blood collected for transfusions, and for other
applications; (ii) Oligozymes (through its approximately 68%-owned subsidiary,
Innovir), (iii) the discovery, mapping, sequencing or validation of
disease-related genes (through a research agreement between Genomics and with
Columbia) and (iv) a cardiovascular anticoagulant compound (through a research
agreement with Columbia). Although the Company continues to seek emerging
innovative technologies to diversify its portfolio of potential products, its
success currently depends upon the success of the foregoing efforts, as to which
there can be no assurance. Further, in the event the foregoing efforts prove
successful, there can be no assurance that more effective and/or less costly
treatments or procedures for the applications being explored by the Company and
its subsidiaries will not be developed by others.
3. Significant Capital Requirements of Innovir. Although the
Company has adequate funds to enable it to operate at its present level through
January 1999, Innovir, the Company's approximately 68%-owned subsidiary, will
exhaust its cash and cash equivalents in late 1997 based upon its current level
of operations, and will require additional capital to finance completion of the
development of its proposed products, including continuing research and the
rigorous testing and regulatory approvals which will be required. The Company
has agreed to provide Innovir with $1,000,000 in funds (through the exercise of
stock options) upon receipt of a written request from Innovir's Board of
Directors subsequent to May 31, 1997 specifying that Innovir has insufficient
funds to continue its operations. Further, there can be no assurance that
Innovir will be successful in obtaining its funding requirements from third
parties or from corporate partnership arrangements, in which event the Company
may be required to provide such funding in order to protect its economic
investment.
4. Skin Photosensitivity of VIMRxyn. The Company's data
analysis of Phase I/Phase II human clinical trials sponsored by the National
Institutes of Health to determine the maximum tolerated dose and any side
effects of VIMRxyn as a treatment for AIDS indicated skin photosensitivity to be
the primary dose-limiting side effect. Although the lower dosage of VIMRxyn
administered in a subsequent Company-sponsored trial in Thailand did not result
in untoward toxicity or skin photosensitivity, there can be no assurance that
such lower dosage will provide sufficient anti-HIV activity to produce a
commercially viable therapeutic product for humans.
6
<PAGE>
5. Government Regulation. The manufacture and marketing of
therapeutic products is subject to extensive regulation by the FDA, as well as
by state and foreign authorities. Prior to the release of VIMRxyn for marketing
as a therapeutic product or agent, its tolerance, safety and efficacy as a
treatment must be established in human clinical trials and approval of a new
drug application ("NDA") obtained. Although the Company-sponsored Thailand
trials did not result in untoward toxicity or skin photosensitivity and, based
on the measurement criteria used, produced evidence of anti-HIV activity in 10
out of 12 patients, there can be no assurance that the FDA will accept the
clinical results therefrom. Among other additional regulatory requirements, it
is possible that additional toxicology studies will need to be performed in the
United States, and Phase III clinical trials, which are both costly and
time-consuming, will need to be undertaken to obtain an NDA. Prior to its
commercialization as a means of inactivating HIV and other lipid-enveloped
viruses in blood collected for transfusions, a product license application
("PLA") or an NDA must be obtained. These are long-term and costly processes as
to the successful completion of which there can be no assurance. The other
applications of VIMRxyn as well as the other products being investigated by the
Company and its subsidiaries will be subject to similar extensive government
regulation.
In addition to regulations enforced by the FDA, the Company's
proposed products also may be subject to regulation under the Occupational
Safety and Health Act, the Environmental Protection Act, the Toxic Substances
Control Act, the Resource Conservation and Recovery Act and other present and
potential future, state or local regulations. Outside the United States, the
Company also is subject to foreign regulatory requirements governing human
clinical trials and marketing approval for drugs. The requirements governing the
conduct of clinical trials, product licensing, pricing and reimbursement vary
widely from country to country.
6. Limited Personnel -- Reliance on Third Parties. At March 1,
1997, the Company had nine full-time employees, and is substantially dependent
upon third parties, with all of the risks attendant thereto, to conduct human
clinical trials for VIMRxyn, develop VIMRxyn as a means of inactivating HIV and
other lipid-enveloped viruses in blood collected for transfusions, conduct
preclinical and clinical studies for other applications of VIMRxyn and to
manufacture synthetic hypericin compounds for the Company's needs.
7. Limited Manufacturing Capability. Only limited quantities
of synthetic hypericin have been manufactured. The synthesis process has been
developed at The Weizmann Institution of Science in Israel, using a natural
product available from a limited number of specialty chemical suppliers as the
precursor. The production process must be further developed and refined for
commercial quantities to be produced, as to the success of which there can be no
assurance.
8. Competition. The biomedical industry is highly competitive.
Competition in the field in which the Company and its subsidiaries are engaged
is intense and expected to increase as knowledge and interest in the technology
and products being developed by the Company and its subsidiaries increase. The
Company and its subsidiaries face competition from biotechnology companies,
large pharmaceutical companies, academic institutions, government agencies and
public and private research organizations, many of which have extensive
resources and experience in research and development, clinical testing,
manufacturing, regulatory affairs, distribution and marketing and some of which
have significant research and development activities in areas upon which the
programs of the Company and its subsidiaries are focused. Current and future
treatments for AIDS, and the use of combination therapy in connection therewith,
may render the Company's synthetic hypericin program for treating AIDS obsolete
or non-competitive. In addition, forms of hypericin extracted from plants are
being used as lay treatments for a variety of disorders, including AIDS. The
Company is similarly subject to substantial competition from pharmaceutical,
chemical and biotechnology firms in the attempt to develop a means of
inactivating blood and other lipid-enveloped viruses in blood collected for
transfusions, and in seeking to develop treatments for hepatitis C and
therapeutics for brain cancer (glioma).
7
<PAGE>
9. Patents and Licenses. The Company has been granted an
exclusive license for the worldwide rights to synthetic hypericin compounds for
viral, retroviral and other applications by New York University and Yeda
Research and Development Co., Ltd. (the "Hypericin Licensors") which have been
issued five U.S. patents for anti-viral and anti-retroviral applications and
manufacturing processes and have filed patent applications for U.S. and foreign
patents relating to the synthesis and therapeutic uses of synthetic hypericin
compounds. Genomics, the Company's 90%-owned subsidiary, has an exclusive
license to develop, manufacture, use, sell or market products resulting from any
invention or research product developed by the Columbia Genome Center under its
research agreement with Columbia. The Company also has an exclusive worldwide
license from Columbia to develop, manufacture, use and sell products based on a
patented cardiovascular anticoagulant compound. There can be no assurance that
such patents, or pending patents if issued, will provide adequate protection.
Further, infringement claims may be asserted against the Company, the Hypericin
Licensors and/or Columbia which, if affirmed, might require the Company to
acquire licenses from others. The Company has agreed to indemnify the Hypericin
Licensors and Columbia with respect to any such claims.
10. Absence of Product Liability Insurance Coverage. The
testing, marketing and sale of pharmaceutical products entails a risk of product
liability claims by consumers and others and such claims may be asserted against
the Company and its subsidiaries. The Company does not maintain product
liability insurance coverage other than a $1,000,000 product/professional
liability policy applicable only to its human clinical trials, and although it
will attempt to obtain such coverage prior to marketing any product, there can
be no assurance it will be able to obtain such insurance at a reasonable cost or
in an amount sufficient to cover all possible liabilities. In the event of a
successful product liability suit against the Company, lack or insufficiency of
insurance coverage could have a material adverse effect on the Company. Further,
the Company is required under its license agreement with the Hypericin Licensors
to have either $5,000,000 of product liability insurance coverage naming the
Hypericin Licensors as additional insureds or an indemnity to the Hypericin
Licensors by an entity satisfactory to the Hypericin Licensors prior to
marketing a hypericin-based product.
11. Risk Factors Relating to Innovir. Innovir, the Company's
approximately 68%-owned subsidiary, is a development stage company subject to
similar risks to those of the Company, including risks associated with an
accumulated deficit, dependence upon a limited potential product line,
government regulation, limited personnel, competition, patents and licenses and
product liability claims. In addition, Innovir has limited capital and
significant capital requirements and is dependent on certain key personnel.
12. Potential Adverse Effect of Sale of Shares and Warrants
Offered Hereby. Sales of the Shares or Warrants offered hereby in the public
market could materially and adversely affect the market price of the Common
Stock. Such sales also might make it more difficult for the Company to sell
equity securities or equity-related securities in the future at a time and price
that the Company deems appropriate.
13. No Cash Dividends. The Company does not anticipate paying
cash dividends on its Common Stock in the foreseeable future.
8
<PAGE>
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the
Shares and/or the Warrants being offered by the Selling Securityholders. The
proceeds to the Company from exercise of the Warrants will be added to the
Company's working capital and will be available for general corporate purposes.
SELLING SECURITYHOLDERS
The following table sets forth certain information with
respect to the Common Stock owned and the Shares and Warrants being offered
hereby by the Selling Securityholders:
<TABLE>
<CAPTION>
Warrants
Shares of and/or
Common Stock Placement Warrant After Offering
Beneficially Shares Shares --------------------
Owned Prior to Being Being Shares Percent of
Name Offering(1) Offered Offered Owned Outstanding
---- ----------- ------- ------- ----- -----------
<S> <C> <C> <C> <C> <C>
Aries Domestic 1,324,999 1,166,666 158,333 --- ---
Fund, L.P (2).......................
The Aries Fund (2).................... 2,725,000 2,500,000 225,000 --- ---
Armen Partners,
L.P............................... 125,000 --- 125,000 --- ---
Chesed Congregations
of America........................ 100,000 --- 100,000 --- ---
Robert J. Conrads..................... 100,500 --- 12,500 88,000 *
Delaware Charter Guarantee & Trust Co.
C/F Barry
F. Schwartz, IRA
Rollover.......................... 50,000 33,333 16,667 --- ---
Nathan Ehrlich........................ 37,500 --- 37,500 --- ---
Irwin Engelman & Rosalyn
A. Engelman....................... 99,999 66,666 33,333 --- ---
Laurence D. Fink (3).................. 400,000 266,667 133,333 --- ---
Laurence D. Fink and Lori W. Fink Family
Trust u/a dated 1/10/95 (3)........... 99,999 66,666 33,333 --- ---
Joseph H. Flom........................ 49,999 33,333 16,666 --- ---
Howard Gittis......................... 199,999 133,333 66,666 --- ---
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<PAGE>
Gilbert Goldstein, Trustee under 250,001 166,667 83,334 --- ---
Indenture of Trust QIT dated 12/23/88.
Gilbert Goldstein
& Carol Goldstein................. 49,999 33,333 16,666 --- ---
Robert P. Gordon...................... 12,500 --- 12,500 --- ---
Richard E. Halperin
& Lucy Landesman
Halperin.......................... 12,499 8,333 4,166 --- ---
The Hancock Foundation................ 49,999 33,333 16,666 --- ---
The Holding Company................... 25,000 --- 25,000 --- ---
Robert and Fern Hurst
Foundation........................ 99,999 66,666 33,333 --- ---
Jackson Hole Investments Acquisition,
L.P................................... 50,000 --- 50,000 --- ---
Kenneth M. Jacobs..................... 39,999 26,666 13,333 --- ---
Javelin Ltd........................... 25,000 --- 25,000 --- ---
Robert Klein, M.D..................... 25,000 --- 25,000 --- ---
Kenneth Lerer......................... 24,999 16,666 8,333 --- ---
Dean Witter Reynolds Cust. for Solomon 25,000 --- 25,000 --- ---
Lerer IRA
Rollover..........................
J. Jay Lobell and Beverly O. Lobell... 100,500 --- 12,500 88,000 *
MacAndrews & Forbes Group, Incorporated 12,500 8,333 4,167 --- ---
Savings or Cash Option Plan for
Employees f/b/o Richard E. Halperin...
James R. Maher........................ 20,001 13,334 6,667 --- ---
James R. Maher as custodian for Caroline 20,000 13,333 6,667 --- ---
C. Maher under the UGMA of NY to age 21..
James R. Maher as custodian for James R. 20,000 13,333 6,667 --- ---
Maher, Jr. under the UGMA of NY to age 21
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<PAGE>
James R. Maher as custodian for 1
Emily L. Maher under the
UGMA of NY to age 21.............. 9,999 13,333 6,666 --- ---
James R. Maher as custodian for
Elizabeth H. Maher under the UGMA of NY
to age 21............................. 19,999 13,333 6,666 --- ---
Alfons Melohn......................... 87,500 --- 87,500 --- ---
Ronald O. Perelman.................... 999,999 666,666 333,333 --- *
Linda G. Robinson(4).................. 249,999 133,333 66,666 50,000 ---
Jerry L. Ruyan........................ 50,000 --- 50,000 --- ---
Stephen H. Sands...................... 9,999 6,666 3,333 --- ---
Sequester Ltd. Corp................... 50,000 --- 50,000 --- ---
J.F. Shea Co., Inc., as Nominee 1995-41 100,000 --- 100,000 --- ---
Todd J. Slotkin....................... 49,999 33,333 16,666 --- ---
Bruce Slovin.......................... 99,999 66,666 33,333 --- ---
Morris Talansky....................... 37,500 --- 37,500 --- ---
The Trustees of Columbia
University in the City
of New York....................... 200,000 200,000 --- --- ---
Venkol Ventures,
L.P (5)........................... 184,167 122,778 61,389 --- ---
Venkol Ventures,
Ltd (5). ......................... 115,833 77,222 38,611 --- ---
Aaron Wolfson......................... 50,000 --- 50,000 --- ---
Abraham Wolfson....................... 50,000 --- 50,000 --- ---
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Morris Wolfson Family Limited Partnership 50,000 --- 50,000 --- ---
Uzi Zucker............................ 25,000 --- 25,000 --- ---
---- ------ --------- --------- ------- ------
Total............................. 8,625,984 5,999,991 2,399,993 226,000 *
========= ========= ========= ======= ======
</TABLE>
* Less than one percent.
- ----------
(1) Includes Warrant Shares issuable upon exercise of Warrants.
(2) Lindsay A. Rosenwald, M.D., a director of the Company, serves as
President and is sole shareholder of Paramount Capital Asset
Management, Inc., ("PCAM") which is the general partner of Aries
Domestic Fund, L.P. and investment manager of The Aries Fund. Dr.
Rosenwald disclaims beneficial ownership of the shares
beneficially owned by PCAM except to the extent of his pecuniary
interest, if any.
(3) Laurence Fink serves as a director of the Company.
(4) Linda Robinson serves as a director of the Company and the Company
retains a strategic communications consulting firm for which Ms.
Robinson serves as Chairman and Chief Executive Officer.
(5) M.S. Koly, a former director and former acting chief executive
officer of the Company (having served in such capacities within
three years prior to the date of this Prospectus), is a general
partner of a limited partnership that serves as general partner of
Venkol Ventures, L,.P., and is a principal shareholder and advisor
to Venkol Ventures, Ltd.
3,000,000 of the Placement Shares were issued on December 23, 1996
to Aries Domestic Fund, L.P. and The Aries Trust (the "Aries Funds") in exchange
for shares of Innovir owned by the Aries Funds in a transaction pursuant to
which the Company acquired a controlling interest in Innovir (the "Innovir
Acquisition") and 200,000 of the Placement Shares were issued in March 1997 to
Columbia in connection with a research agreement with Columbia. The 2,799,991
balance of the Placement Shares and 1,399,991 of the Warrants were issued to
accredited investors in a private placement in June 1996 (the "June 1996 Private
Placement") pursuant to which the investors agreed not to sell such Shares and
the Warrant Shares issuable upon exercise of the Warrants prior to June 21,
1997. The 1,000,000 balance of the Warrants were issued in June 1996 to
accredited investors in exchange for the warrants received by such investors in
a private placement in December 1995 (the "December 1995 Private Placement"). As
part of the Innovir Acquisition, VIMRx agreed to file a registration statement
for the public resale of the 3,000,000 Placement Shares issued to the Aries
Funds and, as part of the June 1996 Private Placement, agreed to file a
registration statement for the public resale of the 2,799,991 Placement Shares
and 2,799,991 Warrants issued in connection therewith. As part of the December
1995 Private Placement, the investors were granted "piggyback" registration
rights with respect to the 1,000,000 Warrants issued to them, and as part of the
research agreement with Columbia, Columbia was granted "piggyback" registration
rights with respect to the 200,000 Placement Shares issued to Columbia.
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The holders of the 2,799,991 Placement Shares and 1,399,991
Warrants issued in the June 1996 Private Placement may not sell or transfer
their respective Placement Shares and Warrants until June 21, 1997, without the
Company's prior written consent, except for sales or transfers to bona fide
affiliates or a bona fide pledge or pursuant to the laws of descent and
distribution.
DESCRIPTION OF SECURITIES
The Company is authorized to issue 120,000,000 shares of Common
Stock, par value $.001 per share.
Common Stock
The holders of Common Stock are entitled to share ratably on a
share-for-share basis with respect to any dividends when, as and if declared by
the Board of Directors out of funds legally available therefor. Each holder of
Common Stock is entitled to one vote for each share held of record. Upon
liquidation, dissolution or winding- up of the Company, the holders of Common
Stock are entitled to share ratably in the net assets legally available for
distribution. Holders of Common Stock have no preemptive rights. All outstanding
shares are, and the shares of Common Stock issuable upon exercise of the
Warrants will be, legally issued, fully paid and non-assessable. The Board of
Directors is authorized to issue additional shares of Common Stock within the
limits authorized by the Company's charter and without stockholder action.
Warrants
Each Warrant entitles the registered holder to purchase one share
of Common Stock at $1.50 per share at any time through June 20, 2006, the
expiration date of the Warrants. The exercise price of the Warrants and the
number and kind of shares of Common Stock or other securities and property
issuable upon exercise of the Warrants are subject to adjustment in certain
circumstances, including a stock split of, stock dividend on, or a subdivision,
combination or capitalization of, the Common Stock, or the sale of Common Stock
at less than the market price of the Common Stock other than upon exercise of
options or warrants outstanding on or prior to June 21, 1996 (the date the
Warrants were issued). Upon notice to the Warrantholders, the Company has the
right to reduce the exercise price or extend the expiration date of the
Warrants.
The Warrants were issued pursuant to a warrant agreement between
the Company and American Stock Transfer & Trust Company, the warrant agent (the
"Warrant Agent"), and are evidenced by warrant certificates in registered form.
The Warrants do not confer upon the holder any voting or other rights of a
stockholder of the Company. The Warrants may be exercised upon surrender of the
Warrant certificate evidencing such Warrants on or prior to the expiration date
of such Warrants at the offices of the Warrant Agent with the form of "Election
to Purchase" on the reverse side of the Warrant certificate completed and
executed as indicated, accompanied by payment of the full exercise price (by
certified check payable to the order of the Warrant Agent) for the number of
Warrants being exercised. At February 1, 1997, there were Warrants outstanding
to purchase 2,399,993 shares of Common Stock.
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Delaware Business Combination Statute
Section 803 of the Delaware General Corporation Law generally
prohibits a publicly-held Delaware corporation from engaging in a "business
combination" with an "interested stockholder" for a period of three years after
the date the person became an interested stockholder unless (with certain
exceptions) the business combination or the transaction in which the person
became an interested stockholder is approved in a prescribed manner. Generally,
a "business combination" includes a merger, asset or stock sale, or other
transaction resulting in a financial benefit to the stockholder, and an
"interested stockholder" is a person who, together with affiliates and
associates, owns (or within three years, did own) 15% or more of a corporation's
outstanding voting stock. The applicability of this provision to the Company may
have the effect of delaying, deferring or preventing a change in control of the
Company without further action by the Company's stockholders.
Transfer Agent and Warrant Agent
The transfer agent for the Common Stock and the Warrant Agent for
the Warrants is American Stock Transfer & Trust Company, New York, New York.
PLAN OF DISTRIBUTION
The Selling Securityholders may sell the Shares and the Warrants
from time to time through dealers or brokers in transactions on The Nasdaq Stock
Market at prices then prevailing, or directly to one or more purchasers in
negotiated transactions at negotiated prices, or in a combination thereof. The
Selling Securityholders and any dealers or brokers that participate in such
distribution may be deemed "underwriters" within the meaning of the Securities
Act and any commissions or discounts received by any such dealer or broker may
be deemed "underwriting compensation."
The cost of registering the Shares and the Warrants under the
Securities Act will be paid by the Company.
LEGAL MATTERS
The validity of the Shares and the Warrants offered hereby is
being passed upon for the Company by Epstein Becker & Green, P.C., New York, New
York. Members of the firm own, directly or indirectly, 295,000 shares of Common
Stock and options to purchase 100,000 shares of Common Stock.
EXPERTS
The financial statements incorporated in this Prospectus by
reference from the Company's Annual Report on Form 10-K for the year ended
December 31, 1996 have been audited by Richard A. Eisner & Company, LLP,
independent auditors, as stated in their report, which is incorporated herein by
reference, and has been so incorporated in reliance upon such report given upon
the authority of such firm as experts in accounting and auditing.
14
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