<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
FILED BY THE REGISTRANT [X] FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
- --------------------------------------------------------------------------------
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
GENTA INCORPORATED
(Name of Registrant as Specified In Its Charter)
NAME OF COMPANY
(Name of Person(s) Filing Proxy Statement)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
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<PAGE> 2
GENTA INCORPORATED
99 HAYDEN AVENUE, SUITE 200
LEXINGTON, MA 02421
(781) 860-5150
June 15, 1999
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
which will be held on July 13, 1999, at 11:00 a.m. at the Harborside Hyatt
Conference Center & Hotel, 101 Harborside Drive, Boston, Massachusetts.
The formal notice of the Annual Meeting and the Proxy Statement have
been made a part of this invitation.
After reading the Proxy Statement, please mark, date and sign the
enclosed proxy and return it at your earliest convenience in the enclosed
postage-prepaid envelope so that, whether you intend to be present at the annual
meeting or not, your shares of Common Stock or Series D Preferred Stock will be
voted. If you have any questions or need assistance in voting your shares,
please call Gerald M. Schimmoeller at the number above.
A copy of the Company's Annual Report on Form 10-K for the year ended
December 31, 1998, is enclosed.
The Board of Directors and Management look forward to seeing you at the
meeting.
Sincerely yours,
/s/ Kenneth G. Kasses
Kenneth G. Kasses, Ph.D.
Chairman of the Board, Chief
Executive Officer and President
<PAGE> 3
GENTA INCORPORATED
Notice of Annual Meeting of Stockholders
to be held July 13, 1999
The Annual Meeting of Stockholders (the "Annual Meeting") of
Genta Incorporated (the "Company") will be held on July 13, 1999, at 11:00 a.m.
at the Harborside Hyatt Conference Center & Hotel, 101 Harborside Drive, Boston,
Massachusetts, for the following purposes:
a. To elect the entire board of directors.
b. To ratify the selection of Deloitte and Touche LLP as the
Company's independent accountants.
c. To transact such other business as may properly come before
the Annual Meeting and any adjournment of the Annual Meeting.
The Executive Committee of the Board of Directors has fixed the close
of business on June 7, 1999 as the record date for determining the stockholders
entitled to notice of and to vote at the Annual Meeting and any adjournment of
the Annual Meeting. A complete list of stockholders entitled to vote will be
available for review at the Company, 99 Hayden Avenue, Suite 200, Lexington,
Massachusetts, from July 3, 1999 until the Annual Meeting.
June 15, 1999 By Order of the Board of Directors,
Kenneth G. Kasses, Ph.D.
Chairman of the Board, Chief
Executive Officer and President
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IT IS IMPORTANT THAT YOUR SHARES ARE REPRESENTED AT THE ANNUAL MEETING.
EVEN IF YOU PLAN TO ATTEND IN PERSON, PLEASE PROMPTLY MARK, DATE, SIGN AND
RETURN THE ENCLOSED PROXY. THIS WILL NOT LIMIT YOUR RIGHT TO ATTEND OR VOTE AT
THE ANNUAL MEETING.
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<PAGE> 4
GENTA INCORPORATED
99 HAYDEN AVENUE, SUITE 200
LEXINGTON, MA 02421
(781) 860-5150
---------------
PROXY STATEMENT
---------------
THIS PROXY STATEMENT IS FURNISHED IN CONNECTION WITH THE SOLICITATION
BY THE BOARD OF DIRECTORS OF GENTA INCORPORATED, A DELAWARE CORPORATION (THE
"COMPANY"), OF PROXIES IN THE ACCOMPANYING FORM TO BE USED AT THE ANNUAL MEETING
OF STOCKHOLDERS TO BE HELD ON JULY 13, 1999 AT 11:00 A.M. AT THE HARBORSIDE
HYATT CONFERENCE CENTER & HOTEL, 101 HARBORSIDE DRIVE, BOSTON, MASSACHUSETTS.
AND ANY ADJOURNMENT OF SUCH ANNUAL MEETING (THE "ANNUAL MEETING"). The shares
represented by the proxies received in response to this solicitation and not
revoked will be voted at the Annual Meeting. A proxy may be revoked at any time
before it is exercised by filing with the Secretary of the Company a written
revocation or a duly executed proxy bearing a later date or by voting in person
at the Annual Meeting. On the matters coming before the Annual Meeting for which
a choice has been specified by a stockholder by means of the ballot on the
proxy, the shares will be voted accordingly. IF NO CHOICE IS SPECIFIED, THE
SHARES WILL BE VOTED FOR EACH PROPOSAL DESCRIBED IN THIS PROXY STATEMENT.
Stockholders of record of the Company's common stock, par value $.001
per share (the "Common Stock") and the Series D convertible preferred stock, par
value $.001 per share ("Series D Preferred Stock") at the close of business on
June 7, 1999 (the "Record Date") are entitled to notice of and to vote at the
Annual Meeting. As of the close of business on the Record Date, the Company had
17,612,017 shares of Common Stock outstanding and entitled to vote. Each holder
of Common Stock is entitled to one vote for each share held as of the Record
Date. As of the close of business on the Record Date, the Company also had
127,608 shares of Series D Preferred Stock outstanding and entitled to vote. The
Series D Preferred Stock is entitled to vote together with the Common Stock on
an as-converted basis (each share of the Series D Preferred Stock has the
equivalent vote of approximately 105.96 shares of Common Stock.) In addition, as
of the close of business on the Record Date, the Company had 352,100 shares of
Series A convertible preferred stock, par value $.001 per share (the "Series A
Preferred Stock") outstanding and entitled to notice of the Annual Meeting.
Holders of the Series A Preferred Stock, however, are not entitled to vote at
the Annual Meeting.
Abstentions and broker non-votes are treated as shares that are present
and entitled to vote for purposes of determining the presence or absence of a
quorum. However, broker non-votes will not be counted for the purposes of
determining the number of votes cast with respect to the particular proposal on
which the broker has expressly not voted. Therefore, broker non-votes will not
affect the determination as to whether the requisite majority of votes cast has
been obtained with respect to a particular proposal.
-1-
<PAGE> 5
The entire expense of printing, preparing, assembling and mailing proxy
materials and the cost of soliciting proxies will be borne by the Company. In
addition to the solicitation of proxies by mail, solicitation may be made by
certain directors, officers and other employees of the Company by personal
interview, telephone, telegram or facsimile. No additional compensation will be
paid to such persons for such solicitation.
The Company will reimburse brokerage firms and others for their
reasonable expenses in forwarding proxy materials to the beneficial owners of
the Company's Common Stock, Series A Preferred Stock and Series D Preferred
Stock, and obtaining voting instructions from beneficial owners of the Company's
Common Stock and Series D Preferred Stock.
This Proxy Statement and the accompanying form of proxy, together with
a copy of the Company's Annual Report on Form 10-K for the year ended December
31, 1998, are being mailed to stockholders on or about June 15, 1999.
IMPORTANT
PLEASE MARK, DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT AT YOUR
EARLIEST CONVENIENCE IN THE ENCLOSED POSTAGE-PREPAID RETURN ENVELOPE SO THAT,
WHETHER YOU INTEND TO BE PRESENT AT THE ANNUAL MEETING OR NOT, YOUR SHARES OF
COMMON STOCK OR SERIES D PREFERRED STOCK WILL BE VOTED. THIS WILL NOT LIMIT YOUR
RIGHT TO ATTEND OR VOTE AT THE ANNUAL MEETING.
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<PAGE> 6
PROPOSAL ONE
ELECTION OF DIRECTORS
The Company currently has ten directors each serving a term of one year
expiring at the Annual Meeting or until such director's successor shall have
been elected and qualified. In prior years, the Board of Directors of the
Company was divided into classes and only one class of directors was elected at
each such prior year's annual meeting. However, the Board of Directors of the
company are no longer divided into classes. Accordingly, the shareholders of the
Company will now be electing the entire Board of Directors.
Unless authority to vote for directors is withheld, the Company intends
that the shares represented by the enclosed proxy will be voted for the election
of Kenneth G. Kasses, Ph.D., Robert E. Klem, Ph.D., Glenn L. Cooper, M.D.,
Donald G. Drapkin, Lawrence J. Kessel, M.D., Peter Salomon, M.D., Bobby W.
Sandage, Jr., Ph.D., Andrew J. Stein, Harlan J. Wakoff, and Michael S. Weiss,
who are currently members of the Board of Directors of the Company. In the event
any of the above nominees become unable or unwilling to accept nomination or
election, the shares represented by the enclosed proxy will be voted for the
election of the remaining nominees and any additional persons the Board of
Directors may select. The Board of Directors has no reason to believe that any
such nominees will be unable or unwilling to serve.
Set forth below is certain information regarding the Company's
directors and executive officers, including information furnished by them as to
their principal occupations and business experience for the past five years,
certain directorships held by each director, their respective ages as of June
15, 1999 and the year in which each became a director of the Company. Each
director has served continuously with the Company since his first election as a
director as indicated below.
DIRECTORS AND EXECUTIVE OFFICERS
NAME AGE POSITION
Kenneth G. Kasses, Ph.D....... 54 President, Chief Executive Officer, and
Chairman of Board of Directors
Robert E. Klem, Ph.D.......... 54 Vice President of Discovery, Chief
Technical Officer, and Director
Gerald M. Schimmoeller........ 55 Vice President and Chief Financial
Officer
Glenn L. Cooper, M.D.......... 46 Director
Donald G. Drapkin............. 51 Director
Lawrence J. Kessel, M.D....... 45 Director
Peter Salomon, M.D............ 39 Director
Bobby W. Sandage, Jr., Ph.D... 45 Director
Harlan J. Wakoff.............. 32 Director
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<PAGE> 7
NAME AGE POSITION
Michael S. Weiss.............. 33 Director
Andrew J. Stein............... 54 Director
Kenneth G. Kasses, Ph.D., has been the Company's Chief Executive
Officer and President since October 1997. Dr. Kasses has been a member of the
Board of Directors since September 1997 and has served as Chairman of the Board
since October 1998. From 1991 to 1997, Dr. Kasses was affiliated with the
Radiopharmaceutical Division of The DuPont Merck Pharmaceutical Company, serving
as Senior Vice President and General Manager until 1994 when he was appointed
President. From 1988 through 1990, he served as Director, Business Development
and Planning, for the Medical Products Department of E.I. DuPont de Nemours &
Company, Inc. In that capacity, he played a key role in the formation of The
Dupont Merck Pharmaceutical Company, a joint venture between DuPont and Merck
and Co., Inc. Prior to 1988 he served as Director, U.S. Pharmaceuticals, for
DuPont from 1987 to 1988 and as President of DuPont Critical Care from 1986 to
1987. Prior to this, Dr. Kasses held various executive positions from 1973 to
1986 at American Critical Care, CIBA-GEIGY Pharmaceuticals, Ayerst Laboratories
and Block Drug Company. Dr. Kasses received a Ph.D. in pharmacology from New
York Medical College in 1974 and a B.S. in biology from Dickinson College in
1966. Dr. Kasses serves on the Board of Directors of the United Way of Merrimack
Valley.
Robert E. Klem, Ph.D., has been a member of the the Company's Board of
Directors since February 1991 and Vice President of the Company since October
1991. In 1973, Dr. Klem co-founded JBL Scientific, Inc. ("JBL"), a wholly-owned
subsidiary of the Company that recently sold substantially all of its assets,
and was Chairman of the Board of JBL with responsibility for research,
development and marketing activities. Previously, Dr. Klem was the Plant Manager
for E.I. DuPont in Victoria, Texas from 1970 to 1974. Dr. Klem received his
Ph.D. in Organic Chemistry from the University of California at Riverside.
Gerald M. Schimmoeller has been Vice President and Chief Financial
Officer of the Company since February 1999. From 1996 to February 1999, he was
the Vice President and Chief Financial Officer for Alphagene, Inc., a
privately-held biotechnology development company focused on functional genomics
technology. From 1994 to 1996, he served as Vice President and Chief Financial
Officer of Concentra Corporation, a publicly held software development company.
From 1987 to 1993, he served as Vice President and Chief Financial Officer of
Artel Communications Corporation, a publicly held data communications company.
At each of these companies he had significant experience in managing the
financial, management information systems, human resources, and investor
relations functions and was involved in managing an initial public offering and
significant private placements. From 1983 to 1987, he was Controller at Telco
Systems, a telecommunications company. He held various senior financial
positions with GTE Corporation. He received his MBA from Northeastern
University's Executive MBA Program and a B.S. Degree from the State University
of New York.
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<PAGE> 8
Peter Salomon, M.D., FACG, has been a member of the Company's Board of
Directors since September 1997. His principal employment during the last five
years has been as a board certified gastroenterologist in private practice in
Boca Raton and Delray Beach, Florida with Gastroenterology Consultants of South
Florida. In addition, he is an expert consultant for several insurance companies
and law firms in the areas of gastroenterology and liver diseases. Dr. Salomon
graduated Magna Cum Laude from New York University in 1981. He received his M.D.
from New York University in 1985. Following this he received his training in
Internal Medicine and Gastroenterology at The Mount Sinai Hospital in New York,
where he held a grant from the Crohn's and Colitis Foundation to perform
research in inflammatory bowel disease. He was also selected to receive advanced
training in therapeutic endoscopic techniques at Aarhus Kommunehospital in
Aarhus, Denmark. He has been elected to the Phi Beta Kappa society and is a
member of MENSA. He has done extensive research in the field of gastroimmunology
and has published numerous articles and book chapters in various leading
scientific journals and textbooks. He is also currently a director of Precision
Pharmaceuticals and PolaRx, both privately-held biotechnology companies.
Andrew J. Stein has been a member of the Company's Board of Directors
since September 1997. In addition, he is President of Benake Corporation, Equity
Partner in Metromedia Asia and a member of the Board of Directors of News
Communications. Mr. Stein is also a member of the New York State Commission of
Privatization and the New York State Research Council on Privatization. He was
the Chairman of the Commission for the Study of Youth Crime and Violence and
Reform of the Juvenile Justice System from 1993 to 1995. From 1986 to 1993, he
was President of the Council, New York City. From 1978 to 1985, he was President
of the Borough of Manhattan and from 1969 to 1977, he was a member of the New
York State Assembly where he served on the Health Committee and was appointed by
Governor Nelson Rockefeller as Chairman of the Commission on Living Costs and
the Economy, which reformed the nursing home industry in New York State. He was
also Chairman of the New York City Commission on Public Information and
Communication, and has been a Trustee of the New York City Employees Retirement
System and an ex officio member of The Museum of The City of New York, The New
York Public Library, The Metropolitan Museum of Art and The Queens Borough
Public Library.
Harlan J. Wakoff has been a member of the Company's Board of Directors
since September 1997. Mr. Wakoff has been a Vice President of the Media and
Entertainment Investment Banking Group at ING Baring Furman Selz LLC since June
1996. He was previously affiliated with the investment banking groups at NatWest
Markets from January 1995 to June 1996 and Kidder Peabody & Co. from August 1993
to January 1995. Mr. Wakoff received an M.B.A. from The Wharton School at the
University of Pennsylvania in May 1993 and a B.S. in accounting, Summa Cum
Laude, from the State University of New York at Albany.
Glenn L. Cooper, M.D., has been a member of the Company's Board of
Directors since September 1997. He has also been Chief Executive Officer,
President and a director of Interneuron Pharmaceuticals, Inc. since May 1993.
From September 1992 to June 1994 Dr.
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<PAGE> 9
Cooper was Chief Executive Officer, President and a director of Progenitor, Inc.
and is currently Chairman at Progenitor. He is also Chairman of Intercardia,
Inc., Chairman and Acting President of Transcell Technologies, Inc. and a
director of InterNutria, Inc., all of which are subsidiaries of Interneuron. In
addition, Dr. Cooper serves as a director of Aeolus Pharmaceuticals, Inc., a
subsidiary of Intercardia. Dr. Cooper also served as President and Chief
Executive Officer of Intercardia from March 1994 to January 1995. Prior to
joining Progenitor, Dr. Cooper was Executive Vice President and Chief Operating
Officer of Sphinx Pharmaceuticals Corporation since August 1990. Dr. Cooper had
been associated with Eli Lilly since 1985, most recently, from June 1987 to July
1990, as Director, Clinical Research, Europe, of Lilly Research Center Limited;
from October 1986 to May 1987 as International Medical Advisor, International
Research Coordination of Lilly Research Laboratories; and from June 1985 to
September 1986 as Medical Advisor, Regulatory Affairs, Chemotherapy Division at
Lilly Research Laboratories. Dr. Cooper received his M.D. from Tufts University
School of Medicine, performed his postdoctoral training in Internal Medicine and
Infectious Diseases at the New England Deaconess Hospital and Massachusetts
General Hospital and is a Magna Cum Laude graduate of Harvard College.
Lawrence J. Kessel, M.D., FACP, CMD, has been a member of the Company's
Board of Directors since September 1997. Dr. Kessel is a physician in private
practice in Philadelphia and a diplomate in both internal medicine and geriatric
medicine, as well as a Fellow of the American College of Physicians and a
Certified Medical Director of Long-Term Nursing Facilities. Dr. Kessel is
affiliated with Chestnut Hill Hospital, Roxborough Memorial Hospital and
Chestnut Hill Rehabilitation Hospital and serves as a clinical instructor at
Jefferson Medical College. He is also a medical director at Integrated Health
Services and a staff physician at Fairview Paper Mill, Green Acres Ivy Hill and
St. Joseph's Villa. Dr. Kessel is a director of PolaRx, a privately-held
biotechnology company. Dr. Kessel graduated Magna Cum Laude from the University
of Pittsburgh with a B.S. in 1975 and Temple Medical School in 1980 with an M.D.
He completed his residency in internal medicine at Abington Memorial Hospital in
1994.
Bobby W. Sandage, Jr., Ph.D., has been a member of the Company's Board
of Directors since September 1997. Dr. Sandage joined Interneuron
Pharmaceuticals, Inc. in November 1991 as Vice President, Medical and Scientific
Affairs. Since December 1995 he has been Executive Vice President, Research and
Development and Chief Scientific Officer of Interneuron Pharmaceuticals, Inc.
From February 1989 to November 1991 he held management positions in the
Cardiovascular Research and Development division of The DuPont Merck
Pharmaceutical Company. From May 1985 to February 1989 he was affiliated with
the Medical Department of DuPont Critical Care. Dr. Sandage is a director of
Aeolus Pharmaceuticals, Inc., a subsidiary of Intercardia, Inc. Dr. Sandage is
an adjunct professor in the Department of Pharmacology at the Massachusetts
College of Pharmacy. Dr. Sandage received his Ph.D. in Clinical Pharmacy from
Purdue University and his B.S. in Pharmacy from the University of Arkansas.
Donald G. Drapkin has been a member of the Company's Board of Directors
since September 1997, and was Chairman from September 1997 until October 1998.
Mr. Drapkin has
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<PAGE> 10
been a director and Vice Chairman of MacAndrews & Forbes Holdings, Inc. and
various of its affiliates since March 1987. Prior to joining MacAndrews &
Forbes, Mr. Drapkin was a partner in the law firm of Skadden, Arps, Meagher &
Flom in New York for more than five years. Mr. Drapkin also is a director of the
following corporations which file reports pursuant to the Securities Exchange
Act of 1934: Algos Pharmaceutical Corporation, Anthracite Capital, Inc.,
BlackRock Asset Investors, Cardio Technologies, Inc., The Molson Companies,
Playboy Enterprises, Inc., Revlon, Inc., Revlon Consumer Products Corporation,
Nexell Therapeutics Inc. and Weider Nutrition International, Inc.
Michael S. Weiss has been Vice Chairman of the Company's Board of
Directors since May 1997. Mr. Weiss is currently the President and CEO of The
Cancer Education Network, Inc., an Internet-based cancer information and
education company. From 1993 until April 1999, Mr. Weiss was Senior Managing
Director of Paramount Capital, Inc., an investment banking firm, and served in a
similar capacity for certain affiliated entities. Prior to this, Mr. Weiss was
an attorney with Cravath, Swaine & Moore. Mr. Weiss also serves on the Board of
Directors of Palatin Technologies, Inc. and AVAX Technologies, Inc., as
Secretary of Atlantic Pharmaceuticals, Inc. and as Chairman of Procept Inc., all
publicly-traded biotechnology companies. Additionally, Mr. Weiss is a member of
the board of directors of several privately-held biopharmaceutical companies.
Mr. Weiss received his J.D. from Columbia University School of Law and a B.S. in
Finance from the State University of New York at Albany.
The Company has standing executive, audit and compensation committees
of the Board of Directors. The members of the executive committee are Dr.
Kasses, Dr. Cooper, Mr. Wakoff and Mr. Weiss. The executive committee has the
power to exercise the responsibilities of the Board of Directors when the Board
is not in session. The executive committee met one time during the year ended
December 31, 1998. The members of the audit committee include Dr. Kessel, Dr.
Sandage and Mr. Wakoff. The audit committee has the power to recommend to the
Board the independent public accountants to be engaged and to arrange the
details of such engagement, and to review with the independent public
accountants various accounting-related issues and policies regarding the
Company. The members of the compensation committee include Dr. Cooper, Mr. Stein
and Mr. Weiss. The compensation committee has the power to determine the
compensation of management and directors of the Company, to approve the
compensation policies applicable to the Company's executive officers, and to
exercise the powers of the Board in respect of the administration of the
Company's stock option and other employee benefit plans.
The Board of Directors held 3 meetings during the year ended December
31, 1998. All directors attended at least 75% of the aggregate number of
meetings of the Board of Directors, with the exception of Dr. Sandage. Directors
receive no fees for their services, but non-employee directors are eligible for
stock options granted in consideration for their service as directors.
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<PAGE> 11
SUMMARY COMPENSATION
The following table sets forth information concerning the compensation
of the following executive officers (collectively, the "Named Executive
Officers") for each of the Company's last three fiscal years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation Awards
---------------------------------------------- --------------------------
Name and Other Annual Securities Underlying
Principal Position Year Salary($) Bonus($) Compensation Options(#)
- ------------------ ---- --------- -------- ------------ ----------
<S> <C> <C> <C> <C> <C>
Thomas H. Adams, Ph.D 1998 $109,034(1) -- -- --
Chairman of the Board and 1997 285,000(1) -- -- 100,000(2)
Chief Executive Officer 1996 285,000(3) -- -- 2,799(3)
Kenneth G. Kasses, Ph.D 1998 300,000 100,000(4) -- 2,236,263
President and 1997 62,500(4) -- -- --
Chief Executive Officer
Robert E. Klem, Ph.D 1998 168,731 -- -- --
Vice President 1997 170,000(5) -- -- --
1996 155,000(3) -- 2,580(6) 853(3)
</TABLE>
(1) Dr. Adams resigned as Chairman of the Board and Chief Executive Officer
on May 5, 1997. Pursuant to a severance and consulting agreements with
the Company, the Company agreed to continue to pay Dr. Adams' salary at
the then-current rate of $285,000 per year for a one-year period,
agreed to continue eligibility for coverage under the Company's health
insurance plan for a one-year period and agreed to grant options to
purchase 100,000 shares of Common Stock exercisable at $3.00 per share
(100% of the fair market value of such stock on May 5, 1997) as
consideration for consulting services of at least 24 days.
(2) See Footnote 1 above. These options were granted to Dr. Adams in May
1998.
(3) Options were granted to Dr. Klem and Dr. Adams during the year ended
December 31, 1996 to compensate them for accepting deferral of the
payment of a portion of base salary in 1995 and 1996. The portions of
salaries so deferred are included in the 1996 salary figures in this
table, consisting of $11,875 and $6,458 for Drs. Adams and Klem,
respectively.
(4) Salary payments commenced on October 1, 1997. See "Compensation of the
President and Chief Executive Officer" below.
(5) This amount does not include the payment in 1997 of the full salary
amounts deferred from 1995 and 1996, as discussed in Footnote 3 above.
(6) Represents payment for an insurance policy covering Dr. Klem.
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<PAGE> 12
COMPENSATION OF DIRECTORS
Directors of the Company receive no fees for their services as
directors or committee members. Non-employee directors are reimbursed by the
Company for their out-of-pocket expenses incurred in attending meetings of the
Board of Directors and its committees and receive annual grants of stock options
under the Company's Non-Employee Director 1998 Stock Option Plan. Pursuant to
the Company's 1998 Stock Incentive Plan, employee directors are eligible for
stock options.
COMPENSATION OF THE PRESIDENT AND CHIEF EXECUTIVE OFFICER
Pursuant to a Letter Agreement, dated September 4, 1997, between
Michael Weiss, then the Interim Chairman of the Board of the Company, and Dr.
Kasses (the "Letter Agreement"), Dr. Kasses was appointed President and Chief
Executive Officer of the Company, effective October 1, 1997, subject to Board
ratification. Among other items, the Letter Agreement provides the following:
1. Dr. Kasses receives a base salary of $300,000 per annum,
subject to semi-annual review commencing on October 1, 1998. In the event Dr.
Kasses is terminated without cause or terminates his employment for cause, Dr.
Kasses becomes entitled to receive this amount as severance for one year
following such termination, subject to set-off for amounts earned from
alternative employment. At the end of Dr. Kasses' first year of employment, he
becomes entitled to a bonus of $100,000 (assuming continued employment by the
Company). In subsequent years, Dr. Kasses is entitled to an additional bonus of
up to $100,000, subject to achievement of agreed-upon milestones.
2. Dr. Kasses is entitled to receive, subject to stockholder
approval, a grant of stock options to purchase 5% of the fully diluted Common
Stock of the Company outstanding as of an agreed-upon date, with quarterly
vesting over four years (assuming continued employment).
3. Dr. Kasses and his dependents receive such medical, long-term
disability, life insurance and such other health benefits as the Company makes
available to its other senior officers and directors.
The Letter Agreement contemplates that these and certain other
provisions will be incorporated into an employment agreement between Dr. Kasses
and the Company. This has not yet occurred. At the end of his first year of
employment, Dr. Kasses received the bonus contemplated in the Letter Agreement.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
By resolution dated January 29, 1998, the Board of Directors appointed
a Compensation Committee consisting of Dr. Glenn L. Cooper, Andrew J. Stein, and
Michael S. Weiss. None of the members of the Compensation Committee had any
"interlock" relationship to report during the Company's fiscal year ended
December 31, 1998.
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<PAGE> 13
PENSION AND LONG-TERM INCENTIVE PLANS
The Company has no pension or long-term incentive plans.
OPTION GRANTS IN THE LAST FISCAL YEAR
The following table sets forth certain information concerning grants of
stock options made during the Company's fiscal year ended December 31, 1998 to
the following Named Executive Officer:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------------------------
POTENTIAL REALIZABLE VALUE
PERCENTAGE AT ASSUMED ANNUAL RATES OF
NUMBER OF OF TOTAL STOCK PRICE APPRECIATION
SECURITIES OPTIONS EXERCISE FOR OPTION TERMS(1)
UNDERLYING GRANTED TO PRICE EXPIRA- -----------------------------------
OPTIONS EMPLOYEE IN PER TION
GRANTED FISCAL YEAR SHARE DATE 0% 5% 10%
--------- ----------- -------- --------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Kenneth G. Kasses 2,236,263 78.8% $0.94375 9/30/2007 $474,647 $3,437,738 $5,474,024
</TABLE>
(1) The amounts shown on this table represent hypothetical gains that could
be achieved for the options if exercised at the end of the option term.
These gains are based on assumed rates of stock appreciation of 0%
(based on a market value on the date of the grant of $1.16 per share),
5% and 10%, compounded annually from the date the options were granted
to their expiration date. The gains shown are net of the option
exercise price, but do not include deductions for taxes or other
expenses associated with the exercise. Actual gains, if any, on stock
option exercises will depend on the future performance of the Common
Stock, the optionholder's continued employment through the option
period, and the date on which the options are exercised.
-10-
<PAGE> 14
OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION VALUES
The following table sets forth certain information concerning the
number and value of unexercised options held by each of the Named Executive
Officers on December 31, 1998:
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
Fiscal Year End(#) Fiscal Year End($)(1)
-------------------------- --------------------------
Shares Acquired Value
Name On Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
- ---- --------------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Thomas H. Adams, Ph.D. -- -- 82,877(2) 17,123(2) -- --
Kenneth G. Kasses, Ph.D. -- -- 698,832 1,537,431 $236,681 --
Robert E. Klem, Ph.D. -- -- 5,353 -- -- --
</TABLE>
- ----------
(1) Calculated on the basis of the fair market value of the underlying
securities as of December 31, 1998 ($1.281 per share), minus the
exercise price.
(2) Includes options to purchase 100,000 shares of Common Stock granted to
Dr. Adams in May 1998 pursuant to a consulting services agreement.
STOCK OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following table sets forth information as of June 7, 1999 as to
shares of Common Stock beneficially owned by (i) the Company's directors, (ii)
the Company's Named Executive Officers set forth in this Proxy Statement, (iii)
the directors and executive officers as a group and (iv) each person known by
the Company to be the beneficial owner of more than five percent of the
outstanding shares of the Common Stock of the Company. As of June 7, 1999, each
share of Series A Preferred Stock was convertible at the option of the holder
into approximately 7.43 shares of Common Stock and each share of Series D
Preferred Stock is convertible at the option of the holder into approximately
105.96 shares of Common Stock. Except as required by law or with respect to the
creation or amendment of senior classes of preferred stock or creation of
different series or classes of Common Stock, and in certain other instances, the
holders of Series A Preferred Stock do not have voting rights until conversion
into Common Stock. The conversion price and the numbers of shares of Common
Stock issuable upon conversion of the Series A and the Series D Preferred Stock
may be adjusted in the future, based on the provisions in the Certificate of
Incorporation, as amended.
-11-
<PAGE> 15
<TABLE>
<CAPTION>
COMMON STOCK SERIES D PREFERRED STOCK
------------ ------------------------
NAME AND ADDRESS AMOUNT AND NATURE OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP AMOUNT AND NATURE OF
- ---------------- -------------------- PERCENT BENEFICIAL PERCENT
(1) OF CLASS OWNERSHIP(1) OF CLASS
--- -------- ------------ --------
<S> <C> <C> <C> <C>
CERTAIN BENEFICIAL
HOLDERS;
Lindsay A. Rosenwald, M.D. 24,032,930 (2) 69.7%(3) 102,247(2) 59.8%
787 Seventh Avenue
New York, NY 10019
Paramount Capital Asset 21,166,537 (4) 66.9%(3) 76,415(4) 52.6%
Management, Inc.
787 Seventh Avenue
New York, NY 10019
United Congregations Mesora 1,159,600 (5) 7.1% 10,000(5) 6.9%
c/o Aetna Realty
1 State Street Plaza
New York, NY 10004
Attn: Chana Adelstein
MANAGEMENT:
Michael S. Weiss 703,939 (6) 4.4% 6,084(6) 4.1%
Robert E. Klem, Ph.D. 324,024 (7) 1.8% 0 .0%
Lawrence J. Kessel, M.D. 61,803 (8) 0.3% 250(8) 0.2%
Peter Salomon, M.D. 33,313 (9) 0.2% 0 .0%
Glenn L. Cooper, M.D. 147,656(10) 0.8% 0 .0%
Donald G. Drapkin 295,313(11) 1.6% 0 .0%
Kenneth G. Kasses, Ph.D. 978,365(12) 5.3% 0 .0%
Bobby W. Sandage, Jr., Ph.D. 147,656(13) 0.8% 0 .0%
Andrew J. Stein 32,813(14) 0.2% 0 .0%
Harlan J. Wakoff 32,813(15) 0.2% 0 .0%
All directors and executive 2,757,695 13.6% 6,334 4.2%
officers as a group (10 persons)
</TABLE>
(1) The number of shares beneficially owned is determined under rules
promulgated by the Commission, and the information is not necessarily
indicative of beneficial ownership for any other purpose. Under those
rules, beneficial ownership includes any shares as to which the
individual has sole or shared voting power or investment power and also
any shares which the individual has the right to acquire within 60 days
of June 7, 1999, through the exercise or conversion of any stock
option, convertible security, warrant or other right. The inclusion in
the table of those shares, however, does not constitute an admission
that the named stockholder is a direct or indirect beneficial owner of
those shares. Unless otherwise indicated, each person
-12-
<PAGE> 16
or entity named in the table has sole voting power and investment power
(or shares that power with that person's spouse) with respect to all
shares of capital stock listed as owned by that person or entity. The
Common Stock represented here includes the Common Stock that the
beneficial holders would directly possess if they converted their
Series D Preferred Stock holdings, set forth under the heading "Series
D Preferred Stock" in the table above.
(2) Dr. Rosenwald may be deemed to have shared voting and investment power
over the 19,303,093 shares of Common Stock (which includes Common Stock
issuable upon conversion of Series D Preferred Stock), 250,800 shares
of Series A Preferred Stock (which are convertible into 1,863,444
shares of Common Stock) and 76,415 shares of Series D Preferred Stock
that may be deemed to be beneficially owned by Paramount Capital Asset
Management, Inc. ("Paramount"), of which Dr. Rosenwald is the sole
stockholder. See footnote 4 below. In addition, Dr. Rosenwald may be
deemed to have sole voting and investment power over approximately
2,866,393 shares of Common Stock that he may be deemed beneficially to
own, consisting of approximately 1,951,801 shares of Common Stock
issuable upon conversion of 18,420 shares of Series D Preferred Stock,
which are themselves issuable upon exercise of warrants, 92,101 shares
of Common Stock issuable upon exercise of warrants, which are
themselves issuable upon exercise of warrants, 785,429 shares of Common
Stock issuable upon conversion of 7,412 shares of Series D Preferred
Stock, which are themselves issuable upon exercise of warrants, and
37,062 shares of Common Stock issuable upon exercise of warrants, which
are themselves issuable upon exercise of warrants. Dr. Rosenwald may be
deemed to have sole voting and investment power over the approximately
25,832 shares of Series D Preferred Stock issuable upon exercise of
warrants that are listed in the preceding sentence.
(3) Holders of the Series D Preferred Stock are is entitled to vote with
holders of the Common Stock on all matters submitted to a vote of the
Company's stockholders. Dr. Rosenwald may be deemed beneficially to own
(within the meaning of Rule 13d-3 under the Securities Exchange Act of
1934, as amended) 57.5% of the aggregate voting power of the
outstanding shares of Common Stock and Series D Preferred Stock.
Similarly, Paramount may be deemed beneficially to own 54.4% of the
aggregate voting power of the outstanding shares of Common Stock and
Series D Preferred Stock.
(4) Paramount may be deemed to have shared voting and investment power over
the 7,009,767 and 14,156,770 shares of Common Stock, and 70,100 and
180,700 shares of Series A Preferred Stock, respectively, which may be
deemed to be beneficially owned by The Aries Domestic Fund, L.P. (the
"Aries Domestic Fund"), a limited partnership, and The Aries Fund, a
Cayman Islands Trust (the "Aries Trust"), for which Paramount is the
General Partner and Investment Advisor, respectively. As of June 7,
1998, Paramount may be deemed to own beneficially the following shares
of Common Stock held by the Aries Trust: 3,351,192 shares of Common
Stock; 1,341,832 shares of Common Stock issuable upon conversion of
180,700 shares of Series A Preferred Stock; 5,194,172 shares of Common
Stock issuable upon conversion of 49,020 shares of Series D Preferred
Stock; and 4,302,074 shares of Common Stock issuable upon the exercise
of warrants. Paramount may be deemed to own beneficially the following
shares of Common Stock held by the Aries Domestic Fund: 1,393,399
shares of Common Stock; 520,545 shares of Common Stock issuable upon
conversion of 70,100 shares of Series A Preferred Stock; 2,796,821
shares of Common Stock issuable upon conversion of 26,395 shares of
Series D Preferred Stock; and 2,316,502 shares of Common Stock issuable
upon exercise of warrants. Paramount may also be deemed the beneficial
owner of the 26,395 shares of Series D Preferred Stock held by the
Aries Domestic Fund and the 49,020 shares of Series D Preferred Stock
held by the Aries Trust.
(5) United Congregations Mesora owns beneficially 10,000 shares of Series D
Preferred Stock (which are convertible into approximately 1,059,600
shares of Common Stock) and Class D Warrants to purchase up to 50,000
shares of Common Stock.
(6) Mr. Weiss's beneficial ownership consists of approximately 15,894
shares of Common Stock issuable upon conversion of 150 shares of Series
D Preferred Stock; 7,434 shares of Common Stock issuable upon exercise
of warrants; approximately 125,749 shares of Common Stock issuable upon
conversion of approximately
-13-
<PAGE> 17
1,187 shares of Series D Preferred Stock issuable upon exercise of
warrants; and options to purchase up to 32,813 shares of Common Stock.
In addition, Mr. Weiss may be deemed to be the beneficial owner of
503,002 shares of Common Stock issuable upon conversion of 4,747 shares
of Series D Preferred Stock issuable upon exercise of warrants and
23,735 shares of Common Stock issuable upon exercise of warrants, that
are held by an entity of which Mr. Weiss is the managing member.
(7) Dr. Klem's beneficial ownership consists of 23,358 shares of Common
Stock and options to purchase 300,666 shares of Common Stock. This
includes 1,875 shares of Common Stock held for Dr. Klem's children in
trust, as to which Dr. Klem has shared voting and investment power, and
150 shares of Common Stock owned by Dr. Klem's wife, as to which he
disclaims beneficial ownership.
(8) Dr. Kessel's beneficial ownership consists of 250 shares of Series D
Preferred Stock (which are convertible into approximately 26,490 shares
of Common Stock), warrants to purchase up to 2,500 shares of Common
Stock and options to purchase up to 32,813 shares of Common Stock.
(9) Dr. Salomon's beneficial ownership consists of 500 shares of Common
Stock and options to purchase up to 32,813 shares of Common Stock.
(10) Dr. Cooper's beneficial ownership consists entirely of options to
purchase Common Stock.
(11) Mr. Drapkin's beneficial ownership consists entirely of options to
purchase Common Stock.
(12) Dr. Kasses' beneficial ownership consists entirely of options to
purchase Common Stock.
(13) Dr. Sandage's beneficial ownership consists entirely of options to
purchase Common Stock.
(14) Mr. Stein's beneficial ownership consists entirely of options to
purchase Common Stock.
(15) Mr. Wakoff's beneficial ownership consists entirely of options to
purchase Common Stock.
COMPENSATION COMMITTEE REPORT TO STOCKHOLDERS ON COMPENSATION
OVERVIEW
The Company seeks to achieve three objectives which serve as guidelines
in making compensation decisions:
- -- Providing a total compensation package which is competitive and,
therefore, enables the Company to attract and retain, on a long-term
basis, high-caliber executive personnel;
- -- Integrating compensation programs with the Company's short-term and
long-term strategic plan and business objectives; and
- -- Encouraging achievement of business objectives and enhancement of
stockholder value by providing executive management long-term incentive
through equity ownership.
In making its compensation determinations, the Compensation Committee
of the Board of Directors has relied, in part, on independent surveys and
analyses of management compensation of executives of companies in the
biotechnology and pharmaceutical industries
-14-
<PAGE> 18
(including companies in the Nasdaq Pharmaceutical Stock Index used in the
Company's Stock Price Performance Graph set forth in this Proxy Statement and
recommendations of management. The Compensation Committee believes it has
established executive compensation levels that are competitive with companies in
the biotechnology and pharmaceutical industries when taking into account
relative company size, stage of development, individual responsibilities and
experience, individual and overall corporate performance and geographic
location.
COMPONENTS OF EXECUTIVE COMPENSATION
The Company's potential therapeutic products are in various stages of
research and development and no revenues have as yet been generated from
therapeutic product sales. As a result, the use of traditional performance
standards, such as corporate profitability, are not believed to be appropriate
in the evaluation of the performance of the Company or its individual
executives. The compensation of the Company's executive officers is based, in
substantial part, on the achievement of individual and overall corporate
objectives. Such objectives are established and modified as necessary to reflect
changes in market conditions and other factors. Individual and overall corporate
performance are measured by reviewing whether these corporate objectives have
been achieved.
The Company's compensation package for executive officers generally
consists of annual cash compensation and long-term compensation in the form of
stock options. In light of the Company's stage of development, considerable
emphasis is placed on equity-based compensation in an effort to preserve cash to
finance the Company's research and development efforts.
ANNUAL CASH COMPENSATION
Compensation levels for the Company's executive officers are determined
in part through comparisons with companies of a similar size, stage of
development and level of complexity in the biotechnology and pharmaceutical
industries and other companies with which the Company competes for personnel. In
addition, the compensation level for each executive officer reflects an
evaluation of the responsibilities required for each respective position,
individual experience levels and individual performance and contributions toward
achievement of the Company's business objectives. The compensation levels for
the Company's executive officers are designed to be competitive within a range
that the Compensation Committee of the Board of Directors determines to be
reasonable in light of the aforementioned factors. The salary level of each
executive officer is reviewed on an annual basis and adjustments are made as
deemed necessary.
STOCK OPTIONS
The Compensation Committee believes that by providing all full-time
employees, including executive officers who have responsibility for the
management and growth of the Company, with an opportunity to obtain an equity
interest in the Company, the best interests of stockholders and the Company's
employees will be closely aligned. Accordingly, all full-time employees,
including executive officers, are eligible to receive stock option grants from
time to time, giving them the right to purchase shares of the Company's Common
Stock at a specified price.
-15-
<PAGE> 19
COMPENSATION OF EXECUTIVE OFFICERS
In making compensation decisions for the Company's fiscal year ended
December 31, 1998, the Compensation Committee took into account the Company's
limited cash resources, its weakened financial condition, the general financial
performance of the Company during 1997 and 1998 and the importance of retaining
the Company's cash to finance its development programs. The Compensation
Committee also considered the importance to the Company of retaining highly
qualified key personnel due to the complex and technologically sophisticated
nature of the Company's business. In light of these factors, the only bonus
compensation awarded to any executive officer was to Dr. Kenneth G. Kasses, in
accordance with his employment agreement when he was hired as the Company's
President and Chief Executive Officer effective October 1, 1997. As well, Dr.
Kasses receives an annual salary of $300,000 pursuant to the terms of a Letter
Agreement dated September 4, 1997. See "Compensation of the President and Chief
Executive Officer" above.
This Compensation Report shall not be deemed incorporated by reference
by any general statement incorporating by reference this Proxy Statement into
any filing under the Securities Act of 1933, as amended, or under the Securities
Exchange Act of 1934, as amended, except to the extent the Company specifically
incorporates this report by reference, and shall not otherwise be deemed filed
under such Acts.
Glenn L. Cooper, M.D.
Andrew J. Stein
Michael S. Weiss
-16-
<PAGE> 20
STOCK PRICE PERFORMANCE GRAPH
The following graph illustrates a comparison of the five-year
cumulative total stockholder return (change in stock price plus reinvested
dividends) of the Company's Common Stock with the CRSP Total Return Index for
The Nasdaq National Market (U.S. and Foreign) (the "Nasdaq Composite Index") and
the CRSP Total Return Index for Nasdaq Pharmaceutical Stocks (the "Nasdaq
Pharmaceutical Index"). The comparisons in the graph are required by the
Securities and Exchange Commission ("SEC") and are not intended to forecast or
be indicative of possible future performance of the Company's Common Stock.
- --------------------------------------------------------------------------------
1993 1994 1995 1996 1997 1998
- --------------------- --------- -------- --------- --------- --------- ---------
Genta Inc. $100.00 $69.49 $ 30.51 $ 5.93 $ 1.06 $ 1.74
- --------------------- --------- -------- --------- --------- --------- ---------
NASDAQ Pharmaceutical $100.00 $75.26 $138.04 $138.47 $142.98 $183.02
- --------------------- --------- -------- --------- --------- --------- ---------
NASDAQ Composite $100.00 $97.00 $136.23 $166.79 $203.98 $281.69
- --------------------------------------------------------------------------------
Assumes a $100 investment on December 31, 1993 in each of the Company's
Common Stock, the securities comprising the Nasdaq Composite Index, and the
securities comprising the Nasdaq Pharmaceutical Index.
The Nasdaq Pharmaceutical Index includes all companies on Nasdaq within
SIC code 283. A copy of the list of companies that comprise the Nasdaq
Pharmaceutical Index may be obtained upon request by contacting Genta
Incorporated, Investor Relations, 99 Hayden Avenue, Suite 200, Lexington,
Massachusetts 02421, Tel. (781) 860-5150.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Michael Weiss is a managing director of Genta Jago Technologies B.V., a
joint venture that is 50% owned by Genta.
-17-
<PAGE> 21
During 1998 and through March 1999, the Company rented office space
from Interneuron Pharmaceuticals, Inc. on a month-to-month basis at $600 a
month. The Company and Interneuron Pharmaceuticals, Inc. entered into a two-year
lease effective April 1, 1999, pursuant to which the Company rents approximately
2,300 square feet of office space for $3,621 per month, subject to a standard
escalation clause. Dr. Glenn L. Cooper is a director and President and Chief
Executive Officer of Interneuron Pharmaceuticals, Inc.,and Dr. Bobby W. Sandage,
Jr., is Executive Vice President, Research and Development, and Chief Scientific
Officer of Interneuron Pharmaceuticals, Inc. Drs. Cooper and Sandage are also
directors of the Company.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR EACH OF THE
NOMINEES FOR DIRECTOR LISTED ABOVE.
Directors are elected by a plurality vote of the aggregate voting power
of the shares of outstanding Common Stock and Series D Preferred Stock, present
in person or represented by proxy, voting together as a single class.
-18-
<PAGE> 22
PROPOSAL TWO
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has selected the firm of Deloitte & Touche LLP
as the Company's independent auditors for the fiscal year ending December 31,
1999, subject to ratification by the stockholders at the Annual Meeting.
The Company's financial statements have been audited by Ernst & Young
LLP since the Company's inception in February, 1988 until Ernst & Young's
resignation in October 1998. Deloitte & Touche LLP was hired by the Company on
February 10, 1999. For more information concerning the resignation of Ernst &
Young LLP and the hiring of Deloitte & Touche LLP, please see the Company's
current reports on Form 8-K dated November 3, 1998 and February 12, 1999,
respectively.
Representatives of Deloitte and Touche LLP are expected to be present
at the Annual Meeting. They will be available to respond to appropriate
questions.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS APPROVAL OF PROPOSAL TWO.
-19-
<PAGE> 23
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the 2000 Annual
Meeting of stockholders of the Company must be received by the Company at the
offices of the Company, 99 Hayden Avenue, Suite 200, Lexington, MA 02421 no
later than March 15, 2000 in order to be included in the proxy statement and
form of proxy relating to such annual meeting.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the directors and executive officers of the Company and persons who
beneficially own more than ten percent of the Company's Common Stock
(collectively, the "Reporting Persons") to report their ownership of and
transactions in the Company's Common Stock to the SEC. Copies of these reports
are also required to be supplied to the Company. The Company believes, upon a
review of the copies of such reports received by the Company, written
representations furnished by the Reporting Persons to the Company and SEC
filings, that during the year ended December 31, 1998 the Reporting Persons
complied with all applicable Section 16(a) reporting requirements.
OTHER MATTERS
The Board of Directors knows of no other business that will be
presented at the Annual Meeting. If any other business is properly brought
before the Annual Meeting, it is intended that proxies in the enclosed form will
be voted in accordance with the judgment of the persons voting the proxies.
Whether you intend to be present at the Annual Meeting or not, we urge
you to return your signed proxy promptly.
By order of the Board of Directors,
Kenneth G. Kasses, Ph.D.
Chairman of the Board, Chief Executive
Officer, and President
Dated: June 15, 1999
-20-
<PAGE> 24
GENTA INCORPORATED
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR ANNUAL MEETING ON JULY 13, 1999.
The undersigned stockholder of Genta Incorporated (the "Company")
acknowledges receipt of the Notice of Annual Meeting of Stockholders and the
Proxy Statement each dated June 15, 1999 and the undersigned revokes all prior
proxies and appoints Kenneth G. Kasses, Ph.D., Gerald M. Schimmoeller, or either
of them, as proxies for the undersigned, with full power of substitution to
each, to vote all shares of Common Stock and/or Series D Preferred Stock of the
Company which the undersigned is entitled to vote at the Company's Annual
Meeting of Stockholders to be held at the Harborside Hyatt Conference Center &
Hotel, 101 Harborside Drive, Boston, Massachusetts, at 11:00 a.m., local time,
on July 13, 1999 and at any postponement or adjournment thereof, and the
undersigned authorizes and instructs said proxies or their substitutes to vote
as follows:
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IN THE ABSENCE OF DIRECTION, THIS PROXY
WILL BE VOTED FOR THE ELECTION OF THE DIRECTORS AND RATIFICATION OF DELOITTE AND
TOUCHE AS THE COMPANY'S ACCOUNTANTS IN ACCORDANCE WITH THE JUDGMENT OF THE
PROXIES, FOR OR AGAINST ANY OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE
ANNUAL MEETING AND ANY ADJOURNMENT THEREOF.
(CONTINUED AND TO BE DATED AND SIGNED ON THE OTHER SIDE.)
XXXXXXX
XXXXXXX
XXXXXXX
XXXXXXX [X]
1. ELECTION OF DIRECTORS: To elect the nominees listed below to the Board of
Directors for a term of one year:
FOR all nominees WITHHOLD (INSTRUCTION: To withhold
listed to the right AUTHORITY authority to vote for any
(except as marked to vote for all nominees individual nominee, strike a
to the contrary) listed to the right line through the nominee's
name in the list below.)
[ ] [ ]
NOMINEES: KENNETH G. KASSES,
Ph.D., ANDREW J. STEIN, ROBERT
E. KLEM, Ph.D., LAWRENCE J.
KESSEL, M.D., DONALD G.
DRAPKIN, PETER SALOMON, M.D.,
HARLAN J. WAKOFF, GLENN L.
COOPER, M.D., BOBBY W.
SANDAGE, Jr., Ph.D., MICHAEL
S. WEISS
2. RATIFICATION OF APPOINTMENT
OF DELOITTE AND TOUCHE LLP
AS THE COMPANY'S ACCOUNTANTS:
FOR AGAINST ABSTAIN and in their discretion, upon any other
[ ] [ ] [ ] matters that may properly come before the
meeting or any adjournments thereof.
Receipt of the Notice of Annual Meeting and
of the Proxy Statement and Annual Report of
the Company accompanying the same is hereby
acknowledged.
PLEASE DATE, SIGN AND RETURN THIS PROXY
PROMPTLY USING THE ENCLOSED ENVELOPE.
]
SIGNATURE______________________ SIGNATURE______________________DATE_____________
PRINT NAME_____________________________ PRINT NAME______________________________
Please sign exactly as your name(s) appears on your stock certificate and print
your name. If signing as attorney, executor, administrator, trustee or guardian,
please indicate the capacity in which signing. When signing as joint tenants,
all parties to the joint tenancy must sign. When the proxy is given by a
corporation, it should be signed by an authorized officer.
<PAGE> 25
GENTA INCORPORATED
REPORT TO SHAREHOLDERS
June 1, 1999
TO OUR SHAREHOLDERS:
I am proud to report to you that the past year was one of great accomplishment
for our Company. Following our restructuring in 1997, we determined to refocus
our direction and efforts on our most promising and exciting value creation
opportunities. As a result we focused our efforts on the development of our
Anticode(TM) oligonucleotide technology, and particularly G3139, our lead cancer
treatment candidate. Our strategy was to develop a clinical program to
investigate the effectiveness of G3139, when combined with chemotherapeutic
agents, in the treatment of various cancers. The cancers we have chosen to
investigate either have higher incidences (larger potential populations) or are
very poorly served by available treatments (with the potential for accelerated
development and approval to market).
In summary, the past year has been met with great success as we exceeded our
objectives. We have achieved very promising results from our preclinical and
clinical studies; raised approximately $5 million through the sale of a
non-strategic asset; and reduced our operating expenses by further focusing our
efforts. Based on exciting findings from both preclinical and clinical trials
and the enthusiastic support from prominent anti-cancer drug researchers, we are
now well positioned to capitalize on these efforts. G3139 has been shown in our
models to have the potential to treat a wide array of cancers and to be useful
when combined with a very broad selection of chemotherapeutic agents.
We have completed one clinical trial and seven others are now underway.
Additional trials are in development with the National Cancer Institute. As I
describe below, these trials address several different cancers and use several
different chemotherapy combinations. While the design of these trials is
primarily intended to assess the safety and dosing of G3139 in these various
cancers and drug combinations, we were quite pleased to see a consistent pattern
of biological effects demonstrated in the results to date. These results with
G3139 in patients with advanced disease and who had previously received other
treatments--without success--are very promising and compelling, and we are
proceeding rapidly to advance the development program.
The following report highlights the progress we have made this year in both
accelerating the development of our technology and strengthening our financial
position.
<PAGE> 26
GENTA INCORPORATED REPORT TO SHAREHOLDERS JUNE 1, 1999
G3139--AT THE FOREFRONT OF ANTISENSE-BASED CANCER THERAPY DEVELOPMENT
- --------------------------------------------------------------------------------
WHAT IS ANTICODE(TM)?
Cells in the human body produce, or "express," tens of thousands of proteins
that are essential for life. Many human diseases arise when cells over-produce
certain normal proteins as a result of inherited or acquired genetic defects.
Anticode(TM) (antisense) compounds, such as G3139, are short, synthetic DNA-like
strands that halt this disease-causing process by binding with a specific
messenger ribonucleic acid (mRNA) and destroying it, thereby preventing the
over-expression of its protein.
The target of G3139 - the bcl-2 gene - has been implicated in prostate cancer,
non-Hodgkin's lymphoma, melanoma, breast and other cancers. Bcl-2 is a
proto-oncogene (a gene associated with malignancy) that acts as a major
inhibitor of apoptosis (programmed cell death) of cancerous cells. The protein
produced by this gene has two known critical functions in the progression of
cancer - it makes cancer cells "immortal," creating a survival advantage for
malignant over normal cells, and confers resistance to radiation and
chemotherapy, rendering these treatments ineffective in the late stages of many
types of cancers. G3139 is designed to inactivate the mRNA that produces the
Bcl-2 protein product, and prevent the excess cellular production of the
protein.
- --------------------------------------------------------------------------------
In 1998, Genta's clinical development program for G3139 was launched and it
continues to be the Company's single most important project. We believe that the
development of G3139 is now at the forefront of antisense-based cancer
therapies. The results of our preclinical and clinical studies present a very
consistent story. Our investigators have reported that G3139 produces a
reduction in the Bcl-2 protein levels, and at least additive effects with
chemotherapies. This encourages us to move forward aggressively in development
of G3139.
SCIENTIFIC RATIONALE FOR G3139
Early in the year, we hypothesized that G3139 should have the greatest clinical
value and utility when used together with chemotherapeutic agents. The rationale
for that hypothesis was that the up-regulation of G3139's target, the Bcl-2
protein, is most highly associated with cancers that are resistant to many
commonly used anticancer drugs that are reported to achieve their benefit by
stimulating apoptosis, or "programmed cell death." Therefore, if G3139
successfully reduces the Bcl-2 protein level in cancer cells that are resistant
to chemotherapy, the combination of G3139 with a chemotherapeutic agent that is
an apoptotic stimulus should produce a greater benefit than would either drug
given alone.
When we approached a number of scientists and clinicians who had worked with
Genta and had experience with G3139, they all agreed with this premise.
Consequently, we began developing a clinical program to investigate our
hypothesis. We also began a series of preclinical studies to test the hypothesis
in animal models and to help us select the appropriate chemotherapy combinations
in the target cancers.
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GENTA INCORPORATED REPORT TO SHAREHOLDERS JUNE 1, 1999
PRECLINICAL STUDIES SHOW HIGH LEVELS OF EFFECTIVENESS IN MULTIPLE ANIMAL MODELS
OF CANCER
In February 1998, an article appeared in Nature Medicine by our collaborators at
the University of Vienna and by Genta scientists. This article reported on the
effects of G3139 in combination with a chemotherapy drug commonly used in the
treatment of MALIGNANT MELANOMA, DTIC (dacarbazine) in a human melanoma
xenograft model in mice. Briefly, this article reported positive effects of the
combined treatment approach in this model and supported our clinical plan. The
authors reported that of 13 animals who were treated with the combination, ten
had no tumor and the remaining three had significantly less tumor volume than
DTIC-treated controls and DTIC plus control oligonucleotides. These results were
statistically significant.(a)
In March, three other groups of collaborators presented their findings at the
American Association for Cancer Research Annual Meeting. Scientists from the
Vancouver General Hospital and the University of British Columbia showed that a
G3139 analog, specific to mice, produced a significant delay in the development
of resistance to hormone therapy in a PROSTATE CANCER model in mice. In
addition, this effect was additive to that of mitoxantrone when given in
combination in this model. These studies also supported the potential clinical
value of G3139 in patients with metastatic prostate cancer that is androgen, or
hormone, insensitive, a situation that is also very highly correlated with the
up regulation of bcl-2.(b)
A group of scientists from the British Columbia (BC) Cancer Agency reported that
in a xenograft model of human LYMPHOMA, G3139 in combination with low-dose
cyclophosphamide led to 100% survival and cures of mice that survived for more
than 3 months after treatment. The control animals and those treated with either
cyclophosphamide or G3139 died from their lymphoma grafts within 1 to 2
months.(c)
Scientists from the Lombardi Cancer Center at Georgetown University Medical
Center presented their work showing that the combination of G3139 and docetaxel
(Taxotere(R)) produced cures in a mouse xenograft model of humaN BREAst CANCER.
This combination produced tumor regression and tumor free survival that lasted
beyond 6 months after treatment. Similar effects were reported when G3139 was
combined with other chemotherapies including paclitaxel (Taxol(R)).(d) In a
separate report, the BC Cancer Agency group also showed a major treatment
response in a mouse model of human breast cancer treated with the combination of
G3139 and doxorubicin.
EARLY DATA FROM CLINICAL STUDIES ARE EXTREMELY ENCOURAGING
During the last year or so, we initiated several new clinical studies. Our plan
was to choose several different cancers and to vary the way in which G3139 and
the chemotherapy agents are administered. The findings from the animal models,
which often demonstrated cures in animals with established tumor grafts, also
guided the rational design of our clinical program.
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GENTA INCORPORATED REPORT TO SHAREHOLDERS JUNE 1, 1999
The status of our clinical trials is summarized in the following table:
STATUS OF G3139 CLINICAL TRIALS
<TABLE>
<CAPTION>
- ---------------------------------------- ------------------------ --------------------------------- ------------------------------
TRIAL LOCATION/ INVESTIGATOR STATUS INDICATION TREATMENT
- ---------------------------------------- ------------------------ --------------------------------- ------------------------------
<S> <C> <C> <C>
ROYAL MARSDEN HOSPITAL: Phase I completed Non-Hodgkin's Lymphoma G3139
David Cunningham, MD
- ---------------------------------------- ------------------------ --------------------------------- ------------------------------
ROYAL MARSDEN HOSPITAL: Phase II in progress Non-Hodgkin's Lymphoma G3139 with Standard Chemo
regimens
David Cunningham, MD
- ---------------------------------------- ------------------------ --------------------------------- ------------------------------
MEMORIAL SLOAN KETTERING CANCER CENTER: Phase I in progress Androgen insensitive metastatic G3139
Prostate Cancer and other solid
Howard Scher, MD tumors
- ---------------------------------------- ------------------------ --------------------------------- ------------------------------
SIDNEY KIMMEL CANCER CENTER: Phase I/IIa in progress Androgen insensitive metastatic G3139 with androgen blockade
Prostate Cancer
John Gutheil, MD
- ---------------------------------------- ------------------------ --------------------------------- ------------------------------
UNIVERSITY OF VIENNA: Phase I/IIa in progress Metastatic Malignant Melanoma G3139 with DTIC
Burkhard Jansen, MD
- ---------------------------------------- ------------------------ --------------------------------- ------------------------------
BRITISH COLOMBIA CANCER AGENCY: Phase I/IIa in progress Androgen insensitive metastatic G3139 with Mitoxantrone
Prostate Cancer
Richard Klasa, MD
- ---------------------------------------- ------------------------ --------------------------------- ------------------------------
BRITISH COLOMBIA CANCER AGENCY: Phase I/IIa in progress Non-Hodgkin's Lymphoma G3139 with Cyclophosphamide
Richard Klasa, MD
- ---------------------------------------- ------------------------ --------------------------------- ------------------------------
LOMBARDI CANCER CENTER: Phase I/IIa in progress Breast Cancer and other solid G3139 with Docetaxel
tumors
Daniel Hayes, MD
- ---------------------------------------- ------------------------ --------------------------------- ------------------------------
</TABLE>
Through April 1999, over 100 cycles of G3139 administration have been given to
patients in our clinical programs. We are rapidly escalating our experience with
and knowledge of this treatment, and we are anticipating rapid progress into
subsequent development phases.
In May, some of our clinical collaborators presented their findings at the
Annual Meeting of the American Society for Clinical Oncology (ASCO).
Our colleagues at the Royal Marsden Hospital in the U.K. have completed their
Phase I study in NON-HODGKIN'S LYMPHOMA and have started a Phase II study. They,
too, have developed a protocol that will combine treatment with G3139 with
standard chemotherapy regimens used at the Royal Marsden. Dr. Justin Waters
presented the findings of the Phase I trial at the ASCO meeting. He reported
that the continuous, subcutaneous infusion of G3139 for two weeks followed by a
four-week observation period was generally well tolerated at doses up to 4.1
mg/kg/day. Local irritation at the site of infusion was frequently reported but
managed by changing the infusion site. One patient obtained a complete remission
of his disease and remains in remission for about 3 years. Two other patients
had minor responses, and seven others had evidence of improvement in symptoms or
laboratory evaluations. I should note that this study
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GENTA INCORPORATED REPORT TO SHAREHOLDERS JUNE 1, 1999
was designed to evaluate the safety of G3139 and that these effects were
observed despite just a single two-week treatment cycle and then after the
four-week, post-treatment observation period. Perhaps equally encouraging for us
was their demonstration of reduced levels of Bcl-2 protein in cells from these
patients after treatment with G3139. These reductions could be seen in
circulating lymphocytes and in tumor biopsies.(e)
Dr. Howard Scher and his colleagues at the Memorial Sloan-Kettering Cancer
Center in New York are progressing well in their Phase I trial in patients with
PROSTATE CANCER OR OTHER SOLID TUMORS. Dr. Michael Morris presented their
findings to date at ASCO.(f) This was the first U.S. trial and also the first to
use a continuous IV infusion. It was also designed as a safety trial to assess
the maximum tolerated dose (MTD). To date the safety profile and pharmacology of
G3139 have been encouraging, and the MTD has not been reached. The current
dosing is beyond that found to be the MTD by the Royal Marsden investigators,
yet the safety profile in this trial appears to be better than in the lymphoma
patients. We believe this may be related to the type of cancer in these patients
and to their relative sensitivity to the treatment based both on their disease
and on their prior treatments. Dr. Morris reported that of their 27 enrolled
patients, eight went on to receive multiple treatment cycles, meaning that their
disease did not progress after the first cycle. This observation of
non-progressing disease was made after the two-week treatment period and a
two-week observation period. Based on the safety findings thus far, Dr. Scher
and his colleagues have been looking to determine how to measure the effect of
treatment on the Bcl-2 protein levels. Their preliminary work has been very
encouraging, and they report that they can now regularly make such assessments.
This will greatly assist us in determining whether or not we can find an optimal
bio-effective dose based on Bcl-2 reductions below an MTD. The investigators
have now also amended their study protocol to explore more aggressive treatment
regimens after the initial cycle to enhance the drug's effect on the patients'
clinical status.
Finally, Dr. Burkhard Jansen from the University of Vienna in Austria reported
on their findings with G3139 in combination with DTIC in patients with
METASTATIC MALIGNANT MELANOMA. Dr. Jansen and his colleagues had initiated a
trial in the clinical setting to evaluate their preclinical findings reported
above. Dr. Jansen reported at ASCO on nine patients with advanced disease who
had failed prior treatments and who received escalating doses of G3139 in a
14-day continuous IV infusion in combination with a standard dose of DTIC given
over days 5-10 of the G3139 infusion. He showed striking responses of some
metastatic lesions that completely disappeared after treatment. He also reported
corresponding reductions in Bcl-2 protein levels from tumor biopsies of
metastatic skin lesions.(g)
After reviewing our preclinical data and clinical plans, the National Cancer
Institute has agreed to a collaboration with us in the development of G3139.
Accordingly, we completed a Cooperative Research and Development Agreement
(CRADA) with the Institute. We are now working
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GENTA INCORPORATED REPORT TO SHAREHOLDERS JUNE 1, 1999
with the NCI to plan the specific studies that they and their investigators will
conduct. We have now agreed that they will pursue Phase II clinical trials in
colorectal cancer and small cell lung cancer, and another study in patients with
resistant or relapsed, acute myelogenous leukemia.
Based on the encouraging findings described above, we believe that the
development of G3139 is at the forefront of antisense-based cancer therapies. We
have seen a consistent pattern of results across both the preclinical and
clinical studies. We have seen a reduction in the Bcl-2 protein levels, and we
have seen at least additive effects with chemotherapies. This presents a
compelling basis for us to move forward aggressively in development of G3139.
Consequently, we recently decided to initiate studies designed to define the
clinical efficacy of G3139 in those tumor types that have been inadequately
treated by currently available therapies. We hope that this approach will help
us achieve registration for marketing G3139 more rapidly than would be possible
with a more traditional approach to development.
FINANCIAL POSITION IMPROVED
COST EFFECTIVE CLINICAL TESTING PROGRAM ESTABLISHED. We have been and are
committed to reducing operating expenses while focusing our resources on the
development of G3139. We succeeded in establishing a highly cost effective
clinical testing program, thanks in part to an enthusiastic group of experts in
cancer drug development. These investigators at leading cancer research
institutions in North America and Europe conducted most of our work.
Furthermore, their support of our technology has been key to our ability to
accelerate the development process.
SALE OF ASSETS OF JBL SCIENTIFIC, INC. In May 1999, we completed the sale of the
assets of JBL Scientific. Through this sale we raised sufficient funds to
continue our current operations into the year 2000. In addition, JBL will
continue to provide to Genta the support services for the G3139 development
program that it had been providing as our wholly owned subsidiary. These
services will be provided at no charge to Genta for about one year, thereby
allowing us to devote our internal resources to other needs.
COMMON STOCK PRICE INCREASED. During 1998, our common stock price increased from
$0.781 to $1.281 (up 64%). As of the end of May 1999, the stock price had
increased to $2.56. Our goal is to continue to enhance the value of our common
stock to the benefit of all of our shareholders.
FINANCIAL OBLIGATIONS IN JOINT VENTURE RELATIONSHIP REDUCED. As a part of our
strategy to focus on the development of G3139, one of our goals has been to
reduce our participation in Genta Jago Technologies B.V., our joint venture with
SkyePharma PLC (formerly with its subsidiary, Jagotec AG) that has been
developing oral, controlled-release drugs that use patented GEOMATRIX(R)
technology. We were successful in achieving that goal, and our expenses for
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GENTA INCORPORATED REPORT TO SHAREHOLDERS JUNE 1, 1999
the JV were significantly reduced. The Company reached an interim agreement with
SkyePharma that relieves each of the partners in the JV of any liability
relating to funding obligations, and SkyePharma agreed to be responsible for the
future development operations of the venture. Genta and SkyePharma will share in
the distribution, in agreed-upon percentages, of the revenues from the JV
products. This change will allow us to intensify our focus on developing new
therapeutic agents such as G3139 while retaining our economic interest in any
realized Genta Jago product revenues.
ACQUISITION OF NEW TECHNOLOGY. In 1998, we established a goal of acquiring an
additional novel technology to expand our development pipeline and offer new
opportunities for financing and future growth. I am pleased to report that we
have identified potential technology acquisitions with significant market
potential, and I hope to be able to report our progress to you in the very near
future. Of course, we cannot be certain that the acquisition will be achieved
until the negotiations are successfully completed.
ADMINISTRATIVE CHANGES
In 1998 we were fortunate to bring two very talented new members to our
management team. Mr. Tom Burger was appointed Vice President, Corporate
Development. He has significant experience in this field and had previously
served in a similar capacity with Genta. Dr. Howard Fingert joined our
management team as Vice President, Clinical and Regulatory Affairs. Dr. Fingert,
a board certified medical oncologist and hematologist, has pharmaceutical
industry experience in drug development, regulatory approval, and in the
marketing of drugs for cancer and other diseases.
In February, Mr. Jerry Schimmoeller joined us as our Vice President and Chief
Financial Officer, and he was subsequently elected Secretary of the Company by
our Board of Directors. Jerry brings to Genta significant experience in the
financial and administrative management of public and private technology
companies, and in raising capital for such companies.
I was personally very gratified by the full support I received from our Board of
Directors when they elected me Chairman. Mr. Donald Drapkin, our former
Chairman, remains a member of the Board. Mr. Harlan Wakoff, who also heads the
Board's Audit Committee, was appointed to the Executive Committee.
Finally, after the first quarter of 1999, we were able to consolidate our
operations in Lexington, MA and to close our facilities in San Diego, CA. This
move will greatly assist us in developing and executing our plans for moving
forward and in managing our resources effectively.
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GENTA INCORPORATED REPORT TO SHAREHOLDERS JUNE 1, 1999
OUR OBJECTIVES
This past year we resolved many of the administrative issues that impeded
Genta's ability to continue its important work. I look forward to the future
with confidence that we will continue to advance the development of a promising
technology that has the potential to benefit the lives of millions of people. To
keep our vision on track, we have set aggressive, yet realistic, goals for the
coming year.
- -- Aggressively continue the development of our G3139 Anticode(TM) compound.
Before the year-end, we intend to initiate trials to define the drug's
clinical effectiveness against selected solid tumor types. Some of these
trials, if positive, could form the basis for an expedited approval to
market the drug for one or more of these tumor types.
- -- Complete the acquisition of an additional high-potential technology that
will expand our pipeline and provide sources for additional funding for the
Company;
- -- Develop corporate partnerships for the future development of G3139.
In summary, we are well on our way to creating a new Genta Incorporated that
will have long-term viability and sustainability. I again want to thank you, our
shareholders, for your continued support and faith in Genta and in its
technology. We all continue to strive to fulfill the dream of our founders and
all employees, past and present, of developing a significant advance in the
fight against cancer.
The statements contained in this report that are not historical are
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended, including statements regarding the expectations, beliefs, intentions
or strategies regarding the future. Without limiting the foregoing, the words
"anticipates," "believes," "expects," "intends," "may" and "plans" and similar
expressions are intended to identify forward-looking statements. The Company
intends that all forward-looking statements be subject to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements reflect the Company's views as of the date they are
made with respect to future events, but are subject to many risks and
uncertainties, which could cause the actual results of the Company to differ
materially from any future results expressed or implied by such forward-looking
statements. For example, the results obtained in pre-clinical studies may not be
indicative of results that will be obtained in clinical trials; Genta has not
successfully completed human clinical trials of a product based on antisense
technology; and delays in the completion of clinical trials as a result of
delays in patient enrollment or other factors may occur. Examples of such risks
and uncertainties also include, but are not limited to: the obtaining of
sufficient financing to maintain the Company's planned operations; the timely
development, receipt of necessary regulatory approvals and acceptance of new
products; the successful application of the Company's technology to produce new
products; the obtaining of proprietary protection for any such
8
<PAGE> 33
GENTA INCORPORATED REPORT TO SHAREHOLDERS JUNE 1, 1999
technology and products; the impact of competitive products and pricing and
reimbursement policies; and the changing of market conditions. The Company does
not undertake to update forward-looking statements.
I hope that you are as excited and encouraged by our achievements as we are. We
are very appreciative of the support of our shareholders, and I look forward to
reporting even greater progress to you in the future.
Sincerely,
Kenneth G. Kasses, Ph.D.
Chairman, President, and Chief Executive Officer
- ----------------
(a) Jansen, Burkhard, et al., "bcl-2 antisense therapy chemosensitizes human
melanoma in SCID mice," Nature Medicine,4(2):232-234 (Feb., 1997)
(b) Tolcher, A., et al., "Downregulation of bcl-2 expression by
antisense-oligonucleotide (AS-ODN) treatment enhances mitoxantrone cytotoxicity
in the androgen-dependent Shionogi tumor model." Proc. Amer. Assoc. Canc. Res.
40:484 (Mar., 1999)
(c) Wong, F., et al., "Low-dose antisense oligonucleotides to bcl-2 with
cyclophosphaimde cures SCID/Rag-2 mice with a human B cell lymphoma." Proc.
Amer. Assoc. Canc. Res. 40:20 (Mar., 1999)
(d) Yang, D., et al., "Tumor regression of human breast carcinomas by
combination therapy of anti-bcl-2 antisense oligonucleotide and chemotherapeutic
drugs." Proc. Amer. Assoc. Canc. Res. 40:729 (Mar., 1999)
(e) Waters, Justin S., et al., "Results of a Phase I Clinical Trial of BCL-2
Antisense Molecule G3139 (GENTA) in Patients with Non-Hodgkin's Lymphoma (NHL)."
Proc. ASCO 18:4a (May, 1999)
(f) Morris, Michael, J., et al., "A Phase I/IIA Dose-Escalating trial of bcl-2
Antisense (G3139) Treatment by 14-Day Continuous Intravenous Infusion (CI) for
Patients with Androgen-independent Prostate Cancer or Other Advanced Solid Tumor
Malignancies." Proc. ASCO 18:323a (May, 1999)
(g) Jansen, Burkhard, et al., "A Phase I-II Study with Dacarbazine and BCL-2
Antisense Oligonucleotide G3139 (GENTA) as a Chemosensitizer in Patients with
Advanced Malignant Melanoma." Proc. ASCO 18:531a (May, 1999)
9
