<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 11, 1998
REGISTRATION NO. 333-____________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
- --------------------------------------------------------------------------------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
- --------------------------------------------------------------------------------
SCICLONE PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
CALIFORNIA 2834 94-3116852
(State or other jurisdiction of (Primary Standard Industrial (IRS Employer
incorporation or organization) Classification Number) Identification No.)
</TABLE>
901 MARINERS ISLAND BOULEVARD, SUITE 205
SAN MATEO, CALIFORNIA 94404
(650) 358-3456
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
- --------------------------------------------------------------------------------
DONALD R. SELLERS
PRESIDENT AND CHIEF EXECUTIVE OFFICER
SCICLONE PHARMACEUTICALS, INC.
901 MARINERS ISLAND BOULEVARD, SUITE 205
SAN MATEO, CALIFORNIA 94404
(650) 358-3456
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
Copies to:
J. HOWARD CLOWES, ESQ.
Gray Cary Ware & Freidenrich LLP
139 Townsend Street, Suite 400
San Francisco, California 94107
(415) 836-2500
- --------------------------------------------------------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time as described in the Prospectus after the effective date of this
Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] _______________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] _______________
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
Title of Each Class of Securities AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING REGISTRATION FEE
to be Registered REGISTERED PER SHARE PRICE
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock (no par value) 2,666,667 shares (1) $3.25 (2) $8,666,668 $2,557
- ----------------------------------------------------------------------------------------------------------------------------------
Common Stock (no par value) 150,000 shares (3) $5.67 (4) $850,500 $251
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL 2,816,667 shares $9,517,168 $2,808
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Represents the number of shares of Common Stock issuable upon conversion
of all issued shares of Series C Preferred Stock as described in the
Prospectus, at an assumed conversion price pursuant to the Company's
agreement with the Series C Investors. Additional shares will be
issuable upon exercise of warrants issued as described in the
Prospectus. Pursuant to Rule 416 of the Securities Act, this
Registration Statement also covers such indeterminable additional shares
as may become issuable upon conversion of shares of Series C Preferred
Stock as a result of any future stock splits, stock dividends or similar
transactions.
(2) Estimated solely for the purpose of computing the registration fee
pursuant to Rule 457(c) of the 1933 Act and based on the average of the
high and low sales prices of the Common Stock of SciClone
Pharmaceuticals, Inc. reported on the Nasdaq National Market on May 5,
1998.
<PAGE> 2
(3) Represents shares issuable upon exercise of outstanding warrants issued
as described in the Prospectus. Pursuant to Rule 416 of the Securities
Act, this Registration Statement also covers such indeterminable
additional shares as may become issuable as a result of any future stock
splits, stock dividends or similar transactions.
(4) Estimated solely for the purpose of computing the registration fee in
accordance with Rule 457(g)(1) of the Securities Act.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SUCH SECTION 8(A),
MAY DETERMINE.
================================================================================
<PAGE> 3
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION DATED MAY 12, 1998
2,816,667 SHARES
SCICLONE PHARMACEUTICALS, INC.
COMMON STOCK
The 2,816,667 shares of Common Stock (the "Shares") of SciClone
Pharmaceuticals, Inc., a California corporation ("SciClone" or the "Company"),
offered by this Prospectus are issuable upon conversion of issued shares of
Series C Preferred Stock of the Company (the "Series C Shares") and upon
exercise of issued warrants to purchase Common Stock of the Company (the
"Warrants"). The Series C Shares and Warrants were issued in connection with a
privately placed equity financing to institutional investors, pursuant to a
Preferred Stock Investment Agreement (the "Investment Agreement"). The Series C
Shares are convertible into shares of the Company's Common Stock, calculated
pursuant to a formula based on the average closing bid price of a share of the
Company's Common Stock during any three consecutive trading days within the
22-day trading period immediately prior to conversion of the Series C Shares as
set forth in the Company's Certificate of Determination Regarding the Terms of
the Series C Preferred Stock (the "Certificate of Determination"). The Shares
are being offered for resale by the purchasers of Series C Shares and recipients
of Warrants under the Investment Agreement (the "Series C Investors") and by the
holders of Warrants issued to the placement agent for such private placement
(together with the Series C Investors, the "Selling Shareholders").
The Warrants are exercisable for 150,000 shares of the Company's Common
Stock at a price per share of $5.67, and may be exercised for cash or on a
cashless basis based on the net appreciated value of the underlying shares. The
Company has agreed to register the Shares under the Securities Act of 1933, as
amended (the "Securities Act"). The Company is also obligated to use its best
efforts to maintain its listing under the Nasdaq National Market and list such
Shares accordingly, and in addition, take certain actions to comply with
applicable state securities laws and regulations. See "Plan of Distribution."
The Company will bear all out-of-pocket expenses incurred in connection
with the registration of the Shares, including, without limitation, all
registration and filing fees imposed by the Securities and Exchange Commission
(the "Commission"), the National Association of Securities Dealers, Inc. (the
"NASD") and blue sky laws, printing expenses, transfer agents' and registrars'
fees, and the reasonable fees and disbursements of the Company's outside counsel
and independent accountants, but excluding transfer or other taxes and other
costs and expenses incident to the issuances of the Shares.
The Company's Common Stock is quoted on The Nasdaq National Market under
the symbol "SCLN." On May 5, 1998, the last sale price of the Company's Common
Stock as reported on The Nasdaq National Market was $3.25.
----------------------------------
<PAGE> 4
SEE "RISK FACTORS" BEGINNING ON PAGE 6 FOR INFORMATION THAT SHOULD BE
CONSIDERED BY PROSPECTIVE PURCHASERS OF THE SHARES OFFERED HEREBY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
----------------------------------
The date of this Prospectus is May 12, 1998.
3
<PAGE> 5
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 (if required) and other
information with the Commission. The reports, proxy statements and other
information filed by the Company with the Commission may be inspected and copied
at the public reference facilities maintained by the Commission at Judiciary
Plaza, Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
Regional Offices of the Commission located at Northwestern Atrium Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60611 and 7 World Trade
Center, Suite 1300, New York, New York 10048. Copies of such material can also
be obtained by mail from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549. The Company's Common Stock is traded
on The Nasdaq National Market. Reports and other information concerning the
Company can also be inspected at the offices of the National Association of
Securities Dealers, Inc., Market Listing Section, 1735 K Street, N.W.,
Washington, D.C. 20006. Such reports and other information may also be inspected
without charge at a Web site maintained by the Commission. The address of the
site is http://www.sec.gov.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the Company
pursuant to the Exchange Act are incorporated herein by reference:
1. Annual Report on Form 10-K for the year ended December 31, 1997,
filed with the Commission on April 2, 1998;
2. The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A filed under the
Exchange Act, including any amendment or report filed for the
purpose of updating such description;
3. The definitive Proxy Statement for the Company's 1998 Annual
Meeting of Shareholders filed with the Commission on April 30,
1998 pursuant to Regulation 14A.
All documents and reports subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Registration Statement and prior to the effective date of this Registration
Statement shall be deemed to be incorporated by reference herein and to be a
part hereof from the date of filing of such documents or reports. Any statement
contained in a document incorporated by reference or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded for purposes of
this Registration Statement to the extent that a statement contained herein or
in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Registration Statement. The Company
will provide without charge to each person to whom this Registration Statement
is delivered, upon written or oral request, a copy of any or all of the
foregoing documents incorporated by reference in this Registration Statement
(other than any exhibits thereto). Requests for such documents should be
directed to SciClone Pharmaceuticals, Inc. at 901 Mariners Island Boulevard,
Suite 205, San Mateo, California 94404 (telephone number (650) 358-3456), Attn.:
Investor Relations.
4
<PAGE> 6
THE COMPANY
SciClone Pharmaceuticals, Inc. ("SciClone" or the "Company") is an
international biopharmaceutical company that acquires, develops, and
commercializes specialist-oriented drugs for treating chronic and
life-threatening diseases, including hepatitis B, hepatitis C, cancer, immune
system disorders and cystic fibrosis. SciClone has two drugs in clinical
development, ZADAXIN(R) (thymosin alpha 1) and CPX, and has other drug
candidates in preclinical development.
ZADAXIN, an immunomodulator (i.e., an immune system regulator), is the
Company's lead drug, targeting hepatitis B, hepatitis C, cancer, vaccine
enhancement and certain immune system disorders such as DiGeorge Anomaly.
ZADAXIN is approved and marketed in the People's Republic of China, the
Philippines and Singapore for treatment of hepatitis B, one of the most common
chronic infectious diseases in the world. In the first quarter of 1998, ZADAXIN
was approved in Kuwait and Peru for treatment of hepatitis B, and in Argentina
for use as an influenza vaccine adjuvant. ZADAXIN is also approved in Italy for
use as an influenza vaccine adjuvant. ZADAXIN has now been approved in each of
the three primary regions SciClone has targeted for hepatitis B sales -- Asia,
Latin America and the Middle East. Collectively, these regions represent most of
the potential hepatitis B markets worldwide. The Company has filed for approval
to market ZADAXIN in additional countries in Asia, Latin America and the Middle
East. SciClone has worldwide marketing, development and manufacturing rights to
ZADAXIN, except in Japan, where the Company's rights have been sublicensed.
In the U.S. and Europe, the Company is planning pivotal phase 3
development of the combination of ZADAXIN plus interferon for the treatment of
hepatitis C, a worldwide epidemic affecting over 170 million worldwide including
ten million people in the U.S., Europe and Japan, the world's largest
pharmaceutical markets. Clinical data demonstrate that the combination of
ZADAXIN plus interferon could be a significant therapeutic advance in the fight
against hepatitis C. Interferon, the only approved therapy to treat hepatitis C,
leads to a sustained response in only 5% to 20% of patients and causes
unpleasant side effects. The Company is pursuing a corporate partnering
arrangement for the pivotal phase 3 development of the combination of ZADAXIN
plus interferon for hepatitis C in the U.S. and Europe.* In Italy a ZADAXIN
marketing application for treatment of non small-cell lung cancer is pending.
In Japan, the world's leading market for viral hepatitis therapies, the
Company has licensed exclusive development and marketing rights to ZADAXIN to
Schering-Plough K.K. ("SPKK"), the Japanese subsidiary of Schering-Plough
Corporation, a leading marketer of viral hepatitis therapies worldwide. In the
second quarter of 1998, SPKK started a pivotal phase 3 ZADAXIN hepatitis B trial
in Japan. SPKK is also developing ZADAXIN in a phase 2 hepatitis C study.
CPX is SciClone's second drug in clinical development. CPX is an orally
administered protein-repair therapy initially developed by the U.S. National
Institutes of Health ("NIH") as a potential treatment for cystic fibrosis
("CF"). SciClone acquired an exclusive license to CPX from the NIH. CF is caused
by mutations in the gene that encodes the cystic fibrosis transmembrane
conductance regulator ("CFTR") protein. More than 70% of the CF patients have
the delta F508 mutation, the most common cause of CF. In October 1997, Harvey
Pollard, M.D., Ph.D, of the Uniformed Services University of the Health Sciences
and formerly of the NIH, presented breakthrough new preclinical data
demonstrating that CPX corrects the two key molecular defects causing CF --
impaired chloride ion transport and abnormal CFTR trafficking. These preclinical
data indicate that CPX is the only drug in clinical development with the
potential to correct the two key molecular defects in CF patients. The Company
has obtained orphan drug status for CPX from the United States Food and Drug
Administration ("FDA"). In 1997, the FDA awarded the Company a $100,000
research grant for phase 1 development of CPX. The Company completed phase 1
development of CPX in April 1998.
The Company was incorporated in California in 1990. Its principal
executive offices are located at 901 Mariners Island Boulevard, Suite 205, San
Mateo, California 94404, and its telephone number is (650) 358-3456. The
Company's international operating subsidiary, SciClone Pharmaceuticals
International Ltd. ("SciClone International"), is incorporated in the Cayman
Islands and headquartered in Hong Kong. The Company also has office locations in
Singapore, Taiwan and Japan.
5
<PAGE> 7
RISK FACTORS
An investment in the Common Stock offered hereby involves a high degree
of risk and the Common Stock should not be purchased by persons who cannot
afford the loss of their entire investment. Purchasers should carefully consider
the following risk factors in conjunction with the other information included
and incorporated by reference in this Prospectus before purchasing or otherwise
acquiring the Common Stock offered hereby.
This Prospectus contains forward-looking statements within the meaning
of Section 27A of the Securities Act and Section 21E of the Securities Exchange
Act and the Company has attempted to identify such statements with an asterisk
("*"). Actual results could differ materially from those projected in these
forward-looking statements as a result of a variety of factors, including those
set forth below and elsewhere in this Prospectus.
DEPENDENCE ON ZADAXIN AND CPX. The Company's principal drug development
efforts are currently focused primarily on ZADAXIN and CPX. Clinical trials of
ZADAXIN sponsored by the Company and/or other parties are currently in progress
or planned and favorable results from such trials will be necessary to gain
regulatory approval in major pharmaceutical markets. Sales of ZADAXIN commenced
in 1997 but are not material at this time. While ZADAXIN has been approved for
commercial sale for treatment of hepatitis B in the People's Republic of China,
Kuwait, Peru, the Philippines and Singapore, no assurance can be given that
ZADAXIN approvals will be obtained in additional countries or for the treatment
of additional indications, such as hepatitis C or cancer, in a timely fashion or
at all. The Company's launch of ZADAXIN in the People's Republic of China, the
Philippines and Singapore is the first commercial introduction of ZADAXIN by the
Company, and no assurance can be given that commercialization of ZADAXIN will
prove successful. The Company has not yet launched ZADAXIN in Argentina, Italy,
Kuwait or Peru and no assurance can be given that future launch of ZADAXIN will
prove successful in these countries or any additional countries. Future sales of
ZADAXIN will depend on market acceptance and successful distribution. In
particular, although the People's Republic of China has the highest hepatitis B
prevalence rate in the world, the low average income and poorly developed
distribution infrastructure present ongoing challenges to successful
commercialization of ZADAXIN in that market. Because the Company currently
relies on ZADAXIN as its sole source of revenue, the failure to demonstrate the
drug's efficacy in future clinical trials, obtain additional marketing approvals
or commercialize the drug successfully would have a material adverse effect on
the Company.
The Company may experience delays and encounter difficulties in clinical
trials of CPX. In addition, there can be no assurance that any clinical trial
will provide statistically significant evidence of the efficacy of CPX in
treating CF. A failure to demonstrate the safety and efficacy of CPX in a CF
clinical trial, obtain regulatory approval of CPX for CF or successfully
commercialize CPX would have a material adverse effect on the Company.
NO HISTORY OF SIGNIFICANT REVENUES; CONTINUING OPERATING LOSSES. The
Company has only recently generated revenues from the commercialization of its
lead product, ZADAXIN, and there is substantial uncertainty regarding the timing
and amount of any future revenues and whether such future revenues will be
material. The Company cannot predict when or if marketing approvals for CPX will
be obtained or additional marketing approvals for ZADAXIN will be obtained. Even
if such approvals are obtained, there can be no assurance that ZADAXIN and CPX
will be commercialized successfully. The Company has experienced significant
operating losses since its inception and has a substantial accumulated deficit.
The Company expects its operating expenses to increase over the next several
years as it expands its development, clinical testing and marketing
capabilities. The Company's ability to achieve a profitable level of operations
is dependent in large part on successful expansion of the market for ZADAXIN in
Asia, Latin America and the Middle East, obtaining additional regulatory
approvals for ZADAXIN and/or future products, entering into a corporate
partnering arrangement for pivotal phase 3 development of the combination of
ZADAXIN plus interferon for hepatitis C in the U.S. and Europe, entering into
other agreements for product development and commercialization, where
appropriate, and continuing to expand from development into successful
marketing. There can be no assurance that the Company will ever achieve a
profitable level of operations.
FUTURE CAPITAL NEEDS; UNCERTAINTY OF ADDITIONAL FINANCING. Since
inception, the Company has financed its operations primarily through sales of
equity securities. The Company will need to obtain additional financing through
sales of equity securities to support its long-term product development
6
<PAGE> 8
and commercialization programs. The Company believes its existing capital
resources and interest on funds available are adequate to maintain its current
and planned operations at least through 1998.* The Company is considering
corporate partnering and other opportunities to increase its capital resources.
However, the Company's future capital requirements will depend on many factors,
including the level of ZADAXIN product sales, the availability of complementary
products, technologies and businesses, the initiation of preclinical and
clinical trials and testing, the timing and cost of regulatory approvals, patent
costs, competing technological and market developments, the nature of existing
and future collaborative relationships, and the Company's ability to establish
development, sales, manufacturing and marketing arrangements. The Company
continues to pursue corporate partnering and public and private financing
alternatives. If additional funds are raised by the Company through the issuance
of equity securities or securities convertible into or exercisable for equity
securities, the percentage ownership of the then current shareholders of the
Company will be reduced. The Company may issue a series of Preferred Stock with
rights, preferences and privileges senior to those of the Company's Common
Stock. There can be no assurance that such financing will be available on
acceptable terms or a timely basis, if at all. The unavailability or timing of
financing could prevent or delay the Company's long-term product development and
commercialization programs and may require curtailment of operations of the
Company.
DEPENDENCE ON THIRD PARTIES. The Company's strategy contemplates that it
will enter into various arrangements with other entities. To date, the Company
has acquired rights to ZADAXIN, CPX and certain other drugs but is only actively
pursuing clinical development of ZADAXIN and CPX. Failure to license or
otherwise acquire rights to additional drugs would result in a shortage of
products for development. In addition, the Company has licensed exclusive rights
to develop and market ZADAXIN in Japan to SPKK. SPKK has a substantial
commitment to alpha interferon, which is an approved therapy for hepatitis B and
hepatitis C in Japan. There can be no assurance that the relationship will prove
successful or that the Company will be able to negotiate additional arrangements
in the future. The amount and timing of resources that collaborators devote to
their activities with the Company will not be within the control of the Company
and may be affected by financial difficulties or other factors affecting these
third parties. There can be no assurance that such parties will perform their
obligations as expected. Moreover, the Company's ability to obtain regulatory
approval in one country may be delayed or adversely affected by the timing of
regulatory activities and approvals in one or more other countries, particularly
if the Company does not participate in the regulatory approval process in such
other countries.
FOREIGN SALES AND OPERATIONS. The Company's financial condition in the
near term will be highly dependent on ZADAXIN sales in foreign jurisdictions,
where sales and operations are subject to inherent risks, including difficulties
and delays in obtaining pricing approvals and reimbursement, unexpected changes
in regulatory requirements, tariffs and other barriers, political instability,
difficulties in staffing and managing foreign operations, longer payment cycles,
greater difficulty in accounts receivable collection, currency fluctuations and
potential adverse tax consequences. Certain foreign countries regulate pricing
of pharmaceuticals and such regulation may result in prices significantly below
those that would prevail in a free market. The majority of the Company's current
sales are to customers in the People's Republic of China where the Company's
accounts receivable collections are typically 180 days or greater. Such
collections to date have been slower than anticipated and the Company is
currently monitoring the situation. If collection of outstanding accounts
receivable does not continue to improve, it may become necessary to further
increase the related allowances for bad debts or slow the rate of sales to this
market.
PATENTS AND PROPRIETARY RIGHTS. The U.S. and most European composition
of matter patents for thymosin alpha 1 have expired. The Company will in the
future have only limited composition of matter patents for thymosin alpha 1 or
other products and this could adversely affect the Company's proprietary rights.
However, the Company owns or has exclusive licenses for use and/or process
patents or patent applications in the U.S., Europe, Japan and other
jurisdictions for thymosin alpha 1, and for CPX in the U.S. and will seek to
protect such products from competition through such patent protection and
through other means. The Company's success is significantly dependent on its
ability to obtain patent protection for its products and technologies and to
preserve its trade secrets and operate without infringing on the proprietary
rights of third parties. No assurance can be given that the Company's pending
patent applications will result in the issuance of patents or that any patents
will provide competitive advantages or will not be invalidated or circumvented
by its competitors. Moreover, no assurance can be given that patents are not
issued to, or patent applications have not been filed by, other companies which
would have an adverse effect on the
7
<PAGE> 9
Company's ability to use, manufacture or market its products or maintain its
competitive position with respect to its products. Numerous patents and patent
applications relating to thymosin alpha 1 are held under exclusive license and
the breach by the Company of the terms of such license could result in the loss
of the Company's rights to such patents and patent applications. Other companies
obtaining patents claiming products or processes useful to the Company may bring
infringement actions against the Company and such litigation is typically costly
and time-consuming. As a result, the Company may be required to obtain licenses
from others or not be able to use, manufacture or market its products. Such
licenses may not be available on commercially reasonable terms, if at all.
The patent positions of biotechnology firms generally are highly
uncertain and involve complex legal and factual questions. No consistent policy
has emerged regarding the validity and scope of claims in biotechnology patents,
and courts have issued varying interpretations in the recent past, and legal
standards concerning validity, scope and interpretations of claims in
biotechnology patents may continue to evolve. Even issued patents may later be
modified or revoked by the U.S. Patent and Trademark Office, the European Patent
Office or the courts in proceedings instituted by third parties. Moreover, the
issuance of a patent in one country does not assure the issuance of a patent
with similar claims in another country and claim interpretation and infringement
laws vary among countries, so the extent of any patent protection is uncertain
and may vary in different countries.
Pharmaceuticals are not patentable in certain countries in SciClone's
ZADAXIN territory, or have only recently become patentable, and enforcement of
intellectual property rights in many countries in such territory has been
limited or non-existent. Future enforcement of patents and proprietary rights in
many countries in SciClone's ZADAXIN territory can be expected to be problematic
or unpredictable. There can be no assurance that any patents issued or licensed
to the Company will provide it with competitive advantages or will not be
challenged by others. No assurance can be given that holders of patents licensed
to the Company will file, prosecute, extend or maintain their patents in
countries where the Company has rights. Furthermore, there can be no assurance
that others will not independently develop similar products or will not design
around patents issued or licensed to the Company.
GOVERNMENT REGULATION AND PRODUCT APPROVALS. The research, preclinical
and clinical development, manufacturing, marketing and sales of pharmaceuticals,
including ZADAXIN, CPX and the Company's other drug candidates, are subject to
extensive regulation by governmental authorities. Products developed by the
Company cannot be marketed commercially in any jurisdiction in which they have
not been approved. The process of obtaining regulatory approvals is lengthy and
requires the expenditure of substantial resources. In some countries where the
Company contemplates marketing ZADAXIN, the regulatory approval process for
drugs not previously approved in countries that have established clinical trial
review procedures is uncertain and this uncertainty may result in delays in
granting regulatory approvals. In addition, in certain countries such as Japan,
the process for obtaining regulatory approval is time consuming and costly
because all clinical trials and most preclinical studies must be conducted
there. The Company is currently sponsoring clinical trials and pursuing
regulatory approvals of ZADAXIN in a number of countries and of CPX in the U.S.,
but there can be no assurance that the Company will be able to complete such
trials, that such trials, if completed, will fulfill regulatory approval
criteria or that the Company will ultimately obtain approvals in such countries.
Adverse results in the Company's development programs also could result in the
placement of restrictions on the use of ZADAXIN and CPX or revocation of the
approval. The marketing approval for ZADAXIN in Singapore requires a patient
surveillance program to continue study of the drug's safety and efficacy.
Adverse results in such program could result in the placement of restrictions on
the use of ZADAXIN or revocation of the approval in Singapore. Failure to comply
with the applicable U.S. or foreign regulatory requirements can, among other
things, result in Warning Letters, fines, suspensions of regulatory approvals,
product recalls or seizures, operating restrictions, injunctions and criminal
prosecutions. Further, additional government regulation may be established or
imposed which could prevent or delay regulatory approval of ZADAXIN, CPX or any
future products of the Company.
MANUFACTURING. The Company has entered into contract manufacturing and
supply agreements to source ZADAXIN and CPX. The Company has experienced delays
of supply of thymosin alpha 1 bulk drug in the past and could do so again in the
future. To be successful, the Company's products must be manufactured in
commercial quantities in compliance with regulatory requirements and at an
acceptable cost. While the Company believes it has and will be able in the
future to establish manufacturing relationships with experienced suppliers
capable of meeting the Company's needs, there can be no assurance that the
Company will establish long term manufacturing
8
<PAGE> 10
relationships with suppliers or that these suppliers will prove satisfactory.
The Company currently has vialing and packaging supply agreements in effect and
has a sufficient supply of finished thymosin alpha 1 for the near term and is
currently negotiating a new vialing and packaging supply agreement. No
assurances can be given that such new agreement will be reached. Production
interruptions, if they occur, could significantly delay clinical development of
potential products, reduce third party or clinical researcher interest and
support of proposed clinical trials. Such interruptions could also delay
commercialization of the Company's products and impair their competitive
position, which would have a material adverse effect on the business and
financial condition of the Company.
MARKETING AND SALES. The Company has established distribution
arrangements with local pharmaceutical distribution companies covering countries
in Asia, Latin America and the Middle East. However, no assurance can be given
that any such distribution arrangements will remain in place or prove
successful.
TECHNOLOGICAL CHANGE AND COMPETITION. Rapid technological development
may result in the Company's products becoming obsolete before they are marketed
or before the Company recovers a significant portion of the related development
and commercialization expenses. Competition in the pharmaceutical field is
intense and the Company expects that competition will increase. The Company's
competitors include major pharmaceutical companies, biotechnology firms and
universities and other research institutions, both in the U.S. and abroad, that
are actively engaged in research and development of products in the therapeutic
areas being pursued by the Company. Many of these companies and institutions
have substantially greater financial, technical, manufacturing, marketing and
human resource capabilities than the Company and extensive experience in
undertaking clinical testing and obtaining regulatory approvals necessary to
market drugs. Principal competitive factors in the pharmaceutical field include
efficacy, safety, price and therapeutic regimen. Where comparable products are
marketed by other companies price is also a competitive factor.
UNCERTAINTY OF THIRD PARTY REIMBURSEMENT; RESOURCES OF PATIENT
POPULATIONS. The Company's ability to successfully commercialize its products
may depend in part on the extent to which reimbursement for the cost of such
products will be available from government health administration authorities,
private health insurers and other organizations. Significant uncertainty exists
as to the reimbursement status of new therapeutic products and there can be no
assurance that third party reimbursement will be available for therapeutic
products the Company might develop. In many of the foreign countries in which
the Company intends to operate, reimbursement of ZADAXIN under government or
private health insurance programs will not be available. In the U.S., health
care reform is an area of increasing national attention and a priority of many
governmental officials. Certain reform proposals, if adopted, could impose
limitations on the prices the Company will be able to charge in the U.S. for its
products or the amount of reimbursement for the Company's products from
governmental agencies or third party payors. In many countries where the Company
has marketing rights for ZADAXIN, government resources and per capita income
levels may be so low that the Company's products will be prohibitively expensive
for a large percentage of the population. In such countries, there can be no
assurance that the Company will be successful in marketing its products on
economically favorable terms, if at all.
DEPENDENCE ON QUALIFIED PERSONNEL AND KEY INDIVIDUALS. Because of the
specialized scientific nature of the Company's business, the Company is highly
dependent upon its ability to continue to attract and retain qualified
management, scientific and technical personnel. There is intense competition for
qualified personnel in the areas of the Company's activities, and there can be
no assurance that the Company will be able to continue to attract and retain the
qualified personnel necessary for the development of its business. In addition,
many key responsibilities within the Company have been assigned to a relatively
small number of individuals. Loss of the services of any of these individuals
unless they were promptly replaced could be significantly detrimental to the
Company's development. The Company does not maintain key person life insurance
on the lives of any of its key personnel.
PRODUCT LIABILITY; ABSENCE OF INSURANCE. The Company's business will
expose it to potential product liability risks which are inherent in the
testing, manufacturing, marketing and sale of pharmaceutical products, and there
can be no assurance that product liability claims will not be asserted against
the Company. Product liability insurance for the pharmaceutical industry
generally is expensive to the extent that it is available at all. The Company
has product liability insurance coverage for clinical trials and commercial
sales. However, there can be no assurance that a product liability claim would
not adversely affect the business or financial condition of the Company.
9
<PAGE> 11
BLANK CHECK PREFERRED STOCK. The Company recently issued shares of
Series C Preferred Stock (the "Series C Shares") in a private placement with
proceeds of $4,000,000 (before deducting offering expenses). The Company's Board
of Directors has the authority to issue additional series of preferred stock and
to determine the price, rights, preferences, privileges and restrictions,
including voting rights, without any further vote or action by the Company's
shareholders. The rights of the holders of the Common Stock will be subject to,
and may be adversely affected by, the rights of the holders of any Preferred
Stock that may be issued in the future. The issuance of Preferred Stock, while
providing desirable flexibility in connection with possible acquisitions and
other corporate purposes, could have the effect of making it more difficult for
a third party to acquire a majority of the outstanding voting stock of the
Company.
SERIES C PREFERRED STOCK. Under certain conditions, each Series C Share
may convert into substantially more than one share of the Company's Common
Stock. If such events were to occur, the conversion of the Series C Shares would
have a dilutive effect on the common shareholders (see footnote 2 to Selling
Shareholders table). In connection with the issuance of the Series C Shares, the
Company will recognize a deemed dividend in the amount of $3,143,000 in the
second quarter ended June 30, 1998. This amount will increase the net loss and
net loss per share applicable to common shareholders and was calculated as
required by the SEC.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the shares of
Common Stock by the Selling Shareholders and all proceeds will go to the Selling
Shareholders to be used for their own purposes. The Company may receive cash
proceeds upon the exercise of the Warrants. The Company expects to use such
proceeds, if any, for working capital. The Company will not receive any proceeds
from conversions of the Series C Shares.
SELLING SHAREHOLDERS
The Selling Shareholders will hold shares of Common Stock which are
issuable upon conversion of the Series C Shares and upon exercise of the
Warrants. The table below lists the Selling Shareholders, the number of shares
of Common Stock which each will own, assuming a conversion date of May 6, 1998,
the number of shares of Common Stock subject to sale pursuant to this
Registration Statement and the number of shares of Common Stock each would own
assuming sale of all shares of Common Stock registered by this Registration
Statement.(3)
<TABLE>
<CAPTION>
Shares Beneficially Shares Offered Shares Beneficially
Owned Prior to the by this Owned After
Selling Shareholder (1) Offering (3) Prospectus(3) the Offering (2)
- ------------------------------------------- ------------------- -------------- -------------------
<S> <C> <C> <C>
Halifax Fund, L.P. 834,105 834,105 --
Heracles Fund 333,641 333,641 --
Themis Partners L.P. 166,822 166,822 --
Reedland Capital Partners 45,000 45,000 --
James Burness 5,000 5,000 --
</TABLE>
- ---------------------
10
<PAGE> 12
(1) The persons named in the table have sole voting and investment power
with respect to all shares of SciClone Common Stock shown as
beneficially owned by them, subject to community property laws, where
applicable.
(2) The number of shares set forth in the table represents an estimate of
the number of shares of Common Stock to be offered by the Selling
Shareholder and assumes the exercise of all Warrants as described in
this Prospectus. Pursuant to the Company's agreement with the Selling
Shareholders as set forth in the Investment Agreement, the number of
shares of Common Stock registered by this Registration Statement equals
the sum of the number of shares of Common Stock that would be issued had
the Series C Shares been converted at a conversion price of $1.50 plus
the number of shares of Common Stock issuable upon exercise of the
Warrants. Assuming a conversion price of $1.50, the number of shares of
Common Stock offered hereby would be as follows: Halifax Fund, L.P.,
1,729,166 shares; Heracles Fund, 691,666 shares; and Themis Partners
L.P., 345,835 shares. The actual number of shares of Common Stock
issuable upon conversion of Series C Shares and exercise of the Warrants
is indeterminate, is subject to adjustment and could be materially less
or more than such estimated number depending on factors which cannot be
predicted by the Company at this time, including among other factors,
the future market price of the Common Stock. The actual number of shares
of Common Stock offered hereby, and included in the Registration
Statement of which this Prospectus is a part, includes such additional
number of shares of Common Stock as may be issued or issuable upon
conversion of the Series C Shares and exercise of the Warrants by reason
of the floating rate conversion price mechanism or other adjustment
mechanisms described therein, or by reason of any stock split, stock
dividend or similar transaction involving the Common Stock, in order to
prevent dilution, in accordance with Rule 416 under the Securities Act.
Pursuant to the Certificate of Determination, if the Series C Shares had
been actually converted on May 6, 1998, the conversion price would have
been $3.24 at which price the Series C Shares would have been converted
into approximately 1,234,568 shares of Common Stock. Pursuant to the
Investment Agreement and the Certificate of Determination, the Series C
Shares are convertible by the Selling Shareholders only to the extent
that the number of shares of Common Stock thereby issuable (but not
including shares of Common Stock underlying unconverted shares of Series
C Shares) would not exceed 19.99% of the Company's outstanding Common
Stock as determined in accordance with Section 13(d) of the Exchange
Act.
(3) Assumes the sale of all shares offered hereby.
PLAN OF DISTRIBUTION
The Selling Shareholders may, from time to time, sell all or a portion
of the Shares on the NNM (or such other exchange on which the Common Stock may
from time to time be trading), in privately negotiated transactions or
otherwise, at fixed prices that may be changed, at market prices prevailing at
the time of sale, at prices related to such market prices or at negotiated
prices. The Shares may be sold by the Selling Shareholders by one or more of the
following methods, without limitation: (a) block trades in which the broker or
dealer so engaged will attempt to sell the Shares as agent but may position and
resell a portion of the block as principal to facilitate the transaction, (b)
purchases by a broker or dealer as principal and resale by such broker or dealer
for its account pursuant to this prospectus, (c) an exchange distribution in
accordance with the rules of such exchange, (d) ordinary brokerage transactions
and transactions in which the broker solicits purchasers, (e) privately
negotiated transactions, (f) short sales and (g) a combination of any such
methods of sale. In effecting sales, brokers and dealers engaged by the Selling
Shareholders may arrange for other brokers or dealers to participate. Brokers or
dealers may receive commissions or discounts from the Selling Shareholders (or,
if any such broker-dealer acts as agent for the purchaser of such Shares, from
such purchaser) in amounts to be negotiated which are not expected to exceed
those customary in the types of transactions involved. Broker-dealers may agree
with the Selling Shareholders to sell a specified number of such Shares at a
stipulated price per share, and, to the extent such broker-dealer is unable to
do so acting as agent for a Selling Shareholder, to purchase as principal any
unsold Shares at the price required to fulfill the broker-dealer commitment to
the Selling Shareholders. Broker-dealers who acquire Shares as principal may
thereafter resell such Shares from time to time in transactions (which may
involve block transactions of the nature described above) in the
over-the-counter market or otherwise at prices and on terms then prevailing at
the time of sale, at prices then related to the then-current market price or in
negotiated transactions and, in connection with such resales, may pay to or
receive from the purchasers of such Shares commissions as described above. The
Selling Shareholders may also sell the Shares in accordance with Rule 144 under
the Securities Act, rather than pursuant to this Prospectus.
The Selling Shareholders and any broker-dealers or agents that
participate with the Selling Shareholders in sales of the Shares may be deemed
to be "underwriters" within the meaning of the Securities Act in connection with
such sales. In such event, any commissions received by such broker-dealers or
agents and any profit on the resale of
11
<PAGE> 13
the Shares purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act.
From time to time the Selling Shareholders may engage in short sales,
short sales against the box, puts and calls and other transactions in securities
of the Company or derivatives thereof, and may sell and deliver the Shares in
connection therewith or in settlement of securities loans. If the Selling
Shareholders engage in such transactions, the Conversion Price may be affected.
From time to time the Selling Shareholders may pledge their Shares pursuant to
the margin provisions of its customer agreements with its brokers. Upon a
default by the Selling Shareholders, the broker may offer and sell the pledged
Shares from time to time.
The Company is required to pay certain expenses incident to the
registration of the shares.
The Selling Shareholders and any other persons participating in the sale
or distribution of the Shares will be subject to applicable provisions of the
Exchange Act and the rules and regulations thereunder, which provisions may
limit the timing of purchases and sales of any of the Shares by the Selling
Shareholders or any other such person. The foregoing may affect the
marketability of the Shares.
The Company has agreed to indemnify in certain circumstances the Selling
Shareholders against certain liabilities, including liabilities under the
Securities Act. The Selling Shareholders have agreed to indemnify in certain
circumstances the Company against certain liabilities, including liabilities
under the Securities Act.
The Company has agreed to use its best efforts to keep the Registration
Statement, of which this Prospectus constitutes a part, effective until the
Shares may be or have been sold pursuant to Rule 144(k) of the Securities Act.
12
<PAGE> 14
LEGAL MATTERS
The legality of the Shares is being passed upon by Gray Cary Ware &
Freidenrich LLP, Palo Alto, California.
EXPERTS
The consolidated financial statements and schedule of the Company
appearing in the Company's Annual Report (Form 10-K) for the year ended December
31, 1997 have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon, included therein and incorporated herein by
reference. Such consolidated financial statements and schedule are incorporated
herein by reference in reliance upon such report given upon the authority of
such firm as experts in accounting and auditing.
13
<PAGE> 15
================================================================================
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION
OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFERING DESCRIBED HEREIN,
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY
SECURITIES OTHER THAN THE REGISTERED SECURITIES TO WHICH IT RELATES, OR AN OFFER
TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, IN ANY JURISDICTION IN WHICH IT
IS UNLAWFUL TO MAKE SUCH 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 AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY
TIME SUBSEQUENT TO THE DATE HEREOF.
TABLE OF CONTENTS
PAGE
----
Available Information.....................................
Incorporation of Certain Documents By Reference...........
The Company...............................................
Risk Factors..............................................
Use of Proceeds...........................................
Selling Shareholders......................................
Plan of Distribution......................................
Legal Matters.............................................
Experts...................................................
================================================================================
================================================================================
2,816,667 SHARES
SCICLONE PHARMACEUTICALS, INC.
COMMON STOCK
PROSPECTUS
May 12, 1998
================================================================================
<PAGE> 16
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the costs and expenses in connection with
the sale and distribution of the securities being registered, other than
underwriting discounts and commissions. All of the amounts shown are estimates
except the Securities and Exchange Commission registration fees and Nasdaq
filing fee.
<TABLE>
<CAPTION>
To be Paid
By The
Registrant
----------
<S> <C>
SEC Registration Fee $ 2,808
Nasdaq filing fee $17,500
Accounting fees and expenses $ 7,000
Legal fees and expenses $15,000
Miscellaneous expenses $ 2,692
Total.......................................$45,000
=======
</TABLE>
- -------------------
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
As permitted by Section 204 of the California Corporations Code (the
"CCC"), the Registrant's Articles of Incorporation provide that each person who
is or was or who had agreed to become a director or officer of the Registrant or
who had agreed at the request of the Registrant's Board of Directors or an
officer of the Registrant to serve as an employee or agent of the Registrant or
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, shall be indemnified by the Registrant
to the full extent permitted by the CCC or any other applicable laws. Such
Articles of Incorporation also provide that no amendment or repeal of such
Articles shall apply to or have any effect on the right to indemnification
permitted or authorized thereunder for or with respect to claims asserted before
or after such amendment or repeal arising from acts or omissions occurring in
whole or in part before the effective date of such amendment or repeal.
The Registrant's Bylaws provide that the Registrant shall indemnify to
the full extent authorized by law any person made or threatened to be made a
party to an action or a proceeding, whether criminal, civil, administrative or
investigative, by reason of the fact that he, his testator or intestate was or
is a director, officer or employee of the Registrant or any predecessor of the
Registrant or serves or served any other enterprise as a director, officer or
employee at the request of the Registrant or an predecessor of the Registrant.
The Registrant's Bylaws also provide that the Registrant may enter into one or
more agreements with any person which provides for indemnification greater or
different than that provided in such Articles of Incorporation.
The Registrant has entered into indemnification agreements with its
directors and certain of its officers.
The Registrant intends to purchase and maintain insurance on behalf of
any person who is a director or officer against any loss arising from any claim
asserted against him and incurred by him in any such capacity, subject to
certain exclusions.
See also the undertakings set out in response to Item 17 herein.
II-1
<PAGE> 17
ITEM 16. EXHIBITS.
The following exhibits are filed with this Registration Statement:
EXHIBIT NO. DESCRIPTION OF EXHIBIT
----------- ----------------------
3.1* Certificate of Determination Regarding the Terms of the
Series C Preferred Stock filed with the California
Secretary of State on March 25, 1998.
4.1* Preferred Stock Investment Agreement by and between
Registrant, Halifax Fund, L.P., Heracles Fund and Themis
Partners L.P. dated as of March 27, 1998.
4.2* Registration Rights Agreement by and between Registrant,
Halifax Fund, L.P., Heracles Fund and Themis Partners
L.P. dated as of April 2, 1998.
4.3* Form of Common Stock Purchase Warrant
5.1 Opinion of Gray Cary Ware & Freidenrich LLP.
23.1 Consent of Ernst & Young LLP, independent auditors.
23.2 Consent of Gray Cary Ware & Freidenrich LLP (included in
Exhibit 5.1).
24.1 Power of Attorney (included in the Signature Page
contained in Part II of the Registration Statement).
* Incorporated by reference from the Company's Annual Report on Form 10-K
filed with the Commission on April 2, 1998.
ITEM 17. UNDERTAKINGS.
A. The undersigned Registrant hereby undertakes:
II-2
<PAGE> 18
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933 (the "Securities Act");
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a 20% change
in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement; provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the Registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
B. The undersigned Registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
C. The undersigned Registrant hereby undertakes to deliver or cause
to be delivered with the prospectus, to each person to whom the prospectus is
sent or given, the latest annual report to security holders that is incorporated
by reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X are not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
D. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers, and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer, or controlling
person of the Registrant in the successful defense of any action, suit, or
proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
II-3
<PAGE> 19
E. The undersigned Registrant hereby undertakes that:
(1) For the purposes of determining any liability under the
Securities Act, the information omitted from the form of prospectus filed as
part of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4)
or 497(h) under the Securities Act shall be deemed to be part of the
registration statement as of the time it was declared effective.
(2) For the purposes of determining any liability under the
Securities Act, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-4
<PAGE> 20
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of San Mateo, State of California on May 11, 1998.
SCICLONE PHARMACEUTICALS, INC.
By: /s/ Donald R. Sellers
-------------------------------------
Donald R. Sellers
President and Chief Executive Officer
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Donald R. Sellers and Shawn K. Singh, and
each of them, as his or her true and lawful attorneys-in-fact and agents, with
full power of substitution and resubstitution, for him or her and in his or her
name, place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement on Form
S-3, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be done
in connection therewith, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said
attorney-in-facts and agents, or either of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ Donald R. Sellers President, Chief Executive Officer and Director May 11, 1998
- ------------------------------------- (Principal Executive Officer)
Donald R. Sellers
/s/ Jere E. Goyan Chairman of the Board and Director May 11, 1998
- -------------------------------------
Jere E. Goyan, Ph.D.
/s/ Diane Lee Director, Corporate Finance and Administration May 11, 1998
- ------------------------------------- (Principal Financial and Accounting Officer)
Diane Lee
Director May __, 1998
- -------------------------------------
John D. Baxter, M.D.
/s/ Edwin C. Cadman Director May 11, 1998
- -------------------------------------
Edwin C. Cadman, M.D.
/s/ Rolf H. Henel Director May 11, 1998
- -------------------------------------
Rolf H. Henel
</TABLE>
II-5
<PAGE> 21
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION OF EXHIBIT
----------- ----------------------
3.1* Certificate of Determination Regarding the Terms of the
Series C Preferred Stock filed with the California
Secretary of State on March 25, 1998.
4.1* Preferred Stock Investment Agreement by and between
Registrant, Halifax Fund, L.P., Heracles Fund and Themis
Partners L.P. dated as of March 27, 1998.
4.2* Registration Rights Agreement by and between Registrant,
Halifax Fund, L.P., Heracles Fund and Themis Partners
L.P. dated as of April 2, 1998.
4.3* Form of Common Stock Purchase Warrant
5.1 Opinion of Gray Cary Ware & Freidenrich LLP.
23.1 Consent of Ernst & Young LLP, independent auditors.
23.2 Consent of Gray Cary Ware & Freidenrich LLP (included in
Exhibit 5.1).
24.1 Power of Attorney (included in the Signature Page
contained in Part II of the Registration Statement).
- ----------
* Incorporated by reference from the Company's Annual Report on Form 10-K
filed with the Commission on April 2, 1998.
II-6
<PAGE> 1
[GRAY CARY WARE, FREIDENRICH, LLP LETTERHEAD] EXHIBIT 5.1
May 12, 1998
Securities and Exchange Commission
450 Fifth Street, N.W
Washington, D.C. 20549
RE: SCICLONE PHARMACEUTICALS, INC.
REGISTRATION STATEMENT ON FORM S-3
Ladies and Gentlemen:
As legal counsel for SciClone Pharmaceuticals, Inc., a California corporation
(the "Company"), we are rendering this opinion in connection with the
preparation and filing of a registration statement on Form S-3 (the
"Registration Statement") relating to the registration under the Securities Act
of 1933, as amended, of 2,816,667 shares of Common Stock, no par value (the
"Common Stock"), to be issued by the Company upon conversion of shares of the
Company's Series C Preferred Stock and upon exercise of certain warrants.
We have examined such instruments, documents and records as we deemed relevant
and necessary for the basis of our opinion hereinafter expressed. In such
examination, we have assumed the genuineness of all signatures and the
authenticity of all documents submitted to us as originals and the conformity to
the originals of all documents submitted to us as copies.
Based on such examination, we are of the opinion that the 2,816,667 shares of
Common Stock of the Company being registered pursuant to the Registration
Statement and to be issued to the purchasers will be, upon issuance in
accordance with the terms of the Company's Certificate of Determination
Regarding the Terms of the Series C Preferred Stock or the terms of the
warrants, as applicable, duly authorized shares, validly issued, fully paid, and
nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement referred to above and the use of our name wherever it
appears in said Registration Statement.
This opinion is to be used only in connection with the issuance of the Common
Stock while the Registration Statement is in effect.
Respectfully submitted,
/s/ Gray Cary Ware & Freidenrich LLP
GRAY CARY WARE & FREIDENRICH LLP
<PAGE> 1
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement on Form S-3 and related Prospectus of SciClone
Pharmaceuticals, Inc. for the registration of 2,816,667 shares of its Common
Stock and to the incorporation by reference therein of our report dated January
16, 1998, except Note 10, as to which date is April 2, 1998, with respect to the
consolidated financial statements and schedule of SciClone Pharmaceuticals, Inc.
included in its Annual Report on Form 10-K for the year ended December 31, 1997
filed with the Securities Exchange Commission.
/s/ ERNST & YOUNG LLP
Palo Alto, California
May 8, 1998
