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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 19, 1999
REGISTRATION NO. 333-77543
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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SCICLONE PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
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CALIFORNIA 94-3116852
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
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. [ ] ______________
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.
================================================================================
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SUBJECT TO COMPLETION, DATED July 19, 1999
750,000 SHARES
SCICLONE PHARMACEUTICALS, INC.
COMMON STOCK
This prospectus relates to the offer and sale of up to 750,000 shares of
our common stock by Solar Developments & Partners, the selling shareholder.
Our common stock is quoted on The Nasdaq National Market under the
symbol "SCLN." On July 12, 1999, the last sale price of the common stock as
reported on The Nasdaq National Market was $1.875.
Our principal executive offices are located at 901 Mariners Island
Boulevard, Suite 205, San Mateo, California 94404, and our telephone number is
(650) 358-3456.
----------------------------------
AN INVESTMENT IN SCICLONE COMMON STOCK INVOLVES A HIGH DEGREE OF RISK.
PLEASE CAREFULLY CONSIDER THE INFORMATION UNDER THE HEADING "RISK FACTORS"
BEGINNING ON PAGE 3.
----------------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES, OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
----------------------------------
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
THE SELLING SHAREHOLDER MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION
STATEMENT FILED WITH THE SEC IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO
SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES
IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
The date of this prospectus is ____________, 1999.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C>
RISK FACTORS ................................................................... 3
ABOUT SCICLONE ................................................................. 10
USE OF PROCEEDS ................................................................ 12
SELLING SHAREHOLDER ............................................................ 12
PLAN OF DISTRIBUTION ........................................................... 13
LEGAL MATTERS .................................................................. 14
EXPERTS ........................................................................ 14
WHERE TO FIND MORE INFORMATION ................................................. 15
DOCUMENTS INCORPORATED BY REFERENCE ............................................ 15
</TABLE>
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RISK FACTORS
You should carefully consider the following risk factors, together with
the other information contained or incorporated by reference in this prospectus,
in evaluating whether to purchase shares of our common stock.
This prospectus contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1934 and Section 21E of the Securities
Exchange Act and we have attempted to identify these statements with an asterisk
("*"). Actual results could differ materially from those projected in these
forward-looking statements due to a variety of factors, including those set
forth below.
IF WE FAIL TO OBTAIN ADDITIONAL REGULATORY APPROVALS OR MARKET ACCEPTANCE FOR
ZADAXIN(R) Or OBTAIN REGULATORY APPROVAL FOR CPX, OUR POTENTIAL FUTURE REVENUE
WOULD BE LIMITED
Our principal drug development efforts currently focus on our two lead
drugs, thymosin alpha 1, which the Company sells under the branded trademark
ZADAXIN, and CPX. Clinical trials of ZADAXIN are in progress and we need
favorable results from these trials to get regulatory approval in major
pharmaceutical markets. ZADAXIN has been approved for commercial sale in 14
countries, principally as a treatment for hepatitis B and hepatitis C, diseases
caused by viruses that affect the liver. However, we may not be able to obtain
approvals for ZADAXIN in other countries or for the treatment of additional
medical conditions, such as cancer. CPX is a drug that targets the underlying
cause of cystic fibrosis, a disease caused by genetic defects. CPX is currently
undergoing clinical testing in the United States.
Our launch of ZADAXIN in the People's Republic of China, the Philippines
and Singapore was our first commercial introduction of ZADAXIN, and may not be
successful. Moreover, our future launches of ZADAXIN in additional countries may
not be successful. Future sales of ZADAXIN will depend on market acceptance and
successful distribution.
In particular, although the People's Republic of China has the highest
prevalence of hepatitis B in the world, its low average income and poorly
developed distribution infrastructure may make it difficult to successfully
commercialize ZADAXIN in the Chinese market. Because we currently rely on
ZADAXIN as our sole source of revenue, our failure to demonstrate its efficacy
in future clinical trials, obtain additional marketing approvals or successfully
commercialize ZADAXIN would adversely affect our revenue and operating results.
We may experience delays and difficulties in clinical trials of CPX. In
addition, clinical trials may not prove that CPX is an effective treatment for
cystic fibrosis. Our failure to demonstrate the safety and efficacy of CPX as a
treatment for cystic fibrosis in a clinical trial, obtain regulatory approval of
CPX as a treatment for cystic fibrosis or successfully commercialize CPX could
adversely affect our potential future revenue and operating results.
IF WE DO NOT BECOME PROFITABLE, WE MAY NOT BE ABLE TO SUSTAIN OUR OPERATIONS
We began to generate revenues from ZADAXIN in 1997. Future ZADAXIN
revenues are uncertain. Marketing approvals for CPX and additional marketing
approvals for ZADAXIN are uncertain. We have experienced significant operating
losses since our inception and have a substantial accumulated deficit. We expect
our operating expenses to increase over the next several years if we expand our
development, clinical testing and marketing capabilities.* Our ability to expand
our operations or become profitable depends in large part on our ability to do
the following:
- obtain additional financing in the near term to support our
operations and long-term product development and
commercialization efforts;
- increase ZADAXIN sales in existing markets;
- launch ZADAXIN in newly-approved markets;
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- obtain additional regulatory approvals for ZADAXIN and/or future
products;
- obtain regulatory approvals for CPX;
- enter into a corporate partnering arrangement for development in
the U.S. and Europe of a combination therapy for hepatitis C
including ZADAXIN plus interferon; and
- enter into other agreements for product development and
commercialization.
In addition, we have recently undertaken a program to reduce our cash
expenses in an effort to maximize our cash resources and minimize the
anticipated expenditures needed to operate profitably. This program includes a
domestic restructuring program which reduced our domestic staff. We intend to
continue to review and implement our expense reduction efforts, depending on the
timing and amount of any additional financing we receive and changes in our
capital requirements for product development and commercialization.* If we do
not become profitable, we may not be able to sustain our operations and our
stock price may decrease.
WE NEED TO OBTAIN ADDITIONAL FUNDS IN THE NEAR FUTURE IN ORDER TO HAVE ENOUGH
CAPITAL RESOURCES TO SUPPORT OUR PRODUCT DEVELOPMENT AND COMMERCIALIZATION
PROGRAMS
Since inception, we have financed our operations primarily through sales
of stock. However, we will need to obtain additional financing to support our
product development and commercialization programs beyond 1999. Without
additional funding, management believes we have enough capital resources to
maintain our current and planned operations only through 1999. As a result, our
independent auditors have issued an opinion on our financial statements for the
period ended December 31, 1998 that includes a paragraph emphasizing the
uncertainty surrounding our ability to continue as a going concern. If we are
unsuccessful in obtaining additional funds, we would be required to curtail or
cease our operations.
We have entered into a Structured Equity Line Flexible Financing(SM)
Agreement which allows us, subject to certain limitations, to sell to the
purchaser under the equity line up to $4 million of common stock during each
"investment period" during the two-year term of the equity line. An "investment
period" under the equity line is approximately three months. If we sell stock
under the equity line, the purchaser's price will be 97% of the lowest reported
sale price during the four days immediately prior to each purchase date selected
by the purchaser during the investment period. In order to use the equity line,
our common stock must trade at more than $1.00 per share, unless we reach a
different agreement with the purchaser under the equity line.
We are evaluating financing alternatives, including a private placement
of common stock and common stock warrants, use of our equity line and debt
financing to increase our capital resources. However, our need for capital will
depend on many factors, including:
- the level of ZADAXIN sales;
- preclinical and clinical development expenses and opportunities;
- the timing and cost of regulatory approvals;
- patent costs;
- our ability to use the equity line; and
- our ability to establish development, sales, manufacturing and
marketing arrangements.
Other than the equity line, we have no commitments or arrangements for
additional funding and we may not be able to obtain the financing we need. Draws
under the equity line are subject to certain conditions, including:
- registration of the investor's resale of the shares;
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- a minimum trading price per share;
- volume limitations;
- limitations on the number of shares that can be issued without
shareholder approval; and
- limitations on the number of shares of our common stock the
investor may hold at any time.
The unavailability or timing of financing could prevent or delay our product
development and commercialization programs and would require us to curtail or
cease our operations.
IF WE DO NOT CONTINUE TO COMPLY WITH CERTAIN NASDAQ LISTING REQUIREMENTS, OUR
COMMON STOCK MAY BE DELISTED WHICH WOULD MAKE IT MORE DIFFICULT TO SELL OUR
COMMON STOCK
Our common stock is listed on the Nasdaq National Market. To remain
listed on the Nasdaq, a company must meet certain criteria, including:
- a minimum bid price of $1.00 per share;
- $4,000,000 in net tangible assets; and
- $5,000,000 market value of the public float, excluding shares
held directly or indirectly by any of our officers or directors
and by anyone holding beneficially more than 10% of our
outstanding shares.
As of July 12, 1999, the closing bid price of our common stock was
$1.875 and as of April 30, 1999, the market value of our public float was
approximately $29,250,000. As of March 31, 1999, we had net tangible assets of
$6,688,000.
If we fail to meet Nasdaq's listing criteria our common stock may be
delisted. Our common stock would thereafter be traded in the non-Nasdaq,
over-the-counter market. If our common stock were delisted, it may be more
difficult to dispose of, or get an accurate market value of, our common stock.
This could severely limit our common shareholders' ability to sell our common
stock in the secondary market.
IF WE ISSUE ADDITIONAL COMMON STOCK OR SECURITIES CONVERTIBLE INTO COMMON STOCK,
THE PERCENTAGE OWNERSHIP OF OUR THEN-CURRENT SHAREHOLDERS WOULD BE REDUCED AND
THE MARKET PRICE OF OUR COMMON STOCK MAY DECREASE
If we sell common stock under the equity line, the percentage ownership
of our then-current shareholders will be reduced. In connection with the equity
line, we also issued to the purchaser a warrant to purchase 200,000 shares of
our common stock at an exercise price of $5.53 per share. We will also issue to
the purchaser additional warrants to purchase up to 300,000 shares of common
stock at an exercise price of 150% of the weighted average purchase price of the
common stock issued under the equity line during the year for which an
additional warrant is issued. If we do not issue any common stock under the
equity line, the exercise price will be 150% of the closing sale price of the
common stock on the day before the end of the two-year term of the equity line.
The purchaser's resale of common stock acquired under the equity line could
depress the market price of the common stock. Moreover, because the shares that
may be issued under the equity line, along with the shares issuable upon
exercise of the warrant and additional warrants, can be immediately resold by
the purchaser, the possibility of these sales could adversely affect the market
price of the common stock.
Similarly, if we raise additional funds through the issuance of common
stock or securities convertible into or exercisable for common stock, the
percentage ownership of our then-current shareholders will be reduced.
In addition, we recently completed a private placement of 1.37 million
shares of common stock and warrants to purchase 1.37 million shares of common
stock. Any common stock issued upon exercise of the warrants would reduce the
percentage ownership of our then-current shareholders. Furthermore, we are
required to register
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for resale the common stock issued in the private placement and issuable upon
exercise of the warrants, and the possibility of such resales may depress the
market price of our common stock.
IF WE DO NOT OBTAIN ADDITIONAL PRODUCT RIGHTS FROM THIRD PARTIES OR IF OUR
LICENSEES DO NOT PERFORM THEIR OBLIGATIONS, OUR POTENTIAL FUTURE REVENUE WOULD
BE LIMITED
Our strategy includes entering into various corporate partnering
arrangements. To date, we have acquired rights to ZADAXIN, CPX and certain other
drugs but we are only actively pursuing clinical development of ZADAXIN and CPX.
If we do not license or otherwise acquire rights to additional drugs we may have
a shortage of drugs to develop which would limit our potential future revenue.
In addition, we have exclusively sublicensed our rights to develop and
market ZADAXIN in Japan to Schering-Plough K.K. However, Schering-Plough K.K.
already has a substantial commitment to alpha interferon, which is an approved
drug for hepatitis B and hepatitis C in Japan. Our relationship with
Schering-Plough K.K. may not be successful and we may not be able to negotiate
similar additional arrangements in the future. We generally do not have control
over the amount and timing of resources that our collaborators devote to their
activities with us. If these parties do not perform their obligations as we
expect them to, the development and sale of our products could be limited or
delayed.
Our ability to obtain regulatory approval in one country may be delayed
or adversely affected by the timing of regulatory activities and approvals in
other countries, particularly if we do not participate in the regulatory
approval process in these other countries. Any delay or failure to achieve
regulatory approvals may limit our potential future revenue.
IF WE EXPERIENCE DIFFICULTIES IN OUR FOREIGN SALES AND OPERATIONS, OUR FINANCIAL
CONDITION WOULD SUFFER
Our financial condition in the near term is highly dependent on ZADAXIN
sales in foreign jurisdictions. The majority of our current ZADAXIN sales are to
customers in the People's Republic of China. However, ZADAXIN sales in the
People's Republic of China may be limited due to its low average income and
poorly developed infrastructure. In addition, our sales and operations in Asia,
Latin America and the Middle East are subject to inherent risks, including:
- difficulties and delays in obtaining pricing approvals and
reimbursement;
- difficulties and delays in obtaining product health registration
and importation permits;
- unexpected changes in regulatory requirements;
- tariffs and other barriers;
- political instability;
- the difficulties of staffing and managing foreign operations;
- long payment cycles;
- difficulty in accounts receivable collection;
- currency fluctuations; and
- potential adverse tax consequences.
We currently do not have any sales in the United States with which to offset any
decrease in revenue from ZADAXIN sales in Asia, Latin America and the Middle
East. In addition, certain countries in these territories
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regulate pharmaceutical prices. This regulation may reduce prices for ZADAXIN
significantly below those that would prevail in a free market.
IF WE FAIL TO PROTECT OUR PRODUCTS, TECHNOLOGIES AND TRADE SECRETS, WE MAY NOT
BE ABLE TO SUCCESSFULLY USE, MANUFACTURE OR MARKET AND SELL OUR PRODUCTS OR WE
MAY FAIL TO ADVANCE OR MAINTAIN OUR COMPETITIVE POSITION
The United States composition of matter patent, which covers the
chemical structure of thymosin alpha 1, and most of the European composition of
matter patents for thymosin alpha 1 have expired. Going forward, we will have
only limited patents covering the chemical structure of thymosin alpha 1 and
this could adversely affect our proprietary rights. Our success depends
significantly on our ability to obtain patent protection for our products and
technologies, to preserve our trade secrets and to avoid infringing on the
proprietary rights of third parties. However, our pending patent applications
may not result in issued patents. Any patents that are issued may not provide a
competitive advantage to us or may be invalidated or circumvented by our
competitors. Others may independently develop similar products or designs around
patents issued or licensed to us. Patents issued to or patent applications filed
by other companies could have an adverse effect on our ability to use,
manufacture or market our products or maintain our competitive position with
respect to our products. Many of our patents and patent applications relating to
thymosin alpha 1 are held under exclusive licenses. If we breach the terms of
any of these licenses we could lose our rights to these patents and patent
applications. Holders of patents licensed to us may not file, prosecute, extend
or maintain their patents in countries where we have rights.
Other companies obtaining patents on products or processes useful to us
may bring infringement actions against us. This type of litigation is typically
costly and time-consuming and could require us to obtain licenses from others,
or prevent us from using, manufacturing or marketing our products. These
licenses may not be available on commercially reasonable terms, if at all.
Pharmaceuticals are not patentable or have only recently become
patentable in certain countries in the territory in which we have exclusive
rights to ZADAXIN. Enforcement of intellectual property rights in many countries
in this territory has been limited or non-existent. Future enforcement of
patents and proprietary rights in many countries in this territory will likely
be problematic or unpredictable. Moreover, the issuance of a patent in one
country does not assure the issuance of a similar patent in another country.
Claim interpretation and infringement laws vary by nation, so the extent of any
patent protection is uncertain and may vary in different jurisdictions.
IF WE FAIL TO OBTAIN REGULATORY APPROVALS FOR OUR PRODUCTS IN COUNTRIES IN WHICH
WE HAVE NOT BEEN APPROVED, WE CANNOT DEVELOP, MARKET AND SELL OUR PRODUCTS IN
THOSE COUNTRIES
The research, preclinical and clinical development, manufacturing,
marketing and sale of ZADAXIN, CPX and our other drug candidates are subject to
extensive regulation by governmental authorities. ZADAXIN, CPX and any other
products must be approved before they can be sold in any jurisdiction. Obtaining
regulatory approval is time-consuming and expensive. In some countries where we
are contemplating marketing and selling ZADAXIN, the regulatory approval process
for drugs that have not been previously approved in countries with established
clinical trial review procedures is uncertain, and this may delay the grant of
regulatory approvals for ZADAXIN.
We are currently sponsoring clinical trials and pursuing regulatory
approvals for ZADAXIN in a number of countries and we are currently sponsoring
clinical trials of CPX in the United States. However, we may not be able to
complete these trials, and even if completed, these trials may not fulfill the
relevant regulatory approval criteria. We ultimately may not be able to obtain
regulatory approvals in these countries. Adverse results in our development
programs also could result in restrictions on the use of ZADAXIN and, if
approved, CPX.
Our failure to comply with applicable United States or foreign
regulatory requirements could, among other things, result in warning letters,
fines, suspensions of regulatory approvals, product recalls or seizures,
operating restrictions, injunctions and criminal prosecutions. In addition,
government regulations may be established or imposed which prevent or delay
regulatory approval of ZADAXIN, CPX or our future products.
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IF WE ARE NOT ABLE TO ESTABLISH AND MAINTAIN ADEQUATE MANUFACTURING AND SUPPLY
RELATIONSHIPS, THE DEVELOPMENT AND SALE OF OUR PRODUCTS COULD BE IMPAIRED
We have entered into contract manufacturing and supply agreements for
ZADAXIN and CPX. To be successful, our products must be manufactured in
commercial quantities, in compliance with regulatory requirements and at an
acceptable cost. While we believe we have and will be able to establish and
maintain manufacturing relationships with experienced suppliers*, we may not be
able to establish long-term manufacturing relationships with these suppliers. We
currently have vialing and packaging supply agreements in effect and a
sufficient supply of finished ZADAXIN for the near term. We have recently
changed and upgraded our manufacturing source of finished ZADAXIN for our
international markets, excluding Japan. In certain countries, this change may
require additional regulatory approvals. If we do not obtain any required
regulatory approvals of this manufacturing change in a timely fashion, new
ZADAXIN marketing approvals may be delayed or sales may be interrupted until the
manufacturing change is approved.
Production interruptions, if any, could significantly delay clinical
development of potential products and reduce third party or clinical researcher
interest and support of proposed trials. These kinds of interruptions could also
impede commercialization of our products, including sales of ZADAXIN in approved
markets, and impair their competitive position, which would have a material
adverse effect on our business.
WE MAY LOSE MARKET SHARE OR OTHERWISE FAIL TO COMPETE IN THE INTENSELY
COMPETITIVE PHARMACEUTICAL INDUSTRY
Competition in the pharmaceutical industry is intense and we expect that
competition to increase. We believe that the principal competitive factors in
the pharmaceutical industry include the efficacy, safety, price and therapeutic
regimen associated with a given drug. Our competitors include pharmaceutical
companies, biotechnology firms, universities and other research institutions,
both in the United States and abroad, that are actively engaged in research and
development of chronic and life-threatening diseases such as hepatitis B,
hepatitis C, cancer, immune system disorders and cystic fibrosis. Most of our
competitors, particularly large pharmaceutical companies, have substantially
greater financial, technical, regulatory, manufacturing, marketing and human
resource capabilities than we do. Most of them also have extensive experience in
undertaking the clinical testing and obtaining the regulatory approvals
necessary to market drugs. In addition, we currently rely on sales of ZADAXIN as
a treatment for hepatitis B and hepatitis C as our sole source of revenue.
Several large pharmaceutical companies have substantial commitments to alpha
interferon, which is an approved drug for treating hepatitis B and hepatitis C.
IF THIRD PARTY REIMBURSEMENT IS NOT AVAILABLE OR PATIENTS CANNOT OTHERWISE PAY
FOR ZADAXIN, WE MAY NOT BE ABLE TO SUCCESSFULLY MARKET ZADAXIN
Our ability to successfully sell ZADAXIN depends in part on whether
pharmaceutical drug consumers will be reimbursed for the cost of ZADAXIN. This
reimbursement may come from government health administration authorities,
private health insurers and other organizations. Third-party reimbursement for
new therapeutic products is highly uncertain and may not available for our
future products. In many of the foreign countries in which we currently operate
or intend to operate, reimbursement for ZADAXIN under government or private
health insurance programs is currently not be available, particularly in
Cambodia, the People's Republic of China, Mexico, the Philippines, Peru, Myanmar
and Malaysia. In the United States, certain proposed health care reforms could
limit the amount of third-party reimbursement available for our products. In
many countries where we have marketing rights to ZADAXIN, government resources
and per capita income may be so low that our products will be prohibitively
expensive. In these countries, we may not be able to market our products on
economically favorable terms, if at all.
IF WE ARE UNABLE TO ATTRACT AND RETAIN QUALIFIED PERSONNEL OR IF OUR PRESIDENT
AND CHIEF EXECUTIVE OFFICER, CHIEF OPERATING OFFICER, CHIEF ADMINISTRATIVE
OFFICER OR OUR REGIONAL MANAGING DIRECTOR FOR GREATER CHINA LEFT SCICLONE, WE
MAY NOT BE ABLE TO SUCCESSFULLY DEVELOP AND COMMERCIALIZE OUR PRODUCTS
We are highly dependent upon our ability to attract and retain qualified
personnel because of the specialized, scientific and international nature of our
business. There is intense competition for qualified
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management, scientific and technical personnel in the pharmaceutical industry,
and we may not be able to attract and retain the qualified personnel we need to
grow and develop our business globally. In addition, many key responsibilities
at SciClone are assigned to a relatively small number of individuals, such as
our President and Chief Executive Officer, Chief Operating Officer, Chief
Administrative Officer and our Regional Managing Director for Greater China. If
we are unable to attract and retain qualified personnel as needed or promptly
replace those employees who are critical to our product development and
commercialization, the development and commercialization of our products would
adversely be affected. We do not maintain "key person" life insurance on any of
our key personnel.
WE HAVE LIMITED PRODUCT LIABILITY INSURANCE AND ANY PRODUCT LIABILITY CLAIMS
ASSERTED AGAINST US COULD RESULT IN SIGNIFICANT EXPENSES AND DECREASED DEMAND
FOR OUR PRODUCTS
Companies which test, manufacture, market and sell pharmaceutical
products commonly receive product liability claims. These claims may be asserted
against us. Product liability insurance for the pharmaceutical industry
generally is expensive, if it is available at all. We have product liability
insurance coverage for our clinical trials and commercial sales. However,
product liability claims in excess of our insurance coverage or that resulted in
the payment of large deductibles would adversely affect our financial condition
and demand for our products.
ISSUING PREFERRED STOCK WITH RIGHTS SENIOR TO THOSE OF OUR COMMON STOCK COULD
ADVERSELY AFFECT HOLDERS OF COMMON STOCK OR HINDER TAKEOVER TRANSACTIONS THAT
OFFER COMMON SHAREHOLDERS AN OPTIMAL PRICE FOR THEIR SHARES
Our charter documents give our board of directors the authority to issue
additional series of preferred stock without a vote or action by our
shareholders. The board also has the authority to determine the terms of
preferred stock, including price, preferences and voting rights. The rights of
holders of our common stock may be adversely affected by the rights granted to
holders of preferred stock. For example, a series of preferred stock may be
granted the right to receive a liquidation preference -- a pre-set distribution
in the event SciClone is liquidated -- that would reduce the amount available
for distribution to holders of common stock. In addition, the issuance of
preferred stock could make it more difficult for a third party to acquire a
majority of our outstanding voting stock. As a result, common shareholders could
be prevented from participating in transactions that would offer an optimal
price for their shares.
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ABOUT SCICLONE
GENERAL
SciClone acquires, develops and commercializes drugs for treating
chronic and life-threatening diseases such as hepatitis B, hepatitis C, cancer,
immune system disorders and cystic fibrosis. We have two drugs in clinical
testing, ZADAXIN and CPX, and we have other potential drugs in preclinical
development.
ZADAXIN. Our lead drug is ZADAXIN, which boosts the immune system. We
are pursuing development of ZADAXIN for treatment of hepatitis B, hepatitis C,
cancer and certain immune system disorders, as well as an enhancement to the
effectiveness of viral vaccines. ZADAXIN is approved for marketing in 14
countries: Argentina, Cambodia, Italy, Kuwait, Mexico, Malaysia, Myanmar,
Pakistan, the People's Republic of China, Peru, the Philippines, Singapore,
Venezuela and Vietnam. We have filed for approval to market ZADAXIN in 22
additional countries outside the U.S., Europe and Japan. In 1998, ZADAXIN
generated over $3.6 million in sales, primarily in the People's Republic of
China, the Philippines and Singapore for treatment of hepatitis B. We hold
worldwide development, manufacturing and marketing rights to ZADAXIN. In Japan,
we have sublicensed our rights to Schering-Plough, K.K., the Japanese subsidiary
of Schering-Plough Corporation, the leading marketer of viral hepatitis
therapies worldwide.
We are pursuing a corporate partnering arrangement for development in
the U.S. and Europe of a combination therapy for hepatitis C including ZADAXIN
plus interferon.* Hepatitis C affects over 170 million people worldwide,
including over 10 million people in the United States, Europe and Japan, which
are the world's largest pharmaceutical markets. Our clinical data show that the
combination of ZADAXIN plus interferon could be a significant therapeutic
advance in the fight against the hepatitis C epidemic. Interferon, the only
established therapy for hepatitis C, leads to a response in only 5% to 20% of
patients and causes unpleasant side effects. Rebetron(TM), a combination of
two drugs, interferon and ribavirin, was approved for treatment of hepatitis C
in the U.S. and certain other countries in 1998. This combination benefits
certain patients. However, ribavirin has its own potential side effects, and
increases the risk of side effects when combined with interferon. Importantly,
ZADAXIN combined with interferon has shown clinical promise for treatment of
hepatitis C without increasing the risk of additive side effects.
In Japan, the world's largest market for viral hepatitis therapies, we
have exclusively sublicensed our rights to develop and market ZADAXIN to
Schering-Plough K.K. In the second quarter of 1998, Schering-Plough K.K. began a
300-patient clinical study of ZADAXIN for treatment of hepatitis B. The drug
interferon, including Schering-Plough K.K.'s interferon, is the leading therapy
for hepatitis B in Japan. Schering-Plough K.K. is also developing ZADAXIN in a
clinical study for treatment of hepatitis C.
CPX. Our second drug in clinical testing is CPX. CPX is a protein-repair
therapy initially developed by the United States National Institutes of Health
as a potential treatment for cystic fibrosis, the most common fatal genetic
disease in the U.S. and Europe.
Cystic fibrosis is caused by mutations in the gene that encodes a
certain protein known as the cystic fibrosis transmembrane conductance
regulator, or CFTR protein. More than 70% of cystic fibrosis patients have a
certain type of mutation, referred to as the "delta F508" mutation. In October
1997, Dr. Harvey Pollard of the Uniformed Services University of the Health
Sciences and formerly of the NIH, presented breakthrough preclinical data
demonstrating that CPX repairs the two key protein defects causing cystic
fibrosis in patients with the delta F508 genetic mutation. CPX is the only drug
in clinical development with the potential to correct the two key
protein-associated defects in most cystic fibrosis patients. In 1997, we were
awarded a $100,000 Orphan Drug Grant by the FDA for the first clinical study of
CPX as a treatment for cystic fibrosis. We completed the first clinical study of
CPX in cystic fibrosis patients in April 1998. In October 1998, we were awarded
a prestigious $200,000 Orphan Drug Grant by the FDA for the second clinical
study of CPX as a treatment for cystic fibrosis. We began the second clinical
study of CPX in cystic fibrosis patients in the U.S. in September 1998. The
Cystic Fibrosis Foundation provided substantial financial support for early
research on CPX at the NIH. The Cystic Fibrosis Foundation also supported us in
our application for an Investigational New Drug exemption to gain approval from
the FDA to begin
10
<PAGE> 12
testing of CPX directly on cystic fibrosis patients rather than the standard
process of testing first in healthy volunteers. The Cystic Fibrosis Foundation
continues to support us with protocol review, patient recruitment and
investigator and study center selection.
We have other drug candidates in early preclinical development. We plan
to continue to evaluate the pharmaceutical potential of our preclinical drug
candidates in 1999.
Internationally, we have 41 ZADAXIN distribution arrangements covering
46 countries outside the U.S., Europe and Japan. We intend to out-license our
products where a collaborative arrangement will materially enhance the prospects
for a drug's commercial success in licensed markets. Our license with
Schering-Plough K.K. for exclusive rights to develop and market ZADAXIN in
Japan, and our arrangements with our ZADAXIN distributors are examples of this
strategy. We are currently pursuing corporate partnering arrangements in the
U.S. and Europe for development of ZADAXIN, particularly the combination of
ZADAXIN plus interferon for the treatment of hepatitis C.* We intend to produce
ZADAXIN, CPX and any future products through contract manufacturing and supply
agreements. We have entered into separate supply agreements in the U.S. and
Europe for the supply of bulk and finished product thymosin alpha 1. We contract
with a major U.S. pharmaceutical company for the supply of bulk CPX and another
U.S. pharmaceutical manufacturer for finished product CPX.
AGREEMENT WITH SCLAVO
In April 1998, we entered into an agreement with Sclavo S.p.A. to
acquire all of Sclavo's rights to develop and market thymosin alpha 1 in Italy,
Spain and Portugal. The transaction closed in September 1998. The rights we
acquired include an approval to market thymosin alpha 1 in Italy as an influenza
vaccine enhancer and an application to market thymosin alpha 1 as a treatment
for non small-cell lung cancer in combination with chemotherapy. We paid
approximately $1.84 million for these rights, consisting of:
- approximately $296,000 in cash;
- 375,000 shares of our common stock, valued at $1.54 million based
on the closing sale price on April 20, 1998; and
- a warrant to purchase another 375,000 shares of our common stock.
The exercise price of the shares that may be purchased upon exercise of
the warrant is $4.125 per share, subject to certain standard adjustments. The
warrant is exercisable until June 29, 2003.
Under the agreement with Sclavo, we agreed to register the 375,000
issued shares and 375,000 warrant shares promptly following the closing of the
transaction and to keep a registration statement covering all 750,000 shares
effective for one year following the closing.
FORMATION AND OTHER INFORMATION
SciClone was incorporated in California in 1990. Our international
operating subsidiary, SciClone Pharmaceuticals International Ltd., is
incorporated in the Cayman Islands and headquartered in Hong Kong. We also have
office locations in Singapore, Taiwan and Japan.
11
<PAGE> 13
USE OF PROCEEDS
If the warrants are exercised by the selling shareholder, we may receive
proceeds in the form of the exercise price. If we receive any of these proceeds,
we expect to use them for working capital. We will not receive any proceeds from
the sale of the shares of common stock by the selling shareholder and all
proceeds will go to the selling shareholder to be used for its own purposes.
SELLING SHAREHOLDER
The selling shareholder, Solar Developments & Partners, owns or has the
right to acquire 375,000 shares of our common stock which were issued and
375,000 shares which are issuable upon exercise of a warrant issued in
connection with our acquisition from Sclavo S.p.A. of certain rights to thymosin
alpha 1 in Italy, Spain and Portugal. Solar Developments & Partners is a
designee of Sclavo pursuant to our agreement with Sclavo, and Sclavo disclaims
beneficial ownership of the shares offered by this prospectus. The table below
sets forth the selling shareholder, the number of shares of common stock which
it owns or has the right to acquire the number of shares of common stock subject
to sale under this prospectus and the number of shares of common stock it would
own assuming the sale of all shares of common stock covered by this prospectus.
Beneficial ownership is determined in accordance with rules promulgated
by the SEC, and the information is not necessarily indicative of beneficial
ownership for any other purpose. This table is based upon information supplied
to us by Sclavo. Except as otherwise indicated, we believe that the person named
in the table has sole voting and investment power with respect to all of the
shares of our common stock listed as beneficially owned by it. Stokenchurch
Enterprises Limited, as the general partner of Solar Developments & Partners,
has investment and voting control over the shares beneficially owned by the
selling shareholder.
<TABLE>
<CAPTION>
Shares Beneficially Shares Offered Shares Beneficially
Owned Prior to by this Owned After
Selling Shareholder the Offering Prospectus the Offering
- ------------------------------ ------------------- -------------- -------------------
<S> <C> <C> <C>
Solar Developments & Partners 750,000 750,000 --
</TABLE>
12
<PAGE> 14
PLAN OF DISTRIBUTION
The selling shareholder has informed us that, acting as principal for
its own account, directly, through agents designated from time to time, or
through brokers, dealers, agents or underwriters also to be designated, it may
sell all or a portion of the shares from time to time on terms to be determined
at the time of sale. The selling shareholder may from time to time sell all or a
portion of the shares in routine brokerage transactions on the Nasdaq Stock
Market or otherwise at the prices and terms prevailing at the time of the sale.
The selling shareholder also may make private resales directly or through
brokers or may make resales pursuant to Rule 144 under the Securities Act. Under
the agreement with Sclavo, we agreed to register the 750,000 shares promptly
following the closing of the transaction and to keep a registration statement
covering these shares effective for one year following the closing. The selling
shareholder may pay customary brokerage fees, commissions and expenses.
To the extent required by Rule 424 under the Securities Act, a
prospectus supplement will be filed with the SEC with respect to a particular
offering setting forth the terms of the offering, including the name or names of
any underwriters or agents, if any, any underwriting discounts and other items
constituting underwriters' compensation, the offering price and any discounts or
concessions allowed or reallowed or paid to dealers. Any offering price and any
discounts or concessions allowed or reallowed or paid to dealers may be changed
from time to time.
If underwriters are used in a sale, shares of common stock will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of sale.
The shares may be offered to the public either through underwriting syndicates
represented by one or more managing underwriters or directly by one or more
firms acting as underwriters. The underwriter or underwriters with respect to a
particular underwritten offering of shares will be named in a prospectus
supplement and, if an underwriting syndicate is used, the managing underwriter
or underwriters, will be set forth on the cover of the prospectus supplement.
Unless otherwise set forth in the prospectus supplement, the obligations of the
underwriters to purchase the shares will be subject to conditions precedent and
the underwriters will be obligated to purchase all of the shares if any are
purchased.
If dealers are utilized in the sale of shares of common stock for which
this prospectus is delivered, the selling shareholder will sell the shares to
the dealers as principals. The dealers may then resell the shares to the public
at varying prices to be determined by the dealers at the time of resale. The
names of the dealers and the terms of the transaction will be set forth in a
prospectus supplement.
If an agent, other than a broker-dealer executing transactions in the
ordinary course, is used, the agent will be named, and the terms of the agency
and any commissions will be set forth, in a prospectus supplement. Unless
otherwise indicated in the prospectus supplement, the agent will be acting on a
best efforts basis for the period of its appointment.
Shares may be sold directly by the selling shareholder to institutional
investors or others, who may be deemed to be underwriters within the meaning of
the Securities Act with respect to any resale of the shares. The terms of any
sales to institutional investors, including the terms of any bidding or auction
process, will be described in a prospectus supplement.
Agents, dealers and underwriters may be entitled under agreements
entered into with the selling shareholder to indemnification against certain
civil liabilities, including liabilities under the Securities Act, or to
contribution with respect to payments which agents, dealers or underwriters may
be required to make in connection with certain civil liabilities. Agents,
dealers and underwriters may be customers of, engage in transactions with or
perform services for us or the selling shareholder in the ordinary course of
business.
We will pay all expenses related to the registration of the shares
covered by this prospectus, including:
- registration and filing fees imposed by the Securities and
Exchange Commission, the National Association of Securities
Dealers, Inc. and blue sky laws;
13
<PAGE> 15
- printing expenses;
- transfer agents' and registrars' fees; and
- the reasonable fees and costs of our outside counsel and
independent accountants.
We will not pay transfer or other taxes and other costs related to the
issuance of the shares.
The selling shareholder is not restricted as to the price or prices at
which it may resell the shares. Any resales may have an adverse effect on the
market price of the common stock. In addition, it is possible that a significant
number of shares could be sold at the same time, which also may have an adverse
effect on the market price of the common stock.
We have agreed to indemnify the selling shareholder against certain
civil liabilities, including liabilities under the Securities Act.
LEGAL MATTERS
The legality of the shares offered by this prospectus is being passed
upon by Gray Cary Ware & Freidenrich LLP, Palo Alto, California.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements and schedule included in our Annual Report on Form 10-K for
the year ended December 31, 1998, as set forth in their report, which contains
an explanatory paragraph describing conditions that raise substantial doubt
about our ability to continue as a going concern as described in Note 1 to the
consolidated financial statements, which is incorporated by reference in this
prospectus and elsewhere in the registration statement. Our financial statements
and schedule are incorporated by reference in reliance on Ernst & Young LLP's
report, given on their authority as experts in accounting and auditing.
14
<PAGE> 16
WHERE TO FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. These reports, proxy statements and other
information filed with the SEC may be inspected and copied at the SEC Public
Reference Room, 450 Fifth Street, N.W., Washington, D.C. 20549.
You may obtain information about the operation of the SEC Public
Reference Room by calling 1-800-SEC-0330. You can also inspect this material
free of charge at a Web site maintained by the SEC at http://www.sec.gov.
Finally, you can also inspect reports and other information concerning SciClone
at the offices of the National Association of Securities Dealers, Inc., Market
Listing Section, 1735 K Street, N.W., Washington, D.C. 20006. SciClone common
stock is traded on The Nasdaq National Market under the symbol "SCLN."
SciClone's Internet web site is located at http://www.sciclone.com.
DOCUMENTS INCORPORATED BY REFERENCE
The SEC allows us to "incorporate by reference" information that we file
with them which means that we can disclose important information to you by
referring you to these documents. The information incorporated by reference is
an important part of this prospectus and information we later file with the SEC
will automatically update and supersede this information. The following
documents filed by us with the SEC are incorporated in this prospectus by
reference:
- Annual Report on Form 10-K for the year ended December 31, 1998,
filed on March 31, 1999 (File No. 0-19825);
- Current Report on Form 8-K, filed on April 26, 1999 (File No.
0-19825);
- Quarterly Report on Form 10-Q for the quarter ended March 31,
1999, filed on May 14, 1998 (File No. 0-19825);
- The description of SciClone's Common Stock contained in
SciClone's Registration Statement on Form 8-A filed under the
Securities Exchange Act, including any amendment or report filed
for the purpose of updating that description (File No. 0-19825).
We also incorporate by reference all documents and reports filed by us
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934 after the date of this prospectus. We will provide free of charge to each
person, including any beneficial owner, to whom this prospectus is delivered,
upon written or oral request, a copy of any or all of the documents incorporated
by reference in this prospectus. Please direct such requests to Investor
Relations, SciClone Pharmaceuticals, Inc., 901 Mariners Island Boulevard, Suite
205, San Mateo, California 94404. Our telephone number is (650) 358-3456.
15
<PAGE> 17
================================================================================
WE HAVE NOT AUTHORIZED ANYONE TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION
OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS.
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS.
THE INFORMATION IN THIS PROSPECTUS IS CORRECT AS OF THE DATE OF
THIS PROSPECTUS. DELIVERY OF THIS PROSPECTUS AFTER THE DATE INDICATED
BELOW DOES NOT MEAN THAT THE INFORMATION IS STILL CORRECT.
750,000 SHARES
SCICLONE PHARMACEUTICALS, INC.
COMMON STOCK
----------
PROSPECTUS
----------
___________, 1999
================================================================================
<PAGE> 18
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 $ 592
Nasdaq filing fee $ 17,500
Accounting fees and expenses $ 5,000
Legal fees and expenses $ 25,000
Miscellaneous expenses $ 1,908
---------
Total........................................................ $ 50,000
=========
</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> 19
ITEM 16. EXHIBITS.
The following exhibits are filed with this Registration Statement:
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT
----------- ----------------------
<S> <C>
5.1** Opinion of Gray Cary Ware & Freidenrich LLP.
10.1* Acquisition Agreement between SciClone and Sclavo S.p.A.,
dated April 20, 1998.
10.2* First Amendment to Acquisition Agreement between SciClone
and Sclavo S.p.A., dated April 20, 1998.
10.3** Second Amendment to Acquisition Agreement by and among
SciClone, Sclavo S.p.A. and Solar Developments and Partners,
dated November 6, 1998.
10.4** Amendment to Warrant by and among SciClone, Sclavo S.p.A. and Solar
Developments and Partners dated April 20, 1998.
10.5* Stock Purchase Warrant dated September 3, 1998
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).
</TABLE>
- -------------------
* Filed as an exhibit to the Company's Report on Form 10-Q for the period ended
September 30, 1998.
** Previously filed.
ITEM 17. UNDERTAKINGS.
A. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933 (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;
II-2
<PAGE> 20
(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> 21
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> 22
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 amendment to
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized in the City of San Mateo, State of California on July 19, 1999.
SCICLONE PHARMACEUTICALS, INC.
By: /s/ Donald R. Sellers
--------------------------------------
Donald R. Sellers
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to 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 July 19, 1999
- -------------------------------- Officer, Interim Chief Financial Officer
Donald R. Sellers and Director (Principal Executive,
Financial and Accounting Officer)
/s/ Jere E. Goyan* Chairman of the Board and Director July 19, 1999
- --------------------------------
Jere E. Goyan, Ph.D.
/s/ John D. Baxter* Director July 19, 1999
- --------------------------------
John D. Baxter, M.D.
/s/ Edwin C. Cadman* Director July 19, 1999
- --------------------------------
Edwin C. Cadman, M.D.
/s/ Rolf H. Henel* Director July 19, 1999
- --------------------------------
Rolf H. Henel
*By /s/ Donald R. Sellers
----------------------------
Donald R. Sellers
Attorney-in-fact
</TABLE>
II-5
<PAGE> 23
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT
----------- ----------------------
<S> <C>
5.1** Opinion of Gray Cary Ware & Freidenrich LLP.
10.1* Acquisition Agreement between SciClone and Sclavo S.p.A.,
dated April 20, 1998.
10.2* First Amendment to Acquisition Agreement between SciClone
and Sclavo S.p.A., dated April 20, 1998.
10.3** Second Amendment to Acquisition Agreement by and among
SciClone, Sclavo S.p.A. and Solar Developments and Partners,
dated November 6, 1998.
10.4** Amendment to Warrant by and among SciClone, Sclavo S.p.A. and Solar
Developments and Partners dated April 20, 1998.
10.5* Stock Purchase Warrant dated September 3, 1998
23.1 Consent of Ernst & Young LLP, independent auditors.
23.2** Consent of Gray Cary Ware & Freidenrich LLP (included in Exhibit .1).
24.1** Power of Attorney (included in the Signature Page contained
in Part II of the Registration Statement).
</TABLE>
- -------------------
* Filed as an exhibit to the Company's Report on Form 10-Q for the period
ended September 30, 1998.
** Previously filed.
<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
Amendment No. 2 to the Registration Statement on Form S-3 and the related
Prospectus of SciClone Pharmaceuticals, Inc. for registration of 750,000 shares
of its Common Stock and to the incorporation by reference therein of our report
dated March 17, 1999, 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, 1998 filed with the Securities and Exchange
Commission.
/s/ ERNST & YOUNG LLP
Palo Alto, California
July 16, 1999
