<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 22, 1996
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
SUNPHARM CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE F593097048
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
4651 SALISBURY ROAD, SUITE 205
JACKSONVILLE, FLORIDA 32256
(904) 296-3320
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
STEFAN BORG
PRESIDENT AND CHIEF EXECUTIVE OFFICER
4651 SALISBURY ROAD, SUITE 205
JACKSONVILLE, FLORIDA 32256
(904) 296-3320
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
---------------
Copies to:
JEFFREY L. WADE
ANDREWS & KURTH L.L.P.
2170 BUCKTHORNE PLACE, SUITE 150
THE WOODLANDS, TEXAS 77380
(713) 220-4801
---------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of the 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
Title of each class of Amount to be offering price aggregate offering Amount of registration
Securities to be registered registered per share (1) price (1) fee
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $0.0001 per 50,000 $6.03125 $301,563 $104
share..............................
==========================================================================================================================
</TABLE>
(1) Estimated pursuant to Rule 457(c) solely for the purpose of calculating the
registration fee based on the average of the high and low sales price per
share of the Registrant's common stock on the Nasdaq Small Cap Market on
July 18, 1996.
---------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
================================================================================
<PAGE>
Subject to Completion
July 22, 1996
50,000 SHARES
SUNPHARM CORPORATION
COMMON STOCK
---------------
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+ 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. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
This Prospectus relates to the offering of up to 50,000 shares (the
"Shares") of common stock, par value $0.0001 per share (the "Common Stock"), of
SunPharm Corporation (the "Company" or "SunPharm") which may be offered by a
stockholder of the Company (the "Selling Stockholder"). All or part of the
Shares may be offered by the Selling Stockholder from time to time for his own
account in transactions on the Nasdaq Small Cap Market, in negotiated
transactions or otherwise at market prices prevailing at the time of sale, at
prices related to such prevailing market prices or at negotiated prices. The
Selling Stockholder may effect such transactions by selling the Shares to or
through broker-dealers and such broker-dealers may receive compensation in the
form of discounts, concessions or commission from the Selling Stockholder or the
purchasers of the Shares for whom such broker-dealers may act as agent or to
whom they sell as principal or both (which compensation to a particular broker-
dealer might be in excess of customary commissions).
None of the proceeds from the sale of the Shares by the Selling Stockholder
will be received by the Company. The Company has agreed to bear certain
expenses in connection with the registration and sale of the Shares being
offered by the Selling Stockholder. The Selling Stockholder and any broker-
dealers participating in the distribution of the Shares may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933, as amended (the
"Securities Act"), and any profit on the sale of Shares by the Selling
Stockholders and any commissions received by any such broker-dealers may be
deemed to be underwriting commissions under the Securities Act.
The Company's Common Stock is traded on The Nasdaq Small Cap Market under
the symbol "SUNP." On July 18, 1996, the last reported sale price of the
Common Stock was $6-1/32 per share.
The Shares have not been registered for sale by the Selling Stockholders
under the securities laws of any state as of the date of this Prospectus.
Brokers or dealers effecting transactions in the Shares should confirm the
registration thereof under the securities laws of the states in which such
transactions occur, or the existence of any exemption from registration.
---------------
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" COMMENCING ON PAGE 5.
---------------
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 , 1996.
<PAGE>
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 and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy statements and other information
filed by the Company can be inspected and copied at the public reference
facilities of the Commission at its principal offices located at Judiciary
Plaza, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at the
following regional offices of the Commission: Seven World Trade Center, 13th
Floor, New York, New York 10048 and 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661, and copies of such materials can be obtained from the
Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. The Commission maintains a site on
the World Wide Web at http://www.sec.gov that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the Commission.
The Company has filed with the Commission a registration statement on Form
S-3 (the "Registration Statement") under the Securities Act of 1933, as amended
(the "Securities Act") with respect to the Shares offered hereby. This
Prospectus does not contain all of the information set forth in the Registration
Statement and the exhibits thereto, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. Statements made in
this Prospectus as to the contents of any contract, agreement or other document
referred to hereafter are not necessarily complete. With respect to each such
contract, agreement or other document filed as an exhibit to the registration
statement, reference is made to the exhibit for a more complete description of
the matters involved. The Registration Statement and any amendments thereto,
including exhibits filed or incorporated by reference as a part thereof are
available for inspection and copying at the Commission's offices as described
above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed with the Commission are hereby
incorporated by reference into this Prospectus.
1. The Company's Annual Report on Form 10-KSB (File No. 0-27578) for the
year ended December 31, 1995.
2. The Company's Quarterly Report on Form 10-QSB for the quarter ended
March 31, 1996.
3. The Company's current Report on Form 8-K filed with the Commission on
June 17, 1996.
4. The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A filed with the Commission on January 18,
1996.
All documents subsequently filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act prior to the termination of the offering
to which this Prospectus relates shall be deemed to be incorporated by reference
into this Prospectus and to be a part of this Prospectus from the date of filing
thereof.
Any statement contained herein or in a document all or a portion of which
is incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus or in any other subsequently filed document that
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 Prospectus.
The Company hereby undertakes to provide without charge to each person to
whom a copy of this Prospectus has been delivered, on the written or oral
request of any such person, a copy of any or all of the documents referred to
above which have been or may be incorporated into this Prospectus by reference,
other than exhibits to such documents unless such exhibits are specifically
incorporated by reference therein. Requests for such copies should be directed
to the Company at its principal executive offices: SunPharm Corporation, 4651
Salisbury Road, Suite 205, Jacksonville, Florida 32256, (904) 296-3320,
Attention: Stefan Borg.
2
<PAGE>
THE COMPANY
The following is qualified in its entirety by the more detailed information
including "Risk Factors" appearing elsewhere in this Prospectus and the
financial statements and notes thereto contained in the Company's Annual Report
on Form 10-K for the year ended December 31, 1995, incorporated by reference
herein (the "Annual Report"). Except for the historical information contained
herein, the discussion in this prospectus contains forward-looking statements
that involve risks and uncertainties. The Company's actual results could differ
materially from those discussed herein. Factors that could cause or contribute
to such differences include, but are not limited to, those discussed in "Risk
Factors" beginning at page 5 of this Prospectus and those discussed in
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Business" contained in the Annual Report, as well those
discussed elsewhere in the Prospectus, the Annual Report or any other document
incorporated herein prior to the termination of the offering.
SunPharm Corporation ("SunPharm" or the "Company") is a development stage
company engaged in the development of small molecule pharmaceutical products,
consisting of novel polyamine analogues and other proprietary compounds invented
at the University of Florida and licensed exclusively worldwide to the Company.
The Company's drug development efforts are centered around three main areas:
cancer, acquired immunodeficiency syndrome ("AIDS") and gastrointestinal
disorders. The Company currently has 13 potential products in various stages of
research or development. One of these polyamine analogue products,
diethylhomospermine ("DEHOP") , is currently in Phase II human clinical trials
for the treatment of AIDS-related chronic diarrhea. In addition, the Company
commenced a Phase I clinical trial in the first half of 1996 to test DEHOP in
cancer patients. A second polyamine analogue product, diethylnorspermine
("DENSPM"), is currently completing Phase I human clinical trials for the
treatment of various forms of cancer. SunPharm has entered into strategic
licensing agreements with Warner-Lambert Company ("Warner-Lambert") and Nippon
Kayaku Co., Ltd. ("Nippon Kayaku") to further the development and worldwide
commercialization of DENSPM for the treatment of cancer.
In vitro and in vivo laboratory tests conducted by the University of
Florida and other collaborating institutions have demonstrated that the
Company's polyamine analogue products gain entry into cancer cells due to their
structural similarity to the polyamines naturally present in all human cells and
essential to cell growth and proliferation. Once inside the cell, the analogues
substitute for the cell's naturally occurring polyamines but do not perform the
functions required for cell growth and proliferation. In addition, the
analogues shut down polyamine biosynthesis by the cell and stimulate production
of an enzyme which triggers the exit from the cell of the naturally occurring
polyamines. As a result, the cancer cells are deprived of their ability to
grow, proliferate and survive. Company-sponsored research at the University of
Florida has demonstrated that DEHOP also inhibits the secretion of fluid into,
and promotes the relaxation of the smooth muscles of, the gastrointestinal
tract, thus counteracting the primary causes of diarrhea.
Research with the Human Immunodeficiency Virus (HIV-1) has shown that
during viral replication in CD4 lymphocytes, the product of the viral regulatory
"rev" gene combines with the protein initiation factor (EIF 5a), a normal
cellular component, and other viral genetic material. This combination moves
from the nucleus to the cytoplasm and directs the cell to synthesize proteins
necessary for viral replication and assembly. The Company's sponsored research
at the University of Florida under Dr. Raymond Bergeron's direction has recently
resulted in the synthesis of two different proprietary analogue compounds that
may have application in the treatment of AIDS by inhibiting such intracellular
viral protein synthesis.
The Company is also conducting preclinical studies of the Company's other
potential compounds and indications through its sponsored research agreement
with the University of Florida and through collaborations with other leading
research institutions. In October 1995, the Company and the Clarke Institute of
Psychiatry at the University of Toronto signed a collaborative agreement for the
preclinical investigation of DENSPM as a possible treatment for Alzheimer's
disease. The Mayo Foundation for Medical Education and Research recently signed
an agreement to test the Company's polyamine analogues in vitro for effects on
beta amyloid, the suggested cause of Alzheimer's Disease. In addition, the
Company continues to investigate the possible use of DENSPM and DEHOP for the
treatment of skin disorders such as psoriasis; the use of
diethyldihydroxyhomospermine ("DEHOHO"), a derivative
3
<PAGE>
of DEHOP, in diarrheal and inflammatory conditions of the gastrointestinal
tract; and cyclic analogues, for their possible anti-inflammatory and anti-
asthmatic effects.
In October 1995, the Company and the University of Florida entered into a
license agreement for the patent rights to a proprietary process used to make
synthetic desferrioxamine ("DFO"), a compound essential in binding and excreting
iron in patients suffering from iron overload. Ciba-Geigy Ltd. ("Ciba-Geigy")
is currently marketing DFO that is manufactured using a fermentation process
which has been found to cause allergic reaction in some patients. The Company's
license agreement with the University of Florida grants the Company exclusive
worldwide rights to manufacture and market DFO using a different process in
exchange for license fees and royalties. The Company intends to sub-contract
the manufacturing and marketing of DFO to third parties, and expects it to be
commercially available in 1998. For this purpose the Company has entered into
an agreement with Shanghai Institute of Organic Chemistry for the scale-up and
production of DFO.
The Company's strategy is to develop products, both independently and
through strategic alliances with larger pharmaceutical companies, pursuant to
which the Company will seek financial, preclinical and clinical trial and
marketing assistance from larger pharmaceutical companies for drugs with broad
market potential, while retaining parallel manufacturing and/or marketing rights
for all or part of those markets. Consistent with this strategy, the Company
sublicensed worldwide rights (excluding Japan) to manufacture and market DENSPM
for all cancer applications to Warner-Lambert in May 1993 and sublicensed such
rights in Japan to Nippon Kayaku in February 1994. Warner-Lambert and Nippon
Kayaku have agreed to make staged payments to SunPharm for license fees and
research and development milestones, of which an aggregate of $2.35 million has
been paid to date, and to pay royalties for sales of products incorporating
DENSPM. In addition, Warner-Lambert has agreed to fund and administer the human
clinical trials for DENSPM following completion of Phase I human clinical
trials, and Nippon Kayaku has agreed to fund and administer all such human
clinical trials which may be conducted in Japan. In June 1996, the Company
granted Warner-Lambert a six-month exclusive option to negotiate an exclusive
license to the remaining linear polyamine analogues licensed to the Company for
the treatment of cancer, concurrent with the payment by Warner-Lambert of one-
half of the milestone payment due ($500,000) on completion of the Phase I
clinical trials.
The Company was incorporated in Delaware in 1990 as Lexigen, Incorporated
and in 1991 changed its name to SunPharm Corporation. The Company's principal
executive offices are located at 4651 Salisbury Road, Suite 205, Jacksonville,
Florida 32256 (telephone number (904) 296-3320).
4
<PAGE>
RISK FACTORS
Prospective investors should carefully consider the following risk factors
in evaluating an investment in the Common Stock.
DEVELOPMENT STAGE COMPANY
The Company is in the development stage and has realized only limited
revenues, all of which have been derived from payments from Warner-Lambert and
Nippon Kayaku in connection with license fees and achieving identified research
milestones with respect to DENSPM. The Company has incurred net losses since
commencement of its operations and it expects to continue to incur losses for
the foreseeable future. As of March 31, 1996, the Company had an accumulated
deficit of $9.4 million. Moreover, there can be no assurance that the Company
will successfully complete the transition from a development company to
successful operations and/or profitability.
NO ASSURANCE OF SUCCESSFUL PRODUCT DEVELOPMENT OR COMMERCIALIZATION
Since its inception, the Company has devoted its efforts exclusively to the
research and development of potential pharmaceutical products based solely upon
its polyamine analogue technology. While one of these analogues, DEHOP, is
presently in Phase II human clinical trials for AIDS related diarrhea and Phase
I human clinical trials for cancer, and another analogue, DENSPM, is presently
in Phase I human clinical trials for cancer, such trials will not be sufficient
to demonstrate their safety or efficacy, and substantial further human clinical
trials must be successfully completed before such products may be approved for
commercialization. There can be no assurance that DEHOP or DENSPM, or any other
potential product currently in development or developed in the future, will
prove to be safe or effective in clinical trials, meet applicable regulatory
standards, be capable of being produced in commercial quantities at acceptable
cost or be successfully marketed.
NEED FOR ADDITIONAL FINANCING; RISK OF NASDAQ DELISTING
The Company has expended and will continue to expend substantial funds to
continue the research and development of its products, conduct preclinical and
clinical trials, establish clinical and commercial scale manufacturing in its
own facilities or in the facilities of others and market its products. The
amount and timing of such expenditures are subject to a number of factors.
Based on its current operating plan, the Company anticipates that its existing
capital resources, including the remaining $500,000 portion of the milestone
payment from Warner-Lambert due upon completion of the Phase I clinical trials
in cancer, will be adequate to satisfy its capital needs through 1996, but will
not be sufficient to fund the Company's operations to the point of introduction
of a commercially successful product. In the event the Warner-Lambert payment
is not received, the Company's existing capital resources will only be adequate
to fund the Company's operations through the third quarter of 1996. Such
milestone payment from Warner-Lambert is conditioned upon the completion of
Phase I clinical trials for DENSPM to Warner-Lambert's reasonable satisfaction;
while the Company believes such trials will be completed during the third
quarter of 1996 to Warner-Lambert's satisfaction, no assurance can be given that
the $500,000 Warner-Lambert payment will be received. Except for such payment
from Warner-Lambert, the Company's rights to receive payments from Warner-
Lambert and Nippon Kayaku are dependent upon the achievement of certain
development and commercialization milestones by Warner-Lambert and Nippon
Kayaku, respectively, and are not within the control of the Company. Further,
the capability of Warner-Lambert or Nippon Kayaku to achieve such milestones
depends upon the availability and/or prioritization of sufficient funding to
support necessary testing of DENSPM, the availability of trained and experienced
staff for testing and the results of such testing, among other factors. As a
result, no assurance can be made that such milestones will be achieved or that
such payments will be received by the Company.
In April 1996, the Company received notice from The Nasdaq Stock Market
("Nasdaq") that the Company's total assets and capital and surplus as of
December 31, 1995, did not meet the minimum requirements for continued listing
on the Nasdaq Small Cap Market and that the Company's Common Stock, Warrants and
Units were subject to delisting. Nasdaq requested that the Company provide a
specific plan demonstrating how the Company will achieve ongoing compliance with
Nasdaq's minimum requirements of $2,000,000 of total assets and $1,000,000 of
capital and
5
<PAGE>
surplus. The Company provided a plan to Nasdaq which contemplated
cash inflows to the Company through the private placement of equity and other
sources in an amount sufficient to bring the Company into compliance by June 15,
1996, the date established by Nasdaq for final determination. On June 17, 1996,
the Company filed a Current Report on Form 8-K which established that the
Company had met the minimum requirements on such date for continued listing on
Nasdaq, as a result of the following events: (i) the receipt in escrow of
$370,460 of proceeds in connection with the offering of Common Stock and
warrants in the private placement; (ii) the exercise of outstanding warrants
from current warrantholders and the issuance of additional warrants to such
individuals, in an amount equal to $468,301; (iii) payment of $500,000 from
Warner-Lambert as a progress payment on the Phase I clinical trials of DENSPM
for cancer; and (iv) the settlement of a lawsuit with Dean L. Rider, M.D., the
Selling Stockholder, pursuant to which the Company issued to Dr. Rider the
50,000 shares of Common Stock offered hereby. After the filing of the Current
Report on Form 8-K, the Company received additional proceeds and conducted an
initial closing on July 19, 1996 in which it received an aggregate of $623,127
of proceeds (including the amount previously held in escrow). As of July 19,
1996, the Company had received subscription agreements and commitments in
connection with the private placement for an additional $250,000, from which the
Company expects to receive additional proceeds in subsequent closings. There
can be no assurance that SunPharm will receive the funds related to the
subscription agreements and commitments of $250,000. In the event such funds
are not received, SunPharm will have to raise funds from other sources. Based
on all of the above, there can be no assurance that the Company will be
successful in maintaining its continued listing on the Nasdaq Small Cap Market.
In the event that the Company's securities are delisted, the market value of
such securities may be adversely affected.
The Company will require significant levels of additional capital, which it
intends to raise through additional equity or debt financing, additional
arrangements with corporate partners or from other sources. No assurance can be
given that the necessary funds will be available for the Company to finance its
development on acceptable terms or at all. If adequate funds are not available
from operations or additional sources of financing, the Company's business will
be materially and adversely affected.
GOVERNMENT REGULATION; NO ASSURANCE OF REGULATORY APPROVAL
Research, preclinical development, clinical trials and the manufacturing
and marketing of therapeutic products under development by the Company are
subject to extensive and rigorous regulation by government authorities in the
United States and other countries, including, but not limited to, the United
States Food and Drug Administration ("FDA"). In order to obtain approval to
commercialize a product, the Company must demonstrate to the satisfaction of the
FDA and comparable authorities in other countries that such product is safe and
effective for its intended uses and that the Company is capable of manufacturing
the product to the applicable standards. In the U.S., this requires that the
product undergo extensive preclinical testing, that the Company file an
Investigational New Drug Application ("IND") with the FDA prior to commencing
human clinical trials and that the Company file a New Drug Application ("NDA")
requesting FDA approval for commercial marketing of the product.
The approval process for the Company's product candidates is likely to take
several years and will involve significant expenditures for which additional
financing will be required. The cost to the Company of conducting human
clinical trials for any potential product can vary dramatically based on a
number of factors, including the order and timing of clinical indications
pursued and the extent of development and financial support, if any, from
corporate partners. Although Phase I and Phase II clinical trials of DENSPM and
DEHOP are presently being conducted, further clinical trials, including large,
time-consuming and more costly Phase II and Phase III clinical trials, will be
required to demonstrate the safety and efficacy of such drug candidates. So far,
the Phase I human clinical trials of DENSPM have involved approximately 64
patients with advanced or terminal cases of cancer. Due to the nature of these
studies, the patient population is limited to cases for which other therapies
have failed. During the pendency of such trials, a number of such patients
have expired. The Company and its clinical investigators believe that these
patients expired as a result of the advanced stage of their cancer, and that
DENSPM did not contribute in any manner to their deaths. There can be no
assurance that the Company will have sufficient resources to complete the
required regulatory review process or that the Company could survive the
inability to obtain, or delays in obtaining, such approvals. Approvals that may
be granted will be subject to continual review, and later discovery of
previously unknown problems may result in withdrawal of products from marketing.
6
<PAGE>
DEPENDENCE ON EXCLUSIVE LICENSE
All of the Company's development and commercialization rights for its
products are derived from its license agreements with the University of Florida.
The Company's rights under the license agreements are subject to early
termination under certain circumstances, including failure to pay royalties or
other material breach by the Company, bankruptcy of the Company or failure by
the Company to carry on its business, failure to commence marketing of a
licensed product within six months of approval in any specific market, and
failure to comply with the terms of the Company's sponsored research agreement
with the University of Florida, among others. In the event that the license
agreement terminates, the Company's rights to manufacture and market DEHOP and
DENSPM and its other products would terminate.
LIMITED PERSONNEL; RELIANCE ON STRATEGIC ALLIANCES; RELIANCE ON COLLABORATIVE
ARRANGEMENTS FOR RESEARCH AND DEVELOPMENT
SunPharm is presently structured as a virtual company with only four full-
time employees. The Company is substantially dependent on third parties, with
all of the risks attendant thereto, to conduct research and development, to
conduct clinical trials of the Company's potential products and to manufacture
DEHOP, DENSPM and other compounds for such research and development.
The Company is dependent upon the University of Florida and Dr. Raymond
Bergeron, the inventor of the Company's technology, with respect to all research
and most early preclinical development of its potential products. The Company
does not have, and has no immediate plans to construct, a laboratory facility.
The Company has no control over the facilities where the research and
development work is being performed or over the personnel performing such work.
If the University of Florida breaches its obligations under its agreement with
the Company, the Company's remedies may be limited by applicable law affecting
actions against state agencies.
The Company benefits significantly from and is dependent upon collaborative
arrangements with the University of Florida and Dr. Bergeron with respect to
human clinical trials of DEHOP and DENSPM, and with The University of Florida
and with Johns Hopkins University with respect to human clinical trials of
DENSPM. Although the Company believes that its relationships with its
collaborators are good, there can be no assurance that the Company's
relationships with such institutions and individuals will continue. The loss of
these relationships would significantly increase the Company's expenses and
could have a substantial negative effect on the Company's ability to attain its
long-range objectives.
The Company is dependent upon strategic alliances with Warner-Lambert and
Nippon Kayaku with respect to the development and commercialization of DENSPM,
and expects to rely upon future strategic alliances with other pharmaceutical
companies with respect to other potential products. Although the Company
believes that Warner-Lambert, Nippon Kayaku and any future strategic alliance
partners have or will have an economic motivation to develop and commercialize
such products, the amount and timing of resources to be devoted to these
activities are not within the control of the Company and will be subject to the
priorities of such strategic alliance partners in allocating these resources,
which may not be consistent with the best interests of the Company. In
addition, the Company's strategic alliance partners or their affiliates may be
pursuing alternative products or technologies which may compete with the
Company's products and technologies. No assurances can be given that the
Company's agreements with Warner-Lambert and Nippon Kayaku, or with any other
strategic alliances the Company may enter in the future, will result in the
successful development or commercialization of DENSPM or other potential
products, or that any such agreements will result in any significant revenues,
profits or cost savings to the Company. Furthermore, no assurances can be given
that the Company will be able to enter into future strategic alliance agreements
on favorable terms or at all. In addition, the Company's strategic alliance
partners or their affiliates may be pursuing alternative products or
technologies which may compete with the Company's products and technologies.
7
<PAGE>
UNCERTAINTIES AS TO PATENTS AND PROPRIETARY TECHNOLOGIES
Subject to a nonexclusive statutory license to the United States
government, the Company is the exclusive licensee of issued patents and patent
applications from the University of Florida. The Company is required to meet
specified milestone and diligence requirements in order to retain its license to
the patents and other proprietary rights licensed from the University of
Florida. No assurance can be given that the Company will satisfy any of these
requirements.
The patent position of pharmaceutical companies generally is highly
uncertain and involves complex legal and factual questions. There can be no
assurance that the patents licensed from the University of Florida will provide
substantial protection or commercial benefit to the Company, afford the Company
adequate protection from competing products, or not be challenged or declared
invalid or that additional related United States or foreign patents will be
issued, the occurrence of any of which could have a material adverse effect on
the Company's operations. The United States government could use its rights as
licensee of the University of Florida's patents to increase the supply of
products based on such patents or to reduce the cost of treatment with such
products.
Certain proprietary trade secrets and unpatented know-how are important to
the Company. There can be no assurance that others may not independently
develop the same or similar technologies. Although the Company has taken steps
to protect its trade secrets and unpatented know-how, third parties nonetheless
may gain access to such information.
There has been significant litigation in the biotechnology and
pharmaceutical industry regarding patents and other proprietary rights. If the
Company became involved in similar litigation regarding its intellectual
property rights, the cost of such litigation could be substantial. The limited
capital resources of the Company could significantly adversely affect its
ability to enforce or defend its intellectual property rights, especially
against companies which have substantially more resources.
UNCERTAINTY OF THIRD-PARTY REIMBURSEMENT
The Company's ability to commercialize its products successfully will
depend in part on the extent to which appropriate reimbursement levels for the
cost of the products and related treatment are obtained from government
authorities, private health insurers and other organizations, such as health
maintenance organizations ("HMOs"). Third-party payors are increasingly
challenging the prices charged for medical products and services. Also, the
trend toward managed healthcare in the United States, the growth of
organizations such as HMOs, and legislative proposals to reform healthcare and
government insurance programs could significantly influence the purchase of
healthcare services and products, resulting in lower prices and reducing demand
for the Company's products. The cost containment measures that healthcare
providers are instituting and any healthcare reform could affect the Company's
ability to sell its products and may have a material adverse effect on the
Company. There can be no assurance that reimbursement in the United States or
foreign countries will be available for any of the Company's products, that any
reimbursement granted will be maintained, or that limits on reimbursement
available from third-party payors will not reduce the demand for, or negatively
affect the price of, the Company's products. The unavailability or inadequacy
of third-party reimbursement for the Company's products would have a material
adverse effect on the Company. The Company is unable to forecast what
additional legislation or regulation relating to the healthcare industry or
third-party coverage and reimbursement may be enacted in the future, or what
effect the legislation or regulation would have on the Company's business.
COMPETITION; RAPID TECHNOLOGICAL CHANGE
Biotechnology and pharmaceutical companies are highly competitive. There
are many pharmaceutical companies, biotechnology companies, public and private
universities, and research organizations actively engaged in research and
development of products that may be similar to, or seek to attack the same
targets as, SunPharm's products. Many of the Company's existing or potential
competitors have substantially greater financial, technical, and human resources
than the Company and may be better equipped to develop, manufacture, and market
products. These companies may develop and introduce products and processes
competitive with or superior to those of the Company.
8
<PAGE>
In addition, other technologies or products may be developed that have an
entirely different approach or means of accomplishing the intended purposes of
the Company's products which might render the Company's technology and products
uncompetitive or obsolete. There can be no assurance that the Company will be
able to compete successfully.
PRODUCT LIABILITY EXPOSURE; LIMITED INSURANCE COVERAGE
The testing, marketing and sale of pharmaceutical products entails a risk
of product liability claims by consumers and others and such claims may be
asserted against the Company. The Company does not maintain product liability
insurance coverage other than $1,000,000 of primary and $1,000,000 of excess
product liability coverage applicable only for DENSPM and DEHOP for the Phase I
human clinical trials of DENSPM and Phase II human clinical trials of DEHOP.
Prior to marketing any product, there can be no assurance it will be able to
obtain such insurance at a reasonable cost or in an amount sufficient to cover
all possible liabilities. In the event of a successful product liability suit
against the Company, lack or insufficiency of insurance coverage could have a
material adverse effect on the Company. Further, SunPharm is required to
indemnify the University of Florida and its trustees, officers, employees and
affiliates against claims resulting from the manufacture or sale of products
derived from its polyamine compounds and to have product liability coverage
naming the University of Florida as an additional insured for such risks.
LACK OF MANUFACTURING EXPERIENCE OR FACILITIES
The Company currently contracts with third parties for the production of
compounds in limited quantities for its preclinical and clinical trials and
currently does not possess the staff or facilities necessary to manufacture
products in commercial quantities. The Company has entered into an agreement,
however, for the production of clinical-scale quantities of its products by a
third party which it believes capable of supplying its short-term requirements.
There can be no assurance that the polyamine compounds can be manufactured by
the Company or its suppliers at a cost or in quantities necessary to make such
compounds commercially viable products.
VOLATILITY OF STOCK PRICE; LIQUIDATION PREFERENCE; LACK OF DIVIDENDS
The market prices for securities of biopharmaceutical companies
historically have been highly volatile. Announcements concerning the Company or
its competitors, including the results of testing and clinical trials,
technological innovations, or commercial products, government regulations,
developments concerning proprietary rights, including patents and litigation
matters, a change in status of a collaborative partner, public concern relating
to the commercial value or safety of the Company's products, and stock market
conditions in general may have a significant impact on the price of the Common
Stock.
The Company has not paid dividends on its Common Stock since its inception
and does not intend to pay any such dividends in the foreseeable future. For
the years ended December 31, 1992, 1993, 1994 and 1995, the Company has incurred
net losses of $998,004, $1,233,352, $2,159,011, and $4,369,653 respectively.
SHARES ELIGIBLE FOR FUTURE SALE
Sales of a substantial number of shares of Common Stock in the public
market could adversely affect the market price of the Common Stock. Of the
2,934,535 shares of Common Stock outstanding as of June 30, 1996, 1,937,525
shares are eligible for resale under Rule 144(k) without restriction under the
Securities Act, and 997,010 shares are restricted securities that may not be
resold unless the resale is registered under the Securities Act or it is made
subject to the volume limitations and other restrictions of Rule 144 or another
exemption from registration under the Securities Act. The holders of 2,849,539
shares of Common Stock have agreed not to sell such shares until January 12,
1997 without the consent of Royce Investment Group, Inc., the managing
underwriter of the Company's initial public offering. As of June 30, 1996,
2,709,070 shares of Common Stock (or 47.1% of the total number of shares
outstanding on a fully diluted basis) were issuable upon the exercise of
outstanding options and warrants. Additional shares may be issued upon the
conversion of preferred stock in the event that the Company issues any shares of
preferred stock. The existence of such warrants, options and convertible
securities, as well as certain registration rights, may adversely affect the
terms on which the Company may obtain additional equity financing.
9
<PAGE>
USE OF PROCEEDS
The Company will not receive any proceeds from sales, if any, of Common
Stock by the Selling Stockholders to the public. The costs and expenses
incurred in connection with the registration under the Securities Act of the
offering described herein are estimated to be $45,000 and will be paid by the
Company. The Selling Stockholder will pay all brokerage fees and commissions,
if any, incurred in connection with the sale of Shares by such party.
SELLING STOCKHOLDER
The following table shows the name of the Selling Stockholder, the shares
of Common Stock owned beneficially and/or of record by the Selling Stockholder
as of June 30, 1996, the number of Shares being offered by the Selling
Stockholder and the number of Shares to be owned by the Selling Stockholder
after completion of the offering, assuming all of the Shares being offered are
sold.
<TABLE>
<CAPTION>
Beneficial Ownership Beneficial Ownership
Selling Stockholder Prior to Offering Shares Being Offered after Offering
------------------- -------------------- -------------------- --------------------
<S> <C> <C> <C>
Dean L. Rider, M.D./(1)/ 61,700 50,000 11,700
</TABLE>
/(1)/ All of the shares of Common Stock being offered by Dr. Rider hereby were
acquired by him in the June 1996 settlement of a lawsuit filed by him
against the Company in December 1995 alleging damages for breach of
contract and fraud relating to the use of DEHOP for the treatment of AIDS-
related diarrhea; the other shares owned by Dr. Rider were acquired upon
the automatic conversion of shares of Series A Preferred Stock purchased
by him in 1992 as a result of the initial public offering of Common Stock
by the Company in January 1995.
PLAN OF DISTRIBUTION
The Selling Stockholder may from time to time sell all or a portion of the
Shares on the Nasdaq Small Cap Market, in negotiated transactions or otherwise,
at market prices prevailing at the time of sale, at prices related to market
prices or at negotiated prices; provided that the Selling Stockholder has agreed
(i) that he will not sell more than 5,000 shares of Common Stock in any calendar
week period and (ii) that this Registration Statement may be withdrawn by the
Company on December 12, 1996, regardless of whether all of the Shares have been
sold hereunder. The Shares may be sold directly to or through brokers or
dealers. The methods by which the Shares may be sold include (a) a block trade
(which may involve crosses) in which the broker or dealer so engaged will
attempt to sell the securities 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) distributions in accordance with the rules of
the Nasdaq Small Cap Market; (d) ordinary brokerage transactions and
transactions in which the broker solicits purchasers; and (e) privately
negotiated transactions. The Selling Stockholder and any broker-dealers
participating in the distribution of the Shares may be deemed to be
"underwriters" within the meaning of the Securities Act and any profit on the
sale of the Shares by the Selling Stockholder and any commissions received by
any such broker-dealers may be deemed to be underwriting commission under the
Securities Act.
LEGAL MATTERS
Certain legal matters with respect to the validity of the securities
offered hereby are being passed upon for the Company by Andrews & Kurth L.L.P.,
Houston, Texas.
EXPERTS
The financial statements incorporated in this prospectus by reference from
the Company's Annual Report on Form 10-KSB for the year ended December 31, 1995
have been audited by Deloitte & Touche LLP, independent auditors, as stated in
their report, which is incorporated herein by reference (which report expresses
an unqualified opinion and includes an explanatory paragraph referring to
recurring losses incurred by the Company from inception
10
<PAGE>
and to an uncertainty surrounding the Company's ability to obtain sufficient
financing in 1996 which raises substantial doubt about the Company's ability to
continue as a going concern), and have been so incorporated in reliance upon the
report of such firm given upon their authority as experts in accounting and
auditing.
The financial statements of SunPharm Corporation for the year ended
December 31, 1994, incorporated by reference into this Prospectus from the
Company's Annual Report on Form 10-KSB for the year ended December 31, 1995,
have been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their report with respect therein and are included in reliance upon
the authority of said firm as experts in giving said report. Reference is made
to said report which includes explanatory paragraphs with respect to certain
factors including that in order to complete research and development and other
activities necessary to commercialize its products, additional financing would
be required subsequent to December 31, 1994 and that certain claims have been
made against the Company the outcome of which was uncertain.
11
<PAGE>
================================================================================
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS OFFERING
OTHER THAN THOSE CONTAINED IN OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS
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 OF THESE
SECURITIES IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH
OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVER OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL AT ANY TIME IMPLY THAT THE
INFORMATION CONTAINED OR INCORPORATED BY REFERENCE HEREIN IS CORRECT AS OF ANY
TIME SUBSEQUENT TO THE DATE HEREOF.
---------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Available Information..... ........... 2
Incorporation of Certain Documents
by Reference....................... 2
The Company........................... 3
Risk Factors.......................... 5
Use of Proceeds.......................10
Selling Stockholder...................10
Plan of Distribution..................10
Legal Matters.........................10
Experts...............................10
</TABLE>
================================================================================
================================================================================
50,000 SHARES
SUNPHARM CORPORATION
COMMON STOCK
---------------
PROSPECTUS
---------------
________, 1996
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth all expenses, other than underwriting
discounts and commissions, payable by the Registrant in connection with the sale
of the Common Stock being registered. All the amounts shown are estimates
except for the registration fee.
<TABLE>
<CAPTION>
<S> <C>
SEC registration fee................ $ 104
NASD filing fee..................... --
Blue Sky fees and expenses.......... --
Legal fees and expenses............. 20,000
Accounting fees and expenses........ 20,000
Transfer agent and registrar fees... --
Miscellaneous fees and expenses..... 4,896
-------
TOTAL $45,000
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS
Reference is made to Article VII of the By-Laws of the Company (filed
as Exhibit 3.2) to the Company's Annual Report on Form 10-KSB for the fiscal
ended December 31, 1995 and to Section 145 of the Delaware General Corporation
Law, which, among other things and subject to certain conditions, authorize the
Company to indemnify each of its officers and directors against certain
liabilities and expenses incurred by such persons in connection with claims made
by reason of their being such officers or directors. Reference is further made
to the Company's 1995 underwriting agreement (filed as Exhibit 1.1) to the
Registration Statement on Form SB-2 (No. 33-85416-A) as filed on January 10,
1995, which contains provisions for the indemnification of directors, officers
and controlling persons of the Company under certain circumstances.
<TABLE>
<CAPTION>
ITEM 16. EXHIBITS
<S> <C>
Exhibit No. Description
----------- -----------
5.1 Opinion of Andrews & Kurth L.L.P.
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Deloitte & Touche LLP
23.3 Consent of Andrews & Kurth L.L.P. (included in
opinion filed as Exhibit 5.1).
24.1 Power of Attorney (included on signature page).
</TABLE>
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement;
II-1
<PAGE>
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (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;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or
any material change to such information in the Registration Statement.
Provided, however, that paragraphs (a)(i) and (a)(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 and Exchange Act of 1934, as
amended (the "Exchange Act") that are incorporated by reference in the
Registration Statement.
(b) 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.
(c) 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.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to section 15(d) of the Exchange Act) 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. 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 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-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Jacksonville, State of Florida on July 19, 1996.
SUNPHARM CORPORATION
Date: July 19, 1996 By: /s/Stefan Borg
--------------
Stefan Borg
President and Chief Executive Officer
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Stefan Borg and Dennis Oistacher, and
each or either of them, his true and lawful attorneys-in-fact and agent, with
full power of substitution and resubstitution for him and in his name, place,
and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, 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 might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, or their or his substitutes or substitute, 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/ Stefan Borg President, Director and Chief July 19, 1996
- --------------------------- Executive Officer (Principal
(Stefan Borg) Executive and Accounting Officer)
Chairman of the Board of Directors July , 1996
- ---------------------------
(Jacques Rejeange)
/s/ Robert Janicki Director July 19, 1996
- ---------------------------
(Robert Janicki)
/s/ Robert Schoellhorn Director July 19, 1996
- ---------------------------
(Robert Schoellhorn
/s/ Philip Tracy Director July 19, 1996
- ---------------------------
(Philip Tracy)
/s/ George Schwartz Director July 19, 1996
- ---------------------------
(George Schwartz)
II-3
</TABLE>
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
5.1 Opinion of Andrews & Kurth L.L.P.
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Deloitte & Touche LLP
23.3 Consent of Andrews & Kurth L.L.P. (included in
opinion filed as Exhibit 5.1).
24.1 Power of Attorney (included on signature page).
</TABLE>
<PAGE>
Exhibit 5.1
July 19, 1996
Board of Directors
SunPharm Corporation
4651 Salisbury Road, Suite 205
Jacksonville, Florida 32256
Gentlemen:
We have acted as counsel to SunPharm Corporation (the "Company") in
connection with the Company's Registration Statement on Form S-3 (the
"Registration Statement") relating to the registration under the Securities Act
of 1933, as amended (the "Securities Act"), of the offer and sale by the Selling
Stockholder identified in the Registration Statement of up to 50,000 shares (the
"Shares") of the Company's Common Stock, par value $0.0001 per share.
As the basis for the opinions hereinafter expressed, we have examined
such statutes, regulations, corporate records and documents, certificates of
corporate and public officials, and other instruments as we have deemed
necessary or advisable. In such examination we have assumed the authenticity of
all documents submitted to us as originals and the conformity with the original
documents of all documents submitted to us as copies.
Based on the foregoing and on such legal considerations as we deem
relevant, we are of the opinion that the Shares have been duly authorized by the
Company and are validly issued, fully paid and nonassessable.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement and reference to our firm under the caption "Legal
Matters" in the Prospectus included therein.
Very truly yours,
Andrews & Kurth L.L.P.
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated April 3, 1995
included in SunPharm Corporation's Form 10-KSB for the year ended December 31,
1994 and for the period from inception on May 3, 1990 through December 31, 1994
and to all references to our Firm included in this registration statement.
ARTHUR ANDERSEN LLP
July 16, 1996
The Woodlands, Texas
<PAGE>
Exhibit 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of SunPharm Corporation (the "Company") on Form S-3 of our report
dated March 15, 1996 (which report expresses an unqualified opinion and includes
an explanatory paragraph referring to recurring losses incurred by the Company
from inception and an uncertainty surrounding the Company's ability to obtain
sufficient financing in 1996 which raises substantial doubt about the Company's
ability to continue as a going concern), appearing in the Annual Report on Form
10-KSB of SunPharm Corporation for the year ended December 31, 1995 and to the
reference to us under the heading "Experts" in the Prospectus, which is a part
of this Registration Statement.
DELOITTE & TOUCHE LLP
Jacksonville, Florida
July 19, 1996
