TEXAS BIOTECHNOLOGY CORP /DE/, S-3, 1996-05-10

TEXAS BIOTECHNOLOGY CORP /DE/
S-3, 1996-05-10
PHARMACEUTICAL PREPARATIONS

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As filed with the Securities and Exchange Commission on May 10, 1996.
REGISTRATION NO. __________

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

TEXAS BIOTECHNOLOGY CORPORATION
(Exact name of registrant as specified in its charter)
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DELAWARE 2834 13-3532643
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification Code Number) Identification Number)
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7000 FANNIN, SUITE 1920
HOUSTON, TEXAS 77030
(713) 796-8822
(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)
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STEPHEN L. MUELLER With copies to:
VICE PRESIDENT OF ADMINISTRATION PORTER & HEDGES, L.L.P.
SECRETARY AND TREASURER 700 LOUISIANA, 35TH FLOOR
TEXAS BIOTECHNOLOGY CORPORATION HOUSTON, TEXAS 770026-2764
7000 FANNIN, SUITE 1920 ATTN: ROBERT G. REEDY
HOUSTON, TEXAS 77030 (713) 266-0600
(713) 796-8822
(Name and address, including zip code, and telephone
number, including area code, of agent for service)
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Approximate date of commencement of proposed sale to the public: As soon as
practicable after the Registration Statement becomes effective.

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 a dividend or
interest reinvestment plan, please 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

TITLE OF EACH CLASS OF PROPOSED MAXIMUM PROPOSED
SECURITIES TO BE REGISTERED AMOUNT TO OFFERING MAXIMUM AGGREGATE AMOUNT OF
BE REGISTERED PRICE PER SHARE OFFERING PRICE REGISTRATION FEE
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Common Stock, par value $.005 per share. 6,551,848 $4.625 $30,302,297 $10,450/(1)/

Common Stock, par value $.005 per 25,587 $ 3.36 $ 85,972 $ 30/(3)/
share/(2)/.............................

Common Stock, par value $.005 per 157,350 $ 4.58 $ 720,663 $ 249/(3)/
share/(2)/.............................

Common Stock, par value $.005 per 477,856 $ 3.50 $ 1,672,496 $ 577/(3)/
share/(2)/.............................
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TOTAL......................... $ 11,306
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(1) Pursuant to Rule 457(c), the registration fee is calculated based on the
average of the high and low prices for the Common Stock, as reported by the
American Stock Exchange on May 7, 1996 or $4.625 per share.
(2) Issuable upon exercise of warrants evidencing the right to purchase shares
of Common Stock, par value $.005 per share. The Registration Statement also
covers any additional securities which may become issuable pursuant to the
antidilution provision of the warrants.
(3) Pursuant to Rule 457(g), the registration fee is calculated based on the
exercise price for the warrants.

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.
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PROSPECTUS
- ----------

TEXAS BIOTECHNOLOGY CORPORATION

7,212,641 SHARES
COMMON STOCK

This Prospectus relates to 7,212,641 shares (the "Shares") of Common Stock,
par value $.005 per share (the "Common Stock"), of Texas Biotechnology
Corporation, a Delaware corporation (the "Company"). The shares will be offered
for resale by certain stockholders of the Company and certain holders of the
warrants to purchase shares of Common Stock (the "Selling Stockholder").
6,733,927 of the Shares relate to the Company's private placement of Common
Stock that was completed on February 13, 1996. Of this total, 6,550,990 Shares
were sold at a price of $2.125 per share to a total of 55 investors. The
remaining Shares represent shares underlying warrants issued in conjunction with
the private placement. 25,587 of the warrants are exercisable at $3.36 per
share and 157,350 of the warrants are exercisable at $4.58 per share. These
warrants are exercisable beginning May 13, 1996 and expire on February 13, 2001.

The Shares also include 477,856 shares of Common Stock underlying warrants
issued in connection with the Company's private placement of Common Stock
completed in October 1991. The warrants are exercisable at $3.50 per share and
expire between August 1, 1998 and October 25, 1998. The Shares also include 858
shares of Common Stock acquired upon exercise of warrants issued in connection
with the Company's private placement of Common Stock completed in October 1991.

The Shares may be offered by the Selling Stockholders from time to time in
transactions on the American Stock Exchange, Inc. ("AMEX"), in privately
negotiated transactions, or by a combination of such methods of sale, at fixed
prices that may be changed, at market prices prevailing at the time of sale, at
prices related to such prevailing market prices or at negotiated prices. The
Selling Stockholders 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 commissions from the Selling Stockholders 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). See "Selling Stockholders"
and "Plan of Distribution."

None of the proceeds from the sale of the Shares by the Selling
Stockholders will be received by the Company except that an aggregate of
$2,479,131 may be received by the Company on the exercise of the warrants. The
Company has agreed to bear certain expenses (other than brokerage commissions,
discounts, fees and other expenses not specifically provided for in the Merger
Agreement), estimated to be $16,806, in connection with the registration and
sale of the Shares being offered by the Selling Stockholders. The Company has
agreed to indemnify certain of the Selling Stockholders against certain
liabilities, including certain liabilities under the Securities Act of 1933, as
amended.

The shares of Common Stock are quoted on the AMEX under the symbol "TXB."
On May 7, 1996, the last reported sale price of the Common Stock was $4.625 per
share.

SEE "RISK FACTORS" ON PAGES 4-11 FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD
BE CONSIDERED BY PROSPECTIVE INVESTORS.

--------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.

The date of this Prospectus is May 10, 1996.
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TABLE OF CONTENTS

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Page
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Available Information................... 3

Incorporation of Certain Documents by 3
Reference..............................

The Company............................. 4

Risk Factors............................ 4

Selling Stockholders.................... 12

Plan of Distribution.................... 14

Legal Matters........................... 15

Experts................................. 15
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AVAILABLE INFORMATION

The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities of the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. and at the Commission's regional offices at the
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-
2511 and 7 World Trade Center, Suite 1300, New York, 10048. Copies of such
material may also be obtained from the Public Reference Section of the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549,
at prescribed rates. Such materials also can be inspected at the offices of the
AMEX, 86 Trinity Place, New York, New York 10006, on which the Common Stock is
listed.

The Company has filed with the Commission a Registration Statement on Form S-
3 (including any amendments thereto, the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act") with respect to the
shares of Common Stock offered hereby. This Prospectus does not contain all of
the information set forth in the Registration Statement and the exhibits and
schedules thereto. For further information with respect to the Company and the
Common Stock, reference is made to the Registration Statement and the exhibits
and schedules thereto. Statements made in this Prospectus regarding the
contents of any contract or document filed as an exhibit to the Registration
Statement are not necessarily complete and, in each instance, reference is
hereby made to the copy of such contract or document so filed. Each such
statement is qualified in its entirety by such reference.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents are hereby incorporated by reference in this
Prospectus:

(1) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995.

(2) The Company's Registration Statement on Form 10 effective June 26,
1992 (as amended) (Commission File No. 0-20117).

(3) The Company's Registration Statement on Form 8-A effective December 15,
1993 (Commission File No. 1-12574).

(4) The Company's Current Report on Form 8-K dated February 13,1996, filed on
February 22, 1996. with the Commission on February 22, 1996.

(5) The Company's Quarterly Report on Form 10-Q for the quarter ended March
31, 1996.

All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and before the
termination of the offering covered hereby will be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the date of filing
such documents. Any statement contained in a document incorporated or deemed to
be incorporated by reference in this Prospectus shall be deemed to be modified
or superseded for purposes of this Prospectus to the extent that a statement
contained in this Prospectus or in any other subsequently filed document that
also is or is deemed to be incorporated by reference modifies or replaces such
statement.

The Company will provide, without charge and on oral or written request, to
each person to whom this Prospectus is delivered, a copy of any or all of the
documents incorporated by reference in this Prospectus other than exhibits to
such documents, unless such exhibits are specifically incorporated by reference
into the information that this Prospectus incorporates. In addition, a copy of
the Company's most recent annual report to stockholders will be promptly
furnished, without charge and on oral or written request, to such persons. All
such requests should be directed to Texas Biotechnology Corporation, 7000
Fannin, Suite 1920, Houston, Texas 77030, Attention: Stephen L. Mueller, Vice
President of Administration, Secretary and Treasurer (telephone (713) 796-8822).

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THE COMPANY

Texas Biotechnology Corporation ("TBC" or the "Company"), a biopharmaceutical
Company, applies innovative drug discovery techniques and its specialized
knowledge of the role of vascular cell biology in cardiovascular disease to the
design and development of novel pharmaceutical compounds. The Company was
incorporated in Delaware in August 1989 under the name Cardiology Institute of
Texas, Ltd., and its name was changed to Texas Biotechnology Corporation in
October 1990. On July 25, 1994, the Company concluded its acquisition of
ImmunoPharmaceutics, Inc. ("IPI") and issued common stock and contingent stock
issue rights in TBC in exchange for all of the outstanding common stock of IPI.
As of April 15, 1996, the Company had 74 employees, 62 of whom were engaged in
research and development. The Company's principal executive offices are located
at 7000 Fannin Street, Suite 1920, Houston, Texas 77030, and its telephone
number is (713) 796-8822. References to TBC or the Company include its
subsidiary, IPI, unless otherwise indicated.

RISK FACTORS

In evaluating the Company and its business, prospective investors should
carefully consider all of the information set forth in this Prospectus and
should give particular attention to the following risk factors.

DEVELOPMENT STAGE; TECHNOLOGICAL UNCERTAINTY

The Company is in a development stage. Except for the activities of its
recently acquired subsidiary, IPI, the Company has not produced or marketed any
products and, accordingly, has not begun to generate revenues from the
commercialization of its product candidates. IPI sold primarily monoclonal
anti-body products and services through its business unit, QED, which was
divested in October of 1995. To date, the Company's resources have been
dedicated to the research and development of small-molecule drugs that prevent
blood clot formation (thrombosis), the proliferation of smooth muscle cells at
sites of vessel injury (vascular proliferative disease), inflammatory responses
to vessel injury (vascular inflammation) and constriction of blood vessels
(vasospasm/hypertension). The Company has developed a number of advanced
technologies in the areas of computer-assisted small-molecule drug design for
peptidomimetics and glycomimetics. Since initiating its research programs in
January 1991, the Company has developed lead compounds in its vascular
proliferation disease, vascular inflammation and vasospasm/hypertension
programs. The commercial applications of the Company's product candidates will
require further investment, research, development, preclinical and clinical
testing and regulatory approvals, both foreign and domestic. There can be no
assurance that the Company will be able to develop, produce at reasonable cost,
or market successfully, any of its product candidates. Further, these product
candidates may prove to have undesirable and unintended side effects and, in
some cases, may require complex delivery systems that may prevent or limit their
commercial use. All of the Company's products will require regulatory approval
before they may be commercialized. Products, if any, resulting from the
Company's research and development programs are not expected to be commercially
available for a number of years, and there can be no assurance that any
successfully developed products will generate substantial revenues or that the
Company will ever be profitable.

NEED FOR ADDITIONAL FUNDS; HISTORY OF OPERATING LOSSES

Because the Company has been unprofitable to date and expects to incur losses
for the next several years as the Company invests in product research and
development, preclinical and clinical testing and regulatory compliance, the
Company will require substantial additional funds to complete the research and
development of its product candidates, to establish commercial-scale
manufacturing facilities and to market its products. The Company has
accumulated approximately $43.9 million in net losses through December 31, 1995.
Estimates of the Company's future capital requirements will depend on many
factors, including: continued scientific progress in its drug discovery
programs; the magnitude of these programs; progress with preclinical testing and
clinical trials; the time and costs involved in obtaining regulatory approvals;
the costs involved in filing, prosecuting and enforcing patent claims; competing
technological and market developments; changes in its existing research
relationships; the ability of the Company to maintain and establish additional
collaborative arrangements; and effective commercialization activities and
arrangements. The Company anticipates its existing capital resources of

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approximately $22.1 million as of March 31, 1996 should be sufficient to fund
its cash requirements into the third quarter of 1997. However, the Company's
existing capital resources will not be sufficient to fund the Company's
operations through commercialization of its first product. The Company expects
that additional expenditures will be required if additional product candidates
enter clinical trials which may require additional expenditures for laboratory
space and scientific and administrative personnel. As a result, additional
funds will need to be raised before any of the Company's product candidates
achieves regulatory approval. Notwithstanding revenues which may be produced
through sales of potential future products if approved, the Company anticipates
that additional funds will need to be secured to continue the required levels of
research and development to reach its long term goals. The Company intends to
seek such additional funding either through collaborative arrangements or
through public or private financings. There can be no assurance that additional
financing will be available, or, if available, that it will be available on
acceptable terms. If additional funds are raised by issuing securities, further
dilution of the equity ownership of existing stockholders will result. If
adequate funds are not available, the Company may be required to delay, scale
back or eliminate one or more of its drug discovery or development programs or
obtain funds through arrangements with collaborative partners or others that may
require the Company to relinquish rights to certain of its technologies, product
candidates or products that the Company would not otherwise relinquish.

DEPENDENCE ON STRATEGIC RELATIONSHIPS; POTENTIAL NEED FOR ADDITIONAL PARTNERS;
LIMITATIONS ON MARKETS AND APPLICATIONS

The Company will rely on strategic relationships with corporate partners to
provide the financing and technical support necessary to develop and
commercialize certain of its product candidates. In May 1993, TBC entered into
an agreement with Genentech to sublicense Genentech's rights and technology
relating to NOVASTAN(R) (argatroban) originally licensed to Genentech by
Mitsubishi Chemical Corporation ("Mitsubishi"), and to license Genentech's own
proprietary technology developed with respect to NOVASTAN(R) (the "Genentech
Agreement"). Under the license and sublicense, the Company has an exclusive
license to use and sell NOVASTAN(R) in the United States and Canada for
specified human cardiovascular indications, not including cerebral
thromboembolism (stroke). The Company is required to pay Genentech and
Mitsubishi specified royalties on net sales of NOVASTAN(R) by the Company and
its sublicensees after its commercial introduction in the United States and
Canada. Genentech has the right to terminate the agreement or to cause the
license to become non-exclusive if the Company fails to exercise due diligence
in performing its obligations under the agreement for a period of 60 days after
receiving written notice from Genentech or fails to maintain a minimum
consolidated tangible net worth of $5.0 million. This due diligence obligation
requires the Company, among other things, to file a new drug application for
NOVASTAN(R) with the United States Food and Drug Administration ("FDA") no later
than June 30, 1997, subject to certain goals being reached in accordance with a
supplemental agreement entered into by the Company, Genentech, and Mitsubishi
effective June 30, 1995. These goals are, in general, (i) enrollment and
treatment with study drugs for a specified minimum number of subjects for
certain human clinical trials by December 31, 1995, (ii) a specified number of
study centers being under contract and performing the trials by December 31,
1995, (iii) commencement of specified planned studies and the pilot phase of
certain human clinical trials by December 31, 1995, (iv) completion of
enrollment and treatment with study drugs of subjects for certain human clinical
trials by June 30, 1996, and (v) completion of milestones related to animal and
human clinical trials and schedules for NOVASTAN(R) by various dates in 1996 and
1997 (the latest date being June 30, 1997). Additionally, the supplemental
agreement provides for a limited sixty (60) day period to cure an inability to
perform enrollment and treatment goals by December 31, 1995, June 30, 1996, or
December 31, 1996, as set forth in the supplemental agreement. The Company
received a variance to the supplemental agreement through March 31, 1996. With
respect to the trials underway, enrollment did not meet the goals outlined in
the supplemental agreement by the March 31, 1996 deadline received in the
variance agreement. The Company is currently negotiating with Genentech and
Mitsubishi for an extension or revision of the agreement. Either party may
terminate the Genentech Agreement on 60 days notice if the other party defaults
in its material obligations under the agreement, declares bankruptcy or is
insolvent, or if a substantial portion of its property is subject to attachment.
The Genentech Agreement is also subject to the continuation of Genentech's
license agreement with Mitsubishi, which is only terminable if Genentech
defaults in its material obligations under the agreement, declares bankruptcy or
is insolvent, or if a substantial portion of its property is subject to
attachment. Unless terminated sooner pursuant to the above described
termination provisions, the Genentech Agreement is expected to expire in June
2007. Under

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the Genentech Agreement, TBC has access to an improved formulation patent
granted in 1993 which expires in 2010 and a use patent which expires in 2009.

On October 11, 1994, the Company signed a collaborative agreement with
Synthelabo, a French pharmaceutical group, to develop and market compounds for
vascular proliferative disease derived from the Company's research programs.
Upon consummation of the transaction, Synthelabo purchased 1,428,571 shares of
Common Stock for $3.50 per share for a total of $5 million becoming the
Company's largest shareholder at that time and paid the Company a non-refundable
licensing fee of $3 million. In addition, Synthelabo has committed to pay $3
million annually in research payments (payable in quarterly installments of
$750,000) for three years. Synthelabo has agreed, upon the achievement of
certain milestones, to make further payments of up to $3 million per year for up
to $18 million in total. Synthelabo has the right to terminate the agreement
any time on or after October 15, 1996 for any reason and either party has the
right to terminate the contract for breach of any material obligation. If
Synthelabo exercises this termination right, the license granted to Synthelabo
will terminate and TBC will pay Synthelabo a royalty on net sales of any
products sold in a certain territory (Europe, Middle East, Africa and countries
of the former Soviet Union) for a period of time. In addition, Synthelabo may,
at its option, require that the technology be transferred to and the development
program be conducted by a joint venture owned by TBC and Synthelabo should "net
worth", as defined in the agreement, be less than $5 million as of the end of
any calendar quarter during the term of the agreement. The first quarterly
research payment of $750,000 was received on October 31, 1994. For the year
ended December 31, 1995, TBC received $3.0 million related to the Synthelabo
agreement. Synthelabo will pay royalties to TBC based on the net sales in those
areas covered in the agreement. In exchange for the above consideration,
Synthelabo will receive an exclusive license to manufacture, use, and sell any
products generated from the research, in Europe, the Middle East, Africa and the
countries of the former Soviet Union. The Synthelabo agreement represents the
Company's only major source of revenue. One of the programs, which involves
antisense, is being jointly reviewed and may result in a redirection of the
research into another area.

The Company will depend, in part, on these strategic alliances to fund its
capital requirements. There can be no assurance that the Company will satisfy
the conditions required to obtain additional milestone payments, some of which
conditions will not be within the control of the Company.

LEGAL PROCEEDINGS

On November 21, 1994, a class action shareholders' suit was filed in the
United States District Court for the Southern District of Texas, Houston
Division seeking damages in the amount of $16 million. Plaintiffs are two
individuals who purchased shares in the Company on December 16, 1993 following
the Company's initial public offering. In their complaint, plaintiffs have sued
the Company and certain members of the board of directors and certain officers
alleging violations of Sections 11, 12 and 15 of the Securities Act of 1933.
Plaintiffs have also named David Blech, D. Blech & Co., Incorporated and Isaac
Blech as defendants. On January 23, 1995, the Company and the members of the
board of directors filed a motion to dismiss the plaintiffs' complaint pursuant
to Rule 9(b) and Rule 12b(6) of the Federal Rules of Civil Procedure. In
addition, defendant John Pietruski filed a motion to dismiss the plaintiffs'
complaint pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure. On
February 7, 1995, the plaintiffs filed a motion for class certification. The
Court denied the motion by the Company and by John Pietruski.

On March 28, 1995, a class action shareholders' suit was filed in the United
States District Court for the Southern District of New York seeking unspecified
damages. Plaintiffs are eight individuals who purchased shares in various
companies for which D. Blech & Co. acted as an underwriter (or co-underwriter)
or marketmaker. Only one of those plaintiffs purchased stock in the Company.
In their complaint, the plaintiffs have sued the Company alleging violations of
Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder by the Securities and Exchange Commission. Plaintiffs have named a
number of defendants, including David Blech and D. Blech & Co., four
individuals, two brokerage firms, one investment management company and ten
other companies for which D. Blech & Co. acted as underwriter or marketmaker.

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On August 14, 1995, the Judicial Panel on The Multi-District Litigation
ordered that the action filed in the United States District Court for the
Southern District of Texas, Houston Division be transferred to the United States
District Court for the Southern District of New York for coordinated or
consolidated pretrial proceedings with the action pending there. In light of
the transfer and consolidation of the Texas case with similar cases against
other companies for which Blech acted as underwriter, the Company requested that
the Court in New York reconsider the Texas Court's denial of its Motion to
Dismiss as a part of the Court's consideration of similar Motions to Dismiss
filed by those companies. All of these Motions were presented to the Court on
February 6, 1996, but no ruling has yet been made. Given the early stage of
this case, the Company is unable to evaluate the potential outcome at this time.
The Company disputes these claims and intends to contest them vigorously.

On June 7, 1995, a class action shareholders' suit was filed in the United
States District Court for the Southern District of New York seeking unspecified
damages. The plaintiff is an individual who purchased shares in the Company on
December 15, 1993 following the Company's initial public offering. In his
complaint, the plaintiff has sued the Company and certain members of the board
of directors and certain officers alleging violations of Sections 11, 12 and 15
of the Securities Act of 1933, Sections 10(b) and 20 of the Securities Exchange
Act of 1934 and Rule 10b-5 promulgated thereunder by the Securities and Exchange
Commission. Plaintiffs have also named David Blech, D. Blech & Co., and a
certain broker-dealer as defendants. On September 15, 1995, the Company and the
members of the board of directors filed a motion to dismiss the Complaint
pursuant to Rule 12(b)(6) and Rule 9(b) of the Federal Rules of Civil Procedure
Act. On November 8, 1995 the plaintiff filed a stipulation for voluntary
dismissal. An order of dismissal was entered by the judge on February 5, 1996.

NO ASSURANCE OF REGULATORY APPROVAL; NEED FOR EXTENSIVE CLINICAL TRIALS

The production and marketing of the Company's products, as well as its
ongoing research and development activities, are subject to regulation by
governmental agencies in the United States and other countries. Any drug
developed by the Company will be subject to rigorous preclinical testing and
approval pursuant to regulations administered by the FDA, comparable agencies in
other countries and, to a lesser extent, by state regulatory authorities. The
approval process for the Company's products and 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. Because of the intense competition in the cardiovascular
market, the Company may have difficulty obtaining sufficient patient populations
or clinician support to conduct its clinical trials as planned and may have to
expend substantial additional funds to obtain access to such resources, or delay
or modify its plans significantly. There is 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. There can be no assurance that clinical testing of the
Company's products will provide evidence of safety and efficacy in humans, that
regulatory approvals will be granted for any of the Company's products or that
it will be economically feasible to commercialize any products for which
regulatory approvals are granted. Approvals that may be granted will be subject
to continual review, and later discovery of previously unknown problems may
result in restrictions on a product's future use or withdrawal of the product
from the market.

Furthermore, health care policy in the United States is currently under
governmental review. Substantial changes in regulatory and reimbursement policy
may affect the Company's research and development expenditures and regulatory
approval of the Company's product candidates. The Company has limited clinical
testing or regulatory compliance experience. The Company will need to hire
additional personnel skilled in clinical testing and regulatory compliance in
order to bring any products to market. There can be no assurance that the
Company will be able to hire such personnel.

TECHNOLOGICAL CHANGE AND COMPETITION

The biopharmaceutical industry is undergoing rapid and significant
technological change and is highly competitive. The Company's success will
depend on its ability to develop and apply its technology and on its ability

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to establish and maintain a market for its products. Potential competitors in
the United States and other countries include major pharmaceutical and chemical
companies, specialized biotechnology firms, universities and other research
institutions, many of which have substantially greater financial, technical,
manufacturing and marketing capabilities than the Company. Competitors may
develop products or other novel technologies that are more effective than any
that have been or are being developed by the Company or may obtain FDA approval
for products more rapidly than the Company. There can be no assurance that
technological development by others will not render the Company uncompetitive or
that the Company will be successful in establishing or maintaining its
technological competitiveness. If the Company commences commercial sales of
products, it will compete in the manufacture and marketing of such products,
areas in which the Company has limited experience.

NO MANUFACTURING, MARKETING OR SALES ACTIVITIES

The Company has no manufacturing, marketing or product sales experience. If
the Company develops any commercially marketable products, there can be no
assurance that contract manufacturing services will be available in sufficient
capacity to supply the Company's product needs on a timely basis. If the
Company decides to build or acquire commercial-scale manufacturing capabilities,
the Company will require additional management and technical personnel and
additional capital. No assurance can be given that the raw materials necessary
for the manufacture of the Company's products will be available in sufficient
quantities or at a reasonable cost. Complications or delays in obtaining raw
materials or in product manufacturing could delay the submission of products for
regulatory approval and the initiation of new development programs, each of
which could materially impair the Company's competitive position and potential
profitability. There can be no assurance that the Company will be able to enter
into any other supply arrangements on acceptable terms, if at all, and there can
be no assurance that the Company's sales staff will achieve success in its
marketing efforts.

DEPENDENCE ON SUPPLIER

At present, Mitsubishi is the only manufacturer of NOVASTAN(R). Should
Mitsubishi discontinue manufacture of NOVASTAN(R), the agreement with Mitsubishi
provides for the transfer of the production technology to another manufacturer.
However, in the event Mitsubishi terminates manufacturing NOVASTAN(R) or
defaults in its supply commitment, there can be no assurance that alternate
sources of bulk will be available to the Company at reasonable cost, or at all.
If such alternate sources of supply are unavailable or uneconomic, the Company's
results of operations would be materially and adversely affected.

UNCERTAINTY OF PHARMACEUTICAL PRICING AND RELATED MATTERS; NEED FOR
REIMBURSEMENT

The future revenues and profitability of, and availability of capital for
biotechnology companies may be affected by the continuing efforts of
governmental and third-party payers to contain or reduce the costs of health
care through various means. For example, in certain foreign markets, the
pricing and profitability of prescription pharmaceuticals is subject to
government control. There have been, and there may continue to be, a number of
federal and state proposals to implement similar government control in the
United States. It is uncertain what form any health care reform legislation may
take or what actions the federal, state and private payers may take in response
to the suggested reforms. The Company cannot predict when any reforms will be
implemented, if ever, or the effect of any implemented reform on the Company's
business. There can be no assurance, however, that any implemented reform will
not have a material adverse effect on the Company's future results of
operations. The Company's long-term ability to market its products successfully
may depend in part on the extent to which reimbursement for the cost of such
products and related treatment will be available from public and private health
insurers and other organizations. Third-party payers are increasingly
challenging the prices of medical products and services. The reimbursement
status of newly-approved health care products is highly uncertain, and there can
be no assurance that third-party coverage will be available or that available
third-party coverage will enable the Company to maintain price levels sufficient
to realize an appropriate return on its investment in product development.

8
<PAGE>

UNCERTAINTY REGARDING PATENTS AND PROPRIETARY INFORMATION

The Company's actively seeks patent protection for its proprietary
technology, both in the United States and abroad. The Company's success will
depend, in part, on its ability to obtain patents and to operate without
infringing on the proprietary rights of others. There can be no assurance that
patents issued to or licensed by the Company will not be challenged, invalidated
or circumvented, or that the rights granted thereunder will provide competitive
advantages to the Company. There can be no assurance that the Company's pending
patent applications or patent applications presently in preparation or in the
future, if and when issued, will be valid and enforceable and withstand
litigation. There can be no assurance that others will not independently
develop substantially equivalent or superseding proprietary technology or that
an equivalent product will not be marketed in competition with the Company's
products, thereby substantially reducing the value of the Company's proprietary
rights. There is a substantial backlog of biotechnology patent applications at
the United States Patent and Trademark Office ("PTO"). Because patent
applications in the United States are maintained in secrecy until patents issue,
and because publication of discoveries in the scientific or patent literature
tend to lag behind actual discoveries by several months, there can be no
assurance that the Company will obtain patent protection for its inventions.
Furthermore, patent positions of pharmaceutical and biotechnology companies, as
well as those of academic and research institutions, are highly uncertain and
involve complex legal and factual questions. In addition, patent protection is
affected by the limited period of time for which a patent is effective. This is
an uncertain and developing area of the law that is potentially subject to
significant change. Therefore, the scope or enforceability of claims allowed in
the patents on which the Company will rely cannot be predicted with any
certainty.

The Company also relies on trade secrets, know-how and continuing
technological advancement to maintain its competitive position. Although the
Company has entered into confidentiality agreements with its employees and
consultants, which contain assignment of invention provisions, no assurance can
be given that others will not gain access to these trade secrets, that such
agreements will be honored or that the Company will be able to effectively
protect its rights to its unpatented trade secrets. Moreover, no assurance can
be given that others will not independently develop substantially equivalent
proprietary information and techniques or otherwise gain access to the Company's
trade secrets.

In addition to protecting its proprietary technology and trade secrets, the
Company may be required to obtain licenses to patents or other proprietary
rights from third parties. No assurance can be given that any licenses required
under any patents or proprietary rights would be made available on acceptable
terms, if at all. If the Company does not obtain required licenses, it could
encounter delays in product introductions while it attempts to design around
blocking patents, or it could find that the development, manufacture or sale of
products requiring such licenses could be foreclosed.

The Company could incur substantial costs in defending any patent
infringement suits or in asserting any patent rights, including those granted by
third parties, in a suit with another party. The PTO could institute
interference proceedings involving the Company in connection with one or more of
the Company's patents or patent applications, and such proceedings could result
in an adverse decision as to priority of invention. The PTO or comparable
agency of a foreign jurisdiction could also institute reexamination or
opposition proceedings against the Company in connection with one or more of the
Company's patents or patent applications and such proceedings could result in an
adverse decision as to the validity or scope of the patents.

PRODUCT LIABILITY EXPOSURE

Product liability risk is inherent in the testing, manufacture, marketing and
sale of the Company's products, and there can be no assurance that the Company
will be able to avoid significant product liability exposure. Product liability
insurance for the pharmaceutical industry, when available, is expensive. The
Company has obtained $2.0 million of product liability insurance to cover its
clinical trial program. Pursuant to its agreement with Genentech, the Company
is obligated to acquire additional coverage as the Company develops products.
Existing coverage will not be adequate as the Company further develops products
and there can be no assurance that

9
<PAGE>

adequate insurance coverage will be available at a reasonable cost in the
future. A future product liability claim may have a material adverse effect on
the business or financial condition of the Company.

POSSIBLE VOLATILITY OF STOCK PRICE

The stock market has from time to time experienced significant price and
volume fluctuations that may be unrelated to the operating performance of
particular companies. In particular, the market price of the Company's
securities, like that of the securities of other biopharmaceutical companies,
may be highly volatile. Factors such as announcements by the Company or its
competitors concerning technological innovations, new commercial products or
procedures by the Company or its competitors, proposed governmental regulations
and developments in both the United States and foreign countries, disputes
relating to patents or proprietary rights, publicity regarding actual or
potential medical results relating to products under development by the Company
or its competitors, public concern as to the safety of biotechnology products,
and economic and other external factors, as well as period-to-period
fluctuations and financial results, may have a significant effect on the market
price of the Company's securities.

LACK OF TRADING VOLUME AND RELATED MATTERS

Historically, there has been limited trading volume with respect to the
Common Stock. In addition, there can be no assurance that a market will
continue to be made or that any analysts will provide coverage with respect to
the Common Stock. Accordingly, with respect to the Common Stock being offered
hereby, no assurances can be made that such factors will not affect the market
for the Common Stock or that the sale of a significant number of shares will not
have an adverse impact on the market price of the Common Stock.

ANTI-TAKEOVER PROVISIONS

The Company's Certificate of Incorporation and the Delaware General
Corporation Law contain certain provisions that may delay or prevent an attempt
by a third party to acquire control of the Company. In addition, the severance
provisions of employment agreements with certain members of management could
impede an attempted change of control of the Company.

SHARES ELIGIBLE FOR FUTURE SALE; REGISTRATION RIGHTS

Of the approximately 24 million shares of Common Stock presently outstanding,
and following registration of the Shares, approximately 3.1 million will be
"restricted" securities as that term is defined under Rule 144 promulgated under
the Securities Act of 1933, as amended (the "Securities Act"). Of these
"restricted" securities, approximately 1.4 million shares are eligible for
immediate resale under Rule 144.

Approximately 2.5 million shares of Common Stock are issuable upon exercise
of outstanding options and will become eligible for sale in the public markets
at prescribed times in the future. As of April 15, 1996, such options were
exercisable, or exercisable within 60 days, to purchase approximately 997,000
shares of Common Stock.

If requested by the holders thereof, the Company may be required to register
under the Securities Act the resale of approximately 1.7 million shares of
Common Stock and, following registration of the Shares, approximately 63,000
shares of Common Stock issuable on the exercise of warrants. Sales of
significant amounts of Common Stock in the public market could adversely affect
the prevailing market price of the Company's Common Stock.

DEPENDENCE ON QUALIFIED PERSONNEL

The Company's success is highly dependent on its ability to attract and
retain qualified scientific and management personnel. The loss of the services
of the principal members of the Company's management and scientific staff may
impede the Company's ability to commercialize its

10
<PAGE>

products. In order to commercialize its products, the Company must maintain and
expand its personnel, particularly in the areas of clinical trial management,
manufacturing, sales and marketing. The Company faces intense competition for
such personnel from other companies, academic institutions, government entities
and other organizations. There can be no assurance that the Company will be
successful in hiring or retaining qualified personnel. Managing the integration
of new personnel and company growth generally could pose significant risks to
the Company's development and progress.

The continued employment of David B. McWilliams, President and Chief
Executive Officer, Richard A. F. Dixon, Ph.D., Vice President of Research, and
Richard P. Schwarz Jr., Ph.D., Vice President of Clinical and Regulatory Affairs
is key to the Company's success. Each of these employees has an employment
agreement with the Company. Mr. McWilliams' and Dr. Dixon's agreements are
effective through July 15, 1996 and provide for continuing one-year extensions.
Dr. Schwarz's agreement is "at will" with no specified term.

The Company relies on consultants and advisors, including its scientific
advisors, to assist the Company in formulating its research and development
strategy. All of the Company's consultants and advisors are employed by
employers other than the Company and may have commitments to or consulting or
advisory contracts with other entities that may affect their ability to
contribute to the Company.

11
<PAGE>

SELLING STOCKHOLDERS

The following table sets forth certain information concerning each Selling
Stockholder. Assuming that the Selling Stockholders offer all of their Shares,
the Selling Stockholders will not have any beneficial ownership after closing.
The Shares are being registered to permit public secondary trading of the
Shares, and the Selling Stockholders may offer the Shares for resale from time
to time. See "Plan of Distribution."

<TABLE>
<CAPTION>
NUMBER OF SHARES
OWNED AND TO BE OWNED
PRIOR TO OFFERING
---------------------
SELLING STOCKHOLDERS NUMBER OF PERCENT NUMBER OF SHARES
SHARES BEING OFFERED
- -------------------------------------------------------------------------------
<S> <C> <C> <C>

Aries Domestic Fund, LP................. 235,295 3.26% 235,295

The Aries Trust......................... 235,295 3.26% 235,295

Balestra Capital Partners, L.P.......... 100,000 1.39% 100,000

R. Scott Bowers......................... 10,000 0.14% 10,000

Howard S. Breslow....................... 37,500 0.52% 37,500

Howard S. Breslow
Breslow & Walker Profit Sharing Plan.... 12,500 0.17% 12,500

Frank Brosens........................... 100,000 1.39% 100,000

Falke Investments, L.P.................. 25,000 0.35% 25,000

Larry N. Feinberg....................... 100,000 1.39% 100,000

Beverly Flaks........................... 100,000 1.39% 100,000

Michael J. Gaido, Jr.................... 10,000 0.14% 10,000

R.E. Garrison II........................ 25,000 0.35% 25,000

Glen Rock Partners, L.P................. 282,353 3.91% 282,353

GSAM Oracle Fund, Inc................... 756,824 10.48% 756,824

David S. Hannes......................... 25,000 0.35% 25,000

Sue Minton Harris....................... 10,000 0.14% 10,000

Sue Minton Harris, TTEE................. 15,000 0.21% 15,000

Titus H. Harris, Jr..................... 10,000 0.14% 10,000

Andrew C. Hart.......................... 20,000 0.28% 20,000

Steven Hazen............................ 25,000 0.35% 25,000

Eric M. Javits 1984 Irrevocable Trust
Charles F. Faddis, Trustee.............. 25,000 0.35% 25,000

Deborah Jennings........................ 15,000 0.21% 15,000

A. Gary and Karan Kovacs................ 5,000 0.07% 5,000

Bernard Levine.......................... 500,000 6.93% 500,000

Howard A. Lipson........................ 12,500 0.17% 12,500

Nathan A. Low........................... 50,000 0.69% 50,000

New York Life Insurance Company......... 500,000 6.93% 500,000

Norwest Bank North Dakota, N.A., as
Trustee of the Conmy, Feste, Bossart,
Hubbard & Corwin, Ltd. 401(k) Profit
Sharing Plan and Trust f/b/o
Charles A. Feste....................... 25,000 0.35% 25,000

</TABLE>
12
<PAGE>

<TABLE>
<CAPTION>
NUMBER OF SHARES
OWNED AND TO BE OWNED
PRIOR TO OFFERING
---------------------

SELLING STOCKHOLDERS NUMBER OF PERCENT NUMBER OF SHARES
SHARES BEING OFFERED
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Oracle Institutional Partners, L.P...... 147,000 2.04% 147,000

Oracle Partners, L.P.................... 924,000 12.81% 924,000

Erinch R. Ozada......................... 30,000 0.42% 30,000

Peka LTD................................ 10,000 0.14% 10,000

Pequot Scout Fund, L.P.................. 100,000 1.39% 100,000

Pharmaceutical/Medical Technology Fund, 141,000 1.95% 141,000
L.P....................................

Porridge Partners, II................... 235,294 3.26% 235,294

Prime Advisors, LP...................... 50,000 0.69% 50,000

Quasar International Partners........... 231,000 3.20% 231,000

Quota Fund/Cold Spring, LDC............. 120,000 1.66% 120,000

Resnick Partners, LP.................... 100,000 1.39% 100,000

RH Capital Assoc. #1, L.P............... 188,235 2.61% 188,235

Michael H. Richmond..................... 6,900 0.10% 6,900

RLH Options, Inc........................ 25,000 0.35% 25,000

Bruce Edward Roberts.................... 12,000 0.17% 12,000

Douglas S. Roberts...................... 12,000 0.17% 12,000

Sands Point Partners, L.P............... 100,000 1.39% 100,000

Alison E. Shimer........................ 25,000 0.35% 25,000

Marc A. Spilker......................... 12,000 0.17% 12,000

Richard B. Stone........................ 50,000 0.69% 50,000

Strategic Health Care Investment Fund... 24,000 0.33% 24,000

Ronald D. Stubblefield.................. 5,000 0.07% 5,000

SZ2 (IGP) General Partnership........... 235,294 3.26% 235,294

Stuart Weisbrod......................... 50,000 0.69% 50,000

WPG Life Sciences Fund, L.P............. 117,647 1.63% 117,647

WPG Institutional Life Sciences Fund, 282,353 3.91% 282,353
L.P....................................

Zeigler, Zeigler & Altman............... 50,000 0.69% 50,000

Jerry Balter(1)......................... 50,625 0.70% 50,625

Jeff Eliot Margolis(1).................. 117,312 1.63% 117,312

Bishop Rosen(1)......................... 6,000 0.08% 6,000

Mitchel Sutin(1)........................ 9,000 0.12% 9,000

Stuart A. Daniels(1).................... 1,286 0.02% 1,286

GKN Securities(1)....................... 4,543 0.06% 4,543

David Nussbaum(1)....................... 2,272 0.03% 2,272

Roger Gladstone(1)...................... 2,272 0.03% 2,272

Robert Gladstone(1)..................... 2,272 0.03% 2,272
</TABLE>
13
<PAGE>

Jordan S. Davis(1)...................... 21,374 0.30% 21,374

Stephen L. Ross(1)...................... 20,725 0.29% 20,725

Biotechnology Investment Group, L.L.C. 367,967 5.10% 367,967
(1)....................................

Paine Webber(1)......................... 42,429 0.59% 42,429

Allen & Company(1)...................... 4,715 0.06% 4,715

James I. Black & Company(1)............. 5,143 0.07% 5,143

John Benesch(1)......................... 1,429 0.02% 1,429

Wellfleet Capital Company(1)............ 1,429 0.02% 1,429

Bishop Rosen & Co....................... 858 0.01% 858

Total.............................. 7,212,641 100.00% 7,212,641
_____________________
</TABLE>

(1) Warrant holder

6,733,927 of the Shares being offered by the Selling Stockholders were
acquired by the Selling Stockholders in the Company's private placement of
Common Stock that was completed on February 13, 1996. Of this total, 6,550,990
Shares were sold at a price of $2.125 per share to a total of 55 investors. The
remaining Shares represent shares underlying warrants issued in conjunction with
the private placement. 25,587 of the warrants are exercisable at $3.36 per
share, and 157,350 of the warrants are exercisable at $4.58 per share. These
warrants are exercisable beginning May 13, 1996 and expire on February 13, 2001.

The Company has filed with the Commission, under the Securities Act, a
Registration Statement on Form S-3, of which this Prospectus forms a part, with
respect to the resale of the Shares from time to time on AMEX or in privately-
negotiated transactions and has agreed to prepare and file such amendments and
supplements to the Registration Statement as may be necessary to keep the
Registration Statement effective for a period of three years after the
registration statement is declared effective. The Company's authorized capital
stock consists of 75,000,000 shares of Common Stock, and 5,000,000 shares of
preferred stock, par value .005 per share. As of April 15, 1996 there were
24,004,144 shares of common stock, and no shares of preferred stock,
outstanding.

PLAN OF DISTRIBUTION

The Company has been advised that the Selling Stockholders may sell Shares
from time to time in transactions on AMEX, in privately-negotiated transactions
or by a combination of such methods of sale, at fixed prices which may be
changed, at market prices prevailing at the time of sale, at prices related to
such prevailing market prices or at negotiated prices. The Selling Stockholders
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 commissions from the Selling Stockholders 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).

14
<PAGE>

The Selling Stockholders and any broker-dealers who act in connection with
the sale of Shares hereunder may be deemed to be "underwriters" as that term is
defined in the Securities Act, and any commissions received by them and profit
on any resale of the Shares as principal might be deemed to be underwriting
discounts and commissions under the Securities Act.

The Company has agreed to indemnify certain of the Selling Stockholders and
underwriters against certain liabilities, including certain liabilities under
the Securities Act.

LEGAL MATTERS

The legality of the securities offered hereby will be passed on for the
Company by Porter & Hedges, L.L.P., Houston, Texas.

EXPERTS

The consolidated financial statements and schedule of Texas Biotechnology
Corporation have been incorporated by reference herein and in the registration
statement in reliance upon the reports of KPMG Peat Marwick LLP, independent
certified public accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.

15
<PAGE>

NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED
HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY
SECURITIES IN WHICH IT RELATES. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL OR A SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES
IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.

-----------------

TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Available Information..... 3
Incorporation of Certain
Documents by Reference.. 3
The Company............... 4
Risk Factors.............. 4
Selling Stockholders...... 12
Plan of Distribution...... 14
Legal Matters............. 15
Experts................... 15

</TABLE>

____________________

TEXAS BIOTECHNOLOGY CORPORATION

7,212,641 Shares
of
Common Stock

----------------

PROSPECTUS

----------------

------------

May 10, 1996
<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The estimated expenses payable by the Company in connection with the
offering of the shares of Common Stock to be registered and offered hereby are
as follows:

SEC registration fee.................... $11,306
Legal fees and expenses................. 2,500
Blue Sky fees and expenses (including 1,000
legal expenses)........................
Accounting fees and expenses............ 1,000
Miscellaneous........................... 1,000
-------
Total.............................. $16,806
=======
</TABLE>

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Section 145 of the Delaware General Corporation Law permits a corporation
to indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact
that he is or was a director, officer, employee or agent of the corporation or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with such action.

In an action brought to obtain a judgment in the corporation's favor,
whether by the corporation itself or derivatively by a stockholder, the
corporation may only indemnify for expenses, including attorney's fees, actually
and reasonably incurred in connection with the defense or settlement of such
action, and the corporation may not indemnify for amounts paid in satisfaction
of a judgment or in settlement of the claim. In any such action, no
indemnification may be paid in respect of any claim, issue or matter as to which
such person shall have been adjudged liable to the corporation except as
otherwise approved by the Delaware Court of Chancery or the court in which the
claim was brought. In any other type of proceeding, the indemnification may
extend to judgments, fines and amounts paid in settlement, actually and
reasonably incurred in connection with such other proceeding, as well as to
expenses (including attorneys' fees).

The statute does not permit indemnification unless the person seeking
indemnification has acted in good faith and in a manner be reasonably believed
to be in, or not opposed to, the best interests of the corporation and, in the
case of criminal actions or proceedings, the person had no reasonable cause to
believe his conduct was unlawful. There are additional limitations applicable
to criminal actions and to actions brought by or in the name of the corporation.
The determination as to whether a person seeking indemnification has met the
required standard of conduct is to be made (i) by a majority vote of a quorum of
disinterested members of the board of directors, (ii) by independent legal
counsel in a written opinion, if such a quorum does not exist or if the
disinterested directors so direct, or (iii) by the stockholders.

As permitted by the Delaware General Corporation Law, the Company's Bylaws
provide that it will indemnify the directors, officers, employees and agents of
the Company against certain liabilities that they may incur in their capacities
as directors, officers, employees and agents. Furthermore, the Company's
Certificate of Incorporation, as amended, indemnifies the directors, officers,
employees, and agents of the Company to the maximum extent permitted by the
Delaware General Corporation Law. The Company has director and officer
liability insurance policies that provide coverage of up to $2.0 million except
that no current coverage is provided for David Blech, a former Company director,
nor for any liabilities arising from the Company's December 1993 initial public
offering.

II-1
<PAGE>

ITEM 16. EXHIBITS.

The following exhibits are filed with this Registration Statement:

EXHIBIT
NUMBER IDENTIFICATION OF EXHIBIT
- ------- -------------------------
<S> <C>

5.1 Opinion of Porter & Hedges, L.L.P.

23.1 Consent of KPMG Peat Marwick LLP

23.2 Consent of Porter & Hedges, L.L.P. (included in
its Opinion filed as Exhibit 5.1 hereto).

</TABLE>

ITEM 17. UNDERTAKINGS.

(1) 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 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.

(2) The undersigned Registrant hereby undertakes to file, during any
period in which offers or sales are being made, a post-effective amendment to
this Registration Statement to include any (i) prospectus required by section
10(a)(3) of the Securities Act, (ii) material information with respect to the
plan of distribution not previously disclosed in the registration statement, or
(iii) material change to such information 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.

(3) The undersigned Registrant hereby undertakes that for the purpose of
determining any liability under the Securities Act of 1933, each 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.

(4) The undersigned Registrant hereby undertakes 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.

(5) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Company pursuant to the foregoing provisions, or otherwise, the Company
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 Company of expenses
incurred or paid by a director, officer or controlling person of the Company 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 Company 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-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 HOUSTON, STATE OF TEXAS, ON MAY 7, 1996.

TEXAS BIOTECHNOLOGY CORPORATION

/s/ Stephen L. Mueller
By: ________________________________________________________
STEPHEN L. MUELLER
VICE PRESIDENT OF ADMINISTRATION,SECRETARY AND
TREASURER (PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER)

POWER OF ATTORNEY

We, the undersigned directors and officers of Texas Biotechnology
Corporation, do hereby constitute and appoint David B. McWilliams and Stephen L.
Mueller, or either of them, our true and lawful attorneys and agents, to do any
and all acts and things in our name and on our behalf in our capacities as
directors and officers, and to execute any and all instruments for us and in our
names in the capacities indicated below, which such attorneys and agents may
deem necessary or advisable to enable the corporation to comply with the
Securities act of 1933, as amended, and any rules, regulations and requirements
of the Securities and Exchange Commission, in connection with the filing of this
Registration Statement, including specifically without limitation, power and
authority to sign for us or any of us, in our names in the capacities indicated
below, any and all that such attorneys and agents shall 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 INDICATED ON MAY 7, 1996.

<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>

/s/ John M. Pietruski Director, Chairman of the Board of Directors
- -----------------------------
JOHN M. PIETRUSKI

/s/ David B. McWilliams Director, President and Chief Executive Officer
- ----------------------------- (Principal Executive Officer)
DAVID B. MCWILLIAMS

/s/ Richard A.F. Dixon, Ph.D. Director, Vice President of Research
- -------------------------------
RICHARD A.F. DIXON, PH.D.

/s/ Stephen L. Mueller Vice President of Administration, Secretary
- -------------------------------- Treasurer and (Principal Financial and
STEPHEN L. MUELLER Accounting Officer)

</TABLE>

II-3
<PAGE>

/s/ Patrick Owen Burns Director
- --------------------------------
PATRICK OWEN BURNS

/s/ Frank C. Carlucci Director
- --------------------------------
FRANK C. CARLUCCI

/s/ Robert J. Cruikshank Director
- --------------------------------
ROBERT J. CRUIKSHANK

/s/ James A. Thomson, Ph.D. Director
- --------------------------------
JAMES A. THOMSON, PH.D.

/s/ James T. Willerson, M.D. Director and Chairman of the
- -------------------------------- Scientific Advisory Board
JAMES T. WILLERSON, M.D.

</TABLE>

II-4
<PAGE>

INDEX TO EXHIBITS

EXHIBIT SEQUENTIAL
NUMBER IDENTIFICATION OF EXHIBIT PAGE NO.
------- ------------------------- ----------
<S> <C> <C>
5.1 Opinion of Porter & Hedges, L.L.P.
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Porter & Hedges, L.L.P.
(included in its Opinion filed as
Exhibit 5.1 hereto).

</TABLE>

II-5

<PAGE>

EXHIBIT 5.1

May 9, 1996

Securities and Exchange Commission
Judiciary Plaza
450 5th Street, N.W.
Washington, D.C. 20549

Re: Texas Biotechnology Corporation-Form S-3 Registration Statement

Ladies and Gentlemen:

We have acted as counsel to Texas Biotechnology Corporation, a Delaware
corporation (the "Company"), in connection with the registration on Form S-3
under the Securities Act of 1933, as amended, of 7,212,641 shares of the
Company's common stock, par value $.005 per share (the "Common Stock"). In such
capacity, we have examined the certificate of incorporation, as amended, the
bylaws, and corporate proceedings of the Company, and based on such examination
and having regard for applicable legal principles, it is our opinion that (i)
the 6,551,848 previously issued shares of Common Stock to be offered and sold
pursuant to the Registration Statement are validly issued, fully-paid and
nonassessable outstanding shares of Common Stock and (ii) up to 660,793 shares
of Common Stock (issuable on the exercise of warrants) to be offered and sold
pursuant to the Registration Statement will be, when issued in accordance with
the terms of the warrants, validly issued, fully-paid and nonassessable
outstanding shares of Common Stock.

We consent to the use of this opinion as an Exhibit to the Registration
Statement and to the reference to our firm under the heading "Legal Matters" in
the Prospectus included in the Registration Statement.

Very truly yours,

PORTER & HEDGES, L.L.P.

<PAGE>

EXHIBIT 23.1

CONSENT OF INDEPENDENT AUDITORS'

The Board of Directors
Texas Biotechnology Corporation:

We hereby consent to the use of our reports incorporated herein by reference and
to the reference to our firm under the heading "Experts" in the prospectus.

KPMG Peat Marwick LLP

Houston, Texas
May 9, 1996