As filed with the Securities and Exchange Commission on
December 24, 1997
Registration No. 333-23085
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
<TABLE>
<CAPTION>
CYPROS PHARMACEUTICAL CORPORATION
(Exact name of Registrant as specified in its charter)
<S> <C> <C>
California 2714 Loker Avenue 33-0476164
(State or other West (I.R.S. Employer
jurisdiction of Carlsbad, California Identification
incorporation 92008 Number)
organization) (760) 929-9500
</TABLE>
<TABLE>
(Address, including zip code, and telephone
number, including area code,of Registrant's
principal executive offices)
David W. Nassif, Esq.
Senior Vice President and Chief Financial Officer
CYPROS PHARMACEUTICAL CORPORATION
2714 Loker Avenue West
Carlsbad, California 92008
(619) 929-9500
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copy to:
M. Wainwright Fishburn, Esq.
COOLEY GODWARD LLP
4365 Executive Drive, Suite 1100
San Diego, CA 92121
(619) 550-6000
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this Post-
Effective Amendment No. 1 to 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. [ ]
</TABLE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
Title of each Amount to Proposed Proposed Amount of
class of be maximum maximum registration
securities to registered offering aggregate fee
be registered (1) price offering
per share(1) price (1)
<S> <C> <C> <C> <C>
Common Stock, 1,365,238 $4.00-$5.41 $7,334,798 $2,221.80
no par value shares
</TABLE>
(1) Estimated in accordance with Rule 457(c) solely for the
purpose of computing the amount of the registration fee. The
price per share and the aggregate offering price are based upon
(a) 1,328,969 shares of Common Stock previously registered
pursuant to the Registrant's Registration Statement on Form S-3
(No. 333-23085), calculated on the basis of the average of the
high and low sales price of the Registrant's Common Stock as
reported on the Nasdaq National Market System ("Nasdaq") on March
6, 1997 and (b) 36,269 shares of Common Stock being registered
hereby calculated on the basis of the average of the high and low
sales price of Registrant's Common Stock as reported on Nasdaq on
December 23, 1997. The portion of the registration fee
attributable to the shares of Common Stock previously registered
was previously paid. The following chart shows the calculation of
the registration fee:
<TABLE>
<CAPTION>
Type of Number Proposed Proposed Amount of
Shares of maximum maximum registration
Shares offering aggregate fee
price offering
per price
share
<S> <C> <C> <C> <C>
Common Stock 1,328,969 $5.41 $7,189,722 $2,179.00
previously
registered
pursuant to
Registration
Statement No.
333-23085
Common Stock 36,269 $4.00 $145,076 $42.80
initially
registered
pursuant to
this Post-
Effective
Amendment No.
1 to
Registration
Statement
</TABLE>
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 that
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.
SUBJECT TO COMPLETION, DATED December 24, 1997
P R O S P E C T U S
1,365,238 Shares
Cypros Pharmaceutical Corporation
Common Stock
______________________________
This Prospectus relates to 1,365,238 shares (the "Shares") of
Common Stock, no par value per share (the "Common Stock"), of
Cypros Pharmaceutical Corporation (the "Company"). The Shares may
be offered by shareholders of the Company (the "Selling
Shareholders") from time to time, as market conditions permit on
the NASDAQ National Market System, or otherwise, through ordinary
brokerage transactions, in negotiated transactions, 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 Shareholders may effect
such transactions by selling the Shares to or through broker-
dealers, and all such broker-dealers may receive compensation in
the form of discounts, concessions or commissions from the
Selling Shareholders and/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 as to a particular broker-
dealer might be in excess of customary commissions). See
"Selling Shareholders" and "Plan of Distribution."
None of the proceeds from the sale of the Shares by the Selling
Shareholders will be received by the Company. The Company has
agreed to bear certain expenses (other than fees and expenses, if
any, of counsel or other advisors to the Selling Shareholders) in
connection with the registration and sale of the Shares being
offered by the Selling Shareholders. The Company has agreed to
indemnify the Selling Shareholders against certain liabilities,
including certain liabilities under the Securities Act of 1933,
as amended.
The Common Stock of the Company is traded on the NASDAQ National
Market System under the symbol "CYPR." On December 23, 1997, the
last sale price for the Common Stock as reported by NASDAQ was
$4.00 per share.
______________________________
The Common Stock offered hereby involves a high degree of risk.
See "Risk Factors" beginning on page 3.
______________________________
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 December , 1997
The information contained herein is subject to completion or ame
ndment. 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.
THE COMPANY
Cypros Pharmaceutical Corporation (the "Company") was founded in
California in 1990 and is engaged in the development and
marketing of drug products for the hospital market. It is
currently marketing three injectable products and is developing
two small molecule therapeutic drugs, CPC-111 and Ceresine, for
the treatment of disorders, such as stroke, traumatic head
injury, cardiac surgery, and sickle cell crisis, all of which are
characterized by ischemia (impaired blood flow), which interrupts
the delivery of both glucose and oxygen to tissue. It also
recently acquired the DIMAC System, a controlled-release drug
delivery technology, and two related FDA-cleared products for the
burn and wound care market, which the Company intends to launch
in 1998. The Company's executive offices are located at 2714
Loker Avenue West, Carlsbad, California 92008, and its telephone
number is (760) 929-9500.
RISK FACTORS
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 here.
Factors that could cause or contribute to such differences
include, but are not limited to, those discussed in the following
risk factors as well as those discussed elsewhere in this
Prospectus and any documents incorporated herein by reference.
The following factors, in addition to those discussed elsewhere
in this Prospectus, or incorporated herein by reference, should
be carefully considered in evaluating the Company and its
business.
Continuing Operating Losses
The Company reported a net loss of $1,392,329 or $0.10 per share
for the quarter ended October 31, 1997, compared to a loss of
$1,608,999 or $0.14 per share for the prior-year period. The
Company expects that it will continue to incur operating losses
as it increases expenditures for clinical testing,
Investigational New Drug Application and New Drug Application
filings and other regulatory activities, U.S. patent prosecution,
and product acquisition and sales and marketing activities. To
achieve profitable operations, the Company, alone or with others,
must successfully develop, obtain regulatory approval for,
introduce, acquire, market and sell additional products. There
can be no assurance that the Company's product acquisition and
development efforts will result in additional products, that
required regulatory approvals will be obtained with respect to
all or any of its products now under development or that any of
these products will be commercially successful.
Significant Capital Requirements; Need for Additional Financing
The development and commercialization of drugs requires the
commitment of significant capital expenditures. The Company
believes that existing capital resources and the cash flow from
its recently-acquired products will allow it to maintain its
current and planned operations for at least two years. In
addition to funds provided from exercises of its currently
outstanding options, the Company is seeking to obtain additional
funds through public or private equity financings, collaborative
or other arrangements with corporate partners or from other
sources. There can be no assurance that such additional financing
can be obtained on desirable terms or at all. If additional
funds are not available, the Company may be required to curtail
significantly or eliminate one or more of its research, discovery
or development programs or obtain funds through arrangements
which may require the Company to relinquish rights to certain of
its products.
Uncertainties Associated with Regulatory Approval
A marketed drug, its manufacturer and its manufacturing
facilities are subject to continual review and periodic
inspections, and later discovery of previously unknown problems
with a product, manufacturer or facility may result in
restrictions on such product or manufacturers, including a
withdrawal of the product from the market. Failure to comply with
the applicable regulatory requirements can, among other things,
result in fines, suspensions of regulatory approvals, product
recalls, operating restrictions and criminal prosecution.
Further, additional government regulation may be established
which could suspend or revoke regulatory approval of the
Company's products.
Unproven Products
In addition to its three approved drugs, the Company has other
products in various stages of development which are subject to
the risks inherent in drug development, including unforeseen
problems, delays, expenses and complications frequently
encountered with the early phases of research, development and
commercialization of products, the dependence on and attempts to
apply new and rapidly changing technology and the competitive
environment of the pharmaceutical industry. Many of these
factors may be beyond the Company's control, such as
unanticipated development requirements, testing, regulatory
compliance and manufacturing, production, and marketing problems
and expenses. The Company does not anticipate being able to
complete the development of its proposed products for a number of
years, if at all. All of the Company's drugs are subject to
extensive regulation and those in development will require
approval from the U.S. Food and Drug Administration (the "FDA")
and other regulatory agencies prior to commercial sales. The
Company may not complete the testing and regulatory approval
process for any of its products in development in the foreseeable
future and, accordingly, is unable to predict whether they will
be commercially successful. Further, there can be no assurance
that the Company's drugs under development will attain acceptance
by providers, payors or patients.
Patents, Proprietary Technology and Licenses
The Company's success is dependent in large measure upon its
ability to obtain patent protection for its drugs, maintain
confidentiality of its trade secrets and know-how and operate
without infringing upon the proprietary rights of third parties.
The Company has licensed rights to six U.S., one European and one
Australian patents from the holders of the patents on CPC-111 and
Ceresine, but each of these licenses may be terminated in the
event that the Company fails to achieve certain milestones or
accomplish certain other contractual obligations. Upon any such
termination, all of the Company's rights would revert to the
licensor. The termination of the license covering CPC-111 or
Ceresine would have a material adverse effect on the Company and
would cause the Company to focus its efforts on its remaining
drug development programs which are not as far advanced. There
can be no assurance that the Company will maintain the licenses
in effect through the successful development and
commercialization of these drugs.
The U.S. patent position of pharmaceutical companies involves
many complex legal and technical issues and has recently been the
subject of much litigation. There is no clear policy
establishing the breadth of claims or the degree of protection
afforded under such patents. As a result, there can be no
assurance that any of the U.S. patent applications will be
approved, except where claims under an application have already
been examined and allowed, nor that the Company will develop
additional proprietary products that are patentable. There can
be no assurance that any U.S. patents issued to the Company or
its licensors will provide the Company with any competitive
advantages or will not be challenged by any third parties or that
patents issued to others will not have an adverse effect on the
ability of the Company to conduct its business.
Furthermore, because patent applications in the United States are
maintained in secrecy until issue, and because publication of
discoveries in the scientific and patent literature often lag
behind actual discoveries, the Company cannot be certain that it
was the first chronologically to make the inventions covered by
each of its pending patent applications or that it was the first
to file patent applications for such inventions. In the event
that a third party has also filed a patent application for any of
its inventions, the Company may have to participate in
interference proceedings declared by the United States Patent and
Trademark Office to determine priority of the invention, which
could result in substantial cost to the Company, even if the
eventual outcome is favorable to the Company. In addition, there
can be no assurance that the Company's patents, including those
of the licensors above, would be held valid by a court of law of
competent jurisdiction. If patents are issued to other companies
that contain competitive or conflicting claims which ultimately
may be determined to be valid, there can be no assurance that the
Company would be able to obtain a license to any of these U.S.
patents.
Under Title 35 of the United States Code, as amended by the
General Agreement on Tariffs and Trade implementing the Uruguay
Round Agreement Act of 1994 ("GATT"), patents that issue from
patent applications filed prior to June 8, 1995, will have a 17-
year period of enforceability as measured from the date of patent
issue while those that issue from applications filed on or after
June 8, 1995 will have a 20-year period of enforceability as
measured from the date the patent application was filed or the
first claimed priority date, whichever is earlier. Patents that
issue from applications filed on or after June 8, 1995, may be
extended under the term extension provisions of GATT for a period
up to five years to compensate for any period of enforceability
lost due to interference proceedings, government secrecy orders
or appeals to the Board of Patent Appeals or the Federal Circuit.
Under the Drug Price Competition and Patent Term Restoration Act
of 1984, including amendments implemented under GATT (the "Patent
Term Restoration Act"), the period of enforceability of a first
or basic product patent or use patent covering a drug may be
extended for up to five years to compensate the patent holder for
the time required for FDA regulatory review of the product. This
law also establishes a period of time following FDA approval of
certain drug applications during which the FDA may not accept or
approve applications for similar or identical drugs from other
sponsors. Any extension under the Patent Term Restoration Act and
any extension under GATT are cumulative. There can be no
assurance that the Company will be able to take advantage of such
patent term extensions or marketing exclusivity provisions of
these laws. While the Company cannot predict the effect that such
changes will have on its business, the adoption of such changes
could have a material adverse effect on the Company's ability to
protect its proprietary information and sustain the commercial
viability of its products. Furthermore, the possibility of
shorter terms of patent protection, combined with the lengthy FDA
review process and possibility of extensive delays in such
process, could effectively further reduce the term during which a
marketed product could be protected by patents.
The Company also relies on trade secrets and proprietary know-
how. The Company has been and will continue to be required to
disclose its trade secrets and proprietary know-how not only to
employees and consultants, but also to potential corporate
partners, collaborators and contract manufacturers. Although the
Company seeks to protect its trade secrets and proprietary know-
how, in part by entering into confidentiality agreements with
such persons or organizations, there can be no assurance that
these agreements will not be breached, that the Company would
have adequate remedies for any breach or that the Company's trade
secrets will not otherwise become known or be independently
discovered by competitors.
Dependence on Others for Manufacture
The Company currently does not have any capability to manufacture
products under current good manufacturing practices ("cGMP") as
required by the FDA. It relies on third parties to manufacture
and formulate Ethamolin, Glofil and Inulin, its three injectable
drug products currently being marketed, and to manufacture and
formulate CPC-111 and Ceresine, its two drug candidates currently
in clinical trials. Although the Company believes that it will be
able to contract with alternative suppliers for its products if
its current suppliers are unable to supply the Company with its
needs for bulk and formulated drugs, there can be no assurance
that this will be the case or that the need to contract with
additional suppliers will not delay the Company's ability to have
its products manufactured. There can be no assurance that these
manufacturers will meet either the Company's requirements for
quality, quantity and timeliness or the FDA's cGMP requirements
or that the Company would be able to find a substitute
manufacturer for any of its products in the future. In the event
that the Company is unable to obtain or retain contract
manufacturers that can manufacture its products under cGMP
requirements, or to obtain manufacturing on commercially
acceptable terms, it may not be able to commercialize its
products as planned.
Potential Claims
Certain members of the Company's Scientific Advisory Board
("SAB") and certain Scientific Advisors who have developed
technology used for the Company's products are employees of
universities, research hospitals or other institutions. The
Company believes that such institutions have no claim to any of
the Company's inventions, technology or products. While no claim
has been asserted by any such institution, there can be no
assurance that such institutions will not assert claims to any or
all of such inventions, technology or products or that, if any
such institution does assert such rights, the Company, if it so
desires, will be able to acquire the rights thereto from such
institution at a commercially practical cost or at all.
Government Regulation
The Company's development, manufacture and sale of drug products
are subject to extensive and rigorous regulation by federal,
state, local and foreign governmental authorities. In particular,
products for human health are subject to substantial preclinical
and clinical testing and other approval requirements by the FDA
and comparable foreign regulatory authorities. The process for
obtaining the required regulatory approvals from the FDA and
other regulatory authorities takes many years and is very
expensive. There can be no assurance that any drug developed by
the Company will prove to meet all of the applicable standards to
receive marketing approval. There can be no assurance that any
such approvals will be granted on a timely basis, if at all.
Delays in and costs of obtaining these approvals could adversely
affect the Company's ability to commercialize its drugs and to
generate significant sales revenues. If regulatory approval of a
drug is obtained, such approval may involve restrictions and
limitations on the use of the drug.
Other conditions for an approval are based on the drug's
manufacture and the quality control procedures in place, such as
cGMP. Failure to insure compliance with cGMP requirements could
result in delay or termination of clinical trials or withdrawal
of an approval. Following market approval, the drug will continue
to be subject to compliance with applicable federal, state, local
and foreign laws and regulations. There can be no assurance that
the FDA will grant approval of any of the Company's drugs in a
timely manner or at all.
Governmental Reforms
Health care reform is an area of increasing national and
international attention and a priority of many elected officials
in the United States. Several proposals to modify the current
health care system in the United States to improve access and
control costs are currently being considered by federal and state
governments. It is uncertain what legislation, if any, will be
adopted or what actions governmental or private payors for health
care goods and services may take in response to proposed or
actual legislation in the United States. The Company cannot
predict the outcome of health care reform proposals or the effect
such reforms may have on its business.
Clinical Trial and Product Liability Claims and Uninsured Risks
The Company may be exposed to liability resulting from the
conduct of its clinical trials or the commercial use of its
drugs. Such liability might result from claims made directly by
patients, hospitals, clinics or other consumers or by
pharmaceutical companies or others manufacturing such drugs on
behalf of the Company. The Company currently has clinical trial
and product liability insurance, but there can be no assurance
that it will be adequate to protect the Company against
liability.
Competition and Technological Change
The products that the Company is marketing and the drugs that the
Company is developing may compete for market share with alternate
therapies. A number of companies are pursuing the development of
novel pharmaceuticals which target the same diseases as the
Company is targeting. Many of these competitors have
substantially greater capital resources, research and development
staffs and facilities than the Company. They may develop and
introduce products and processes competitive with those of the
Company. They represent significant long-term competition for
the Company. For certain of the Company's drugs, an important
factor in competition may be the timing of market introduction of
these competitive products. This timing will be based on the
effectiveness with which the Company or the competition can
complete clinical trials and approval processes and supply
quantities of these products to market. Competition among
products approved for sale will be based on, among other things,
efficacy, safety, reliability, price, marketing capability and
patent position.
The pharmaceutical industry has undergone rapid and significant
technological changes. The Company expects that the technologies
associated with its research and development will continue to
develop rapidly. There can be no assurance that the Company will
be able to establish itself in such fields or, if established,
that it will be able to maintain a competitive position.
Further, there can be no assurance that the development by others
of new or improved processes or products will not make the
Company's products and processes, if any, less competitive or
obsolete.
Dependence on Key Personnel
The Company's success also depends in large part on its ability
to attract and retain other qualified scientific and management
personnel. The Company faces competition for such persons from
other companies, academic institutions, government entities and
other organizations. There can be no assurance that the Company
will be successful in recruiting or retaining personnel of the
requisite caliber or in adequate numbers to enable it to conduct
its business as proposed. Furthermore, the Company's expected
expansion into activities requiring additional expertise in
manufacturing, sales and marketing will place increased demands
on the Company's resources and management skills.
Limited Sales and Marketing Capability
The commercialization of products such as the Company's drugs is
an expensive and time-consuming enterprise. The Company now has
a nine-person sales and marketing department, including six sales
representatives for Ethamolin, Glofil and Inulin, and intends to
hire additional sales representatives as sales of those products
increase and/or other products are acquired by the Company.
The Company believes that it will be able to serve the hospital
market in North America with a 50 to 100 person sales and
marketing staff. There can be no assurance that the Company will
be able to establish successfully sales and distribution
capabilities or be successful in gaining market acceptance for
its drugs or to obtain the assistance of any other pharmaceutical
company in these efforts if it should seek assistance.
Reimbursement
In both domestic and foreign markets, sales of the Company's
products will be dependent in part on the availability of
reimbursement from third party payors, such as government and
private insurance plans. Third party payors are increasingly
challenging the prices charged for medical products and services.
There can be no assurance that the Company's products will be
considered cost-effective, that reimbursement will be available
or, if available, that the payor's reimbursement policies will
not adversely affect the Company's ability to sell its products
profitably.
Shares Reserved for Issuance Pursuant to Outstanding Options
The Company has reserved shares of Common Stock for issuance
pursuant to outstanding options as follows: (i) 1,725,539 shares
of Common Stock are reserved for issuance pursuant to outstanding
options under the Company's 1992 Stock Option Plan and (ii)
181,500 shares are reserved for issuance pursuant to outstanding
options under the Company's 1993 Non-Employee Directors' Stock
Option Plan. Holders of options are likely to exercise them when,
in all likelihood, the Company could obtain additional capital on
terms more favorable than those provided by the options.
Further, while the options are outstanding, they may adversely
affect the terms on which the Company could obtain additional
capital.
Potential Volatility of Stock Price
There has been significant volatility in the market price of
securities of biomedical companies in general. Announcements of
technological innovations or new commercial products by the
Company or its competitors, developments concerning proprietary
rights, clinical trial results, government policy or regulation,
relations with licensors or other corporate partners, general
market conditions or public concern as to the safety of
biomedical products and period to period fluctuations in revenues
and financial results may have a significant impact on the
Company's business and on the market price of the Company's
securities.
Dividends Not Likely
The Company has not paid any cash dividends on its Common Stock.
For the foreseeable future it is anticipated that earnings, if
any, which may be generated from the Company's operations will be
used to finance the growth of the Company and that cash dividends
will not be paid to holders of Common Stock.
SELLING SHAREHOLDERS
The following table sets forth certain information regarding the
beneficial ownership of Common Stock of the Selling Shareholders
as of December 23, 1997 and as adjusted to give effect to the
sale of the Shares offered hereby. The Shares are being
registered to permit public secondary trading of the Shares, and
the Selling Shareholders may offer the Shares for resale from
time to time. See "Plan of Distribution."
<TABLE>
<CAPTION>
Name and Address of Number of Number of Beneficial
Selling Shares Shares Being Ownership After
Shareholders Beneficially Offered Offering
Owned Prior Number of
to Offering Shares Percent
<S> <C> <C> <C>
President and 1,637,500(1) 1,000,000 637,500 4.10%
Fellows of Harvard
College
c/o Harvard
Management
Company, Inc.
600 Atlantic Avenue
Boston, MA 02210
Fernhill Partners 75,000(2) 75,000 (2) 0 *
c/o Wood Island
Associates
80 E. Sir Francis
Drake Blvd.
Larkspur, CA 94939
Paresco, Inc. 247,079(3) 247,079 0 *
101 Hudson Street
Jersey City, NJ
07302
Liberty View Plus 28,772(3) 28,772 0 *
Fund
101 Hudson Street
Jersey City, NJ
07302
Liberty View Fund, 14,387(3) 14,387 0 *
LLC
101 Hudson Street
Jersey City, NJ
07302
</TABLE>
__________
* Less than one percent.
(1) On March 5, 1997, the Company entered into Common Stock
Purchase Agreements (the "Agreements") with the President and
Fellows of Harvard College ("Harvard") and Fernhill Partners
("Fernhill"), whereby Harvard and Fernhill agreed to purchase
1,000,000 and 75,000 shares, respectively, of the Company's
Common Stock (the "Stock") at $4.645 per share.
(2) Subsequent to the closing of the transactions contemplated
by the Agreements, pursuant to Registration Statement No. 333-
23085, Fernhill sold 35,100 of the shares that it purchased.
Fernhill currently holds only the remaining 39,900 shares that
it purchased.
(3) On April 10, 1996, Paresco, Inc., Liberty View Plus Fund and
Liberty View Fund LLC (the "Purchasers") each purchased a
mandatorily convertible note from the Company in the principal
amounts of $850,000, $100,000 and $50,000, respectively with a
maturity of April 9, 1999 (the "Notes"). The principal amount of
the Notes (or portions thereof) was convertible beginning April
10, 1997, and the remaining principal amount of the Notes will be
automatically converted (if not converted in full before then) on
April 9, 1999. When converted at the noteholders election, the
principal amount being converted will convert at a 25% discount
from the 10-day average of the closing prices for the Company's
Common Stock preceding the conversion date, subject to a minimum
conversion price of $1.00.
As of the date of this prospectus, the Purchasers have converted
$885,600 of the principal amount of the Notes into 253,907 shares
of Common Stock of Cypros. All of these shares have been re-sold
in either negotiated or ordinary brokerage transactions pursuant
to Registration Statement No. 333-23085, and the Purchasers
currently own no shares of Common Stock. For SEC purposes, the
number of shares listed above as beneficially owned by the
Purchasers reflects ownership by the Purchasers of the 253,907
shares of Common Stock acquired upon conversion of $885,600 of
the principal amount of the Notes (prior to the subsequent resale
by the Purchasers), assumes conversion of (a) $16,100 of the
remaining principal amount at $3.15 per share based upon a 25%
discount from the 10-day average of the closing price of $4.2063
per share on August 8, 1997 (the date the Company received
written conversion notices from two of the Purchasers), (b)
$50,000 of the remaining principal amount at $3.14 per share
based upon a 25% discount from the 10-day average of the closing
price of $4.1875 per share on August 25, 1997 (the date the
Company received a written conversion notice from one of the
Purchasers), and (c) the remaining $48,300 in principal amount
based on a 25% discount from the 10-day average closing price of
$4.2188 per share. However, the filing of this registration
statement is not intended to reflect any obligation of the
Purchasers to convert the remainder of the Notes immediately.
PLAN OF DISTRIBUTION
The Company has been advised that the Selling Shareholders may
sell Shares from time to time, as market conditions permit, on
the Nasdaq National Market System, or otherwise, through ordinary
brokerage transactions, in negotiated transactions, 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 Shareholders may effect
such transactions by selling the Shares to or through broker-
dealers, and all such broker-dealers may receive compensation in
the form of discounts, concessions or commissions from the
Selling Shareholders and/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 as to a particular broker-
dealer might be in excess of customary commissions). The
aforementioned methods of sale may not be all-inclusive.
Any broker-dealer acquiring the Shares in the over-the-counter
market from the holder may sell the Shares either directly, in
its normal market-making activities, through or to other brokers
on a principal or agency basis or to its customers. Any such
sales may be at prices then prevailing in the over-ther-counter
market, at prices related to such prevailing market prices or at
negotiated prices to its customers or a combination of such
methods. The Selling Shareholders and any broker-dealers that act
in connection with the sale of Shares hereunder may be deemed to
be "underwriters" within the meaning of Section 2(11) of the
Securities Act; any commissions received by them and profits on
any resale of the Shares as principal might be deemed to be
underwriting discounts and commissions under the Securities Act.
Any such commissions, as well as other expenses of the Selling
Shareholders and applicable transfer taxes, are payable by such
parties, as the case may be.
The Company has agreed to indemnify the Selling Shareholders
against certain liabilities, including certain liabilities under
the Securities Act of 1933, as amended.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby have
been passed upon for the Company by Cooley Godward LLP, 4365
Executive Drive, San Diego, California 92121. As of the date of
this Prospectus, a partner of Cooley Godward LLP, holds 45,625
shares of Common Stock and options to purchase 37,500 shares of
Common Stock.
EXPERTS
The financial statements of Cypros Pharmaceutical Corporation
included in Cypros Pharmaceutical Corporation's Annual Report
(Form 10-K) for the year ended July 31, 1997, have been audited
by Ernst & Young LLP, independent auditors, as set forth in their
report thereon included therein and incorporated herein by
reference. Such financial statements are incorporated herein by
reference in reliance upon such report given upon the authority
of such firm as experts in accounting and auditing.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, 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 filed by the
Company may be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Judiciary Plaza, Washington, D.C. 20549, and at
the Commission's following Regional Offices: Chicago Regional
Office, Northwestern Atrium Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661; and New York Regional
Office, 7 World Trade Center, New York, New York 10048. Copies
of such material can also be obtained at prescribed rates from
the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Judiciary Plaza, Washington, D.C. 20549.
The Company has filed with the Commission a Registration
Statement on Form S-3 under the Securities Act, with respect to
the Common Stock offered hereby. This Prospectus does not
contain all of the information set forth in the Registration
Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. For further
information with respect to the Company and the Common Stock
offered hereby, reference is made to the Registration Statement
and the exhibits and schedules thereto, which may be inspected
without charge at, and copies thereof may be obtained at
prescribed rates from, the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Judiciary Plaza,
Washington, D.C. 20549.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year
ended July 31, 1997, the Company's Form 10-Q for the quarter
ended October 31, 1997, the Company's proxy statement for the
1998 Annual Meeting of Shareholders filed pursuant to Rule 14a-6
of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the Company's Registration Statement on Form 8-A dated
October 23, 1992 filed with the Securities and Exchange
Commission (the "Commission") are hereby incorporated by
reference in this Prospectus except as superseded or modified
herein. Additionally, the description of the Common Stock which
is contained in the Registration Statement on Form S-1 (No. 33-
51682), effective November 3, 1992, as filed with the Commission
under the Act, including any amendment or reports filed for the
purpose of updating such description, is hereby incorporated by
reference into this Prospectus and shall be deemed to be a part
hereof. All documents filed with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act") after the date of this
Prospectus and prior to the termination of the offering shall be
deemed to be incorporated by reference into this Prospectus and
to be a part hereof from the date of filing of such documents.
Any statement contained in any document incorporated or deemed to
be incorporated by reference herein shall be deemed to be
modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall
not be deemed, except as modified or superseded, to constitute a
part of this Prospectus. The Company will provide without charge
to each person, including any beneficial owner, to whom this
Prospectus is delivered, upon written or oral request of such
person, a copy of any and all of the documents that have been or
may be incorporated by reference herein (other than exhibits to
such documents which are not specifically incorporated by
reference into such documents). Such requests should be directed
to the Vice President and Chief Financial Officer of the Company
at the Company's principal executive offices at 2714 Loker Avenue
West, Carlsbad, California 92008.
No person is authorized in connection with any offering made
hereby to give any information or to make any representation not
contained or incorporated by reference in this Prospectus, and
any information or representation not contained or incorporated
herein must not be relied upon as having been authorized by the
Company or the Selling Shareholders. This Prospectus does not
constitute an offer to sell, or a solicitation of an offer to
buy, by any person in any jurisdiction in which it is unlawful
for such person to make such offer or solicitation. Neither the
delivery of this Prospectus at any time nor any sale made
hereunder shall, under any circumstances, imply that the
information herein is correct as of any date subsequent to the
date hereof.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth all expenses payable by the
Registrant in connection with the sale of the Common Stock being
registered. All the amounts shown are estimates except for the
SEC registration fee and the Nasdaq NMS listing application fee.
SEC Registration fee............................$ 2,221.80
NASDAQ NMS listing application fee.............. 17,500.00
Legal fees and expenses......................... 9,000.00
Accounting fees and expenses.................... 5,000.00
Total...........................................$33,721.80
Item 15. Indemnification of Officers and Directors.
Under Section 317 of the California Corporations Code, the
Registrant is authorized to indemnify its directors, officers,
employees and other agents against liabilities they may incur in
such capacities, including liabilities under the Securities Act
of 1933, as amended. The Registrant's Bylaws provide that the
Registrant will indemnify its directors and executive officers
and may indemnify its other officers, employees and other agents
to the full extent permitted by law. The Bylaws further provide
that rights, conferred under such Bylaws shall not be deemed to
be exclusive of any other rights such persons may have or acquire
under any statute, any provisions of the Registrant's Restated
Articles of Incorporation or Bylaws, or any agreement, vote of
the shareholders or disinterested directors or otherwise.
In addition, the Registrant's Restated Articles of Incorporation
provide that to the fullest extent permitted by California law,
the Company's directors will not be personally liable for
monetary damages for breach of the directors' fiduciary duty of
care to the Company and its shareholders. This provision in the
Restated Articles of Incorporation does not eliminate the duty of
care, and in appropriate circumstances equitable remedies such as
an injunction or other forms of non-monetary relief would remain
available under California law. Each director will continue to
be subject to liability for breach of the director's duty of
loyalty to the Registrant, for acts or omissions not in good
faith or involving intentional misconduct for knowing violations
of law, for actions leading to improper personal benefit, for
acts or omissions that constitute an unexcused pattern of
inattention that amounts to an abdication of the director's duty
to the Registrant or its shareholders and for payment of
dividends, approvals of stock repurchases or redemptions or loans
or guarantees that are unlawful under California law. These
provisions do not affect a director's responsibilities under any
other laws, such as the federal securities laws or the state or
federal environmental laws.
There is no pending material litigation or proceeding involving a
director, officer, employee or other agent of the Registrant as
to which indemnification is being sought, nor is the Registrant
aware of any pending or threatened material litigation that may
result in claims for indemnification by any director, officer,
employee or other agent.
<TABLE>
<CAPTION>
Item 16.
Exhibits.
Exhibit
Number Description of Document
<S> <C>
5.1 Opinion of Cooley Godward LLP.
10.1(1) Common Stock Purchase Agreement.
23.1 Consent of Ernst & Young LLP, Independent
Auditors.
23.2 Consent of Cooley Godward LLP. Reference is
made to Exhibit 5.1.
24.1(1) Power of Attorney.
</TABLE>
__________
(1) Previously filed.
Item 17. Undertakings.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers,
and controlling persons of the Registrant pursuant to the
provisions described in Item 15 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 Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or
paid by a director, officer, or controlling person of the
Registrant in the successful defense of any action, suit, or
proceeding) is asserted by such director, officer, or controlling
person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
The undersigned Registrant hereby undertakes: (1) to file, during
any period in which offers or sales are being made, a post-
effective amendment to this registration statement
(i) to include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement;
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such information
in the registration statement;
provided however, that clauses (i) and (ii) do not apply if the
information required to be included in a post-effective amendment
by these clauses is contained in periodic reports filed by the
Registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement; (2) that, for the
purpose of determining any liability under the Securities Act 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; and (3)
to remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
The undersigned Registrant hereby undertakes: (1) for purpose of
determining any liability under the Securities Act of 1933, the
information omitted from the form of prospectus filed as part of
the registration statement in reliance upon Rule 430A and
contained in the form of prospectus filed by the Registrant
pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities
Act shall be deemed to be part of the registration statement as
of the time it was declared effective; (2) for the purpose of
determining any liability under the Securities Act of 1933, each
post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof; and (3) for purposes of determining any liability under
the Securities Act of 1933, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
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 Post-Effective Amendment No. 1 to
Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of San Diego,
County of San Diego, State of California, on the 23rd day of
December, 1997.
CYPROS PHARMACEUTICAL CORPORATION
By: /s/ Paul J. Marangos
- ------------------------
Paul J. Marangos
Chairman of the Board,
President and Chief Executive Officer
(Principal executive officer)
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 1 to Registration Statement has been
signed below by the following persons in the capacities and on
the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/Paul J. Marangos Chairman of the December 23, 1997
- -------------------- Board, President and
Paul J. Marangos Chief Executive
Officer
(Principal executive
officer)
/s/David W. Nassif Senior Vice December 23, 1997
- -------------------- President, Chief
David W. Nassif Financial Officer
and Secretary
(Principal financial
and accounting
officer
*------------------- Director December 23, 1997
Digby W. Barrios
*------------------- Director December 23, 1997
Robert F. Allnutt
*------------------- Director December 23, 1997
Virgil D. Thompson
*------------------- Director December 23, 1997
Robert A. Vukovich
</TABLE>
*By:--------------------------
David W. Nassif, Attorney-in-fact
<TABLE>
<CAPTION>
INDEX TO EXHIBITS
Exhibit Sequentially
Number Description Numbered
Page
<S> <C> <C>
5.1 Opinion of Cooley Godward LLP 21
23.1 Consent of Ernst & Young LLP, 43
Independent Auditors
</TABLE>
EXHIBIT 5.1
December 24, 1997
Cypros Pharmaceutical Corporation
2714 Loker Avenue West
Carlsbad, California 92008
Ladies and Gentlemen:
You have requested our opinion with respect to certain matters in
connection with the filing by Cypros Pharmaceutical Corporation
(the "Company") of a Registration Statement on Form S-3, as
amended (the "Registration Statement"), with the Securities and
Exchange Commission covering the offer and sale of up to an
aggregate of 1,365,238 shares of the Company's Common Stock, no
par value, by certain shareholders, in connection with the resale
of an aggregate of 290,238 shares of the Company's Common Stock
(the "Converted Shares") issuable upon conversion of three
Convertible Notes, each due and payable as of April 9, 1999 (the
"Notes") and 1,075,000 shares of the Company's Common Stock (the
"Shares") issued upon the closing of sales pursuant to two Common
Stock Purchase Agreements, each dated as of March 5, 1997 (the
"Stock Purchase Agreements").
In connection with this opinion, we have examined the
Registration Statement and related Prospectus, your Restated
Articles of Incorporation, as amended, your Bylaws, as amended,
the Notes, the Stock Purchase Agreements, and such other
documents, records, certificates, memoranda and other instruments
as we deem necessary as a basis for this opinion. We have
assumed the genuineness and authenticity of all documents
submitted to us as originals, the conformity to originals of all
documents submitted to us as copies thereof, and the due
execution and delivery of all documents where due execution and
delivery are a prerequisite to the effectiveness thereof.
On the basis of the foregoing, and in reliance thereon, we are of
the opinion that the Converted Shares, when sold and issued in
accordance with the Notes, and that the Shares, when sold and
issued in accordance with the Stock Purchase Agreements, will be
validly issued, fully paid, and nonassessable.
We consent to the reference to our firm under the caption "Legal
Matters" in the Prospectus included in the Registration Statement
and to the filing of this opinion as an exhibit to the
Registration Statement
Very truly yours,
COOLEY GODWARD LLP
By: /s/ M. Wainwright Fishburn, Jr.
- ------------------------------------
M. Wainwright Fishburn, Jr.
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption
"Experts" in the Registration Statement(Post-Effective Amendment
No. 1 to Form S-3) and related Prospectus of Cypros
Pharmaceutical Corporation for the registration of 33,250 shares
of its common stock and to the incorporation by reference therein
of our report dated August 21, 1997 (except Note 5, as to which
the date is October 9, 1997), with respect to the financial
statements of Cypros Pharmaceutical Corporation included in its
Annual Report (Form 10-K) for the year ended July 31, 1997, filed
with the Securities and Exchange Commission.
ERNST & YOUNG LLP
San Diego, California
December 22, 1997
