[As filed with the Securities and Exchange Commission on
September 8, 1997]
[Registration No. 333-32159]
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[AMENDMENT NO. 1 TO]
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
CYPROS PHARMACEUTICAL CORPORATION
(Exact name of Registrant as specified in its charter)
California
(State or other jurisdiction of
incorporation organization)
2714 Loker Avenue West
Carlsbad, California 92008
(760) 929-9500
33-0476164
(I.R.S. Employer Identification Number)
(Address, including zip code, and
telephone number, including area code,
of Registrant's principal executive
offices) David W. Nassif, Esq.
Vice President and Chief Financial Officer
CYPROS PHARMACEUTICAL CORPORATION
2714 Loker Avenue West
Carlsbad, California 92008
(760) 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 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>
<CAPTION>
CALCULATION OF REGISTRATION FEE
<S> <C> <C> <C> <C>
Title of each Amount to Proposed Proposed Amount
class of be maximum maximum of
securities to registered offering aggregate registration
be registered (1) price offering fee
per price (1)
share (1)
Common Stock, 623,830 $4.1875 $2,612,288 $791.60
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 based on
the average of the high and low prices of the Registrant's Common
Stock as reported on the NASDAQ National Market System on July
23, 1997.
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 SEPTEMBER 8, 1997]
P R O S P E C T U S
623,830 Shares
Cypros Pharmaceutical Corporation
Common Stock
______________________________
This Prospectus relates to 623,830 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 a shareholder of the Company (the "Selling
Shareholder") 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 Shareholder
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 Shareholder 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
brokerdealer might be in excess of customary commissions). See
"Selling Shareholder" and "Plan of Distribution."
None of the proceeds from the sale of the Shares by the Selling
Shareholder 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
Shareholder) in connection with the registration and sale of
the Shares being offered by the Selling Shareholder. The
Company has agreed to indemnify the Selling Shareholder 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 September 5,
1997, the last sale price for the Common Stock as reported by
NASDAQ was $4.50 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
SE CURITIES 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 September , 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
(formerly CPC-211), for the treatment of disorders, such as
stroke, traumatic head injury, congestive heart failure,
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.
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 $1,471,014 or $0.12 per
share for the quarter ended April 30, 1997, compared to a loss
of $787,419 or $0.07 per share for the prior-year period and a
net loss of $5,247,711 or $0.44 per share for the nine months
ended April 30, 1997, compared to a loss of $2,168,359 or $0.19
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 Redeemable Class B Warrants (the "Class B
Warrants"), 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 five U.S. 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
knowhow, 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 Ethamolinr, 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
fivehas no experience in sales, marketing or distributio sales
representatives for Ethamolinr, 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.To market any of its drugs directly, the Company
expects to develop a marketing and sales force with technical
expertise and supporting distribution capability. The Company
believes that it will be able to serve the hospital market in
North America do so with a 50 to 100 person sales and marketing
staff. since its drugs will be sold primarily to and
administered in acute care facilities rather than sold directly
to physicians' offices or retail drug stores. 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.
Outstanding Warrants and Options
[There are currently outstanding 4,673,512 Class B Warrants.
Additional shares of Common Stock are issuable as follows: (i)
1,256,936 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 warrants
and 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 warrants and
options. Further, while the warrants and 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 SHAREHOLDER
[The following table sets forth certain information regarding
the beneficial ownership of Common Stock of the Selling
Shareholder as of September 8, 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 Shareholder may offer the Shares for resale
from time to time. See "Plan of Distribution."]
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Name and Number of Number of Beneficial
Address of Shares Shares Ownership
Selling Beneficially Being After
Shareholder Owned Prior Offered Offering
to Offering
Number
of
Shares Percent
Paresco, Inc. 785,543(1) 623,830 161,713 1.1%
101 Hudson
Street Jersey
City, NJ 07302
</TABLE>
__________
*Less than one percent.
(1) On July 10, 1996, Paresco, Inc. (the "Purchaser")
purchased a mandatorily convertible note from the Company in
the principal amount of $2,000,000 with a maturity of July 9,
1999 (the "Note"). The principal amount of the Note (or
portions thereof) is convertible at any time, and the remaining
principal amount of the Note will be automatically converted
(if not converted in full before then) on July 9, 1999. When
converted at the Purchaser's 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.
Because the Purchaser may convert the Note at any time, the
Company is registering herein a certain amount of shares
issuable upon conversion of the Note, which amount may be
increased or decreased over time by means of an amendment to
this registration statement. For SEC purposes, the number of
shares listed above as beneficially owned by the Purchaser
assumes conversion based on a 25% discount from a 10-day
average closing price of $4.275 per share. However, the filing
of this registration statement is not intended to reflect any
obligation of the Purchaser to convert all or any portion of
the Note prior to July 9, 1999.
PLAN OF DISTRIBUTION
The Company has been advised that the Selling Shareholder 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 Shareholder
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 Shareholder 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 brokerdealer 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 Shareholder 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 Shareholder and
applicable transfer taxes, are payable by such parties, as the
case may be.
The Company has agreed to indemnify the Selling Shareholder
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 and Forms 10/A) for the year ended July 31, 1996,
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 Reports on Form 10-K and Forms 10-K/A the fiscal year
ended July 31, 1996, the Company's Form 8-K dated September 20,
1996, the Company's Form 8-K dated November 4, 1996, the Company's
Form 8-K/A dated January 16, 1997, the Company's Form 10-Q and Form
10-Q/A for the quarter ended October 31, 1996, the
Company's Form 10-Q and Form 10-Q/A for the quarter ended January 31,
1997, the Company's Form 10-Q and Form 10-Q/A for the quarter ended
April 30, 1997, the Company's proxy statement for the 1997 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 Exchange Act after the date of this Prospectus and prior
to the termination of the offering and all amendments to the
documents incorporated by reference in this Prospectus 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 Shareholder. 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.
<TABLE>
<CAPTION>
<S> <C>
SEC Registration fee $ 791.60
NASDAQ NMS listing application fee 12,476.60
Legal fees and expenses 5,000.00
Accounting fees and expenses 3,000.00
Total $21,268.20
</TABLE>
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 fullest 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.
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*] Power of Attorney. Reference is made to
page 17.
</TABLE>
[* 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
posteffective 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 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 8th day of September, 1997.]
CYPROS PHARMACEUTICAL CORPORATION
By: /s/ 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 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 [September 8,1997]
- -------------------- Board, President and
Chief Executive
Officer (Principal
executive officer)
/s/ David W. Nassif Vice President, [September 8,1997]
- -------------------- Chief Financial
Officer and
Secretary (Principal
financial and
accounting officer)
[*]
- --------------------
Digby W. Barrios Director [September 8,1997]
[*]
_________________
Robert F. Allnutt Director [September 8,1997]
[*]
- -----------------
Virgil D. Thompson Director [September 8,1997]
[*]
- ----------------
Robert A. Vukovich Director [September 8,1997]
- ----------------------
</TABLE>
[* David W. Nassif
By:-----------------------
David W. Nassif, Attorney-in-fact]
<TABLE>
<CAPTION>
INDEX TO EXHIBITS
<S> <C> <C>
Sequentially
Exhibit Description
Number
Numbered
Page
23.1 Consent of Ernst & Young LLP, 23
Independent Auditors
</TABLE>
Exhibit 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
[We consent to the reference to our firm under the caption
"Experts" in Amendment No. 1 to the Registration Statement
(Form S-3) and related Prospectus of Cypros Pharmaceutical
Corporation for the registration of shares of its common
stock and to the incorporation by reference therein of our
report dated August 26, 1996, with respect to the financial
statements of Cypros Pharmaceutical Corporation included in
its Annual Report (Form 10-K and Forms 10-K/A) for the year ended
July 31, 1996, filed with the Securities and Exchange Commission.]
ERNST & YOUNG LLP
(Signature)
San Diego, California
[September 4, 1997]
