<PAGE> 1
Filed pursuant to Rule 424(b)(3)
Registration No. 333-45637
PROSPECTUS
7,294,737 SHARES
[ORAVAX LOGO]
COMMON STOCK
------------------------
This Prospectus covers the resale of up to 7,294,737 shares of Common
Stock, $0.001 par value per share (the "Common Stock") of OraVax, Inc. ("OraVax"
or the "Company") by certain stockholders of the Company (the "Selling
Stockholders"). See "Selling Stockholders." 6,631,579 of the shares of Common
Stock covered by this Prospectus may be issuable to the Selling Stockholders
upon conversion of shares of the Series 6% Convertible Preferred Stock, $.001
par value per share ("Convertible Preferred Stock"), of the Company which were
issued to the Selling Stockholders pursuant to the several Preferred Stock
Investment Agreements between the Company and the Selling Stockholders, each
dated as of December 23, 1997 (collectively, the "Investment Agreement"). The
remaining 663,158 shares of Common Stock may be issuable to Selling Stockholders
who received certain warrants (the "Convertible Preferred Stock Warrants") to
acquire Convertible Preferred Stock in connection with the services of Cappello
Capital Corp. as placement agent. All of the shares offered hereunder are to be
sold by the Selling Stockholders. The Company will not receive any of the
proceeds from the sale of the shares by the Selling Stockholders.
The shares covered by this Prospectus represent 200% of the number of
shares that may be issued as of the date of this Prospectus based upon a
conversion price of $2.00 per share. The actual number of shares of Common Stock
offered hereby is subject to adjustment and could be materially less or more
than the estimated amount indicated depending upon factors which cannot be
predicted by the Company at this time, including, among others, market prices
prevailing at the actual date of conversion. This presentation is not intended
to constitute a prediction as to the future market price of the Common Stock or
as to when Selling Stockholders will elect to convert shares of Convertible
Preferred Stock.
The Selling Stockholders may from time to time sell the shares covered by
this Prospectus on the Nasdaq National Market in ordinary brokerage
transactions, in negotiated transactions, or otherwise, at market prices
prevailing at the time of sale or at negotiated prices. See "Plan of
Distribution." The Common Stock is traded on the Nasdaq National Market under
the symbol "ORVX".
------------------------
THE SHARES OFFERED HEREBY INVOLVE A HIGH DEGREE
OF RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 5.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
THE DATE OF THIS PROSPECTUS IS FEBRUARY 13, 1998.
<PAGE> 2
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company with the Commission
pursuant to the informational requirements of the Exchange Act may be inspected
and copied at the public reference facilities maintained by the Commission at
450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549 and at the
Commission's regional offices located at Seven World Trade Center, Suite 1300,
New York, New York 10048, and at Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661. Copies of such materials also may be obtained
from the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. In addition, the Company is required
to file electronic versions of these documents through the Commission's
Electronic Data Gathering, Analysis and Retrieval system (EDGAR). The Commission
maintains a World Wide Web site at http://www.sec.gov that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the Commission. The Common Stock of the Company is
traded on the Nasdaq National Market. Reports and other information concerning
the Company may be inspected at the National Association of Securities Dealers,
Inc., 1735 K Street, N.W., Washington, D.C. 20006.
The Company has filed with the Commission a Registration Statement on Form
S-3 (together with all amendments, supplements, exhibits and schedules thereto,
the "Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the shares of Common Stock offered hereby.
This Prospectus does not contain all of the information set forth in the
Registration Statement, as certain items are omitted in accordance with the
rules and regulations of the Commission. For further information pertaining to
the Company and the shares of Common Stock offered hereby, reference is made to
the Registration Statement. Statements contained in this Prospectus regarding
the contents of any agreement or other document are not necessarily complete,
and in each instance reference is made to the copy of such agreement or document
filed as an exhibit to the Registration Statement, each such statement being
qualified in all respects by such reference. The Registration Statement,
including all exhibits and schedules thereto, may be inspected without charge at
the office of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549,
and copies of all or any part thereof may be obtained from the Commission at
prescribed rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated herein by reference:
(i) The Company's Annual Report on Form 10-K for the year ended December
31, 1996, as filed with the Commission on March 31, 1997;
(ii) The Company's Quarterly Reports on Form 10-Q for the quarterly
periods ended March 31, 1997, June 30, 1997 and September 30, 1997,
as filed with the Commission on May 12, 1997, August 14, 1997 and
November 12, 1997, respectively;
(iii) The Company's Current Reports on Form 8-K, dated April 2, 1997 and
December 23, 1997, as filed with the Commission on April 11, 1997 and
January 21, 1998, respectively; and
(iv) The Company's Registration Statement on Form 8-A registering the
Common Stock under Section 12(g) of the Exchange Act, as filed with
the Commission on May 8, 1995.
All documents filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date hereof and
prior to the termination of the offering of the Common Stock registered hereby
shall be deemed to be incorporated by reference into this Prospectus and to be a
part hereof from the date of filing such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference 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
2
<PAGE> 3
which also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon written or oral request of such person, a copy of
any or all of the foregoing documents incorporated by reference into this
Prospectus (without exhibits to such documents other than exhibits specifically
incorporated by reference into such documents). All such requests shall be
directed to: OraVax, Inc., 38 Sidney Street, Cambridge, Massachusetts 02139,
Attention: President, Telephone: (617) 494-1339.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION AND
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY SECURITIES OTHER THAN THE REGISTERED SECURITIES TO WHICH IT
RELATES. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION
OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR
SOLICITATION IS UNLAWFUL.
SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION
Certain statements in this Prospectus and in the documents incorporated
herein constitute "forward-looking statements" within the meaning of Section 27A
of the Securities Act and Section 2B of the Exchange Act. For this purpose, any
statements contained herein or incorporated herein that are not statements of
historical fact may be deemed to be forward-looking statements. Without limiting
the foregoing, the words "believes," "plans," "expects" and similar expressions
are intended to identify forward-looking statements. There are a number of
important factors that could cause the results of the Company to differ
materially from those indicated by such forward-looking statements. These
factors include those set forth in "Risk Factors" herein.
3
<PAGE> 4
THE COMPANY
OraVax, Inc. ("OraVax" or the "Company") is a leader in the discovery and
development of oral vaccines and non-injected antibody products to prevent or
treat diseases which infect the human body at its mucosal surfaces. Most
bacteria and viral infections attack the body at its mucosal surfaces. These
surfaces include the linings of the gastrointestinal, respiratory and
genitourinary tracts and the surface of the eyes, an exposed surface area of
over 3,600 square feet in the average adult. Consequently, the largest part of
the body's immune system is at the mucosal surface and forms an important first
line of defense against disease. OraVax was founded to pursue drug discovery and
development utilizing the mucosal immune system. The Company has developed
proprietary technology and accumulated valuable expertise in the exploitation of
the mucosal immune system for drug discovery and development OraVax believes
oral vaccines and non-injected antibody products that provide immunity at
mucosal surfaces offer a number of important clinical and commercial advantages
relative to injected products, including greater clinical efficacy, a higher
level of safety, lower costs of administration and improved patient compliance.
The Company was incorporated in Delaware in 1990 and has its principal
offices and laboratories at 38 Sidney Street, Cambridge, Massachusetts
(telephone: 617-494-1339).
4
<PAGE> 5
RISK FACTORS
The shares of Common Stock offered hereby include a high degree of risk.
The following risk factors should be considered carefully in addition to the
other information included or incorporated by reference in this Prospectus
before purchasing the Shares offered hereby.
Early Stage of Product Development. The products under development by the
Company will require significant additional research and development efforts,
including extensive clinical testing and regulatory approval, prior to
commercial use. The Company's potential products are subject to the risks of
failure inherent in the development of pharmaceutical products based on new
technologies. These risks include the possibilities that the Company's
therapeutic approach will not be successful, that any or all of the Company's
potential products will be found to be unsafe, ineffective, toxic or otherwise
fail to meet applicable regulatory standards or receive necessary regulatory
clearances, that the potential products, if safe and effective, will be
difficult to develop into commercially viable products, to manufacture on a
large scale or be uneconomical to market, that proprietary rights of competitors
or other parties will preclude the Company from marketing such products; or that
competitors or other parties will market superior or equivalent products.
Future Capital Needs. In addition, the Company will require substantial
additional funds in order to continue its research and development programs,
preclinical and clinical testing of its product candidates and to conduct full
scale manufacturing and marketing of any pharmaceutical products that may be
developed. The Company's capital requirements depend on numerous factors,
including but not limited to the progress of its research and development
programs, the progress of preclinical and clinical testing, the time and costs
involved in obtaining regulatory approvals, the cost of filing, prosecuting,
defending and enforcing any patent claims and other intellectual property
rights, competing technological and market developments, changes in the
Company's existing research relationships, the ability of the Company to
establish collaborative arrangements, the development of commercialization
activities and arrangements, and the purchase of additional facilities and
capital equipment. Based upon its current plans, the Company believes that it
has sufficient funds to fund the Company's operating expenses and meet its
capital requirements through the fourth quarter of 1998. There can be no
assurance, however, that changes in the Company's research and development
plans, acquisitions or other events affecting the Company's operations will not
result in accelerated or unexpected expenditures. Thereafter, the Company will
need to raise substantial additional capital to fund its operations. There can
be no assurance, however, that additional financing will be available, or if
available, will be available on acceptable or affordable terms.
Manufacturing Limitations. At present, the Company's ability to
manufacture its products is limited to clinical trial quantities. The Company
does not have the capability to manufacture commercial quantities of products.
The Company's long-term strategy is to develop manufacturing facilities for
producing both pilot-scale and commercial quantities of its products. To ensure
compliance with current Good Manufacturing Practices ("cGMP") imposed by the
FDA, OraVax will need to establish sufficient technical staff to oversee all
product operations, including quality control, quality assurance, technical
support and manufacturing management. The Company may enter into arrangements
with contract manufacturing companies to expand its own production capacity in
order to meet requirements for its product candidates. If the Company chooses to
contract for manufacturing services and encounters delays or difficulties in
establishing relationships with manufacturers to produce, package and distribute
its finished pharmaceutical or other medical products (if any), clinical trials,
market introduction and subsequent sales of such products would be adversely
affected. Moreover, contract manufacturers must operate in compliance with cGMP.
The Company's potential dependence upon third parties for the manufacture of its
products may adversely affect the Company's profit margins and its ability to
develop and deliver such products on a timely and competitive basis.
Risks Associated with Collaborative Arrangements. The Company's product
development strategy may require the Company to enter into various additional
arrangements with corporate, government and academic collaborators, licensors,
licensees and others. Therefore, the Company may be dependent upon the
subsequent success of these outside parties in performing their
responsibilities. There can be no assurance that the Company will be able to
establish additional collaborative arrangements or license agreements that the
5
<PAGE> 6
Company deems necessary or acceptable to develop and commercialize its potential
pharmaceutical products or that such collaborative arrangements or license
agreements will be successful.
Patent and Proprietary Rights. The Company seeks to protect its trade
secrets and proprietary know-how, in part, through confidentiality agreements
with its employees, consultants, advisors and collaborators. There can be no
assurance that these agreements will not be violated by the other parties, that
OraVax will have adequate remedies for any breach, or that the Company's trade
secrets will not otherwise become known or be independently developed by
competitors. Certain of the technology that may be used in the products of
OraVax is not covered by any patent applications relating to the Company's
product candidates will result in patents being issued. Moreover, there can be
no assurance that any such patents will afford protection against competitors
with similar technology. There may be pending or issued third-party patents
relating to the product candidates of OraVax. OraVax may need to acquire
licenses to, or to contest validity of, any such third party patents. It is
likely that significant funds would be required to defend any claim that OraVax
infringes a third-party patent, and any such claim could adversely affect sales
of the challenged product of OraVax until the claim is resolved. There can be no
assurance that any license required under any such patent would be made
available.
Government Regulation. The rigorous preclinical and clinical testing
requirements and regulatory approval process of the FDA and of foreign
regulatory authorities can take a number of years and require the expenditure of
substantial resources. The Company has limited experience in conducting and
managing preclinical and clinical testing necessary to obtain government
approvals. There can be no assurance that the Company will be able to obtain the
necessary approvals for clinical testing or for the manufacturing and marketing
of any products that it develops. Additional government regulation may be
established that could prevent or delay regulatory approval of the Company's
product candidates. Delays in obtaining regulatory approvals would adversely
affect the marketing of any products developed by the Company and the Company's
ability to receive product revenues or royalties. If regulatory approval of a
potential product is granted, such approval may include significant limitations
on the indications for which such product may be marketed. Even if initial
regulatory approvals for the Company's product candidates are obtained, the
Company, its products and its manufacturing facilities are subject to continual
review and periodic inspection. The regulatory standards for manufacturing are
applied stringently by the FDA. Discovery of previously unknown problems with a
product, manufacturer or facility may result in restrictions on such product or
manufacturer or facility, including warning letters, fines, suspensions of
regulatory approvals, product recalls, operating restrictions, delays in
obtaining new product approvals, product recalls, operating restrictions, delays
in obtaining new product approvals, withdrawal of the product from the market,
and criminal prosecution. Other violations of FDA requirements can result in
similar penalties.
Uncertainty of Third-Party Reimbursement. Government and other third-party
payers are increasingly attempting to contain healthcare costs by limiting both
coverage and the level of reimbursement for new products approved for marketing
by the FDA and by refusing, in some cases, to provide any coverage for uses of
approved products for disease indications for which the FDA has not granted
marketing approval. If adequate coverage and reimbursement levels are not
provided by government and third party payers for uses of the Company's
products, the market acceptance of these products would be adversely affected.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of Common Stock by
the Selling Stockholders.
6
<PAGE> 7
THE INVESTMENT AGREEMENT
PREFERRED STOCK PRIVATE PLACEMENT
General
On December 23, 1997, the Company completed a private placement (the "1997
Private Placement") of 6,300 shares of Convertible Preferred Stock pursuant to
which it received gross proceeds of $6.3 million. The securities issuances
related to the 1997 Private Placement (including shares of Common Stock issuable
upon conversion of shares of Convertible Preferred Stock) are referred to herein
as the "1997 Private Placement Issuances." All of the securities sold in the
1997 Private Placement were sold in private placements solely to accredited
investors under the Securities Act.
Summary of Transaction Terms
Set forth below is a summary of the material terms of the 1997 Private
Placement, which summary is qualified by reference to the full text of the
underlying documents which have been previously filed as exhibits to the
Company's Current Report on Form 8-K dated as of December 23, 1997.
Pursuant to the terms of the Investment Agreement, the Company issued and
sold in a private placement to certain accredited investors for $1,000 per share
an aggregate of 6,300 shares of Convertible Preferred Stock, resulting in gross
proceeds to the Company of $6.3 million in the aggregate.
Each share of Convertible Preferred Stock is entitled to receive cumulative
dividends at the rate of $60.00 per share per annum, payable in shares of
Convertible Preferred Stock valued at $1,000 per share, when and as declared by
the Company's Board of Directors. Such dividends accrue from day to day whether
or not earned or declared. Each share of Convertible Preferred Stock is also
entitled to a liquidation preference of $1,000 per share, plus any accrued but
unpaid dividends and any amounts owing as a result of a failure by the Company
to file an effective registration statement within the prescribed period (see
discussion below), in preference to any other class or series of capital stock
of the Company. Except to determine whether such stock is entitled to its
liquidation preference under certain circumstances, and as provided by
applicable law, holders of shares of Convertible Preferred Stock have no voting
rights.
Commencing on March 23, 1998, at least 20% and up to 50% (depending upon
the price at which the Common Stock is trading) of the number of shares of
Convertible Preferred Stock held of record by each holder on such day will
become convertible into shares of Common Stock, and thereafter on the same day
in successive months additional shares of Convertible Preferred Stock will
become convertible (with the additional amount varying from 20% to 50% of the
number of shares of Convertible Preferred Stock held of record by such holder on
such day depending upon the price at which the Common Stock is trading). On
December 23, 2002, all outstanding shares of Convertible Preferred Stock will
automatically be converted into Common Stock.
The number of shares of Common Stock issuable upon conversion of shares of
Convertible Preferred Stock will equal the liquidation preference of the shares
being converted divided by the then-effective conversion price applicable to the
Convertible Preferred Stock (the "Conversion Price"). The Conversion Price as of
any date after March 23, 1998 will be the lowest trading price of the Common
Stock during the 22 consecutive trading days immediately preceding the date of
conversion reduced by the Applicable Percentage described below. The "Applicable
Percentage", which is dependent upon the time elapsed after the date of issuance
to the date of measurement, will be 5.000% starting on the first day of the
fourth month and will increase in the subsequent 14 months to 6.125%, 7.250%,
8.375%, 9.500%, 10.625%, 11.750%, 12.875%, 14.000%, 15.125%, 16.250%, 17.375%,
18.500%, 19.750% and 21.000%, respectively. At any date after the first day of
the eighteenth month after the date of issuance, the Conversion Price will be
the lesser of (i) 79% of the average of the daily low trading prices of the
Common Stock for the eighteenth month, (ii) 79% of the average of the daily low
trading prices of the Common Stock for the twenty-fourth month, and (iii) 79% of
the average of the daily low trade prices of the Common Stock for the thirtieth
month (the "Conversion Cap"). The Conversion Price is at all times also subject
to customary anti-dilution adjustment for events such as stock splits, stock
dividends, reorganizations and certain mergers affecting the Common Stock. No
holder of
7
<PAGE> 8
Convertible Preferred Stock will be entitled to convert any share of Convertible
Preferred Stock into shares of Common Stock if, following such conversion, the
holder and its affiliates (within the meaning of the Exchange Act) will be the
beneficial owners (as defined in Rule 13d-3 under the Exchange Act) of 10% or
more of the outstanding shares of Common Stock.
In addition, following conversion of the Convertible Preferred Stock into
shares of Common Stock, the holders of such shares of Common Stock have agreed
to be limited on resales of such shares on any trading day to the greater of (i)
10% of the average daily trading volume of the Common Stock for the five trading
days preceding any such sale, (ii) 4,000 shares, and (iii) 10% of the trading
volume of the Common Stock on the date of any such sale. Further, upon proper
notice the Company has the right, if the Conversion Price falls below a price
designated by the Company, and subject to certain other conditions, to honor any
conversion request by a cash payment in lieu of the issuance of Common Stock in
an amount equal to the proceeds which would otherwise have been received by the
holder if conversion were in fact made into shares of Common Stock and such
shares were sold at the high trade price on the date of conversion (the "Green
Floor").
The Company is not obligated to issue, in the aggregate, more than
2,016,163 shares of Common Stock if issuance of a larger number of shares would
constitute a breach of the rules (the "NASD Rules") of the National Association
of Securities Dealers, Inc., including the stockholder approval rules of Nasdaq
described above. If stockholder approval is not received prior to March 15,
1998, the Company will be obligated to redeem on or before March 30, 1998, at a
premium price, a sufficient number of shares of Convertible Preferred Stock
which, in the Company's reasonable judgment, will permit conversion of the
remaining shares of Convertible Preferred Stock without breaching the NASD
Rules. Any delay in payment will cause such redemption amount to accrue interest
at the rate of 0.05% per day until paid. Subject to this requirement to effect a
special redemption of the Convertible Preferred Stock, the Company has informed
Nasdaq that it will exercise the Green Floor with respect to any issuance of
Common Stock upon conversion of any shares of Convertible Preferred Stock which
would otherwise constitute a breach of the NASD Rules.
The Company has agreed to register the shares of Common Stock issuable upon
conversion of the Convertible Preferred Stock for resale under the Securities
Act no later than March 23, 1998. Any delay in having the related registration
statement declared effective by the Commission beyond the applicable period, or
any unavailability to the holders of Convertible Preferred Stock of a current
prospectus after such period, will require the Company to pay to the holders, in
cash, 3% of the total purchase price of the Convertible Preferred Stock, or
$189,000 in the aggregate, for each 30-day period of the delay (pro rated for
any shorter period).
The placement agent for the issuances described above was Cappello Capital
Corp. (the "Placement Agent"). In consideration for placing such securities, the
Placement Agent received aggregate cash compensation of 8.5% of the gross
proceeds received by the Company, or $563,000. The Placement Agent also received
Convertible Preferred Stock Warrants to acquire an aggregate of 630 shares of
Convertible Preferred Stock for a purchase price of $1,000 per share (subject to
the same anti-dilution protections as are applicable to the Convertible
Preferred Stock). Such Convertible Preferred Stock Warrants will be exercisable
for a period of five years for shares of Convertible Preferred Stock. The
Company is obligated to register the shares of Common Stock issuable upon
exercise and conversion of the Convertible Preferred Stock Warrants for resale
under the Securities Act, and is doing so herein. The Placement Agent will
retain its compensation whether or not the required shareholder approval of the
1997 Private Placement Issuances is obtained.
Stockholder Approval
The Company intends to seek the approval of its stockholders of the 1997
Private Placement Issuance to satisfy certain stockholder approval requirements
contained in the Company's agreements with Nasdaq and with the holders of
Convertible Preferred Stock. It is presently expected that this approval will be
sought at a special meeting of Stockholders to be held on March 10, 1998.
8
<PAGE> 9
THE SELLING STOCKHOLDERS
The following table sets forth the name and the number of shares of Common
Stock beneficially owned by each of the Selling Stockholders as of the date of
this Prospectus, the number of the shares to be offered by each of the Selling
Stockholders and the number and percentage of shares to be owned beneficially by
each of the Selling Stockholders if all of the shares offered hereby by the
Selling Stockholders are sold as described herein.
<TABLE>
<CAPTION>
NUMBER OF SHARES OF PERCENTAGE OF
COMMON STOCK NUMBER OF SHARES SHARES OF
BENEFICIALLY OWNED NUMBER OF SHARES OF COMMON STOCK COMMON
NAME OF PRIOR TO OF COMMON STOCK BENEFICIALLY OWNED STOCK OWNED
SELLING STOCKHOLDER OFFERING(1) OFFERED HEREBY AFTER OFFERING(1) AFTER OFFERING
- --------------------------------------- ------------------- ---------------- ------------------ --------------
<S> <C> <C> <C> <C>
KA INVESTMENTS......................... 1,052,631 1,052,631 -- --
ProFutures Special Equities Fund,
L.P.................................. 789,473 789,473 -- --
Deere Park Capital Management, Inc. (as
Nominee)............................. 526,316 526,316 -- --
Linda S. Cappello...................... 403,158 403,158 -- --
Steven Amos............................ 315,789 315,789 -- --
Leonardo, L.P.......................... 315,789 315,789 -- --
Marcy Polier........................... 315,789 315,789 -- --
Gerard K. Cappello..................... 304,210 304,210 -- --
Anvil Investment Partners, L.P......... 263,158 263,158 -- --
ELARA Ltd.............................. 263,158 263,158 -- --
OTATO LIMITED PARTNERSHIP.............. 263,158 263,158 -- --
Paul Rajewski.......................... 263,158 263,158 -- --
Marcy Polier, Trustee Marcy Polier
Living Trust......................... 210,526 210,526 -- --
Lawrence K. Fleischman................. 166,316 166,316 -- --
Licap Partners......................... 157,895 157,895 -- --
Smart Technology Ventures I, LLC....... 157,895 157,895 -- --
Peter J. Cocoziello.................... 105,263 105,263 -- --
Earl E. Gales, Jr...................... 105,263 105,263 -- --
Cristina C. Garcia (IRA)............... 105,263 105,263 -- --
Teresa I. Grove, Trustee, J.F.
Grove III GRAT #2.................... 105,263 105,263 -- --
Laredo Capital Partners................ 105,263 105,263 -- --
AG Super Fund International Partners,
L.P.................................. 52,632 52,632 -- --
GAM Arbitrage Investments, Inc......... 52,632 52,632 -- --
Charles B. Krusen...................... 52,632 52,632 -- --
Ronald H. Means........................ 52,632 52,632 -- --
Ramius Fund, Ltd....................... 52,632 52,632 -- --
Raphael, L.P........................... 52,632 52,632 -- --
Alfred Romano.......................... 52,632 52,632 -- --
John M. Bendheim, Jr................... 26,316 26,316 -- --
Lisa G. Shine.......................... 26,316 26,316 -- --
Loretta Hirsh Shine.................... 26,316 26,316 -- --
Kenneth L. Staub, Trustee Kenneth L.
Staub Trust dated 5/9/90............. 26,316 26,316 -- --
</TABLE>
- ---------------
(1) Such beneficial ownership represents an estimate of the number of shares of
Common Stock issuable upon the conversion of shares of Convertible Preferred
Stock beneficially owned by such person (either directly or through the
exercise of Convertible Preferred Stock Warrants), assuming a price of $2.00
per share of Common Stock was used to determine the number of shares of
Common Stock issuable upon conversion. The actual number of shares of Common
Stock offered hereby is subject to adjustment and could by materially less
or more than the estimated amount indicated depending upon factors which
cannot be predicted by the Company at this time, including, among others,
application of the conversion provisions based on market prices prevailing
at the actual date of conversion. In order to calculate the number of shares
of Convertible Preferred Stock or Convertible Preferred Stock Warrants to
purchase such shares beneficially held, multiply the amount included in the
column captioned "Number of Shares of Common Stock Beneficially Owned Prior
to Offering" by 0.00095. This presentation is not intended to constitute a
prediction as to the future market price of the Common Stock or as to when
Selling Stockholders will elect to convert shares of Convertible Preferred
Stock and the Convertible Preferred Stock Warrants issued in the 1997
Private Placement.
9
<PAGE> 10
PLAN OF DISTRIBUTION
Shares of Common Stock covered hereby may be offered and sold from time to
time by the Selling Stockholders. The Selling Stockholders will act
independently of the Company in making decisions with respect to the timing,
manner and size of each sale. Such sales may be made in the over-the-counter
market or otherwise, at prices related to the then current market price or in
negotiated transactions, including pursuant to an underwritten offering or one
or more of the following methods: (a) purchases by a broker-dealer as principal
and resale by such broker or dealer for its account pursuant to this Prospectus;
(b) ordinary brokerage transactions and transactions in which the broker
solicits purchasers; and (c) block trades in which the broker-dealer so engaged
will attempt to sell the shares as agent but may position and resell a portion
of the block as principal to facilitate the transaction. The Company has been
advised by the Selling Stockholders that they have not made any arrangements
relating to the distribution of the shares covered by this Prospectus. In
effecting sales, broker-dealers engaged by the Selling Stockholders may arrange
for other broker-dealers to participate. Broker-dealers will receive commissions
or discounts from the Selling Stockholders in amounts to be negotiated
immediately prior to the sale. The Investment Agreement provides that the
Company will indemnify the Selling Stockholders against certain liabilities,
including liabilities under the Securities Act.
In offering the shares of Common Stock covered hereby, the Selling
Stockholders and any broker-dealers and any other participating broker-dealers
who execute sales for the Selling Stockholders may be deemed to be
"underwriters" within the meaning of the Securities Act in connection with such
sales, and any profits realized by the Selling Stockholders and the compensation
of such broker-dealer may be deemed to be underwriting discounts and
commissions.
The Company has advised the Selling Stockholders that during such time as
they may be engaged in a distribution of Common Stock included herein they are
required to comply with Rules 10b-6 and 10b-7 under the Exchange Act and, in
connection therewith, that they may not engage in any stabilization activity in
connection with the Company's securities, are required to furnish to each
broker-dealer through which Common Stock included herein may be offered copies
of this Prospectus, and may not bid for or purchase any securities of the
Company or attempt to induce any person to purchase any securities of the
Company except as permitted under the Exchange Act. The Selling Stockholders
have agreed to inform the Company when the distribution of the shares of Common
Stock offered hereby is completed.
Rule 10b-6 under the Exchange Act prohibits, with certain exceptions,
participants in a distribution from bidding for or purchasing, for an account in
which the participant has a beneficial interest, any of the securities that are
the subject of the distribution. Rule 10b-7 governs bids and purchases made in
order to stabilize the price of a security in connection with a distribution of
the security.
This offering will terminate on the date on which all shares offered hereby
have been sold by the Selling Stockholders.
LEGAL MATTERS
The validity of the shares offered hereby will be passed upon for the
Company by Hale and Dorr LLP, 60 State Street, Boston, Massachusetts 02109.
EXPERTS
The consolidated balance sheets of the Company as of December 31, 1995 and
1996 and the consolidated statements of operations, stockholders' equity
(deficit) and cash flows for each of the three years in the period ended
December 31, 1996, all appearing in the Company's Annual Report on Form 10-K for
the year ended December 31, 1996 have been audited by Coopers & Lybrand L.L.P.,
independent accountants, as set forth in their report thereon included therein
and incorporated herein by reference and are so incorporated herein by reference
in reliance upon such firm given upon their authority as experts in accounting
and auditing.
10
<PAGE> 11
================================================================================
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE SELLING
STOCKHOLDER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF ANY OFFER TO BUY TO ANY PERSON IN ANY JURISDICTION IN WHICH SUCH
OFFER OR SOLICITATION OF AN OFFER OR SOLICITATION WOULD BE UNLAWFUL. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY OFFER OR SALE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF
ANY DATE HEREOF.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................. 2
Incorporation of Certain Documents By
Reference........................... 2
Special Note Regarding Forward-Looking
Information......................... 3
The Company........................... 4
Risk Factors.......................... 5
Use of Proceeds....................... 6
The Investment Agreement.............. 7
The Selling Stockholders.............. 9
Plan of Distribution.................. 10
Legal Matters......................... 10
Experts............................... 10
</TABLE>
------------------------
================================================================================
================================================================================
[OraVax LOGO]
7,294,737 SHARES
COMMON STOCK
------------------------
PROSPECTUS
------------------------
FEBRUARY 13, 1998
================================================================================
