<PAGE>
As filed with the Securities and Exchange Commission on April 6, 1998.
REGISTRATION NO. 333-________
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
______________________
GENZYME TRANSGENICS CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Massachusetts 04-3186494
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
FIVE MOUNTAIN ROAD, FRAMINGHAM, MASSACHUSETTS, 01701 (508) 620-9700
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
______________________
JAMES A. GERAGHTY
President and Chief Executive Officer
Genzyme Transgenics Corporation
Five Mountain Road
Framingham, Massachusetts 01701
(508) 620-9700
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
with copies to:
LYNNETTE C. FALLON, ESQUIRE
Palmer & Dodge LLP
One Beacon Street
Boston, Massachusetts 02108
(617) 573-0100
______________________
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time 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. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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Title of each class of Amount to be Proposed maximum offering Proposed maximum aggregate Amount of
securities to be registered registered price per share(1) offering price(1) registration fee
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $0.01 par value 3,599,138 shares(2) $11.625 $41,839,979.25 $12,342.80
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of determining the registration fee
and computed pursuant to Rule 457(c), based upon the average of the high and low
sale prices on March 31, 1998, as reported by the Nasdaq National Market.
(2) Shares of Common Stock which may be offered pursuant to this
Registration Statement consisting of (i) 2,749,138 shares issuable upon
conversion of 20,000 shares of Series A Convertible Preferred Stock (the
"Preferred Stock"), (ii) 800,000 shares issuable upon exercise of warrants
issued in connection with the Preferred Stock, and (iii) 50,000 shares issuable
upon exercise of other warrants. For purposes of estimating the number of
shares of Common Stock to be included in this Registration Statement, the
Company calculated (i) 200% of the number of shares of Common Stock issuable
upon conversion of the Preferred Stock (based on a conversion price of $14.55,
which is 120% of the average of the closing bid prices of the Common Stock
reported on the Nasdaq National Market for the five trading days ending March
19, 1998) and exercise of warrants exercisable for 400,000 shares of Common
Stock plus (ii) 100% of the number of shares of Common Stock issuable upon
exercise of warrants exercisable for 50,000 shares of Common Stock. The amount
of shares being hereby registered is deemed to include any additional shares
issued upon conversion of or in respect of the Preferred Stock and the warrants
as a result of stock splits, stock dividends and antidilution provisions
(including floating rate conversion prices) in accordance with Rule 416.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
<PAGE>
Subject to Completion, dated April 6, 1998
GENZYME TRANSGENICS CORPORATION
3,599,138 SHARES OF COMMON STOCK
This Prospectus relates to the offer and sale of up to 3,599,138 shares
(the "Shares") of Common Stock, $0.01 par value (the "Common Stock"), of Genzyme
Transgenics Corporation ("GTC" or the "Company") by certain of the Company's
existing stockholders (the "Selling Stockholders"). The Shares are issuable
upon conversion of outstanding shares of Series A Convertible Preferred Stock,
$0.01 per share par value, of the Company ("Preferred Stock"), and Common Stock
Purchase Warrants issued to the Selling Stockholders ("Warrants") in a private
placement in March 1998. The Shares may be offered and sold by the Selling
Stockholders, or their respective pledgees, donees, transferees or other
successors in interest, from time to time in one or more transactions (which may
involve block transactions), in open-market transactions, in
privately-negotiated transactions through the purchase or writing of options on
the Shares, in short sales or in a combination of such methods of sale, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. The Selling Stockholders may
effect such transactions by selling the Shares to or through broker-dealers and
such broker-dealers may receive compensation in the form of discounts,
concessions or commissions from the Selling Stockholders or the purchasers of
the Shares for whom such broker-dealers may act as agent or to whom they sell as
principal or both (which compensation to a particular broker-dealer might be in
excess of customary commissions). See "Selling Stockholders" and "Plan of
Distribution."
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 Company has agreed to bear certain
expenses (other than fees and expenses, if any, of counsel or other advisors to
the Selling Stockholders) in connection with the registration and sale of the
Shares. The Company has agreed to indemnify the Selling Stockholders against
certain liabilities, including certain liabilities under the Securities Act of
1933, as amended (the "Securities Act").
The Common Stock of the Company is listed for quotation on the Nasdaq
National Market under the symbol GZTC. On April 4, 1998, the closing sale price
of the Common Stock, as reported on the Nasdaq National Market, was $11.625 per
share.
______________________________
AN INVESTMENT IN THE SECURITIES REGISTERED HEREBY INVOLVES
A HIGH DEGREE OF RISK. SEE "RISK FACTORS."
______________________________
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.
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. No person is authorized, in connection with the offering made
hereby, to give any information or to make any representation other than as
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. This Prospectus is not 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 an offer or solicitation.
The date of this Prospectus is April 6, 1998
<PAGE>
TABLE OF CONTENTS
AVAILABLE INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE. . . . . . . . . . . . . . . 3
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
THE COMPANY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
USE OF PROCEEDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SELLING STOCKHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
LEGALITY OF COMMON STOCK . . . . . . . . . . . . . . . . . . . . . . . . . . 14
EXPERTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy and
information statements and other information filed by the Company can be
inspected and copied at the public reference facilities of the Commission, Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
Commission's regional offices located at 7 World Trade Center, 13th Floor, New
York, New York 10048 and Northwestern Atrium Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661. Copies of such materials can be obtained
from the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. Such reports and other information
can also be reviewed through the Commission's web site on the Internet
(http://www.sec.gov). The Common Stock of the Company is quoted 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. 20006-1506.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission (File No. 0-21794),
pursuant to the Exchange Act, are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 28, 1997, filed with the Commission on March 27, 1998.
(b) All other reports, if any, filed by the Company pursuant to Section
13(a) or 15(d) of the Exchange Act since the Annual Report referred to
in paragraph (a) above.
(c) The description of the Common Stock of the Company contained in the
Company's Registration Statement on Form 8-A, filed on May 19, 1993,
including any amendment or reports filed for the purpose of updating
such description.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the securities offered hereby shall be deemed
incorporated by reference into this Prospectus and to be a part hereof from the
date of filing 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 so modified or superseded, to constitute a part of this
Prospectus.
The Company will provide, without charge, to each person to whom a copy of
this Prospectus is delivered, upon written or oral request of any such person, a
copy of any or all of the documents which are incorporated herein by reference,
except for certain exhibits to such documents. Requests should be
3
<PAGE>
directed to the Company, Five Mountain Road, Framingham, Massachusetts 01701,
attention: John B. Green, telephone: (508) 620-9700.
RISK FACTORS
An investment in the shares of Common Stock being offered hereby involves a
high degree of risk. Prospective investors should carefully consider the
following risk factors, in addition to the other information contained in this
Prospectus, before purchasing the shares of Common Stock offered hereby.
HISTORY OF OPERATING LOSSES; NEED FOR ADDITIONAL FUNDS. GTC has had
operating losses since its inception and expects such losses to continue for the
next several years. For the period from its inception in 1993 to December 28,
1997, the Company incurred cumulative losses of approximately $27.3 million.
GTC's losses have resulted principally from costs incurred in connection with
research activities and from expenses in excess of revenues from the Company's
contract research organization ("CRO") services. GTC's sources of revenues to
date have consisted primarily of research and development contracts and CRO
services. Such revenues to date have not been sufficient to generate profits.
The Company expects to continue to incur significant operating losses until such
time as product sales and CRO service revenues are sufficient to fund its
operations. No assurance can be given that the Company will become profitable.
The Company currently believes that existing cash resources and available
financing will be sufficient to meet its operating cash flow needs and capital
requirements at least through the end of 1998. The development of transgenic
products by the Company will require the commitment of substantial resources to
conduct costly and time-consuming research, preclinical testing and clinical
trials necessary to bring such products to market. If GTC's businesses do not
achieve profitable operations at or prior to the time such existing resources
are exhausted, the Company will need to obtain additional financing, through
public or private financings, including debt or equity financings, or through
collaborative or other arrangements with corporate partners, as appropriate.
Adequate funds for the Company's operations from such sources may not be
available when needed or on terms acceptable to the Company. If additional
financing cannot be obtained when needed or on acceptable terms, GTC could be
forced to delay, scale back or eliminate certain of its research and development
programs or to license to other parties rights to commercialize products or
technologies that the Company would otherwise seek to develop internally as well
as delaying or forgoing timely expansion, improvement or investment in the
Company's contract research services.
The foregoing forward-looking statements regarding the Company's
expectations of the need for additional funds are subject to risks and
uncertainties. The Company's cash requirements may vary materially from those
now planned, depending upon the results of existing businesses, the terms of
future collaborations, results of research and development, competitive and
technological advances, regulatory requirements and other factors.
EARLY STAGE OF TRANSGENIC TECHNOLOGY. Development of products based on
transgenic technology is subject to a number of significant technological risks
and the time period required for any such development is both lengthy and
uncertain. Neither GTC nor, to GTC's knowledge, any other entity has completed
human clinical trials of any protein produced in the milk of transgenic animals,
and there can be no assurance that GTC will be able to do so successfully.
There can be no assurance that any transgenically produced protein will be safe
or effective. All of the proteins that GTC is developing will require
significant additional research, development and testing and will require the
expenditure of
4
<PAGE>
substantial additional capital prior to their commercialization. In addition,
there can be no assurance that research and discoveries by others will not
render GTC's technology obsolete or noncompetitive.
NO ASSURANCE OF COMMERCIAL SUCCESS OF TRANSGENIC PRODUCTS. The successful
commercialization of any transgenic protein product by the Company will depend
on many factors, including the successful completion of clinical testing, the
response of medical professionals to the data from clinical trials, the
Company's ability to create or access a sales force able to market such
transgenic products, the Company's ability to supply a sufficient amount of
product to meet market demand, the degree to which third-party reimbursement for
use of such product is available and the number and relative efficacy of
competitive products that may subsequently enter the market, as well as, with
respect to transgenic products designed to replace or supplement products
currently being marketed, the relative cost-effectiveness of the transgenic
products. There can be no assurance that the Company or its collaborative
partners will be successful in efforts to develop and implement a
commercialization strategy for any such products.
GTC does not currently have a sales force to market any transgenic products
it may develop. The Company anticipates that, for products it develops
independently, it will enter into marketing arrangements with larger
pharmaceutical or biotechnology companies which have established sales forces
that are able to market such products. There can be no assurance that any
marketing or distribution arrangements will be available on acceptable terms or
that, in the alternative, GTC will be able to establish its own sales force
successfully. Unforeseen delays in this process may have an adverse effect on
the commercialization of any of the Company's products.
Third-party payors are increasingly attempting to contain health care costs
by limiting both coverage and the level of reimbursement for new therapeutic
products. The successful commercialization of any products developed by the
Company may depend on obtaining coverage and reimbursement for the use of these
products from third-party payors.
In addition, the successful commercialization of the Company's products
will require that medical professionals become convinced of the efficacy of the
products in treating a particular condition and incorporate such products as
standard practice in relevant therapeutic protocols. There can be no assurance
that any transgenic product developed by GTC will be accepted by the medical
profession.
GOVERNMENT REGULATION. Transgenic products will require approval by the
U.S. Food and Drug Administration ("FDA") prior to marketing in the United
States. In addition, the manufacturing and marketing of such products, and
certain areas of research related to them, are subject to regulations by other
U.S. governmental authorities including the United States Department of
Agriculture (the "USDA") and the Environmental Protection Agency (the "EPA").
Comparable authorities are involved in other countries.
In cases where the Company expects to obtain revenue from the sale of
transgenic products, whether through direct sales, marketing relationships with
others or royalty arrangements, the Company will incur the risk of such product
failing to satisfy applicable regulatory requirements prior to marketing. The
approval process involves two parts, governing first the approval of an
individual pharmaceutical product as safe and effective and second the approval
of the manufacturing process as complying with applicable FDA current good
manufacturing practices regulations ("GMPs"). In 1995, the FDA and comparable
European regulatory authorities issued guidelines regarding the production of
therapeutic proteins in transgenic animals. While the FDA's guidelines, known
as Points to Consider guidelines ("Points to
5
<PAGE>
Consider"), cover issues specific to transgenic production, the basic regulatory
framework for FDA approval will also apply to transgenic therapeutic products
submitted for approval. To GTC's knowledge, no protein produced in the milk of
a transgenic animal has been submitted for regulatory approval in the United
States or elsewhere.
The FDA and comparable agencies in foreign countries impose substantial
requirements upon the introduction of therapeutic pharmaceutical products
through lengthy and detailed laboratory and clinical testing procedures,
sampling activities and other costly and time-consuming procedures.
Satisfaction of these requirements typically takes several years or more and can
vary substantially based upon the type, complexity and novelty of the product.
With respect to therapeutic products, the standard FDA approval process includes
preclinical laboratory and animal testing, submission of an IND to the FDA,
appropriate human clinical trials to establish safety and effectiveness and
submission of either a Biologics License Application or a New Drug Application
("NDA") prior to market introduction. With respect to obtaining approval for
the production facilities to be used in producing a therapeutic product, the
Company expects to be subject to both the requirements for establishment license
applications and the Points to Consider issued with respect to transgenic
recombinant products.
The effect of government regulation may be to delay marketing of the
Company's products for a considerable or indefinite period of time, impose
costly procedural requirements upon the Company's activities and may furnish a
competitive advantage to larger companies or companies more experienced in
regulatory affairs. There can be no assurance that the FDA or other regulatory
approvals for any products developed by the Company will be granted on a timely
basis or at all. Any delay in obtaining or any failure to obtain such approvals
could adversely affect the Company's ability to generate revenue. Even if
initial regulatory approvals for the Company's product candidates are obtained,
the Company, its products and its transgenic manufacturing processes would be
subject to continual review and periodic inspection. There can be no assurance
that the FDA will permit the marketing of any transgenic product for any
particular indication, if at all.
The Company's operations are also subject to federal, state and local laws,
rules, regulations and policies governing the use, generation, manufacture,
storage, air emission, effluent discharge, handling and disposal of certain
materials and waste, including but not limited to animal waste and waste water.
DEPENDENCE OF TESTING SERVICES ON CURRENT GOVERNMENT REGULATORY
REQUIREMENTS. The market for GTC's preclinical testing services is dependent
upon the maintenance of strict standards for the conduct of laboratory and
clinical tests and related procedures which are promulgated by governmental
entities responsible for public health and welfare, including the FDA, and by
regulatory authorities in foreign countries. The process of obtaining these
approvals varies according to the nature and use of the product and routinely
involves lengthy and detailed laboratory and clinical testing and other costly
and time-consuming procedures. The Company offers the customers of its
preclinical testing and development services the necessary expertise to comply
with these complex regulations. If the regulatory structure were to change in a
way which reduced the need for such services, the Company could be materially
adversely affected.
DEPENDENCE ON GENZYME. GTC has entered into a number of contractual
agreements with Genzyme regarding technology and product development and other
matters, as discussed below:
Under a research and development agreement, Genzyme is obligated to use
commercially reasonable efforts to perform purification services for GTC. GTC
does not currently have personnel capable of
6
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undertaking such purification services. Until such time, if ever, as GTC
develops its own capabilities in this regard, there can be no assurance that
Genzyme will be able to provide such services when and as required by GTC or
that GTC would be able to obtain comparable services elsewhere.
Under a collaboration agreement, Genzyme has agreed to provide funding for
transgenic AT-III development in exchange for co-marketing rights to AT-III in
all territories other than Asia. The term of the agreement is perpetual, except
that either party may terminate the agreement for certain material breaches,
failure to make payments, and either upon the grant, or certain absences of a
grant, by the FDA of a license to market an AT-III product. There can be no
assurance, should the agreement terminate before completion of the development
of an AT-III product, that Genzyme and GTC could reach an agreement to extend
Genzyme's development funding, that the Company would be able to fund such
program on its own or that the Company would be able to obtain such funding from
a third party on acceptable terms, if at all.
Under a services agreement, GTC pays Genzyme a fixed monthly fee for basic
laboratory and administrative support services provided by Genzyme. The monthly
fee is adjusted annually, based on the services to be provided and changes in
Genzyme's cost of providing the services. The services agreement is
self-renewing annually and may be terminated upon 90 days notice by either party
to the other party. There can be no assurance, should the agreement terminate,
that GTC would be able to renegotiate a new agreement or obtain the provision of
substitute services from a third party on acceptable terms, if at all.
In 1995, GTC obtained a credit line and a term loan with a commercial bank,
each secured by Genzyme's guaranty of the Company's obligations thereunder. GTC
has agreed to reimburse Genzyme for any liability Genzyme may incur under such
guaranty and has granted Genzyme a first lien on all of GTC's assets to secure
such obligation. The various loan documents provide that if GTC or Genzyme
breach certain financial covenants, the bank may refuse to extend further credit
as well as accelerate outstanding indebtedness. There can be no assurance, in
the event Genzyme or GTC breaches such financial covenants, that GTC will be
able to meet any repayment demands upon acceleration or to make new arrangements
with the bank, Genzyme and/or any third parties to provide for a replacement
extension of credit on acceptable terms, if at all.
In March 1996, GTC entered into the Genzyme Credit Line Agreement with
Genzyme (the "Genzyme Credit Line ") under which Genzyme agreed to provide a
revolving line of credit in the amount of $10 million. During 1996, $1,673,000
of debt was converted into 219,565 shares of common stock, leaving $8,327,000
available on the revolving line of credit. In September 1997, GTC and Genzyme
amended the terms of the $8.3 million Genzyme Credit Line. The expiration date
of the revolving credit line was extended to March 31, 2000, with an option, at
that date, for GTC to convert the outstanding balance to a three-year term loan.
As a result of the issuance of the Preferred Stock in the private placement of
March 1998, the amount of the credit line was reduced by approximately $1.9
million. There can be no assurance, upon the termination of the credit line,
that GTC will be able to negotiate an extension or replacement of the line of
credit, if necessary, with Genzyme or a third party on acceptable terms, if at
all.
POTENTIAL CONFLICTS OF INTEREST WITH GENZYME. Genzyme is the largest
single stockholder of GTC. Assuming exercise of a currently exercisable warrant
for 145,000 shares of Common Stock, Genzyme beneficially owns approximately 44%
of the outstanding Common Stock of GTC. Genzyme's ownership
7
<PAGE>
interest gives it significant influence over any election of directors and any
other action requiring approval by the holders of a majority of the Common
Stock. Three members of GTC's Board of Directors also serve as directors and/or
executive officers of Genzyme. The interests of Genzyme on the one hand and GTC
on the other hand may, from time to time, differ.
DEPENDENCE ON COLLABORATORS. The success of GTC's transgenic protein
production business will depend, in large part, on GTC's ability to enter into
arrangements with biotechnology and pharmaceutical companies for the transgenic
production of proteins to which such companies have proprietary rights or to
fund the development of transgenic proteins which are in the public domain or
the subject of expiring patents. To date, the scope of these agreements has
generally been limited to demonstrating the feasibility of transgenic production
of targeted proteins in particular animal species. There can be no assurance
that these feasibility studies will be successful or lead to agreements for the
commercial production of any proteins. Depending upon the terms of any future
collaborations, the Company's role in such collaborations may be limited to the
production aspects of the proteins under development. As a result, GTC may also
be dependent on collaborators for other aspects of the development, preclinical
and clinical testing, regulatory approval and commercialization of any
transgenic product.
UNCERTAINTY REGARDING PATENTS AND PROPRIETARY TECHNOLOGY. GTC has relied
upon trade secrets, proprietary know-how and continuing technological innovation
to develop and maintain its competitive position and to protect its proprietary
technology. In part, these legal rights are protected by contracts with
employees, consultants and business partners. There can be no assurance that
trade secrets possessed by GTC will be maintained, that secrecy obligations will
be honored or that others will not independently develop similar or superior
technology. There is no assurance that patent applications filed by GTC will
result in patents being issued or that any patents issued to or licensed by GTC
will be held valid. The Company may also be subject to claims that result in
the revocation of patent rights previously licensed to GTC as a result of which
the Company may be required to obtain licenses from others to continue to
develop, test or commercialize its products. There can be no assurance that GTC
will be able to obtain such licenses on acceptable terms, if at all. In
addition, there may be pending or issued patents held by parties not affiliated
with GTC that relate to the technology utilized by GTC. As a result, GTC may
need to acquire licenses to, or contest the validity of, such patents or any
other similar patents which may be issued. GTC could incur substantial costs in
defending itself against challenges to patent or infringement claims made by
third parties or in enforcing any patent rights of its own. The loss or
exposure of trade secrets possessed by GTC could also adversely affect its
business.
COMPETITION. The industries in which GTC operates are highly competitive
and may become even more competitive. It will be necessary for GTC to continue
to devote substantial efforts and expense to research, development, sales and
marketing in order to maintain a competitive position. There can be no
assurance that developments by others will not render GTC's current and proposed
services, products or technologies obsolete. In addition, GTC may encounter
significant competition for protein development and production contracts from
other companies. Transgenic products may face significant competition from
biological products manufactured in cell culture or derived from human serum or
tissue or animal serum or tissue. GTC's business will compete both against
other companies whose business is dedicated to offering transgenic production or
preclinical testing and development as a service and with prospective customers
or collaborators who decide to pursue such transgenic production or preclinical
testing and development internally.
RISK OF SERVICE OR PRODUCT LIABILITY. GTC's business exposes it to
potential product and professional liability risks which are inherent in the
testing, production, marketing and sale of human therapeutic
8
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products. While GTC has obtained product and professional liability insurance
under an insurance policy arrangement with Genzyme and Genzyme's affiliates,
there can be no assurance that such insurance will be sufficient to cover any
claim. Uninsured product or service liability could have a material adverse
effect on the financial results of GTC. In addition, there can be no assurance
that any insurance will provide GTC with adequate protection against potential
liabilities. Potential liability also may arise from the handling by GTC of
clinical samples containing human blood and tissues, which may contain human
pathogens; liability may also arise from handling animal blood and tissue which
may contain zoonotic pathogens. Although such products are used only in the
laboratory, inadvertent human contact may occur.
RETENTION OF KEY PERSONNEL. Although GTC believes that the size and
qualifications of its current staff are adequate for its current business, the
Company must continue to attract and retain qualified scientific, technical,
marketing and management personnel as its business expands. There is intense
competition for qualified personnel in the areas of the Company's activities,
and there can be no assurance that GTC will be able to continue to attract and
retain the qualified personnel necessary for the development of its business.
Loss of the services of, or failure to recruit, key scientific and technical
personnel could have a material adverse effect on GTC's business.
PUBLIC CONCERNS. Certain of GTC's activities involve animal testing and
genetic engineering in animals. Such activities have been the subject of
controversy and adverse publicity. Animal rights groups and various other
organizations and individuals have attempted to stop animal testing and genetic
engineering activities by pressing for legislation and regulation in these
areas. To the extent the activities of such groups are successful, GTC's
business may be adversely affected.
SHARES ELIGIBLE FOR FUTURE SALE. Sales of substantial amounts of Common
Stock in the public market, or the perception that such sales may occur, could
adversely affect the prevailing market price of the Common Stock. As of April
1, 1998, there were 17,603,138 shares of Common Stock outstanding. As of April
1, 1998, options to purchase an aggregate of 1,922,141 shares of Common Stock at
varying exercise prices were outstanding; of such total, options for 1,217,403
shares were immediately exercisable and such shares could be immediately resold
into the public market. All of the 7,428,365 shares held by Genzyme could be
sold into the public markets upon compliance with Rule 144. The 145,000 shares
issuable to Genzyme upon exercise of an outstanding warrant are entitled to
registration rights, which could expedite the resale of such shares into the
public market. Another 210,600 shares of Common Stock are reserved for issuance
upon exercise of outstanding warrants, all of which are currently exercisable.
Furthermore, in connection with a private placement in March 1998, 3,599,138
shares of Common Stock are reserved for issuance, and will be registered for
resale under the registration statement of which this Prospectus forms a part,
upon (i) exercise of currently exercisable warrants for 450,000 shares of Common
Stock and (ii) conversion of 20,000 shares of Preferred Stock, currently
convertible into 1,374,569 shares of Common Stock. See "Selling Stockholders."
POSSIBLE VOLATILITY OF STOCK PRICE; ABSENCE OF DIVIDENDS. There has been a
history of significant volatility in the market prices of publicly-traded common
stock of companies engaged in applications of biotechnology, including the
Company, and the market price of the Common Stock has been and may continue to
be highly volatile. Announcements of technological innovations or new products
by GTC or others, developments or disputes concerning patents or proprietary
rights, publicity regarding actual or potential medical results relating to
products under development by GTC or its competitors, regulatory developments,
period-to-period fluctuations in GTC's financial results and general economic
and market conditions, among other things, may have a significant impact on the
market price of the Common Stock.
9
<PAGE>
GTC has not paid any dividends since its inception and does not intend to pay
any dividends in the foreseeable future.
CHANGE IN CONTROL. Certain provisions of Massachusetts law and of GTC's
charter documents could have the effect of discouraging others from attempting
hostile takeovers of GTC. Such provisions may also have the effect of
preventing changes in the management of GTC. It is possible that such
provisions could make it more difficult to accomplish transactions which
stockholders may deem to be in their best interests.
THE COMPANY
GTC is engaged in the application of transgenic technology to the
development and production of recombinant proteins for therapeutic and
diagnostic uses. GTC produces such proteins by inserting a gene that directs
the production of a desired protein into the genetic material of an animal such
that the target protein is secreted in the milk of female offspring. GTC
believes that transgenic production offers significant economic and
technological advantages relative to traditional protein production systems.
GTC intends to develop and produce a broad range of proteins, both in
collaboration with pharmaceutical and biotechnology companies and independently.
Through a wholly-owned subsidiary, Primedica Corporation, GTC also provides
preclinical testing services to pharmaceutical, biotechnology, medical device
and chemical companies. Such services help Primedica's customers reduce the
time and cost of bringing their products to market.
GTC's principal executive offices are located at Five Mountain Road,
Framingham, Massachusetts 01701, and its telephone number at that location is
(508) 620-9700.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of Common Stock by
the Selling Stockholders.
SELLING STOCKHOLDERS
The Selling Stockholders are the holders of 20,000 shares of Preferred
Stock and of warrants currently exercisable for 450,000 shares of Common Stock
issued by the Company in a private placement that closed on March 20, 1998.
Upon effectiveness of the Registration Statement on Form S-3 filed with the
Commission under the Securities Act (the "Registration Statement"), of which
this Prospectus forms a part, and up until December 20, 1998, each share of
Preferred Stock will be convertible into that number of shares of Common Stock
equal to the per share face value of the Preferred Stock ($1,000) divided by a
conversion price of $14.55 per share, subject to certain anti-dilution price
adjustment protection. At such conversion price, the 20,000 shares of Preferred
Stock currently held by the Selling Stockholders will be convertible into
1,374,569 shares of Common Stock. On and after December 21, 1998, however, the
conversion price per share of Preferred Stock shall become the lower of (i)
$14.55 and (ii) the average closing price of the Company's Common Stock as
quoted by the Nasdaq National Market for any five trading days, selected by the
holder, during the twenty trading days immediately preceding the date
10
<PAGE>
of conversion. As a result, the number of shares of Common Stock issuable upon
conversion of the Preferred Stock may increase above, but will not decrease
below, 1,374,569 shares.
The following table sets forth the name of, and the number of shares of
Common Stock beneficially owned by, each Selling Stockholder as of April 6, 1998
(including shares which the holder has the right to acquire within sixty (60)
days of such date), the number of the shares to be offered by each Selling
Stockholder pursuant to this Prospectus and the number of the Company's
outstanding shares to be beneficially owned by each Selling Stockholder after
the offering if all of the shares offered hereby by such Selling Stockholder are
sold as described herein. The Selling Stockholders have not held any position
or office with, been employed by, or otherwise had a material relationship with,
the Company or any of its predecessors or affiliates other than as stockholders
of GTC subsequent to their respective acquisition of shares of GTC securities,
and other than their relationship with Shoreline Pacific Institutional Finance
("Shoreline Pacific"). Shoreline Pacific, of which Harlan P. Kleiman, Steve
Lamar and James L. Kropf are affiliates, acted as placement agent for the
Company in connection with the private placement of the securities under which
the Shares offered hereby are issuable. The Shares are being registered to
permit public secondary trading of the Shares, and the Selling Stockholders may
offer the Shares for resale from time to time. See "Plan of Distribution."
In recognition of the fact that Selling Stockholders may wish to be legally
permitted to sell their Shares when they deem appropriate, the Company has filed
the Registration Statement with respect to the resale of the Shares from time to
time in the public markets or in privately-negotiated transactions and has
agreed to prepare and file such amendments and supplements to the Registration
Statement as may be necessary to keep the Registration Statement effective until
the Shares are no longer required to be registered for the sale thereof by the
Selling Stockholders.
The Company has agreed to pay for all costs and expenses incident to the
issuance, offer, sale and delivery of the Shares, including, but not limited to,
all expenses and fees of preparing, filing and printing the Registration
Statement and Prospectus and related exhibits, amendments and supplements
thereto and mailing of such items. The Company will not pay selling commissions
and expenses associated with any such sales by the Selling Stockholders. The
Company has agreed to indemnify the Selling Stockholders against civil
liabilities including liabilities under the Securities Act.
11
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF SHARES NUMBER OF SHARES NUMBER OF SHARES
NAME OF BENEFICIALLY OWNED OF COMMON STOCK BENEFICIALLY OWNED
SELLING STOCKHOLDER AS OF APRIL 6, 1998 OFFERED HEREBY AFTER OFFERING
------------------- ------------------- ---------------- ------------------
<S> <C> <C> <C>
RGC International Investors, 887,285 887,285 0
LDC(1)(2)
Shepherd Investments 443,642 443,642 0
International, Ltd.(1)(3)
Stark International(1)(3) 443,642 443,642 0
Harlan P. Kleiman (4) 40,000 40,000 0
Steve Lamar (4) 5,000 5,000 0
James L. Kropf (4) 5,000 5,000 0
--------- --------- --
TOTAL 1,824,569 1,824,569 0
--------- --------- --
--------- --------- --
</TABLE>
_______________________________
(1) The number of shares set forth in the table represents an estimate of the
number of shares of Common Stock to be offered by the Selling Stockholder. The
actual number of shares of Common Stock issuable upon conversion of the
Preferred Stock and exercise of the Warrants is indeterminate, is subject to
adjustment and could be materially more than such estimated number depending on
factors which cannot be predicted by the Company at this time, including, among
other factors, the future market price of the Common Stock. The actual number
of shares of Common Stock offered hereby, and included in the Registration
Statement, includes such additional number of shares of Common Stock as may be
issued or issuable upon conversion of the Preferred Stock and exercise of the
Warrants by reason of the floating rate conversion price mechanism or other
adjustment mechanisms described therein, or by reason of any stock split, stock
dividend or similar transaction involving the Common Stock, in order to prevent
dilution, in accordance with Rule 416 under the Securities Act. Pursuant to the
terms of the Preferred Stock, if the Preferred Stock had been actually converted
on April 1, 1998, the conversion price would have been $14.55 (120% of the
average of the daily low trading price of the Common Stock for the five trading
days ending March 19, 1998) at which price the Preferred Stock would have been
converted into approximately 887,285 shares of Common Stock per 10,000 shares of
Preferred Stock. The Warrants held by the Selling Stockholder are exercisable
for shares of Common Stock at an exercise price of $15.1563. Pursuant to the
terms of the Preferred Stock and the Warrants, at any given time, only that
portion of the shares of Preferred Stock will be convertible and of the Warrants
will be exercisable by the holder such that the number of shares of Common Stock
thereby issuable, together with the number of shares of Common Stock owned by
such holder and its affiliates, would not exceed 4.9% of the then outstanding
Common Stock as determined in accordance with Section 13(d) of the Exchange Act.
Accordingly, the number of shares of Common Stock beneficially owned by this
Selling Stockholder, calculated in accordance with Rule 13d-3 under the Exchange
Act, may vary at any given time. Furthermore, the number of shares of Common
Stock owned by this Selling Stockholder as set forth in the table may exceed the
number of shares of Common Stock the Selling Stockholder would be deemed, at any
given time, to own beneficially.
(2) Estimated amount, consisting of 200,000 shares issuable upon exercise of
warrants and 687,285 shares issuable upon conversion of Preferred Stock
convertible upon effectiveness of the Registration Statement, subject to the
qualifications described in note 1 to this table.
12
<PAGE>
(3) Estimated amount, consisting of 100,000 shares issuable upon exercise of
warrants and 343,642 shares issuable upon conversion of Preferred Stock
convertible upon effectiveness of the Registration Statement, subject to the
qualifications described in note 1 to this table.
(4) Consists of shares issuable upon exercise of warrants. Under the terms of
the warrants, the number of shares of Common Stock issuable upon exercise of the
warrants is subject to certain anti-dilution adjustments and could, in the
future, be materially more than the number provided in the table.
PLAN OF DISTRIBUTION
The Company has filed with the Commission the Registration Statement, of
which this Prospectus forms a part, with respect to the resale of the Shares
from time to time by the Selling Stockholders or their respective pledgees,
donees, transferees or other successors in interest as described below. The
Company has agreed to keep the Registration Statement effective until the
earlier of (i) the date on which all of the Shares have been sold and (ii) the
date on which the Shares may be immediately sold without any resale
restrictions, including volume limitations, without a registration statement.
The Shares being offered by the Selling Stockholders, or their respective
pledgees, donees, transferees or other successors in interest, will be sold in
one or more transactions (which may involve block transactions) on the Nasdaq
National Market or on such other market on which the Common Stock may from time
to time be trading, in privately-negotiated transactions, through the writing of
options on the Shares, short sales or any combination thereof. The sale price
to the public may be the market price prevailing at the time of sale, a price
related to such prevailing market price or such other price as the Selling
Stockholders determine from time to time. The Shares may also be sold pursuant
to Rule 144. The Selling Stockholders shall have the sole and absolute
discretion not to accept any purchase offer or make any sale of Shares if they
deem the purchase price to be unsatisfactory at any particular time.
The Selling Stockholders or their respective pledgees, donees, transferees
or other successors in interest, may also sell the Shares directly to market
makers acting as principals and/or broker-dealers acting as agents for
themselves or their customers. Brokers acting as agents for the Selling
Stockholders will receive usual and customary commissions for brokerage
transactions, and market makers and block purchasers purchasing the Shares will
do so for their own account and at their own risk. Each Selling Stockholder
will be responsible for all brokerage commissions and other amounts payable with
respect to any sale of Shares with respect to such Selling Stockholder and any
legal, accounting or their expenses incurred.
It is possible that a Selling Stockholder will attempt to sell shares of
Common Stock in block transactions to market makers or other purchasers at a
price per share which may be below the then market price. There can be no
assurance that all or any of the Shares offered hereby will be issued to, or
sold by, the Selling Stockholders. The Selling Stockholders and any brokers,
dealers or agents, upon effecting the sale of any of the Shares offered hereby,
may be deemed "underwriters" as that term is defined under the Securities Act or
the Exchange Act, or the rules and regulations thereunder, and any commissions
received by them or profit on any resale of the Shares as principal might be
deemed to be underwriting discounts and commissions under the Securities Act.
The Selling Stockholders, alternatively, may sell all or any part of the
Shares offered hereby through an underwriter. No Selling Stockholder has
entered into any agreement with a prospective underwriter, and there is no
assurance that any such agreement will be entered into. If a Selling
13
<PAGE>
Stockholder enters into such an agreement or agreements, the relevant details
will be set forth in a supplement or revisions to this Prospectus.
The Selling Stockholders and any other persons participating in the sale or
distribution of the Shares will be subject to applicable provisions of the
Exchange Act and the rules and regulations thereunder, which provisions may
limit the timing of purchases and sales of any of the Shares by the Selling
Stockholders or any other such person. The foregoing may affect the
marketability of the Shares.
The Company has agreed to indemnify the Selling Stockholders, or their
transferees or assignees, against certain liabilities, including liabilities
under the Securities Act, or to contribute to payments the Selling Stockholders
or their respective pledgees, donees, transferees or other successors in
interest, may be required to make in respect thereof.
LEGALITY OF COMMON STOCK
The validity of the securities offered hereby will be passed upon for the
Company by Palmer & Dodge LLP, Boston, Massachusetts. Lynnette C. Fallon, a
partner of Palmer & Dodge LLP, is Clerk of the Company.
EXPERTS
The consolidated balance sheets of the Company as of December 28, 1997 and
December 29, 1996 and the related consolidated statements of operations, cash
flows and changes in shareholders' equity for each of the three fiscal years in
the period ended December 28, 1997 appearing in the Company's Annual Report on
Form 10-K for the year ended December 28, 1997 have been audited by Coopers &
Lybrand L.L.P., independent accountants, as set forth in their reports included
therein and incorporated herein by reference. Such consolidated financial
statements of the Company are referred to above and incorporated herein by
reference in reliance upon such reports given upon the authority of that firm as
experts in accounting and auditing.
14
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses to be borne by the Company in connection with this offering
are as follows:
<TABLE>
<CAPTION>
<S> <C>
SEC registration fee. . . . . . . . . . $12,343
Nasdaq listing fee. . . . . . . . . . . 17,500
Accounting fees and expenses. . . . . . 1,000
Legal fees and expenses . . . . . . . . 5,000
Printing and photocopying expenses. . . 1,000
Miscellaneous expenses. . . . . . . . . 2,000
-------
Total. . . . . . . . . . . . . . . $38,843
-------
-------
</TABLE>
All of the above figures, except the SEC registration and Nasdaq listing
fees, are estimates. Selling Stockholders will bear the costs of their own
counsel fees and may also incur fees and expenses in connection with the resale
of the Common Stock offered hereby.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 67 of chapter 156B of the Massachusetts Business Corporation Law
grants the Company the power to indemnify any director, officer, employee or
agent to whatever extent permitted by the Company's Restated Articles of
Organization, Bylaws or a vote adopted by the holders of a majority of the
shares entitled to vote thereon, unless such indemnitee has been adjudicated in
any proceeding not to have acted in good faith in the reasonable belief that his
or her actions were in the best interests of the corporation or, to the extent
that the matter for which indemnification is sought relates to service with
respect to an employee benefit plan, in the best interests of the participants
or beneficiaries of such employee benefit plan. Such indemnification may
include payment by the Company of expenses incurred in defending a civil or
criminal action or proceeding in advance of the final disposition of such action
or proceeding, upon receipt of an undertaking by the person indemnified to repay
such payment if he or she shall be adjudicated to be not entitled to
indemnification under the statute.
Article VI of the Company's Bylaws provides that the Company shall, to the
extent legally permissible, indemnify each person who may serve or who has
served at any time as a director or officer of the corporation or of any of its
subsidiaries, or who, at the request of the Company, may serve or at any time
has served as a director, officer or trustee of, or in a similar capacity with,
another organization or an employee benefit plan, against all expenses and
liabilities (including counsel fees, judgments, fines, excise taxes, penalties
and amounts payable in settlements) reasonably incurred by or imposed upon such
person in connection with any threatened, pending or completed action, suit or
other proceeding, whether civil, criminal, administrative or investigative, in
which he or she may become involved by reason of his or her serving or having
served in such capacity (other than a proceeding voluntarily initiated by such
person unless he or she is successful on the merits, the proceeding was
authorized by the corporation or
II-1
<PAGE>
the proceeding seeks a declaratory judgment regarding his or her own conduct).
Such indemnification shall include payment by the Company of expenses incurred
in defending a civil or criminal action or proceeding in advance of the final
disposition of such action or proceeding, upon receipt of an undertaking by the
person indemnified to repay such payment if he or she shall be adjudicated to be
not entitled to indemnification under Article VI, which undertaking may be
accepted without regard to the financial ability of such person to make
repayment.
The indemnification provided for in Article VI is a contract right inuring
to the benefit of the directors, officers and others entitled to
indemnification. In addition, the indemnification is expressly not exclusive of
any other rights to which such director, officer or other person may be entitled
by contract or otherwise under law, and inures to the benefit of the heirs,
executors and administrators of such a person.
ITEM 16. EXHIBITS
See the Exhibit Index immediately following the signature page.
ITEM 17. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes as follows:
(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;
(ii) to reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the most recent
post-effective amendment hereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this 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 this Registration Statement;
provided, however, that no filing will be made pursuant to paragraph
(a)(1)(i) or (a)(1)(ii) if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports
filed by the Registrant pursuant to Section 13 or 15(d) of the Exchange Act that
are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
II-2
<PAGE>
(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 this offering.
(b) The undersigned hereby undertakes that, for purposes of determining
any liability under the Securities Act, each filing of the registrant's annual
report pursuant to section 13(a) or section 15(d) of the Exchange Act that is
incorporated by reference in this 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.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the 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.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Town of Framingham, Commonwealth of Massachusetts, on April
6, 1998.
GENZYME TRANSGENICS CORPORATION
By: /s/ James A. Geraghty
---------------------------------------------------
James A. Geraghty
President, Chief Executive Officer and Chairman of
the Board
POWER OF ATTORNEY
We, the undersigned officers and directors of Genzyme Transgenics
Corporation, hereby severally constitute and appoint James A. Geraghty, John B.
Green and Lynnette C. Fallon, and each of them singly, our true and lawful
attorneys-in-fact, with full power to them in any and all capacities, to sign
any amendments to this Registration Statement on Form S-3 (including any
post-effective amendments thereto), and to file the same, with exhibits thereto
and other documents in connection therewith, with the Securities and Exchange
Commission, hereby ratifying and confirming all that each of said
attorneys-in-fact may do or cause to be done by virtue hereof.
Witness our hands and common seal on the dates set forth below.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed below by the following persons in
the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ James A. Geraghty President, Chief Executive April 6, 1998
-------------------------- Officer, Chairman of the
James A. Geraghty Board
and Director
(Principal Executive
Officer)
II-4
<PAGE>
Signature Title Date
--------- ----- ----
/s/ John B. Green Vice President, Chief April 6, 1998
-------------------------- Financial Officer and
John B. Green Treasurer
(Principal Financial
Officer
and Principal Accounting
Officer)
/s/ Robert W. Baldridge Director April 6, 1998
-------------------------
Robert W. Baldridge
/s/ Henry E. Blair Director April 6, 1998
-------------------------
Henry E. Blair
/s/ Francis J. Bullock Director April 6, 1998
-------------------------
Francis J. Bullock
/s/ Alan E. Smith Director April 6, 1998
-------------------------
Alan E. Smith
------------------------- Director
Henri A. Termeer
/s/ Alan W. Tuck
------------------------- Director April 6, 1998
Alan W. Tuck
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Number Description
- ------ -----------
<S> <C>
4.1.1 Restated Articles of Organization of the Company, filed with the
Secretary of the Commonwealth of Massachusetts on December 27, 1993.
Filed as Exhibit 3.1 to the Company's Annual Report on Form 10-K for
the year ended December 31, 1993 and incorporated herein by reference.
4.1.2 Articles of Amendment to the Restated Articles of Organization filed
with the Secretary of the Commonwealth of Massachusetts on October 3,
1994. Filed as Exhibit 3.1.2 to the Company's Annual Report on Form
10-K for the year ended December 28, 1997 and incorporated herein by
reference.
4.1.3 Articles of Amendment to the Restated Articles of Organization of the
Company filed with the Secretary of the Commonwealth of Massachusetts
on June 26, 1997. Filed as Exhibit 3 to the Company's Quarterly
Report on Form 10-Q for the quarter ended June 29, 1997 and
incorporated herein by reference.
4.1.4 Certificate of Vote of Directors Establishing a Series of a Class of
Stock (Series A Convertible Preferred Stock). Filed as Exhibit 3.1.4
to the Company's Annual Report on Form 10-K for the year ended
December 28, 1997 and incorporated herein by reference.
4.2 By-Laws of the Company, as amended. Filed as Exhibit 3.2 to the
Company's Registration Statement on Form S-1, File No. 33-62782, and
incorporated herein by reference.
4.3 Specimen Common Stock Certificate. Filed as Exhibit 4.1 to the
Company's Registration Statement on Form S-1, File No. 33-62782, and
incorporated herein by reference.
4.4 Specimen Series A Convertible Preferred Stock Certificate. Filed as
Exhibit 4.2 to the Company's Annual Report on Form 10-K for the year
ended December 28, 1997 and incorporated herein by reference.
4.5.1 TSI Specimen Warrant Certificate. Filed as Exhibit 4.8 to TSI
Corporation's Registration Statement on Form S-3, File No. 33-48107,
and incorporated herein by reference.
4.5.2 Form of Notice of Assumption by GTC of the TSI warrants to which
Exhibit 4.2.1 to this Report relate. Filed as Exhibit 4.2.2 to the
original filing of the Company's Annual Report on Form 10-K for the
year ended December 31, 1994 and incorporated herein by reference.
4.6.1 TSI Common Stock Purchase Warrant No. F-1 issued to The First National
Bank of Boston ("FNBB") on October 28, 1993. Filed as Exhibit 4.6 to
the Company's Registration Statement on Form S-4, File No. 33-80924,
and incorporated herein by reference.
4.6.2 TSI Common Stock Purchase Warrant No. G-1, dated September 27, 1994,
issued to Financing for Science International, Inc. ("FSI"). Filed as
Exhibit 4.4 to the original filing of the Company's Annual Report on
Form 10-K for the year ended December 31, 1994 and incorporated herein
by reference.
II-6
<PAGE>
4.6.3 Form of Notice of Assumption by GTC of the TSI Common Stock Purchase
Warrants Nos. F-1 and G-1. Filed as Exhibit 4.5 to the original
filing of the Company's Annual Report on Form 10-K for the year ended
December 31, 1994 and incorporated herein by reference.
4.7 Common Stock Purchase Warrant, dated June 30, 1995, issued to FSI.
Filed as Exhibit 10.9 to the Company's Quarterly Report on Form 10-Q
for the period ended July 2, 1995 and incorporated herein by
reference.
4.8 Common Stock Purchase Warrant, dated July 3, 1995, issued to Genzyme.
Filed as Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q
for the period ended July 2, 1995 and incorporated herein by
reference.
4.9 Common Stock Purchase Warrant, dated March 13, 1996, issued to FSI.
Filed as Exhibit 4.8 to the Company's Quarterly Report on Form 10-K
for the year ended December 31, 1995 and incorporated herein by
reference.
4.10 Common Stock Purchase Warrant, dated as of June 26, 1997, issued to
Government Land Bank d/b/a The MassDevelopment. Filed as Exhibit 4 to
the Company's Quarterly Report on Form 10-Q for the quarter ended June
29, 1997 and incorporated herein by reference.
4.11 Form of Common Stock Purchase Warrant issued to the Purchasers of
Series A Convertible Preferred Stock, dated as of March 20, 1998,
together with a schedule of holders. Filed as Exhibit 4.9 to the
Company's Annual Report on Form 10-K for the year ended December 28,
1997 and incorporated herein by reference.
4.12 Form of Common Stock Purchase Warrant issued to Shoreline Pacific
Institutional Finance and affiliates, dated as of March 20, 1998.
Filed as Exhibit 4.10 to the Company's Annual Report on Form 10-K for
the year ended December 28, 1997 and incorporated herein by reference.
4.13 Registration Rights Agreement between the Company and certain
Stockholders named therein. Filed as Exhibit 10.53 to the Company's
Annual Report on Form 10-K for the year ended December 28, 1997 and
incorporated herein by reference.
4.14 Securities Purchase Agreement, dated as of March 20, 1998, between the
Company and certain purchasers named therein. Filed as Exhibit 10.54
to the Company's Annual Report on Form 10-K for the year ended
December 28, 1997 and incorporated herein by reference.
5 Opinion of Palmer & Dodge LLP. Filed herewith.
23.1 Consent of counsel (contained in opinion of Palmer & Dodge LLP filed
as Exhibit 5).
23.2 Consent of Coopers & Lybrand L.L.P. Filed herewith.
24 Power of Attorney. Included on signature page to this Registration
Statement.
</TABLE>
II-7
<PAGE>
Exhibit 5
[Palmer & Dodge LLP letterhead]
Telephone: (617) 573-0100 Facsimile: (617) 227-4420
April 6, 1998
Genzyme Transgenics Corporation
Five Mountain Road
Framingham, MA 01701
Ladies & Gentlemen:
We are rendering this opinion in connection with the Registration
Statement on Form S-3 (the "Registration Statement") filed by Genzyme
Transgenics Corporation (the "Company") with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, on or about the date
hereof. The Registration Statement relates to up to 3,599,138 shares of the
Company's Common Stock, $0.01 par value (the "Shares"), representing up to
1,374,569 shares currently issuable upon conversion of outstanding shares of
the Company's Series A Convertible Preferred Stock, $0.01 par value (the
"Preferred Stock"), and up to 450,000 shares issuable upon exercise of
outstanding warrants, and 1,774,569 shares as may become issuable upon
conversion of the Preferred Stock and exercise of the Warrants (i) to prevent
dilution resulting from stock splits, stock dividends or similar transactions
or (ii) by reason of changes in the conversion price of the Preferred Stock
in accordance with the terms of the Certificate of Designation relating
thereto or the exercise price of the Warrants in accordance with the terms
thereof as described in the Registration Statement (the "Warrants"). We
understand that the Shares are to be offered and sold in the manner described
in the Registration Statement.
We have acted as your counsel in connection with the preparation of the
Registration Statement. We are familiar with the proceedings of the Board of
Directors on March 4, 1998 in connection with the authorization, issuance and
sale of the Shares. We have examined such other documents as we consider
necessary to render this opinion.
Based upon the foregoing, we are of the opinion that the Shares have been
duly authorized and, upon conversion of shares of Preferred Stock in
accordance with the Certificate of Vote of Directors Establishing a Series of
a Class of Stock, as filed with the Secretary of the Commonwealth of
Massachusetts on March 20, 1998, and upon exercise of the Warrants in
accordance with the terms thereof, the Shares will be validly issued,
fully paid and non-assessable.
We hereby consent to the filing of this opinion as a part of the
Registration Statement and to the reference to our firm under the caption
"Legality of Common Stock" in the Prospectus filed as part thereof.
Very truly yours,
/s/ Palmer & Dodge LLP
PALMER & DODGE LLP
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement
of Genzyme Transgenics Corporation (the "Company") on Form S-3 to register
3,599,138 shares of common stock of our report dated February 25, 1998,
except as to the information presented in Note 13, for which the date is
March 20, 1998, on our audits of the consolidated financial statements of the
Company as of December 28, 1997 and December 29, 1996 and for each of the
three fiscal years in the period ended December 28, 1997 which report is
included in the Company's 1997 Annual Report on Form 10-K. We also consent
to the reference to our firm under the captain "Experts."
/s/ Coopers & Lybrand L.L.P.
Coopers & Lybrand L.L.P.
Boston, Massachusetts
April 6, 1998
