<PAGE>
As filed with the Securities and Exchange Commission on May 1, 1998.
REGISTRATION NO. 333-________
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)
<TABLE>
<CAPTION>
Massachusetts 04-3186494
<S> <C>
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
</TABLE>
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
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<CAPTION>
Title of each class of securities to be registered Proposed maximum aggregate offering price(1) Amount of registration fee
- -------------------------------------------------- -------------------------------------------- --------------------------
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Common Stock, $0.01 par value $12,000,000 $3,540.00
- -------------------------------------------------- --------------------------------------------- --------------------------
</TABLE>
(1) Estimated solely for the purpose of determining the registration fee and
computed pursuant to Rule 457(o).
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>
Preliminary Prospectus
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. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities law of
any such State.
Subject to Completion, dated May 1, 1998
$12,000,000
Genzyme Transgenics Corporation
Common Stock, $0.01 par value per share
Genzyme Transgenics Corporation (the "Company") may offer, from time to
time, shares of its Common Stock at an aggregate offering price not to exceed
$12,000,000 (the "Shares"). The Shares will be offered directly by the Company.
No underwriter has been or will be engaged by the Company in connection with the
sale of any of the Shares. The Common Stock of the Company is listed for
quotation on the Nasdaq National Market under the symbol "GZTC." The price to
purchasers for a specific offering will be determined by the Company at or prior
to the sale of the Shares with respect to such offering and set forth in a
supplement hereto relating to the particular offering (a "Prospectus
Supplement"). The applicable Prospectus Supplement will also set forth the
number of Shares offered at such price, the expected date of delivery of such
shares and any other material terms of such offering and sale. The net proceeds
to the Company will be the purchase price less expenses payable by the Company
specific to the particular issuance and set forth in the applicable Prospectus
Supplement.
The purchase price with respect to any particular offering may be equal or
related to the then prevailing market price or such other price as the Company
and the purchasers in such offering may agree upon. On April 30, 1998, the
closing sale price of the Common Stock, as reported on the Nasdaq National
Market, was $10.50 per share.
-----------------
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF SECURITIES
UNLESS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
-----------------
AN INVESTMENT IN THE SECURITIES REGISTERED HEREBY INVOLVES
A HIGH DEGREE OF RISK. SEE "RISK FACTORS" ON PAGE ONE.
-----------------
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 ___________, 1998
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 or Prospectus Supplement, and, if given or made, such
information or representations must not be relied upon as having been authorized
by the Company. This Prospectus and any Prospectus Supplement 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.
<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 or any Prospectus Supplement 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 directed to the Company, Five Mountain Road, Framingham,
Massachusetts 01701, attention: John B. Green, telephone: (508) 270-2579.
ii
<PAGE>
TABLE OF CONTENTS
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AVAILABLE INFORMATION........................................................................................... ii
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE................................................................. ii
RISK FACTORS.................................................................................................... 1
THE COMPANY..................................................................................................... 7
USE OF PROCEEDS................................................................................................. 7
PLAN OF DISTRIBUTION............................................................................................ 8
LEGALITY OF COMMON STOCK........................................................................................ 8
EXPERTS......................................................................................................... 8
</TABLE>
iii
<PAGE>
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
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.
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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 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,
2
<PAGE>
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 undertaking such purification
services. Until such time, if ever, as GTC develops its own capabilities
3
<PAGE>
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 interest gives it
significant influence over any election of directors and any other action
requiring approval
4
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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 products. While GTC has
obtained product and professional liability insurance under an insurance policy
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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 have been registered for
resale, 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. Approximately twice
the number of shares currently issuable upon conversion of the securities issued
in the March 1998 private placement were registered because on and after
December 21, 1998 the conversion price per share of the 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 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. Lastly, an indeterminate amount of
shares have been registered for issuance and sale by the Company to certain
purchasers on a continuous basis at a maximum offering price of $12,000,000
pursuant to a registration statement, of which this Prospectus constitutes a
part. See "Plan of Distribution." The number of shares offered in a particular
offering
6
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and/or sold in any prior offerings under such Registration Statement will be set
forth in the applicable Prospectus Supplement.
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. 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
Unless otherwise set forth in the applicable Prospectus Supplement, the
Company estimates that the majority of the net proceeds of this offering will be
used to fund investment in facilities and capital equipment required for the
Company's transgenic development programs, other research and product
development activities and general corporate purposes. Such general corporate
purposes may include acquisitions of other businesses, technologies or products
complementary to those of the Company, although the Company currently has no
agreements or commitments in this regard. The amounts and timing of the
Company's actual expenditures will depend upon a number of factors, including
the scope and results of preclinical studies and clinical trials, the progress
of research and development activities,
7
<PAGE>
the cost, timing and outcomes of regulatory review, the rate of technological
advances, determinations as to the commercial potential of the Company's
products under development, administrative and legal expenses, the status of
competitive products, the establishment of manufacturing capacity or third-party
manufacturing arrangements, the establishment of collaborative arrangements with
other companies and the availability of other financing.
The Company will require substantial additional funds to conduct its
operations in the future. The Company believes that its existing capital
resources, including the proceeds of this offering and interest earned thereon,
and its available lines of credit, together with anticipated funding of
estimated reimbursable costs pursuant to collaborative agreements, will be
sufficient to support its current and planned operations for the next year.
Pending application of the proceeds as described above, the Company intends to
invest the net proceeds of this offering in investment-grade, interest-bearing
instruments.
PLAN OF DISTRIBUTION
The Company has filed with the Commission a Registration Statement on Form
S-3 (the "Registration Statement") under to the Securities Act of 1933, as
amended (the "Securities Act"), of which this Prospectus is a part, with respect
to the offer and sale by the Company, from time to time, of the Shares directly
to the purchasers. No underwriter has been or will be engaged by the Company in
connection with the sale of any of the Shares. The per share sale price to
particular purchasers will be set forth in a Prospectus Supplement relating to a
particular offering pursuant to this Prospectus. Such per share price 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 purchasers may accept.
The Company 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 Company. The foregoing may
affect the marketability of the Shares.
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 report 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.
8
<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 the securities
being registered are as follows:
<TABLE>
<S> <C>
SEC registration fee........................ $2,950
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.................................. $29,450
=======
</TABLE>
All of the above figures, except the SEC registration and Nasdaq
listing fees, are estimates.
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 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
II-1
<PAGE>
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.
(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.
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<PAGE>
(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.
(d) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
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
May 1, 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.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ James A. Geraghty President, Chief May 1, 1998
- --------------------- Executive Officer,
James A. Geraghty Chairman of the Board
and Director
(Principal Executive
Officer)
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ John B. Green Vice President, Chief May 1, 1998
- -----------------------------
John B. Green Financial Officer and
Treasurer
(Principal Financial
Officer
and Principal
Accounting Officer)
/s/ Robert W. Baldridge Director May 1, 1998
- -----------------------------
Robert W. Baldridge
/s/ Henry E. Blair Director May 1, 1998
- -----------------------------
Henry E. Blair
/s/ Francis J. Bullock Director May 1, 1998
- -----------------------------
Francis J. Bullock
/s/ Alan E. Smith Director May 1, 1998
- -----------------------------
Alan E. Smith
Director May 1, 1998
/s/ Henri A. Termeer
- ------------------------------
Henri A. Termeer
/s/ Alan W. Tuck Director May 1, 1998
- ------------------------------
Alan W. Tuck
</TABLE>
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.
</TABLE>
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<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 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.
II-7
<PAGE>
Exhibit 5
[Palmer & Dodge LLP letterhead]
Telephone: (617) 573-0100 Facsimile: (617) 227-4420
May 1, 1998
Genzyme Transgenics Corporation
Five Mountaine 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 (the "Commission")ounderLtheetterhead] Securities Act of 1933, as
amended, on or about the date hereof. The Registration Statement relates to
shares of the Company's Common Stock, $0.01 par value to be offered at an
aggregate purchase price not to exceed $12,000,000 (the "Shares"). 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 (the "Board") on April 30, 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, and subject to the assumptions and
qualifications hereinafter stated, we are of the opinion that the Shares have
been duly authorized and, when both (A) the Board has taken any additional
corporate action, if necessary, to approve the issuance of the shares of Common
Stock with respect to a particular offering of such shares, and (B) such shares
of Common Stock have been issued in accordance with the applicable definitive
purchase agreement executed and delivered by a duly authorized officer of the
Company and the purchasers identified therein upon payment of the consideration
therefor (not less then the par value of the Common Stock), then such shares of
Common Stock will be validly issued, fully paid and non-assessable.
The opinion expressed above is subject to the following assumptions:
(1) a Prospectus Supplement will have been prepared and filed with the
Commission describing the terms of the particular offering of such shares of
Common Stock offered thereby and will comply with all applicable laws;
<PAGE>
Genzyme Transgenics Corporation
May 1, 1998
Page 2
(2) the Shares will be issued and sold in compliance with applicable
federal and state securities laws and in the manner stated in the Registration
Statement and the applicable Prospectus Supplement; and
(3) the total number of Shares sold under the Registration Statement
will not exceed the shares authorized and available for issuance under the
Company's Restated Articles of Organization, as amended, in effect on the date
hereof.
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
shares of the Company's Common Stock at an aggregate offering price not to
exceed $12,000,000 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
May 1, 1998
