As filed with the Securities and Exchange Commission on January 10, 2001
Registration No. 333-53086
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
- - - - - - - -
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
- - - - - - - -
IGEN INTERNATIONAL, INC.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 94-2852543
(State or Other Jurisdiction of (I.R.S. Employer Identification Number)
Incorporation
or Organization)
16020 Industrial Drive
Gaithersburg, Maryland 20877
(301) 869-9800
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
Samuel J. Wohlstadter
Chairman of the Board & Chief Executive Officer
IGEN International, Inc.
16020 Industrial Drive
Gaithersburg, Maryland 20877
(301) 869-9800
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
With a copy to:
Thomas F. Cooney, III, Esq.
Kirkpatrick & Lockhart LLP
1800 Massachusetts Avenue, N.W.
Washington, D.C. 20036
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED
SALE TO THE PUBLIC: At any time and from time to time after this
Registration Statement becomes effective.
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/
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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. / /
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.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES
IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
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PROSPECTUS
Subject to Completion, dated January 10, 2001
[LOGO] IGEN INTERNATIONAL, INC.
3,000,000 SHARES OF COMMON STOCK
- This prospectus will allow us to issue common stock over time.
This means:
- We will provide a prospectus supplement each time we issue common
stock.
- The prospectus supplement will inform you about the specific terms
of that offering and also may add, update or change information
contained in this document.
- You should read this document and any prospectus supplement carefully
before you invest.
- Our common stock trades on the Nasdaq National Market under the
symbol "IGEN."
- Our address is 16020 Industrial Drive, Gaithersburg, Maryland 20877,
and our telephone number is (301) 869-9800.
ON JANUARY 8, 2001, THE CLOSING SALE PRICE OF ONE SHARE OF OUR COMMON
STOCK AS QUOTED ON THE NASDAQ NATIONAL MARKET WAS $12.875.
PLEASE SEE "RISK FACTORS" BEGINNING ON PAGE 6 FOR A DISCUSSION OF
CERTAIN FACTORS YOU SHOULD CONSIDER IN CONNECTION WITH THIS OFFERING.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES, OR DETERMINED IF
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is January __, 2001
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TABLE OF CONTENTS
Prospectus Summary ............................................................4
About IGEN ....................................................................4
The Offering ..................................................................5
Risk Factors ..................................................................6
Forward-Looking Statements ...................................................20
Where to Find More Information ...............................................21
Incorporation of Documents by Reference ......................................22
Use of Proceeds ..............................................................23
Plan of Distribution .........................................................23
Legal Matters ................................................................24
Experts ......................................................................24
Indemnification ..............................................................24
Commission Policy ............................................................25
You should rely only on the information contained in this prospectus.
We have not authorized anyone to provide you with information different from
that contained in this prospectus. This prospectus is not an offer to sell or a
solicitation of an offer to buy our common stock in any jurisdiction where it is
unlawful. The information contained in this prospectus is accurate only as of
the date of this prospectus, regardless of the time of delivery of this
prospectus or of any sale of common stock. This preliminary prospectus is
subject to completion prior to this offering.
ORIGEN, M-SERIES and TRICORDER are trademarks owned by or licensed to
IGEN International, Inc. Other trademarks and trade names appearing in this
prospectus are the property of their holders. The domain name and website
address www.igen.com, and all rights thereto, are registered in the name of and
owned by IGEN International, Inc. The information on our website is not intended
to be a part of this prospectus.
PROSPECTUS SUMMARY
THIS SUMMARY PROVIDES AN OVERVIEW OF SELECTED INFORMATION CONTAINED IN
THIS PROSPECTUS AND DOES CONTAIN ALL OF THE INFORMATION THAT YOU SHOULD
CONSIDER. YOU SHOULD ALSO CONSULT THE MORE DETAILED FINANCIAL STATEMENTS, AND
NOTES TO FINANCIAL STATEMENTS, INCORPORATED BY REFERENCE IN THIS PROSPECTUS.
THIS PROSPECTUS CONTAINS FORWARD-LOOKING STATEMENTS AND ACTUAL RESULTS COULD
DIFFER MATERIALLY FROM THOSE PROJECTED IN THE FORWARD-LOOKING STATEMENTS AS A
RESULT OF CERTAIN UNCERTAINTIES INCLUDING THOSE DESCRIBED IN THE RISK FACTORS
OUTLINED IN THIS PROSPECTUS.
ABOUT IGEN
We develop and market products that incorporate our proprietary
ORIGEN(R) technology, which permits the detection and measurement of biological
substances. We believe that ORIGEN offers significant advantages over competing
detection methods by providing a unique combination of speed, sensitivity,
flexibility and throughput in a single technology platform. ORIGEN is
incorporated into instrument systems and related reagents, and we also offer
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assay development and other services used to perform analytical testing.
Products based on our ORIGEN technology have been developed and sold for the
life science, clinical testing and industrial testing markets.
We and our corporate collaborators have commercialized five product
lines to serve these markets. These sales and placements have been made
predominately through our license arrangement with Roche Diagnostics GmbH, the
world's leading provider of clinical diagnostic products.
In August 1999, we began selling the M-SERIES(TM) System, our new
product line for use by pharmaceutical and biotechnology companies in drug
discovery and development. The M-SERIES System may be used in all phases of drug
discovery, including (1) validating targets identified through genomics, (2)
screening of large numbers of compounds generated through combinatorial
chemistry, (3) re-testing and optimization of lead compounds, and (4) clinical
trial testing or drug candidates. We also provide custom assay development
services. We market the M-SERIES System through our sales, marketing and
applications team dedicated to the life science market.
We have also applied our ORIGEN technology to the rapidly growing
market for testing food and water for disease causing pathogens. We have begun
commercializing our first product for this market, the PATHIGEN E. Coli 0157
test, primarily to food processors. We have a complementary panel of tests
currently under development to detect more accurately and efficiently other food
and water pathogens, including tests for salmonella, listeria, campylobacter and
cryptosporidium parvum.
Our address is 16020 Industrial Drive, Gaithersburg, Maryland 20877,
and our telephone number is (301) 869-9800.
THE OFFERING
Common stock offered.................................... 3,000,000 shares
Common stock to be outstanding after the offering....... 18,816,655 shares
Use of proceeds......................................... We anticipate using
the net proceeds from
this offering to fund
research, development
and product
manufacturing, to
acquire or invest in
businesses, products
and technologies, to
provide working
capital and for
general corporate
purposes. See "Use of
Proceeds."
Nasdaq National Market symbol........................... IGEN
The number of shares of common stock to be outstanding after the
offering is based on the number of shares outstanding as of December 1, 2000 and
excludes:
- 1,800,159 shares of common stock reserved for issuance
pursuant to outstanding stock options at a weighted average
price of $7.35 per share;
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- 1,663,224 shares of common stock reserved for issuance upon
conversion of the Series B Convertible Preferred Stock
- 1,129,032 shares of common stock reserved for issuance upon
conversion of the 5% Subordinated Convertible Debentures
due January 2005 together with an unspecified number of
shares that may be issued to the holders of the debentures
as payment for the interest due
- 282,258 shares of common stock reserved for issuance upon
exercise of outstanding Stock Purchase Warrants
RISK FACTORS
INVESTING IN OUR COMMON STOCK IS VERY RISKY. YOU SHOULD BE ABLE TO BEAR
A COMPLETE LOSS OF YOUR INVESTMENT. YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING
FACTORS, IN ADDITION TO OTHER INFORMATION CONTAINED ELSEWHERE IN THIS PROSPECTUS
OR INCORPORATED BY REFERENCE INTO THIS PROSPECTUS FROM OUR OTHER SEC FILINGS.
THE RISKS AND UNCERTAINTIES BELOW ARE NOT THE ONLY ONES FACING IGEN BECAUSE WE
ARE ALSO SUBJECT TO ADDITIONAL RISKS AND UNCERTAINTIES NOT PRESENTLY KNOWN TO
US. IF ANY OF THESE RISKS ACTUALLY OCCURS, OUR BUSINESS, FINANCIAL CONDITION,
OPERATING RESULTS OR CASH FLOWS COULD BE HARMED.
IF THE COMPANIES THAT LICENSE TECHNOLOGY FROM US DO NOT EFFECTIVELY
DEVELOP AND MARKET PRODUCTS BASED ON THAT TECHNOLOGY, OUR REVENUE WOULD BE
ADVERSELY AFFECTED.
The success of our business depends, in large part, on how effectively
the companies to which we have licensed our technology develop and market that
technology. If these companies do not effectively develop and market products
based on this technology, our revenues would decrease.
We have licensed our technology to Organon Teknika B.V., Eisai Co.,
Ltd., and Roche Diagnostics GmbH for selected markets and uses. Our license
agreements with each of these companies allow each company to develop products
using our technology and to manufacture and sell those products in selected
markets. In return for the right to use our technology, each of these companies
must pay royalties to us based on revenues they receive from sales of products
based on our technology. These royalties are a significant part of our overall
revenue.
We believe that the companies licensing our technology have economic
incentives to continue marketing products using our technology. However, we
cannot be sure that these companies will diligently and effectively market
products that incorporate the technology we have licensed to them. In addition,
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we have brought a lawsuit against Roche, one of our licensees, in part because
we believe Roche has not properly calculated and paid royalties to us and
because we believe Roche has not commercialized our technology as diligently as
our license agreement with Roche requires. See the risk factor immediately below
for a more detailed description of this litigation and the risks it poses to us.
We cannot predict whether similar or other problems will arise with other
companies to whom we license our technology.
WE ARE SUING THE LARGEST LICENSEE OF OUR TECHNOLOGY, AND THE OUTCOME OF
THAT LITIGATION COULD MATERIALLY ADVERSELY AFFECT OUR REVENUES AND FINANCIAL
CONDITION.
We have filed a lawsuit in Maryland federal court against Roche. Roche
is the largest licensee of our technology in terms of royalty income, accounting
for over 90% of our royalty income in fiscal 2000 and the six months ended
September 30, 2000. The lawsuit centers on disputes over our license agreement
with Roche. We cannot predict whether we will succeed in this litigation. If we
do not succeed, our business and revenues could be materially adversely
affected.
Our license agreement with Roche gives Roche the exclusive right to
manufacture, market and sell immunodiagnostic products using our patented ORIGEN
technology to a designated field. The license restricts Roche's rights in the
Japanese clinical diagnostic market.
In the lawsuit, we claim that Roche has failed to perform a variety of
its obligations under the license agreement. This includes Roche's failure to
diligently commercialize the licensed technology and to properly compute and pay
the royalties owed to us. In addition, we have alleged that Roche has improperly
marketed and sold products to customers it was not permitted to sell under the
license agreement. Based on Roche's violations of the license agreement, we have
asked the court to (1) award us monetary damages, (2) prohibit Roche from
violating the license agreement in the future and (3) determine that we are
entitled to terminate the license agreement because of Roche's material breaches
of the agreement.
Roche has filed a counterclaim against us in the lawsuit, alleging,
among other things, that we breached the Roche license by permitting Eisai Co.,
Ltd., another of our licensees, to market some ORIGEN-based products in Japan.
In addition, during fiscal 2000, we received notice from Roche that it
is reducing royalty payments due to us through an additional deduction from
sales on which the royalty payment is based. Roche has also claimed that we owe
it $2.6 million in royalties previously paid to us as a result of a retroactive
application of this deduction back to 1997. Although we believe that the
deduction and its retroactive application are not in accordance with the license
agreement, we cannot assure you that we will be successful in defending this
claim. Roche has notified us that it does not intend to seek to collect this
retroactive deduction pending continuation of ongoing settlement discussions
between Roche and us. If Roche enforces this claim by withholding future royalty
payments from us, our results of operations will be adversely affected for those
quarters in which the royalty payments are withheld.
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We are vigorously pursuing this action against Roche, and we believe it
is well founded. We cannot be certain, however, that we will win the lawsuit.
The risks involved in the litigation include:
- If the court determines that Roche has not miscalculated or
underpaid royalties, or that its underpayments were less than
we believe, our future royalty revenue from Roche could be
materially less than we believe we are entitled to. Also, we
would not, or may not, receive money damages for past
underpayments that we believe Roche has made.
- If the court determines that Roche can continue to market and
sell other Roche products that compete with its ORIGEN-based
products, we will not be able to collect from Roche royalty
revenues that we would have otherwise received if Roche had
sold more ORIGEN-based products instead of its other competing
products.
- If the court determines that Roche may market products using
our technology to customers that we believe are not within the
scope of the license, such as to physicians' offices, our
ability to market our products to those customers would be
weakened.
- If the court determines that Roche's counterclaim regarding
our license to Eisai is valid, then Eisai's right to market
ORIGEN-based products in Japan could be adversely affected. As
a result, our royalty income from Eisai could be reduced.
- Regardless of whether we win the lawsuit, Roche may divert its
attention from selling the licensed products and focus its
energies instead on finding alternative products to develop
and market, especially if Roche believes we may be successful
in obtaining the right to terminate the license agreement.
- If the court were to decide that we may terminate the license
agreement with Roche and we did so, royalty revenues would
suffer unless and until we found one or more comparable
replacements for Roche. In addition, our overall income may
significantly decrease. Moreover, at this time we cannot be
sure that we would be able to find a suitable replacement.
- Regardless of whether we are successful in the litigation, we
have expended, and will continue to expend, a significant
amount of money and management time to pursue the lawsuit and
to defend against Roche's counterclaim. This time and money
have been, and will continue to be, unavailable for use in the
development of our business.
For a more detailed description of our relationship with Roche, as well
as our claims and Roche's counterclaims, see our Annual Report on Form 10-K for
the fiscal year ended March 31, 2000, our Quarterly Reports on Form 10-Q for the
fiscal quarters ended June 30, 2000 and September 30, 2000, which are
incorporated by reference into this prospectus, as they may be amended by future
filings.
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IF WE ARE NOT SUCCESSFUL IN OUR LITIGATION AGAINST HITACHI, OUR ROYALTY
INCOME COULD SUFFER.
We are suing Hitachi Ltd. in Japan. Hitachi develops and manufactures
diagnostic equipment based on ORIGEN technology for Roche, to whom we license
our technology. We believe that Hitachi's actions in Japan violate rights that
we originally granted to Eisai Co., Ltd. to develop, manufacture and sell
products using ORIGEN technology to the Japanese clinical diagnostic market. We
have asked the Japanese court to prohibit Hitachi from manufacturing, using or
selling in Japan the Elecsys 2010 Instrument, which Hitachi developed for Roche
based on our technology.
If we lose our lawsuit against Hitachi and Hitachi continues Japanese
manufacturing of products covered by our license with Eisai, Eisai's ability to
sell products based on our technology in Japan could suffer, and the royalty
income we receive from Eisai could decrease as a result. If, on the other hand,
we win the lawsuit against Hitachi, Roche will either have to find a new
manufacturer to make equipment based on ORIGEN technology or make arrangements
for Hitachi to manufacture the equipment outside of Japan. Our royalty income
could suffer if Roche cannot effectively make alternate arrangements.
FAILURE TO MEET OUR DEBT OBLIGATIONS COULD ADVERSELY AFFECT OUR RESULTS
OF OPERATIONS AND FINANCIAL CONDITION; IN ADDITION, OUR DEBT SERVICE OBLIGATIONS
COULD IMPAIR OUR OPERATING FLEXIBILITY.
We have a substantial amount of indebtedness, and there is a
possibility that we may be unable to generate cash or arrange financing
sufficient to pay the principal of, interest on and other amounts due in respect
of our indebtedness when due, or in the event any of our indebtedness is
accelerated. In addition, our substantial leverage may require that we dedicate
a substantial portion of our expected cash flow from operations to service our
indebtedness, which would reduce the amount of our expected cash flow available
for other purposes, including working capital and capital expenditures.
In March 1999, we entered into a debt financing with John Hancock
Mutual Life Insurance Company under a note purchase agreement in which we
received $30 million, and we issued 8.5% senior secured notes due 2006. We have
made quarterly interest only payments on the notes of $637,500 through September
2000. Beginning in December 2000, principal and interest installments of $1.7
million will be due quarterly through March 2006. The notes are secured by,
among other things, royalty payments and our right to receive monies due under
our license agreement with Roche and a restricted cash balance account. If we
are unable to meet our obligations under the notes, the noteholders could
exercise their rights as a secured party and take possession of the pledged
collateral. This would adversely affect our results of operations and financial
condition materially.
In addition, covenants in the note purchase agreement for our 8.5%
senior secured notes require us to comply with annual and quarterly royalty
payment coverage ratios that are tied to royalty payments and debt service. The
note purchase agreement also contains covenants that limit our ability to take
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specified actions, including incurring additional secured debt and amending our
license agreement with Roche, which could affect our ability to resolve issues
that are being litigated through an amendment to the existing license agreement
with Roche. These restrictions may limit our operating flexibility, as well as
our ability to raise additional capital.
In January 2000, we sold $35 million in aggregate principal amount of
5% subordinated convertible debentures due 2005. Unless and until holders of the
debentures convert their debentures into common stock, we are required to make
semi-annual interest payments of $875,000 which commenced in July 2000. If we
are unable to meet our obligations under the subordinated convertible
debentures, the debenture holders could require us to repay the principal amount
of, and accrued interest on, the subordinated convertible debentures, and we may
not have sufficient financial resources or be able to arrange sufficient
financing to make those payments when required.
WE HAVE A HISTORY OF OPERATING LOSSES, EXPECT TO INCUR FUTURE LOSSES
AND CANNOT BE CERTAIN THAT WE WILL BECOME A PROFITABLE COMPANY.
We have experienced significant operating losses each year since our
inception, and we expect those losses to continue. We also have an accumulated
deficit and negative net worth. Our losses have resulted principally from costs
incurred in research and development and from litigation costs, selling costs
and other general and administrative costs.
We expect to incur additional operating losses as a result of increases
in expenses for manufacturing, marketing and sales capabilities, litigation
costs and expenses, research and product development and general and
administrative costs. We cannot assure you that we will ever achieve
profitability in the future. Our ability to become profitable in the future will
depend on, among other things, our ability to:
- expand the commercialization of our existing products;
- upgrade and enhance the M SERIES product capabilities;
- introduce new products into the market;
- develop our marketing capabilities cost-effectively;
- develop sales and distribution capabilities cost-effectively;
and
- establish successful collaborations with corporate partners
to develop and commercialize products that incorporate our
technologies.
OUR QUARTERLY OPERATING RESULTS MAY FLUCTUATE SIGNIFICANTLY, AND THESE
FLUCTUATIONS MAY CAUSE OUR STOCK PRICE TO FALL.
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Our quarterly operating results depend upon:
- the volume and timing of orders for M-SERIES or other
products;
- the timing of instrument deliveries and installations;
- the success of M-SERIES upgrades and enhancements;
- variations in revenue recognized from royalties and other
contract revenues;
- our mix of products sold;
- whether our instruments are sold to or placed with customers;
- the timing of our introduction of new products;
- our competitors' introduction of new products;
- variations in expenses we incur in connection with the
operation of our business, including legal fees, research and
development costs, and sales and marketing costs, including
costs for upgrading the M SERIES products;
- our manufacturing capabilities; and
- the volume and timing of product returns and warranty claims.
These factors may cause our quarterly operating results to fluctuate
significantly, which in turn, may cause our stock price to fall. In addition,
because our revenues and operating results are volatile and difficult to
predict, we believe that period-to-period comparisons of our results of
operations are not a good indication of our future performance.
WE MAY NOT BE ABLE TO RAISE SUFFICIENT ADDITIONAL CAPITAL TO
SUCCESSFULLY DEVELOP OUR BUSINESS.
We need substantial amounts of money to fund our operations. We
currently anticipate that our existing capital resources, together with revenue
from product sales, will be adequate to fund our operations through the middle
of calendar year 2001. Our access to funds could be negatively impacted by many
factors, including the results of pending litigation, the volatility of the
price of our common stock, continued losses from operations and other factors.
We may need to raise substantial amounts of money to fund a variety of
future activities integral to the development of our business, including the
following:
- for research and development in order to successfully develop
our technology;
- to obtain regulatory approval for some of our products;
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- to file and prosecute patent applications in order to protect
our technology;
- to respond to innovations that our competitors develop;
- to continue to aggressively pursue our ongoing litigations
against Roche and Hitachi;
- to retain qualified employees, particularly in light of
intense competition for qualified scientists and engineers;
- to make new arrangements to market our technology, especially
if we terminate our license agreement with Roche;
- to manufacture products ourselves or through a third party;
and
- to market different products to different markets, either
through building our own sales and distribution capabilities
or relying on a third party.
We cannot be certain that we will have access to enough funds to
successfully develop our business.
We may try to raise necessary additional capital by issuing additional
debt or equity securities. Holders of debt securities would have priority over
our equity holders with respect to the proceeds from the sale of our assets in
the event of liquidation of our business, and any debt financings we obtain may
contain restrictive terms that limit our operating flexibility. If, on the other
hand, we raise additional capital by selling more common or preferred stock, the
holdings of existing stockholders would be diluted.
If we are unable to raise additional capital, we may have to scale
back, or even eliminate, some programs. Alternatively, we may have to consider
pursuing arrangements with other companies, such as granting licenses or
entering into joint ventures. These arrangements could require that we give up
substantial rights to technology or products.
WE MAY NOT BE ABLE TO COMPETE EFFECTIVELY AGAINST MORE ESTABLISHED
COMPANIES AND INSTITUTIONS, WHICH COULD ADVERSELY AFFECT OUR BUSINESS.
We are a relatively young company in a highly competitive industry. We
compete against established companies and research and academic institutions,
and we expect this competition to intensify. Many of these companies and
institutions have one or more competitive advantages over us, including:
- more money to invest;
- greater expertise and resources in developing, manufacturing,
marketing and selling products;
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- a larger, more experienced workforce; and
- more experience in obtaining regulatory approval for clinical
diagnostic products.
As a result, we may not be able to compete successfully against our
current or future competitors. This could have a material adverse effect on our
business, financial condition and revenue.
WE DEPEND ON CONTINUING PRODUCT DEVELOPMENT.
The market for our products is characterized by rapidly changing
technology, evolving industry standards, the need for updated and effective
technology and new product introduction. Our future success will depend in part
upon our ability to enhance existing products and to develop and introduce new
or enhanced products. There can be no assurance that we will be able to avoid
the obsolescence of our products due to rapid technological change and evolving
industry standards. In general, the development of new or enhanced products is a
complex and uncertain process requiring the accurate anticipation of
technological and market trends as well as precise technological execution. We
have and may continue to experience design, development, implementation and
other difficulties that could delay or prevent our introduction of new or
enhanced products or affect the performance of existing products. These
difficulties and delays have caused, and may continue to cause, our expenses to
increase and our product sales to fluctuate.
WE DEPEND ON HIGHLY TRAINED AND SKILLED EMPLOYEES AND MANAGEMENT, AND
WE CANNOT BE SURE THAT WE WILL BE ABLE TO ATTRACT AND RETAIN SUFFICIENT
PERSONNEL.
We need to hire additional staff and to retain existing staff, both of
which are difficult in today's competitive marketplace. Because we are a
technology company, we depend heavily on scientists and engineers to develop
products and to build a successful business. Research and development efforts
could suffer if we are not able to hire and retain enough qualified scientists
and engineers.
We cannot be sure that we will succeed in our hiring and retention
efforts. We compete with other technology companies and research and academic
institutions for experienced scientists. Many of these companies and
institutions have greater resources than we do and thus may be in a better
position to attract desirable candidates.
In addition to scientists, we will also need to hire managers as the
business grows. We will need managers who are able to address the need for
regulatory, manufacturing and marketing capabilities. If we are not able to hire
managers with these skills, or develop expertise in these areas, our business
prospects could suffer.
WE DEPEND ON A LIMITED NUMBER OF SUPPLIERS FOR MATERIALS USED IN
MANUFACTURING OUR PRODUCTS, AND ANY INTERRUPTION IN THE SUPPLY OF THOSE
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MATERIALS COULD HAMPER OUR ABILITY TO MANUFACTURE PRODUCTS AND MEET CUSTOMER
ORDERS.
We depend on vendors to supply key materials that we use in our
products. Some of these materials are available only from limited sources. In
the event of a reduction in, interruption of, or degradation in the quality of
the supply of any of our required materials, or an increase in the cost of
obtaining those materials, we would be forced to locate an alternative source of
supply. If no alternative source were available or if an alternative source were
not available on a timely basis or at a reasonable cost or otherwise on
acceptable terms, our ability to manufacture one or more of our products would
be delayed or halted. Any changes in sources of supply may require additional
engineering or technical development in order to ensure consistent and
acceptable performance of the products. If any of these events occur, we could
lose sales as well as customers, and our business would be significantly harmed
as a result.
WE MUST OBTAIN FDA APPROVAL TO MARKET OUR CLINICAL DIAGNOSTIC PRODUCTS,
WHICH IS OFTEN COSTLY AND TIME CONSUMING, AND IF WE DO NOT OBTAIN THE NECESSARY
APPROVAL OUR BUSINESS PROSPECTS WOULD SUFFER.
The FDA regulates many areas in which we conduct research and in which
we develop, produce and market products. In particular, we must obtain FDA
approval before we can market clinical diagnostic products such as those we are
currently developing for the patient care market. The approval process is often
costly and time consuming. In addition, we cannot assure you that we will be
successful in obtaining FDA approval for any of our clinical diagnostic
products, which would materially adversely affect our future prospects.
In order to obtain FDA approval in the United States, we, or the
companies with whom we work, will need to either obtain premarket application
approval or premarket notification clearance from the FDA. In order to obtain
premarket notification clearance, we must submit data from clinical trials
demonstrating that new clinical diagnostic systems are substantially equivalent
to diagnostic systems that the FDA has already approved. If a product is subject
to the substantial equivalence requirement, neither we nor any of our licensees
can sell that system for clinical use in the United States until the FDA
determines that a new ORIGEN-based system is substantially equivalent to a
previously approved system. Typically, the FDA review process takes 90 days, but
the FDA's review could take longer. In addition, we cannot be sure that we will
be able to demonstrate substantial equivalence for future diagnostic systems.
If we do not successfully demonstrate substantial equivalence, or if we
are required to obtain premarket application approval as an initial matter, we
will have to conduct extensive clinical testing of these products, which could
take years to complete. Extensive testing could involve substantial additional
costs and might delay bringing clinical diagnostic products to market, weakening
our competitive position. If we fail to obtain FDA approval for new products
altogether, we will be unable to market our ORIGEN-based systems at all for
clinical use in the United States.
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WE ARE SUBJECT TO EXTENSIVE, ONGOING GOVERNMENT REGULATION, WHICH MAY
INVOLVE SIGNIFICANT COSTS AND MAY RESTRICT OUR ABILITY TO CONDUCT BUSINESS.
We expect that we may need to spend a substantial amount of money to
comply on an ongoing basis with the regulations of the FDA and other government
agencies. Government agencies, such as the FDA and the Environmental Protection
Agency, regulate manufacturers of diagnostic products and the manufacturing
process itself. The costs of complying with governmental regulations and any
restrictions that government agencies might impose could have a significant
impact on our business. As we increase our manufacturing, these costs will
increase.
Whether we manufacture products ourselves or contract with another
company to manufacture products based on our technology, the FDA will
continually review and periodically inspect the manufacturing process. If the
FDA were to discover a problem with our products, the manufacturing process or
the manufacturing facility, the FDA could place restrictions on these products
and on the manufacturer. For example, the FDA could require us to recall, or
even totally withdraw, a product from the market or close a manufacturing
facility. In addition to FDA regulations, the process of manufacturing products
is subject to a variety of environmental and safety laws and regulations,
including laws and regulations governing the use and disposal of hazardous
materials. If we fail to comply with these laws or regulations, our business and
financial condition could be materially adversely affected.
WE HAVE LIMITED MANUFACTURING AND MARKETING EXPERIENCE, WHICH PUTS US
AT A COMPETITIVE DISADVANTAGE.
We lack experience in large-scale manufacturing, which could hamper our
ability to manufacture existing products or new products that we develop. We
have two options to address this issue. First, we could expand our internal
ability to manufacture products. Second, we could contract with a third party to
manufacture for us products based on our technology. If, however, we are unable
to expand our own manufacturing capability or find a suitable manufacturer on
acceptable terms in a timely manner, we may be unable to meet demand for
existing products and could be delayed in introducing new products to the
market. Failure to meet demand for existing products or delays in introducing
new products could put us at a competitive disadvantage and could harm our
financial condition or our business prospects.
We will also need to develop greater selling, marketing and
distribution capabilities. To market clinical diagnostic products directly to
customers, and not through a licensee, we need to develop a substantial sales
force with technical expertise. We also need to establish a distribution system
to support the sales force. Alternatively, we could license or contract with
another company to provide sales and distribution services for products, in much
the same way as we have done with Roche, Eisai and Organon Teknika. We cannot be
sure, however, that we will be able to develop a sufficient sales and
distribution force or that we will be able to find a suitable company to fill
that role for us.
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THE SUCCESS OF OUR BUSINESS DEPENDS ON PATENTS THAT WILL EXPIRE AND
THAT MUST BE ACTIVELY PURSUED AND PROTECTED.
Our business depends heavily on patents that will expire over time and
may be challenged or circumvented by competitors. Patents allow us to prevent
others, for a time, from using our inventions to compete against us. Our
business success or failure will depend, in part, on our ability to obtain and
maintain adequate patent protection for the ORIGEN technology. We cannot be
certain that current patents or future patents will adequately protect our
technology from being used by our competitors.
Because there is no consistent policy governing the scope of claims in
medical patents, patent protection is uncertain. Companies may, for example,
challenge and invalidate patents or circumvent valid claims in patents, all of
which could make it necessary for us to defend our patents in litigation.
Litigation over patents poses the following risks to our business:
- Litigation costs can be extremely high, which could drain our
financial resources.
- Litigation over our patents could discourage other companies
from working with us to develop and market new products based
on technology covered by these disputed patents.
- If we lose some patent protection as a result of litigation,
our competitive advantage could be eroded.
OUR BUSINESS WOULD BE HARMED IF WE VIOLATE THE PATENT RIGHTS OF OTHERS.
Our business success or failure will also depend, in part, on the
patent rights of others. We license technology from other companies and academic
institutions. Because access to this technology is necessary to our business, we
must be certain that we comply with these license agreements. Our business could
be harmed if we breached any of these license agreements and lost the rights to
use this patented technology or if we were unable to renew existing licenses on
acceptable terms or get additional licenses that we may need on acceptable
terms.
We must also make sure that we do not infringe the patent rights of
others. If we were to infringe others' patent rights we could be exposed to the
following risks:
- We could be required to alter our products or processes.
- We could be required to obtain a license from the patent holder.
- We could lose customers that are reluctant to continue using our
products or doing business with us.
- We could be forced to abandon development work that we had begun
with respect to these products.
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- We could be required to pay damages that could be substantial.
We cannot be sure that we would be able to alter products or processes
or that we could obtain a license at a reasonable cost, if at all. Our business
could be damaged if we were unable to make necessary alterations or obtain a
necessary license on acceptable terms.
In addition, we may need to litigate the scope and validity of patents
held by others. Litigation could be a substantial cost for us. We are currently
defending a patent infringement claim that Laboratoires Serono, S.A. filed
against us, Roche and Organon Teknika. This action claims that we and the other
defendants are infringing a patent for "A Method Assay Employing a Magnetic
Electrode." We, along with the other defendants, have denied any infringement
and have asserted that the patent is invalid and unenforceable. Recently, F.
Hoffman-La Roche Ltd., a member of the Roche family of companies, acquired the
patent from Serono and continues in Serono's place to assert the infringement
claim against Organon Teknika and us. We cannot assure you that we will be
successful in defending against this claim. If we are not successful, our
business and financial condition could be adversely affected.
WE RELY ON TRADE SECRETS AND OTHER INFORMATION THAT CANNOT BE PROTECTED
BY PATENTS, AND WE FACE RISKS THAT THIS INFORMATION WILL BE DISCLOSED TO OTHERS.
In addition to patents, we also rely in our business on trade secrets,
know-how and other proprietary information. If this information were disclosed
to competitors, our business would suffer. We seek to protect this information,
in part, by entering into confidentiality agreements with licensees, employees
and consultants, which prohibit these parties from disclosing our confidential
information. Despite our entering into these agreements, we cannot be sure that
the agreements will provide adequate protection for our trade secrets, know-how
and other proprietary information or that the information we share with others
during the course of our business will remain confidential. We also cannot be
certain that we would have sufficient legal remedies to correct or compensate
for unauthorized disclosures or sufficient resources to seek redress.
RESTRICTIONS ON HEALTH CARE COSTS AND HEALTH CARE AND INSURANCE
FINANCING PRACTICES COULD LIMIT DEMAND FOR OUR PRODUCTS.
In the United States and elsewhere, demand for clinical diagnostic
testing is dependent, in part, on consumers' ability to be reimbursed for the
cost of the tests by third-party payors, such as government agencies, health
maintenance organizations and private insurers. Medicaid and other third-party
payors are increasingly challenging the prices charged for medical services,
including clinical diagnostic tests. They are also attempting to contain costs
by limiting their coverage of, and the amount they will reimburse for, clinical
diagnostic tests and other health care products. We cannot be certain that
insurers will provide coverage for clinical diagnostic tests in the future.
Without adequate coverage and reimbursement, consumer demand for clinical
diagnostic tests may decrease. Decreased demand would likely cause sales of our
clinical diagnostic products, and sales by our licensees, to fall since fewer
tests would be performed or prices would be lowered, or both. Reduced sales or
royalty income would hurt our business and our business prospects.
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In many foreign markets, governments directly set the prices that
clinical diagnostic companies may charge for their products and services. In the
United States, a number of legislative and regulatory proposals aimed at
changing the health care system have been proposed in recent years. We cannot
predict whether these proposals will be adopted or the effect that these
proposals or managed care efforts may have.
WE ARE EXPOSED TO PRODUCT LIABILITY RISKS.
We may not be able to adequately insure against risk of product
liability. As we begin marketing products, we may face product liability for
claims and lawsuits brought by customers. Damages awarded in product liability
cases can be very large. While we have product liability insurance, this
coverage is limited. We cannot assure you that our current product liability
insurance would be adequate to cover us against our potential liabilities or
that we will be able to maintain current levels of product liability insurance
on acceptable terms, if at all. Claims or losses in excess of our current or
future product liability insurance coverage could have a material adverse effect
on our financial condition.
MANAGEMENT EXERCISES SIGNIFICANT CONTROL OVER IGEN.
Our management has significant control over IGEN through its stock
ownership. Our officers and directors own, or have the right to purchase, about
38% of our common stock. Our Chief Executive Officer owns approximately 27% of
our common stock. Our officers and directors have significant influence over the
election of directors and other stockholders actions.
FAILURE TO MANAGE OUR GROWTH COULD ADVERSELY AFFECT OUR BUSINESS.
We have grown rapidly and expect to continue to grow rapidly by hiring
new employees in all areas of our operations, increasing our presence in
existing markets and introducing new products we develop into new potential
high-growth markets. Our growth has placed, and continues to place, a strain on
our management and our operating and financial systems.
As we grow, our personnel, systems, manufacturing capabilities and
resources, procedures and controls may be inadequate to support future
operations. In order to accommodate the increased operations for sales and
marketing, research and development, facilities and administration, we will need
to hire, train and retain the appropriate personnel. We may also need to improve
our financial and management controls, reporting systems and operating systems.
We may encounter difficulties in developing and implementing other new systems.
In response to our growth, we have recently implemented a new
enterprise resource planning system in order to automate all of our accounting,
manufacturing, sales and purchasing. If the enterprise resource planning system
fails to operate as we expect or experiences delays or interruptions, our
operations, as well as our ability to manage our increased growth, could be
materially adversely affected.
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PROVISIONS OF OUR GOVERNING DOCUMENTS MAY DETER OTHERS FROM ATTEMPTING
TO ACQUIRE US.
Our governing documents contain provisions designed to prevent hostile
takeovers, which may limit the ability of stockholders to sell their stock at a
premium in a takeover. According to our governing documents, stockholders can
only act at annual meetings or at special meetings of stockholders. Stockholders
are not allowed to act by written consent. In addition, stockholders are not
allowed to call for a special meeting. Only our board of directors, the chairman
of the board or the president may call a special meeting. These provisions may
make it difficult for stockholders to force us to hold special meetings. These
provisions may also limit the ability of stockholders to consider transactions
that they may want to approve, such as a hostile takeover of us.
Our governing documents also contain other provisions that could make
it more difficult for a change in control to be effected. Our board of directors
can issue preferred stock and can determine the rights of those preferred
stockholders without the approval of our common stockholders. For example, our
board of directors could give preferred stockholders one or more votes on issues
on which common stockholders vote. This could have the effect of diluting the
voting rights of common stockholders, which might further discourage other
companies from trying to acquire us.
In addition, our certificate of incorporation contains provisions
dividing our board of directors into three classes. Each class serves until the
third succeeding annual meeting, and one class is elected at each annual meeting
of stockholders. As a result, even if our stockholders might prefer to effect a
change sooner, it could take at least two annual meetings of stockholders to
change a majority of the members of the board of directors.
Furthermore, our certificate of incorporation authorizes, and we have
adopted, a preferred share purchase rights plan, commonly referred to as a
"poison pill." Under the rights plan, we made a dividend distribution to the
stockholders of record on November 6, 1996 of one right to purchase from us one
one-hundredth of a share of our preferred stock for each outstanding share of
our common stock. The terms of the rights and the circumstances under which they
may be exercised are contained in a rights agreement, which has been filed with
the SEC. These terms have been designed to deter hostile takeovers of us, even
though our stockholders might favor a takeover, especially if it were to afford
them an opportunity to sell their stock at a price above the prevailing market
rate.
OUR STOCK PRICE IS VOLATILE AND COULD DROP PRECIPITOUSLY AND
UNEXPECTEDLY.
Our common stock currently trades on The Nasdaq National Market. The
prices of publicly traded stock often fluctuate. The price of our stock may rise
or fall dramatically, even though our business performance has not changed. In
the past, the stock price of technology companies has been especially volatile.
We expect that this will continue to be the case.
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In addition to these fluctuations, an investment in our stock could be
affected by a wide variety of factors that relate to our business and industry,
many of which are outside of our control. For example, the value of our common
stock could be affected by:
- new product introductions;
- innovations by competitors;
- our competitors' announcements of their financial results;
- the failure of our operating results to meet or exceed the
expectations of investors and analysts;
- changes in financial estimates and recommendations by security
analysts;
- general economic conditions;
- disputes over patents or other proprietary rights;
- new or existing litigation, including our litigation with
Roche;
- publicity;
- regulations;
- market conditions; and
- fluctuations in our performance and the performances of our
licensees.
WE DO NOT PLAN TO PAY ANY CASH DIVIDENDS ON OUR COMMON STOCK.
We have never paid cash dividends on our common stock. We have no plans
to pay cash dividends in the foreseeable future.
THE VALUE OF THE COMMON STOCK MAY BE DILUTED IN THE FUTURE.
Our officers, directors, employees and consultants have options to
purchase a significant aggregate amount of our common stock. If they exercise
their options and purchase common stock, our common stock will be diluted. In
addition, we currently have preferred stockholders and convertible debenture
holders who have the right to convert their preferred shares and debentures, as
the case may be, to common stock. Our common stock would be diluted if these
preferred stockholders or convertible debenture holders decide to convert their
securities in the future. Moreover, our common stock could be further diluted if
we issue additional common stock or securities convertible into common stock in
the future, which we may need to do to raise funds for our business. Sales of
additional shares of our common stock or the conversion of securities into our
common stock could cause the market price of our common stock to decrease.
THIS PROSPECTUS INCLUDES FORWARD-LOOKING INFORMATION.
This prospectus and the documents incorporated in this prospectus by
reference include forward-looking statements under the Securities Act. In
addition from time to time, we or our representatives have made or may make
forward-looking statements orally or in writing. The words "may," "will,"
"expect," "anticipate," "believe," "estimate," "plan," "intend" and similar
expressions have been used in this prospectus and the documents incorporated in
this prospectus by reference to identify forward-looking statements. We have
based these forward-looking statements on our current views with respect to
future events and financial performance. Actual results could differ materially
20
<PAGE>
from those projected in the forward-looking statements. These forward-looking
statements are subject to risks, uncertainties and assumptions, including, among
other things:
- adverse results in our litigation with Roche;
- risks associated with managing and maintaining internal growth;
- competition, including market competition, competition in the
patent process and our ability to consummate contract
negotiations with prospective licensees;
- the possible termination of contracts with key licensees;
- changes in coverages or reimbursement practices of health
maintenance organizations and private insurers;
- adverse results in other litigation and in regulatory matters,
the adoption of adverse legislation or regulations, more
aggressive enforcement of existing legislation or regulations or
a change in the interpretation of existing legislation or
regulations;
- dependence on key members of management;
- other risks described in this "Risk Factors" section; and
- other risks described from time to time in our filings with the
SEC.
We are not obligated to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
All subsequent written and oral forward-looking statements attributable to us or
persons acting on our behalf are expressly qualified in their entirety by the
cautionary statements contained throughout this prospectus and the documents
incorporated in this prospectus by reference. Because of these risks,
uncertainties and assumptions, you should not place undue reliance on these
forward-looking statements.
WHERE TO FIND MORE INFORMATION
We are subject to the reporting requirements of the Securities Exchange
Act of 1934 and file annual, quarterly and current reports, proxy statements and
other information with the SEC. You may read and copy these reports, proxy
statements and other information at the SEC's public reference facilities at
Judiciary Plaza, 450 Fifth Street, N.W, Washington, D.C. 20549, Seven World
Trade Center, 13th floor, New York, New York 10048 and at Northwest Atrium
Center, 500 W Madison Street, Suite 1400, Chicago, Illinois 60661-2511. You can
request copies of these documents by writing to the SEC and paying a fee for the
copying cost. Please call the SEC at 1-800-SEC-0330 for more information about
the operation of the public reference facilities. SEC filings are also available
at the SEC's Web site at http://www.sec.gov. Our common stock is listed on the
Nasdaq National Market, and you can read and inspect our filings at the offices
of the National Association of Securities Dealers, Inc. at 1735 K Street,
Washington, D.C. 20006.
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This prospectus is only part of a Registration Statement on Form S-3
that we have filed with the SEC under the Securities Act of 1933 and therefore
omits certain information contained in the Registration Statement. We have also
filed exhibits and schedules with the Registration Statement that are excluded
from this prospectus, and you should refer to the applicable exhibit or schedule
for a complete description of any statement referring to any contract or other
document. You may inspect a copy of the Registration Statement, including the
exhibits and schedules, without charge, at the public reference room or obtain a
copy from the SEC upon payment of the fees prescribed by the SEC.
INCORPORATION OF DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" information that we
file with them. Incorporation by reference allows us to disclose important
information to you by referring you to those other documents. The information
incorporated by reference is an important part of this prospectus, and
information that we file later with the SEC will automatically update and
supersede this information. We filed a Registration Statement on Form S-3 under
the Securities Act of 1933 with the SEC with respect to the common stock being
offered pursuant to this prospectus. This prospectus omits certain information
contained in the Registration Statement, as permitted by the SEC. You should
refer to the Registration Statement, including the exhibits, for further
information about us and the common stock being offered pursuant to this
prospectus. Statements in this prospectus regarding the provisions of certain
documents filed with, or incorporated by reference in, the Registration
Statement are not necessarily complete and each statement is qualified in all
respects by that reference. Copies of all or any part of the Registration
Statement, including the documents incorporated by reference or the exhibits,
may be obtained upon payment of the prescribed rates at the offices of the SEC
listed above. We incorporate by reference the documents listed below and any
future filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 until we sell all of our shares of common stock
covered by the registration statement. The documents we are incorporating by
reference are:
- Annual Report on Form 10-K for the year ended March 31, 2000;
- Quarterly Reports on Form 10-Q for the quarters ended June 30;
and September 30, 2000;
- Current Report on Form 8-K, dated June 29, 2000;
- Proxy Statement dated July 31, 2000;
- Current Report on Form 8-K, dated October 2, 2000;
- Current Report on Form 8-K, dated December 5, 2000;
- Current Report on Form 8-K, dated January 2, 2001; and
- The description of our common stock contained in our
Registration Statement on Form 8-A filed with the SEC on
December 10, 1996 including any amendments or reports filed
for the purpose of updating such description.
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Upon request, we will provide without charge to each person to whom a
copy of this prospectus has been delivered a copy of any information that was
incorporated by reference in the prospectus (other than exhibits to documents,
unless the exhibits are specifically incorporated by reference into the
prospectus). We will also provide upon request, without charge to each person to
whom a copy of this prospectus has been delivered, a copy of all documents filed
by us from time to time with the SEC pursuant to the Securities Exchange Act of
1934. Requests for copies should be directed to:
IGEN International, Inc.
16020 Industrial Drive
Gaithersburg, MD 20877
Attention: George Migausky, Chief Financial Officer
Telephone: (301) 869-9800
This prospectus is part of a Registration Statement we filed with the
SEC. You should rely only on the information incorporated by reference in or
provided in this prospectus and the Registration Statement. We have not
authorized any other person to provide you with different information. We are
not making an offer of these securities in any state where the offer is not
permitted. You should not assume that the information in this prospectus is
accurate as of any date other than the date on the front of this document.
USE OF PROCEEDS
We cannot guarantee that we will receive any proceeds in connection
with this offering.
The principal purposes of this offering are to increase our
capitalization and our operating and financial flexibility. As of the date of
this prospectus, we cannot specify with certainty all of the particular uses for
the net proceeds we will have upon completion of this offering and our
management will have broad discretion in the application of net proceeds, if
any.
We anticipate that we would use the net proceeds of this offering, if
any, to fund research and development (including, without limitation, programs
that may be established under one or more potential corporate alliances), to
fund product manufacturing, to provide working capital, and for general
corporate purposes. We may also use a portion of the net proceeds to acquire or
invest in businesses, products and technologies that are complementary to our
own, although no acquisitions are planned or being negotiated as of the date of
this prospectus, and no portion of the net proceeds has been allocated for any
specific acquisition. Pending these uses, the net proceeds will be invested in
investment-grade, interest-bearing securities.
Based upon our current operating plan, we believe that our available
cash and existing sources of revenue and interest earned thereon, will be
adequate to satisfy our capital needs until at least the middle of year 2001,
which would be extended if we successfully complete the sale of some or all of
the shares in this offering.
PLAN OF DISTRIBUTION
We may offer the common stock:
- directly to purchasers, including in connection with any potential
settlement of on-going litigation;
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- to or through underwriters;
- through dealers, agents or institutional investors; or
- through a combination of such methods.
Regardless of the method used to sell the common stock, we will provide
a prospectus supplement that will disclose:
- the identity of any underwriters, dealers, agents or investors who
purchase the common stock;
- the material terms of the distribution, including the number of
shares sold and the consideration paid;
- the amount of any compensation, discounts or commissions to be
received by the underwriters, dealers or agents;
- the terms of any indemnification provisions, including
indemnification from liabilities under the federal securities
laws; and
- the nature of any transaction by an underwriter, dealer or agent
during the offering that is intended to stabilize or maintain
the market price of the common stock.
LEGAL MATTERS
The validity of the issuance of the common stock offered in this
prospectus is being passed upon for us by Kirkpatrick & Lockhart LLP.
EXPERTS
The consolidated financial statements incorporated in this prospectus
by reference from IGEN's Annual Report on Form 10-K for the year ended March 31,
2000 have been audited by Deloitte & Touche LLP, independent auditors, as stated
in their report, which is incorporated herein by reference and have been so
incorporated in reliance upon the report of such firm given upon their authority
as experts in accounting and auditing.
INDEMNIFICATION
The Company's Bylaws provide that the Company shall indemnify its
directors and officers to the fullest extent not prohibited by the General
Corporation Law of the State of Delaware; provided, however, that the Company
may modify the extent of such indemnification by individual contracts with its
directors and officers; and, provided, further, that the Company shall not be
required to indemnify any director or officer in connection with any proceeding
(or part thereof) initiated by such person unless (i) such indemnification is
expressly required by law, (ii) the proceeding was authorized by the Board of
Directors of the Company, (iii) such indemnification is provided by the Company,
in its sole discretion, pursuant to the powers vested in the Company by the
General Corporation Law of the State of Delaware, or (iv) such indemnification
is otherwise required by law, by agreement, or by vote of the stockholders or
disinterested directors. Pursuant to these Bylaw provisions, the Company has
entered into indemnity agreements with each of its directors and executive
officers and has obtained director and officer liability insurance in the amount
of $25,000,000.
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Section 145 of the General Corporation Law of the State of Delaware
permits a corporation, under specified circumstances, to indemnify its
directors, employees or agents against expenses (including attorney's fees),
judgments, fines and amounts paid in settlements actually and reasonably
incurred by them in connection with any action, suit or proceeding brought by
third parties by reason of the fact that they were or are directors, officers,
employees or agents of the corporation, if such directors, officers, employees
or agents acted in good faith and in a manner they reasonably believed to be in
or not opposed to the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reason to believe their conduct was
unlawful. In a derivative action, i.e., one by or in the right of the
corporation, indemnification may be made only for expenses actually and
reasonably incurred by directors, officers, employees or agents in connection
with the defense or settlement of an action or suit, and only with respect to a
matter as to which they shall have acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the
corporation, except that no indemnification shall be made if such person shall
have been adjudged liable to the corporation, unless and only to the extent that
the court in which the action or suit was brought shall determine upon
application that the defendant directors, officers, employees or agents are
fairly and reasonably entitled to indemnity for such expenses despite such
adjudication of liability.
Article VI of the Company's Certificate of Incorporation states that
directors of the Company will not be personally liable to the Company or its
stockholders for monetary damages for any breach of fiduciary duty as a
director, except for liability (i) for any breach of the director's duty of
loyalty to the company or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the General Corporation Law of the state of
Delaware, which makes directors liable for unlawful dividends or unlawful stock
repurchases or redemptions or (iv) for any transaction from which the director
derived an improper personal benefit. The Company's Certificate of Incorporation
further provides that if the General Corporation Law of the State of Delaware is
amended to authorize corporate action further eliminating or limiting the
personal liability of directors, then the liability of the Company's directors
shall be eliminated or limited to the fullest extent permitted by the General
Corporation Law of the State of Delaware, as so amended.
COMMISSION POLICY
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling us, we have
been informed that in the opinion of the SEC such indemnification is against
public policy as expressed in the Securities Act and is therefore unenforceable.
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We have not authorized any dealer, salesperson or other person to give
any information or represent anything not contained in this prospectus. You must
not rely on any unauthorized information. If anyone provides you with different
or inconsistent information, you should not rely on it. This prospectus does not
offer to sell any shares in any jurisdiction where it is unlawful. The
information in this prospectus is current as of the date shown on the cover
page.
[LOGO] IGEN International, Inc.
3,000,000 Shares of Common Stock
----------------------------------------------
PROSPECTUS
----------------------------------------------
January __, 2001
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PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the Company's estimates (other than the
SEC and Nasdaq registration fees) of the expenses in connection with the
issuance and distribution of the shares of common stock being registered.
ITEM AMOUNT
SEC registration fee.................................. $ 8,460
Nasdaq listing fee.................................... $ 4,230
Legal fees and expenses............................... $ 25,000
Accounting fees and expenses.......................... $ 10,000
Miscellaneous fees and expenses....................... $ 5,310
___________
Total $ 53,000
------------------------------ ===========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
See "Indemnification" contained in Part I hereof, which is incorporated
herein by reference.
ITEM 16. EXHIBITS
INSERT
EXHIBIT
NUMBER DESCRIPTION
4.7 Form of Common Stock Certificate (Previously filed and
incorporated by reference to Registration Statement on
Form 8-A of the Company filed with the Securities and
Exchange Commission on December 10, 1996)
5.1* Opinion of Kirkpatrick & Lockhart LLP regarding
legality
23.1* Consent of Kirkpatrick & Lockhart LLP (see Exhibit 5.1)
23.2* Consent of Deloitte & Touche LLP
24.1 Power of Attorney (included on signature page)
------------------------------
*Filed herewith
-----------------------------
ITEM 17. UNDERTAKINGS
A. Rule 415 Offering.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
<PAGE>
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a 20% change
in the maximum aggregate offering price set forth in the "Calculation of
Registration Fees" table in the effective registration statement.
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement;
provided, however, that paragraphs (A)(1)(i) and (A)(1)(ii) do not apply if the
registration statement is on Form S-3 or Form S-8, and 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 Section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each 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
the offering.
B. Filings Incorporating Subsequent Exchange Act Documents by Reference.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1954 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
C. Registration Statement Permitted by Rule 430A under the Securities Act
of 1933.
The undersigned registrant hereby undertakes that:
II-2
<PAGE>
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 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 of 1933 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 of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
D. Request for Acceleration of Effective Date.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, may be permitted to directors, officers, and controlling persons of
the registrant pursuant to the provisions described in Item 15 or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer, or controlling
person of the registrant in the successful defense of any action suit, or
proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 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, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Amendment
No. 1 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Gaithersburg and State of
Maryland on the 10th day of January, 2001.
IGEN INTERNATIONAL, INC.
By /s/ Samuel J. Wohlstadter
-------------------------------
Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1
to the Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
SIGNATURE TITLE DATE
Chairman, Chief
/s/ Samuel J. Wohlstadter* Executive Officer
------------------------------ (Principal Executive January 10, 2001
Samuel J. Wohlstadter Officer); Director ------------------
Vice President and Chief
/s/ George V. Migausky* Financial Officer
------------------------------ (Principal Financial January 10, 2001
George V. Migausky and Accounting Officer) ------------------
/s/ Richard J. Massey*
------------------------------ January 10, 2001
Richard J. Massey President; Director ------------------
/s/ Richard W. Cass*
------------------------------ January 10, 2001
Richard W. Cass Director ------------------
<PAGE>
SIGNATURE TITLE DATE
/s/ Anthony Rees* January 10, 2001
------------------------------ ------------------
Anthony Rees Director
/s/ Robert R. Salsmans* January 10, 2001
------------------------------ ------------------
Robert R. Salsmans Director
January 10, 2001
/s/ Joop Sistermans* ------------------
------------------------------
Joop Sistermans Director
------------------
*Executed by power-of-attorney
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
4.7 Form of Common Stock Certificate (Previously filed and
incorporated by reference to Registration Statement on Form
8-A of the Company filed with the Securities and Exchange
Commission on December 10, 1996).
5.1* Opinion of Kirkpatrick & Lockhart LLP regarding legality
23.1* Consent of Kirkpatrick & Lockhart LLP (see Exhibit 5.1)
23.2* Consent of Deloitte & Touche LLP
24.1 Power of Attorney (included on signature page)
-------------------------------
*Filed herewith
-----------------------
