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As filed with the Securities and Exchange Commission on December 21, 1999
Registration No. 333-89365
SECURITIES AND EXCHANGE COMMISSION
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
INKINE PHARMACEUTICAL COMPANY, INC.
(Exact name of registrant as specified in its charter)
NEW YORK 13-3754005
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation organization)
1720 WALTON ROAD, SUITE 200, BLUE BELL, PENNSYLVANIA 19422,
(610) 260-9350 (Address, including zip code, and telephone number, including
area code, of registrant's principal executive
offices)
LEONARD S. JACOB, M.D., PH.D.
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
INKINE PHARMACEUTICAL COMPANY, INC.
1720 WALTON ROAD, BLUE BELL, PENNSYLVANIA 19422, (610)260-9350
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies of all communications to:
CHARLES C. ZALL, ESQUIRE
SAUL, EWING, REMICK & SAUL LLP
1500 MARKET STREET, 38TH FLOOR, PHILADELPHIA,
PENNSYLVANIA 19102-2186, (215) 972-7701
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.[ ]
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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.
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PROSPECTUS
3,069,229 SHARES
INKINE PHARMACEUTICAL COMPANY, INC.
COMMON STOCK, PAR VALUE $.0001 PER SHARE
The shareholders named on page 12 are selling up to 3,069,229 shares of
InKine's stock. No shares will be sold by InKine.
InKine's common stock is traded on the Nasdaq SmallCap Market under the
symbol "INKP". On December 17, 1999, the reported closing price of the common
stock was $2.00 per share. InKine's principal executive offices are located at
1720 Walton Road, Suite 200, Blue Bell, PA 19422, and its telephone number is
(610) 260-9350.
THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK. SEE "RISK FACTORS" BEGINNING
ON PAGE 1 OF THIS PROSPECTUS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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THE DATE OF THIS PROSPECTUS IS DECEMBER __, 1999
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TABLE OF CONTENTS
<TABLE>
<S> <C>
RISK FACTORS........................................................ 1
RECENT EVENTS....................................................... 11
USE OF PROCEEDS..................................................... 11
SELLING SHAREHOLDERS................................................ 12
PLAN OF DISTRIBUTION................................................ 13
AVAILABLE INFORMATION............................................... 14
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE..................... 14
LEGAL MATTERS....................................................... 15
EXPERTS............................................................. 15
</TABLE>
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RISK FACTORS
Investing in InKine's common stock is very risky. You should be able to
bear a complete loss of your investment. This prospectus and the documents
included in this prospectus contain forward-looking statements that involve
risks or uncertainties. Actual events or results may differ from those discussed
in this prospectus and the documents included in this prospectus. Factors that
could cause or contribute to such differences include, but are not limited to,
the factors discussed below as well as those discussed elsewhere in this
prospectus and in the documents included in this prospectus.
IF INKINE DOES NOT OBTAIN ADDITIONAL CAPITAL IN THE NEAR TERM, THEN IT
MAY NOT BE ABLE TO CONTINUE ITS OPERATIONS BEYOND JUNE 30, 2000.
InKine needs substantial additional capital to develop, manufacture and
market its proposed products. Specifically, InKine will spend funds for the
following:
- - Researching and developing its proposed products, including
participating in human clinical trials and animal studies conducted
before clinical trials;
- - Seeking necessary approvals from the government;
- - Developing manufacturing and distribution capabilities; and
- - Funding InKine's growth as a company.
InKine believes that its current capital resources will fund its
operations through June 30, 2000. The following factors may affect InKine's
future capital requirements:
- - Continued progress in its research and development activities;
- - Successful progress with human clinical trials and animal studies
conducted before clinical trials;
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- - Prosecution and enforcement of patent claims;
- - Technology and market developments;
- - The cost of manufacturing;
- - Effectiveness of marketing activity; and
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- - Entering into joint arrangements for marketing and manufacturing its
products.
InKine regularly seeks funding for its operations from a variety of
sources, including public and private securities offerings, loans and joint
arrangements with partners. InKine currently does not possess a commitment to
obtain additional funding, and it may never receive additional funding in the
future. If InKine fails to obtain additional funding, InKine will delay, scale
back or eliminate its research and development activities or enter into
arrangements with others to develop and market certain proposed products that
InKine may otherwise have developed itself.
INKINE HAS NOT GENERATED ANY REVENUE TO DATE. IF INKINE CONTINUES TO INCUR
SUBSTANTIAL LOSSES, THEN THE VALUE OF INKINE'S COMMON STOCK IS LIKELY TO BE
REDUCED. ALSO, INKINE MAY NEVER ACHIEVE A PROFITABLE LEVEL OF OPERATION.
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To date, InKine has engaged solely in the research and development of
proposed drug products. InKine has never generated any revenue from product
sales or royalties and has incurred losses in each year since its inception on
July 1, 1993. As of June 30, 1999, InKine had an accumulated deficit of
approximately $23.1 million.
InKine's proposed products are in various stages of development and
require significant research, development and testing. InKine must obtain all of
the necessary government approvals for its products before it can sell any
proposed product. As a result, InKine believes its losses will increase further
in the foreseeable future as it develops its products.
If InKine's research spending in the foreseeable future is greater than
potential sales revenue, then it may never be able to conduct its operations at
a profit. InKine's common stock is likely to decrease in value if InKine is
unable to generate profits or if the market believes that InKine is unable to do
so.
InKine has granted or committed to grant shares and options to founding
scientists and consultants when InKine achieves certain product development
goals. These goals relate to InKine filing with the U.S. Food and Drug
Administration, or FDA, and achieving certain sales targets. As a result,
InKine's potential earnings per share will decrease because of the necessary
accounting treatment of these options.
IF INKINE CANNOT FULLY DEVELOP, MANUFACTURE, AND SELL A PRODUCT, THEN IT MAY
NEVER GENERATE ANY REVENUES.
InKine has not developed any product to date. Accordingly, InKine has
not generated any revenue to date. InKine will not realize significant revenues
from product sales or royalties for several years, if ever.
InKine's technologies and products must undergo significant,
time-consuming and costly development and testing before InKine can manufacture
and market them. These efforts may fail to produce safe, effective products with
medical benefits which will be approved by the government.
Even if InKine successfully develops its products and receives all
necessary approvals, it may not effectively market or manufacture its products.
InKine plans to enter into alliances or other arrangements with marketing and
manufacturing companies. If InKine does not enter into an arrangement with a
marketing or manufacturing company, InKine may never manufacture or market its
products. If InKine successfully enters into an arrangement with a marketing or
manufacturing company, InKine may receive less revenue when its products are
manufactured
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and sold then it would have received if it had manufactured and marketed the
products itself.
IF INKINE DOES NOT OBTAIN REQUIRED APPROVALS FROM THE GOVERNMENT, THEN INKINE
MAY NOT SUCCESSFULLY MARKET OR SELL ITS PRODUCTS.
Numerous government agencies, including the FDA, regulate InKine's
business. Federal, state and foreign government agencies impose rigorous
preclinical and clinical testing and approval requirements on InKine's proposed
products. For example, the FDA requires multiple stages of tests, known as phase
I, II and III clinical trials, on all pharmaceutical products. In addition, the
FDA must confirm that the federal regulations regarding good manufacturing
practices, or GMP, are maintained during testing and manufacturing of the
products at all manufacturing facilities used by InKine. The process to obtain
government approvals of a pharmaceutical product takes many years and requires
substantial resources.
The FDA may delay or deny the approval of InKine's proposed products.
If the FDA delays or denies approval of a proposed product, then InKine may
delay or stop marketing this product. InKine does not believe it is subject to
risks which are materially different than other pharmaceutical companies seeking
FDA approval, but the process of obtaining FDA approval is expensive,
time-consuming and often filled with unexpected problems. Even if InKine
receives approval of a product candidate, it may be conditioned upon certain
limitations and restrictions for the drug's use and may be subject to continuous
review. If InKine fails to comply with any applicable regulatory requirements,
it could be subject to penalties, including:
- - warning letters;
- - fines;
- - withdrawal of regulatory approval;
- - product recalls;
- - operating restrictions;
- - injunctions; and
- - criminal prosecution.
1. FDA marketing approval:
Before InKine may market a product, the FDA reviews all phases
of InKine's drug development and marketing programs. The first step in the FDA
approval process is the accumulation of scientific studies, commonly referred to
as preclinical studies, which show early safety of a proposed drug product in
animals. InKine submits the results of the preclinical studies to the FDA as
part of an investigational new drug application, commonly referred to as an IND.
Once the IND is approved, human clinical trials (phase I, II and III) may be
conducted. InKine then submits the results of these trials to the FDA as part of
a new drug application, or NDA. After InKine files the NDA, the FDA may approve
the product for marketing, require additional testing or deny the application.
2. FDA manufacturing approval:
Detailed manufacturing information is also required to be included in
the NDA for review and approval by the FDA. All manufacturing facilities and
processes must comply with GMP regulations prescribed by the FDA. All
manufacturers must, among other things, pass manufacturing plant inspections and
provide records of detailed manufacturing processes. Among other things, drug
manufacturers must demonstrate that:
- - the drug product can be consistently manufactured at the same quality
standard;
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- the drug product is stable over time; and
- the level of chemical impurities in the drug product are under
a designated level.
For example, the FDA has not approved InKine's manufacturing
process for DIACOL(TM). DIACOL(TM) is one of InKine's proposed products that is
taken in tablet form and used to clean the colon for medical purposes. The FDA
may delay or prevent InKine from marketing DIACOL(TM) if InKine does not
consistently manufacture appropriate amounts of DIACOL(TM) or cannot repeat the
manufacturing process used to manufacture the phase III clinical trial batches
of DIACOL(TM).
3. FDA oversight after product approval:
The FDA will regulate InKine after a product has been
approved. The FDA may require post-marketing testing and surveillance to monitor
the effects of an approved product. The FDA may also place conditions on any
approvals that could restrict the sale or use of a product.
4. Status of InKine's products in the FDA approval process:
InKine's proposed products are in various stages of
development and in various stages of the FDA approval process, as set forth
below:
- DIACOL(TM). InKine has completed a phase I, IIb, and two phase III
clinical trials for DIACOL(TM). InKine submitted a NDA for
DIACOL(TM) to the FDA on November 23, 1999. InKine is awaiting FDA
approval to begin marketing DIACOL(TM).
- CBP-1011. CBP-1011 is a compound developed by InKine for the
treatment of idiopathic thrombocytopenic purpura, or ITP, an
autoimmune disease which causes spontaneous bleeding. CBP-1011 is
currently in phase III clinical trials. InKine refers to CBP-1011
and certain related products as the Fc receptor technology.
- Thrombospondin technology products. InKine has acquired an
exclusive worldwide license to a cancer treatment technology known
as the thrombospondin technology. InKine is evaluating a number of
product opportunities utilizing the thrombospondin technology in
the area of cancer treatment, which are in the early stages of
development (before phases I, II and III). InKine has not begun
human clinical trials for these products.
InKine may never receive FDA approval for any of these products, and
without FDA approval, InKine may not manufacture, market or sell these products.
IF INKINE DOES NOT DEVELOP AND MAINTAIN RELATIONSHIPS WITH MANUFACTURERS, THEN
IT MAY NOT SUCCESSFULLY MANUFACTURE AND SELL ITS PRODUCTS.
InKine does not possess the capabilities, resources or facilities to
manufacture any of its proposed products. InKine must contract with
manufacturers to produce its proposed products on a commercial scale as required
by government regulations. InKine's future development and delivery of its
products on a timely, profitable and competitive basis depends on the
performance of these manufacturers. A limited number of manufacturers exist
which are capable of manufacturing InKine's proposed products. InKine may fail
to contract with the necessary manufacturers or InKine's contracts with
manufacturers may not be financially acceptable to InKine.
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Manufacturers may utilize their own technology, InKine's technology or
technology obtained from others in developing a manufacturing process for
InKine's products. InKine may pay a license fee to the manufacturer if InKine
utilizes the manufacturing process developed by the manufacturer or if it seeks
a third party to participate in the development process.
InKine has retained Pharmaceutical Manufacturing Research Services, a
manufacturing development company, to develop a manufacturing process for
DIACOL(TM) which meets the FDA requirements. InKine is currently seeking an
appropriate manufacturer to produce CBP-1011 and other proposed products. InKine
may be unable to develop a cost-effective manufacturing process for these
products.
If InKine does not develop and maintain either internal or external marketing
capabilities, then it may not successfully sell its products.
InKine has no experience in marketing, distributing and selling
pharmaceutical products. InKine may contract with third parties which specialize
in marketing, selling and distributing pharmaceutical products or try to build
an internal sales and marketing operation. If InKine chooses to utilize third
parties for sales and marketing then InKine will exert limited control over
these third parties and the amount and timing of resources which will be devoted
to InKine's products. InKine may not achieve its desired amount of revenue from
product sales if these third parties fail to market and sell InKine's products
effectively or in the manner required by InKine.
InKine may establish an internal sales and marketing force. If InKine
chooses to follow this strategy, then InKine will have to spend significant
additional funds and devote significant resources and time to establish this
internal sales and marketing force. Because of InKine's inexperience in these
areas, however, it may not successfully implement an internal sales and
marketing force which is competitive or cost effective.
If InKine cannot develop and market its products as rapidly or cost-effectively
as its competitors, then InKine will not be able to conduct its operations at a
profit.
InKine is developing products that will compete in three very
competitive segments of the pharmaceutical industry. The three segments are
those which include (i) DIACOL(TM), (ii) CBP-1011, and (iii) the thrombospondin
technology. Based on total assets and revenues, InKine is significantly smaller
than the majority of its competitors in these segments. Therefore, InKine may
encounter significant competition with respect to each of its potential
products, primarily from the following competitors:
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PRODUCT CANDIDATES
<TABLE>
<CAPTION>
Thrombospondin
DIACOL(TM) CBP-1011 Technology
<S> <C> <C> <C>
COMPETITORS Braintree Laboratories, La Jolla Pharmaceutical Boston Life Sciences,
Inc. Company Inc.
C.B. Fleet Company, Inc. GeneLabs Technologies, Inc. Entremed, Inc.
Schwarz Pharma Inc. IDEC Pharmaceuticals Human Genome Sciences
Corporation
Immune Response
Corporation
Autoimmune, Inc.
Anergen, Inc.
</TABLE>
The financial strength of InKine's competitors is particularly
important in the pharmaceutical industry, where technological innovations occur
rapidly. These technological innovations can dramatically affect the price and
effectiveness of a product line, and they can render a competing product line
obsolete. InKine's competitors that have strong financial resources may develop
competitive products that are cheaper and more effective than InKine's products.
These competitive products may render InKine's products unmarketable or
non-competitive. Even if InKine's competitors do not develop better and more
cost effective products, they may manufacture and market their products more
successfully than InKine. Therefore, InKine's competitors may capture all or a
large segment of InKine's market, severely restricting InKine's ability to
achieve a profitable level of product sales.
In addition to InKine's competitors in the pharmaceutical industry,
colleges and universities, hospitals, government agencies and other research
organizations are conducting research and seeking patent protection for a
variety of products which may compete with InKine's products. Any of these
organizations could develop products which could render InKine's products
obsolete or non-competitive.
If the owners of technology licensed to InKine terminate InKine's license
agreements, then InKine could be prevented from developing, manufacturing or
selling the product covered by that license.
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InKine has acquired the worldwide exclusive right to market DIACOL(TM), the Fc
receptor technology and the thrombospondin technology under various license
agreements. Each of the owners of the technology licensed to InKine may
terminate the license prior to its expiration date under certain circumstances,
including InKine's failure to comply with commitments related to the development
of the products specified in the licenses. For example, some of InKine's
licensing agreements require InKine to spend specific amounts for research and
development of its products. If InKine does not comply with the terms of these
agreements, the owners of the licensed technology could demand the return of all
rights to the licensed technology, and force InKine to cease developing,
manufacturing or selling the products covered by that license.
IF INKINE IS UNABLE TO PROTECT ITS INTELLECTUAL PROPERTY, THEN INKINE'S
COMPETITORS MAY DEVELOP SIMILAR PRODUCTS WHICH COULD RENDER INKINE'S PRODUCTS
OBSOLETE.
InKine's success depends, in part, on its ability to develop and
maintain a strong patent position for its products and technologies both in the
United States and other countries. As with most biotechnology and pharmaceutical
companies, our patent position is highly uncertain and involves complex legal
and factual questions. Without patent and other protections, other companies
could offer substantially identical products for sale without incurring the
sizeable development and testing costs that InKine has incurred. InKine's
ability to recoup these expenditures and realize profits upon sale of product
could be diminished.
InKine cannot be certain that its:
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- patents will issue from any of its patent applications;
- patent rights will be sufficient to protect its technology;
- patents will not be successfully challenged or circumvented by
competitors; or
- patent rights will provide it with any commercial advantages.
The process of obtaining patents can be time consuming and expensive.
Even after significant expenditure, a patent may not issue. InKine can never be
certain that it was the first to develop the technology or that it was the first
to file a patent application for the particular technology because U.S. patent
applications are maintained in secrecy until a patent issues and publications in
the scientific or patent literature lag behind actual discoveries.
Even after InKine is issued patent rights, it cannot be certain that:
- others will not develop similar technologies or duplicate the
technology;
- others will not design around the patented aspects of the
technology;
- InKine will not be obliged to defend itself in court against
allegations of infringement of third-party patents;
- InKine's issued patents will be held valid in court; or
- an adverse outcome in a suit would not subject InKine to
significant liabilities to third parties, require rights to be
licensed from third parties, or require InKine to cease using
such technology.
In 1997, the U.S. Patent and Trademark Office issued a patent covering
the use of DIACOL(TM) as a colonic cleansing agent or as a laxative. InKine has
filed patent applications for DIACOL(TM) under the Patent Cooperation Treaty
which designate Europe and Canada.
One of InKine' products, CBP-1011 (within the Fc receptor technology),
is not patentable. Instead of a patent, InKine expects that CBP-1011 will
receive protection based on FDA designation of Orphan Drug Status, which means
the FDA determines that the number of people affected by the disease to be
treated by the drug is less than 200,000, and that having numerous companies
compete for the market is unrealistic and likely to harm, rather than help,
prospective users of the product. If InKine receives this designation, InKine
will have an exclusive right to sell CBP-1011 for seven years.
Patents or patent applications are pending for InKine's TSP-1 peptide,
one of the thrombospondin technology compounds. The area of cancer technology is
complex and the patents covering InKine's TSP-1 peptide may not be adequate.
InKine has also obtained the rights to foreign patents, and intends to
apply for additional foreign patents, for other products and technologies.
Competitors could challenge or develop around the patents, or the scope of the
patents may not be adequate to protect the patented product from competitors.
The commercial success of InKine's products will also depend upon InKine's
ability to make sure the products do not infringe on patents issued to
competitors. InKine has not conducted a search to determine if there are any
patents similar to those covering
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DIACOL(TM) or the TSP-1 peptide.
InKine's employees or scientific consultants may develop inventions or
processes independently that may be related to InKine's products. These
employees or consultants could claim ownership of these inventions or processes,
and these claims could succeed. InKine may need to enter into protracted and
costly litigation to enforce or determine the scope of its proprietary rights.
Certain of InKine's patents, in particular the patents covered under
the thrombospondin technology and the Fc receptor technology may have been
developed with funds from government agencies or academic institutions. Although
InKine has acquired the rights to use such patents, these agencies or
institutions may have certain rights to the inventions, including rights to the
royalty-free use, but not sale, of the invention or technology for its own
purposes.
IF INKINE DOES NOT RECEIVE ADEQUATE REIMBURSEMENT FROM THE GOVERNMENT, MANAGED
CARE ORGANIZATIONS AND PRIVATE INSURANCE PLANS, THEN SOME PATIENTS MAY BE UNABLE
OR UNWILLING TO PURCHASE INKINE'S PRODUCTS AND INKINE WILL ACHIEVE LESS REVENUE
FROM PRODUCT SALES.
Successful sales of InKine's products in the United States and other
countries depends on the availability of adequate reimbursement from the
government, managed care organizations and private insurance plans.
Reimbursement by
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these organizations depends on a number of factors, including product features
such as safety, medical necessity, cost and the experimental nature of the
product. InKine will spend significant amounts of time and other resources to
obtain reimbursement for its products. The organizations which provide
reimbursement routinely limit reimbursement and attempt to exert significant
pressure on medical suppliers to lower their prices. InKine cannot predict the
amounts or reliability of reimbursement because reimbursement for pharmaceutical
products incorporating new technology is historically unpredictable in the
pharmaceutical industry. Additionally, reimbursement varies from country to
country. InKine does not know what reimbursement, if any, will be available from
domestic or foreign reimbursement sources for its products.
IF THE HOLDERS OF INKINE'S OUTSTANDING OPTIONS AND WARRANTS EXERCISE SUCH
OPTIONS AND WARRANTS, THEN THE MARKET PRICE OF THE COMMON STOCK MAY DROP.
InKine has a total of approximately 11 million options and warrants
outstanding. In addition, InKine can issue an additional 1.9 million options
pursuant to InKine's option plans. To date, option and warrant holders have
exercised approximately 843,000 options and warrants in the aggregate at prices
ranging from $0.50 to $1.37. InKine believes options and warrants may be
exercised when InKine will be able to obtain additional financing on more
favorable terms. The exercise of these outstanding warrants and options and the
sale of the related shares may cause InKine's common stock price to drop.
IF INKINE'S COMMON STOCK CONTINUES TO BE VOLATILE AND THINLY TRADED, THEN
INKINE'S SHAREHOLDERS MAY NOT BE ABLE TO SELL THEIR SHARES WHEN DESIRED.
The market price of InKine's common stock, similar to other
development-stage public pharmaceutical or biotechnology companies, has been
volatile and may remain volatile for the foreseeable future. Several factors may
affect InKine's stock price in the future, including:
- product testing results;
- technology innovations;
- new products;
- government regulations;
- changes in proprietary rights; and
- litigation.
InKine's shareholders may not sell their shares when they desire
because the stock price is highly volatile and the stock is not widely traded.
For example, the number of InKine's shares theoretically available for sale in
any one day is approximately 19,400,000 shares and its average daily trading
volume has historically been approximately 146,000 shares. If InKine's stock
continues to trade thinly, InKine's shareholders may not be able to sell their
shares when desired.
IF INKINE DOES NOT MAINTAIN THE NECESSARY STANDARDS FOR LISTING ON THE NASDAQ
SMALLCAP MARKET, THEN
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INKINE'S SHAREHOLDERS MAY NOT BE ABLE TO SELL THEIR SHARES WHEN DESIRED.
InKine's common stock is listed on the Nasdaq SmallCap Market. InKine
must meet specific requirements to maintain its listing. For example, Nasdaq
requires a minimum bid price of $1.00 per share. On several occasions in the
first two quarters of fiscal year 1999, the price of InKine's common stock
dropped below $1.00. InKine was not removed from Nasdaq on these occasions. If
the stock price drops below $1.00 in the future, Nasdaq may remove InKine from
listing.
If Nasdaq removes InKine's stock from listing, InKine's shareholders
would trade their shares in the over-the-counter market or electronic bulletin
board, commonly referred to as the "pink sheets". InKine's shareholders may have
difficulty selling their shares when they desire or obtaining accurate price
quotations if their shares trade on the pink sheets rather than Nasdaq.
If Nasdaq removes InKine's stock from listing and its price is below
$5.00 per share, these events will trigger the SEC's so called "penny stock"
rules. These rules impose additional sales practice requirements on
broker-dealers who sell these securities to certain purchasers. The
broker-dealers must make a special suitability determination for the purchase
and must obtain the purchaser's written consent to the transaction prior to
sale. If Nasdaq removes InKine's stock from listing and InKine becomes subject
to the penny stock rules, broker-dealers and shareholders of InKine may not be
able to sell their shares when desired.
IF INKINE DOES NOT HAVE ADEQUATE INSURANCE FOR PRODUCT LIABILITY CLAIMS, INKINE
MAY BE SUBJECT TO SIGNIFICANT EXPENSES RELATING TO THESE CLAIMS.
InKine is subject to significant product liability risks relating to
the testing, manufacturing and sale of the products being developed by InKine.
These risks include:
- InKine's proposed products could cause undesirable side
effects or injury during clinical trials;
- InKine's products could cause undesirable side effects or
injury when sold; or
- InKine may agree to reimburse others that incur liability
relating to its product.
InKine currently maintains insurance for product liability claims in
the amount of $10,000,000 per occurrence and $10,000,000 in the aggregate.
InKine has no way of knowing if these amounts will be adequate to cover any
product liability claims filed against it. If InKine does not or cannot maintain
adequate insurance coverage, InKine may incur a significant liability if a
product liability claim arises.
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IF INKINE'S CERTIFICATE OF INCORPORATION AND NEW YORK LAW CONTINUE TO CONTAIN
PROVISIONS THAT DISCOURAGE POTENTIAL TAKEOVERS, THEN INKINE'S SHAREHOLDERS MAY
NOT RECEIVE A PREMIUM FOR THEIR SHARES IN A TAKEOVER SITUATION AND WILL BE
SUBJECT TO CERTAIN RESTRICTIONS ON VOTING AND OTHER RIGHTS.
InKine's board of directors has the right, granted under InKine's
certificate of incorporation, to authorize certain preferred stock which may
have a variety of terms, commonly known as blank check preferred stock. The
board of directors may designate the rights and preferences of this stock
without shareholder approval. If the directors authorize and issue this stock,
potential purchasers of the company may be unable to purchase the common stock
at a premium over its market price. In addition, the issuance of this stock
could have a negative impact on the market price of the stock, and the voting
rights and other rights of the holders of the common stock.
New York corporate law places restrictions on transactions with
beneficial owners of 20% or more of the outstanding voting shares of a
corporation. These restrictions could reduce the potential for takeover of
InKine and therefore reduce the chances of shareholders receiving a premium for
their shares over the market price.
-16-
<PAGE> 23
-17-
<PAGE> 24
RECENT EVENTS
On September 20, 1999, InKine sold a total of 2,307,691 shares of
common stock and warrants to purchase 761,538 shares of common stock to The Tail
Wind Fund, Ltd., Resonance Limited, Oxford Bioscience Partners II L.P. and
Oxford Bioscience Partners (Bermuda) II Limited Partnership for a total purchase
price of $3 million. The warrants may be exercised at $1.78 per share. All of
the warrants, or part of the warrants, may be exercised at any time before
September 20, 2003. InKine agreed to file the registration statement, of which
this prospectus is a part, which enables the selling shareholders to sell their
shares, including the shares obtained on the exercise of the warrants. InKine
also agreed to reimburse the selling shareholders for liability caused by any
untrue statements of material fact or the failure to state a material fact in
this registration statement.
USE OF PROCEEDS
InKine will not receive any proceeds from the sale of the shares of
common stock by the selling shareholders. All proceeds will be received by the
selling shareholders.
-18-
<PAGE> 25
SELLING SHAREHOLDERS
The table below describes the amount of common stock owned by the
selling shareholders on December 21, 1999 and the number of shares of common
stock to be sold by them under this prospectus.
<TABLE>
<CAPTION>
PERCENTAGE OF PERCENTAGE OF
SHARES SHARES OWNED SHARES OWNED
SHARES OFFERED PRIOR TO AFTER
SELLING SHAREHOLDERS OWNED(1) HEREBY(1) OFFERING(2) CLOSING(2)
<S> <C> <C> <C> <C>
The Tail Wind Fund, Ltd. 2,046,153(3) 2,046,153(3) 7.7% 0
Resonance Limited 511,538(4) 511,538(4) 1.9% 0
Oxford Bioscience Partners II L.P. 2,042,406(5)(6) 292,406(5) 7.6% 6.6%
Oxford Bioscience Partners (Bermuda) 1,969,132(8) 219,132(7) 7.4% 6.6%
II Limited Partnership
</TABLE>
- -------------------------------------
(1) Assumes the exercise of all outstanding warrants owned by the selling
shareholders.
(2) Based on shares of common stock outstanding as of December 21, 1999 and
includes 761,538 shares of common stock which are issuable upon the
exercise of outstanding warrants owned by the selling shareholders.
(3) Includes 507,692 shares of common stock which are issuable upon the
exercise of outstanding warrants owned by the selling shareholder.
(4) Includes 126,923 shares of common stock which are issuable upon the
exercise of outstanding warrants owned by the selling shareholder.
(5) Includes 72,552 shares of common stock which are issuable upon the
exercise of outstanding warrants owned by the selling shareholder.
(6) This information is presented in reliance on information disclosed in a
Schedule 13-G filed by this selling shareholder, and includes 749,665
shares of common stock held by Oxford Bioscience Partners (Bermuda) II
Limited Partnership, an affiliate of the selling shareholder.
(7) Includes 54,371 shares of common stock which are issuable upon the
exercise of outstanding warrants owned by the selling shareholder.
(8) This information is presented in reliance on information disclosed in a
Schedule 13-G filed by this selling shareholder, and includes 1,000,335
shares of common stock held by Oxford Bioscience Partners II L.P., an
affiliate of the selling shareholder.
-19-
<PAGE> 26
PLAN OF DISTRIBUTION
InKine is registering all of the shares on behalf of the selling shareholders.
InKine will receive no proceeds from this offering. "Selling shareholders," as
used in this prospectus, includes anyone who receives the shares from the named
selling shareholders after the date of this prospectus. The selling shareholders
may sell their shares from time to time. The selling shareholders will act
independently of InKine in making decisions about the timing, manner and size of
each sale. The sales may be made on one or more exchanges or in the
over-the-counter market or otherwise, at prices and at terms then prevailing or
at prices related to the then current market price, or in negotiated
transactions. The selling shareholders may sell their shares by one or more of,
or a combination of, the following methods:
- purchases by a broker-dealer as principal and the resale by
such broker or dealer for its account pursuant to this
prospectus;
- ordinary brokerage transactions and transactions in which the
broker solicits purchasers;
- block trades in which the broker-dealer so engaged will
attempt to sell the shares as agent but may position and
resell a portion of the block as principal to facilitate the
transaction;
- in options transactions; and
- for shares that qualify for resale under Rule 144 of the
Securities Act of 1933, or the Securities Act, under that rule
rather than this prospectus.
The selling shareholders may enter into hedging transactions with
broker-dealers in
-20-
<PAGE> 27
connection with distributions of the shares or otherwise. In these transactions,
broker-dealers may engage in short sales of the shares in the course of hedging
the positions they assume with the selling shareholders. The selling
shareholders also may sell shares short and redeliver the shares to close out
these short positions. The selling shareholders may enter into option or other
transactions with broker-dealers which require the delivery to the broker-dealer
of the shares. The broker-dealer may then resell or otherwise transfer these
shares through this prospectus. The selling shareholders also may loan or pledge
the shares to a broker-dealer. The broker-dealer may sell the shares so loaned,
or upon a default the broker-dealer may sell the pledged shares by use of this
prospectus.
In effecting sales, broker-dealers engaged by the selling shareholders
may arrange for other broker-dealers to participate. Broker-dealers will receive
commissions or discounts from the selling shareholders in amounts to be
negotiated immediately prior to the sale. In offering the shares covered hereby,
the selling shareholders and any broker-dealers who execute sales for the
selling shareholders may be deemed to be "underwriters" within the meaning of
the Securities Act in connection with such sales. Any profits realized by the
selling shareholders and the compensation of any broker-dealer may be deemed to
be underwriting discounts and commissions. Because the selling shareholders may
be deemed to be underwriters, they will be subject to the prospectus delivery
requirements of the Securities Act. The selling shareholders have advised InKine
that they have not entered into any agreements, understandings or arrangements
with any underwriters or broker-dealers regarding the sale of the shares. There
is no underwriter or coordinating broker acting in connection with the proposed
sale of shares by the selling shareholders.
The shares will be sold only through registered or licensed brokers or
dealers if required under applicable state securities laws. In addition, in
certain states the shares may not be sold unless they have been registered or
qualified for sale in the applicable state or an exemption from the registration
or qualification requirement is available and is complied with.
Under applicable rules and regulations of the Securities Exchange Act
of 1934, or the Exchange Act, any person engaged in the distribution of the
shares may not simultaneously engage in market making activities with respect to
InKine's common stock for a period of two business days before the commencement
of this distribution. In addition, the selling shareholders will be subject to
applicable provisions of the Exchange Act and the associated rules and
regulations under the Exchange Act, including Regulation M, which provisions may
limit the timing of purchases and sales of shares of InKine's common stock by
the selling shareholders. InKine will make copies of this prospectus available
to the selling shareholders and has informed the selling shareholders of the
need for delivery of copies of this Prospectus to potential purchasers at or
before the time of any sale of the shares.
InKine will file a supplement to this prospectus, if required, under
Rule 424(b) under the Securities Act.
InKine has agreed to reimburse in certain circumstances the selling
shareholders against certain liabilities, including liabilities under the
Securities Act. The selling shareholders have agreed to reimburse in certain
circumstances InKine and certain related persons against certain liabilities,
including liabilities under the Securities Act.
AVAILABLE INFORMATION
InKine has filed a registration statement, of which this prospectus is
a part, and related exhibits with the SEC pursuant to the Securities Act. The
registration statement contains
-21-
<PAGE> 28
additional information about InKine and InKine's common stock. InKine also files
annual and quarterly reports, proxy statements and other information with the
SEC. You may read and copy the registration statement or any other document
InKine files with the SEC at the SEC's Public Reference Room at 450 Fifth
Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for
further information on the Public Reference Room.
The SEC also maintains a website that contains reports, proxy and
information statements, and other information filed electronically by InKine.
The SEC's website is located at http://www.sec.gov.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows InKine to "incorporate by reference" the information
InKine provides in documents filed with the SEC, which means that InKine can
disclose important information by referring to those documents. The information
incorporated by reference is an important part of this prospectus. Any statement
contained in a document which is incorporated by reference in this prospectus is
automatically updated and superseded if information contained in this
prospectus, or information that InKine later files with the SEC, modifies and
replaces this information. InKine incorporates by reference the following
documents InKine has filed with the SEC:
1. annual report on Form 10-K for the year ended June 30, 1999;
2. current report on Form 8-K filed on October 1, 1999;
3. proxy statement, dated October 8, 1999 for InKine's 1999
annual meeting of shareholders; and
4. The description of InKine's common stock, which is registered
under Section 12 of the Exchange Act, contained in InKine's
registration statement on Form 8-A, including any amendments
or reports filed for the purpose of updating such description.
All documents filed by InKine with the SEC under Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this prospectus will become a
part of this prospectus.
To receive a free copy of any of the documents incorporated by
reference in this prospectus call or write Robert F. Apple, Senior Vice
President and Chief Financial Officer, InKine Pharmaceutical Company, Inc., 1720
Walton Road, Suite 200, Blue Bell, PA 19422, telephone (610) 260-9350. Exhibits
to the documents will not be sent unless those exhibits have been specifically
incorporated by reference in this prospectus.
You should rely only on the information incorporated by reference or
included in this prospectus or the applicable prospectus supplement. InKine has
not authorized anyone else to provide you with different information. The
selling shareholders may only use this prospectus to sell securities if it is
accompanied by a prospectus supplement to the extent one is required. The
selling shareholders are only offering these securities in states where the
offer is permitted. You should not assume that the information in this
prospectus or the applicable prospectus supplement is accurate as of any date
other than the dates set forth on the front of these documents.
-22-
<PAGE> 29
LEGAL MATTERS
Saul, Ewing, Remick & Saul LLP, Philadelphia, Pennsylvania, will pass
upon the validity of the shares of common stock offered in this prospectus for
InKine.
EXPERTS
The financial statements of InKine as of June 30, 1999 and 1998, and
for the years then ended and for the period from July 1, 1993 (commencement of
operations) through June 30, 1999 included in InKine's 1999 annual report on
Form 10-K, have been incorporated by reference in this prospectus and in the
registration statement in reliance upon the report of KPMG LLP, independent
certified public accountants, also incorporated by reference in this prospectus,
and upon the authority of KPMG LLP as experts in accounting and auditing.
The statements of operations, changes in shareholders' equity and cash
flows of InKine for the year ended June 30, 1997 and for the period (not
separately presented in the Form 10-K) from July 1, 1993 (inception) to June 30,
1997 contained in InKine's annual report on Form 10-K for the fiscal year ended
June 30, 1999, incorporated by reference in this prospectus and in the
registration statement, have been audited by Richard A. Eisner & Company, LLP,
independent auditors, and are incorporated by reference in this prospectus in
reliance upon such report given upon the authority of Richard A. Eisner &
Company, LLP as experts in accounting and auditing.
-23-
<PAGE> 30
Until __________________, all dealers that effect transactions in these
securities, whether or not participating in this offering, may be required to
deliver a prospectus. This is in addition to the dealers' obligation to deliver
a prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
You should rely only on the information contained in this prospectus or
incorporated by reference. InKine has not authorized anyone to provide you with
additional or different information. InKine is not making an offer of these
securities in any jurisdiction where the offer or sale is not permitted. You
should not assume that the information contained in or incorporated by reference
in this prospectus is accurate as of any date other than the date on the front
cover of this prospectus, regardless of the date of delivery of this prospectus
or the date of any sale of the securities.
3,069,229
INKINE PHARMACEUTICAL COMPANY, INC.
Common Stock
Prospectus
December __, 1999
<PAGE> 31
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following expenses incurred in connection with the sale of the
securities being registered will be borne by InKine. Other than the SEC
registration fee, the amounts stated are estimates.
<TABLE>
<S> <C>
SEC registration fee..................................... $ 1,409
Accounting fees and expenses............................. 10,000
Legal fees and expenses.................................. 25,000
Printing................................................. 3,000
Miscellaneous expenses................................... 2,000
---------
Total........................................... $ 41,409
=========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Sections 721-726 of the New York Business Corporation Law empower a
corporation to indemnify any person, made, or threatened to be made, a party to
an action or proceeding, other than one by or in the right of the corporation,
whether civil or criminal, by reason of the fact that he or she was a director
or officer of the corporation or served such corporation in any capacity. A
corporation is empowered to indemnify such director or officer against
judgments, fines, amounts paid in settlement and reasonable expenses, including
attorney's fees, if such director or officer acted, in good faith, for a purpose
which he or she reasonably believed to be in the best interest of the
corporation and, in criminal actions or proceedings, had no reasonable cause to
believe that his or her conduct was unlawful.
InKine's certificate of incorporation provides that the directors of
InKine shall not be liable for damages for any breach of duty as directors,
except that a director shall be liable if a judgment or other final adjudication
adverse to such director establishes that his acts or omissions were in bad
faith or involved intentional misconduct or a knowing violation of law, or that
he personally gained a financial profit or other advantage to which he was not
legally entitled or that his acts violated Section 719 of the New York Business
Corporation Law.
InKine's bylaws provide that the directors and officers of InKine shall
be indemnified and held harmless by InKine to the fullest extent currently
authorized by the New York Business Corporation Law. These provision indemnify
these persons against all expenses, liabilities, and losses that are reasonably
incurred or suffered. Further, the bylaws provide for the advancement of
expenses to persons eligible for indemnification. In addition, the bylaws
authorize InKine to maintain insurance to protect itself and any director or
officer of InKine against any expense, liability, or loss, whether or not InKine
would have the power to indemnify such persons against such expense, liability,
or loss under the New York Business Corporation Law.
II-1
<PAGE> 32
ITEM 16. EXHIBITS.
The following is a list of exhibits filed as part of the registration
statement:
<TABLE>
<CAPTION>
No. Title
<S> <C>
*4.1 Purchase Agreement dated September 20, 1999 between InKine and certain
Investors listed on the signature page thereto.
*4.2 Registration Rights Agreement dated September 20, 1999 between InKine
and certain Investors listed on the signature page thereto.
*4.3 Form of Common Stock Purchase Warrant (In accordance with Item 601 of
Regulation S-K, similar warrants granted to the selling shareholders
have not been filed because they are identical in all material respects
except for the number of warrants granted to each selling shareholder.)
5 Opinion of Saul, Ewing, Remick & Saul LLP as to the legality of the
securities registered hereunder.
23.1 Consent of KPMG LLP.
23.2 Consent of Richard A. Eisner & Company, LLP.
23.3 Consent of Saul, Ewing, Remick & Saul LLP (included in Exhibit 5).
*24 Power of Attorney (contained on signature page of initial filing).
</TABLE>
- ------------------------
* Filed as an Exhibit to the Registrant's registration statement on Form
S-3 (File No. 333-89365) filed on October 20, 1999, and incorporated
herein by reference.
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:
(i) to include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.
II-2
<PAGE> 33
(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 (1)(i) and (1)(ii) above 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 with or furnished to the SEC
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. Filing 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 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration 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. 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 foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
D. Incorporated Annual and Quarterly Reports
The undersigned registrant hereby undertakes to deliver or cause to be
delivered with this prospectus, to each person to whom this prospectus is sent
or given, the latest annual report to security holders that is incorporated by
reference in this prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X are not set forth in this prospectus, to deliver, or
cause to be delivered to each person to whom this prospectus is sent or given,
the latest quarterly report that is
II-3
<PAGE> 34
specifically incorporated by reference in this prospectus to provide such
interim financial information.
II-4
<PAGE> 35
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 registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Blue Bell, Commonwealth of Pennsylvania, on December
21,1999.
INKINE PHARMACEUTICAL COMPANY, INC.
By: /s/ Leonard S. Jacob, M.D., Ph.D.
----------------------------------------------
Leonard S. Jacob, M.D., Ph.D.
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/Leonard S. Jacob, M.D., Ph.D. Chairman and Chief December 21, 1999
- ------------------------------------------
Leonard S. Jacob, M.D., Ph.D. Executive Officer and
Director
/s/Robert F. Apple Sr. Vice President and December 21, 1999
- ------------------------------------------ Chief Financial Officer
Robert F. Apple (principal financial and
accounting officer)
/s/Robert F. Apple, Attorney-in-Fact Sr. Vice President Clinical December 21, 1999
- ------------------------------------------
</TABLE>
II-5
<PAGE> 36
<TABLE>
<S> <C> <C>
Martin Rose, M.D., J.D. Research and Regulatory
Affairs
/s/ Robert F. Apple, Attorney-in-Fact Director December 21, 1999
- ------------------------------------------
J.R. LeShufy
/s/ Robert F. Apple, Attorney-in-Fact Director December 21, 1999
- ------------------------------------------
Steven B. Ratoff
/s/ Robert F. Apple, Attorney-in-Fact Director December 21, 1999
- ------------------------------------------
Thomas P. Stagnaro
/s/ Robert F. Apple, Attorney-in-Fact Director December 21, 1999
- ------------------------------------------
Robert A. Vukovich, Ph.D.
</TABLE>
II-6
<PAGE> 37
<TABLE>
<S> <C> <C>
/s/ Robert F. Apple, Attorney-in-Fact Director December 21, 1999
- ------------------------------------------
Jerry Weisbach, Ph.D.
</TABLE>
II-7
<PAGE> 38
EXHIBIT INDEX
<TABLE>
<CAPTION>
No. Title
<S> <C>
5 Opinion of Saul, Ewing, Remick & Saul LLP as to the legality of the
securities registered hereunder.
23.1 Consent of KPMG LLP.
23.2 Consent of Richard A. Eisner & Company, LLP.
23.3 Consent of Saul, Ewing, Remick & Saul LLP (included in Exhibit 5).
</TABLE>
<PAGE> 39
<PAGE> 1
Exhibit 5
[SAUL, EWING, REMICK & SAUL LLP LETTERHEAD]
December 21, 1999
InKine Pharmaceutical Company, Inc.
1720 Walton Road
Suite 200
Blue Bell, PA 19422
Gentlemen:
We refer to the Registration Statement on Form S-3 (collectively with
any amendments thereto, the "Registration Statement") of InKine Pharmaceutical
Company, Inc., a New York corporation (the "Company") (File No.: 333-89365),
filed with the Securities and Exchange Commission covering the registration
under the Securities Act of 1933, as amended (the "Securities Act"), of up to
3,069,229 shares of common stock, par value $.0001 per share, of the Company
(the "Shares"), including (i) 2,307,691 (the "Original Shares") currently issued
and outstanding and (ii) 761,538 shares (the "Warrant Shares") issuable upon
exercise of certain warrants (the "Warrants"), all as described in the
Prospectus included in the Registration Statement.
We have examined the Registration Statement, the Certificate of
Incorporation and By-laws of the Company and such records, certificates and
other documents as we have considered necessary or appropriate for the purposes
of this opinion. Without limiting the generality of the foregoing, in our
examination we have assumed without independent verification that (i) each
natural person executing a document we examined is legally competent to do so,
(ii) all documents submitted to us as originals are "authentic", the signatures
on all documents that we examined are genuine, and all documents submitted to us
as certified, conformed, photostatic or facsimile copies conformed to the
original document, and (iii) all corporate records made available to us by the
Company and or public records reviewed are accurate and complete.
Based on the foregoing, it is our opinion that:
1. the Original Shares were, when issued, duly authorized, validly
issued, fully paid and non-assessable; and
<PAGE> 2
December 21, 1999
Page 2
2. the Warrant Shares have been duly authorized and, when issued in
accordance with the terms of the Warrants, and upon receipt by the Company of
payment therefor as provided in the Warrants, will be validly issued, fully paid
and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to this form under the caption
"Legal Matters" in the Prospectus contained therein. In giving this consent, we
do not admit that we are in the category of persons whose consent is required
under Section 7 of the Securities Act or the rules and regulations of the
Securities and Exchange Commission thereunder.
Very truly yours,
/s/ Saul, Ewing, Remick & Saul LLP
SAUL, EWING, REMICK & SAUL LLP
CCZ/SWF/FVM/hp
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
InKine Pharmaceutical Company, Inc.
We consent to the use of our report dated August 11, 1999, incorporated herein
by reference, and to the reference to our firm under the heading "Experts" in
the prospectus.
/s/ KPMG LLP
Philadelphia, Pennsylvania
December 21, 1999
<PAGE> 1
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Amendment No. 1 to Form S-3) and related prospectus of
InKine Pharmaceutical Company, Inc. for the registration of 3,069,229 shares of
its common stock and to the incorporation by reference therein of our report
dated July 24, 1997 relating to the statements of operations, cash flows, and
changes in shareholders' equity of InKine Pharmaceutical Company, Inc. for the
year ended June 30, 1997 and for the period from July 1, 1993 (commencement of
operations) through June 30, 1997 (not separately presented therein), included
in its Annual Report on Form 10-K for the year ended June 30, 1999 filed with
the Securities and Exchange Commission.
/s/ Richard A. Eisner & Company, LLP
Richard A. Eisner & Company, LLP
New York, New York
December 14, 1999
