As filed with the Securities and Exchange Commission on January 2, 1998
Registration No. 333-______
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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EXOGEN, INC.
(Exact Name of Registrant as Specified in Its Charter)
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DELAWARE 22-3208468
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
10 Constitution Avenue
Piscataway, New Jersey 08855
(732) 981-0990
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
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Ellen B. Corenswet, Esq.
Luci Staller Altman, Esq.
Grace E. Han, Esq.
Brobeck, Phleger & Harrison LLP
1633 Broadway, 47th Floor
New York, New York 10019
(212) 581-1600
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
Approximate date of commencement of proposed sale to the public: As
soon as practicable on or after this Registration Statement is declared
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 ]
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.
<PAGE>
If this Form is a post-effective amendment filed pursuant to Rule
462(c) 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 delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box.
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
====================================================================================================================================
Title Of Shares Amount To Be Proposed Maximum Proposed Maximum Aggregate Amount of Registration
To Be Registered Registered Aggregate Price Per Unit(1) Offering Price(1) Fee
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<S> <C> <C> <C> <C>
Common Stock,
$.0001 par value 1,799,019 Shares $3.4375 $6,184,127.80 $1,825.00
====================================================================================================================================
</TABLE>
(1) Estimated pursuant to Rule 457(c) solely for the purpose of computing
the registration fee based upon the average of the high and low prices
of the Common Stock, as reported on The Nasdaq National Market as of a
date which is within five business days of the date of this
Registration Statement.
---------------------------
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
PROSPECTUS
1,799,019 Shares
EXOGEN, INC.
Common Stock
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This Prospectus relates to the public offering, which is not being
underwritten, of up to 1,799,019 shares of Common Stock, par value $.0001 per
share (the "Shares"), of Exogen, Inc. ("Exogen" or the "Company"). All of such
Shares are currently issued and outstanding and are held by certain stockholders
of the Company. The Shares may be offered by holders of such Shares
(collectively, the "Selling Stockholders"). The shares were issued by the
Company to the Selling Stockholders in a private placement in October 1997.
The Shares may be offered by the Selling Stockholders or by pledgees,
donees or transferees of, or other successors in interest to, the Selling
Stockholders from time to time in transactions on The Nasdaq National Market, in
negotiated transactions, or a combination of such methods of sale, at fixed
prices which may be changed, at market prices prevailing at the time of sale, at
prices related to prevailing market prices or at negotiated prices. The Selling
Stockholders may effect such transactions by selling the Shares to one or more
purchasers (including pledgees) or through broker-dealers, and such
broker-dealers may receive compensation in the form of discounts, concessions or
commissions from the Selling Stockholders and/or the purchasers of the Shares
for whom such broker-dealers may act as agents or to whom they sell as
principals, or both (which compensation as to a particular broker-dealer might
be less than or in excess of customary commissions). Neither the Company nor the
Selling Stockholders can presently estimate the amount of such compensation. The
Company knows of no existing arrangement between the Selling Stockholders, any
other stockholder, broker, dealer, underwriter or agent relating to the sale or
distribution of the Shares. The Selling Stockholders may transfer their Shares
under certain circumstances to other persons who may, in turn, resell Shares in
the manner described above. In addition, the Selling Stockholders may pledge or
make gifts of their Shares and such Shares may also be sold by the pledgees or
transferees. To the extent required, the number of Shares being offered and the
terms of the offering, including the public offering price, the names of the
Selling Stockholders and any underwriters, dealers or agents, the purchase price
paid by any underwriter for the Shares purchased from Selling Stockholders, any
discounts, commissions and other items constituting compensation from the
Selling Stockholders and any discounts, commissions or concessions allowed or
reallowed or paid to dealers with respect to any particular offer will be set
forth in an accompanying Prospectus Supplement. See "Selling Stockholders" and
"Plan of Distribution."
None of the proceeds from the sale of the Shares by the Selling
Stockholders will be received by the Company. The Company has agreed to bear
certain expenses (other than selling discounts and commissions) in connection
with the registration of the Shares pursuant to preexisting agreements. The
Company has agreed to indemnify the Selling Stockholders and their affiliates
against certain liabilities, including liabilities under the Securities Act of
1933, as amended (the "Securities Act"). The Selling Stockholders have agreed to
indemnify the Company and its affiliates against certain liabilities, including
liabilities under the Securities Act under certain circumstances.
<PAGE>
AN INVESTMENT IN THE SHARES OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 3.
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The Common Stock of the Company is traded on The Nasdaq National Market
under the symbol "EXGN." The last reported sales price of the Company's Common
Stock on The Nasdaq National Market on December 31, 1997 was $4.00 per share.
---------------------------
The Selling Stockholders and any broker-dealers, agents or underwriters
that participate with the Selling Stockholders in the distribution of the Shares
may be deemed to be "underwriters" within the meaning of Section 2(11) of the
Securities Act, and any commissions received by them and any profit on the
resale of the Shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. See "Plan of Distribution"
herein for a description of indemnification arrangements.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION 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 January 2, 1998
<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 under the Securities Act with
respect to the Common Stock offered hereby. This Prospectus does not contain all
of the information set forth in the Registration Statement and the exhibits and
the schedules thereto. For further information with respect to the Company and
such Common Stock, reference is made to the Registration Statement and exhibits
and schedules thereto. Statements contained in this Prospectus as to the
contents of any contract or other document referred to are not necessarily
complete, and, with respect to any contract or other document filed as an
exhibit to the Registration Statement, each such statement is qualified in all
respects by reference to such exhibit. Copies of the Registration Statement and
the exhibits thereto are on file at the offices of the Commission and may be
obtained upon payment of the prescribed fee or may be examined without charge at
the public reference facilities of the Commission described below.
The Company is subject to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files annual and quarterly reports, proxy statements and other
information with the Commission. Such reports, proxy statements and other
information may be inspected, and copies of such material may be obtained upon
payment of the prescribed fees, at the Commission's Public Reference Section,
Room 1024, 450 Fifth Street, N.W., Washington D.C. 20549, the Commission's
Regional Offices at Seven World Trade Center, New York, New York 10048, and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511, and the Commission's World Wide Web site at http://www.sec.gov.
The Common Stock of the Company is traded on The Nasdaq National
Market, and in accordance therewith, annual and quarterly reports, proxy
statements and other information concerning the Company may be inspected at the
National Association of Securities Dealers, Inc., at 1735 K Street, N.W.,
Washington, D.C. 20006.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed with the Commission are hereby
incorporated by reference in this Prospectus: (i) the Annual Report of the
Company on Form 10-K for the fiscal year ended September 30, 1997 (the "1997
Form 10-K") and (ii) the description of the Common Stock contained in the
Registration Statement on Form 8-A filed with the Commission on May 26, 1995
under Section 12 of the Exchange Act.
All reports and other documents subsequently filed by the Company
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date
of this Prospectus and prior to the termination of this Offering shall be deemed
to be incorporated by reference herein and to be a part hereof from the date of
filing of such reports and documents. Any statement incorporated herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus.
<PAGE>
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon written or oral request of such person, a copy of
any or all of the foregoing documents incorporated herein by reference (other
than exhibits to such documents, unless such exhibits are specifically
incorporated by reference into such document). Requests for such documents
should be submitted in writing to Chief Financial Officer, Exogen, Inc., 10
Constitution Avenue, Piscataway, New Jersey 08855.
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<PAGE>
An investment in the shares of Common Stock offered hereby involves a
high degree of risk and should not be made by any investors who cannot afford
the loss of their entire investment. In addition, this Prospectus contains
certain statements of a forward-looking nature relating to future events or the
future financial performance of the Company. Such statements are only
predictions, and the actual events or results may differ materially from the
results discussed in the forward-looking statements. In evaluating such
statements and in making any investment decisions, prospective investors should
specifically consider the various factors identified in this Prospectus,
including the matters set forth in the "Risk Factors" section below, which could
cause actual results to differ materially from those indicated by such
forward-looking statements. In addition, when used in this Prospectus, the words
"intends to," "believes," "anticipates," "expects" and similar expressions are
intended to identify forward-looking statements.
THE COMPANY
The Company was incorporated in New York on January 24, 1992, and was
reincorporated in Delaware on February 8, 1993. The Company's principal
executive offices are located at 10 Constitution Avenue, Piscataway, New Jersey
08855, and its telephone number is (732) 981-0990.
RISK FACTORS
In addition to the other information in this Prospectus, the following
factors should be considered carefully in evaluating an investment in the shares
of Common Stock offered by this Prospectus.
Limited Operating History
The Company has a limited history of operations that, to date, has
consisted primarily of research and development, product engineering, obtaining
approval from the FDA for the Company's SAFHS device, developing the Company's
sales and marketing organization, supervising the manufacture of the SAFHS
device by a contract manufacturer, developing in-house manufacturing capability,
and selling its SAFHS device domestically and internationally. The Company was
formed for the purpose of acquiring the SAFHS technology and related clinical
data, as well as the mechanical-stress technology. The Company has limited
direct clinical trial experience. The Company received approval of its PMA
Application for the SAFHS Model 2A device and began marketing it in October
1994, and further received approval of the SAFHS 2000 device and began marketing
the SAFHS 2000 in May 1997, and therefore has limited experience in marketing
and selling its products in commercial quantities. The Company had no previous
direct manufacturing experience prior to commencing in-house refurbishing of its
SAFHS device in fiscal 1996. Whether the Company can successfully manage the
transition to a larger-scale commercial enterprise will depend, in part, upon
further developing its distribution network; successfully developing its
manufacturing capability; and strengthening its financial and management
systems, procedures, and controls. Failure to make such a transition
successfully would have a material adverse effect on the Company's business,
financial condition, results of operations, and cash flows.
Uncertainty of Market Potential and Market Acceptance
The Company's SAFHS device was approved by the FDA for commercial
marketing in October 1994 to treat closed, cast-immobilized, fresh fractures of
the tibia and distal radius within approved indications. Since that time, the
Company has been engaged in efforts to gain physician acceptance of the SAFHS
<PAGE>
device and reimbursement coverage for its use. The market potential of the
Company's SAFHS device depends on the acceptance by the medical community of the
use of ultrasound technology as a safe and effective method of treating fresh
fractures and the use of the Company's SAFHS device by physicians for treatment
of these fractures. The SAFHS device is based upon new technology that had not
been used previously to treat bone fractures. There can be no assurance that
physicians will prescribe treatment using the SAFHS device. In addition, use of
the SAFHS device depends significantly on the availability and extent of
third-party reimbursement (which has occurred substantially on a case-by-case
basis), increased awareness of the effectiveness of the SAFHS technology, and
focused sales efforts by the Company. Electrical stimulation devices, the only
other non-invasive devices commercially available for the treatment of bone
fractures, have gained only limited physician acceptance to date.
- 3 -
<PAGE>
Failure of the Company's SAFHS device to achieve market acceptance would have a
material adverse effect on the Company's business, financial condition, results
of operations, and cash flows.
Dependence on Third-Party Reimbursement
Successful sales of SAFHS devices in the United States, Europe, and
other countries depend on the availability of adequate reimbursement from
third-party payors such as managed care organizations, workers' compensation
insurers, private insurance plans, and government entities. There is significant
uncertainty concerning third-party reimbursement for the use of any medical
device incorporating new technology, such as the SAFHS device. Reimbursement by
a third-party payor may depend on a number of factors, including the payor's
determination that the use of the SAFHS device is safe and effective, medically
necessary, appropriate for the specific patient, cost-effective, and not
experimental or investigational. In addition, devices incorporating a new
technology are often prescribed by physicians for indications other than those
approved by the FDA (off-label). Reimbursement for such off-label uses may not
be available or permitted by government regulations. Since reimbursement
approval is required from each payor individually, seeking such approvals is a
time-consuming and costly process that requires the Company to provide
scientific and clinical support for the use of the SAFHS device to each payor
separately. In most cases, in the United States, the Company has received
reimbursement approval from third-party payors only on a case-by-case basis.
Currently, third-party payors that have conducted technology assessments of the
SAFHS therapy, and have established medical guidelines for its use, require the
Company, in most cases, to obtain preauthorization from these third-party payors
prior to providing the SAFHS devices to the patients. There can be no assurance
that third-party reimbursement will be sufficiently available for the SAFHS
device or any of the Company's other products that may be developed, that such
third-party reimbursement will be adequate, or that other third-party payors,
including Medicare, will not recommend that the SAFHS device not be covered
under their programs.
In August 1996, the Technology Advisory Committee of the Health Care
Financing Administration recommended that the SAFHS device not be covered under
the Medicare program. The Company, however, continues to pursue coverage for
SAFHS by providing additional information to the HCFA staff; in the interim, the
Company is not shipping orders to patients covered under Medicare. The United
States Congress is also considering various proposals to significantly reduce
Medicare and Medicaid expenditures, which, if they were enacted and if SAFHS
were covered under Medicare or Medicaid, could have a material adverse effect on
the Company's business, financial condition, results of operations, and cash
flows. In addition, third-party payors are increasingly limiting reimbursement
coverage for medical devices, and in many instances have put pressure on medical
suppliers to lower their prices. The Company has limited experience in obtaining
reimbursement for its products in countries other than the United States, and
has obtained only limited reimbursement in Germany. There is no assurance that
the Company's efforts to obtain reimbursement approval in Germany and in other
countries will be successful. Lack of or inadequate reimbursement by
governmental and other third-party payors for the Company's products would have
a material adverse effect on the Company's business, financial condition,
results of operations, and cash flows.
History of Losses; Profitability Uncertain; Fluctuations in Operating Results
The Company has incurred substantial losses since inception and, as of
<PAGE>
September 30, 1997, had an accumulated deficit of approximately $34.3 million.
Such losses have resulted principally from expenses associated with obtaining
FDA approval for the Company's SAFHS device, engineering and developing the
SAFHS and mechanical-stress devices, and establishing and expanding the sales
and marketing organization and reimbursement activities in the United States and
in Europe. The Company expects to generate substantial additional losses in the
future primarily attributable to development of, and clinical trials for, the
mechanical-stress device, clinical trials for expanded indications of the SAFHS
technology, the continued expansion of domestic and international sales and
marketing activities, and the expansion of in-house manufacturing capability.
Results of operations may fluctuate significantly from quarter to quarter based
on such factors, and will also depend upon reimbursement by third-party payors,
new product introductions by the Company or its competitors, timing of
regulatory actions, expenditures incurred in the research and development of new
products, and the mix of product sales between the United States and abroad. The
Company's future revenues and profitability are critically dependent on whether
it can successfully market and sell its SAFHS device. There can be no assurance
that significant revenues or profitability will ever be achieved.
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<PAGE>
Dependence on Principal Product
Essentially all of the Company's product revenues to date have been
derived from sales of its SAFHS device. The SAFHS device is expected to continue
to account for substantially all of the Company's revenues for the foreseeable
future. The Company's long-term success will depend in part on the successful
commercialization of the SAFHS device for its approved indications, the
development and regulatory approval of SAFHS devices to treat additional
indications, and the acceptance of the SAFHS treatment by the medical community
and third-party payors. Failure to gain market acceptance for the SAFHS device
or to obtain adequate reimbursement coverage, among other factors, would have a
material adverse effect on the Company's business, financial condition, results
of operations, and cash flows.
Limited Sales and Marketing Experience
The Company began marketing the SAFHS device in the United States in
October 1994. Because of limited market awareness of SAFHS therapy, the sales
effort is a lengthy process, requiring the Company to educate physicians and
third-party payors regarding the clinical benefits and cost-effectiveness of the
SAFHS technology, to assist patients in the reimbursement process, and to
provide product support to patients. The Company uses a combination of direct
sales representatives and a network of independent sales representatives to
market and distribute its products. Independent sales representatives typically
market orthopaedic and other devices for a variety of manufacturers. These
representatives do not have prior experience in the sale or use of devices to
accelerate fresh-fracture healing. There can be no assurance that these
independent sales representatives will commit the necessary resources to market
the SAFHS device effectively or that the Company's direct sales staff will
succeed in its efforts to promote the SAFHS technology to physicians and
third-party payors.
The Company markets the SAFHS device in several European countries
through independent distributors and sales agents, and has recorded sales in
Germany, Austria, the Netherlands, Denmark, Switzerland, Belgium, and Israel.
The Company also will collaborate with marketing partners in the Pacific Rim to
assist with regulatory requirements and to market and distribute the Company's
products. The Company has entered into one such agreement covering Japan with
Teijin Limited, a Japanese corporation. Each of the foreign markets in which the
Company sells, or plans to sell, its products has its own regulatory
requirements and approvals, and the distribution, price, and market structure to
be established by the Company might vary from country to country. No assurance
can be given that the Company can successfully market the SAFHS device in Europe
or that it can secure additional marketing partners in the Pacific Rim on terms
acceptable to the Company, or at all.
The Company's marketing success in the United States and abroad will
depend on whether it can gain further regulatory approvals, successfully
demonstrate the cost-effectiveness of its products, further develop direct sales
capability to augment its existing distribution network, and establish
arrangements with distributors and marketing partners. Failure by the Company to
successfully market its products domestically and internationally would have a
material adverse effect on the Company's business, financial condition, results
of operations, and cash flows.
<PAGE>
Risks Associated with International Operations
The Company established a subsidiary in Germany during fiscal 1995 as
part of its strategy to introduce the SAFHS device in Europe, and commenced
commercial distribution of the device in certain European countries during
fiscal 1996. International product sales, which were principally in Germany,
were 14% of total product sales in fiscal 1996 and 18% in fiscal 1997, and such
revenues are expected to continue to represent a significant percentage of total
revenues. The Company believes that its profitability and continued growth will
require expansion of sales in foreign markets, and so it intends to continue to
expand its operations outside the United States and enter additional
international markets, which will require significant management attention and
financial resources. There can be no assurance that the Company will be able to
achieve market acceptance of its products in international markets or maintain
or increase international market demand for its products.
As of September 30, 1997, the balance in international accounts
receivable, net of allowances for returns and bad debt, was $1.4 million, with
days outstanding of approximately 390 days. The international accounts
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<PAGE>
receivable is primarily derived from sales in Germany, where the Company has
received limited local reimbursement on a case-by-case basis. To assist the
collection of outstanding claims and to expedite the reimbursement process on
future claims, the Company is seeking nationwide approval by the National
Krankenkasse, the German governing organization that establishes medical
reimbursement policy for health-care providers. To this end, in August 1997 the
Company submitted a formal application to the National Krankenkasse. The
application process includes a scientific assessment and a reimbursement
assessment; the Company is currently in the scientific-assessment phase. In the
interim, the Company has elected to sell SAFHS devices in Germany only when
reimbursement is preapproved. There can be no assurance that the Company will
obtain a favorable ruling on its request for nationwide approval on a timely
basis, if at all. Lack of approval by the National Krankenkasse for the
Company's products could have a material adverse effect on the Company's
business, financial condition, results of operations, and cash flows.
The Company's international product sales are denominated in foreign
currencies. Management can give no assurances that changes in currency and
exchange rates will not materially affect the Company's revenues, costs, cash
flows, and business practices and plans. Additional risks inherent in the
Company's international business activities generally include unexpected changes
in regulatory requirements, tariffs and other trade barriers, delays in
receiving payments on accounts receivable balances, reimbursement approvals
(both government and private), difficulties in managing international
operations, potentially adverse tax consequences, restrictions on repatriation
of earnings, and the burdens of complying with a wide variety of foreign laws.
There can be no assurances that such factors will not have a material adverse
effect on the Company's future international revenues and, consequently, on the
Company's business, financial condition, results of operations, or cash flows.
Manufacturing and Related Risks
The Company has developed in-house refurbishing capability for the
SAFHS Model 2A device and in-house manufacturing capability for the SAFHS 2000
device. In addition, the Company uses a contract manufacturer to manufacture a
portion of the Company's SAFHS 2000 production. Both the Company's and the
contract manufacturer's respective facilities have been inspected by the FDA,
and have been approved for the production of the SAFHS 2000 under the FDA's Good
Manufacturing Practices ("GMP") requirements. Any failure by either the Company
or the contract manufacturer to maintain its respective facility in accordance
with GMP requirements could result in the inability to manufacture the SAFHS
device on a commercial scale, and could limit the Company's ability to deliver
the SAFHS device to physicians or patients, which would have a material adverse
effect on the Company's business, financial condition, results of operations,
and cash flows.
Several components incorporated in the SAFHS device currently are, and
will continue to be, manufactured by single-source vendors. For certain of these
components, there are relatively few alternative sources of supply, and
establishing additional or replacement suppliers for such components cannot be
accomplished quickly. Any supply interruption from single-source vendors would
have a material adverse effect on the Company's business, financial condition,
results of operations, and cash flows.
Intense Competition and Risks Associated with Rapid Technological Change
The medical device industry is characterized by intense competition.
<PAGE>
Many of the Company's existing and potential competitors have substantially
greater financial, marketing, sales, distribution, and technical resources than
the Company and more experience in research and development, clinical trials,
regulatory matters, manufacturing, and marketing. In addition, most of these
companies have established third-party reimbursement for their products.
Furthermore, the medical device industry is characterized by rapid product
development and technological change. The Company's products could be rendered
obsolete or uneconomical by technological advances by one or more of the
Company's competitors or by other therapies such as drugs to treat conditions
addressed by the Company's products. The Company's business, financial
condition, results of operations, and cash flows will depend upon whether the
Company can compete effectively with other developers of such medical devices
and therapies.
The SAFHS device competes with non-invasive bone-growth
electrical-stimulation devices and with various surgical treatments. The
Company's mechanical-stress device to prevent bone loss related to osteoporosis,
if developed and marketed, will compete with drug therapies and exercise
- 6 -
<PAGE>
regimens. There can be no assurance that such device will ever be developed,
approved by the FDA, or become commercially available. Four companies currently
market electrical-stimulation devices for the treatment of non-union fractures
(fractures that remain unhealed after nine months). The Company believes that at
least one of these companies is conducting clinical trials for the use of
electrical stimulation for the treatment of fresh fractures. In addition, other
companies are developing a variety of products and technologies to be used in
the treatment of fractures and osteoporosis, including growth factors,
bone-graft substitutes, and exercise/physical therapy equipment. There can be no
assurance that competitors will not develop products that are superior to the
Company's products, achieve greater market acceptance, or render the Company's
technology and products obsolete or noncompetitive. As a result, the Company's
long-term viability may depend on whether it can continue to develop new
products. There can be no assurance that the Company will be able to compete
successfully against current or future competitors or that competition will not
have a material adverse effect on the Company's business, financial condition,
results of operations, or cash flows.
Extensive Government Regulation
The manufacture and sale of medical devices are subject to extensive
government regulation in the United States and in other countries. The process
of obtaining FDA and other required regulatory approvals can be time-consuming,
expensive, and uncertain, frequently requiring several years from commencing
clinical trials to receiving regulatory approval. For example, the process of
conducting clinical trials and obtaining the PMA for the SAFHS Model 2A took
nine years. The Company is required to file PMA supplements for new or expanded
indications for its SAFHS technology. In addition, modifications to its SAFHS
devices may require PMA supplements. If a supplement were not accepted by the
FDA, the Company would be required to undertake and complete the entire PMA
process in order to use future SAFHS devices to treat those additional
indications or commercialize a modified device. There can be no assurance that
the Company will obtain any such approvals on a timely basis, or at all, which
could have a material adverse effect on the Company's business, financial
condition, results of operations, and cash flows.
The Company filed a PMA Supplement for its second-generation SAFHS, the
SAFHS 2000, in December 1995, and in March 1997, the FDA approved this
supplement. In May 1997, the Company commenced commercial distribution of the
SAFHS 2000 in the United States. The Company recently filed a PMA Supplement
seeking approval of an expanded indication for the SAFHS 2000, but withdrew that
application in July 1997 to revise and resubmit it for both expanded and new
applications. The Company expects to refile this Supplement during the second
quarter of fiscal 1998. The Company will also be required to file a PMA
application for its mechanical-stress device, if and when development is
completed. No assurance can be given that such application will be made, and if
made, that a PMA or a supplement to an existing PMA will be granted on a timely
basis, or at all. In order for the Company to market the SAFHS device or any
future products in foreign jurisdictions, it will be required to seek regulatory
approvals in those jurisdictions. No assurance can be given that the Company can
obtain required regulatory approvals in foreign countries on a timely basis, or
at all.
Regulatory approvals, if granted, may include significant limitations
on the indicated uses for which a product may be marketed. FDA enforcement
policy strictly prohibits the promotion by the Company and any of its
<PAGE>
distributors of approved medical devices for off-label uses. There can be no
assurance that the Company will not become subject to FDA actions as a result of
physicians' prescribing the SAFHS device for off-label uses. In addition,
product approvals may be withdrawn for failure to comply with regulatory
standards or the occurrence of unforeseen problems following initial marketing.
The Company is required to adhere to FDA regulations setting forth GMP
requirements relating to tests, control, and documentation. Ongoing compliance
with GMP and other applicable regulatory requirements is monitored through
periodic inspections by state and federal agencies, including the FDA, and by
comparable agencies in other countries. Failure to comply with applicable United
States and international regulatory requirements can result in failure of the
relevant government agency to grant pre-market approval for devices, withdrawal
of approval, total or partial suspension of production, fines, injunctions,
civil penalties, recall or seizure of products, and criminal prosecution.
Furthermore, changes in existing regulations or adoption of new regulations or
policies could prevent the Company from obtaining, or affect the timing of,
future regulatory approvals or clearances.
During 1996, the Company received regulatory approval of the SAFHS
Model 2A in Germany. Under German law, medical devices must have a "GS" mark
affixed to the product labeling. The GS mark, which the Company received in
- 7 -
<PAGE>
December 1995, denotes that the product meets certain safety standards. In 1996,
the Company also received the "CE" (Medical Device Directive) mark for the SAFHS
Model 2A. The CE mark is recognized by countries that are members of the
European Union and the European Free Trade Association, and effective June 1998,
will be required to be affixed to all medical devices sold in the European
Union.
There can be no assurance that the Company will be able to obtain
necessary regulatory approvals or clearances in the United States, Europe, the
Pacific Rim, or elsewhere on a timely basis, or at all. Delays in receipt of or
failure to receive such approvals or clearances, the loss of previously received
approvals or clearances, or failure to comply with existing or future regulatory
requirements would have a material adverse effect on the Company's business,
financial condition, results of operations, and cash flows.
Limited Protection of Patents, Copyrights and Proprietary Rights; Risk of Patent
Infringement
The Company relies on a combination of patents, trade secrets,
copyrights, and confidentiality agreements to protect its proprietary
technology, rights, and know-how. No assurance can be given that the Company's
patent applications will issue as patents or that any issued patents owned by
the Company will provide competitive advantages for the Company's products or
will not be successfully challenged or circumvented by competitors. Under
current law, patent applications in the United States are maintained in secrecy
until patents are issued, and patent applications in foreign countries are
maintained in secrecy for a period after filing. The right to a device patent in
the United States is attributable to the first to invent the device, not the
first to file a patent application. Accordingly, the Company cannot be sure that
its products or technologies do not infringe patents that may be granted in the
future pursuant to pending patent applications or that its products do not
infringe any patents or proprietary rights of third parties. In the event that
any relevant claims of third-party patents are upheld as valid and enforceable,
the Company could be prevented from selling its products or could be required to
obtain licenses from the owners of such patents or be required to redesign its
products to avoid infringement. There can be no assurance that such licenses
would be available or, if available, would be on terms acceptable to the
Company, or that the Company would be successful in any attempt to redesign its
products or processes to avoid infringement. The Company's failure to obtain
these licenses or to redesign its products would have a material adverse effect
on the Company's business, financial condition, results of operations, and cash
flows. The Company also relies on trade secrets and proprietary information, and
enters into confidentiality agreements with its employees, consultants, and
advisors. There can be no assurance that the obligations to maintain the
confidentiality of such trade secrets and proprietary information will
effectively prevent disclosure of the Company's confidential information or
provide meaningful protection for the Company's confidential information if
there is unauthorized use or disclosure, or that the Company's trade secrets or
proprietary information will not be independently developed by the Company's
competitors. The Company also holds rights to copyrights on text and on software
developed by or for itself for use in its SAFHS device. There can be no
assurance that any copyrights owned by the Company will provide competitive
advantages for the Company's products or will not be challenged or circumvented
by its competitors. Litigation may be necessary to defend against claims of
infringement, to enforce patents and copyrights issued or licensed to the
Company, or to protect trade secrets, and could result in substantial cost to,
and diversion of effort by, the Company. There can be no assurance that the
Company would prevail in any such litigation.
<PAGE>
Uncertainty of New Product Development
The Company plans to seek FDA approval to commence clinical trials in
the near future to expand the approved indications for the SAFHS technology to
include other fractures, spine fusion, and cartilage repair. In addition, the
Company has developed a mechanical-stress device to prevent bone loss related to
osteoporosis. The Company has commenced a pilot clinical trial in the United
States, and anticipates that it will be required to undertake additional
development activities and human clinical trials before seeking regulatory
approval for this device. There can be no assurance that the mechanical-stress
device will prove to be safe and efficacious, that product development will ever
be successfully completed, that a PMA, if applied for, will be granted by the
FDA on a timely basis, or at all, that adequate levels of third-party
reimbursement will be available, or that the mechanical-stress device will ever
achieve commercial acceptance. The Company's inability to show efficacy in
additional applications of its SAFHS technology, to successfully develop the
mechanical-stress device, or to achieve market acceptance of such new
applications and products would have a material adverse effect on the Company's
business, financial condition, results of operations, and cash flows.
- 8 -
<PAGE>
Royalty Payment Obligations; Potential Loss of Exclusive License
The Company is required to pay a royalty on any net revenues from sales
of the mechanical-stress device, if such device is successfully developed. In
the event that the Company does not commercially exploit the underlying
technology as required by the license agreement for such technology, the Company
will forfeit its exclusive license to the mechanical-stress technology. There
can be no assurance that the Company will commercially exploit such technology
within the meaning of such license, and forfeiture of such exclusive license
could have a material adverse effect on the Company's business, financial
condition, results of operations, and cash flows.
Product Liability and Insurance
The Company faces an inherent business risk of exposure to product
liability claims in the event that the use of its products is alleged to have
resulted in adverse effects. There can be no assurance that liability claims
will not exceed the coverage limits of the Company's insurance policies or that
such insurance will continue to be available on commercially reasonable terms,
or at all. Consequently, product liability claims could have a material adverse
effect on the Company's business, financial condition, results of operations,
and cash flows.
Reliance on Key Personnel
The Company's success depends to a significant extent upon a number of
key management and technical personnel. The loss of the services of one or more
key employees could have a material adverse effect on the Company's business,
financial condition, results of operations, and cash flows. The Company also
believes that its future success will depend in large part on whether it can
attract and retain highly skilled technical, management, sales and marketing,
and reimbursement personnel. Competition for such personnel is intense, and
there can be no assurance that the Company will be successful in attracting and
retaining such personnel. The Company's failure to attract, hire, and retain
these personnel would have a material adverse effect on the Company's business,
financial condition, results of operations, and cash flows.
Possible Volatility of Stock Price
The trading price of the Company's Common Stock could be subject to
significant fluctuations in response to variations in quarterly operating
results, announcements of technological innovations or new products by the
Company or its competitors, changes in earning estimates by analysts, general
conditions in the medical device industry, and other events or factors. In
addition, the stock market in general has experienced extreme price and volume
fluctuations that have affected the market price for many companies in
industries similar or related to that of the Company and that have been
unrelated to the operating performance of these companies. These market
fluctuations may adversely affect the market price of the Company's Common
Stock.
Certain Anti-Takeover Provisions
The Company's Second Amended and Restated Certificate of Incorporation
grants the Board of Directors the authority to issue up to 3,000,000 shares of
preferred stock of the Company, $0.0001 par value per share (the "Preferred
Stock"), in one or more series and to fix the rights, preferences, privileges,
<PAGE>
and restrictions thereof, including dividend rights, dividend rates, conversion
rights, voting rights, terms of redemption, redemption prices, liquidation
preferences, and the number of shares constituting any series or the designation
of such series, without further vote or action by the stockholders. Effective
December 6, 1996, pursuant to the Rights Agreement, the Company's Board of
Directors declared a dividend of one Right to purchase, under certain
circumstances, one one-hundredth share of the Company's Series A Preferred Stock
for each outstanding share of Common Stock of the Company. Although the Company
has no present plans to issue any additional shares of Preferred Stock, it may
do so in the future.
The Company's Bylaws specify procedures for director nominations by
stockholders and the submission of other proposals for consideration at
stockholder meetings. Certain provisions of Delaware law applicable to the
Company could also delay or make more difficult a merger, tender offer, or proxy
- 9 -
<PAGE>
contest involving the Company, including Section 203, which prohibits a Delaware
corporation from engaging in any business combination with any interested
stockholder for a period of three years unless certain conditions are met. The
possible issuance of Preferred Stock (including pursuant to the Rights Plan),
the procedures required for director nominations and stockholder proposals, and
Delaware law could have the effect of delaying, deferring, or preventing a
change in control of the Company, including without limitation, discouraging a
proxy contest, making more difficult the acquisition of a substantial block of
the Company's Common Stock, or limiting the price that investors might be
willing to pay in the future for shares of the Company's Common Stock.
USE OF PROCEEDS
None of the proceeds from the sale of the Shares will be received by
the Company.
SELLING STOCKHOLDERS
The following table sets forth the number of shares of Common Stock
beneficially owned by each of the Selling Stockholders as of November 28, 1997.
None of the Selling Stockholders has had a material relationship with the
Company within the past three years other than as a result of the ownership of
the Shares or other securities of the Company, except that Messrs. Benson,
Lothrop and Wall serve as Directors of the Company. The relationship of Messrs.
Benson and Lothrop to certain Selling Stockholders is set forth in the notes
below. The Shares offered by this Prospectus may be offered from time to time by
the Selling Stockholders. See "Plan of Distribution."
<TABLE>
<CAPTION>
Beneficial Ownership
After Offering(1)
Number of Shares Number of Shares ------------------------
Beneficially Owned Registered Number
Name of Selling Stockholder Prior to Offering for Sale Hereby of Shares Percent
- --------------------------- ------------------- --------------------- --------- -------
<S> <C> <C> <C> <C>
Delphi Ventures III, L.P. (2).......... 693,398 693,398 -- --
Delphi Bio-Investments III, L.P. (2)... 12,484 12,484 -- --
The Demeter Trust Dtd. 6/5/90.......... 20,000 20,000 -- --
Alexandra F. Johnson Trust Dtd. 11/6/78 15,000 15,000 -- --
Bradford D. Johnston Trust Dtd. 11/6/78 15,000 15,000 -- --
William M. Johnston Trust Dtd. 11/6/78. 15,000 15,000 -- --
Robert F. Johnston (3)................. 160,049 57,549 102,500 *
Pequot Private Equity Fund L.P......... 652,660 652,660 -- --
Pequot Offshore Private Equity Fund, Inc. 82,634 82,634 -- --
Piper Jaffray Healthcare Capital
Limited Partnership (SBIC) (4)...... 299,465 117,647 181,818 *
Terence D. Wall (5).................... 168,632 117,647 50,985 *
TOTAL........................ 2,134,322 1,799,019 335,303 *
--------- --------- ------- --
</TABLE>
- --------------------
* Less than 1%.
<PAGE>
(1) The number of shares of Common Stock and the percentage of shares of Common
Stock beneficially owned by each Selling Stockholder after the offering are
based on the assumption that all of the Selling Stockholders will sell all
of the Shares registered for sale hereby. Because the Selling Stockholders
may offer all, some or none of the Shares pursuant to this Prospectus, and
because there are currently no agreements, arrangements or understandings
with respect to the sale of any of the Shares, no estimate can be given as
to the number of Shares that will be held by the Selling Stockholders after
completion of the sale of Shares hereunder. See "Plan of Distribution."
(2) Mr. Lothrop is a general partner of Delphi Management Partners III, L.L.C.,
which is the general partner of each of Delphi Ventures III, L.P. ("Ventures
III") and Delphi Bio-Investments III, L.P. ("Bio-Investments III").
(3) In September 1997, Mr. Johnston became a consultant to the Company and
pursuant to an advisory agreement with the Company, he acquired a warrant
(at a cost of $0.20 per share) to purchase up to 100,000 shares of the
Company's Common Stock at an exercise price of $4.50 per share.
- 10 -
<PAGE>
(4) Mr. Benson is a Managing Director of Piper Ventures Capital, Inc., which is
the general partner of Piper Ventures Management IV Limited Partnership,
which is the general partner of Piper Jaffray Healthcare Capital Limited
Partnership (SBIC) ("Piper Jaffray").
(5) Mr. Wall is a director of the Company. The number of shares beneficially
owned by Mr. Wall includes 2,500 shares issuable within 60 days of November
28, 1997 upon the exercise of stock options, of which 1,250 shares, if
issued, would be subject to the Company's repurchase right.
The Shares registered for sale hereby were acquired by the Selling
Stockholders from the Company in a private placement transaction (the "Private
Placement") in October 1997 for an aggregate purchase price of approximately
$7.5 million, which proceeds were to be used for general corporate purposes.
Ventures III, Bio-Investments III, Piper Jaffray and Mr. Wall, each a director
or affiliate of a director of the Company, paid $4.25 per share or an aggregate
of approximately $4.0 million for the Shares purchased by them. The other
investors in the Private Placement paid a purchase price of $4.08 per share or
an aggregate of approximately $3.5 million for the Shares purchased by them. The
Company has agreed to bear certain expenses (other than selling discounts and
commissions) in connection with the registration of the Shares.
The Company has agreed to prepare and file such amendments and
supplements to the Registration Statement as may be necessary to keep this
Registration Statement effective until the earlier of October 20, 1998 or until
all of the Shares have been sold pursuant to the terms hereof.
PLAN OF DISTRIBUTION
The Shares offered hereby are being offered directly by the Selling
Stockholders or by pledgees, donees or transferees of, or other successors in
interest to, the Selling Stockholders. The Company will not receive any of the
proceeds from the sale of the Shares by the Selling Stockholders. The sale of
the Shares may be effected by the Selling Stockholders from time to time in
transactions on The Nasdaq National Market, in negotiated transactions, or a
combination of such methods of sale, at fixed prices which may be changed, at
market prices prevailing at the time of sale, at prices related to prevailing
market prices or at negotiated prices. The Selling Stockholders may effect such
transactions by selling the Shares to one or more purchasers (including
pledgees) or through broker-dealers, and such broker-dealers may receive
compensation in the form of discounts, concessions or commissions from the
Selling Stockholders and/or the purchasers of the Shares for whom such
broker-dealers may act as agents or to whom they sell as principals, or both
(which compensation as to a particular broker-dealer might be less than or in
excess of customary commissions). Neither the Company nor the Selling
Stockholders can presently estimate the amount of such compensation. The Company
knows of no existing arrangement between the Selling Stockholders, any other
stockholder, broker, dealer, underwriter or agent relating to the sale or
distribution of the Shares. The Selling Stockholders may transfer their Shares
under certain circumstances to other persons who may, in turn, resell Shares in
the manner described above. In addition, the Selling Stockholders may pledge or
make gifts of their Shares and such Shares may also be sold by the pledgees or
transferees. The distribution of the Shares may be effected in one or more of
the following methods: (i) ordinary brokers' transactions, which may include
long or short sales; (ii) transactions involving cross or block trades or
otherwise on the Nasdaq National Market; (iii) purchases by brokers, dealers or
underwriters as principal and resale by such purchasers for their own accounts
pursuant to this Prospectus; (iv) "at the market" to or through market makers or
into an existing market for the Common Stock; (v) in other ways not involving
<PAGE>
market makers or established trading markets, including direct sales to
purchasers or sales effected through agents; (vi) through transactions in
options, swaps or other derivatives (whether exchange-listed or otherwise); or
(vii) any combination of the foregoing, or by any other legally available means.
In addition, the Selling Stockholders or their successors in interest may enter
into hedging transactions with broker-dealers who may engage in short sales of
Shares in the course of hedging the positions they assume with the Selling
Stockholders. The Selling Stockholders or their successors in interest may also
enter into option or other transactions with broker-dealers that require the
delivery by such broker-dealers of the Shares, in which Shares may be resold
thereafter pursuant to this Prospectus. The Selling Stockholders or their
successors in interest may also pledge shares as collateral for margin accounts
and such shares could be resold pursuant to the terms of such accounts.
At the time a particular offer of Shares is made, to the extent
required, a Prospectus Supplement will be distributed which will set forth the
number of Shares being offered and the terms of the offering including the name
or names of any underwriters, dealers or agents.
- 11 -
<PAGE>
In order to comply with the securities laws of certain states, if
applicable, the Shares will be sold in such jurisdictions only through
registered or licensed brokers or dealers. 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 by the Company and the Selling
Stockholders.
The Selling Stockholders may also transfer their Shares pursuant to
Rule 144, whether or not the Registration Statement, of which this Prospectus
forms a part, is effective at the time of any such transfer.
The Selling Stockholders and any broker-dealers, agents or
underwriters that participate with the Selling Stockholders in the distribution
of the Shares may be deemed to be "underwriters" within the meaning of Section
2(11) of the Securities Act, and any commissions received by them and any profit
on the resale of the Shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. The Company has agreed to
indemnify the Selling Stockholders and their affiliates against certain
liabilities, including liabilities under the Securities Act. The Selling
Stockholders have agreed to indemnify the Company and its affiliates against
certain liabilities, including liabilities under the Securities Act under
certain circumstances.
Under applicable rules and regulations under the Exchange Act, any
person engaged in the distribution of the Shares may not simultaneously engage
in market making activities with respect to the Common Stock of the Company for
a period of two business days prior to the commencement of such distribution. In
addition and without limiting the foregoing, each Selling Stockholder will be
subject to applicable provisions of the Exchange Act and the rules and
regulations thereunder, including, without limitation, Rule 102 under Regulation
M, which provisions may limit the timing of purchases and sales of shares of the
Company's Common Stock by the Selling Stockholders.
The Company has agreed to bear certain expenses (other than discounts
and selling commissions) in connection with the registration of the Shares.
LEGAL MATTERS
The validity of the Shares offered hereby will be passed upon for the
Company by Brobeck, Phleger & Harrison LLP, New York, New York. Ellen B.
Corenswet, a partner of Brobeck, Phleger & Harrison LLP, owns 2,000 shares of
Common Stock of the Company.
EXPERTS
The financial statements and schedules incorporated by reference in
this Prospectus and elsewhere in the registration statement have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto and are included herein in reliance upon the
authority of said firm as experts in giving said reports.
- 12 -
<PAGE>
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus in connection with
the offering made hereby, and if given or made, such information or
representations must not be relied upon as having been authorized by the
Company, any Selling Stockholder or by any other person. Neither the delivery of
this Prospectus nor any sale made hereunder shall, under any circumstances,
create any implication that the information herein is correct as of any time
subsequent to the date hereof. This Prospectus does not constitute an offer to
sell or a solicitation of an offer to buy the Shares to any person or by anyone
in any jurisdiction in which such offer or solicitation may not lawfully be
made.
---------------------------
Table of Contents
Page
----
Available Information......................... 2
Incorporation of Certain Information by
Reference..................................... 2
The Company................................... 3
Risk Factors.................................. 3
Use of Proceeds............................... 10
Selling Stockholders.......................... 10
Plan of Distribution.......................... 11
Legal Matters................................. 12
Experts....................................... 12
<PAGE>
1,799,019
EXOGEN, INC.
Common Stock
---------------------------
PROSPECTUS
---------------------------
January 2, 1998
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth an estimate of the expenses to be
incurred by the Company in connection with the issuance and distribution of the
securities being registered:
Amount to
Be Paid
----------
Registration Fee - SEC............................................. $ 1,825
Nasdaq National Market Listing Fee................................. 17,500
Legal Fees and Expenses............................................ 30,000
Accounting Fees and Expenses....................................... 15,000
Miscellaneous...................................................... 15,675
Total.............................................................. 80,000
Item 15. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law authorizes a court
to award or a corporation's Board of Directors to grant indemnification to
directors and officers in terms sufficiently broad to permit such
indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the Securities Act of 1933,
as amended (the "Securities Act"). Articles 8 and 9 of the Registrant's Second
Amended and Restated Certificate of Incorporation provide for indemnification of
its directors and officers and permissible indemnification of employees and
other agents to the maximum extent permitted by the Delaware General Corporation
Law. The Selling Stockholders have agreed to indemnify officers, directors and
controlling persons of the Registrant against certain liabilities, including
liabilities under the Securities Act under certain circumstances. The Company
has obtained liability insurance for its directors and officers.
Item 16. Exhibits
The following is a list of Exhibits filed as part of the Registration
Statement:
4.1 Specimen certificate for shares of the Registrant's Common Stock,
incorporated herein by reference to Exhibit 4.1 to Registration
Statement No. 33-92740.
4.2 Provisions of the Certificate of Incorporation and Bylaws of the
Registrant defining rights of holders of Common Stock of the
Registrant, incorporated herein by reference to Exhibits 3.2 and 3.3 to
Registration Statement No. 33-92740.
5. Opinion and Consent of Brobeck, Phleger & Harrison LLP.
23.1 Consent of Arthur Andersen LLP, independent public accountants.
23.2 Consent of Brobeck, Phleger & Harrison LLP (included in the opinion
filed as Exhibit 5).
24. Powers of Attorney.
II-1
<PAGE>
Item 17. Undertakings
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, Delaware General Corporation
Law, the Certificate of Incorporation, the Bylaws of the Registrant, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission (the "Commission") such indemnification is against
public policy as expressed in the Act, and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of 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 and will be governed by the final adjudication of such issue.
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, as amended.
(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 percent change
in the maximum aggregate offering price set forth in the "Calculation
of Registration Fee" 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.
(2) That, for the purpose of determining any liability under the Act,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
<PAGE>
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act") (and, where applicable, each filing of
an employee benefit plan's annual report pursuant to Section 15(d) of the
Exchange Act) 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.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Act, 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 shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
II-2
<PAGE>
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Piscataway, State of New Jersey, on this 2nd day
of January, 1998.
EXOGEN, INC.
By: /s/ Patrick A. McBrayer
-----------------------
Patrick A. McBrayer,
Chief Executive Officer,
President and Director
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated on January 2, 1998:
Signature
By: /s/ John P. Ryaby
-----------------
John P. Ryaby, Chairman of the Board of Directors and Vice
President of Research and Development and Regulatory Affairs
By: /s/ Patrick A. McBrayer
-----------------------
Patrick A. McBrayer, Chief Executive Officer, President, and
Director (Principal Executive Officer)
By: /s/ Richard H. Reisner
----------------------
Richard H. Reisner, Vice President, Chief Financial Officer,
and Secretary (Principal Financial Officer and Principal
Accounting Officer)
By: *
---------------------
Buzz Benson, Director
By: *
---------------------------
Donald J. Lothrop, Director
By: *
-------------------------
Peter C. Madeja, Director
<PAGE>
By: *
------------------------------------
David J. Ottensmeyer, M.D., Director
By: *
-------------------------
Terence D. Wall, Director
*By: /s/ Patrick A. McBrayer
-----------------------
Patrick A. McBrayer
Attorney-in-Fact
<PAGE>
EXHIBIT INDEX
Exhibit
No. Description
--- -----------
4.1 Specimen certificate for shares of the Registrant's Common Stock,
incorporated herein by reference to Exhibit 4.1 to Registration
Statement No. 33-92740
4.2 Provisions of the Certificate of Incorporation and By-Laws of the
Registrant defining rights of holders of Common Stock of the
Registrant, incorporated herein by reference to Exhibits 3.2 and 3.3 to
Registration Statement No. 33-92740
5. Opinion and Consent of Brobeck, Phleger & Harrison LLP
23.1 Consent of Arthur Andersen LLP, independent public accountants
23.2 Consent of Brobeck, Phleger & Harrison LLP (included in the opinion
filed as Exhibit 5)
24. Powers of Attorney
EXHIBIT 5
January 2, 1998
Exogen, Inc.
10 Constitution Ave.
Piscataway, NJ 08855
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-3, (the
"Registration Statement") transmitted for filing by you with the Securities and
Exchange Commission on January 2, 1998, in connection with the registration
under the Securities Act of 1933, as amended, of 1,799,019 shares of your Common
Stock, $.0001 par value (the "Shares").
We have examined such records and documents and have made such
examination of laws as we considered necessary to form a basis for the opinion
set forth herein. In our examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals, and
the conformity with the originals of all documents submitted to us as copies
thereof.
Based upon and subject to the foregoing, we are of the opinion
that the Shares, when sold in the manner described in the Registration
Statement, will be validly issued, fully paid and nonassessable.
We hereby consent to the use of our name under the caption
"Legal Matters" in the Registration Statement, including the prospectus
constituting a part thereof, and any amendment to the Registration Statement,
and consent to the filing of this opinion as an exhibit thereto.
Very truly yours,
/s/ Brobeck, Phleger & Harrison LLP
-------------------------------
BROBECK, PHLEGER & HARRISON LLP
EXHIBIT 23.1
CONSENT OF PUBLIC INDEPENDENT ACCOUNTANTS
To Exogen, Inc.:
As independent public accountants, we hereby consent to the use of our
reports and to all references to our firm included in or made a part of this
Registration Statement on Form S-3.
/s/ Arthur Andersen LLP
-------------------
ARTHUR ANDERSEN LLP
New York, New York
January 2, 1998
EXHIBIT 24
POWER OF ATTORNEY
We, the undersigned directors and/or officers of Exogen, Inc. (the
"Company"), hereby severally constitute and appoint Patrick A. McBrayer, Chief
Executive Officer and President, and Richard H. Reisner, Vice President, Vice
Chief Financial Officer and Secretary, and each of them individually, with full
powers of substitution and resubstitution, our true and lawful attorneys, with
full powers to them and each of them to sign for us, in our names and in the
capacities indicated below, the Registration Statement on Form S-3 filed with
the Securities and Exchange Commission, and any and all amendments to said
Registration Statement (including post-effective amendments), and any
registration statement filed pursuant to Rule 462(b) under the Securities Act of
1933, as amended, in connection with the registration under the Securities Act
of 1933, as amended, of equity securities of the Company, and to file or cause
to be filed the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys, and each of them, full power and authority to do and perform
each and every act and thing requisite and necessary to be done in connection
therewith, as fully to all intents and purposes as each of them might or could
do in person, and hereby ratifying and confirming all that said attorneys, and
each of them, or their substitute or substitutes, shall do or cause to be done
by virtue of this Power of Attorney.
WITNESS our hands on this 2nd day of January, 1998.
/s/ John P. Ryaby /s/ Donald J. Lothrop
----------------- ---------------------
John P. Ryaby Donald J. Lothrop
Chairman of the Board of Directors Director
and Vice President of Research
and Development and Regulatory Affairs
/s/ Patrick A. McBrayer /s/ Peter C. Madeja
------------------- ---------------
Patrick A. McBrayer Peter C. Madeja
Chief Executive Officer, President, Director
and Director (Principal Executive Officer)
/s/ Richard H. Reisner /s/ David J. Ottensmeyer
------------------ --------------------
Richard H. Reisner David J. Ottensmeyer, M.D.
Vice President, Chief Financial Officer, Director
and Secretary (Principal Financial Officer
and Principal Accounting Officer)
/s/ Buzz Benson /s/ Terence D. Wall
----------- ---------------
Buzz Benson Terence D. Wall
Director Director
