<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 4, 2000
REGISTRATION NO. 333-95671
________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------
VION PHARMACEUTICALS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 13-3671221
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
</TABLE>
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4 SCIENCE PARK
NEW HAVEN, CONNECTICUT 06511
(203) 498-4210
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
-------------------
ALAN KESSMAN
PRESIDENT AND CHIEF EXECUTIVE OFFICER
VION PHARMACEUTICAL, INC.
4 SCIENCE PARK
NEW HAVEN, CONNECTICUT 06511
(203) 498-4210
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
-------------------
COPIES OF ALL COMMUNICATIONS, INCLUDING ALL COMMUNICATIONS SENT TO THE AGENT
FOR SERVICE, SHOULD BE SENT TO:
PAUL JACOBS, ESQ.
FULBRIGHT & JAWORSKI L.L.P.
666 FIFTH AVENUE
NEW YORK, NEW YORK 10103
-------------------
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, as amended, other than securities offered only in connection with a
dividend or interest reinvesment 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. [ ]
(cover continued on next page)
-------------------
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>
(cover continued from previous page)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED
MAXIMUM PROPOSED
AMOUNT AGGREGATE MAXIMUM
TITLE OF SHARES TO BE PRICE AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED PER UNIT OFFERING PRICE REGISTRATION FEE (1)
<S> <C> <C> <C> <C>
Common stock underlying outstanding
Class A warrants (2) 1,059,947 $4.63 $ 4,907,555 $1,296
Common stock underlying outstanding
Class B warrants (2) 1,348,449 $6.23 $ 8,400,838 $2,218
Class B warrants issuable upon exercise
of outstanding Class A warrants (2) 1,059,947 -- -- --
Common stock underlying Class B
warrants issuable upon exercise of
outstanding Class A warrants 1,059,947 $6.23 $ 6,603,470 $1,744
Total $19,911,863 $5,258*
</TABLE>
* Previously paid.
(1) The registration fee was calculated in accordance with Rule 457(g) under the
Securities Act of 1933, as amended.
(2) These securities were offered and sold to the public in 1995.
<PAGE>
PROSPECTUS
[LOGO]
3,468,343 SHARES OF COMMON STOCK
1,059,947 CLASS B WARRANTS
-------------------
We are offering and selling an aggregate of 3,468,343 shares of our common
stock and 1,059,947 common stock purchase warrants. All of the securities that
we are offering are issuable upon the exercise of warrants. Of the common stock
offered, 1,059,947 shares are issuable upon exercise of our Class A warrants and
2,408,396 shares are issuable upon exercise of our Class B warrants. The
Class A and Class B warrants were issued and sold to the public in our initial
public offering in 1995.
NASDAQ MARKET SYMBOLS:
COMMON STOCK -- VION
CLASS B WARRANTS -- VIONZ
CLOSING PRICES (FEBRUARY 3, 2000):
COMMON STOCK -- $11.31
CLASS B WARRANTS -- $5.06
-------------------
SEE 'RISK FACTORS,' WHICH BEGINS ON PAGE 8 OF THIS PROSPECTUS, FOR CERTAIN
INFORMATION THAT YOU SHOULD CONSIDER BEFORE YOU INVEST IN THE SECURITIES BEING
OFFERED PURSUANT TO THIS PROSPECTUS.
-------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR
DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is February 4, 2000
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
About this Prospectus....................................... 2
Prospectus Summary.......................................... 3
Recent Developments......................................... 6
Risk Factors................................................ 8
Use of Proceeds............................................. 15
Plan of Distribution........................................ 15
Legal Matters............................................... 15
Experts..................................................... 15
Note Regarding Forward-Looking Statements................... 15
Where You Can Find More Information......................... 16
</TABLE>
<PAGE>
ABOUT THIS PROSPECTUS
This prospectus is a part of a registration statement on Form S-3 filed by
us with the Securities and Exchange Commission to register 3,468,343 shares of
our common stock and 1,059,947 warrants to purchase common stock. This
prospectus does not contain all of the information set forth in the registration
statement, certain parts of which are omitted in accordance with the rules and
regulations of the SEC. Accordingly, you should refer to the registration
statement and its exhibits for further information about us and our common
stock. Copies of the registration statement and its exhibits are on file with
the SEC. Statements contained in this prospectus concerning the documents we
have filed with the SEC are not intended to be comprehensive, and in each
instance we refer you to the copy of the actual document filed as an exhibit to
the registration statement or otherwise filed with the SEC. Each such statement
is qualified in its entirety by such reference.
You should rely only on the information provided or incorporated by
reference in this prospectus and the registration statement. We have not
authorized anyone to provide you with different information. The information
contained in this prospectus is accurate only as of the date of this prospectus,
regardless of the time of delivery of this prospectus or of any sale of common
stock or warrants to purchase common stock.
2
<PAGE>
PROSPECTUS SUMMARY
You should read the following summary together with the more detailed
information, financial statements and notes to the financial statements
incorporated by reference into this prospectus.
ABOUT VION
Vion Pharmaceuticals, Inc. is a biopharmaceutical company engaged in the
research, development and commercialization of cancer treatment technologies.
Pursuant to license agreements with Yale University, we have acquired the rights
to several patents and patent applications related to cancer treatment
technologies. Our product portfolio consists of a drug delivery platform and
three cancer therapeutics.
DRUG DELIVERY PLATFORM: TAPET'r'
We believe that our core technology, TAPET, or Tumor Amplified Protein
Expression Therapy, addresses one of the biggest challenges faced in treating
cancer: how to effectively deliver anticancer agents while having a minimal
effect on healthy, normal tissues. Administered systemically, most anticancer
drugs affect rapidly growing cells, both cancerous and normal, throughout the
body. Too often, the result is significant side effects that take a toll on
patient health, limiting the amount of treatment a patient may receive.
Therefore, a great need exists for new therapies and delivery mechanisms that
are able to deliver anticancer agents to tumors preferentially, safely and
efficiently. We believe that TAPET will meet this need.
We believe that TAPET is the first and only drug delivery technology that
uses genetically altered strains of Salmonella as a bacterial vector, or
vehicle, for delivering cancer-fighting drugs preferentially to solid tumors.
The Salmonella utilized in the TAPET system have been genetically modified to
minimize the occurrence of septic shock. As an additional safety measure, TAPET
organisms have been designed to remain fully sensitive to antibiotics.
Therefore, if there is an adverse reaction, the bacteria can be treated with
antibiotics at any time during therapy. Preclinical studies have demonstrated
these safety measures to be effective.
In preclinical studies, after injection into the body, TAPET organisms
migrated to and penetrated throughout tumors, including the necrotic, or the
deep, oxygen-starved cells of solid tumors where other anticancer drugs have
difficulty reaching. These studies showed that TAPET organisms double in
quantity every 30 to 45 minutes, thereby increasing their ability to inhibit
tumor growth and enabling the continuous delivery of anticancer drugs to tumors.
We believe that bringing a 'drug factory' preferentially to the tumor will
result in a cancer therapy that is more concentrated, more effective and less
toxic to normal tissue.
Preclinical studies have demonstrated TAPET's ability to inhibit the growth
of a broad range of solid tumors, such as melanoma and colon, lung and breast
cancer. Additionally, in these preclinical studies, TAPET organisms have been
shown to selectively accumulate in solid tumors of the lung, colon, breast,
prostate, liver, kidney and also in melanoma at ratios of greater than 1,000:1
relative to normal tissues. These types of solid tumors represent more than 60%
of all new cancer incidences in the world today. Administration of unarmed TAPET
vectors, without an anticancer drug, to mice bearing melanoma tumors inhibited
the growth of these tumors by 94% compared with untreated control animals. In
addition, the treated mice survived more than twice as long as those that did
not receive TAPET treatment.
We believe that TAPET's greatest potential application is the ability to
continuously deliver a large variety of anticancer drugs directly to tumors
while minimizing the side effects associated with current chemotherapy. Through
genetic engineering, we intend to develop TAPET vectors that manufacture and
deliver Vion-developed anticancer drugs. Some of these drugs will be generic and
non-proprietary, however, when combined with the TAPET system, they could result
in proprietary products for us. In addition, we intend to seek multiple
strategic partnerships with pharmaceutical companies to use TAPET to deliver
their proprietary anticancer drugs.
3
<PAGE>
Following the submission of an investigational new drug, or IND, application
to the U.S. Food and Drug Administration, we are now working under an open IND
status to prepare for and initiate Phase I intratumoral safety studies in human
patients using unarmed TAPET organisms. On October 11, 1999, we received
Institutional Review Board approval to begin Phase I safety trials at the
Cleveland Clinic under the supervision of Ronald M. Bukowski, M.D. The trial
began in December 1999. If successful, these safety studies will soon be
followed by additional Phase I studies of TAPET organisms delivered
intravenously, as well as by an armed vector designed to manufacture and express
an anticancer drug.
ANTICANCER CELL THERAPEUTICS
Promycin'r'
Promycin, which is currently being evaluated in a multicenter Phase III
clinical trial for the treatment of head and neck cancer, is designed to improve
the treatment of solid tumors by attacking the hypoxic, or oxygen-depleted,
cancer cells that are often resistant to traditional radiation therapy. Small
quantities of hypoxic cells within a tumor often survive and proliferate after
most of the non-hypoxic malignant cells in the tumor have been eradicated by
radiation treatment. Because radiation therapy requires oxygenation of the
tissue in order to be effective, oxygen depleted cells are less susceptible to
radiation therapy and tend to form a therapeutically resistant group within
solid tumors. Preclinical studies have shown that Promycin, in conjunction with
radiation, is effective in eradicating oxygen-depleted cells.
A Phase I/II trial was conducted on 21 patients who were treated with
radiation, and in some cases, surgery, in conjunction with Promycin for certain
types of head and neck cancer. In this study, there was a 33% cancer-free
survival rate at five years versus the clinical expectation of approximately 15%
for radiation therapy alone. Based on these findings, Vion and Boehringer
Ingelheim International GmbH collaborated to initiate a Phase III trial of
Promycin in patients with head and neck cancer at 44 centers worldwide. The
trial is designed to determine the efficacy of Promycin as an adjunct to
radiation therapy for these conditions.
Triapine'r'
Triapine is designed to prevent the replication of tumor cells by blocking a
critical step in the synthesis of DNA. In preclinical trials, Triapine has shown
a broad spectrum of activity against human tumors grafted onto another species
and mouse tumors. We received clearance from the U.S. Food and Drug
Administration to proceed with a Phase I human clinical trial in January 1998.
Both single dose and multiple dose regimens are currently being evaluated in
patients with solid tumors.
Sulfonyl Hydrazine Prodrugs
Sulfonyl hydrazine prodrugs represent compounds that are designed to be
converted to unique, potent alkylating agents. Alkylating agents are highly
effective against tumors, but lack selectivity and affect many normal tissues as
well as cancer cells, causing toxic side-effects. Developing the sulfonyl
hydrazine alkylating agent as a prodrug form yields a relatively non-toxic drug
form that may be converted preferentially into the active drug, allowing it to
exploit a property of tumor cells for conversion into powerful cancer-fighting
drugs.
OUR BUSINESS STRATEGY
Our product development strategy consists of two main approaches. First, we
engage in product development with respect to anticancer technologies through
in-house research and through collaboration with academic institutions. Second,
we seek partnerships with other companies to develop, and eventually market, our
products.
4
<PAGE>
Our plan of operations for the next 18 months includes the following
elements:
Continue to conduct internal research and development with respect to our
core technologies and other product candidates that we may identify;
Conduct Phase III clinical studies of Promycin in the United States and
Europe for treatment of head and neck cancer;
Conduct Phase I clinical studies of Triapine in the United States for
safety and efficacy;
File IND(s) with the FDA and conduct Phase I clinical studies in the United
States and Europe for the safety and selective tumor accumulation of
several bacterial constructs using our TAPET delivery system;
Continue to support research and development being performed at Yale
University and by other collaborators; and
Continue to seek collaborative partnerships, joint ventures, co-promotional
agreements or other arrangements with third parties.
We were incorporated in Delaware on May 13, 1993 and began operations on
May 1, 1994. Our executive offices are located at 4 Science Park, New Haven,
Connecticut 06511, and our telephone number is (203) 498-4210.
5
<PAGE>
RECENT DEVELOPMENTS
POSSIBLE WARRANT REDEMPTION
We are currently eligible to redeem our Class A warrants and may become
eligible to redeem our Class B warrants soon after the date of this prospectus.
If and when we determine to redeem the warrants, notices will be mailed to
registered warrant holders at least 30 days before the warrants have to be
redeemed. Warrant holders will then have the opportunity to exercise them until
the redemption date, or redeem them for five cents each. The notices will
describe the other terms of the redemption.
PUBLIC OFFERING
In October and November of 1999, we completed the sale of 2,530,000 newly
issued shares of our common stock (including shares sold to the underwriter upon
the exercise of its over-allotment option) at a purchase price of $5.00 per
share, in an underwritten public offering managed by Brean Murray & Co., Inc.
The proceeds from this offering were approximately $11.15 million. We have used,
and plan to continue to use, these proceeds for working capital, including
product research and development, and other general corporate purposes.
GRANT OF REQUEST FOR INTERFERENCE
In November of 1999, the United States Patent and Trademark Office granted
our request for an Interference between a patent application we licensed from
Yale University and United States patent No. 5,532,246 assigned to BioChem
Pharma, Inc. Both the patent application and the BioChem Pharma patent claim the
right to use of 3TC, also known as lamivudine and Epivir'TM', to treat
hepatitis B virus.
An Interference is a legal proceeding that determines which party is
entitled to a patent containing commonly claimed subject matter. The Patent
Office has designated us as the senior party of the Interference and BioChem
Pharma as the junior party. As the junior party, BioChem Pharma bears the burden
of proof. Both we and BioChem Pharma, however, have an opportunity to argue our
positions during the Interference proceeding. Depending upon the length of an
Interference proceeding, which could be reduced by a mutually agreed upon
settlement, its cost to each party could be substantial. Determinations in
Interference proceedings are subject to appeal in the appropriate United States
federal courts.
If we were to prevail in the Interference, we would have the right to go to
court to enforce our rights in the United States. Additionally, if we were to
prevail in the Interference, other parties such as BioChem Pharma might be
willing to license from us the right to use 3TC in a method for treating HBV.
There can be no guarantee that we would be successful in licensing these rights
on acceptable terms.
RESTRUCTURING OF LICENSE AGREEMENT WITH BOEHRINGER INGELHEIM
In December 1999, we restructured our exclusive worldwide license agreement
for the development of Promycin. Promycin is currently in clinical development
for the treatment of head and neck cancer. Boehringer Ingelheim International
GmbM will assume full managerial and financial responsibility for the
development of Promycin. We will receive reduced milestone and royalty payments
on all future sales.
TAPET SAFETY TRIALS
In December 1999, TAPET was administered to the first patients enrolled into
our Phase I intratumoral trial, which is being conducted at the Cleveland Clinic
Foundation. The Phase I study is designed to evaluate the safety, potential
efficacy and optimum biological dose of an intratumoral administration for
patients with either cutaneous or subcutaneous solid tumors.
6
<PAGE>
OPTION AGREEMENT WITH ASTRAZENECA
In January 2000, we entered into an option agreement with AstraZeneca to
collaborate on the evaluation of novel anticancer therapies jointly under
development by us and EPTTCO Limited. Under the terms of the agreement, we and
EPTTCO will co-develop specific EPTTCO-armed TAPET vectors and test them in
preclinical cancer models. AstraZeneca will provide access under its rights to
certain prodrugs. AstraZeneca has been granted an exclusive option period to
license the specific TAPET vector we co-develop with EPTTCO. Financial terms of
the license, if exercised, will be determined at the time of exercise.
SBIR GRANT
In January 2000, we received a two-year, Small Business Innovation and
Research grant from the National Institutes of Health/National Cancer Institute
for $750,000. This grant will be used to enhance our TAPET research.
7
<PAGE>
RISK FACTORS
You should carefully consider the following risk factors in addition to the
other information in this prospectus before purchasing our shares.
WE DO NOT HAVE A LONG OPERATING HISTORY AND ARE VULNERABLE TO THE UNCERTAINTIES
AND DIFFICULTIES FREQUENTLY ENCOUNTERED BY EARLY STAGE COMPANIES
To date, our activities have consisted primarily of research and development
and we have generated minimal revenues. Therefore, we are vulnerable to the
uncertainties and difficulties encountered by early stage companies, such as our
ability to:
implement sales and marketing initiatives;
attain, retain and motivate qualified personnel;
respond to actions taken by our competitors;
effectively manage our growth by building a solid base of operations and
technologies; and
move from the product development stage to the commercialization stage.
WE DO NOT HAVE MANUFACTURING OR MARKETING CAPABILITIES OF OUR OWN
We have no experience in manufacturing or marketing any therapeutic
products. We currently do not have the resources to manufacture or market
independently on a commercial scale any products that we may develop. We
currently intend to outsource some or all manufacturing requirements we may
have. We may not be able to enter into suitable arrangements for manufacturing.
If, alternatively, we decide to establish a manufacturing facility, we will
require substantial additional funds and will be required to hire significant
additional personnel and comply with the extensive FDA-mandated good
manufacturing practices that would apply to such a facility. Additionally, we
currently have no marketing or sales staff and we may not be successful in
hiring such a staff.
WE DEPEND ON OUTSIDE PARTIES FOR ASPECTS OF OUR PRODUCT DEVELOPMENT EFFORTS
Our strategy for the research, development and commercialization of our
products entails entering into various arrangements with corporate partners,
licensors, licensees, collaborators at research institutions and others. We are
dependent, therefore, upon the actions of these third parties in performing
their responsibilities. We also rely on our collaborative partners to conduct
research efforts and clinical trials, to obtain regulatory approvals and to
manufacture and market our products. In particular, we have contracted a
research organization to conduct the Phase III clinical studies of Promycin. As
a result, the amount and timing of resources to be devoted to these activities
by these other parties may not be within our control.
WE HAVE AN ACCUMULATED DEFICIT, WE ANTICIPATE THAT OUR LOSSES WILL CONTINUE AND
WE RECEIVED A GOING CONCERN OPINION FROM OUR AUDITORS
We are in the development stage and at September 30, 1999, we had an
accumulated deficit of approximately $59.5 million. The loss applicable to
common shareholders is also approximately $59.5 million. Since then, we have
experienced significant losses which we expect to continue for the foreseeable
future. We have incurred a substantial portion of our losses in connection with
research we sponsored on several product candidates pursuant to agreements with
Yale University. We continue to have substantial financial commitments to Yale
pursuant to the agreements with them. We will continue to conduct significant
research, development, testing and regulatory compliance activities which,
together with administrative expenses, are expected to result in operating
losses for at least the next several years. We also received an opinion from our
independent auditors for the fiscal year ended December 31, 1998 expressing
substantial doubt as to our ability to continue as a going concern as a result
of our recurring operating losses and need for substantial amounts of additional
funding to continue our operations.
8
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WE ARE IN THE EARLY STAGES OF PRODUCT DEVELOPMENT AND OUR PRODUCT CANDIDATES MAY
NOT BE SUCCESSFULLY DEVELOPED
Some of our proposed products are in the early development stage and require
significant further research and development. We have not yet selected lead
drugs to use with our proposed TAPET drug delivery platform and one of our
proposed products is just beginning clinical trials. We do not expect our
products to be commercially available for a significant period of time, if ever.
Results obtained in research and testing conducted to date are not conclusive as
to whether products we are investigating will be effective or safe for their
proposed uses. Our successful development of any product is subject to the risks
of failure inherent in the development of products or therapeutic procedures
based on innovative technologies. These risks include the possibilities that:
the proposed products are found to be ineffective or unsafe, or otherwise
fail to receive necessary regulatory clearances or approvals;
the proposed products are uneconomical to market or do not achieve broad
market acceptance;
third parties hold proprietary rights that preclude us from marketing
proposed products; or
third parties market a superior or equivalent product.
THE EFFICACY AND SAFETY OF OUR TAPET TECHNOLOGY IS UNCERTAIN
TAPET uses genetically altered Salmonella bacteria for delivery of genes or
gene products to tumors. The use of bacteria in general, and Salmonella in
particular, to deliver genes or gene products is a new technology, and existing
preclinical and clinical data on the safety and efficacy of this technology are
very limited. Unacceptable side effects may be discovered during preclinical and
clinical testing of our potential products utilizing the TAPET technology.
Products utilizing the TAPET technology are not yet in human clinical trials,
and the results of preclinical studies do not always predict safety or efficacy
in humans. Possible serious side effects of TAPET include bacterial infections,
particularly the risk of septic shock, a serious and often fatal result of
bacterial infection of the blood.
WE ARE LIKELY TO REQUIRE ADDITIONAL CAPITAL TO CONTINUE OUR OPERATIONS
Our strategy is to continue to test our current anticancer therapeutics and
technologies and to discover, develop and commercialize other products for the
treatment of cancer. In order to implement our strategy, we expect to spend
significant amounts of money to:
pay our financial commitments to our current academic collaborators;
fund our research and product development programs;
enter into additional strategic/collaborative partnerships with academic
institutions;
sponsor the performance of clinical trials and other tests on our products;
market our products; and
fund operating losses and working capital.
We recently completed a public offering of our common stock from which we
received approximately $11.15 million and we will likely require additional
capital from public or private equity or debt sources. We anticipate that our
existing available capital resources and interest earned on available cash and
short-term investments, assuming no exercise of outstanding warrants, will be
sufficient to fund our operating expenses and capital requirements as currently
planned until at least November 30, 2000. We may not be able to raise additional
capital in the future on terms acceptable to us or at all. Moreover, future
equity financings may be dilutive to our stockholders. If alternative sources of
financing are insufficient or unavailable, we will be required to delay, scale
back or eliminate our research and product development programs or to license
third parties to commercialize products or technologies that we would otherwise
seek to develop alone. In addition, we may be unable to meet our obligations
under license agreements, research
9
<PAGE>
agreements or other collaborative agreements. If we fail to make any payments
required to academic collaborators or licensors, or otherwise default under any
agreement with such parties, they will have the right to terminate their
agreements with us. As a result, we would be unable to continue development of
or to commercialize all or a portion of our product candidates licensed under
these agreements.
WE DEPEND HEAVILY ON PATENTS WHICH MAY NOT ADEQUATELY PROTECT OUR TECHNOLOGIES
FROM USE BY OTHERS
Our success will depend on our ability, or the ability of our licensors, to
obtain and maintain patent protection on technologies and products, to preserve
trade secrets and to operate without infringing the proprietary rights of
others. Patent applications filed by us or on our behalf may not result in
patents being issued or, if issued, the patents may not afford protection
against competitors with similar technology. Furthermore, others may
independently develop similar technologies or duplicate any technology developed
by us. It is possible that before any of our potential products can be
commercialized, their related patents may expire, or remain in existence for
only a short period following commercialization, thus reducing any advantage of
the patent. Moreover, composition of matter patent protection, which gives
patent protection for a compound or a composition per se, may not be available
for some of our product candidates.
Our processes and potential products may conflict with patents that have
been or may be granted to competitors, universities or others. As the
biopharmaceutical industry expands and more patents are issued, the risk
increases that our processes and potential products may give rise to claims that
they infringe the patents of others. These other persons could bring legal
actions against us claiming damages and seeking to enjoin clinical testing,
manufacturing and marketing of the affected product or process. If any of these
actions are successful, in addition to any potential liability for damages, we
could be required to obtain a license in order to continue to conduct clinical
tests, manufacture or market the affected product or use the affected process.
Required licenses may not be available on acceptable terms, if at all, and the
results of litigation are uncertain. If we become involved in litigation or
other proceedings, it could consume a substantial portion of our financial
resources and the efforts of our personnel. In addition, we may have to expend
resources to protect our interests from possible infringement by others.
We are aware that BioChem Pharma has been granted an issued U.S. patent with
claims to methods of use of a compound or a group of compounds, including 3TC,
for treating HBV. Under an agreement with Yale, we have rights in a patent
application with claims directed to methods for the use of 3TC or a mixture
containing 3TC for treating HBV. In November 1997, we requested that the U.S.
Patent and Trademark Office declare an Interference between the BioChem patent
and our patent application. In November 1999, our request was granted.
We have received correspondence from F. C. Gaskin, Inc. alleging that we may
be infringing certain of their patents relating to melanin-containing
compositions and their use. We believe this assertion has no merit.
WE RELY ON CONFIDENTIALITY AGREEMENTS TO PROTECT OUR TRADE SECRETS; DISPUTES MAY
ARISE AS TO TECHNOLOGY DEVELOPED BY OUR EMPLOYEES
We also rely on trade secrets that we may seek to protect through
confidentiality agreements with employees and other parties. If these agreements
are breached, remedies may not be available or adequate and our trade secrets
may otherwise become known to competitors. To the extent that our consultants,
key employees or other third parties apply technological information
independently developed by them or by others to our proposed projects, third
parties may own all or part of the proprietary rights to such information, and
disputes may arise as to the ownership of these proprietary rights which may not
be resolved in our favor.
10
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WE HAVE PAID AND MUST CONTINUE TO PAY SIGNIFICANT AMOUNTS OF MONEY TO YALE, BUT
WE MAY NEVER REALIZE ANY BENEFITS FROM OUR AGREEMENTS WITH YALE
We have significant financial commitments to academic collaborators in
connection with licenses and sponsored research agreements. In particular,
through September 30, 1999, we have paid approximately $6.2 million in total to
Yale, and we continue to have substantial funding commitments to Yale whether or
not the research results in suitable product candidates. Moreover, we generally
do not have the right to control the research that Yale is conducting pursuant
to the sponsored research agreements, and the funds may not be used to conduct
research relating to products that we would like to pursue. Additionally, if the
research being conducted by Yale results in technologies that Yale has not
already licensed or agreed to license to us, we may need to negotiate additional
license agreements or we may be unable to utilize those technologies.
WE DEPEND HEAVILY ON KEY PERSONNEL
Because of the specialized scientific nature of our business, we are
dependent upon the continued efforts of our management and scientific and
technical personnel. We are also dependent upon key employees and our scientific
advisors. We do not maintain key-man life insurance on any of our employees.
Competition among biopharmaceutical and biotechnology companies for qualified
employees is intense. We may not be able to attract, retain and motivate any
additional highly skilled employees required for the expansion of our
activities. In addition, the hiring process will be time consuming and will
divert the efforts and attention of our management from our operations.
THE FDA AND COMPARABLE FOREIGN REGULATORY AUTHORITIES MAY NOT APPROVE OUR FUTURE
PRODUCTS
The FDA and comparable foreign regulatory authorities require rigorous
preclinical testing, clinical trials and other approval procedures for human
pharmaceutical products. Numerous regulations also govern the manufacturing,
safety, labeling, storage, record keeping, reporting and marketing of
pharmaceutical products. Governmental regulations may significantly delay the
marketing of our products, prevent marketing of products altogether or impose
costly requirements on our activities. A delay in obtaining or a failure to
obtain regulatory approvals for any of our drug candidates will have an adverse
effect on our business.
Government regulatory requirements vary widely from country to country, and
the time required to complete preclinical testing and clinical trials and to
obtain regulatory approvals is typically several years. The process of obtaining
approvals and complying with appropriate government regulations is time
consuming and expensive. Changes in regulatory policy or additional regulations
adopted during product development and regulatory review of information we
submit could also result in added cost, delays or rejections. Our success
substantially depends upon our ability to demonstrate the safety and
effectiveness of our drug candidates to the satisfaction of government
authorities.
EVEN IF OUR PRODUCTS RECEIVE REGULATORY APPROVAL, WE MAY STILL FACE DIFFICULTIES
IN MARKETING AND MANUFACTURING THOSE PRODUCTS
If we receive regulatory approval of any of our drug candidates, the FDA or
comparable foreign regulatory agency may, nevertheless, limit the indicated uses
of the drug candidate. A marketed product, its manufacturer and the
manufacturer's facilities are subject to continual review and periodic
inspections. The discovery of previously unknown problems with a product,
manufacturer or facility may result in restrictions on the product or
manufacturer, including withdrawal of the product from the market. The failure
to comply with applicable regulatory requirements can, among other things,
result in:
fines;
suspended regulatory approvals;
refusal to approve pending applications;
refusal to permit exports from the United States;
product recalls;
11
<PAGE>
seizure of products;
injunctions;
operating restrictions; and
criminal prosecutions.
THERE IS UNCERTAINTY RELATED TO HEALTHCARE REIMBURSEMENT AND REFORM MEASURES
THAT COULD AFFECT THE COMMERCIAL VIABILITY OF ANY PRODUCTS WE DEVELOP
Our success in generating revenue from sales of therapeutic products may
depend on the extent to which reimbursement for the cost of those products will
be available from government health administration authorities, private health
insurers and other organizations. Significant uncertainty exists as to the
reimbursement status of newly-approved healthcare products. If government and
third-party payors do not provide adequate coverage and reimbursement levels for
uses of our therapeutic products, the market acceptance of these products could
be adversely affected. Further, third-party insurance coverage may not reimburse
us at price levels sufficient for realization of an appropriate return on our
investment in developing new therapies or products.
Government and other third-party payors are increasingly attempting to
contain healthcare costs by limiting both coverage and the level of
reimbursement of new therapeutic products approved for marketing by the FDA and
by refusing, in some cases, to provide any coverage of uses of approved products
for disease indications other than those for which the FDA has granted marketing
approval. In addition, Congress regularly considers numerous proposals relating
to healthcare reform which, if adopted, could affect the amount paid for
pharmaceutical products and medical procedures.
WE FACE INTENSE COMPETITION IN THE MARKET FOR ANTICANCER PRODUCTS
The market for anticancer products is large and growing rapidly and will
attract new entrants. We are in competition with other pharmaceutical companies,
biotechnology companies and research and academic institutions. Many of these
companies have substantially greater financial and other resources and
development capabilities than us and have substantially greater experience in
undertaking preclinical and clinical testing of products, obtaining regulatory
approvals and manufacturing and marketing pharmaceutical products. In addition,
our competitors may succeed in obtaining approval for products more rapidly than
us and in developing and commercializing products that are safer and more
effective than those that we propose to develop. The existence of these
products, other products or treatments of which we are not aware or products or
treatments that may be developed in the future may adversely affect the
marketability of our products by rendering them less competitive or obsolete. In
addition to competing with universities and other research institutions in the
development of products, technologies and processes, we may compete with other
companies in acquiring rights to products or technologies from universities.
THE TESTING AND MARKETING OF OUR POTENTIAL PRODUCTS WILL PRESENT LIABILITY RISKS
Our business exposes us to potential product liability risks that are
inherent in the testing, manufacturing and marketing of drug products including,
but not limited to, unacceptable side effects. These risks are particularly
inherent in human trials of our proposed products. Side effects and other
liability risks could give rise to viable product liability claims against us.
We do not currently have any product liability insurance. When we seek to obtain
product liability insurance, we may not be able to obtain or maintain product
liability insurance on acceptable terms and insurance may not provide adequate
coverage against potential liabilities. As a result, if we are subject to
product liability claims, we may incur significant expense defending such
claims.
OUR COMPLIANCE WITH ENVIRONMENTAL LAWS MAY NECESSITATE EXPENDITURES IN THE
FUTURE
We cannot accurately predict the outcome or timing of future expenditures
that we may be required to pay in order to comply with comprehensive federal,
state and local environmental laws and regulations. We must comply with
environmental laws that govern, among other things, all emissions, waste water
discharge and solid and hazardous waste disposal, and the remediation of
12
<PAGE>
contamination associated with generation, handling and disposal activities.
Environmental laws have changed in recent years and we may become subject to
stricter environmental standards in the future and face larger capital
expenditures in order to comply with environmental laws. Our limited capital
makes it uncertain whether we will be able to pay for these larger than expected
capital expenditures. Also, future developments, administrative actions or
liabilities relating to environmental matters may have a material adverse effect
on our financial condition or results of operations.
All of our operations are performed under strict environmental and health
safety controls consistent with the Occupational Safety and Health
Administration, or OSHA, the Environmental Protection Agency, or EPA, and the
Nuclear Regulatory Commission, or NRC, regulations. We cannot be certain that we
will be able to control all health and safety problems. If we cannot control
those problems, we may be held liable and may be required to pay the costs of
remediation. These liabilities and costs could be material.
EFFECTS OF ANTI-TAKEOVER PROVISIONS COULD INHIBIT THE ACQUISITION OF VION
Some of the provisions of our certificate of incorporation, bylaws and
Delaware law could, together or separately:
discourage potential acquisitions;
delay or prevent a change in control; and
limit the price that investors might be willing to pay in the future for
shares of our common stock.
In particular, our certificate of incorporation provides that our board may
issue from time to time, without stockholder approval, additional shares of
preferred stock. The issuance of preferred stock may make it more difficult for
a third party to acquire, or may discourage a third party from acquiring, voting
control of our stock. This provision could also discourage, hinder or preclude
an unsolicited acquisition, even if such acquisition is beneficial to us, and
could make it less likely that stockholders receive a premium for their shares
as a result of any such attempt. Furthermore, we are subject to Section 203 of
the Delaware General Corporation Law which generally prohibits a Delaware
corporation from engaging in any of a broad range of business combinations with
any interested stockholder for a period of three years following the date on
which the stockholder became an interested stockholder.
In addition, we have adopted a 'poison pill' pursuant to which our
stockholders may exercise rights to purchase additional shares of common stock
in the event of certain acquisitions of our common stock.
WE MAY ISSUE PREFERRED STOCK ON TERMS THAT MAY DISADVANTAGE OUR COMMON
STOCKHOLDERS
We currently have 498,194 shares of Class A Preferred Stock and 5,000 shares
of 5% Redeemable Convertible Preferred Stock Series 1998 outstanding, and the
board may issue additional preferred stock without stockholder approval. The
issuance of additional shares of preferred stock by our board could decrease the
amount of earnings and assets available for distribution to our common
stockholders. Preferred stockholders could receive voting rights and rights to
payments on liquidation or of dividends or other rights that are greater than
the rights of the common stockholders.
UNFORESEEN YEAR 2000 PROBLEMS MAY HAVE ADVERSE EFFECTS ON OUR BUSINESS AND
RESULTS OF OPERATIONS
While we have not experienced any Year 2000 problems as of the date of this
prospectus, such problems could arise in the future. In that event, our
operations could be affected in several adverse ways. Failure of a scientific
instrument or laboratory facility or by any of our suppliers could result, among
other things, in the loss of experiments that would take weeks to set up and
repeat. Such delays in the progress of research could have an adverse impact on
our stock price and on our ability to raise capital, and the cost of repeating
lost experiments cannot reasonably be
13
<PAGE>
estimated at this time. In addition, research delays could occur due to the
impact of Year 2000 problems at major vendors, government research funding
agencies, or development partners.
OUR MANAGEMENT HAS BROAD DISCRETION AS TO THE USE OF THE PROCEEDS FROM THE
EXERCISE OF WARRANTS
Our management will have broad discretion with respect to the use of
proceeds from the exercise of warrants. We intend to use the proceeds from the
exercise of warrants for working capital and general corporate purposes,
including additional research and development projects, increasing marketing
activities and possible expansion through acquisitions. As a result, you must
rely solely on management's ability and discretion to apply the proceeds to
these ends effectively.
THERE MAY BE AN ADVERSE EFFECT ON THE MARKET PRICE OF OUR STOCK AS A RESULT OF
SHARES BEING AVAILABLE FOR SALE IN THE FUTURE
Sales of a substantial amount of common stock in the public market, or the
perception that these sales may occur, could adversely affect the market price
of our common stock prevailing from time to time. This could also impair our
ability to raise additional capital through the sale of our equity securities.
We have approximately 18.2 million shares of common stock outstanding. All of
these shares are freely tradeable except for any shares purchased by an
affiliate of ours, which will be subject to the limitations of Rule 144 under
the Securities Act.
There are currently options and warrants outstanding that are exercisable
for an aggregate of approximately 7.6 million shares of common stock. Options
and warrants to purchase approximately 6 million shares are currently
exercisable, and the remainder become exercisable at various times through 2003.
14
<PAGE>
USE OF PROCEEDS
We estimate that the proceeds from the sale of the 3,468,343 shares of
common stock and 1,059,947 Class B warrants offered by us, will be approximately
$19,911,863, if all Class A warrants and Class B warrants are exercised in full.
We cannot assure you that all or any number of warrants will be exercised. We
must pay a 5% commission to D.H. Blair Investment Banking Corp. for each
Class A warrant and each Class B warrant that is exercised if the exercise is
solicited by D.H. Blair.
We will receive proceeds of $4.63 for each Class A warrant that is exercised
and $6.23 for each Class B warrant that is exercised.
We intend to use the net proceeds from the exercise of warrants and options
for working capital and general corporate purposes, including additional
research and development projects, increasing marketing activities and possible
expansion through acquisitions.
PLAN OF DISTRIBUTION
We are registering shares of common stock issuable upon the exercise of
outstanding Class A warrants and Class B warrants. The Class A warrants and
Class B warrants were issued as part of units that we offered to the public in
1995. We are also registering the Class B warrants issuable upon the exercise of
the outstanding Class A warrants and the shares of common stock issuable upon
the exercise of those Class B warrants.
The shares of common stock are traded on the Nasdaq Stock Market National
Market System under the symbol VION and the Class B warrants are traded on the
Nasdaq SmallCap Market under the symbol VIONZ. The shares and warrants may be
sold from time to time directly by the holders of common stock or warrants.
Alternatively, the holders of common stock or warrants may from time to time
offer such securities through underwriters, dealers or agents. The distribution
of securities by the holders of common stock or warrants may be effected in one
or more transactions that may take place on the Nasdaq Stock Market, including
ordinary broker's transactions, privately-negotiated transactions or through
sales to one or more broker-dealers for resale of such shares as principals, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. Usual and customary or
specifically negotiated brokerage fees or commissions may be paid by holders of
common stock or warrants in connection with such sales of securities.
LEGAL MATTERS
The validity of the shares of common stock offered by this prospectus have
been passed upon for us by Fulbright & Jaworski L.L.P., New York, New York.
EXPERTS
The financial statements of Vion Pharmaceuticals, Inc. appearing in Vion
Pharmaceuticals, Inc.'s Annual Report (Form 10-KSB/A Amendment No.1) for the
year ended December 31, 1998, have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report thereon (which contains an
explanatory paragraph describing conditions that raise substantial doubt about
the Company's ability to continue as a going concern as described in Note 1 to
the financial statements) included therein and incorporated herein by reference.
Such financial statements are incorporated herein by reference in reliance upon
such report given upon the authority of such firm as experts in accounting and
auditing.
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus (including the documents incorporated by reference in this
prospectus) contains forward-looking statements (as that term is defined in the
Private Securities Litigation Reform Act of 1995) and information about our
financial condition, results of operations and business that are based on our
current and future expectations. You can find many of these
15
<PAGE>
statements by looking for words such as 'estimate,' 'project,' 'believe,'
'anticipate,' 'intend,' 'expect' and similar expressions. These statements
reflect our current views with respect to future events and are subject to risks
and uncertainties, including those discussed under 'Risk Factors,' that could
cause our actual results to differ materially from those contemplated in the
forward-looking statements. We caution you that no forward-looking statement is
a guarantee of future performance. You should not place undue reliance on these
forward-looking statements, which speak only as of the date of this prospectus.
We do not undertake any obligation to publicly release any revisions to these
forward-looking statements to reflect events or circumstances after the date of
this prospectus or to reflect the occurrence of unanticipated events which may
cause our actual results to differ from those expressed or implied by the
forward-looking statements contained in this prospectus.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational requirements of the Securities Exchange
Act of 1934. Therefore, we file reports, proxy statements and other information
with the SEC. You can read and copy all of our filings at the SEC's public
reference facilities in Washington, D.C., New York, New York and Chicago,
Illinois. You may obtain information on the operation of the SEC's public
reference facilities by calling the SEC at 1-800-SEC-0300. You can also read and
copy all of our filings at the offices of the Nasdaq Stock Market, 1735 K Street
N.W., Washington, D.C. 20006. You may also obtain our SEC filings from the SEC's
Web site on the Internet that is located at http://www.sec.gov.
The SEC allows us to 'incorporate by reference' much of the information we
file with them (File No. 0-26534), which means that we can disclose important
information to you by referring you to those publicly available documents. The
information that we incorporate by reference is considered to be part of this
prospectus. Because we are incorporating by reference our future filings with
the SEC, this prospectus is continually updated and those future filings may
modify or supersede some or all of the information included or incorporated in
this prospectus. This means that you must look at all of the SEC filings that we
incorporate by reference to determine if any of the statements in this
prospectus or in any document previously incorporated by reference have been
modified or superseded. This prospectus incorporates by reference the documents
listed below and any future filings we will make with the SEC under Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until all of
the securities offered by this prospectus have been issued and sold:
(a) Our Annual Report on Form 10-KSB/A Amendment No. 1 for the year
ended December 31, 1998;
(b) Our Current Report on Form 8-K filed October 15, 1999;
(c) Our Current Report on Form 8-K filed July 15, 1999;
(d) Our Current Report on Form 8-K filed April 28, 1999;
(e) The description of our common stock, Class A Warrants and Class B
Warrants contained in Item 1 of our Registration Statement on Form 8-A dated
July 31, 1995; and
(f) Our Quarterly Reports on Form 10-QSB for the quarters ended
March 31, 1999, June 30, 1999 and September 30, 1999.
The information about us contained in this prospectus should be read
together with the information in the documents incorporated by reference. You
may request a copy of any or all of these filings, at no cost, by writing or
telephoning us at Vion Pharmaceuticals, Inc., 4 Science Park, New Haven,
Connecticut 06511, Attention: Thomas E. Klein, Vice President -- Finance and
Chief Financial Officer, Telephone: (203) 498-4210.
16
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses payable by the registrant in connection with the issuance and
distribution of the securities being registered hereby are as follows:
<TABLE>
<CAPTION>
AMOUNT
------
<S> <C>
SEC Registration Fee........................................ $ 5,258.00
Legal, Accounting and Printing Expenses..................... 50,000.00
Miscellaneous Expenses...................................... 4,742.00
----------
Total................................................... $60,000.00
----------
----------
</TABLE>
- ---------
* Estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under the General Corporation Law of the State of Delaware ('DGCL'), a
corporation may include provisions in its certificate of incorporation that will
relieve its directors of monetary liability for breaches of their fiduciary duty
to the corporation, except under certain circumstances, including a breach of
the director's duty of loyalty, acts or omissions of the director not in good
faith or which involve intentional misconduct or a knowing violation of law, the
approval of an improper payment of a dividend or an improper purchase by the
corporation of stock or any transaction from which the director derived an
improper personal benefit. The registrant's Restated Certificate of
Incorporation, as amended, eliminates the personal liability of directors to the
registrant or its stockholders for monetary damages for breach of fiduciary duty
as a director with certain limited exceptions set forth in the DGCL.
Section 145 of the DGCL grants to corporations the power to indemnify each
officer and director against liabilities and expenses incurred by reason of the
fact that he or she is or was an officer or director of the corporation if he or
she acted in good faith and in a manner he or she reasonably believed to be in
or not opposed to the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his or her
conduct was unlawful. The registrant's Restated Certificate of Incorporation, as
amended, and Bylaws provide for indemnification of each officer and director of
the registrant to the fullest extent permitted by the DGCL. Section 145 of the
DGCL also empowers corporations to purchase and maintain insurance on behalf of
any person who is or was an officer or director of the corporation against
liability asserted against or incurred by him in any such capacity, whether or
not the corporation would have the power to indemnify such officer or director
against such liability under the provisions of Section 145. The registrant has
purchased and maintains a directors' and officers' liability policy for such
purposes.
ITEM 16. EXHIBITS
<TABLE>
<S> <C>
4.1 -- Form of Warrant Agreement for Class A and Class B Warrants. (1)
5.1 -- Opinion of Fulbright & Jaworski L.L.P.
23.1 -- Consent of Ernst & Young LLP
23.2 -- Consent of Fulbright & Jaworski L.L.P. (included in Exhibit 5.1)
24.1 -- Power of Attorney. (Included in signature page)
</TABLE>
- ---------
(1) Incorporated by reference to the registrant's Registration Statement on Form
SB-2 (File No. 33-93468), effective August 14, 1995.
II-1
<PAGE>
ITEM 17. UNDERTAKINGS
(a) 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 together,
represent a fundamental change in the information in the registration
statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or 15(d) of the 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) 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 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the provisions described under Item 15 above, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New Haven, State of Connecticut, on February 3, 2000.
VION PHARMACEUTICALS, INC.
By: /s/ ALAN KESSMAN
..................................
ALAN KESSMAN,
PRESIDENT AND CHIEF EXECUTIVE
OFFICER
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Alan Kessman and Thomas E. Klein, or either of
them, as his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sing any and all amendments (including post-effective
amendments) to this Registration Statement, and any registration statement
relating to the offering hereunder pursuant to Rule 462 under the Securities Act
of 1933, as amended, and to rile the same, with all exhibits thereto, and other
documents in connection wherewith, with the Securities and Exchange Commission,
granting unto said attorney-in-fact and agents, 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 he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or either of them or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Chairman of the Board February 3, 2000
......................................
(WILLIAM R. MILLER)
/S/ ALAN KESSMAN President, Chief Executive Officer and February 3, 2000
...................................... Director (Principal Executive
(ALAN KESSMAN) Officer)
/S/ THOMAS E. KLEIN Vice President -- Finance and Chief February 3, 2000
...................................... Financial Officer (Principal
(THOMAS E. KLEIN) Financial and Accounting Officer)
* Director February 3, 2000
......................................
(MICHEL C. BERGERAC)
* Director February 3, 2000
......................................
(FRANK T. CARY)
Director February 3, 2000
......................................
(JAMES FERGUSON)
* Director February 3, 2000
......................................
(ALAN C. SARTORELLI)
* Director February 3, 2000
......................................
(WALTER B. WRISTON)
</TABLE>
* By: /s/ THOMAS E. KLEIN
.............................
THOMAS E. KLEIN
AS ATTORNEY-IN-FACT
II-3
STATEMENT OF DIFFERENCES
------------------------
The trademark symbol shall be expressed as............................. 'TM'
The registered trademark symbol shall be expressed as.................. 'r'
<PAGE>
EXHIBIT 5.1
[LETTERHEAD OF FULBRIGHT & JAWORSKI L.L.P.]
February 3, 2000
VION PHARMACEUTICALS, INC.
4 Science Park
New Haven, Connecticut 06511
Dear Sirs:
We have acted as counsel to Vion Pharmaceuticals, Inc., a Delaware
corporation (the 'Company'), in connection with its filing with the Securities
and Exchange Commission of Amendment No. 1 to the Registration Statement on Form
S-3 (Registration No. 333-95671) (the 'Registration Statement'), under the
Securities Act of 1933, as amended. The Registration Statement relates to the
proposed sale by the Company of an aggregate of 3,468,343 shares of the
Company's Common Stock, par value $.01 per share ('Common Stock') and 1,059,947
Class B warrants (the 'Warrants').
In connection with this opinion, we have examined the originals, or copies
certified or otherwise identified to our satisfaction, of (i) the Company's
Restated Certificate of Incorporation, as amended, and By-Laws, (ii) the form of
Warrant Agreement for Class A and Class B Warrants, filed as Exhibit 4.1 (the
'Warrant Agreement') and (iii) such corporate records, documents and such
questions of law as we have deemed necessary or appropriate for the purposes of
this opinion. In such examinations, we have assumed the genuineness of
signatures and the conformity to original documents of the documents supplied to
us as copies. As to the various questions of fact material to such opinion, we
have relied upon statements and certificates of officers and representatives of
the Company. We have further assumed that all documents examined by us in the
form of drafts will, when executed by the requisite signatories thereto, conform
in substance and form in all material respects to the drafts that we have
examined.
Based upon the foregoing, and subject to the qualifications hereinafter set
forth, we are of the opinion that the Common Stock and the Warrants have been
duly authorized and, when issued and sold in accordance with the terms and
conditions of the Warrant Agreement, will be validly issued, fully paid and
nonassessable.
We consent to the filing of this opinion as Exhibit 5.1 to the Registration
Statement and to the reference to this firm under the caption 'Legal Matters' in
the Prospectus contained therein. This consent is not to be construed as an
admission that we are a person whose consent is required to be filed with the
Registration Statement under the provisions of the Securities Act of 1933, as
amended.
Very truly yours,
/s/ FULBRIGHT & JAWORSKI L.L.P.
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption 'Experts' in
Amendment No. 1 to the Registration Statement (Form S-3 No. 333-95671) and
related Prospectus of Vion Pharmaceuticals, Inc. for the registration of
3,468,343 shares of its common stock and 1,059,947 warrants and to the
incorporation by reference therein of our report dated February 12, 1999, with
respect to the financial statements of Vion Pharmaceuticals, Inc. included in
its Annual Report (Form 10-KSB/A Amendment No. 1) for the year ended
December 31, 1998 filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Stamford, Connecticut
February 3, 2000
