As filed with the Securities and Exchange Commission on June 7, 2000
Registration No. 333-______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
VION PHARMACEUTICALS, INC.
--------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 13-3671221
-------- ----------
(State or other juris- (I.R.S. Employer
diction of incorporation Identification
or organization) Number)
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)
VION PHARMACEUTICALS, INC.
AMENDED AND RESTATED 1993 STOCK OPTION PLAN
(Full title of the Plan)
ALAN KESSMAN
PRESIDENT AND CHIEF EXECUTIVE OFFICER
VION PHARMACEUTICALS, 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:
MICHAEL GRUNDEI, ESQ.
WIGGIN & DANA
THREE STAMFORD PLAZA
STAMFORD, CONNECTICUT 06901
(203) 363-7600
<TABLE><CAPTION>
CALCULATION OF REGISTRATION FEE
--------------------------- -------------------- ------------------ ------------------ ----------------
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF SECURITIES TO BE AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION FEE
REGISTERED REGISTERED SHARE(1) PRICE(1)
--------------------------- -------------------- ------------------ ------------------ ----------------
<S> <C> <C> <C> <C>
COMMON STOCK $.01 PAR VALUE
PER SHARE........... 1,500,000 SHARES (2) $6.79 $10,185,000.00 $2,688.84
=========================== ==================== ================== ================== ================
</TABLE>
(1) THE PRICE IS ESTIMATED SOLELY FOR THE PURPOSE OF CALCULATING THE
REGISTRATION FEE PURSUANT TO RULE 457(H)(1) AND RULE 457(C). THE OFFERING
PRICE AND FEE ARE COMPUTED BASED ON THE AVERAGE OF THE HIGH AND LOW PRICES
OF THE COMMON STOCK AS REPORTED ON THE NASDAQ STOCK MARKET ON JUNE 1,
2000.
(2) DOES NOT INCLUDE 1,500,000 PREVIOUSLY REGISTERED SHARES ISSUABLE
PURSUANT TO THE AMENDED AND RESTATED 1993 STOCK OPTION PLAN FOR WHICH A
FEE WAS PREVIOUSLY PAID.
================================================================================
<PAGE>
PROSPECTUS
1,500,000 SHARES OF COMMON STOCK
VION PHARMACEUTICALS, INC.
4 SCIENCE PARK
NEW HAVEN, CT 06511
(203) 498-4210
This prospectus relates to the offer and sale of up to 1,500,000 shares of our
common stock by certain selling stockholders. These selling stockholders are
directors or other affiliates who have acquired or may acquire these shares upon
the exercise of stock options. The stock options were or will be granted
pursuant to Vion Pharmaceuticals, Inc. 1993 Amended and Restated Stock Option
Plan. On June 6, 2000, the closing price of the Common Stock was $8.1563 per
share.
The selling stockholders may offer their shares from time to time, in different
types of transactions, including brokerage and negotiated transactions or
otherwise, at market prices prevailing at the time of sale or at negotiated or
other prices.
We will receive no proceeds from any of these sales although we will receive the
exercise prices of the stock options.
NASDAQ NATIONAL MARKET(SM) TRADING SYMBOL - VION
------------------
THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD PURCHASE SHARES ONLY
IF YOU CAN AFFORD A COMPLETE LOSS. SEE "RISK FACTORS" BEGINNING ON PAGE 6.
------------------
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 JUNE 7, 2000.
<PAGE>
TABLE OF CONTENTS
Page
----
Where You Can Find More Information 2
Cautionary Statement Regarding Forward-Looking Statements 3
Prospectus Summary 3
Risk Factors 6
Use of Proceeds 12
Selling Stockholders 12
Plan of Distribution 12
Legal Matters 13
Experts 13
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission. You may read and copy
any reports, statements or other information filed by us at the Commission's
public reference room at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and the regional offices of the Commission located at
Seven World Trade Center, 13th Floor, New York, New York 10048, and 500 West
Madison Street, Chicago, Illinois 60661. Copies of such material can be also
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, and its public reference rooms in New
York, New York and Chicago, Illinois, at prescribed rates. Please call the
Commission at 1-800-SEC-0330 for further information on the public reference
rooms. Copies of such information may also be inspected at the reading room of
the library of the National Association of Securities Dealers, Inc., 1735 K
Street, N.W., Washington, D.C. 20006. Our filings with the Commission are also
available to the public from commercial document retrieval services and at the
Commission's web site at "http://www.sec.gov."
We are allowed to "incorporate by reference" the information we file with the
Commission (File No. 0-26534), which means that we can disclose important
information to you by referring you to another document we filed with the
Commission. The information incorporated by reference is an important part of
this Prospectus, and information that we file later with the Commission will
automatically update and supersede this information. We incorporate by reference
the documents listed below and any future filings made with the Commission under
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as
amended, until the selling stockholders sell all of the shares of common stock:
(a) Our Annual Report on Form 10-KSB for the year ended December 31, 1999.
(b) Our Quarterly Report on Form 10-Q for the three-month period ended
March 31, 2000.
(c) Our Current Reports on Form 8-K filed on February 14, 2000 concerning
our Notice of Redemption and letter to Class A warrant holders and March 28,
2000 concerning our Notice of Redemption and letter to Class B warrant holders.
(d) The description of our Common Stock contained in Item 1 of the
Company's Registration Statement on Form 8-A filed July 31, 1995.
You should read the information relating to us in this Prospectus together with
the information in the documents incorporated by reference.
Any statement contained in a document incorporated by reference herein, unless
otherwise indicated therein, speaks as of the date of the document. Statements
contained in this Prospectus may modify or replace statements contained in the
documents incorporated by reference.
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We will furnish without charge to you, upon request, a copy of any or all of the
documents described above, except for exhibits to such documents, unless such
exhibits are specifically incorporated by reference into such documents.
Requests should be addressed to: Vion Pharmaceuticals, Inc., 4 Science Park, New
Haven, Connecticut 06511, (203) 498-4210, Attention: Thomas E. Klein, Vice
President and Chief Financial Officer. We furnish our stockholders with an
annual report containing audited financial statements. In addition, we may
furnish such other reports as may be authorized, from time to time, by the Board
of Directors.
This prospectus is part of a registration statement we filed with the
Commission. You should rely only on the information incorporated by reference or
provided in this prospectus or any supplement. We have not authorized anyone
else to provide you with different information. The selling stockholders will
not make an offer of the shares of common stock in any state where the offer is
not permitted. You should not assume that the information in this prospectus or
any supplement is accurate as of any date other than the date on the front of
those documents.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains certain "forward-looking statements" as defined in the
Private Securities Litigation Reform Act of 1995 and information relating to us
that are based on the beliefs of our management, as well as assumptions made by
and information currently available to our management. When used in this
prospectus, the words "estimate," "project," "believe," "anticipate," "intend,"
"expect" and similar expressions are intended to identify forward-looking
statements. These forward-looking statements reflect our current views with
respect to future events and are subject to risks and uncertainties that could
cause actual results to differ materially from those contemplated in these
forward-looking statements, including those risks discussed under "Risk
Factors." You are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date on this prospectus. We have no
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.
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
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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.
We received approval for an IND from the FDA and are now running Phase I
intratumoral safety studies in human patients using a TAPET organism that is
unarmed, or without an anticancer drug. On December 8, 1999, we announced that
VNP20009, our first generation TAPET(R) bacterial vector, was administered to
the first patients enrolled into Vion's Phase I intratumoral trial, which is
being conducted at The Cleveland Clinic Foundation. The patients were initially
monitored in the hospital and subsequently discharged. The Phase I safety trials
are being conducted at the Cleveland Clinic under the direction of Ronald M.
Bukowski, M.D. On March 28, 2000, we announced the approval to begin a Phase I
human clinical trial of Vion's first TAPET(R) bacterial vector at the National
Cancer Institute (NCI), Bethesda, Maryland. This Phase I trial is designed to
determine the safety and tolerability of intravenously injected TAPET in
patients with advanced cancer that has progressed despite best available
therapy. Additionally, the trial is expected to provide information regarding
TAPET's ability to penetrate and preferentially replicate within tumor
metastases. Both clinical and subsequent preclinical studies will be conducted
under the direction of Steven A. Rosenberg, M.D., Ph.D., Chief of Surgery in the
Division of Clinical Sciences of the NCI. If successful, these safety studies
will be followed by additional Phase I studies using TAPET organisms delivered
intravenously, as well as an armed TAPET organism 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.
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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 42 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. A
single dose regimen has been completed 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.
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 I clinical studies of Triapine in the United States for safety
and dosage;
- File investigational new drug application(s) with the FDA for "armed" TAPET
vectors and conduct Phase I clinical studies in the United States and Europe for
the safety and selective tumor accumulation of several "armed" and "unarmed"
bacterial constructs using our TAPET delivery system;
- Continue to support research and development being performed at Yale
University and by other collaborators;
- Continue to seek collaborative partnerships, joint ventures, co-promotional
agreements or other arrangements with third parties; and
- Conduct preclinical toxicology studies on a sulfonyl hydrazine agent and
evaluate its suitability to proceed to clinical trials.
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.
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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. 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
We are in the development stage and at March 31, 2000, we had an accumulated
deficit of approximately $65.4 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.
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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 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 will be sufficient
to fund our operating expenses and capital requirements as currently planned
through 2001. 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
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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 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.
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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 March 31, 2000, we have paid over $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;
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- refusal to approve pending applications;
- refusal to permit exports from the United States;
- product recalls;
- 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
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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 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
Our Board may issue preferred stock without stockholder approval from time to
time. 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.
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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 25.4 million shares of common stock outstanding as of
April 30, 2000. 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 3.5 million shares of common stock. Options and
warrants to purchase approximately 2.6 million shares are currently exercisable,
and the remainder become exercisable at various times through 2004.
USE OF PROCEEDS
We will not receive any proceeds from the sale of shares of common stock by the
selling stockholders, although we will receive the exercise prices of the stock
options.
SELLING STOCKHOLDERS
We will supplement this prospectus from time to time to include certain
information concerning the security ownership of the selling stockholders and
the position, office or other material relationship which a selling stockholder
has had within the past three years with us or any of our predecessors or
affiliates.
PLAN OF DISTRIBUTION
We are registering the shares covered by this prospectus on behalf of the
selling stockholders. All costs, expenses and fees in connection with the
registration of these shares will be paid by us. Brokerage commissions, if any,
attributable to the sale of these shares will be paid by the selling
stockholders or their donees or pledgees.
Sales of these shares may be effected from time to time in transactions (which
may include block 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, or at
negotiated or other prices. The selling stockholders may also sell these shares
pursuant to Rule 144 promulgated under the Securities Act of 1933, as amended,
or may pledge shares as collateral for margin accounts and such shares could be
resold pursuant to the terms of such accounts. Pursuant to this prospectus, the
selling stockholders may also donate a certain de minimus number (as allowed by
the Securities and Exchange Commission) of their shares of common stock, and
such shares could be resold pursuant to rules set forth by the Commission. The
selling stockholders may effect such transactions by selling common stock
directly to purchasers or to or through broker-dealers which may act as agents
or principals. These broker-dealers may receive compensation in the form of
discounts, concessions or commissions from each selling stockholder and/or the
purchasers of the shares for whom the broker-dealers may act as agents or to
whom they sell as principal, or both (which compensation as to a particular
broker-dealer might be in excess of customary commissions). The selling
stockholders and any broker-dealers that act in connection with the sale of the
shares might be deemed to be "underwriters" within the meaning of Section 2(11)
of the Securities Act and any commission received by them and any profit on the
resale of the shares of common stock as principal might be deemed to be
underwriting discounts and commissions under the Securities Act. The selling
stockholders may agree to indemnify any agent, dealer or broker-dealer that
participates in transactions involving sales of the shares against certain
liabilities, including liabilities arising under the Securities Act. Liabilities
under the federal securities laws cannot be waived.
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Because the selling stockholders may be deemed to be "underwriters" within the
meaning of Section 2(11) of the Securities Act, the selling stockholders will be
subject to prospectus delivery requirements under the Securities Act.
Furthermore, in the event of a "distribution" of the shares, the selling
stockholder, any selling broker or dealer and any "affiliated purchasers" may be
subject to Regulation M under the Exchange Act. Such regulation would prohibit,
with certain exceptions, any such person from bidding for or purchasing any
security which is the subject of the distribution until his, her or its
participation in that distribution is completed. In addition, Regulation M
prohibits any "stabilizing bid" or "stabilizing purchase" for the purpose of
pegging, fixing or stabilizing the price of common stock in connection with this
offering.
LEGAL MATTERS
Legal matters relating to the common stock have been passed upon for us by
Wiggin & Dana, Stamford, Connecticut.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our financial statements
included in our annual report on Form 10-KSB for the year ended December 31,
1999, as set forth in their report, which is incorporated by reference in this
prospectus and elsewhere in the registration statement. Our financial statements
are incorporated by reference in reliance on Ernst & Young LLP's report, given
on their authority as experts in accounting and auditing.
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NO PERSON (INCLUDING ANY SALESMAN OR BROKER) IS AUTHORIZED TO PROVIDE ORAL OR
WRITTEN INFORMATION ABOUT THIS OFFERING NOT CONTAINED IN THIS PROSPECTUS. YOU
SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED IN THIS PROSPECTUS IS ACCURATE
AS OF ANY DATE OTHER THAN THE DATE INDICATED BELOW.
1,500,000 Shares
VION PHARMACEUTICALS, INC.
COMMON STOCK
PROSPECTUS
JUNE 7, 2000
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, which are on file with the Commission (File No.
0-26534), are incorporated in this Prospectus by reference and made a part
hereof:
(a) The Company's Annual Report on Form 10-KSB for the year ended December
31, 1999.
(b) The Company's Quarterly Report on Form 10-Q for the three-month period
ended March 31, 2000.
(c) The Company's Current Reports on Form 8-K filed on February 14, 2000
and March 28, 2000.
(d) The description of the Company's Common Stock contained in Item 1 of
the Company's Registration Statement on Form 8-A filed July 31, 1995.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Registration Statement
and prior to the termination of this offering shall be deemed to be incorporated
by reference into this Registration Statement and to be a part hereof from the
respective dates of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for all purposes to the extent that a
statement contained in this Registration Statement or any other subsequently
filed document that is also incorporated by reference herein modifies or
supersedes such statement. Any such statements so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
None.
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ITEM 6. 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 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
Exhibit
No. Description
--- -----------
4.1 Vion Pharmaceuticals, Inc. Amended and Restated 1993 Stock
Option Plan, as amended
4.2 Form of Incentive Stock Option Agreement
4.3 Form of Non-Qualified Stock Option Agreement
5 Opinion of Wiggin & Dana
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23.1 Consent of Ernst & Young LLP
23.2 Consent of Wiggin & Dana (filed as part of Exhibit 5)
24 Power of Attorney (included on the signature page hereof)
ITEM 9. 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 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
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.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant's annual report pursuant
to Section 13(a) or Section 15(d) of the 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.
(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that, in the opinion of the Securities and
Exchange Commission, such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy, as expressed in the Act, and
will be governed by the final adjudication of such issue.
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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-8 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 June 7,
2000.
VION PHARMACEUTICALS, INC.
By:/s/ Alan Kessman
------------------------------------
Alan Kessman
President and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Alan Kessman and Thomas E. Klein his true and
lawful attorneys-in-fact and agents, each acting alone, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments to this Registration
Statement, including post-effective amendments, and to file the same, with all
exhibits thereto, and all documents in connection therewith, with the Securities
and Exchange Commission, granting unto said attorneys-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 and about the premises, as fully to
all intents and purposes as he might or could do in person, and hereby ratifies
and confirms all that said attorneys-in-fact and agents, each acting alone, or
their substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this registration statement has been signed below by the following
persons in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ William R. Miller
----------------------------- Chairman of the Board June 7, 2000
William R. Miller
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/s/ Alan Kessman
----------------------------- President, Chief Executive June 7, 2000
Alan Kessman Officer and Director
/s/ Michel C. Bergerac
----------------------------- Director June 7, 2000
Michel C. Bergerac
/s/ Frank T. Cary
----------------------------- Director June 7, 2000
Frank T. Cary
/s/ James L. Ferguson
----------------------------- Director June 7, 2000
James L. Ferguson
/s/ Alan C. Sartorelli, Ph.D.
----------------------------- Director June 7, 2000
Alan C. Sartorelli, Ph.D.
/s/ Walter B. Wriston
------------------------- Director June 7, 2000
Walter B. Wriston
/s/ Thomas E. Klein
------------------------- Vice President - Finance, June 7, 2000
Thomas E. Klein Chief Financial Officer
and Treasurer (Principal
Financial and Accounting
Officer)
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