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SUBJECT TO COMPLETION, DATED MAY __, 1996
PROSPECTUS
48,072,758 Shares
Boston Life Sciences, Inc.
Common Stock and Warrants
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The securities offered hereby consist of (i) 48,072,758 shares of common
stock, $.01 par value per share (the "Common Stock"), and (ii) 5,997,782
warrants (the "Warrants"), each of which entitles the holder thereof to
purchase one share of Common Stock of Boston Life Sciences, Inc., a
Delaware corporation ("BLSI" or the "Company"), which are owned by the
selling stockholders listed herein under "Selling Stockholders"
(collectively, the "Selling Stockholders") (the Common Stock and Warrants
offered hereby are collectively referred to as the "Shares"). The Shares
may be offered from time to time by the Selling Stockholders. All expenses
of registration incurred in connection herewith are being borne by the
Company, but all selling and other expenses incurred by a Selling
Stockholder will be borne by that Selling Stockholder. The Company will
not receive any of the proceeds from the sale of the Shares by the Selling
Stockholders.
The Selling Stockholders have not advised the Company of any specific plans
for the distribution of the Shares covered by this Prospectus, but it is
anticipated that the Shares will be sold from time to time primarily in
transactions (which may include block transactions) on the Nasdaq SmallCap
Market of The Nasdaq Stock Market, Inc. (the "Nasdaq SmallCap Market") at
the market price then prevailing, although sales may also be made in
negotiated transactions or otherwise. The Selling Stockholders and the
brokers and dealers through whom sale of the Shares may be made may be
deemed to be "underwriters" within the meaning of the Securities Act of
1933, as amended (the "Securities Act"), and their commissions or discounts
and other compensation may be regarded as underwriters' compensation. See
"Plan of Distribution."
The Company's Common Stock is traded on the Nasdaq SmallCap Market under
the symbol "BLSI." On May __, 1996, the last reported closing price of the
Common Stock was $__________ per share.
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An investment in the Common Stock and Warrants offered hereby involves a
high degree of risk. See "Risk Factors" beginning on page 5 of this
Prospectus.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
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The date of this Prospectus is May __, 1996.
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No dealer, salesman or other person has been authorized to give any
information or to make any representation not contained in or incorporated
by reference in this Prospectus and, if given or made, such information or
representation must not be relied upon as having been authorized by the
Company, the Selling Shareholders or any other person. This Prospectus
does not constitute an offer to sell or a solicitation of an offer to buy
any of the securities offered hereby in any jurisdiction to any person to
whom it is unlawful to make such an offer in such jurisdiction. Neither
the delivery of this Prospectus nor any sale made hereunder shall, under
any circumstances, create any implication that the information herein is
correct as of any time subsequent to the date hereof or that there has been
no change in the affairs of the Company since that date.
AVAILABLE INFORMATION
This Prospectus, which constitutes a part of a Registration Statement on
Form S-3 (the "Registration Statement") filed by the Company with the
Securities and Exchange Commission (the "Commission") under the Securities
Act, omits certain of the information set forth in the Registration
Statement. Reference is hereby made to the Registration Statement and to
the exhibits thereto for further information with respect to the Company
and the securities offered hereby. Copies of the Registration Statement
and the exhibits thereto are on file at the offices of the Commission and
may be obtained upon payment of the prescribed fee or may be examined
without charge at the public reference facilities of the Commission
described below.
Statements contained herein concerning the provisions of documents are
necessarily summaries of such documents, and each statement is qualified in
its entirety by reference to the copy of the applicable document filed with
the Commission.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, accordingly,
files reports, proxy statements and other information with the Commission.
Such reports, proxy statements and other information can be inspected and
copied at the public reference facilities maintained by the commission at
Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the Commission's Regional Offices located at Seven World Trade
Center, New York, New York 10048 and Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
documents may also be obtained from the Public Reference Section of the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. In addition, reports and proxy statements
concerning the Company can be inspected at the offices of the National
Association of Securities Dealers, Inc., 1735 K Street, N.W., Washington,
D.C. 20006.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents or portions of documents filed by the Company (File
No. 0-6533) with the Commission are incorporated hereby by reference:
(a) Annual Report on Form 10-K for the fiscal year ended December
31, 1995.
(b) Annual Report on Form 10-K, as amended by Form 10-K/A, for the
fiscal year ended December 3, 1994.
(c) Current Report on Form 8-K filed February 23, 1996.
(d) Current Report on Form 8-K filed March 7, 1996.
(e) The description of the Company's Common Stock which is
contained in the Company's Registration Statement on Form 8-A filed under
the Exchange Act, including any amendment or reports filed for the purpose
of updating such description.
All reports and other documents subsequently filed by the Company pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the
filing of a post-effective amendment which indicates that all securities
offered hereby have been sold or which deregisters all securities remaining
unsold, shall be deemed to be incorporated by reference in this Prospectus
and to be a part hereof from the date of the filing of such reports or
documents. Any statement
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contained in a document, all or a portion of which is incorporated by
reference herein, shall be deemed to be modified or superseded for purposes
of this Prospectus to the extent that a statement contained or incorporated
by reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
Upon request, the Company will provide without charge to each person to
whom this Prospectus is delivered a copy of any or all of such documents
which are incorporated herein by reference (other than exhibits to such
documents unless such exhibits are specifically incorporated by reference
into the documents that this Prospectus incorporates). Written or oral
requests for copies should be directed to Marc E. Lanser, M.D., Executive
Vice President and Chief Scientific Officer, 1601 Trapelo Road, Waltham,
Massachusetts 02154, telephone number (617) 890-8263.
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THE COMPANY
Boston Life Sciences, Inc. ("BLSI" or the "Company") is the result of a
merger (the "Merger") between BLSI and Greenwich Pharmaceuticals, Inc.
("Greenwich"). The Merger took place on June 15, 1995 and resulted in a
publicly traded company managed by the Board of Directors and management of
Boston Life Sciences, Inc. ("Old BLSI"), the company existing prior to the
merger.
BLSI is a development stage biotechnology company engaged in the research
and development of novel therapeutic and diagnostic products to treat
chronic debilitating diseases, such as cancer, Parkinson's Disease, central
nervous system (CNS) disorders and autoimmune diseases. With the exception
of the technologies originating with Greenwich, all of BLSI's technologies
currently under development were invented or discovered by researchers
working at Harvard University and/or its affiliated hospitals ("Harvard and
its Affiliates"). In addition, as a result of the merger, BLSI in the case
of THERAFECTIN(R) amiprilose HC1 ("THERAFECTIN"), expects to commence a
Phase III trial in the second quarter of 1996.
Corporate Strategy
The Company intends to (i) fund the early development of its compounds in
preclinical development and (ii) enter into corporate partnering
arrangements with established pharmaceutical or biotechnology companies to
support the continued development of BLSI's compounds and potential
marketing of any products following government approvals. Additionally,
BLSI does not currently own any laboratory or manufacturing facilities and
intends to contract out such services.
With the addition of Greenwich's carbohydrate technologies acquired in the
Merger, BLSI will also be formulating a strategy to address the potential
future requirements of THERAFECTIN with the ultimate objective of obtaining
U.S. Food and Drug Administration (FDA) approval. See "Recent
Developments." There can be no assurances, however, that the
implementation of any strategy would ultimately result in the approval of
THERAFECTIN by FDA.
Strategic Alliances
In June 1995, BLSI entered into a research and development collaboration
agreement with Zeneca Pharmaceuticals, Ltd. ("Zeneca") for all indications,
on a worldwide basis, of BLSI's MHC Class II Inhibition technology. The
collaboration calls for Zeneca to fund approximately the first two years of
research and for BLSI to receive payments from Zeneca as lead compounds
reach traditional clinical development milestones. In addition, BLSI will
receive royalties payable on the sale of any products originating from the
collaboration.
BLSI is also a party to two collaborations for THERAFECTIN with different
pharmaceutical companies for various geographic regions in the world.
Those development and license agreements are with (i) Kissei Pharmaceutical
Co., Ltd. ("Kissei") for all indications of amiprilose HCl in the Far East
and Russia and (ii) Irotec Laboratories of Cork, Ireland ("Irotec") to
market amiprilose HCl in the territories of the Republic of Ireland and the
Netherlands. Unless BLSI obtains marketing approval for THERAFECTIN in the
United States and Kissei and Irotec obtain marketing approval of amiprilose
HCl in their respective regions, the future milestone payments from Kissei
and Irotec will not be received.
Products Under Development And Research Programs
Compounds Approved for Clinical Development
THERAFECTIN. The Company currently expects to commence a Phase III
clinical trial for THERAFECTIN in the second quarter of 1996. THERAFECTIN
previously formed the foundation of Greenwich's drug development efforts.
Early work on THERAFECTIN revealed potent pharmacologic effects, e.g.
enhancement of killing and clearance of intracellular pathogens (including
bacteria, fungi, viruses, parasites) and anti-tumor activity. Further work
supported the immunostimulatory effects of THERAFECTIN. As the significant
anti-inflammatory effects of other known
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immunostimulants (levamisole and muramyl dipeptide) were well documented,
investigations of the potential anti-inflammatory activity of THERAFECTIN
were initiated.
Since the Merger, the Company has actively been engaged in a review of the
THERAFECTIN preclinical and clinical data, including the IND and NDA
filings made with FDA, correspondence between Greenwich and FDA, and the
transcripts of the Arthritis Advisory Committee meetings. The Company has
sought input from outside independent regulatory affairs consultants and
reviewed the preclinical and clinical data with certain of Greenwich's
scientific and regulatory affairs personnel. Based on its analysis, the
Company concluded that there was sufficient evidence of therapeutic
efficacy and that further investigation of the clinical development of
THERAFECTIN was warranted. To this end, the Company has assembled a panel
comprised of expert academic clinical rheumatologists and enlisted the aid
of medical, regulatory, and statistical consultants to assist BLSI in
formulating a clinical strategy for THERAFECTIN. The Company held a
consensus meeting with the entire panel and its consultants to discuss such
strategy (including potential protocols for any possible additional
clinical study) for THERAFECTIN. In November, the Company submitted to FDA
a draft protocol for a proposed Phase III study of THERAFECTIN. The draft
protocol is for a double-blind, placebo-controlled, multi-center study
similar to a successful Phase III study (RA-9) previously performed by
Greenwich. The Company has met with FDA to discuss the protocol and
currently intends to commence the study in the second quarter of 1996.
ALTROPANE (Parkinson's Disease-Diagnostic Agent). BLSI is developing a
nuclear medicine imaging agent, Altropane, that it believes will be useful
in the early diagnosis of Parkinson's Disease at its early stages, prior to
the onset of specific symptoms. Since administration of currently
available therapies in the early stages of Parkinson's Disease may delay
the progression of the disease, early definitive diagnosis may be of
substantial benefit. ALTROPANE is currently undergoing Phase I/II clinical
testing under a physician-sponsored IND.
Preclinical Development Programs
CDI (Cartilage-Derived Inhibitor). BLSI is developing a factor derived
from cartilage called CDI, which inhibits new blood vessel formation.
Angiogenesis (new blood vessel formation) plays a role in the growth and
spread of solid tumors throughout the body because cancerous tumors require
new blood vessels in order to grow and metastasize. The Company's
collaborating scientists have isolated and cloned CDI, and the Company
currently anticipates commencing large-scale animal testing in the second
quarter of 1996. BLSI plans to develop CDI for the treatment of solid
tumors and other diseases of neovascularization, including rheumatoid
arthritis and numerous eye diseases.
Autoimmune Diseases (Inhibition of the Expression of MHC Molecules).
Autoimmune diseases are characterized by the production of antibodies
directed against the body's own tissues, and the consequent destruction of
those tissues by the body's immune cells. Central to the pathogenesis of
these diseases is the expression of MHC (Major Histocompatibility Complex)
class II DR molecules on the surface of antigen-presenting cells that are
found within the tissues that are attacked in autoimmune disease. The
Company is developing a means to specifically inhibit MHC DR expression.
Inhibition of DR expression might provide a specific treatment for
autoimmune diseases, because of its specificity, this treatment might be
relatively free of side effects. In June 1995, BLSI entered into a
research and development collaboration agreement with Zeneca for all
indications, on a worldwide basis, of BLSI's MHC Class II Inhibition
technology. See "Summary of Offering Memorandum -- Strategic Alliances."
Cancer (Tumor Targeting). Monoclonal antibodies (MAbs) have high
specificity and high affinity and/or avidity for their antigens. Because
of this, MAbs have been considered particularly attractive as selective
carriers of diagnostic and therapeutic products. Recently, problems such
as low per cent maximum injected dose per gram of target tissue and slow
clearance and nonuniform distribution within tumors have led many to
question the future of MAbs in radioimmunodiagnosis and radioimmunotherapy.
There is thus a need for new methods for directing therapeutic molecules to
tumors that do not rely upon strict structural integrity of all MAb
molecules used, and could insure delivery of sufficient doses of
radiotherapy to tumors without harming normal tissues. The Company is
presently developing such a system to target radiotherapy to solid tumors.
This system is comprised of sequential specific binding pairs of reagents
that are injected in such a manner that the binding between functional
groups is specific and the results are maximally amplified.
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Central Nervous System (Axogenesis Factor 1). Axogenesis Factor 1 (AF-1)
is a recently discovered nerve growth factor that has the unique
characteristic of being the only factor identified so far that promotes
axon outgrowth from central nervous system (CNS) cells (i.e. CNS
regeneration). This property is significant, since the zone of partial
injury surrounding the central necrotic zone of a stroke contains live but
damaged nerve cells that have lost their axons. AF-1 would therefore
potentially salvage these partially injured cells, resulting in some
recovery of function. The same phenomena occurs in brain injury and in
spinal cord trauma. The Company hopes that AF-1 could provide the first
truly "regenerative" treatment for these conditions. Since the discovery
of AF-1 one year ago, AF-1 has been purified and amino acid composition has
been obtained. AF-1 is a peptide having 5 amino acids, which could make it
relatively simple to manufacture. Following amino acid sequencing of AF-1,
the Company believes that quantities sufficient for in vitro and in vivo
testing could be made without difficulty and at a reasonable price. This
material will then be tested in an animal model of spinal cord injury and
stroke. If the animal models are successful, then reformulation to
maximize crossing of the blood-brain barrier would have to be done prior to
filing of an IND. The Company believes that an IND could be filed within
three years although there can be no assurance to that effect.
Parkinson's Disease Therapy
The Company's interest in developing novel therapeutic agents for
Parkinson's Disease continues. However, based on recent insights into the
structure-function relationship of the D1 receptor-dopamine interaction,
the Company's emphasis has shifted toward the development of new molecules
that have been designed to mimic dopamine's action on the D1 receptor. The
Company has entertained inquiries from potential corporate partners, and
intends to pursue this R&D effort if a corporate partnership is secured.
There can be no assurances that a corporate partner will be secured or, if
secured, that the partnership will be successful.
CAPITAL INVESTMENT SINCE JANUARY 1, 1996
Pursuant to Regulation D of the Act, in January and February 1996, the
Company sold pursuant to certain subscription agreements approximately 240
units (each, a "Unit") for net proceeds to the Company of approximately
$20.8 million. Each Unit consists of (i) 1,000 shares of Series A
Convertible Preferred Stock, stated value $100 per share (the "Preferred
Stock"), and (ii) warrants to purchase 25,000 shares of Common Stock at
$.6708 per share at any time over a ten-year period. The Preferred Stock
is initially convertible at any time at the option of the holder into
shares of the Company's Common Stock pursuant to a ratio of 175.3771 shares
of Common Stock for each share of Preferred Stock. This initial conversion
ratio is subject to adjustment in February 1997 (the "Adjustment Date") if
the fair market value on the Adjustment Date of the Company's Common Stock
issuable upon conversion of one share of the Preferred Stock is less than
$130.00.
The proceeds from the Regulation S and Regulation D offers described above
are expected to be sufficient to fund the Company's current development
programs at their present levels of expenditure through 1997.
NAME CHANGE
The Company was incorporated in Delaware in 1972 under the name Greenwich
Pharmaceuticals Incorporated ("Greenwich") and, effective June 15, 1995
changed its name to Boston Life Sciences, Inc. Effective June 15, 1995,
Old BLSI merged with and into Greenwich. The Company's principal executive
offices are now located at Reservoir Place, 1601 Trapelo Road, Waltham,
Massachusetts, and its telephone number at that location is (617) 890-8263.
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RISK FACTORS
In addition to the other information appearing elsewhere or incorporated by
reference in this Prospectus, prospective investors should consider the
following factors in evaluating the Company and its business before
purchasing any of the Shares offered hereby.
DEVELOPMENT STAGE
Each of BLSI and Greenwich prior to the Merger had net operating losses
since their respective inceptions. Further, the Company has not generated
revenues to date from product sales. Presently, the Company is expected to
incur substantial additional operating losses for the foreseeable future.
The Company's ability to achieve profitability will depend, among other
things, on a combination of one or more of the following factors: the
Company's ability to obtain significant additional financing; the Company's
ability to obtain regulatory approvals for, and successfully complete the
development and commercialization of, its product candidates, preclinical
compounds and technologies; the time and cost of obtaining regulatory
approvals for its products; the Company's ability to protect its
proprietary rights, including its patent claims and the patent claims of
its licensors and collaborators; the Company's licensors' and
collaborators' ability to protect their patent claims; the Company's
ability to enter into agreements for product development and
commercialization; competing technological and market developments;
manufacturing costs associated with its products and product candidates;
and the costs of commercializing its products. There can be no assurance
that the Company will obtain required regulatory approvals, or successfully
develop, manufacture and market its products or that the Company will
achieve profitability.
STATUS OF LITIGATION
The Company was served with five complaints during 1992, which complaints
were subsequently consolidated and granted class action status, alleging
violations of the Federal securities laws and common law. On April 12,
1995, the Court entered a Final Judgment and Order of Dismissal pursuant to
Rule 23(e) of the Federal Rules of Civil Procedure approving the Class
Action Settlement and on April 25, 1995 the Court of Chancery of the State
of Delaware for New Castle County entered an Order and Final Judgment
pursuant to Rule 23.1 of the Rules of the Court of Chancery approving the
Derivative Action Settlement. During the 30-day period following such court
orders, appeals of the settlements are permitted. No appeals were accepted
and the orders approving the Class Action Settlement and the Derivative
Action Settlement are final.
EARLY STAGE OF BLSI'S PRODUCTS; NO MARKETING EXPERIENCE
None of the Company's product candidates, preclinical compounds and
technologies have been approved for marketing by FDA or FDA's international
equivalent. The evaluation, research and development of any of the
Company's product candidates, preclinical compounds or technologies
requires further extensive laboratory and clinical testing prior to
regulatory approval. There can be no assurance that any of the Company's
product development efforts will be successfully completed, that any
required regulatory approvals will be obtained, that any such product
candidates will be capable of being manufactured in commercial quantities
at reasonable cost or that any new products, if introduced, will achieve
market acceptance. Also, there can be no assurance that the Company will
not cease (i) all efforts to obtain approval of its technologies or (ii)
the research and development of any of its current compounds in preclinical
development.
In addition, BLSI has had no experience in marketing pharmaceutical
products. In order to achieve commercial success for any product
candidates, the Company will be required to either enter into arrangements
with third parties with respect to the marketing of the Company's products
or develop such marketing experience internally. There can be no assurance
that the Company will be able to enter into marketing agreements with
others on acceptable terms, if at all, or that it will successfully develop
such experience.
DEPENDENCE UPON HARVARD AND ITS AFFILIATES
BLSI currently conducts a substantial portion of its research and
development through Harvard and its Affiliates pursuant to sponsored
research agreements. Virtually all of BLSI's current technologies under
development were
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invented or discovered by researchers working for Harvard and its
Affiliates (the "BLSI Technologies"). A substantial portion of the
Company's business is thus dependent upon (i) the continuing research and
development performed by Harvard and its Affiliates pursuant to sponsored
research agreements with BLSI relating to BLSI's technologies, and (ii) the
licenses granted to BLSI with respect to the BLSI Technologies by, or the
licenses that it is seeking to acquire from, Harvard Medical School,
Harvard School of Public Health and The Children's Medical Center
Corporation. As a result of such dependence, the success of the Company
depends, in large part, upon its maintaining its sponsored research
agreements with Harvard and its Affiliates. There can be no assurances that
the Company will be successful in this regard or that Harvard and its
Affiliates will continue to provide access to their resources.
There can be no assurance that any research performed by Harvard and its
Affiliates and sponsored by the Company will ever result in any proprietary
technology which is patentable by Harvard and its Affiliates or that any
issued patents will provide the Company with any competitive advantages or
will not be successfully challenged by any third parties. Moreover, the
Company will not own licenses to all of the Company's technologies. There
can be no assurance that the Company will be able to obtain any required
licenses or that any patent applications which are the subject of such
licenses will result in the issuance of any patents.
RELIANCE UPON FUTURE COLLABORATIONS; CERTAIN PRIOR RELATIONSHIPS
The Company expects its strategy for the development, clinical testing,
manufacturing and commercializing of its product candidates, preclinical
compounds and technologies will include entering into various
collaborations with corporate partners, joint venturers, licensors, sub-
licensees and others. There can be no assurance that the Company will be
able to negotiate any such collaborative arrangements on acceptable terms,
if at all, that such arrangements will be successful or that the Company
will realize any revenues pursuant to such arrangements. Even if the
Company is able to negotiate collaborative arrangements on acceptable
terms, there can be no assurance that such collaborations will be
completed, will be successful or that disputes will not arise with respect
to the ownership rights to any technology which may be developed pursuant
to such collaborations.
In the event that the Company enters into collaborative arrangements, the
amount and timing of resources which the other parties to such
collaborations devote to these activities will not necessarily be within
the control of the Company. There can be no assurance that such parties
will perform their obligations as expected. If any of the Company's
collaborators breaches or terminates its agreement with the Company or
otherwise fails to conduct its collaborative activities in a timely manner,
the development or commercialization of the product candidate or technology
subject to such collaboration agreement may be delayed, and the Company may
be required to undertake unforeseen additional responsibilities or to
devote unforeseen additional resources to such development or
commercialization, or such development or commercialization could be
terminated. The termination or cancellation of collaborative arrangements
could also adversely affect the Company's financial condition, intellectual
property position and operations.
In addition, the Company expects to rely on third parties to manufacture
its product candidates. There can be no assurance that the Company will be
able to contract with manufacturers that meet the Company's requirements
for quality, quantity and timeliness, or that the Company would be able to
find substitute manufacturers, if necessary. Such inability to contract
for manufacturing capabilities on acceptable terms may adversely affect the
Company's ability to conduct preclinical and clinical testing and may
result in delays in obtaining regulatory approvals, which also may
adversely affect the Company. In addition, the manufacture by the Company
of its products on a commercial scale will require significant start-up
expenses and expansion of facilities and personnel, and no assurance can be
given that the Company can develop such manufacturing capability or hire
and train qualified personnel.
To the extent that the Company is not able to establish collaborative
arrangements, it will face increased capital requirements to undertake
research and development activities at its own expense and may encounter
significant delays in introducing its products into certain markets or find
that the development, manufacture or sale of its products in such markets
is adversely affected by the absence of such collaborative arrangements.
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UNCERTAINTY REGARDING PATENTS AND PROPRIETARY RIGHTS
Even though patent protection will be sought for proprietary technologies
either by the Company, its collaborators or the inventors or owners of such
technologies which are subject to licenses granted to the Company, the
patent application and issuance process can be expected to take several
years and may entail considerable expense without any assurance that any
patent will issue. The Company's ability to obtain protection for any of
its product candidates, preclinical compounds and technologies could be
delayed or adversely affected if the United States Patent and Trademark
Office (the "USPTO") requires clinical data demonstrating efficacy of
potential therapeutic agents. The failure to obtain patent protection on
the Company's product candidates, preclinical compounds and unpatented
technologies may have a material adverse effect on the Company's
competitive position and business prospects. Further, even if patents can
be obtained, there can be no assurance that any such patents will provide
the Company with any competitive advantage, that others will not
independently develop similar technologies or products or duplicate any
technology developed by or on behalf of the Company or, if patents are
issued, design around the patented aspects of any technology or products
developed by or on behalf of the Company, or that any such patent will not
be successfully challenged by a third party. It is also possible that
patented technologies or products of the Company or its licensors or
collaborators may infringe on patents or other rights owned by others,
licenses to which may not be available to the Company. The Company may
have to alter its products or processes, pay licensing fees or cease
certain activities altogether because of patent rights of third parties,
thereby causing additional unexpected costs and delays to the Company.
Patent law relating to the scope of claims in the fields of healthcare and
biosciences is still evolving, and the Company's patent rights will be
subject to this uncertainty. The Company's patent rights on its products
therefore might conflict with the patent rights of others, whether existing
now or in the future. For the same reasons, the products of others could
infringe the patent rights of the Company. The defense and prosecution of
patent claims is both costly and time-consuming, even if the outcome is
favorable to the Company. The failure of any existing or future patents
owned by or licensed to the Company or its collaborators to provide the
Company protection against competitors, including without limitation
protection against a claim of patent infringement, could subject the
Company to significant liabilities to third parties, require disputed
rights to be licensed from third parties, require the Company to alter its
products or processes or require the Company to cease selling its products.
The Company relies on trade secrets and proprietary know-how, which it
seeks, and will continue to seek, to protect in part by confidentiality
agreements with their collaborators, employees and consultants. There can
be no assurance that these agreements will not be breached, that the
Company will have adequate remedies for any such breach or that the
Company's trade secrets will not otherwise become known or be independently
developed by competitors.
To the extent that consultants, key employees or other third parties apply
technological information independently developed by them or by others to
the Company's product candidates, preclinical compounds or technologies,
disputes may arise as to the proprietary rights to such information which
may not be resolved in favor of the Company. The Company's scientific
advisors and other consultants are each employed by, and may have
consulting agreements with, third parties and any inventions discovered by
such individuals are not likely to become property of the Company.
POTENTIAL NEED FOR ADDITIONAL KEY PERSONNEL
Should the Company determine to undertake the research and development of
any of the product candidates or preclinical compounds, such research and
development and the resultant preclinical and clinical testing of its
various product candidates and preclinical compounds, the governmental
approval process and the marketing of its product candidates may require
the addition of key management and scientific personnel, in addition to
those presently employed by the Company, in areas such as research and
development, preclinical testing, clinical investigation, regulatory
affairs, manufacturing and, to the extent applicable, marketing and product
sales. The failure of the Company to attract, or to gain access to, such
personnel could have a material adverse effect on the Company's ability to
develop such product candidates, preclinical compounds and technologies.
The Company will face intense competition for such personnel from other
companies, research and academic institutions, government entities and
other organizations. There can be no assurance that the Company will be
successful in hiring, retaining or otherwise gaining access to the
personnel required for such activities.
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POTENTIAL DIFFICULTY IN OBTAINING FDA AND OTHER GOVERNMENTAL APPROVALS
The Company's products and its manufacturing and research activities will
be subject to varying degrees of regulation by a number of government
authorities in the United States and other countries, including FDA
pursuant to the Federal Food, Drug and Cosmetic Act. FDA regulates
pharmaceutical products, including their manufacture and labeling. Prior
to marketing, any product developed by the Company must undergo an
extensive regulatory approval process, which includes preclinical and
clinical testing of such product to demonstrate its safety and efficacy.
This regulatory process can require many years and the expenditure of
substantial resources. Data obtained from preclinical and clinical trials
are subject to varying interpretations, which can delay, limit or prevent
FDA approval. See "Development Stage."
None of the Company's product candidates, preclinical compounds and
technologies have been approved for marketing by FDA or FDA's international
equivalent. The Company cannot accurately predict all relevant regulatory
requirements or issues. Changes in existing laws, regulations, policies or
interpretations of prior events could prevent the Company or its licensees,
licensors or collaborators from, or could affect the timing of, achieving
compliance with regulatory requirements, including obtaining current and
future regulatory clearances, where necessary. Federal and state laws,
regulations and policies are always subject to change, with possible
retroactive effect, and depend heavily on administrative policies and
interpretations. There can be no assurance that any changes with respect
to Federal and state laws, regulations and policies, and, particularly,
with respect to FDA and other such regulatory bodies, will not have a
material adverse effect on the Company.
The process of obtaining FDA clearances can be time-consuming and
expensive, and there is no assurance that such clearances will be granted
or that the FDA review process will not involve delays that materially and
adversely affect the testing, marketing and sale of the Company's products.
Similar delays may be encountered in foreign countries. Moreover,
regulatory clearances for new products, even if granted, may include
significant limitations on the uses for which such products may be
marketed. In addition, even if regulatory approval is obtained, any
marketed product and its manufacturer are subject to continual review and
any discovery of previously unrecognized problems with a product or
manufacturer could result in suspension or limitation of approvals. There
can be no assurance that any clearances that are required, once obtained,
will not be withdrawn or that compliance with other regulatory requirements
can be maintained, to the degree that the Company may have already
complied.
LIMITED PUBLIC MARKET FOR COMMON STOCK; POSSIBLE VOLATILITY OF PRICES, NO
DIVIDENDS
Historically, the Common Stock has experienced low trading volumes. The
market price of the Common Stock also has been highly volatile and it may
continue to be highly volatile as has been the case with the securities of
other public biotechnology companies. Factors such as announcements by the
Company or its competitors concerning technological innovations, results of
clinical trials, new commercial products or procedures, proposed government
regulations and developments of disputes relating to patents or proprietary
rights may have a significant effect on the market price of the Company
securities. The securities markets have experienced volatility that
particularly effects prices of equity securities of biotechnology companies
and which often is unrelated to the performance of such companies. Thus,
changes in the market price of the Common Stock may bear no relation to the
Company's actual operations or financial results. The Company does not
expect to pay any dividends on its capital stock for the foreseeable
future.
BROKER-DEALER SALES OF COMPANY SECURITIES
The Common Stock currently is, and in the future may continue to be,
subject to a Commission rule that imposes additional sales practice
requirements on broker-dealers who sell certain securities to persons other
than established customers and accredited investors (generally institutions
with assets in excess of $5,000,000 or individual with net worth in excess
of $1,000,000 or annual income exceeding $200,000, or $300,000 jointly with
his or her spouse). For transactions covered by the rule, the broker-
dealer must make a special suitability determination for the purchaser and
receive the purchaser's written agreement to the transaction before the
sale. Consequently, the rule may affect the ability of broker-dealers to
sell the Common Stock issuable upon conversion of the Preferred Stock and
also may affect the ability of purchasers in the Offering to sell the
Preferred Stock in the secondary market.
10
<PAGE>
OUTSTANDING OPTIONS AND WARRANTS
As of December 31, 1995, the Company had granted stock options and warrants
to purchase approximately 25.8 million shares of its Common Stock at
exercise prices ranging from $.01 - $8.91 per share. Many of these
previously granted options and warrants were issued at exercise prices
substantially below the conversion price of the Preferred Stock. To the
extent that such previously issued outstanding stock options and warrants
are exercised, dilution to the percentage interest of the Company's
stockholders will occur. Moreover, the terms upon which the Company would
be able to obtain additional equity capital may be affected adversely since
the holders of such outstanding options and warrants can be expected to
exercise them at a time when the Company would, in all likelihood, be able
to obtain any needed capital on terms more favorable to the Company than
those provided in the outstanding options and warrants.
TECHNOLOGICAL CHANGE AND COMPETITION
The Company operates in rapidly evolving fields. Competition from larger,
more experienced and better capitalized companies will be intense. There
can be no assurance that developments by others will not render the
Company's product candidates, preclinical compounds or technologies
obsolete or noncompetitive or that the Company will be able to keep pace
with any new technological developments. In addition, if the Company
commences sales of products, manufacturing efficiency and marketing
capabilities are likely to be significant competitive factors. The Company
has no sales force or marketing experience. In addition, many of the
Company's competitors and potential competitors have substantially greater
capital resources, manufacturing experience, research and development
staffs and production facilities than the Company. Many of these
competitors also may have significantly greater experience than the Company
in undertaking preclinical and clinical testing of new pharmaceutical
products and obtaining FDA and other regulatory approvals of products for
use in health care.
A substantial number of patents have been applied for by and issued to
other pharmaceutical and biotechnology companies, and other companies may
have filed applications for patents, may have been issued patents or may
have obtained additional patents and proprietary rights relating to
products or processes competitive with those of the Company. Patent
applications in the United States are maintained in secrecy until patents
based thereon issue, and since publication of discoveries in the scientific
or patent literature often lags behind actual discoveries, the Company
cannot be certain that it or any of its licensors or collaborators were the
first creator of inventions covered by pending patent applications or that
it or any of such licensors or collaborators were the first to file patent
applications for such inventions. Consequently, there can be no assurance
that existing patents of the Company or any patents that may be issued to
the Company or its licensors or collaborators in the future will provide
protection against competitive products or otherwise be commercially
valuable.
POTENTIAL PRODUCT LIABILITY CLAIMS
The use of the Company's product candidates in clinical trials and the sale
of any resulting products may expose the Company to liability claims
resulting from the use of such candidates or products. These claims might
be made directly by consumers or by pharmaceutical companies or other
sellers of such products. While the Company currently has product
liability insurance, there can be no assurance that such insurance will be
sufficient to satisfy any liabilities that may arise for the Company.
Moreover, such coverage is becoming increasingly expensive and difficult to
obtain. The existing coverage will not be adequate as the Company's
product development activities progress. There can be no assurance that
adequate insurance coverage will be available to the Company in the future
at an acceptable cost, if at all. An inability to obtain sufficient
insurance coverage at an acceptable cost or otherwise to protect against
potential product liability claims could prevent or limit the
commercialization of any products by the Company. In addition, there can
be no assurance that any product liability claims will not materially and
adversely affect the business or financial condition of the Company.
UNCERTAINTY OF PHARMACEUTICAL PRICING AND RELATED MATTERS; UNCERTAIN
AVAILABILITY OF HEALTH CARE REIMBURSEMENT
The Company's business may be materially adversely affected by the
continuing efforts of government and third-party payors to contain or
reduce the costs of health care through various means. For example, in
certain foreign markets, pricing or profitability of prescription
pharmaceuticals is subject to government control. In the United States,
there
11
<PAGE>
have been a number of federal and state proposals to implement similar
government control. Over the last eighteen months, a number of bills
proposing comprehensive health care reform have been introduced in
Congress. In general, such proposals are designed to reform the health care
system to, among other things, (i) control or reduce public and private
spending on health care, (ii) provide for uniform health insurance benefits
packages and administrative efficiency in the health care system, and (iii)
provide universal access to health care within the next several years. Some
of the proposals introduced in Congress call for a pricing regulatory
oversight board (sometimes referred to as the Breakthrough Drug Pricing
Committee) which may have input and/or place caps or limitations on
pharmaceutical prices, and potential mandatory or voluntary pharmaceutical
product rebate policies. Such proposals, if adopted, could decrease the
price that the Company receives for any products it may sell in the future.
There can be no assurance that such initiatives or proposals, if adopted,
will not have an adverse effect upon the Company. In addition, there have
been a number of federal and state proposals to subject the pricing of
health care products and services to government control. It is uncertain
what legislative proposals will be adopted, if any, or what actions
federal, state or private payors for health care goods and services may
take in response to any health care reforms and no assurance can be given
that any such reforms will not have a material adverse effect on the
Company. To the extent that such proposals or reforms have a material
adverse effect on the business, financial condition and profitability of
other pharmaceutical companies that are prospective collaborators for
certain of the Company's product candidates, the Company's ability to
commercialize its product candidates may be adversely affected.
The Company's ability to commercialize pharmaceutical products may depend
in part on the extent to which reimbursement for the costs of such products
and related treatments will be available from government health
administration authorities, private health insurers and others.
Significant uncertainty exists as to the reimbursement status of newly
approved health care products, and third-party payors are increasingly
challenging the prices charged for medical products and services. There
can be no assurance that adequate third-party insurance coverage will be
available to patients to allow the Company to establish and maintain price
levels sufficient for realization of an appropriate return on its
investment in developing its product candidates. If adequate coverage and
reimbursement levels are not provided by government and third-party payors
for use of the Company's products, the market acceptance of these products
will be adversely affected. In addition, many health maintenance
organizations and other managed care companies are seeking to negotiate
substantial volume discounts for the sale of pharmaceutical products to
their members thereby reducing profit margins for manufacturers, and
competitive pressures are inducing many manufacturers to accept such
discount arrangements.
12
<PAGE>
USE OF PROCEEDS
The net proceeds from the sale of the Shares will be received by the
Selling Shareholders. The Company will not receive any proceeds from the
sale of the Shares by the Selling Stockholders.
SELLING STOCKHOLDERS
The table below sets forth certain information regarding ownership of the
Company's Common Stock and Warrants by the Selling Stockholders on March
18, 1996 and the number of Shares to be sold by them under this Prospectus.
The Shares include 42,074,976 shares of Common Stock which were issued or
are issuable upon the conversion of outstanding Preferred Shares owned by
the Selling Stockholders and 5,997,782 shares of Common Stock which were
issued or are issuable upon the exercise of Warrants owned by the Selling
Stockholders, which Preferred Shares and Warrants were acquired by the
Selling Stockholders in a private placement by the Company.
In recognition of the fact that investors may wish to be legally permitted
to sell their Shares when they deem appropriate, the Company has filed with
the Commission, under the Act, a Registration Statement on Form S-3, of
which this Prospectus forms a part, with respect to the resale of the
Shares from time to time on the Nasdaq SmallCap Market or in privately-
negotiated transactions and has agreed to prepare and file such amendments
and supplements to the Registration Statement as may be necessary to keep
the Registration Statement effective until the Shares are no longer
required to be registered for the sale thereof by the Selling Stockholders.
<TABLE>
<CAPTION>
Name of Selling Warrants Owned Shares Owned Prior Shares Being Shares Owned
Shareholder to Offering (1)(2) Offered After Offering
Number of Percent Number of Percent
Shares Shares
<S> <C> <C> <C> <C> <C> <C>
126736 CANADA, Inc. 537,250 4,306,104 3.2 4,306,104 0 0%
Strome Offshore Limited 477,500 3,827,203 2.9 3,827,203 0 0
Strome Partners, L.P. 477,500 3,827,203 2.9 3,827,203 0 0
Reliance Insurance 375,000 3,005,657 2.3 3,005,657 0 0
Company
Mr. & Mrs. Jerome J. 225,000 1,803,394 1.4 1,803,394 0 0
Mullins
Strome, Susskind 179,073 1,435,290 1.1 1,435,290 0 0
Hedgecap Fund, L.P.
Alfons Melohn 150,000 1,202,264 * 1,202,264 0 0
Rahn & Bodmer 150,000 1,202,263 * 1,202,263 0 0
Diversified Fund Ltd. 125,000 1,001,886 * 1,001,886 0 0
Robert Merrill Hunter 100,000 801,510 * 801,510 0 0
Rosalind Davidowitz 100,000 801,509 * 801,509 0 0
Vincent Lanteri and 100,000 801,509 * 801,509 0 0
Susan Lanteri
Armen Partners, L.P. 87,500 701,320 * 701,320 0 0
Legong Investments 75,000 601,133 * 601,133 0 0
N.V.
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
Name of Selling Warrants Owned Shares Owned Prior Shares Being Shares Owned
Shareholder to Offering (1)(2) Offered After Offering
Number of Percent Number of Percent
Shares Shares
<S> <C> <C> <C> <C> <C> <C>
Moussa Rahmanan & 62,500 500,943 * 500,943 0 0
Son
Strome Hedgecap 59,699 478,489 * 478,489 0 0
Limited
Etablissement Occramis 56,250 450,850 * 450,850 0 0
Atrix-Ventana 53,933 432,275 * 432,275 0 0
Investment Co., LP
Concordia Partners, 50,000 400,755 * 400,755 0 0
L.P.
Dr. & Mrs. Douglas N. 50,000 400,755 * 400,755 0 0
Benson
IASD Health Services 50,000 400,755 * 400,755 0 0
Corp.
Kathryn K. Croughan 50,000 400,755 * 400,755 0 0
Keys Foundation 50,000 400,755 * 400,755 0 0
Lion Tower Corporation 50,000 400,755 * 400,755 0 0
Michael Bollag 50,000 400,755 * 400,755 0 0
Porter Partners, L.P. 50,000 400,755 * 400,755 0 0
Robert A. Foisie 50,000 400,755 * 400,755 0 0
Thomas G. Williams 50,000 400,755 * 400,755 0 0
Vivaldi, Ltd. 50,000 400,755 * 400,755 0 0
C.S.L. Associates, L.P. 37,500 300,567 * 300,567 0 0
Mark Berg 37,500 300,566 * 300,566 0 0
Palmetto Partners, Ltd. 37,500 300,566 * 300,566 0 0
Pyton Finance 37,500 300,566 * 300,566 0 0
Associated Urology 25,000 200,378 * 200,378 0 0
Pension Plan
Beverly O. Lobell 25,000 200,378 * 200,378 0 0
Billy K. Yeh, M.D. 25,000 200,378 * 200,378 0 0
Bios Equity Fund, L.P. 25,000 200,378 * 200,378 0 0
Bishops Merchant Group 25,000 200,378 * 200,378 0 0
Limited
Bruce Pomper 25,000 200,378 * 200,378 0 0
Charles A. Zaffuto 25,000 200,378 * 200,378 0 0
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
Name of Selling Warrants Owned Shares Owned Prior Shares Being Shares Owned
Shareholder to Offering (1)(2) Offered After Offering
Number of Percent Number of Percent
Shares Shares
<S> <C> <C> <C> <C> <C> <C>
Debra Freedberg 25,000 200,378 * 200,378 0 0
Debra L. Freedberg 25,000 200,378 * 200,378 0 0
Trust
Demachy Worms & Co. 25,000 200,378 * 200,378 0 0
Intern'l. LTD
DeWind Partners, L.P. 25,000 200,378 * 200,378 0 0
EJA Management 25,000 200,378 * 200,378 0 0
L.L.C.
Elliott Broidy 25,000 200,378 * 200,378 0 0
Ernest Trefz 25,000 200,378 * 200,378 0 0
Evan B. Pappas 25,000 200,378 * 200,378 0 0
Finter Bank Zurich 25,000 200,378 * 200,378 0 0
Halifax Fund, L.P. 25,000 200,378 * 200,378 0 0
Herman Tauber 25,000 200,378 * 200,378 0 0
J. Jay Lobell 25,000 200,378 * 200,378 0 0
J.F. Shea Co., Inc. 25,000 200,378 * 200,378 0 0
John D. Shepherd 25,000 200,378 * 200,378 0 0
Joseph A. Natiello 25,000 200,378 * 200,378 0 0
Larich Associates 25,000 200,378 * 200,378 0 0
Michael P. Marcus 25,000 200,378 * 200,378 0 0
Monument Trust 25,000 200,378 * 200,378 0 0
Company Ltd.
Mova Investments 25,000 200,378 * 200,378 0 0
Limited
Mr. & Mrs. Delbert E. 25,000 200,378 * 200,378 0 0
Allen, Jr.
Mr. & Mrs. Derek A. 25,000 200,378 * 200,378 0 0
Bruce
Mr. & Mrs. Jeffrey C. 25,000 200,378 * 200,378 0 0
Fernyhough
Mr. & Mrs. Joseph 25,000 200,378 * 200,378 0 0
Strassman
P.A.W. Offshore Fund, 25,000 200,378 * 200,378 0 0
Ltd.
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
Name of Selling Warrants Owned Shares Owned Prior Shares Being Shares Owned
Shareholder to Offering (1)(2) Offered After Offering
Number of Percent Number of Percent
Shares Shares
<S> <C> <C> <C> <C> <C> <C>
Patrick M. Kane 25,000 200,378 * 200,378 0 0
Peter W. Frautschi 25,000 200,378 * 200,378 0 0
Robert J. Whetten 25,000 200,378 * 200,378 0 0%
Robert Rehme 25,000 200,378 * 200,378 0 0
Roger C. Keys 25,000 200,378 * 200,378 0 0
Sagres Group LTD. 25,000 200,378 * 200,378 0 0
Scoggin Capital 25,000 200,378 * 200,378 0 0
Management, L.P.
Sharyar & Babok 25,000 200,378 * 200,378 0 0
Baradaran
Shriya Investment 25,000 200,378 * 200,378 0 0
Holdings Limited
Termtec, Ltd. 25,000 200,378 * 200,378 0 0
The Holding Company 25,000 200,378 * 200,378 0 0
Thomas R. Ulie 25,000 200,378 * 200,378 0 0
Uzi Zucker 25,000 200,378 * 200,378 0 0
Winward Venture 25,000 200,378 * 200,378 0 0
Partners, Inc.
Ventana Growth Capital 21,068 168,859 * 168,859 0 0
Fund V, L.P.
Albert Milstein 18,750 150,284 * 150,284 0 0
Neil and Laurie Spindel 18,750 150,283 * 150,283 0 0
Robert Klein, M.D. 18,750 150,283 * 150,283 0 0
The Lincoln Fund Tax 18,750 150,283 * 150,283 0 0
Advantaged, L.P.
Amram Kass P.C. 14,250 114,216 * 114,216 0 0
Defined Benefit Pension
Plan
Richard Elkin 13,750 110,208 * 110,208 0 0
Alan Weiss 12,500 100,189 * 100,189 0 0
Andre P. Visser 12,500 100,189 * 100,189 0 0
Arnold Byer and Marisa 12,500 100,189 * 100,189 0 0
Byer
Arthur or Sean Kohn 12,500 100,189 * 100,189 0 0
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
Name of Selling Warrants Owned Shares Owned Prior Shares Being Shares Owned
Shareholder to Offering (1)(2) Offered After Offering
Number of Percent Number of Percent
Shares Shares
<S> <C> <C> <C> <C> <C> <C>
Bridgewater Partners, 12,500 100,189 * 100,189 0 0
L.P.
Carlos Plancarte Garcia 12,500 100,189 * 100,189 0 0
Naranjo
Colony Partners, A 12,500 100,189 * 100,189 0 0
California GP
Daniel F. Herrmann 12,500 100,189 * 100,189 0 0
Debra Potter 12,500 100,189 * 100,189 0 0
Frank J. Lincoln, Jr. 12,500 100,189 * 100,189 0 0
GHA Management 12,500 100,189 * 100,189 0 0
Corporation
Harold S. Goldstein 12,500 100,189 * 100,189 0 0
Harris R. L. Lydon 12,500 100,189 * 100,189 0 0
Indian Creek Capital, 12,500 100,189 * 100,189 0 0
Ltd.
Jeffrey S. Gutfreund 12,500 100,189 * 100,189 0 0
Jonathan Kurt 12,500 100,189 * 100,189 0 0
Leonard J. Adams 12,500 100,189 * 100,189 0 0
Marjorie L. Stieduhar 12,500 100,189 * 100,189 0 0
Marvin G. Barish 12,500 100,189 * 100,189 0 0
Michael Cantor 12,500 100,189 * 100,189 0 0
Michael Kubin and 12,500 100,189 * 100,189 0 0
Nicole Kubin
Mr. & Mrs. Amnon 12,500 100,189 * 100,189 0 0
Barness
Myron M. Teitelbaum, 12,500 100,189 * 100,189 0 0
M.D.
Old Oly, J.V. 12,500 100,189 * 100,189 0 0
Ralph S. O'Connor 12,500 100,189 * 100,189 0 0
RHL Associates, L.P. 12,500 100,189 * 100,189 0 0
Robert P. Gordon 12,500 100,189 * 100,189 0 0
Schottenfeld Associates, 12,500 100,189 * 100,189 0 0
L.P.
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
Name of Selling Warrants Owned Shares Owned Prior Shares Being Shares Owned
Shareholder to Offering (1)(2) Offered After Offering
Number of Percent Number of Percent
Shares Shares
<S> <C> <C> <C> <C> <C> <C>
The Townsen Family 12,500 100,189 * 100,189 0 0
Trust
Tis Prager 12,500 100,189 * 100,189 0 0
Wayne Saker 12,500 100,189 * 100,189 0 0
Lifelines Care, Inc. 10,000 80,151 * 80,151 0 0
Scott G. Sandler 10,000 80,151 * 80,151 0 0
Harriet Brother & Bruce 8,750 70,132 * 70,132 0 0
Leibowitz
Ronald S. Baruch 8,750 70,132 * 70,132 0 0
Martin Zelman 7,500 60,114 * 60,114 0 0
Mechie Nebenzahl 7,500 60,114 * 60,114 0 0
Aaron Speisman (IRA) 6,250 50,095 * 50,095 0 0
JMS Inc. Cust. FBO
Alfred D. Morgan 6,250 50,095 * 50,095 0 0
Amy Goldberg 6,250 50,095 * 50,095 0 0
Arie Belldegrun 6,250 50,095 * 50,095 0 0
Dan Valahu 6,250 50,095 * 50,095 0 0
Edward Julie 6,250 50,095 * 50,095 0 0
Frederick J. Korniewicz 6,250 50,095 * 50,095 0 0
Geun-Eun Kim 6,250 50,095 * 50,095 0 0
Jeffrey C. Hoos, DMD 6,250 50,095 * 50,095 0 0
Lewis Cohen 6,250 50,095 * 50,095 0 0
Lindsay A. McManus 6,250 50,095 * 50,095 0 0%
M. Rafael Gonalez 6,250 50,095 * 50,095 0 0
Cavillo
Marathon Agents Profit 6,250 50,095 * 50,095 0 0
Sharing
Mark H. Maier 6,250 50,095 * 50,095 0 0
Martin S. Kratchman 6,250 50,095 * 50,095 0 0
Martine Rothblatt 6,250 50,095 * 50,095 0 0
Michael C. Miles 6,250 50,095 * 50,095 0 0
Mr. & Mrs. Alan Wise 6,250 50,095 * 50,095 0 0
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
Name of Selling Warrants Owned Shares Owned Prior Shares Being Shares Owned
Shareholder to Offering (1)(2) Offered After Offering
Number of Percent Number of Percent
Shares Shares
<S> <C> <C> <C> <C> <C> <C>
Mr. & Mrs. Steve Beane 6,250 50,095 * 50,095 0 0
Ofelia Anton Gomez 6,250 50,095 * 50,095 0 0
Robert E. Spivak 6,250 50,095 * 50,095 0 0
Associates, Inc.
Robert J. Conrads 6,250 50,095 * 50,095 0 0
Ross D. Ain 6,250 50,095 * 50,095 0 0
Seymour Buehler 6,250 50,095 * 50,095 0 0
Stephen Unger and 6,250 50,095 * 50,095 0 0
Kathleen Unger
Stuart Schube 6,250 50,095 * 50,095 0 0
Techknoledge 6,250 50,095 * 50,095 0 0
Consulting Inc.
Elke R. de Ramirez 5,000 40,076 * 40,076 0 0
Jeffrey Rothenberg, 5,000 40,076 * 40,076 0 0
DDS
Mark B. Fisher 5,000 40,076 * 40,076 0 0
Sal and Lorraine 5,000 40,076 * 40,076 0 0
Albanese
Anthony J. Gerace 3,750 30,057 * 30,057 0 0
Mr. & Mrs. Donald R. 3,750 30,057 * 30,057 0 0
Kendall, Jr.
William G. McCahey 3,125 25,048 * 25,048 0 0
Alain M. Oberrotman 2,500 20,038 * 20,038 0 0
Alan Mitchell Troyetsky 2,500 20,038 * 20,038 0 0
Bruce Carver Jackson 2,500 20,038 * 20,038 0 0
Chaim Herman 2,500 20,038 * 20,038 0 0
Jon D. Blakesberg 2,500 20,038 * 20,038 0 0
Richard M. Liling 2,500 20,038 * 20,038 0 0
Blumen Partners 1,875 15,029 * 15,029 0 0
Mr. & Mrs. Brian 1,250 10,019 * 10,019 0 0
Johnston
____________________
</TABLE>
19
<PAGE>
* Less than one percent.
(1) Assumes the conversion of all outstanding Preferred Shares and the
exercise of all outstanding Warrants owned by the Selling
Stockholders.
(2) Based on shares of Common Stock outstanding as of April 16, 1996 and
includes 42,074,976 shares of Common Stock which were issued or are
issuable upon the conversion of outstanding Preferred Shares owned by
the Selling Stockholders and 5,997,782 shares of Common Stock which
were issued or are issuable upon the exercise of outstanding Warrants
owned by the Selling Stockholders.
PLAN OF DISTRIBUTION
The Shares offered hereby by the Selling Stockholders may be sold from time
to time by any such Selling Stockholder, or by pledgees, donees,
transferees or other successors in interest. Such sales may be made on one
or more exchanges or in the over-the-counter market (including the Nasdaq
SmallCap Market), or otherwise at prices and at terms then prevailing or at
prices related to the then-current market price, or in negotiated
transactions. The Shares may be sold by one or more of the following
methods, including, without limitation: (a) a block trade in which the
broker-dealer so engaged will attempt to sell the Shares as agent but may
position and resell a portion of the block as principal to facilitate the
transaction; (b) purchases by a broker or dealer as principal and resale by
such broker or dealer for its account pursuant to this Prospectus; (c)
ordinary brokerage transactions and transactions in which the broker
solicits purchasers; and (d) face-to-face transactions between the Selling
Stockholders and purchasers without a broker-dealer. In effecting sales,
brokers or dealers engaged by the Selling Stockholders may arrange for
other brokers or dealers to participate. Such brokers or dealers may
receive commissions or discounts from the Selling Stockholders in amounts
to be negotiated immediately prior to the sale. Such brokers or dealers
and any other participating brokers or dealers may be deemed to be
"underwriters" within the meaning of the Securities Act, in connection with
such sales. In addition, any securities covered by this Prospectus that
qualify for sale pursuant to Rule 144 under the Securities Act might be
sold under Rule 144 rather than pursuant to this Prospectus.
Upon the Company being notified by any Selling Shareholder that a material
arrangement has been entered into with a broker or dealer for the sale of
shares through a block trade, special offering, exchange distribution or
secondary distribution or a purchase by a broker or dealer, a supplemented
Prospectus will be filed, if required, pursuant to Rule 424(c) under the
Securities Act, disclosing (a) the name of each such broker-dealer, (b) the
number of shares involved, (c) the price at which such shares were sold,
(d) the commissions paid or discounts or concessions allowed to such
broker-dealer(s), which applicable, (e) that such broker-dealer(s) did not
conduct any investigation to verify the information set out or incorporated
by reference in this Prospectus, as supplemented, and (f) other facts
material to the transaction.
The Company is bearing all costs relating to the registration of Shares
(other than fees and expenses, if any, of counsel or other advisers to the
Selling Stockholders). Any commissions, discounts or other fees payable to
broker-dealers in connection with any sale of the Shares will be borne by
the Selling Stockholders selling such Shares.
20
<PAGE>
The Company has agreed to indemnify the Selling Stockholders in certain
circumstances against certain liabilities, including liabilities arising
under the Securities Act. Each Selling Stockholder has agreed to indemnify
the Company, its directors and its officers who sign the Registration
Statement against certain liabilities, including liabilities arising under
the Securities Act.
21
<PAGE>
DESCRIPTION OF SECURITIES TO BE REGISTERED
Common Stock
The description of the Company's Common Stock is contained in the Company's
Registration Statement on Form 8-A filed under the Exchange Act, including
any amendment or reports filed for the purpose of updating such
description, and is incorporated herein by reference.
Warrants
Exercise Price and Terms
Each Warrant entitles the holder thereof to purchase one share of Common
Stock at an exercise price of $.6708. Warrants are issued, subject to
adjustment in accordance with the adjustment provisions referred to below.
The Warrants may be exercised upon surrender of the Warrant certificate on
or prior to February 28, 2006 (or, if redeemed prior thereto, the date
immediately preceding the redemption date) at the offices of the Warrant
Agent, with the subscription form on the reverse side of the Warrant
certificate completed as indicated, accompanied by payment of the full
exercise price (by cashier's or certified check payable to the order of the
Warrant Agent, or by wire transfer) for the number of Warrants being
exercised. No fractional shares will be issued upon exercise of the
Warrants, and the Company will pay cash in lieu of fractional shares.
After February 28, 2006, Warrants will become void and of no value.
Adjustments
The exercise price and the number of shares of Common Stock purchasable
upon the exercise of the Warrants are subject to adjustments upon the
occurrence of certain events, such as stock dividend or stock splits of the
Common Stock. Additionally, an adjustment would be made in the case of the
reclassification or exchange of the Common Stock, consolidation or merger
of the Company with or into another corporation or sale of all or
substantially all of the assets of the Company, in order to enable Warrant
holders to acquire the kind and number of shares of Common Stock that might
otherwise have been purchased upon the exercise of the Warrant. No
adjustment to the exercise price of the shares subject to the Warrants will
be made for dividends (other than dividends in the form of stock), if any,
paid on the Common Stock.
Redemption
The Warrants are subject to redemption by the Company at $.10 per share for
each share subject to each Warrant on 60 days prior written notice provided
that the closing bid quotation for the Common Stock as reported on the
Nasdaq SmallCap Market, or on such exchange on which the Common Stock is
then traded exceeds 200% of the exercise price per share for 20 consecutive
trading days ending three days prior to the date of redemption. The
Warrants are not redeemable on or prior to February 28, 1997.
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Warrant Holder Not a Stockholder
The Warrants do not confer upon holders thereof any voting or other rights
of a stockholder of the Company. The shares of Common Stock issuable upon
exercise of the Warrants in accordance with the terms thereof will be fully
paid and nonassessable.
Transfer and Warrant Agent
The transfer and warrant agent for the Common Stock is Continental Stock
Transfer & Trust Company, 2 Broadway, New York, New York 10004.
LEGAL OPINION
The validity of the shares of Common Stock offered hereby will be passed
upon for the Company by Ballard Spahr Andrews & Ingersoll, Philadelphia,
Pennsylvania.
EXPERTS
The Consolidated Financial Statements of Greenwich and its subsidiary,
Greenwich Pharmaceuticals International Incorporated, as of December 31,
1994 and 1993 and for each of the three years in the period ended December
31, 1994 incorporated by reference in this Prospectus, have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect thereto, and is included herein in reliance upon the
authority of said firm as experts in giving said reports. Reference is
made to said report which contains an explanatory paragraph relating to
Greenwich's ability to continue as a going concern as discussed in Note 1
to the consolidated financial statements incorporated herein. Arthur
Andersen LLP did not audit the financial statements of Greenwich for the
period from inception to December 31, 1988. Such statements are included
in from inception to December 31, 1994 totals. The statements of
operations, stockholders' equity and cash flows of Greenwich for the period
from inception (February 1969) to December 31, 1988 (not presented or
incorporated by reference separately herein) have been audited by Deloitte
& Touche LLP, independent auditors, as stated in their report, which is
incorporated herein by reference and has been so incorporated in reliance
upon the report of such firm given upon their authority as experts in
accounting and auditing. Such report includes an explanatory paragraph
that states that the ultimate success of Greenwich's development program is
dependent upon future events, the outcome of which is currently
undeterminable, and is also dependent upon obtaining additional financing
adequate to fulfill its development activities and achieving a level of
revenues adequate to support Greenwich's cost structure.
The consolidated financial statements of the Company as of December 31,
1995 and 1994, for the three years ended December 31, 1995 and for the
period from inception (October 16, 1992) through December 31, 1995,
incorporated by reference in this Prospectus from the Company's Annual
Report on Form 10-K for the year ended December 31, 1995, have been so
included in reliance on the report
23
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of Price Waterhouse LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
24
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No dealer, salesperson or any other individual has been authorized to give
any information or to make any representations not contained in this Prospectus
in connection with the offer covered by this Prospectus. If given or made, such
information or representations must not be relied upon as having been authorized
by the Company or the Selling Stockholders. This Prospectus does not constitute
an offer to sell, or a solicitation of an offer to buy, any of these securities
in any jurisdiction where, or to any person whom, it is unlawful to make such
offer or solicitation. Neither the delivery of this Prospectus nor any offer or
sale made hereunder shall, under any circumstances, create any implication that
there has been no change in the affairs of the Company or that the information
contained herein is correct as of any time subsequent to the date hereof.
TABLE OF CONTENTS
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PAGE
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Available Information
Incorporation of Certain
Documents by Reference
The Company
Risk Factors
Use of Proceeds
Selling Stockholders
Plan of Distribution
Description of Securities
to be Registered
Legal Opinion
Experts
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48,072,758 Shares
BOSTON LIFE SCIENCES, INC
Common Stock
Warrants
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PROSPECTUS
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May , 1996
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