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PROSPECTUS
IMMUNOGEN, INC.
687,648 SHARES OF COMMON STOCK
(PAR VALUE OF $.01 PER SHARE)
The 687,648 shares of Common Stock of ImmunoGen, Inc., a Massachusetts
corporation ("ImmunoGen" or the "Company"), offered hereby are being sold by the
selling stockholders identified herein (the "Selling Stockholders"). Such offers
and sales may be made on one or more exchanges, in the over-the-counter market,
or otherwise, at prices and on terms then prevailing, or at prices related to
the then-current market price, or in negotiated transactions, or by underwriters
pursuant to underwriting agreements in customary form, or in a combination of
any such methods of sale. The Selling Stockholders may also sell such shares in
accordance with Rule 144 under the 1933 Act. The Selling Stockholders are
identified and certain information with respect to them is provided under the
caption "Selling Stockholders" herein, to which reference is made. The expenses
of the registration of the securities offered hereby, including fees of counsel
for the Company, will be paid by the Company. The following expenses will be
borne by the Selling Stockholders: underwriting discounts and selling
commissions, if any, and the fees of legal counsel, if any, for the Selling
Stockholders. The filing by the Company of this Prospectus in accordance with
the requirements of Form S-3 is not an admission that any person whose shares
are included herein is an "affiliate" of the Company.
The Selling Stockholders have advised the Company that they have not
engaged any person as an underwriter or selling agent for any of such shares,
but they may in the future elect to do so, and they will be responsible for
paying such a person or persons customary compensation for so acting. The
Selling Stockholders and any broker executing sell orders on behalf of any
Selling Stockholder may be deemed to be "underwriters" within the meaning of the
1933 Act, in which event commissions received by any such broker may be deemed
to be underwriting commissions under the 1933 Act. The Company will not receive
any of the proceeds from the sale of the securities offered hereby. The Common
Stock is listed on the Nasdaq Stock Market ("Nasdaq") under the symbol IMGN. On
July 11, 1996, the closing sale price of the Common Stock, as reported by
Nasdaq, was $3.75 per share.
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THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" ON PAGE 4 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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No person is authorized in connection with any offering made hereby to give
any information or to make any representations other than as contained in this
Prospectus, and, if given or made, such information or representations must not
be relied upon as having been authorized by the Company. This Prospectus is not
an offer to sell, or a solicitation of an offer to buy, by any person in any
jurisdiction in which it is unlawful for such person to make such an offer or
solicitation. Neither the delivery of this Prospectus nor any sales made
hereunder shall under any circumstances create any implication that the
information contained herein is correct as of any time subsequent to the date
hereof.
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THE DATE OF THIS PROSPECTUS IS JULY 12, 1996.
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AVAILABLE INFORMATION
The Company is subject to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and in accordance therewith
files reports and other information with the Securities and Exchange Commission
(the "Commission" ). These reports, proxy statements and other information can
be inspected and copied at the public reference facilities maintained by the
Commission at Room 1024 of the Commission's office at 450 Fifth Street, N.W.,
Judiciary Plaza, Washington, D.C. 20549, and at its regional offices located at
7 World Trade Center, Suite 1300, New York, NY 10048 and Citicorp Center, 500
West Madison Street, Suite 1400, Chicago, IL 60661. Copies of such reports,
proxy statements and other information can be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates. Additional updating information with respect to the securities
covered herein may be provided in the future to purchasers by means of
appendices to this Prospectus.
The Company has filed with the Commission in Washington, D.C. a
registration statement (herein, together with all amendments and exhibits,
referred to as the "Registration Statement") under the 1933 Act with respect to
the securities offered or to be offered hereby. This Prospectus does not contain
all of the information included in the Registration Statement, certain items of
which are omitted in accordance with the rules and regulations of the
Commission. For further information about the Company and the securities offered
hereby, reference is made to the Registration Statement and the exhibits
thereto.
The Company will provide without charge to each person to whom this
Prospectus is delivered, on the written or oral request of such person, a copy
of any document incorporated herein by reference, excluding exhibits. Requests
should be made to ImmunoGen, Inc., 148 Sidney Street, Cambridge, MA 02139,
telephone (617) 661-9312 and directed to the attention of the Chief Financial
Officer.
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TABLE OF CONTENTS
PAGE
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RISK FACTORS.......................................................................... 4
THE COMPANY........................................................................... 8
SELLING STOCKHOLDERS.................................................................. 9
PLAN OF DISTRIBUTION.................................................................. 9
LEGALITY OF COMMON STOCK.............................................................. 10
EXPERTS............................................................................... 10
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE..................................... 10
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS....................................... II-1
SIGNATURES............................................................................ II-4
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RISK FACTORS
An investment in the shares being offered by this Prospectus involves a
high degree of risk. The following factors, in addition to those discussed
elsewhere in the Prospectus or incorporated herein by reference, should be
carefully considered in evaluating the Company and its business prospects before
purchasing shares offered by this Prospectus. This Prospectus contains and
incorporates by reference forward-looking statements within the "safe harbor"
provisions of the Private Securities Litigation Reform Act of 1995. Reference is
made in particular to the discussion set forth under "Management's Discussion
and Analysis of Financial Condition and Results of Operations" in the Company's
Annual Report on Form 10-K for the fiscal year ended June 30, 1995 (the "Form
10-K") and the Quarterly Reports on Form 10-Q for the quarters ended September
30, 1995, December 31, 1995 and March 31, 1996, and under "Business" in the Form
10-K, incorporated in this Prospectus by reference. Such statements are based on
current expectations that involve a number of uncertainties including those set
forth in the risk factors below. Actual results could differ materially from
those projected in the forward looking statements.
EARLY STAGE OF INITIAL PRODUCT DEVELOPMENT. The Company has not begun to
market or generate revenues from the sale of products. The Company's products
will require significant additional development, laboratory and clinical testing
and investment prior to commercialization. There can be no assurance that such
products will be successfully developed, prove to be safe and efficacious in
clinical trials, meet applicable regulatory standards, obtain required
regulatory approvals, be capable of being produced in commercial quantities at
reasonable costs or be successfully marketed.
HISTORY OF OPERATING LOSSES AND ACCUMULATED DEFICIT. The Company has been
unprofitable since inception and expects to incur additional net losses over the
next several years, if it is able to raise sufficient working capital to
continue operations.
FINANCING REQUIREMENTS AND ACCESS TO CAPITAL FUNDING. The Company's cash
resources at June 30, 1996 were approximately $2.8 million. Gross proceeds to
the Company from a March 1996 private placement of debentures (the "Private
Placement") were $5.0 million. The Company anticipates that its existing cash
resources will enable it to maintain its current and planned operations through
September 1996. Although management continues to pursue additional funding
arrangements, no assurance can be given that such financing will in fact be
available to the Company. If the Company is unable to obtain financing on
acceptable terms in order to maintain operations, it could be forced to curtail
or discontinue its operations.
NO COMMERCIAL MANUFACTURING EXPERIENCE. The Company has not yet
commercially introduced any products. To be successful, the Company's products
must be manufactured in commercial quantities, in compliance with regulatory
requirements and at acceptable costs. Although the Company has produced its
products in the laboratory and scaled its production process to pilot levels,
production in commercial quantities will create technical as well as financial
challenges for the Company. The Company's current facilities are not yet
approved by the Food and Drug Administration ("FDA") for commercial production
of its proposed products, and there can be no assurance that such approval will
be obtained. In order to manufacture its products in commercial quantities, the
Company will have to enhance its existing manufacturing facilities, which will
require additional funds. The Company has no experience in large-scale
manufacturing, and no assurance can be given that the Company will be able to
make the transition to commercial production successfully.
LACK OF MARKETING AND DISTRIBUTION EXPERIENCE. Although the Company
intends to market certain of its products through a direct sales force if and
when regulatory approval is obtained, it currently has no marketing or sales
staff. To the extent that the Company determines not to, or is unable to,
arrange third-party distribution for its products, significant additional
expenditures, management resources and time will be required to develop a sales
force. There can be no assurance that the Company will be able to establish such
a sales force or be successful in gaining market acceptance for its products.
THIRD-PARTY REIMBURSEMENT. In both domestic and foreign markets, sales of
the Company's proposed products will depend in part on the availability of
reimbursement from third-party payors such as government health administration
authorities, private health insurers and other organizations. Third-party payors
are
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increasingly challenging the price and cost-effectiveness of medical products
and services. Significant uncertainty exists as to the reimbursement status of
newly approved health care products. There can be no assurance that the
Company's proposed products will be considered cost effective or that adequate
third-party reimbursement will be available to enable ImmunoGen to maintain
price levels sufficient to realize an appropriate return on its investments in
product development. Legislation and regulations affecting the pricing of
pharmaceuticals may change before any of the Company's proposed products are
approved for marketing. Adoption of such legislation could further limit
reimbursement for medical products and services.
TECHNOLOGICAL CHANGE AND COMPETITION. The biotechnology industry is
subject to rapid and significant technological change. Competitors of the
Company engaged in all areas of biotechnology in the United States and abroad
are numerous and include major pharmaceutical and chemical companies,
specialized biotechnology firms, universities and other research institutions.
There can be no assurance that the Company's competitors will not succeed in
developing technologies and products that are more effective than any which have
been or are being developed by the Company or which would render the Company's
technology and products obsolete and noncompetitive. Many of these competitors
have substantially greater financial and technical resources and production and
marketing capabilities than the Company. In addition, many of the Company's
competitors have significantly greater experience than the Company in
preclinical testing and human clinical trials of new or improved pharmaceutical
products and in obtaining FDA and other regulatory approvals of products for use
in health care. The Company has limited experience in conducting and managing
preclinical and clinical testing necessary to obtain government approvals.
Accordingly, the Company's competitors may succeed in obtaining FDA approval for
products more rapidly than the Company. If the Company commences significant
commercial sales of its products, it will also be competing with respect to
manufacturing efficiency and marketing capabilities, areas in which it has
limited or no experience.
DEPENDENCE ON OTHERS. The Company plans to conduct certain aspects of its
future operations with third-party collaborators. While the Company believes its
potential collaborators will have an economic motivation to succeed in
performing their obligations under such arrangements, the amount and timing of
funds and other resources to be devoted under such arrangements will be
controlled by such other parties and would be subject to financial or other
difficulties that may befall such other parties. Thus, no assurance can be given
that the Company will generate any revenues from such arrangements. In addition,
although the Company is currently exploring entry into such arrangements, no
such arrangements have been concluded nor is there any assurance that any such
arrangements will ever come into effect.
The Company currently depends on a single supplier to produce required
quantities of a certain antibody. There can be no assurance that this antibody
will continue to be available from this supplier or, if not available, that the
Company will be able to obtain this antibody from other sources at all or at
acceptable cost or to manufacture sufficient supplies of this antibody on its
own.
DEPENDENCE ON KEY PERSONNEL. The Company's success is dependent on certain
key management and scientific personnel. Competition for qualified employees
among biotechnology companies is intense, and the loss of key personnel, or the
inability to attract and retain the additional, highly skilled employees
required for the expansion of the Company's activities, could adversely affect
its business.
PATENTS AND PROPRIETARY RIGHTS. The patent situation in the field of
biotechnology generally is highly uncertain and involves complex legal,
scientific and factual questions. To date, no consistent policy has emerged
regarding the breadth of claims allowed in biotechnology patents. Accordingly,
there can be no assurance that patent applications relating to the Company's
products or technology will result in patents being issued or that, if issued,
the patents will afford protection against competitors with similar technology.
There has been significant litigation in the biotechnology industry
regarding patent and other intellectual property rights and this litigation is
likely to continue in the future. If the Company becomes involved in such
litigation, it could consume a substantial portion of the Company's resources.
Also, patents and applications owned or licensed by the Company may become the
subject of interference proceedings in the U.S. Patent and Trademark Office to
determine priority of invention, which could result in substantial cost to the
Company, as well as a possible adverse decision as to priority of invention of
the patent or patent application involved. An
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adverse decision in an interference proceeding may result in the Company's loss
of rights under a patent or patent application subject to such a proceeding.
In addition, companies may obtain patents claiming products or processes
that are necessary for or useful to the development of the Company's products
and bring legal actions against the Company claiming infringement and may seek
to recover damages and to enjoin the Company from manufacturing and marketing
the affected product or process. If any such actions are successful, in addition
to any potential liability for damages, the Company may be required to obtain
licenses from others to continue to develop, manufacture or market its products.
There can be no assurance that the Company will prevail in any such action or
that it will be able to obtain such licenses on commercially reasonable terms.
The Company owns three issued patents. It has also applied for several
patents. In addition, Dana-Farber has filed applications for a number of patents
to which the Company has exclusive rights, and several of these have been issued
as patents. There can be no assurance that any patent applications will issue as
patents or that any issued patents will provide the Company with significant
protection against competitors.
In order to practice its antibody humanization technology using either
Complementarily Determining Region ("CDR") grafting or resurfacing, the Company
will need to obtain one or more licenses under patents issued to third parties.
The Company understands that such licenses may be available on what it believes
to be commercially acceptable terms. However, there can be no assurance that any
such licenses will in fact be, or continue to be, available on commercially
acceptable terms, if at all.
The Company is aware that a patent has been issued to a third party in
Europe which contains claims covering the Company's blocked ricin technology.
The Company also is aware that patents have been issued in Australia and New
Zealand, that a patent application has been filed in Canada, and the Company
believes that a patent application has been filed in the United States, each of
which may contain claims covering the Company's blocked ricin technology. The
Company intends to oppose the European patent and will, as it deems appropriate,
initiate revocation proceedings against the Australian and New Zealand patents
and interference proceedings against the Canadian and United States
applications, if such patents and applications are shown to cover the Company's
blocked ricin technology. However, there can be no assurance that the Company
will be successful in any opposition, revocation or interference proceeding.
Moreover there can be no assurance that additional patents containing similar
claims will not be issued in other jurisdictions. If the Company is not
successful in invalidating or opposing such patents or otherwise avoiding
infringement, its business may be materially adversely affected as a result of
one or more of the adverse consequences described above.
The Company also relies upon unpatented proprietary technology, and no
assurance can be given that others will not duplicate or independently develop
substantially equivalent technology, or otherwise gain access to the Company's
proprietary technology or disclose such technology, or that the Company can
meaningfully protect its rights in such unpatented proprietary technology.
The Company's license agreement with Dana-Farber requires ImmunoGen to use
all reasonable efforts, consistent with sound and reasonable business practices
and judgment, to effect introduction of licensed products into the commercial
market as soon as practicable. Failure to do so can result in the loss of the
Company's exclusive rights to such licensed products.
GOVERNMENT REGULATION. The production and marketing of the Company's
products and its ongoing research and development activities are subject to
regulation by numerous governmental authorities in the United States and other
countries. The rigorous preclinical and clinical testing requirements and
regulatory approval processes typically take a number of years and require the
expenditure of substantial resources. Delays in obtaining regulatory approvals
would adversely affect the marketing of products developed by the Company and
the Company's ability to receive product revenues or royalties. In light of the
limited regulatory history of monoclonal antibody-based therapeutics, there can
be no assurance that regulatory approvals for the Company's products will be
obtained without lengthy delays, if at all. Moreover, the Company is, or may
become, subject to various federal, state and local laws, regulations and
recommendations relating to safe working conditions, laboratory and
manufacturing practices, the experimental use of animals and the use and
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disposal of hazardous substances, including radioactive compounds and infectious
disease agents, used in connection with the Company's research work. In
addition, the Company cannot predict the extent to which existing or proposed
governmental regulations might have an adverse effect on the production and
marketing of the Company's products.
PROPOSED INTERNATIONAL TREATY. More than 150 nations, including the United
States, are signatories to an international treaty restricting the manufacture
and sale of chemical substances identified therein as components of chemical
warfare. Ricin, a natural toxin obtained from a cultivated plant, is among the
substances restricted pursuant to the proposed treaty. If the treaty is ratified
by the United States, the Company's ability to obtain ricin could be affected,
although the Company believes it could purchase adequate quantities within the
United States and abroad to satisfy its needs.
PRODUCT LIABILITY EXPOSURE. The use of the Company's product candidates
during testing or after approval entails an inherent risk of adverse effects
which could expose the Company to product liability claims. There can be no
assurance that the Company would have sufficient resources to satisfy any
liability resulting from these claims. The Company currently has limited product
liability insurance for products in clinical testing. There can be no assurance
that such coverage will be adequate in scope to protect the Company in the event
of a successful product liability claim.
VOLATILITY OF STOCK PRICE. The market prices for securities of
biotechnology companies have been volatile. The market price for the Company's
Common Stock has fluctuated significantly since public trading commenced in
1989, and it is likely that the market price will continue to fluctuate in the
future. Announcements of technological innovations or new commercial products by
the Company or its competitors, developments concerning proprietary rights,
including patents and litigation matters, publicity regarding actual or
potential medical results relating to products under development by the Company
or its competitors, regulatory developments in both the United States and
foreign countries, public concern as to the safety of biotechnology products and
economic and other external factors, including the outbreak or material
escalation of hostilities or other calamity or crisis, as well as
period-to-period fluctuations in financial results, may have a significant
impact on the Company's business and on the market price of the Common Stock.
Sales of substantial amounts of the Common Stock in the public market may also
have an adverse impact on the market price of the Common Stock.
ABSENCE OF DIVIDENDS. The Company has not paid any cash dividends on its
capital stock since inception. Furthermore, the Company does not anticipate
paying cash dividends in the foreseeable future.
SHARES ELIGIBLE FOR FUTURE SALE. Sales of substantial amounts of Common
Stock in the public market could have an adverse affect on the price of the
Company's Common Stock. In addition to the shares registered in the Registration
Statement of which this Prospectus is a part, approximately 15,725,585 million
shares of Common Stock are currently freely tradeable on the open market. In
addition, approximately 874,270 million shares are eligible for sale pursuant to
Rule 144 of the Act. Also, there were a total of 1,691,862 options to purchase
Common Stock outstanding as of June 30, 1996 pursuant to the Company's stock
option plans and 895,788 of such options are currently vested and can be
exercised at any time prior to their respective expiration dates. As of June 30,
1996, 26,738 shares of Common Stock were issuable upon the exercise of warrants
issued in connection with a capital lease financing in March 1994 and 1,009,000
shares of Common Stock were issuable upon the exercise of warrants issued to
date in connection with the Company's March 1996 Debenture financing (the "March
1996 Private Placement").
In addition, a $2.5 million debenture (the "$2.5 Million Debenture") issued
by the Company in connection with the March 1996 Private Placement is
convertible into shares of the Company's Common Stock at any time based on a
predetermined formula. The price at which the $2.5 Million Debenture will
convert into Common Stock will be the lower of (i) $2.50 or (ii) 85% of the
average of the closing bid price for the five days prior to conversion (the
"Conversion Date Price"). Upon conversion, the holder will receive warrants (the
"Second Warrants") to purchase Common Stock (the "Second Warrant Shares") for
50% of the number of shares issuable upon conversion of the $2.5 Million
Debenture. The Second Warrants will be exercisable at $4.00 per share and expire
five years after the date of issuance. There can be no assurance, however, that
any or all of the warrants will be exercised, or that the Company will receive
any proceeds from
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such exercise. The Company has registered for resale the approximately 1,873,000
shares of Common Stock which are issuable upon conversion of the $2.5 Million
Debenture and the Second Warrants. If the $2.5 Million Debenture and the Second
Warrants become convertible into more than 1,873,000 shares, the Company will be
obligated to register additional shares of Common Stock.
The holders of approximately 792,769 shares of Common Stock (the
"Registrable Securities") are entitled to certain rights to register such shares
under the 1933 Act for sale to the public, pursuant to a Registration Rights
Agreement by and among the Company and the holders of Registrable Securities, as
amended (the "Registration Rights Agreement"). The holders of Registrable
Securities include, among others, Aeneas Venture Corporation. Such holders have
the right to require the Company, on not more than two occasions, whether or not
the Company proposes to register any of its Common Stock for sale, to register
all or part of their shares for sale to the public under the Securities Act,
subject to certain conditions and limitations. In addition, holders of
Registrable Securities may require the Company to register all or part of their
shares on Form S-3 (or a successor short form or registration) if the Company
then qualifies for use of such form, subject to certain conditions and
limitations. The Registration Rights Agreement was amended on October 9, 1991 to
limit the circumstances pursuant to which the registration rights granted
thereunder may be transferred to third parties and to amend certain procedural
requirements.
DILUTION. Dilution is likely to occur upon conversion of the $2.5 Million
Debenture and the exercise of the Second Warrants, and also upon the exercise of
other outstanding stock options and warrants. The $2.5 Million Debenture can be
converted into shares of the Company's Common Stock at any time. See "Shares
Eligible for Future Sales".
THE COMPANY
ImmunoGen develops pharmaceuticals, primarily for the treatment of cancer.
The Company's products are "immunoconjugates," each comprising a potent effector
molecule -- a proprietary toxin or drug -- coupled to a monoclonal antibody for
delivery to and destruction of targeted cells. Through its subsidiary, Apoptosis
Technology, Inc. ("ATI"), established in 1993, the Company is developing
additional technology platforms, based on the regulation of cell proliferation
and programmed cell death, or apoptosis, with which to identify therapeutic
product candidates for the treatment of cancer and viral diseases.
Since its inception, the Company has acquired significant expertise and
proprietary know-how with regard to the development of immunoconjugates for the
treatment of cancer. The key elements of the Company's proprietary position
include its expertise in identifying and designing both potent effector
molecules and specific targeting agents. Through its network of collaborators,
advisors and consultants, the Company also has access to significant medical
expertise with regard to the treatment of cancer.
Through ATI, the Company has established collaborative ties with leading
academic researchers in the area of apoptosis research and its applications to
the treatment of cancer and viral diseases.
The Company uses several different toxins and drugs in its immunoconjugates
as effector molecules with which to destroy target cells. In each of the
Company's first four products -- the Oncolysins -- a proprietary derivative of
ricin, a powerful, naturally occurring plant toxin, is coupled to a targeting
monoclonal antibody. In the Company's next group of products -- small-drug
immunoconjugates -- potent small-molecule drugs are conjugated to humanized
monoclonal antibodies. ATI is basing its proprietary technology portfolio on the
development of molecular and cellular screening systems for the identification
of leads for therapeutic product candidates.
The Company began conducting clinical trials with the first of the
Oncolysin products in 1988. That first product, Oncolysin B, is now being tested
in lymphoma patients in a large-scale, randomized Phase III clinical study. The
Company's small-drug immunoconjugates are in the research and preclinical phases
of development: in April 1994, the Company successfully submitted an
Investigational New Drug Application with the U.S. Food and Drug Administration
to begin human clinical testing of anti-B4-DC1, its first small-drug
immunoconjugate.
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The Company's products will require significant additional investment and
laboratory and clinical testing, and regulatory approvals. The Company is
seeking to commercialize its products through collaborations with established
pharmaceutical companies to support clinical testing and development and
manufacturing and for product sales and marketing. The Company also may elect in
the future to establish a specialized sales force in the United States and to
serve international markets through foreign licensees. There can be no
assurance, however, that the Company will be successful in attracting
collaborative partners or in developing or commercializing its products.
The Company's executive offices are located at 148 Sidney Street,
Cambridge, Massachusetts 02139, and its telephone number is (617) 661-9312.
SELLING STOCKHOLDERS
The shares offered hereby by The Dana-Farber Cancer Institute, Inc.
("Dana-Farber") are issuable upon conversion of a $1,312,943 Convertible
Debenture (the "Dana-Farber Debenture") issued by the Company to DanaFarber as
repayment of certain sums owed by the Company to Dana-Farber. The shares offered
hereby by LBC Capital Resources, Inc. ("LBC") are issuable upon the exercise of
warrants to purchase Common Stock (the "LBC Warrants") acquired by LBC in
partial payment for LBC's services in securing the March 1996 Private Placement
for the Company.
The following table sets forth information with respect to the beneficial
ownership of the Company's Common Stock by the Selling Stockholder as of June
30, 1996, and as adjusted to reflect the sale of the Common Stock offered hereby
by the Selling Stockholders.
SHARES SHARES
OWNED PRIOR TO OWNED AFTER
OFFERING NUMBER OF OFFERING(3)
-------------------- SHARES BEING ------------------
SELLING STOCKHOLDER NUMBER PERCENT OFFERED NUMBER PERCENT
- ----------------------------------------- ------- ------- ------------ ------ -------
Dana-Farber.............................. 437,648(1) 2.6% 437,648 0 --
LBC...................................... 250,000(2) 1.5% 250,000 0 --
- ---------------
(1) Based on 16,599,855 shares of Common Stock outstanding on June 30, 1996, and
adjusted to reflect the conversion by Dana-Farber of the Debenture into up
to 437,648 shares of Common Stock (assuming a market price of approximately
$3.00 at the time of conversion).
(2) Based on 16,599,835 shares of Common Stock outstanding on June 30, 1996, and
adjusted to reflect the exercise of the LBC Warrants.
(3) Assumes the sale of all shares offered hereby to unaffiliated third parties.
PLAN OF DISTRIBUTION
The 687,648 shares of Common Stock of the Company offered hereby may be
offered and sold from time to time by the Selling Stockholders, or by pledgees,
donees, transferees or other successors in interest. Such offers and sales may
be made from time to time on one or more exchanges or in the over-the-counter
market, or otherwise, at prices and on terms then prevailing or at prices
related to the then-current market price, or in negotiated transactions. The
methods by which the shares may be sold may include, but not be limited to, the
following: (a) a block trade in which the broker or 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; (c) an
exchange distribution in accordance with the rules of such exchange; (d)
ordinary brokerage transactions and transactions in which the broker solicits
purchasers; (e) privately negotiated transactions; and (f) a combination of any
such methods of sale. In effecting sales, brokers or dealers engaged by the
Selling Stockholder may arrange for other brokers or dealers to participate.
Brokers or dealers may receive commissions or discounts from the Selling
Stockholders or from the purchasers in amounts to be negotiated immediately
prior to the sale. The Selling Stockholders may also sell such shares in
accordance with Rule 144 under the 1933 Act.
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The Company has agreed to use its best efforts to maintain the
effectiveness of the registration of the shares being offered hereunder until
(a) in the case of the shares offered by Dana Farber, the earlier of the date
upon which all of the shares of Common Stock offered hereby have been sold or
one year from the date hereof, and (b) in the case of LBC, the earlier of the
date upon which all of the shares of Common Stock offered hereby have been sold,
or the date on which the shares of Common Stock offered hereby, in the opinion
of counsel, may be immediately sold by the Selling Stockholder without
registration.
The Selling Stockholders and any brokers participating in such sales may be
deemed to be underwriters within the meaning of the 1933 Act. There can be no
assurance that the Selling Stockholders will sell any or all of the shares of
Common Stock offered hereunder.
All proceeds from any such sales will be the property of the Selling
Stockholder who will bear the expense of underwriting discounts and selling
commissions, if any, and their own legal fees.
LEGALITY OF COMMON STOCK
The validity of the shares of Common Stock hereby is being passed upon for
the Company by Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., Boston,
Massachusetts.
EXPERTS
The financial statements incorporated in this Prospectus by reference to
the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 1995
have been so incorporated in reliance on the report (which includes an
explanatory paragraph concerning uncertainties surrounding the Company's ability
to continue as a going concern) of Coopers & Lybrand L.L.P., independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed with the Commission are incorporated herein
by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended June
30, 1995 (File No. 0-17999).
(b) The Company's Quarterly Reports on Form 10-Q for the fiscal quarters
ended September 30, 1995, December 31, 1995 and March 31, 1996.
(c) The Company's Current Report on Form 8-K for the August 17, 1995 event.
(d) The Company's Current Report on Form 8-K for the March 21, 1996 event.
(e) The Company's Current Report on Form 8-K for the June 6, 1996 event.
(f) The description of the Company's capital stock contained in the
Company's registration statement on Form 8-A under the 1934 Act (File No.
0-17999), including amendments or reports filed for the purpose of updating such
description.
All reports and other documents subsequently filed by the Company with the
Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the 1934 Act,
prior to the filing of a post-effective amendment which indicates that all
securities covered by this Prospectus have been sold or which deregisters all
such securities then remaining unsold, shall be deemed to be incorporated by
reference herein and to be a part hereof from the date of the filing of such
reports and documents.
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