AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 23, 2001
REGISTRATION STATEMENT NO. 333-64250
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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Amendment No. 1
to
FORM S-3
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REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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BIOTRANSPLANT INCORPORATED
(Exact name of registrant as specified in its charter)
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DELAWARE 04-3119555
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
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BUILDING 75, THIRD AVENUE
CHARLESTOWN NAVY YARD
CHARLESTOWN, MASSACHUSETTS 02129
(617) 241-5200
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
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ELLIOT LEBOWITZ, PH.D.
BUILDING 75, THIRD AVENUE
CHARLESTOWN NAVY YARD
CHARLESTOWN, MASSACHUSETTS 02129
(617) 241-5200
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
--------------------------
COPY TO:
STEVEN D. SINGER, ESQ.
HALE AND DORR LLP
60 STATE STREET
BOSTON, MASSACHUSETTS 02109
TELEPHONE: (617) 526-6000
TELECOPY: (617) 526-5000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] 333-_______.
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ] 333-__________.
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
--------------------------
THE COMPANY HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE COMPANY SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
SHALL DETERMINE.
================================================================================
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE
SELLING STOCKHOLDERS NAMED IN THIS PROSPECTUS MAY NOT SELL THESE SECURITIES OR
ACCEPT AN OFFER TO BUY THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT
AN OFFER TO SELL THESE SECURITIES, AND THE SELLING STOCKHOLDERS NAMED IN THIS
PROSPECTUS ARE NOT SOLICITING OFFERS TO BUY THESE SECURITIES IN ANY JURISDICTION
WHERE THE OFFER OR SALE IS NOT PERMITTED.
PROSPECTUS (Subject to Completion)
Issued July 23, 2001
BIOTRANSPLANT INCORPORATED
3,022,457 SHARES OF COMMON STOCK
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This prospectus relates to resales of common stock that we issued
and sold to the selling stockholders listed on page 14. We will not receive
any of the proceeds from the sale of the shares by the selling stockholders.
The selling stockholders identified in this prospectus, or their
pledgees, donees, transferees or other successors in interest, may offer the
shares from time to time through public or private transactions at prevailing
market prices, at prices related to prevailing market prices or at privately
negotiated prices.
Our common stock is traded on the Nasdaq National Market under the
symbol "BTRN." On July 20, 2001, the last reported sale price of our common
stock on the Nasdaq National Market was $6.92 per share. You are urged to
obtain current market quotations for the common stock.
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INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 5.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Our principal executive offices are located at Building 75, Third
Avenue, Charlestown Navy Yard, Charlestown, Massachusetts 02129 and our
telephone number is (617) 241-5200.
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The date of this prospectus is __________ __, 2001
TABLE OF CONTENTS
PAGE
Prospectus Summary...........................................3
Who We Are...................................................3
The Offering.................................................4
Risk Factors.................................................5
Special Note Regarding Forward-Looking Information...........13
Use Of Proceeds..............................................14
Selling Stockholders.........................................14
Plan Of Distribution.........................................17
Legal Matters................................................18
Experts......................................................18
Where You Can Find More Information..........................18
Incorporation Of Certain Documents By Reference..............19
BioTransplant Incorporated's executive offices are located at Building
75, Third Avenue, Charlestown Navy Yard, Charlestown, Massachusetts 02129, and
our telephone number is 617-241-5200. Unless the context otherwise requires
references in this prospectus to "BioTransplant," "we," "us," and "our" refer to
BioTransplant Incorporated and its subsidiaries.
BioTransplant(TM), ImmunoCognance(TM), AlloMune(TM), BTI-322(TM),
BCell-HDM(TM), TCell-HDM(TM), PanT-HDM(TM), BrCa-HDM(TM), Neu/RBC-HDM(TM),
AcT-IV(TM), Leuko-HDM(TM), ReacT-HDM(TM), AcTCell-HDM(TM) and HDM(TM) are our
trademarks. This prospectus also contains trademarks and tradenames of others.
We have not authorized anyone to provide you with information different
from that contained or incorporated by reference in this prospectus. The selling
stockholders are offering to sell, and seeking offers to buy, shares of our
common stock only in jurisdictions where offers and sales are permitted. The
information contained in this prospectus is accurate only as of the date of this
prospectus, regardless of the time of delivery of this prospectus or of any sale
of common stock.
-2-
PROSPECTUS SUMMARY
THIS SUMMARY HIGHLIGHTS IMPORTANT FEATURES OF THIS OFFERING AND THE
INFORMATION INCLUDED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS. THIS
SUMMARY DOES NOT CONTAIN ALL OF THE INFORMATION THAT YOU SHOULD CONSIDER BEFORE
INVESTING IN OUR COMMON STOCK. YOU SHOULD READ THE ENTIRE PROSPECTUS CAREFULLY,
ESPECIALLY THE RISKS OF INVESTING IN OUR COMMON STOCK DISCUSSED UNDER "RISK
FACTORS."
WHO WE ARE
BioTransplant is developing pharmaceutical products and systems to
enable the body's immune system to better tolerate the transplantation of
foreign cells, tissues and organs. Our lead product, the Eligix BCell-HDM
Cell Separation System, received CE Mark approval in February 2001, and is
currently being marketed in Europe. In addition, MEDI-507, an antibody
product, is being developed in collaboration with MedImmune, Inc. We are also
independently developing proprietary technology, which we refer to as
ImmunoCognance technology, which is based upon mixing elements of a donor's
immune system with that of a patient in a manner that enables the patient to
recognize the donor's tissues as if those foreign tissues belonged to the
patient. We believe that our ImmunoCognance technology will have the
following benefits when compared to current technologies:
o improve clinical outcomes in bone marrow transplantation for
cancer and other diseases;
o reduce or eliminate the need for long-term administration of
potentially debilitating immunosuppressive drugs to a patient
after a transplantation procedure;
o minimize infection and health complications that may result
from conventional therapies used in connection with the
transplantation of foreign cells, tissues and organs;
o reduce the cost of treating end-stage organ disease; and
o increase the supply of cells, tissues and organs available for
transplantation procedures.
Based upon our ImmunoCognance technology, we are developing a portfolio
of products designed to improve therapies associated with organ and bone marrow
transplantation as well as to improve the treatment of cancer, autoimmune
diseases and blood disorders. Our AlloMune System for Cancer is currently in a
multi-center Phase I/II clinical trial for therapy-resistant lymphoma, and we
anticipate filing an investigational new drug application in 2001 for additional
indications. We expect that Phase I clinical studies of our AlloMune System for
Transplantation for human kidney transplantation will begin in 2001.
On May 15, 2001, we completed our acquisition of Eligix, Inc.
Through this acquisition we gained access to Eligix' patented High Density
Microparticle, or HDM, technology, which is designed to enable the efficient
selection of specific populations of human cells from blood and bone marrow.
Our HDM product candidates, BCell-HDM and TCell-HDM, will target bone marrow
and stem cell transplant procedures. We are targeting these products for the
removal of unwanted or undesirable cells from stem cell transplants and
related blood products to reduce the risk of relapse or graft-versus-host
disease following bone marrow or stem cell transplantation for cancer and
other diseases, including autoimmune and genetic disorders. We received CE
mark approval of our BCell-HDM product in February 2001 and began U.S. Phase
III clinical trials in May 2001. We are currently preparing our TCell-HDM
product for CE mark approval. CE mark approval indicates compliance with
European standards for safety and allows certified products to be marketed
and sold in Europe.
We are working with MedImmune in the development of MEDI-507. We
have exclusively licensed MEDI-507 to MedImmune as a stand-alone agent, and
we are entitled to royalties on product sales, if any, as well as milestone
payments if specific product-related milestones are achieved. MEDI-507 is
currently in multiple Phase II clinical trials for the treatment of psoriasis.
In September 2000, we and Novartis Pharma AG formed a new company,
Immerge BioTherapeutics AG, to conduct further research in the area of
xenotransplantation, which is the transplantation of cells, tissues and
-3-
organs from one species to another. Novartis has committed $30 million in
research funding to Immerge over three years, and has exclusively licensed
technology to Immerge in return for a 67% ownership and exclusive development
and marketing rights. BioTransplant has exclusively licensed technology to
Immerge in exchange for a 33% ownership and future royalties from the sale of
any xenotransplantation products by Novartis.
In addition to our corporate collaboration with MedImmune and our
joint venture with Novartis, we are collaborating with a number of other
organizations, including the Massachusetts General Hospital and the Dana
Farber Cancer Institute, in the fields of cell, tissue and organ
transplantation.
We believe that we have built a strong patent portfolio relating to our
technology. As of May 31, 2001, we owned or had licensed 37 issued United States
patents and 39 allowed or pending United States patent applications, as well as
applications for foreign patents.
THE OFFERING
Common Stock offered by selling stockholders.................. 3,022,457 shares
Use of proceeds............................................... BioTransplant Incorporated will not receive any
proceeds from the sale of shares in this offering
Nasdaq National Market symbol................................. BTRN
-4-
RISK FACTORS
AN INVESTMENT IN OUR COMMON STOCK INVOLVES SIGNIFICANT RISKS. YOU
SHOULD CAREFULLY CONSIDER THE FOLLOWING RISKS, TOGETHER WITH ALL OF THE OTHER
INFORMATION INCLUDED IN THIS PROSPECTUS OR INCORPORATED HEREIN BY REFERENCE,
BEFORE YOU DECIDE TO BUY OUR COMMON STOCK. IF ANY OF THE FOLLOWING RISKS
ACTUALLY OCCURS, OUR BUSINESS, FINANCIAL CONDITION OR RESULTS OF OPERATIONS
COULD BE HARMED. IN SUCH AN EVENT, THE TRADING PRICE OF OUR COMMON STOCK COULD
DECLINE AND YOU MAY LOSE ALL OR PART OF YOUR INVESTMENT.
RISKS RELATED TO OUR BUSINESS, INDUSTRY AND STRATEGY
THERE ARE UNCERTAINTIES AS TO THE EFFECTIVENESS OF OUR TECHNOLOGICAL
APPROACHES AND, AS A RESULT, WE MAY NOT BE ABLE TO SUCCESSFULLY DEVELOP AND
COMMERCIALIZE ANY PRODUCTS.
Our future success depends on the successful development of our
ImmunoCognance and Eligix Cell Separation System technologies. The MEDI-507
antibody product under development, the prototype AlloMune System and the Eligix
Cell Separation System have been tested in relatively few patients and we may
not be able to demonstrate the clinical benefits of these products in a larger
patient population. Furthermore, the technology that we have exclusively
licensed to our joint venture with Novartis Pharma AG is based upon the
transplantation of organs from swine into humans. To our knowledge,
transplantation of swine organs has never been tested in humans. As a
consequence, we are not sure whether any of our or our collaborators' potential
products will be effective in treating any of the disorders we have targeted. In
addition, these products may prove to have undesirable or unintended side
effects, toxicities or other characteristics that may prevent or limit their
commercial use. If our technological approach is not successful or accepted,
then neither we nor our collaborators will be able to develop or commercialize
these products.
WE ARE DEPENDENT ON MEDIMMUNE AND NOVARTIS TO DEVELOP, MANUFACTURE AND
SELL TECHNOLOGIES EXCLUSIVELY LICENSED BY US, AND IF THESE PARTIES ARE NOT
SUCCESSFUL, THEN WE WILL NOT ACHIEVE SIGNIFICANT REVENUES BASED ON THESE
TECHNOLOGIES.
We have a collaborative agreement with MedImmune under which we have
provided MedImmune with the exclusive worldwide right to develop and
commercialize products derived from the BTI-322 and MEDI-507 antibodies. In
addition, our joint venture with Novartis, Immerge BioTherapeutics, has
exclusively licensed to Novartis the right to develop and commercialize any
products derived from Immerge's research program in xenotransplantation,
which refers to the transplantation of cells, tissues and organs from one
species to another. Under each of these collaborative agreements, we have the
right to receive royalties on product sales, if any. Our ability to achieve
royalty revenue under these arrangements will be heavily dependent on the
efforts and activities of MedImmune and Novartis. Our arrangements with
MedImmune and, through our joint venture, with Novartis allow them
significant discretion in determining the efforts and resources that they
will apply to the development and commercialization of products based upon
our technologies. Accordingly, we are unable to control whether or not
products based upon our technologies will be scientifically or commercially
successful.
The risks that we face in connection with our agreements with MedImmune
and Novartis include the following:
o These agreements are subject to termination on short notice.
Specifically, MedImmune may terminate the agreement with us,
and Novartis has the right to terminate the agreement with the
joint venture, on 60 days' notice as a result of an uncured
material breach by us or the joint venture, as the case may
be. If either MedImmune or Novartis terminates its
collaboration with us, or the joint venture, in the case of
Novartis, it may be difficult for us to attract a new partner
to develop and commercialize products based on our
technologies and may adversely affect the perception of us in
the business and financial communities.
o If MedImmune or Novartis were to breach or terminate its
agreement with us, or the joint venture, in the case of
Novartis, reduce its funding or otherwise fail to conduct the
collaboration
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successfully, we could be required to devote additional
internal resources to the program that is the subject of the
collaboration, scale back or terminate the program or seek an
alternative partner.
o MedImmune and Novartis may pursue higher priority programs or
change the focus of their research and development programs,
which could affect either party's commitment to us.
o If any product under development is approved for marketing,
any reductions in marketing or sales efforts or a
discontinuation of marketing or sales of that product by
MedImmune or Novartis would reduce any revenues we may then
be receiving on sales of the product.
WE WILL DEPEND ON OUR BCELL-HDM CELL SEPARATION SYSTEM FOR
SUBSTANTIALLY ALL OF OUR NEAR-TERM REVENUE, AND IF THE BCELL-HDM CELL SEPARATION
SYSTEM DOES NOT GAIN WIDESPREAD MARKET ACCEPTANCE, THEN OUR REVENUE WILL NOT
GROW.
We only recently received CE mark approval to sell our lead product,
the BCell-HDM Cell Separation System, in the European Union. To date, we have
sold only relatively few BCell-HDM devices. Because we currently depend on
our BCell-HDM Cell Separation System to generate all of our near-term
revenue, if we fail to achieve widespread market acceptance of the product we
will not be able to grow our product revenue.
WE WILL NOT BE PROFITABLE IF THE MARKET IS NOT RECEPTIVE TO NEW
PRODUCTS UPON THEIR INTRODUCTION.
The commercial success of our products when and if they are approved
for marketing will depend upon their acceptance by the medical community and
third-party payors as clinically useful, cost effective and safe. All of the
products that we are developing are based upon new technologies or therapeutic
approaches. As a result, it may be more difficult for us to convince the medical
community and third-party payors to accept and use any products we may develop.
Other factors that we believe will materially affect market acceptance
of our products under development include:
o the timing of our receipt of marketing approvals, if any,
and the countries in which approvals are obtained;
o the safety, efficacy and ease of administration of any
products we develop;
o the success of our physician education programs; and
o the availability of government and third-party payor
reimbursement of any products we develop.
XENOTRANSPLANTATION INVOLVES RISKS WHICH HAVE RESULTED IN ADDITIONAL
FDA OVERSIGHT AND WHICH IN THE FUTURE MAY RESULT IN ADDITIONAL REGULATION.
Xenotransplantation poses a risk that viruses or other animal
pathogens may be unintentionally transmitted to a human patient. The United
States Food and Drug Administration, or FDA, will require testing to
determine whether infectious agents, including specific viruses referred to
as porcine endogenous retroviruses, also known as PERV, are present in
patients who have received cells, tissues or organs from miniature swine.
While porcine endogenous retroviruses have not been shown to cause any
disease in pigs, it is not known what effect, if any, these retroviruses may
have on humans.
Other companies are currently conducting clinical trials involving the
transplantation of pig cells into humans. The FDA requires lifelong monitoring
of these transplant recipients. If porcine endogenous retroviruses or any other
virus or infectious agent is detected in tests or samples from these transplant
recipients, the FDA may require Novartis to halt its clinical trials and perform
additional tests to assess the risk of infection to potential patients. This
could result in delays in the successful development and commercialization of
any xenotransplantation products.
-6-
The FDA has proposed, but not yet established, definitive regulatory
guidelines for xenotransplantation. We and Novartis may not be able to comply
with any final guidelines the FDA may issue.
RISKS RELATING TO OUR FINANCIAL RESULTS AND NEED FOR FINANCING
WE WILL REQUIRE SUBSTANTIAL ADDITIONAL FINANCING IN THE NEAR TERM,
WHICH MAY BE DIFFICULT TO OBTAIN AND MAY DILUTE YOUR OWNERSHIP INTEREST IN US.
We anticipate that our existing funds will be sufficient to fund our
operating and capital requirements through the second quarter of 2002. We expect
to use rather than generate funds from operations for the foreseeable future. In
particular, we will require substantial funds to conduct research and
development, including preclinical testing and clinical trials of our AlloMune
System and Eligix Cell Separation System and to manufacture and market products
that are approved for commercial sale, such as our BCell-HDM product which we
began selling in Europe in 2001. If we cannot raise more funds, we could be
required to reduce our capital expenditures, scale back our research and product
developments, reduce our workforce and license to others products or
technologies we would otherwise seek to commercialize ourselves.
We may seek additional funding through collaborative arrangements,
borrowing money and by the sale of additional equity securities. Any sales of
additional equity securities are likely to result in further dilution to our
then existing stockholders. Further, if we issue additional equity securities,
the new equity securities may have rights, preferences or privileges senior to
those of existing holders of our common stock. We may also borrow money from
conventional lenders, possibly at high interest rates, which will increase the
risk of your holdings. Despite our efforts, additional funding may not be
available to us at all or only on terms that are unacceptable to us. We also
could be required to seek funds through arrangements with collaborative partners
or others that may require us to relinquish rights to our technologies, product
candidates or products which we would otherwise pursue on our own.
Even if we are able to raise additional funds in a timely manner, our
future capital requirements will vary depending on many factors, including the
following:
o continued progress in our research and development programs,
as well as the magnitude of these programs;
o the resources required to successfully complete our clinical
trials;
o the time and costs involved in obtaining regulatory approvals;
o the cost of manufacturing and commercialization activities;
o the cost of any additional facilities requirements;
o the timing, receipt and amount of milestone and other payments
from collaborative partners;
o the timing, receipt and amount of sales and royalties from our
potential products in the market; and
o the costs involved in preparing, filing, prosecuting,
maintaining and enforcing patent claims and other
patent-related costs, including litigation costs and the costs
of obtaining any required licenses to technologies.
WE HAVE INCURRED SUBSTANTIAL LOSSES, EXPECT TO CONTINUE TO INCUR
ADDITIONAL LOSSES AND WILL NOT BE SUCCESSFUL UNTIL WE REVERSE THIS TREND.
We have incurred losses in each year since our date of organization. We
expect to incur operating losses for the foreseeable future.
-7-
To date, we have not successfully commercialized and sold the types of
products we are currently developing. Many of the products that we are
developing will require additional research and development, extensive
preclinical studies and clinical trials and regulatory approval before they can
be sold commercially in major markets such as the United States. In particular,
we may need to successfully develop several new technologies in order to
complete development of our AlloMune System. If we do not successfully develop
and commercialize any products, we will never become profitable.
To date, we have generated substantially all of our revenues from
payments from our collaborative partners. In 2000, we generated approximately
$4.6 million, or 100% of our total revenue, from our collaboration with
Novartis, which was terminated in October 2000 in connection with the formation
of our joint venture with Novartis. We have not received significant revenues
from the sale of products. We anticipate that it may be a number of years, if
ever, before we will receive significant revenues from product sales or
royalties.
RISKS RELATING TO CLINICAL AND REGULATORY MATTERS
IF OUR CLINICAL TRIALS ARE NOT SUCCESSFUL OR ARE NOT COMPLETED ON A
TIMELY BASIS, WE WILL NOT BE ABLE TO DEVELOP AND COMMERCIALIZE ANY RELATED
PRODUCTS AND, THEREFORE, WE WILL NOT ACHIEVE PROFITABILITY.
To obtain regulatory approvals for the commercial sale of our products,
we and our collaborative partners will need to complete extensive clinical
trials in humans to demonstrate the safety and efficacy of the products. We have
had limited experience in conducting clinical trials.
Prior to commencing new clinical trials, we must submit investigational
new drug and/or investigational device exemption applications to the FDA. Even
if we receive authorization from the FDA to commence clinical trials, we or our
collaborative partners may not be able to successfully complete these trials
within an acceptable timeframe, if at all. How quickly we and our collaborative
partners complete clinical trials is dependent in part upon the rate of
enrollment of patients. Patient enrollment is a function of many factors,
including the size of the patient population, the proximity of patients to
clinical sites, the eligibility criteria for the study and the existence of
competitive clinical trials. In particular, the patient population for a number
of our potential products is small. If we experience delays in patient
enrollment, we may incur additional costs and delay our research and development
programs.
Furthermore, we, our collaborative partners or the FDA may suspend our
clinical trials at any time on various grounds, including a finding that the
patients in the trials are being exposed to unacceptable health risks. Finally,
our clinical trials, if completed, may not show the potential product to be safe
or effective, thereby preventing regulatory approval.
WE ARE DEPENDENT ON OUR COLLABORATIVE PARTNERS TO CONDUCT CLINICAL
TRIALS ON OUR MEDI-507 AND XENOTRANSPLANTATION PRODUCTS AND, THEREFORE, WE ARE
NOT IN CONTROL OF THE TIMING OF THESE CLINICAL TRIALS.
We are dependent upon MedImmune to conduct clinical trials with respect
to MEDI-507 and will be dependent upon Novartis to conduct clinical trials for
the development of xenotransplantation products, if any, that arise out of our
joint venture's research program. We may become dependent upon other third
parties to conduct future clinical trials of our AlloMune System and Eligix Cell
Separation System. As a result, we will have less control over these clinical
trials than if we were conducting the trials directly. Consequently, these
trials may not begin or be completed on a schedule that is acceptable to us.
THE APPROVAL PROCESS IS COSTLY AND LENGTHY AND WE MAY NOT OBTAIN AND
MAINTAIN THE REGULATORY APPROVALS REQUIRED TO SUCCESSFULLY MARKET AND SELL OUR
PRODUCTS.
We must obtain regulatory approval for our ongoing development
activities and before marketing or selling any of our products. We may not
receive regulatory approvals to conduct clinical trials of our products or to
manufacture or market our products. In addition, regulatory agencies may not
grant such approvals on a timely basis or may revoke previously granted
approvals or impose fines, suspensions, product recalls and other sanctions if
we fail to comply with applicable regulatory requirements.
-8-
The process of obtaining FDA and other required regulatory approvals is
expensive and typically takes a number of years, depending on the complexity and
novelty of the product. Any delay in obtaining or failure to obtain required
clearance or approval of a product by the appropriate regulatory authorities,
would materially adversely affect our ability to generate revenues from the
affected product. We have limited experience in filing and prosecuting the
applications required to gain regulatory approval.
There is limited regulatory precedent for the approval of products
based upon the technologies that we are employing to develop products. The
AlloMune System and Eligix Cell Separation System are based on new
technologies and/or new therapeutic approaches that have not been extensively
tested in humans. Accordingly, the regulatory requirements governing these
products under development may be more rigorous than for conventional
products. In addition, the FDA has not yet established final or comprehensive
guidelines for xenotransplantation. As a result, we may experience a longer
regulatory process in connection with any products that we or our
collaborators seek to develop based on these new technologies and/or new
therapeutic approaches.
We also are subject to numerous foreign regulatory requirements
governing the design and conduct of the clinical trials and the manufacturing
and marketing of our future products. The approval procedure varies among
countries. The time required to obtain foreign approvals often differs from
that required to obtain FDA approvals. Moreover, even if we receive FDA
approval, we may not receive necessary approvals by regulatory authorities in
other countries.
All of these regulatory risks also are applicable to development,
manufacturing and marketing undertaken by our key collaborators, MedImmune and
Novartis, and any other future collaborators who may seek to develop, market and
sell products based upon our technologies.
RISKS RELATING TO INTELLECTUAL PROPERTY
WE MAY NOT BE ABLE TO OBTAIN PATENT PROTECTION FOR OUR DISCOVERIES AND
WE MAY INFRINGE PATENT RIGHTS OF THIRD PARTIES.
Our success depends in significant part on our ability to:
o obtain patents;
o protect trade secrets;
o operate without infringing upon the proprietary rights of
others; and
o prevent others from infringing on our proprietary rights.
The validity and permissible scope of claims covered in patents
relating to our technology involve important unresolved legal principles.
Furthermore, there is substantial uncertainty as to whether human clinical data
will be required for issuance of patents for human therapeutics. If human
clinical data are required, our ability to obtain patent protection could be
delayed or otherwise adversely affected.
Patents may not issue from any patent applications that we own or
license. If patents do issue, the claims allowed may not be sufficiently broad
to protect our technology. In addition, issued patents that we own or license
may be challenged, invalidated or circumvented. Our patents also may not afford
us protection against competitors with similar technology. Because patent
applications in the United States are maintained in secrecy until patents issue,
third parties may have filed or maintained patent applications for technology
used by us or covered by our pending patent applications without our being aware
of these applications.
We may not hold proprietary rights to all of the patents related to our
proposed products or services. These patents may be owned or controlled by third
parties. As a result, we or our collaborative partners may be required to obtain
licenses under third-party patents to market our proposed products or services.
If licenses are not available on acceptable terms, we or our collaborative
partners will not be able to market these products or services.
-9-
IF WE LOSE IMPORTANT LICENSE RIGHTS, WE MAY BE UNABLE TO SUCCESSFULLY
DEVELOP AND COMMERCIALIZE OUR PRODUCTS AND ACHIEVE PROFITABILITY.
We are a party to technology in-licenses with the Catholic University
of Louvain, the Alberta Research Council and the Coulter Corporation. We expect
to enter into additional licenses in the future. These in-licenses relate to
important technologies that may be necessary for the development and
commercialization of our products. These licenses impose various
commercialization, indemnification, royalty, insurance and other obligations on
us. Although we currently meet the requirements imposed by the licenses, if we
fail to comply with these requirements in the future, the licensors will have
the right to terminate these licenses or make the licenses non-exclusive, which
could affect our ability to exploit important technologies that are required for
successful development of our products.
RISKS RELATING TO PRODUCT MANUFACTURING, MARKETING AND SALES
WE HAVE ONLY LIMITED SALES AND MARKETING EXPERIENCE AND MAY DEPEND
SIGNIFICANTLY ON THIRD PARTIES WHO MAY NOT SUCCESSFULLY COMMERCIALIZE OUR
PRODUCTS.
We have only limited sales, marketing and distribution experience
and our current sales and marketing operation, which we only recently began
to develop, is not sufficient to achieve the level of market awareness and
sales we need to expand our business. We plan to rely significantly on sales,
marketing and distribution arrangements with third parties, including our
collaborative partners. For example, we have granted MedImmune exclusive
marketing rights to the MEDI-507 product under development and have granted
Novartis exclusive worldwide rights to develop and market products based upon
our xenotransplantation technologies. We may have to enter into additional
marketing arrangements in the future and we may not be able to enter into
these additional arrangements on terms which are favorable to us, if at all.
In addition, we may have limited or no control over the sales, marketing and
distribution activities of these third parties and sales through these third
parties could be less profitable to us than direct sales. These third parties
could sell competing products and may devote insufficient sales efforts to
our products. Our future revenues will be materially dependent upon the
success of the efforts of these third parties.
We may seek to independently market products that are not already
subject to marketing agreements with other parties. If we determine to perform
sales, marketing and distribution functions ourselves, we could face a number of
additional risks, including:
o we may not be able to attract and build a significant
marketing staff or sales force;
o the cost of establishing a marketing staff or sales force may
not be justifiable in light of the revenues generated by any
particular product; and
o our direct sales and marketing efforts may not be successful.
IF WE EXPERIENCE MANUFACTURING DELAYS OR INTERRUPTIONS IN PRODUCTION OF
OUR ELIGIX CELL SEPARATION SYSTEM, THEN WE MAY EXPERIENCE CUSTOMER
DISSATISFACTION AND OUR REPUTATION COULD SUFFER.
If we fail to produce enough products at our own manufacturing facility
or at a third-party manufacturing facility, we may be unable to deliver products
to our customers on a timely basis, which could lead to customer dissatisfaction
and could harm our reputation and ability to compete. We currently produce key
components of our Eligix Cell Separation System in one manufacturing facility.
We would likely experience significant delays or cessation in producing our
Eligix Cell Separation System at this facility if a labor strike, natural
disaster, or other supply disruption were to occur. If we are unable to
manufacture our Eligix Cell Separation System at our own facility, we may be
required to enter into arrangements with one or more contract manufacturing
companies. We could encounter delays or difficulties establishing relationships
with contract manufacturers or in establishing agreements on terms that are
favorable to us. In addition, if we are required to depend on third-party
manufacturers, our profit margins may be lower, which will make it more
difficult for us to achieve profitability.
-10-
WE WILL DEPEND ON THIRD-PARTY MANUFACTURERS TO PRODUCE SOME OF OUR
PRODUCTS UNDER DEVELOPMENT, AND IF THESE THIRD PARTIES DO NOT SUCCESSFULLY
MANUFACTURE OUR PRODUCTS OUR BUSINESS WILL BE HARMED.
We currently rely upon MedImmune to produce material for preclinical
and clinical testing of MEDI-507 and expect to continue to do so in the future.
In addition, if we receive the necessary regulatory approvals for other products
under development, we also expect to rely upon third parties, including our
collaborative partners, to produce materials required for commercial production.
To the extent that we enter into manufacturing arrangements with third parties,
we will be dependent upon these third parties to perform their obligations in a
timely manner. If third-party manufacturers with whom we contract fail to
perform their obligations, we may be adversely affected in a number of ways,
including:
o we may not be able to initiate or continue clinical trials of
products that are under development;
o we may be delayed in submitting applications for regulatory
approvals for our products; and
o ultimately, we may not be able to meet commercial demands for
our products.
IF WE OR OUR THIRD-PARTY MANUFACTURERS FAIL TO COMPLY WITH REGULATORY
REQUIREMENTS, WE COULD EXPERIENCE DISRUPTIONS IN THE MANUFACTURE AND SALE OF OUR
PRODUCTS.
Manufacturers, including us, must adhere to the FDA's current good
manufacturing practices regulations, which are enforced by the FDA through
its facilities inspection program. We and any third party manufacturers may
not be able to comply or maintain compliance with good manufacturing
practices regulations. If we or our manufacturers fail to comply, our receipt
of premarket approval could be significantly delayed, or we or the third
party manufacturer could be subject to FDA enforcement action, including an
embargo on imported devices. For a premarket approval device, if we change
our manufacturing facility or switch to a third-party manufacturer we will be
required to submit a premarket approval application supplement before the
change is implemented.
BECAUSE WE RELY ON A LIMITED NUMBER OF SUPPLIERS, WE MAY EXPERIENCE
DIFFICULTY IN MEETING OUR CUSTOMERS' DEMANDS FOR OUR ELIGIX CELL SEPARATION
SYSTEM PRODUCT IN A TIMELY MANNER OR WITHIN BUDGET.
We currently purchase key components of our Eligix Cell Separation
System from a variety of outside sources. Some of these components may only be
available to us through a few sources. We generally do not have long-term
agreements with any of our suppliers.
Our reliance on our suppliers exposes us to risks, including:
o the possibility that one or more of our suppliers could
terminate their services at any time without penalty;
o the potential inability of our suppliers to obtain required
components;
o the potential delays and expenses of seeking alternative
sources of supply;
o reduced control over pricing, quality and timely delivery due
to the difficulties in switching to alternative suppliers; and
o the possibility that one or more of our suppliers could fail
to satisfy any of the FDA's required current good standing
manufacturing practices regulations.
Consequently, in the event that our suppliers delay or interrupt the
supply of components for any reason, our ability to produce and supply our
products could be impaired, which could lead to customer dissatisfaction.
-11-
RISKS RELATING TO OUR FOREIGN OPERATIONS
IF WE ARE UNABLE TO MEET THE OPERATIONAL, LEGAL AND FINANCIAL
CHALLENGES THAT WE WILL ENCOUNTER IN OUR INTERNATIONAL OPERATIONS, WE MAY NOT BE
ABLE TO GROW OUR BUSINESS.
We currently expect to derive our near-term revenue from the sale of
our Eligix Cell Separation Device in the European Union. We are subject to a
number of challenges which specifically relate to our international business
activities. Our international operations may not be successful if we are unable
to meet and overcome these challenges, which would limit the growth of our
business. These challenges include:
o failure of local laws to provide the same degree of protection
against infringement of our intellectual property;
o protectionist laws and business practices that favor local
competitors, which could slow our growth in international
markets;
o potentially longer sales cycles to sell products, which could
slow our revenue growth from international sales; and
o potentially longer accounts receivable payment cycles and
difficulties in collecting accounts receivable.
RISKS RELATING TO THE ELIGIX ACQUISITION
WE MAY FACE CHALLENGES IN INTEGRATING ELIGIX INTO BIOTRANSPLANT AND, AS
A RESULT, MAY NOT REALIZE THE EXPECTED BENEFITS OF THE MERGER.
In May 2001, we acquired Eligix through a merger. The merger involves
the integration of two different companies that have previously operated
independently. Integrating Eligix' operations, technologies and personnel with
those of BioTransplant will be a complex process. We may not be able to complete
the integration rapidly. After the integration, the combined company may not
achieve the expected benefits of the merger. The diversion of the attention of
our management and any difficulties encountered in the process of combining our
companies could lead to unanticipated liabilities and costs and cause the
disruption of, or a loss of momentum in, the business activities of the combined
company. Further, the process of combining our companies could negatively affect
employee morale and the ability of the combined company to retain some of its
key employees after the merger. As a consequence, we may not successfully
integrate Eligix or profitably manage the combined company. In addition, the
combined company may not achieve revenues, net income or loss levels,
efficiencies or synergies that justify the merger, and the merger may not result
in earnings for the combined company in any future period.
SIGNIFICANT MERGER-RELATED CHARGES AGAINST EARNINGS WILL INCREASE OUR
LOSSES IN THE SECOND QUARTER OF 2001 AND DURING THE POST-MERGER INTEGRATION
PERIOD.
We have incurred charges of approximately $3.7 million in connection
with the consummation of the merger. The charges include legal and financial
advisory fees and other integration costs. In addition, we may incur other
additional unanticipated merger costs. Some of these nonrecurring costs will be
charged to operations in the second fiscal quarter of 2001, the quarter in which
the merger was consummated while others will be expensed as incurred during the
post-merger integration period.
THE LOSS OF KEY PERSONNEL COULD MAKE IT DIFFICULT TO COMPLETE EXISTING
PROJECTS AND UNDERTAKE NEW PROJECTS.
The success of the combined company depends on our ability to identify,
hire and retain our employees, and a significant component of the value of the
merger is in the know-how and experience of the Eligix and BioTransplant
employees that we determined to employ as part of the combined company following
the merger. None of our employees is bound by a long-term agreement with the
combined company. If key employees were to leave, we may be unable to integrate
Eligix' Cell Separation Systems into our product offerings, complete existing
Eligix projects or undertake new projects.
-12-
As a result of the merger, former Eligix employees who became employees
of BioTransplant after the merger received stock options to purchase an
aggregate of approximately 605,714 shares of our common stock, which options
are fully vested. These options have substantial value to these employees.
Because a substantial number of options vested in full and became immediately
exercisable after the merger, these employees will not be incentivized through
these stock options to remain employed as a condition to the continued vesting
of their options. Consequently, we face the risk that former Eligix employees
will leave following the merger.
WE MAY INCUR SIGNIFICANT SEVERANCE-RELATED COSTS IF FORMER ELIGIX
MANAGEMENT MEMBERS LEAVE FOR GOOD REASON OR WE TERMINATE THEM WITHOUT CAUSE IN
THE NEXT 12 MONTHS.
Each of the eleven management members of Eligix that was hired by us
at the time of the merger is entitled to receive severance-related payments if
he or she leaves for good reason or is terminated without cause after the
merger. Consequently, we may incur significant severance-related costs,
including:
o cash severance payments of up to an aggregate of approximately
$975,000 if all eleven Eligix management members leave; and
o the acceleration in full of the vesting of the 990,000 shares
of our common stock to be issued under the Eligix management
equity incentive plan, which shares had a value of
approximately $7,266,600 based on the closing price of our
common stock on June 15, 2001.
RISKS RELATING TO OUR COMMON STOCK
OUR STOCK PRICE IS HIGHLY VOLATILE, WHICH COULD CAUSE YOU TO LOSE
ALL OR PART OF YOUR INVESTMENT.
The market price of our common stock is highly volatile. For example,
during the past three years, our stock price fluctuated from a low sale price of
$1.00 in the quarter ended December 31, 1998 to a high sale price of $23.00 in
the quarter ended March 31, 2000. Prices for our common stock will be determined
in the market place and may be influenced by many factors, including variations
in our financial results and investors' perceptions of us, as well as their
perceptions of general economic, industry and market conditions. Broad market
fluctuations may adversely affect the market price of our common stock and may
cause a rapid and substantial decline in the value of your investment in our
common stock.
SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION
We include and incorporate in this prospectus forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. All statements, other than
statements of historical facts, that we include or incorporate in this
prospectus, including regarding our strategy, future operations, financial
position, future revenues, projected costs, prospects, plans and objectives of
management, are forward-looking statements. We use the words "anticipates,"
"believes," "estimates," "expects," "intends," "may," "plans," "projects,"
"will," "would" and similar expressions to identify forward-looking statements,
although not all forward-looking statements contain these identifying words. We
cannot guarantee that we actually will achieve the plans, intentions or
expectations disclosed in our forward-looking statements and you should not
place undue reliance on our forward-looking statements. Actual results or events
could differ materially from the plans, intentions and expectations we disclose
in the forward-looking statements we make. We have included important factors in
the cautionary statements included or incorporated in this prospectus,
particularly under the heading "Risk Factors", that we believe could cause
actual results or events to differ materially from the forward-looking
statements that we make. Our forward-looking statements do not reflect the
potential impact of future events, including any future acquisitions, mergers,
dispositions, joint ventures or investments we may make. We caution you that we
may not update any or all of the forward-looking statements we make in this
prospectus and incorporate in this prospectus by reference to other documents.
-13-
USE OF PROCEEDS
We will not receive any proceeds from the sale of shares by the selling
stockholders.
The selling stockholders will pay any underwriting discounts and
commissions and expenses incurred by the selling stockholders for brokerage,
accounting, tax or legal services or any other expenses incurred by the selling
stockholders in disposing of the shares. We will bear all other costs, fees and
expenses incurred in effecting the registration of the shares covered by this
prospectus, including, without limitation, all registration and filing fees,
Nasdaq listing fees and fees and expenses of our counsel and our accountants.
SELLING STOCKHOLDERS
The selling stockholders are offering up to a total of 3,022,457
shares of common stock. The shares of common stock offered herein and covered
by this prospectus were issued to certain of the selling stockholders by us
in a private placement in June 2001. The following table sets forth, to our
knowledge, certain information about the selling stockholders.
Beneficial ownership is determined in accordance with the rules of
the SEC, and includes voting or investment power with respect to shares.
Unless otherwise indicated below, to our knowledge, all persons named in the
table have sole voting and investment power with respect to their shares of
common stock, except to the extent authority is shared by spouses under
applicable law. The inclusion of any shares in this table does not constitute
an admission of beneficial ownership for the person named below.
We do not know when or in what amounts a selling stockholder may offer
shares for sale. The selling stockholders may not sell any or all of the shares
offered by this prospectus. Because the selling stockholders may offer all or
some of the shares pursuant to this offering, and because there are currently no
agreements, arrangements or understandings with respect to the sale of any of
the shares, we cannot estimate the number of the shares that will be held by the
selling stockholders after completion of the offering. However, for purposes of
this table, we have assumed that, after completion of the offering, none of the
shares covered by this prospectus will be held by the selling stockholders.
To our knowledge, except as noted in this paragraph, none of the
selling stockholders has held any position or office with, or has otherwise
had a material relationship with, us or any of our subsidiaries within the
past three years. Leerink, Swann, Garrity, Sollami, Yaffe & Wynn, Inc., also
referred to as Leerink, Swann, acted as private placement agent in connection
with BioTransplant's private placement in June 2001. BioTransplant paid
Leerink, Swann a fee for this service. In addition, Jeffrey Leerink, L. Eric
Swann and Lee Yaffe are each principals of Leerink, Swann. Punk Ziegel and
Company, which acted as a private placement agent in connection with
BioTransplant's private placement in June 2001 and was paid a fee in
connection with this service, is the General Partner of each of Argyle
Capital Partners, L.P. and Millennium Investment Partners, L.P.
Shares of Common Stock Shares of Common Stock to
Beneficially Owned Prior Number of be Beneficially Owned
to Offering Shares of After Offering (1)
------------------------- Common Stock -------------------------
Name of Selling Stockholder Number Percentage Being Offered Number Percentage
--------------------------- -------- ---------- ------------- ----------- ----------
Argyle Capital Partners, L.P. ............ 30,000 * 30,000 0 *
Baker Street Capital Partners, L.P. ...... 99,206 * 99,206 0 *
Baker Street Technology Partners, L.P. ... 99,206 * 99,206 0 *
Boston Biotech & Health Sciences.......... 60,000 * 60,000 0 *
Boston Financial Partners................. 100,000 * 100,000 0 *
Core Technology Fund...................... 45,200 * 7,200 38,000 *
Crown Growth Partners L.P. ............... 100,745 * 31,746 68,999 *
-14-
Donald D. Graham.......................... 10,000 * 10,000 0 *
Donald E. Garlikov & Edith Garlikov
JT/WROS.............................. 150,000 * 150,000 0 *
Drs. David, Gilbert & Cohen DPM PA
Pension Plan dated 2/1/74............ 15,000 * 15,000 0 *
Edward B. Roberts & Nancy Roberts JW...... 75,000 * 75,000 0 *
Executive Technology, L.P. ............... 22,500 * 8,500 14,000 *
Forstmann International Fund. L.P. ....... 125,000 * 125,000 0 *
Forstmann Partners II, L.P. .............. 20,000 * 20,000 0 *
Forstmann Partners, L.P. ................. 15,000 * 15,000 0 *
Foundation Partners Fund, GP.............. 8,900 * 3,900 5,000 *
Frank B. Sensel Trust UAD 9/17/91......... 50,000 * 50,000 0 *
George A. Yaffe........................... 5,000 * 5,000 0 *
George P. Warren, Jr. & Jane M. Warren.... 60,000 * 60,000 0 *
Hans H. Leerink IRA....................... 10,000 * 10,000 0 *
Harry T. Poteat........................... 15,873 * 15,873 0 *
Henry Robertelli.......................... 5,000 * 5,000 0 *
James A. & Margaret M. Ruffalo............ 20,000 * 20,000 0 *
Jeffrey A. Leerink........................ 10,000 * 10,000 0 *
Jeffrey T. Barnes......................... 3,968 * 3,968 0 *
Kevin X. Barbary and Deborah J.
Barbary, JTWROS...................... 5,000 * 5,000 0 *
L. Eric Swann............................. 5,000 * 5,000 0 *
Yaffe Investment Trust, DTD 7/14/99,
Lee Yaffe as Trustee................. 5,000 * 5,000 0 *
Leerink, Swann, Garrity, Sollami,
Yaffe & Wynn, Inc. .................. 50,000 * 50,000 0 *
Leonard J. Adams.......................... 27,777 * 27,777 0 *
Little Wing, L.P. ........................ 457,048 2.31% 119,048 338,000 1.71%
Maximus Capital Investment Ltd. .......... 112,070 * 78,170 33,900 *
Maximus Capital, L.P. .................... 35,080 * 24,380 10,700 *
Maximus Managed Domestic, L.P. ........... 39,530 * 27,430 12,100 *
Maximus Managed Offshore Ltd. ............ 158,320 * 110,020 48,300 *
Michael A. Russell Trust DTD 2/5/99....... 4,000 * 4,000 0 *
Millennium Investment Partners, L.P. ..... 15,000 * 15,000 0 *
Narragansett I, L.P. ..................... 101,106 * 101,106 0 *
Narragansett Offshore Ltd. ............... 214,850 1.09% 214,850 0 *
Nob Hill Capital Associates L.P. ......... 5,000 * 5,000 0 *
Nob Hill Capital Partners, L.P. .......... 25,000 * 25,000 0 *
Orion BioMedical Fund, L.P. .............. 260,794 1.32% 260,794 0 *
Orion BioMedical Offshore Fund, L.P. ..... 56,667 * 56,667 0 *
Paul J. Fraser and Laurie C. Fraser....... 4,000 * 4,000 0 *
Peter M. Greco............................ 3,968 * 3,968 0 *
Pine Street Asset Management.............. 23,809 * 23,809 0 *
Quota Rabbico II, Ltd. ................... 65,000 * 65,000 0 *
Samuel & Shirley Straface JTWROS.......... 15,873 * 15,873 0 *
-15-
Sands Point Partners...................... 50,000 * 50,000 0 *
Sci-Tech Investment Partners, L.P. ....... 44,300 * 16,600 27,700 *
SDS Merchant Fund, L.P. .................. 100,000 * 100,000 0 *
SG Partners, L.P. ........................ 166,000 * 66,500 99,500 *
Sol L. Davidow Trust dated 3/26/88........ 100,000 * 100,000 0 *
Stuart Barich & Patricia Barich, JTWROS... 5,000 * 5,000 0 *
Tampsco II Partners....................... 2,300 * 2,300 0 *
The Matrix Technology Group, N.V. ........ 12,000 * 4,100 7,900 *
The Walt Disney Company Retirement Plan... 132,600 * 49,800 82,800 *
Toledano Capital LLC...................... 20,000 * 20,000 0 *
Tradewinds Fund, Ltd. .................... 150,792 * 39,682 111,110 *
Ursus Capital L.P. ....................... 100,700 * 73,200 27,500 *
Ursus Offshore Ltd. ...................... 26,800 * 26,800 0 *
Wayne Saker............................... 31,746 * 31,746 0 *
Westfield Life Sciences Fund, L.P. ....... 45,000 * 45,000 0 *
Westfield Life Sciences Fund, L.P. II..... 20,000 * 20,000 0 *
Willoughby I. Stuart...................... 15,873 * 15,873 0 *
Worthington Growth L.P. .................. 79,365 * 79,365 0 *
--------------------------
* Less than one percent.
-16-
PLAN OF DISTRIBUTION
The shares covered by this prospectus may be offered and sold from time
to time by the selling stockholders. The term "selling stockholders" includes
donees, pledgees, transferees or other successors-in-interest selling shares
received after the date of this prospectus from a selling stockholder as a gift,
pledge, partnership distribution or other non-sale related transfer. The selling
stockholders will act independently of us in making decisions with respect to
the timing, manner and size of each sale. Such sales may be made on one or more
exchanges or in the over-the-counter market or otherwise, at prices and under
terms then prevailing or at prices related to the then current market price or
in negotiated transactions. The selling stockholders may sell their shares by
one or more of, or a combination of, the following methods:
o purchases by a broker-dealer as principal and resale by such
broker-dealer for its own account pursuant to this prospectus;
o ordinary brokerage transactions and transactions in which the
broker solicits purchasers;
o block trades 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;
o an over-the-counter distribution in accordance with the rules
of the Nasdaq National Market;
o in privately negotiated transactions; and
o in options transactions.
In addition, any shares that qualify for sale pursuant to Rule 144
of the Securities Act may be sold under Rule 144 rather than pursuant to this
prospectus.
To the extent required, this prospectus may be amended or supplemented
from time to time to describe a specific plan of distribution. In connection
with distributions of the shares or otherwise, the selling stockholders may
enter into hedging transactions with broker-dealers or other financial
institutions. In connection with such transactions, broker-dealers or other
financial institutions may engage in short sales of the common stock in the
course of hedging the positions they assume with selling stockholders. The
selling stockholders may also sell the common stock short and redeliver the
shares to close out such short positions. The selling stockholders may also
enter into option or other transactions with broker-dealers or other financial
institutions which require the delivery to such broker-dealer or other financial
institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such transaction). The selling
stockholders may also pledge shares to a broker-dealer or other financial
institution, and, upon a default, such broker-dealer or other financial
institution, may effect sales of the pledged shares pursuant to this prospectus
(as supplemented or amended to reflect such transaction).
In effecting sales, broker-dealers or agents engaged by the selling
stockholders may arrange for other broker-dealers to participate. Broker-dealers
or agents may receive commissions, discounts or concessions from the selling
stockholders in amounts to be negotiated immediately prior to the sale.
In offering the shares covered by this prospectus, the selling
stockholders and any broker-dealers who execute sales for the selling
stockholders may be deemed to be "underwriters" within the meaning of the
Securities Act in connection with such sales. Any profits realized by the
selling stockholders and the compensation of any broker-dealer may be deemed to
be underwriting discounts and commissions.
In order to comply with the securities laws of certain states, if
applicable, the shares must be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
shares may not be sold unless they have been registered or qualified for sale in
the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.
-17-
We have advised the selling stockholders that the anti-manipulation
rules of Regulation M under the Exchange Act may apply to sales of shares in the
market and to the activities of the selling stockholders and their affiliates.
In addition, we will make copies of this prospectus available to the selling
stockholders for the purpose of satisfying the prospectus delivery requirements
of the Securities Act. The selling stockholders may indemnify any broker-dealer
that participates in transactions involving the sale of the shares against
certain liabilities, including liabilities arising under the Securities Act.
At the time a particular offer of shares is made, if required, a
prospectus supplement will be distributed that will set forth;
o the number of shares being offered;
o the terms of the offering, including the name of any
underwriter, dealer or agent;
o the purchase price paid by any underwriter;
o any discount, commission and other item constituting
compensation;
o any discount, commission or concession allowed or reallowed
or paid to any dealer; and
o the proposed selling price to the public.
We have agreed to indemnify the selling stockholders against certain
liabilities, including certain liabilities under the Securities Act.
We have agreed with the selling stockholders to keep the
registration statement of which this prospectus constitutes a part effective
until the earlier of (i) such time as all of the shares covered by this
prospectus have been disposed of pursuant to and in accordance with the
registration statement, (ii) June 8, 2003 or (iii) such time as all of the
shares covered by this prospectus can be sold within any given three-month
period without regard to the trading volume of the common stock pursuant to
Rule 144 of the Securities Act.
LEGAL MATTERS
The validity of the shares offered by this prospectus has been passed
upon by Hale and Dorr LLP.
EXPERTS
The consolidated balance sheets of BioTransplant Incorporated as of
December 31, 1999 and 2000 and the related consolidated statements of
operations, stockholders' equity (deficit) and cash flows for each of the years
in the three-year period ended December 31, 2000 and for the period from
inception (March 20, 1990) to December 31, 2000, incorporated by
reference in this registration statement have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in giving said reports.
The audited historical financial statements of Eligix, Inc. as of
December 31, 2000 and 1999 and for each of the three years in the period
ended December 31, 2000 and for the period from inception (December 27, 1996)
to December 31, 2000 incorporated in this prospectus by reference to the
BioTransplant Incorporated Form 8-K/A dated May 15, 2001, have been so
incorporated in reliance on the report (which contains an explanatory
paragraph relating to Eligix, Inc.'s ability to continue as a going concern
as described in Note A to the financial statements) of PricewaterhouseCoopers
LLP, independent accountants, given on the authority of said firm as experts
in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements and other documents with the SEC. You
may read and copy any document we file at the SEC's public reference room at
Judiciary Plaza Building, 450 Fifth Street, N.W., Room 1024, Washington, D.C.
20549. You should call 1-800-SEC-0330 for more information on the public
reference room. Our SEC filings are also available to you on the SEC's Internet
site at http://www.sec.gov.
This prospectus is part of a registration statement that we filed with
the SEC. The registration statement contains more information than this
prospectus regarding us and our common stock, including certain exhibits and
schedules. You can obtain a copy of the registration statement from the SEC at
the address listed above or from the SEC's Internet site.
-18-
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC requires us to "incorporate" into this prospectus information
that we file with the SEC in other documents. This means that we can disclose
important information to you by referring to other documents that contain that
information. The information incorporated by reference is considered to be part
of this prospectus. Information contained in this prospectus and information
that we file with the SEC in the future and incorporate by reference in this
prospectus automatically updates and supersedes previously filed information. We
incorporate by reference the documents listed below and any future filings we
make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, prior to the sale of all the shares covered by this
prospectus.
(1) Our Annual Report on Form 10-K for the year ended December 31,
2000, as amended by Amendment No. 1 to Form 10-K/A and
Amendment No. 2 to Form 10-K/A;
(2) Our Quarterly Report on Form 10-Q for the quarter ended March
31, 2001, as amended by Amendment No. 1 to Form 10-Q/A;
(3) Our Current Reports on Form 8-K dated February 21, 2001,
February 23, 2001, March 9, 2001, March 12, 2001, May 25,
2001, and June 14, 2001;
(4) Our Current Report on Form 8-K/A dated June 26, 2001;
(5) All of our filings pursuant to the Exchange Act after the date
of filing the initial registration statement and prior to
effectiveness of the registration statement; and
(6) The description of our common stock contained in our
registration statement on Form 8-A filed with the SEC on
April 26, 1996, including any amendments or reports filed
for the purpose of updating that description.
You may request a copy of these documents, which will be provided to
you at no cost, by writing or telephoning us using the following contact
information:
BioTransplant Incorporated
Building 75, Third Avenue
Charlestown Navy Yard
Charlestown, Massachusetts 02129
Attention: Richard V. Capasso
Telephone: (617) 241-5200
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses to be incurred in
connection with the sale and distribution of the securities being registered
hereby, all of which will be borne by BioTransplant Incorporated (except any
underwriting discounts and commissions and expenses incurred by the selling
stockholders for brokerage, accounting, tax or legal services or any other
expenses incurred by the selling stockholders in disposing of the shares). All
amounts shown are estimates except the Securities and Exchange Commission
registration fee.
Filing Fee - Securities and Exchange Commission ........ $ 5,789
Legal fees and expenses................................. $30,000
Accounting fees and expenses............................ $ 2,500
-------
Total Expenses................................. $38,289
=======
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article IX of our Restated Certificate of Incorporation provides that
no director of our company shall be personally liable for any monetary damages
for any breach of fiduciary duty as a director, except to the extent that the
Delaware General Corporation Law prohibits the elimination or limitation of
liability of directors for breach of fiduciary duty.
Article X of our Restated Certificate of Incorporation provides that a
director or officer of our company (a) shall be indemnified by us against all
expenses (including attorneys' fees), judgments, fines, and amounts paid in
settlement incurred in connection with any litigation or other legal proceeding
(other than an action by or in the right of our company) brought against him by
virtue of his position as a director or officer of our company if he acted in
good faith and in a manner he reasonably believed to be in, or not opposed to,
the best interests of our company, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful and (b)
shall be indemnified by us against all expenses (including attorneys' fees) and
amounts paid in settlement incurred in connection with any action by or in the
right of our company brought against him by virtue of his position as a director
or officer of our company if he acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best interests of our
company, except that no indemnification shall be made with respect to any matter
as to which such person shall have been adjudged to be liable to us, unless a
court determines that, despite such adjudication but in view of all of the
circumstances, he is entitled to indemnification of such expenses.
Notwithstanding the foregoing, to the extent that a director or officer has been
successful, on the merits or otherwise, he will be indemnified by us against all
expenses (including attorneys' fees) incurred in connection therewith. Expenses
shall be advanced to a director or officer at his request, provided that he
undertakes to repay the amount advanced if it is ultimately determined that he
is not entitled to indemnification for such expenses.
Indemnification is required to be made unless we determine that the
applicable standard of conduct required for indemnification has not been met. In
the event of a determination by us that the director or officer did not meet the
applicable standard of conduct required for indemnification, or if we fail to
make an indemnification payment within 60 days after such payment is claimed by
such person, such person is permitted to petition the court to make an
independent determination as to whether such person is entitled to
indemnification. As a condition precedent to the right of indemnification, the
director or officer must give us notice of the action for which indemnity is
sought and we have the right to participate in such action or assume the defense
thereof.
Article X of our Restated Certificate of Incorporation further provides
that the indemnification provided therein is not exclusive, and provides that in
the event that the Delaware General Corporation Law is amended to
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expand the indemnification permitted to directors or officers we must indemnify
those persons to the fullest extent permitted by such law as so amended.
Section 102 of the Delaware General Corporation Law allows a
corporation to eliminate the personal liability of directors of a corporation to
the corporation or its stockholders for monetary damages for a breach of
fiduciary duty as a director, except where the director breached his duty of
loyalty, failed to act in good faith, engaged in intentional misconduct or
knowingly violated a law, authorized the payment of a dividend or approved a
stock repurchase in violation of Delaware corporate law or obtained an improper
personal benefit. BioTransplant Incorporated has included such a provision in
its Certificate of Incorporation.
Section 145 of the Delaware General Corporation Law provides that a
corporation has the power to indemnify a director, officer, employee, or agent
of the corporation and certain other persons serving at the request of the
corporation in related capacities against amounts paid and expenses incurred in
connection with an action or proceeding to which he is or is threatened to be
made a party by reason of such position, if such person shall have acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and, in any criminal proceeding, if such person
had no reasonable cause to believe his conduct was unlawful; provided that, in
the case of actions brought by or in the right of the corporation, no
indemnification shall be made with respect to any matter as to which such person
shall have been adjudged to be liable to the corporation unless and only to the
extent that the adjudicating court determines that such indemnification is
proper under the circumstances.
We maintain a general liability insurance policy which covers certain
liabilities of directors and officers of our company arising out of claims based
on acts or omissions in their capacities as directors or officers.
ITEM 16. EXHIBITS
EXHIBIT NUMBER DESCRIPTION
4.1(1) Restated Certificate of Incorporation of the Registrant, as
amended to date.
4.2(2) By-laws of the Registrant, as amended to date.
5.1(3) Opinion of Hale and Dorr LLP.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of PricewaterhouseCoopers LLP.
23.3(3) Consent of Hale and Dorr LLP, included in Exhibit 5.1 filed
herewith.
24.1(3) Power of Attorney.
----------------
(1) Incorporated herein by reference to the Registrant's Current Report on
Form 8-K dated July 18, 2000.
(2) Incorporated herein by reference to the Registrant's Registration
Statement on Form S-1, as amended (File No. 333-02144).
(3) Previously filed.
ITEM 17. UNDERTAKINGS.
ITEM 512(a) OF REGULATION S-K. The undersigned Registrant hereby
undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933, as amended (the "Securities Act");
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(ii) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this Registration Statement. Notwithstanding the foregoing, any
increase or decrease in the volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration Statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration
Statement or any material change to such information in this
Registration Statement;
PROVIDED, HOWEVER, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included is a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), that are
incorporated by reference in this Registration Statement.
(2) That, for the purposes of determining any liability under the
Securities Act, each post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at the time shall be deemed to be the initial BONA
FIDE offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
ITEM 512(b) OF REGULATION S-K. The Registrant hereby undertakes that,
for purposes of determining any liability under the Securities Act, each filing
of the Registrant's annual report pursuant to Section 13(a) or 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
ITEM 512(h) OF REGULATION S-K. Insofar as indemnification for
liabilities arising under the Securities Act may be permitted to directors,
officers and controlling persons of the Registrant pursuant to the
indemnification provisions described herein, or otherwise, the Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-3 and has duly
caused this Amendment No. 1 to Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of
Charlestown, Commonwealth of Massachusetts, on this 20th day of July, 2001.
BIOTRANSPLANT INCORPORATED
By: /s/ Richard V. Capasso
-----------------------
Vice President, Finance
and Treasurer
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Amendment No. 1 to Registration Statement has been signed by
the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
/s/ Elliot Lebowitz* Chief Executive Officer and Director July 20, 2001
------------------------------- (Principal Executive Officer)
Elliot Lebowitz, Ph.D.
/s/ Walter C. Ogier* President, Chief Operating Officer and Director July 20, 2001
-------------------------------
Walter C. Ogier
/s/ Richard V. Capasso Vice President, Finance and Treasurer July 20, 2001
------------------------------- (Principal Financial and Accounting Officer)
Richard V. Capasso
/s/ James C. Foster*
------------------------------- Director July 20, 2001
James C. Foster, J.D.
------------------------------- Director ____ __, 2001
Daniel O. Hauser, Ph.D.
/s/ Arnold L. Oronsky*
------------------------------- Director July 20, 2001
Arnold L. Oronsky, Ph.D.
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/s/ Michael S. Perry*
------------------------------- Director July 20, 2001
Michael S. Perry, D.V.M., Ph.D.
/s/ Susan M. Racher*
------------------------------- Director July 20, 2001
Susan M. Racher
*By: /s/ Richard V. Capasso
----------------------
Richard V. Capasso
Attorney-in-fact
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EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION
4.1(1) Restated Certificate of Incorporation of the Registrant, as
amended to date.
4.2(2) By-laws of the Registrant, as amended to date.
5.1(3) Opinion of Hale and Dorr LLP.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of PricewaterhouseCoopers LLP.
23.3(3) Consent of Hale and Dorr LLP, included in Exhibit 5.1 filed
herewith.
24.1(3) Power of Attorney.
-------------------
(1) Incorporated herein by reference to the Registrant's Current Report on
Form 8-K dated July 18, 2000 (File No. 000-28324).
(2) Incorporated herein by reference to the Registrant's Registration
Statement on Form S-1, as amended (File No. 333-02144).
(3) Previously filed.
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