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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 16, 1998
REGISTRATION NO. 333-61873
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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CELTRIX PHARMACEUTICALS, INC.
(Exact Name of Registrant as Specified in Its Charter)
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DELAWARE 2834 94-3121462
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification Number)
3055 PATRICK HENRY DRIVE
SANTA CLARA, CALIFORNIA 95054-1815
(408) 988-2500
(Address, Including Zip Code, and Telephone Number, Including Area
Code, of Registrant's Principal Executive Offices)
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ANDREAS SOMMER, PH.D.
PRESIDENT AND CHIEF EXECUTIVE OFFICER
3055 PATRICK HENRY DRIVE
SANTA CLARA, CALIFORNIA 95054-1815
(408) 988-2500
(Name, Address Including Zip Code, and Telephone Number Including
Area Code, of Agent for Service)
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COPIES TO:
Craig W. Johnson
Edmund S. Ruffin, Jr.
VENTURE LAW GROUP
A Professional Corporation
2800 Sand Hill Road
Menlo Park, CA 94025
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED
SALE TO THE PUBLIC: AS SOON AS PRACTICABLE AFTER THE
EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. |X|
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_| _______________
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_| _______________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
CALCULATION OF REGISTRATION FEE
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TITLE OF EACH CLASS OF AMOUNT TO BE PROPOSED MAXIMUM OFFERING PROPOSED MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PRICE PER UNIT(1) OFFERING PRICE(1) REGISTRATION FEE(2)
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Common Stock, par value $0.01 10,075,000 $1.90625 $19,205,468.75 $569.69
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(1) Estimated solely for the purpose of computing the amount of the
registration fee based on the average of the high and low closing price of the
Common Stock as reported on the Nasdaq National Market on December 9, 1998
pursuant to Rule 457(c).
(2) The registration fee applicable to this Amendment No. 1 has been computed
for the registration of 1,075,000 additional shares based on the average of the
high and low closing price of the Common Stock as reported on the Nasdaq
National Market on December 9, 1998 pursuant to Rule 457(c). A registration fee
of $3,899.54 for the registration of 9,000,000 shares on August 20, 1998 was
previously paid based on the average of the high and low closing price of the
Common Stock as reported on the Nasdaq National Market on August 17, 1998.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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SUBJECT TO COMPLETION, DATED DECEMBER 16, 1998
CELTRIX PHARMACEUTICALS, INC.
10,075,000 SHARES
COMMON STOCK
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THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" COMMENCING ON PAGE 4 OF THIS PROSPECTUS FOR INFORMATION THAT SHOULD BE
CONSIDERED BY PROSPECTIVE INVESTORS.
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All references herein to "Celtrix" or the "Company"or "Registrant" mean
Celtrix Pharmaceuticals, Inc. unless otherwise indicated by the context.
The 10,075,000 shares of Celtrix Pharmaceuticals, Inc. Common Stock, $.01
par value, covered by this Prospectus (the "Shares") are offered for the account
of certain stockholders of the Company (the "Selling Stockholders"). The Shares
were issued (or will be issuable upon exercise of warrants issued) to the
Selling Stockholders in connection with a private placement (the "Private
Placement") of Company Common Stock and warrants to purchase Common Stock (the
"Warrants") on November 20, 1998. For additional information concerning this
Private Placement, see "Issuance of Common Stock and Warrants to Selling
Stockholders." The Selling Stockholders may sell the Shares from time to time on
the Nasdaq National Market in regular brokerage transactions, in transactions
directly with market makers or in certain privately negotiated transactions. See
"Plan of Distribution." Each Selling Stockholder has advised the Company that no
sale or distribution other than as disclosed herein will be effected until after
this Prospectus shall have been appropriately amended or supplemented, if
required, to set forth the terms thereof. The Company will not receive any
proceeds from the sale of the Shares by the Selling Stockholders.
Each of the Selling Stockholders may be deemed to be an "Underwriter," as
such term is defined in the Securities Act of 1933, as amended (the "Securities
Act").
On August 17, 1998, the last sale price of the Company's Common Stock on
the Nasdaq National Market was $1.5625 per share and on December 9, 1998 the
last sale price of the Company's Common Stock on the Nasdaq National Market was
$1.9375 per share.
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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PRICE TO UNDERWRITING PROCEEDS TO
DISCOUNTS AND SELLING
PUBLIC OMISSIONS(1) STOCKHOLDERS(1)
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Per Share.................................. See Text Above See Text Above See Text Above
Total......................................
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(1) All expenses of registration of the Shares, estimated to be approximately
$115,000 shall be borne by the Company. Selling commissions, brokerage
fees, any applicable stock transfer taxes and any fees and disbursements of
counsel to the Selling Stockholders are payable individually by the Selling
Stockholders.
The date of this Prospectus is December __, 1998.
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No person is authorized in connection with any offering made hereby to give any
information or to make any representation not contained in this Prospectus, and,
if given or made, such information or representation must not be relied upon as
having been authorized by the Company or the Selling Stockholders. This
Prospectus does not constitute an offer to sell or a solicitation of an offer to
buy any security other than the shares of Common Stock offered hereby, nor does
it constitute an offer to sell or a solicitation of an offer to buy any of the
shares offered hereby to any person in any jurisdiction in which it is unlawful
to make such an offer or solicitation. Neither the delivery of this Prospectus
nor any sale 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.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and in accordance
therewith files proxy statements, reports and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy and
information statements, and other information filed by the Company with the
Commission can be inspected and copied at the public reference facilities
maintained by the Commission in Washington, D.C., and at its Regional Offices
located at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511 and 7 World Trade Center, Suite 1300, New York, New York
10048; and at the Public Reference Office of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549. Copies of such material can be obtained from the
Public Reference Section of the Commission, 450 Fifth Street, N.W., Washington,
D.C. 20549 at prescribed rates. In addition, the Company is an electronic filer
and copies of such material may be retrieved from the Web site
(http://www.sec/gov) maintained by the Commission.
The Company's Common Stock is quoted on the Nasdaq National Market under
the symbol "CTRX." Reports, proxy and information statements and other
information about the Company may be inspected at the Nasdaq National Market,
1735 K Street, N.W., Washington, DC 20006-1506.
INFORMATION INCORPORATED BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated by reference in this Prospectus:
1. The Company's Current Reports on Form 8-K dated April 20, 1998, May
4, 1998, May 14, 1998, June 3, 1998, June 15, 1998, July 15, 1998, July 23,
1998, September 18, 1998, November 19, 1998, December 2, 1998 and December 10,
1998.
2. The Company's Annual Report on Form 10-K for the year ended March 31,
1998.
3. The Company's definitive Proxy Statement dated July 29, 1998, filed in
connection with the Company's September 10, 1998 Annual Meeting of Stockholders.
4. The Company's Quarterly Reports on Form 10-Q for the quarters ended
June 30, 1998 and September 30, 1998.
5. The description of the Company's Common Stock set forth in the
Company's Registration Statement on Form 10 filed with the Commission on
January 24, 1991.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the Common Stock offered hereby shall be deemed
to be incorporated by reference in this Prospectus. Any statement
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contained in a document incorporated by reference herein shall be deemed to be
modified or superseded for purposes hereof to the extent that a statement
contained herein (or in any other subsequently filed document which also is
incorporated by reference herein) modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed to constitute a
part hereof, except as so modified or superseded.
The Company will furnish without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, on the written or oral
request of such person, a copy of any or all of the documents incorporated by
reference, other than exhibits to such documents. Requests should be directed to
the Chief Financial Officer, Celtrix Pharmaceuticals, Inc., 3055 Patrick Henry
Drive, Santa Clara, California, 95054-1815, telephone: 408-988-2500.
The "Celtrix Pharmaceuticals" logo (used alone or with the Company's name)
and "Celtrix Pharmaceuticals" are trademarks of the Company; "SomatoKine" is a
registered trademark of the Company. All other tradenames and trademarks
appearing in this Prospectus are the property of their respective holders.
THE COMPANY
Celtrix Pharmaceuticals, Inc. ("Celtrix" or the "Company") is a
biopharmaceutical company developing novel therapeutics for the treatment of
seriously debilitating, degenerative conditions primarily associated with aging,
chronic diseases and severe trauma. The Company's focus is on restoring lost
tissues and metabolic processes essential for the patient's health and quality
of life. Product development programs target severe osteoporosis, including hip
fracture surgery in the elderly, diabetes, and acute traumatic injury as in
severe burns. Other potential indications include protein wasting diseases
associated with cancer, AIDS, advanced kidney failure, and other
life-threatening conditions.
The Company's leading drug candidate is SomatoKine, a naturally occurring
complex comprised of the anabolic hormone insulin-like growth factor-I (IGF-I)
and its primary binding protein, BP3. IGF-I is known to play a major role in
diverse biological processes, including bone and muscle formation, tissue
repair, and endocrine regulation. However, IGF-I does not naturally exist in
quantity free of its binding proteins, and limitations associated with
administering free IGF-I therapeutically have proven significant. When IGF-I is
bound to BP3, as it is in nature, it does not display these acute limitations.
The Company initiated a Phase II clinical feasibility study in January 1997
using SomatoKine to treat severely osteoporotic patients recovering from hip
fracture surgery. Interim results from the Phase II study have suggested that
short-term treatment with SomatoKine may help to minimize, or even prevent bone
loss in such patients, substantially improving patient recovery. The Company
plans to establish corporate partnership(s) for the continued global development
of SomatoKine for severe osteoporosis, including recovery from hip fracture
surgery.
The Company began a Phase II feasibility study in patients with severe
burns in July 1997. Preliminary data from the study suggest that SomatoKine has
a normalizing effect on protein synthesis and immune function which offers the
potential to provide critical protection from serious infection, speed recovery
and reduce the patient's hospital stay.
The Company initiated a Phase II feasibility study in Type I diabetes
patients in July 1998 to evaluate SomatoKine as a potential therapeutic in
managing glucose homeostasis in these patients.
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The Company further believes that SomatoKine may prove efficacious for
treatment of protein wasting in patients suffering from cancer, AIDS, advanced
kidney failure, and other life-threatening conditions. SomatoKine's anabolic
effects offer the potential to preserve and restore muscle strength and mobility
important for these patients' survival and quality of life.
In efforts to reduce the Company's cash burn rate and preserve value in the
Company's core assets and technologies, in the second quarter of 1998, the
Company restructured its operations to eliminate manufacturing and announced a
reduction in work force of up to 90%. Accordingly, the Company expects to retain
only 7 full-time employees as of January 1, 1999, and will require additional
funding prior to initiating future clinical trials. Although such actions were
designed to permit the Company to continue its clinical development of
SomatoKine, there can be no assurance that such restructuring efforts will be
successful or that the Company will be able to raise additional funding through
collaborative arrangements or otherwise, or that the Company will be able to
sustain its clinical development activities going forward.
Prior to the Company's restructuring, the Company manufactured SomatoKine
for clinical trials at its Santa Clara, California facility, but discontinued
manufacturing operations in September 1998.
The Company has a product development, license and marketing agreement with
Genzyme Corporation ("Genzyme") for TGF-beta-2. Genzyme is currently developing
TGF-beta-2 for tissue repair and the treatment of systemic indications. Celtrix
is not currently pursuing an in-house TGF-beta-2 program.
The Company was spun off from Collagen Corporation and was incorporated in
Delaware in December 1990 as "Celtrix Laboratories, Inc." The Company changed
its name to "Celtrix Pharmaceuticals, Inc." in December 1991.
The Company's principal executive offices are located in Santa Clara,
California. The mailing address and telephone number are: 3055 Patrick Henry
Drive, Santa Clara, CA 95054-1815, telephone: (408) 988-2500. The Company plans
to move to a new location prior to December 31, 1998, and its mail and
telephone lines will be forwarded to the new address.
RISK FACTORS
PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED HEREBY SHOULD CAREFULLY
CONSIDER THE FOLLOWING RISK FACTORS IN ADDITION TO THE OTHER INFORMATION
APPEARING IN OR INCORPORATED BY REFERENCE INTO THIS PROSPECTUS.
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RISK FACTORS
Restructuring
In efforts to reduce the Company's cash burn rate and preserve value in
the Company's core assets and technologies, in the second quarter of 1998, the
Company restructured its operations to eliminate manufacturing and announced a
reduction in work force of up to 90%. Such actions were designed to permit the
Company to continue its clinical development of SomatoKine. There can be no
assurance that the restructuring efforts the Company has engaged in to date will
be successful or that the Company will be able to sustain its clinical
development activities going forward. In addition, there can be no assurance
that the Company's management will not deem it appropriate to undertake other
restructuring efforts in the future or to what degree any such efforts will
result in improved performance or a reduction in the Company's cash burn rate.
Future Capital Requirements and Uncertainty of Additional Funding
After the completion of the November 1998 Private Placement and the sale
of fixed assets as a result of discontinuing its manufacturing operations, the
Company anticipates that sufficient funds will be available to fund the
Company's operations into the third calendar quarter of 1999, not including
further clinical trials beyond the fourth quarter of 1998. Accordingly, further
development of the Company's products will require the commitment of substantial
resources to conduct the time-consuming research and development, clinical
studies and regulatory activities necessary to bring any potential therapeutic
products to market and to establish production, marketing and sales
capabilities. Such additional funding will need to be raised through
collaborative arrangements or through public or private financings, including
equity financing. Any additional equity financing may be dilutive to
stockholders, and any debt financing, if available, may involve restrictions on
the Company's ability to pay future dividends on its capital stock or the manner
in which the Company conducts its business.
Nasdaq Issues
In October 1998, the Company's stock price dropped below $1.00, and due
to the restructuring charge made in the quarter ending September 30, 1998, the
Company's net tangible assets were below $4 million, both Nasdaq National Market
Maintenance Standards for continued listing. In November 1998, the Company
received notice from Nasdaq of its failure to meet these two maintenance
standards and further advising that if the Company was unable to comply with the
minimum bid price requirement for a ten (10) trading day period prior to
February 1999, it would be subject to delisting. Subsequent to the notification
from Nasdaq, the Company's stock price rose above the required minimum bid price
of $1 per share for more than 10 consecutive trading days and the proceeds from
the November 1998 Private Placement allowed the Company to meet the minimum net
tangible asset requirement on a pro forma basis for the quarter ended September
30, 1998. Consequently, the Company believes that it is currently in compliance
with Nasdaq continued listing requirements. However, if the Company is unable to
continue to meet these standards, or any other Nasdaq requirements, it will be
subject to delisting by Nasdaq. Such delisting may have a material adverse
effect on the price of the Company's Common Stock and the levels of liquidity
currently available to its stockholders. Although the Company is working to
comply with all continued listing requirements of Nasdaq, there can be no
assurance that it will be able to satisfy all such requirements on an ongoing
basis.
Early Stage of Development; No Developed or Approved Products
The Company's potential products are in research and development and no
material revenues have been generated to date from product sales. To achieve
profitable operations, the Company, alone or with others, must successfully
develop, obtain regulatory approval for, manufacture and market its potential
products. Much of the clinical development work for the Company's potential
products remains to be completed. No assurance can be given that the Company's
product development effort will be successfully completed, that required
regulatory approval will be obtained or that any products, if developed and
introduced will be successfully marketed or achieve market acceptance.
History of Operating Losses; Accumulated Deficit
The Company has incurred net operating losses in every year of operation
since its inception. As of September 30, 1998, the Company had an accumulated
deficit of approximately $129.1 million. Losses have resulted principally from
costs incurred in connection with the Company's research and development
activities and from general and administrative costs associated with the
Company's operations. The Company expects to incur substantial and increasing
operating losses for at least the next several years. The Company's ability to
achieve profitability will depend in part on completing the research and
development of, and obtaining regulatory approvals for, its products and
successfully commencing product commercialization. The Company's financial
statements have been prepared assuming that the Company continues as a going
concern. At September 30, 1998, the Company had negative working capital of
$1.0 million, an accumulated deficit of $129.1 million, and incurred a net loss
of $8.6 million for the quarter ended September 30, 1998 which included a $5.2
million restructuring charge. In November 1998, the Company completed the
Private Placement pursuant to which the Shares are being registered hereunder,
resulting in net proceeds to the Company of approximately $1.9 million,
reversing the negative working capital position on a pro forma basis. Current
cash, cash equivalents and short-term investments, including proceeds from this
financing, and the sale of fixed assets as a result of discontinuing the
Company's manufacturing operations in connection with the September 1998
restructuring, will be sufficient to fund ongoing operations into the third
calendar quarter of 1999.
Possible Volatility of Stock Price; Dividend Policy
The market prices for securities of biopharmaceutical and biotechnology
companies have historically been highly volatile, and the market has from time
to time experienced significant price and volume fluctuations that are unrelated
to the operating performance of particular companies. Since the Company's Common
Stock became listed for public trading, its market price has fluctuated over a
wide range and the Company expects that it will continue to fluctuate. In
addition, announcements concerning the Company or its competitors, the results
of clinical trials, technological innovations or new commercial products,
government regulations, developments concerning proprietary rights, litigation
or public concern as to safety of the Company's potential products as well as
changes in general market conditions may have a significant effect on the market
price of Celtrix's common stock.
The Company has never paid dividends on its capital stock and the Company
does not anticipate paying any cash dividends in the foreseeable future.
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There can be no assurance that any such financing will be available to
the Company or on terms attractive to the Company, or that the Company can enter
into a collaborative relationship with a corporate partner for the continuation
of the clinical trials in any of its current indications. The inability to
obtain funds, or to enter into additional corporate collaborations, may require
the Company, ultimately, to liquidate its assets or to cease operations.
Stringent Government Regulation; Need for Product Approvals
The preclinical testing and clinical trials of any compounds developed by
the Company or its collaborative partners and the manufacturing and marketing of
any drugs resulting therefrom are subject to regulation by numerous federal,
state and local governmental authorities in the United States, the principal one
of which is the United States Food and Drug Administration (the "FDA"), and by
similar agencies in other countries in which drugs developed by the Company or
its collaborative partners may be tested and marketed (each of such federal,
state, local and other authorities and agencies, a "Regulatory Agency"). Any
compound developed by the Company or its collaborative partners must receive
Regulatory Agency approval before it may be marketed as a drug in a particular
country. The regulatory process, which includes preclinical testing and clinical
trials of each compound in order to establish its safety and efficacy, can take
many years and requires the expenditure of substantial resources. Data obtained
from preclinical and clinical activities are susceptible to varying
interpretations which could delay, limit or prevent Regulatory Agency approval.
In addition, delays or rejections may be encountered based upon changes in
Regulatory Agency policy during the period of drug development and/or the period
of review of any application for Regulatory Agency approval for a compound.
Delays in obtaining Regulatory Agency approvals could adversely affect the
marketing of any drugs developed by the Company or its collaborative partners,
impose costly procedures upon the Company's and its collaborative partners'
activities, diminish any competitive advantages that the Company or its
collaborative partners may attain and adversely affect the Company's ability to
receive royalties, any of which could have a material adverse effect on the
Company's business, financial condition and results of operations.
There can be no assurance that, even after such time and expenditures,
Regulatory Agency approvals will be obtained for any compounds developed by or
in collaboration with the Company. Moreover, if Regulatory Agency approval for a
drug is granted, such approval may entail limitations on the indicated uses for
which it may be marketed that could limit the potential market for any such
drug. Furthermore, if and when such approval is obtained, the marketing and
manufacture of the Company's products would remain subject to extensive
regulatory requirements, and discovery of previously unknown problems with a
drug or its manufacturer may result in restrictions on such drug or
manufacturer, including withdrawal of the drug from the market. Failure to
comply with regulatory requirements could, among other things, result in fines,
suspension of regulatory approvals, operating restrictions and criminal
prosecution. In addition, Regulatory Agency approval of prices is required in
many countries and may be required for the marketing of any drug developed by
the Company or its collaborative partners in such countries.
Uncertainties Related to Clinical Trials
Before obtaining regulatory approvals for the commercial sale of any of
its products under development, the Company must demonstrate through preclinical
studies and clinical trials that the product is safe and efficacious for use in
each target indication. The results from preclinical studies and early clinical
trials may not be predictive of results that will be obtained in large-scale
testing, and there can be no assurance that the Company's clinical trials will
demonstrate the safety and efficacy of any products or will result in marketable
products.
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A number of companies in the biotechnology industry have suffered significant
setbacks in advanced clinical trials, even after promising results in earlier
trials. For example, in fiscal year 1995, Celtrix discontinued its in-house
TGF-beta-2 program for the treatment of ophthalmic conditions as a result of
disappointing clinical study results.
The rate of completion of the Company's clinical trials is dependent
upon, among other factors, the rate of patient enrollment. Patient enrollment is
a function of many factors, including the size of the patient population, the
nature of the protocol, the proximity of patients to clinical sites and the
eligibility criteria for the study. Delays in planned patient enrollment may
result in increased costs and delays, which could have a material adverse effect
on the Company's business, financial condition and results of operations.
No Assurance of Market Acceptance
There can be no assurance that any products successfully developed by the
Company, if approved for marketing, will achieve market acceptance. The products
and therapies which the Company is attempting to develop will compete with a
number of well-established traditional drugs and therapies manufactured and
marketed by major pharmaceutical companies. The degree of market acceptance of
any products developed by the Company will depend on a number of factors,
including the establishment and demonstration in the medical community of the
clinical efficacy and safety of the Company's product candidates, their
potential advantage over existing treatment methods, and reimbursement policies
of government and third-party payors. Competitors may also develop new
technologies or products which are more effective or less costly than SomatoKine
or perceived to be more cost-effective. There is no assurance that physicians,
patients or the medical community in general will accept and utilize any
products that may be developed by the Company. The Company's business, financial
condition and results of operations may be materially adversely affected if
SomatoKine does not receive market acceptance for any reason.
Substantial Competition
In each of the Company's potential product areas, competition from large
pharmaceutical companies, biotechnology companies and other companies,
universities and research institutions is substantial. At least three large
biotechnology and pharmaceutical companies with substantial financial and legal
resources have patent applications on file in the United States and abroad
directed at the production of recombinant IGF-I by various methods. Relative to
the Company, most of these entities have substantially greater capital
resources, research and development staffs, facilities and experience in
conducting clinical trials and obtaining regulatory approvals, as well as in
manufacturing and marketing pharmaceutical products. Furthermore, the Company
believes that competitors have used, and may continue to use, litigation to gain
competitive advantage. In addition, these and other entities may have or develop
new technologies or use existing technologies that are, or may in the future be,
the basis for competitive products.
Any potential products that the Company succeeds in developing and for
which it gains regulatory approval will have to compete for market acceptance
and market share. For certain of the Company's potential products, an important
factor in such competition may be the timing of market introduction of
competitive products. Accordingly, the relative speed with which the Company can
develop products, complete the clinical testing and regulatory approval
processes and supply commercial quantities of the product to the market are
expected to be important competitive factors. The Company expects that
competition will be based, among other things, on product efficacy, safety,
reliability, availability, timing and scope of regulatory approval and price.
There can be no assurance that the Company's competitors will not succeed in
developing technologies and products that are more effective than any that are
being developed by the Company or that would render the Company's technology and
products obsolete or
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noncompetitive. In addition, many of the Company's competitors may achieve
product commercialization or patent protection earlier than the Company. The
failure of the Company to compete effectively would have a material adverse
effect on the Company's business, financial condition and results of operations.
Dependence on Proprietary Technology; Uncertainty of Patent Protection
The Company's success will depend in part on its ability to obtain
patents, maintain trade secrets and operate without infringing on the
proprietary rights of others, both in the United States and in other countries.
The patent positions of pharmaceutical, biopharmaceutical and biotechnology
companies, including the Company, are highly uncertain and involve complex legal
and factual questions. Patent law relating to the scope of claims in the
technology fields in which the Company operates is still evolving. The degree of
future protection for the Company's proprietary rights is therefore uncertain.
No consistent policy has emerged regarding the permissible breadth of coverage
of claims in biotechnology patents. Therefore, no assurance can be given that
any of the Company's or its licensors' patent applications will issue as patents
or that any such issued patents will provide competitive advantages for the
Company's products or will not be successfully challenged or circumvented by its
competitors. In addition, there can be no assurance that others will not
independently develop substantially equivalent proprietary technology that is
not covered by the Company's patents or that others will not be issued patents
that may prevent the sale of the Company's proposed products or require
licensing and the payment of significant fees or royalties by the Company.
At least three large biotechnology and pharmaceutical companies with
substantial financial and legal resources have issued patents and/or patent
applications on file in the United States and abroad directed at the production
and/or use of recombinant IGF-I by various methods. The earliest date of filing
of these patent applications is April 25, 1983. Unless and until all of these
applications issue, it is not possible to determine the breadth of these claims
regarding a process for IGF-I production or for the use of IGF-I for any
particular indication. Furthermore, a large biotechnology and pharmaceutical
company with substantial financial and legal resources has a patent issued in
the United States directed towards certain DNA molecules encoding BP3 and the
corresponding BP3 protein. This same patent was previously granted in Europe and
was successfully opposed by Celtrix. However, this large biotechnology and
pharmaceutical company has recently appealed the decision and there can be no
assurance that the appeal will not be successful, and it is not possible to
determine what, if any, claims will be reinstated or the breadth of such claims.
In addition, this large biotechnology company has been issued a patent directed
toward the subcutaneous bolus administration of IGF-BP3 for certain limited
areas of use. Each of the referenced companies can be expected to defend its
patent position vigorously.
Celtrix has developed a new process for the production of IGF and BP3
which it does not believe will infringe on other patents relating to recombinant
protein production in general or on other patents relating to the production of
IGF and BP3 in particular, although there can be no assurance that a contrary
position will not be asserted. A large number of other companies have pending
patent applications and/or issued patents which claim certain methods of use of
IGF. There can be no assurance that third parties will not claim the Company's
technology, current or future products or manufacturing processes infringe the
proprietary rights of others. If other companies were to successfully bring
legal actions against the Company claiming patent or other intellectual property
infringements, in addition to any potential liability for damages, then the
Company could be required to obtain a license in order to continue to use the
affected process or to manufacture or use the affected products or cease using
such products or process if enjoined by a court. Any such claim, with or without
merit, could result in costly litigation or might require the Company to enter
into royalty or licensing agreements, all of which could delay or otherwise
adversely impact the Company's potential products for commercial use. If any
licenses are required, there can be no assurance that the
8
10
Company will be able to obtain any such license on commercially favorable terms,
if at all, and if these licenses are not obtained, the Company might be
prevented from pursuing the development of certain of its potential products.
The Company's breach of an existing license or failure to obtain or delay in
obtaining a license to any technology that it may require to commercialize its
products may have a material adverse impact on the Company.
Litigation, which could result in substantial costs to the Company, may
also be necessary to enforce any patents issued or licensed to the Company or to
determine the scope and validity of another party's proprietary rights. There
can be no assurance that the Company's issued or licensed patents would be held
valid by a court of competent jurisdiction. An adverse outcome in litigation or
an interference or other proceeding in a court or patent office could subject
the Company to significant liabilities to other parties, require disputed rights
to be licensed from other parties or require the Company to cease using such
technology, any of which could have a material adverse effect on the Company.
Celtrix also relies on trade secrets to protect technology, especially
where patent protection is not believed to be appropriate or obtainable. Celtrix
attempts to protect its proprietary technology and processes in part by
confidentiality agreements with its employees, consultants and certain
contractors. There can be no assurance that these agreements will not be
breached, that the Company would have adequate remedies for any breach, or that
the Company's trade secrets will not otherwise become known or be independently
discovered by competitors in such a manner that the Company has no practical
recourse. To the extent that the Company or its consultants or research
collaborators use intellectual property owned by others in their work for the
Company, disputes may also arise as to the rights in related or resulting
know-how and inventions.
Limited Manufacturing Experience and Capacity
The Company's products must be manufactured in compliance with regulatory
requirements and at acceptable costs. In September 1998, the Company implemented
a restructuring plan to focus its operation on the clinical development of its
lead drug compound, SomatoKine(R), and to reduce its cash burn rate. With
sufficient clinical grade SomatoKine to support the conduct of clinical trials
over the next two years, the Company discontinued its in-house manufacturing
operations. In the future, the Company will need to contract its manufacturing
operations or enter into corporate partnering arrangements that will support
manufacturing of drug material to support additional clinical drug needs and
eventual commercial scale manufacturing. There can be no assurance that the
Company will be able to successfully identify and contract a third party
manufacturer, to manufacture any of its current or future products on a
commercial scale, nor that such products can be manufactured at a cost or in
quantities to make commercially viable products. Failure to obtain sufficient
commercial quantities of SomatoKine at acceptable terms will have an adverse
impact on the Company's attempts to seek approval for this product, or to
commercialize this product.
Limited Sales and Marketing Experience
If the Company is permitted to commence commercial sales of products, it
will face commercial competition with respect to sales, marketing and
distribution, areas in which it has no experience. To market any of its products
directly, the Company must develop a marketing and sales force with technical
expertise and with supporting distribution capability. Alternatively, the
Company may obtain the assistance of a pharmaceutical company with a large
distribution system and a large direct sales force. There can be no assurance
that the Company will be able to establish sales and distribution capabilities
or be successful in gaining market acceptance for its proprietary products. To
the extent the Company enters into co-promotion or other licensing arrangements,
any revenues received by the Company will be
9
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dependent on the efforts of third parties and there can be no assurance that
such efforts will be successful.
Reliance on Qualified and Key Personnel
The Company is highly dependent on the principal members of its
scientific and management staff, the loss of whose services might significantly
delay or prevent the achievement of research, development, or business
objectives. Although the Company believes it has retained sufficient employees
to achieve its near-term business objectives after its reduction in force in
September 1998, there can be no assurance that the loss of service of such
employees would not impede the Company's objectives. Furthermore, there can be
no assurance that the reduction in force will not adversely affect the Company's
ability to retain its remaining employees. The loss of key management or
scientific personnel could adversely affect the Company's continued business.
The Company's potential expansion into areas and activities requiring
additional expertise, such as clinical trials, governmental approvals, contract
manufacturing and marketing, are expected to place a significant strain on the
Company's management, operational and financial resources. These demands are
expected to require a substantial increase in management and scientific
personnel and the development of additional expertise by existing management
personnel. The failure to attract and retain such personnel or to develop such
expertise could materially adversely affect prospects for the Company's success.
Product Liability; Availability of Insurance
The Company currently has in force general liability insurance, with
coverage limits of $2.0 million per incident and $4.0 million in the aggregate
annually, and product liability insurance with coverage limits of $1.0 million
per incident and $3.0 million in the aggregate annually. The Company's insurance
policies provide coverage for product liability on a claims made basis and
general liability on occurrence basis. These policies are subject to annual
renewal. Such insurance may not be available in the future on acceptable terms
or at all. There can be no assurance that the Company's insurance coverage will
be adequate or that a product liability claim or recall would not materially
adversely affect the business or financial condition of the Company.
The use of the Company's potential products or technology in clinical
trials and the sale of such products may expose the Company to liability claims.
Such risks exist even with respect to those potential products, if any, that
receive regulatory approval for commercial sale. Although Celtrix has taken and
will continue to take what it believes are appropriate precautions, there can be
no assurance that it will avoid significant product liability exposure. There
also can be no assurance that the Company's insurance coverage will be adequate
or that a product liability claim or recall would not materially adversely
affect the business or financial condition of the Company.
Concentration of Stock Ownership
As of September 30, 1998 the Company's directors and officers and their
affiliates beneficially owned approximately 30% of the outstanding Common Stock.
As a result, these stockholders have been able to exercise significant influence
over all matters requiring stockholder approval, including the election of
directors and approval of significant corporate transactions. Such concentration
of ownership may have the effect of delaying or preventing a change in control
of the Company. In November 1998, the Company completed the Private Placement of
4,000,000 shares of newly issued common stock pursuant to a Common Stock and
Warrant Purchase Agreement dated October 12, 1998 which had a dilutive impact on
the foregoing stock ownership percentage. However, it is anticipated that the
Company's
10
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directors and officers and their affiliates collectively will continue to be
able to exercise influence in matters requiring stockholder approval in the
future.
Impact of Year 2000
Many computer systems experience problems handling dates beyond the year
1999. Therefore, some computer hardware and software will need to be upgraded or
modified prior to the Year 2000 in order to remain functional. The Company is
currently assessing the impact of Year 2000 on its existing software and
systems. The Company expects to implement successfully the systems and software
changes necessary to address the Year 2000 issues, and does not believe that the
costs of such actions will have a material effect on the Company's results of
operations or financial condition. However, it is unknown the extent, if any, of
the impact of the Year 2000 on other systems and equipment of third parties with
which the Company does business. There can be no assurance that third parties
will address the Year 2000 issue in a timely fashion, or at all. Any Year 2000
compliance problem or delay of either the Company, its suppliers, its clinical
research organizations, or its collaborative partners could have a material
adverse effect on the Company's business, operating results and financial
conditions.
Dilutive and Potential Dilutive Effect to Stockholders
11
13
The November 1998 Private Placement issuance of shares of the Company's
common stock and warrants exercisable for common stock will dilute the
beneficial ownership of existing Company stockholders, and any future issuances
are likely to be of a similar dilutive nature.
Environmental Liability
The Company is subject to federal, state and local laws and regulations
governing the use, generation, manufacture, storage, discharge, handling and
disposal of certain materials and wastes that have been used in its operations.
There can be no assurance that the Company will not be required to incur
significant costs in connection with its compliance with environmental laws and
regulations for its current research activities and prior manufacturing
activities.
12
14
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of Common Stock by
the Selling Stockholders in the Offering.
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Section 145 of the Delaware General Corporation Law authorizes a court to
award, or a corporation's Board of Directors to grant, indemnity to directors
and officers in terms sufficiently broad to permit such indemnification under
certain circumstances for liabilities (including reimbursement for expenses
incurred) arising under the Securities Act of 1933, as amended (the "Securities
Act"). Section 10 of the Company's Amended and Restated Certificate of
Incorporation and Article VI of the Company's Bylaws provide for indemnification
of its directors, officers, employees and other agents to the maximum extent
permitted by law. In addition, the Company has entered into Indemnification
Agreements with its officers and directors and maintains director and officer
liability insurance.
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 foregoing provisions, or otherwise, the Company 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 Company of expenses
incurred or paid by a director, officer or controlling person of the Company in
the successful defense of any action, suit or proceeding) is asserted against
the Company by such director, officer or controlling person in connection with
the securities being registered hereunder, the Company 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.
ISSUANCE OF COMMON STOCK AND WARRANTS TO SELLING STOCKHOLDERS
On November 20, 1998, the Company privately placed 4,000,000 shares of its
Common Stock and Warrants to purchase 6,000,000 shares of its Common Stock to
the Selling Stockholders pursuant to the terms of a Common Stock and Warrant
Purchase Agreements dated as of October 12, 1998 by and between the Company and
the Selling Stockholders. In connection with such Private Placement, the Company
also issued a Warrant exercisable for up to 75,000 shares of Common Stock to its
placement agent, Credit Suisse First Boston Corporation ("CSFB"). This
Prospectus covers the 10,075,000 shares of the Company's Common Stock issued (or
issuable upon exercise of the Warrants issued) in connection with the Private
Placement to the Selling Stockholders.
PLAN OF DISTRIBUTION
The Selling Stockholders may sell the Shares in whole or in part, from time
to time on the over-the-counter market at prices and on terms prevailing at the
time of any such sale. Any such sale may be made in broker's transactions
through broker-dealers acting as agents, in transactions directly with market
makers or in privately negotiated transactions where no broker or other third
party (other than the purchaser) is involved. The Selling Stockholders will pay
selling commissions or brokerage fees, if any, with respect to the sale of the
Shares in amounts customary for the type of transaction effected. Each Selling
Stockholder will also pay all applicable transfer taxes and all fees and
disbursements of counsel for such Selling Stockholder incurred in connection
with the sale of shares. The Warrants issued to the Selling Stockholders are
not exercisable by such holders prior to February 20, 1999, provided however,
that the Warrant issued to CSFB is not exercisable by such holder prior to
November 20, 1999.
13
15
Each Selling Stockholder has advised the Company that before or during such
time as such Selling Stockholder may be engaged in the attempt to sell Shares
registered hereunder, such person will:
(i) notify the Company of its intent to sell any Shares at least three (3)
full business days prior to such sale; and
(ii) cause to be furnished to each person to whom Shares included herein
may be offered, and to each broker-dealer, if any, through whom Shares are
offered, such copies of this Prospectus, as supplemented or amended, as may be
required by such person.
The Selling Stockholders, and any other persons who participate in the sale
of the Shares, may be deemed to be "Underwriters" as defined in the Securities
Act. Any commissions paid or any discounts or concessions allowed to any such
persons, and any profits received on resale of the Shares, may be deemed to be
underwriting discounts and commissions under the Securities Act.
The Company has agreed to maintain the effectiveness of this Registration
Statement until the earlier of the sale of all the Shares registered pursuant to
this Prospectus or such date as the Company shall be satisfied that each holder
of Shares can sell all of the Shares it holds in any three-month period in
compliance with Rule 144 promulgated under the Securities Act, but in no event
after November 20, 2000. No sales may be made pursuant to this Prospectus after
such date unless the Company amends or supplements this Prospectus to indicate
that it has agreed to extend such period of effectiveness.
The Company has agreed to indemnify the Selling Stockholders against
certain liabilities, including liabilities under the Securities Act.
14
16
The following table sets forth certain information with respect to the
Selling Stockholders as of December 3, 1998 (as of which date 25,061,053 shares
of the Company's Common Stock were issued and outstanding):
SHARES BENEFICIALLY SHARES OF SHARES BENEFICIALLY
OWNED PRIOR COMMON STOCK OWNED AFTER
TO THE OFFERING(1) THE OFFERING(1)(2)
------------------------ OFFERED ------------------------
NAME OF SELLING STOCKHOLDER NUMBER PERCENT HEREBY NUMBER PERCENT
- -------------------------------------------- ------ ------- ------- ------ -------
Biotechnology Development Fund, L.P. 3,095,774 11.7% 1,250,000 1,845,774 7.2%
Frank Kung, General Partner
575 Hight Street
Suite 201
Palo Alto, CA 94301
Biotechnology Development Fund, III L.P. 2,500,000 9.4% 2,500,000 0 *
Frank Kung, General Partner
575 Hight Street
Suite 201
Palo Alto, CA 94301
Veron International, Ltd. 3,272,887 12.2% 2,350,000 922,887 3.6%
Chinachem Golden Plaza
77 Mody Road
Tsin Sha Tsui East
Kowloon, Hong Kong
Attn: W.K. Leung
Lee Wei Chen 2,350,000 8.9% 2,350,000 0 *
c/o Fu Sheng Industrial Co., Ltd.
172 Nanking East Road, Sec. 2
Taipei 104, Taiwan
R.O.C.
Attn: Shubbin King
Hofung Holdings Limited 1,042,287 4.1% 950,000 92,287 *
20 F East Town Bldg.
41 Lockard Rd.
Wanchai, Hong Kong
Attn: Robert Ho
Wanpyng Chuang and Jesse Chen 342,287 1.4% 250,000 92,287 *
1608 Pebble Beach Ct.
Milpitas, CA 95035
Nai-Ping Leung 211,518 * 150,000 61,518 *
95A, Hill Road 1/F
Western District
Hong Kong
Wen-Chen Yuan 200,000 * 200,000 0 *
8/F 33 One hundred fifty first Avenue
Fourth District
Ren-ai Street
Taipei, R.O.C.
Credit Suisse First Boston Corporation 75,000 * 75,000 0 *
Eleven Madison Avenue
New York, NY 10010-3629
- ------------
* Less than 1%
(1) Information with respect to beneficial ownership is based upon information
contained in filings made by certain Selling Stockholders with the
Securities and Exchange Commission, and information obtained from the
Company's transfer agent and certain of the Selling Stockholders. Includes
with respect to the following individuals and entities warrants exercisable
for the following number of shares of the Company's Common Stock:
Biotechnology Development Fund, L.P. -- 1,365,258; Biotechnology
Development Fund, III L.P. -- 1,500,000; Veron International, Ltd. --
1,717,629; Lee Wei Chen -- 1,410,000; Hofung Holdings Limited -- 600,762;
Wanpying Chuang and Jesse Chen -- 180,762; Nai-Ping Leung -- 110,506;
Wen-Chen Yuan -- 120,000; Credit Suisse First Boston Corporation -- 75,000.
(2) Assumes sale of all Shares, including shares issuable upon exercise of
Warrants hereto, offered hereby and no other purchases or sales of the
Company's Common Stock. See "Plan of Distribution."
No Selling Stockholder has had any material relationship with the Company
or any of its predecessors or affiliates within the last three years.
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LEGAL MATTERS
Certain legal matters with respect to the legality of the issuance of the
Common Stock offered hereby will be passed upon for the Company by Venture Law
Group, A Professional Corporation, 2800 Sand Hill Road, Menlo Park, California
94025. Craig W. Johnson, a director of Venture Law Group, is Secretary of the
Company. As of the date of this Prospectus, certain partners of Venture Law
Group beneficially own 19,500 shares of the Company's Common Stock.
EXPERTS
The consolidated financial statements of Celtrix Pharmaceuticals, Inc.
appearing in the Company's Annual Report (Form 10-K) for the year ended March
31, 1998 have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon included therein (which contains an explanatory
paragraph with respect to the Company's ability to continue as a going concern
mentioned in Note 1 to the consolidated financial statements) and incorporated
herein by reference. Such consolidated financial statements are incorporated
herein by reference in reliance upon such report given upon the authority of
such firm as experts in accounting and auditing.
ADDITIONAL INFORMATION
This Prospectus constitutes a part of the Registration Statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") filed by the Company with the Securities and Exchange
Commission (the "Commission") under the Securities Act. This Prospectus does not
contain all of the information set forth in the Registration Statement, certain
parts of which are omitted in accordance with the rules and regulations of the
Commission. For further information with respect to the Company and the shares
of Common Stock offered hereby, reference is hereby made to the Registration
Statement. Statements contained herein concerning the provisions of any document
are not necessarily complete, and each such statement is qualified in its
entirety by reference to the copy of such document filed with the Commission.
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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 costs and expenses payable by the
Registrant in connection with the sale and distribution of the Common Stock
being registered. Selling commissions and brokerage fees and any applicable
transfer taxes and fees and disbursements of counsel for the Selling
Stockholders are payable individually by the Selling Stockholders. All amounts
are estimates except the registration fee.
AMOUNT
TO BE PAID
----------
Registration Fee..................................... $ 4,500
Legal Fees and Expenses.............................. 15,000
Accounting Fees and Expenses......................... 7,000
Finders Fee (in connection with private placement)... 82,500
--------
Miscellaneous...................................... 6,000
--------
Total....................................... $ 115,000
========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law ("DGCL") provides a
detailed statutory framework covering indemnification of officers and directors
against liabilities and expenses arising out of legal proceedings brought
against them by reason of their being or having been directors or officers.
Section 145 generally provides that a director or officer of a corporation (i)
shall be indemnified by the corporation for all expenses of such legal
proceedings when he is successful on the merits, (ii) may be indemnified by the
corporation for the expenses, judgments, fines and amounts paid in settlement of
such proceedings (other than a derivative suit), even if he is not successful on
the merits, if he 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, with respect
to any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful, and (iii) may be indemnified by the corporation for the
expenses of a derivative suit (a suit by a stockholder alleging a breach by a
director or officer of a duty owed to the corporation), even if he is not
successful on the merits, if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation. No indemnification may be made under clause (iii) above, however,
if the director or officer is adjudged liable for negligence or misconduct in
the performance of his duties to the corporation, unless a corporation
determines that, despite such adjudication, but in view of all the
circumstances, he is entitled to indemnification. The indemnification described
in clauses (ii) and (iii) above may be made only upon a determination that
indemnification is proper because the applicable standard of conduct has been
met. Such determination may be made by a majority of a quorum of disinterested
directors, independent legal counsel, the stockholders or a court of competent
jurisdiction.
Section 102(b)(7) of the DGCL permits a corporation to provide in its
certificate of incorporation that a director of the corporation shall not be
personally liable to the corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director, except for liability (i) for any
breach of the director's duty of loyalty to the corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL,
or (iv) for any transaction from which the director derived an improper personal
benefit. Section 10 of the Registrant's Amended and Restated Certificate of
Incorporation and Article IV of the Registrant's Bylaws provide for
indemnification of its directors, officers, employees and other agents to
II-1
19
the maximum extent permitted by law. In addition, the Registrant has entered
into Indemnification Agreements with its officers and directors pursuant to
which the Company has agreed to indemnify such individuals to the fullest extent
permitted by Delaware law, and maintains director and officer liability
insurance.
ITEM 16. EXHIBITS
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------- ------------------------------------------------
4.5 Form of Warrant of Registrant dated November 20,
1998.
5.1 Opinion of Venture Law Group, A Professional
Corporation
10.50 Common Stock and Warrant Purchase Agreement dated
as of October 12, 1998 by and among the Company and
each Selling Stockholder
23.1 Consent of Ernst & Young LLP, Independent Auditors
23.2 Consent of Counsel (included in Exhibit 5.1)
- ------------
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement to include any material
information with respect to the plan of distribution not previously disclosed in
the Registration Statement or any material change to such information in the
Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(4) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the Registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by
reference in the Registration Statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions referred to in Item
II-2
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15 above or otherwise, the Registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 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 against the
Registrant by such director, officer or controlling person in connection with
the securities being registered hereunder, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has caused this Amendment to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Santa Clara, State of California, on
the 14th day of December 1998.
CELTRIX PHARMACEUTICALS, INC.
By: /s/ Andreas Sommer
-------------------------------------
Andreas Sommer, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Andreas Sommer* President, Chief Executive Officer and December 14, 1998
- ---------------------------------------- Director
(Andreas Sommer) (Principal Executive Officer)
/s/ Donald D. Huffman Vice President, Finance and Administration December 14, 1998
- ---------------------------------------- and
(Donald D. Huffman) Chief Financial Officer
(Principal Financial and Accounting Officer)
/s/ Henry E. Blair* Director December 14, 1998
- ----------------------------------------
(Henry E. Blair)
/s/ Barry M. Sherman* Director December 14, 1998
- ----------------------------------------
(Barry M. Sherman)
/s/ James E. Thomas* Chairman of the Board of Directors December 14, 1998
- ----------------------------------------
(James E. Thomas)
* By /s/ Donald D. Huffman December 14, 1998
- ----------------------------------------
Attorney-in-Fact
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CELTRIX PHARMACEUTICALS, INC.
INDEX TO EXHIBITS
EXHIBIT
NUMBER
-------
4.5 Form of Warrant of Registrant dated November 20,
1998
5.1 Opinion of Venture Law Group, A Professional
Corporation
10.55 Common Stock and Warrant Purchase Agreement dated as of October
12, 1998 between the Company and each of the Selling
Stockholders
23.1 Consent of Ernst & Young LLP, Independent Auditors
23.2 Consent of Counsel (included in Exhibit 5.1)