As filed with the Securities and Exchange Commission on June 28, 1996
Registration No. 333-
- - --------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
-------------------
XOMA CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 94-2756657
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2910 Seventh Street
Berkeley, California 94710
(510) 644-1170
(Address, including ZIP code, and telephone number, including
area code, of registrant's principal executive offices)
--------------------
CHRISTOPHER J. MARGOLIN, ESQ.
XOMA CORPORATION
2910 Seventh Street
Berkeley, California 94710
(510) 644-1170
(Name, address, including ZIP code, and telephone number, including
area code, of agent for service)
--------------------
Copy to:
GEOFFREY E. LIEBMANN, ESQ.
CAHILL GORDON & REINDEL
80 Pine Street
New York, New York 10005
(212) 701-3000
--------------------
Approximate date of commencement of proposed sale to the public:
From time to time 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, 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. /_/
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
- - --------------------------------------------------------------------------------
Title of Each Class Proposed Proposed
of Securities Amount Maximum Maximum Amount of
To Be To Be Offering Price Aggregate Registration
Registered Registered per Unit(1) Offering Price(1) Fee
- - --------------------------------------------------------------------------------
Common Stock,
par value $.0005
per share...... 1,500,000(2) $6.53 $9,795,000 $3,378
- - ---------------------------------------------------------------------------------
(1) Estimated solely for purposes of computing the registration fee
pursuant to Rule 457(c).
(2) Includes a like number of Preferred Stock Purchase Rights (the
"Rights"). Since no separate consideration is paid for the
Rights, the registration fee is included in the fee for the
Common Stock.
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
the Registration Statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a), may determine.
- - -------------------------------------------------------------------------
SUBJECT TO COMPLETION, DATED JUNE 28, 1996
1,500,000 Shares
XOMA CORPORATION
COMMON STOCK
This Prospectus relates to 1,500,000 shares of Common
Stock, par value $.0005 per share (the "Common Stock"), of XOMA
Corporation (the "Company"), which have been registered for sale
from time to time by the selling stockholder named herein (the
"Selling Stockholder"). Any or all of the Common Stock being reg-
istered hereby may be sold from time to time to purchasers
directly by the Selling Stockholder. Alternatively, the Selling
Stockholder may from time to time offer the Common Stock through
underwriters, dealers or agents who may receive compensation in
the form of underwriting discounts, concessions or commissions
from the Selling Stockholder and/or the purchasers of Common Stock
for whom they may act as agent. The Company will receive no pro-
ceeds from the sale by the Selling Stockholder of the Common Stock
offered hereby. The shares of Common Stock to which this Prospec-
tus relates were issued to the Selling Stockholder in the Private
Placement (as defined herein). All Registration Expenses (as
defined herein) incurred in connection with the registration of
the Common Stock to which this Prospectus relates will be borne by
the Company. The Company has agreed to indemnify the Selling
Stockholder against certain liabilities, including certain liabil-
ities under the Securities Act of 1933, as amended (the "Securi-
ties Act"), or to contribute to payments which the Selling Stock-
holder may be required to make in respect thereof. See "Plan of
Distribution."
The Common Stock is traded on the Nasdaq National Market
under the symbol "XOMA." The last reported bid price of the Com-
mon Stock as reported by the Nasdaq National Market on June 27,
1996 was $6.50 per share.
The Common Stock offered hereby involves a high degree
of risk. See "Risk Factors."
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMIS-
SION 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.
---------------------
The date of this Prospectus is , 1996.
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.
-2-
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and is
required to file periodic reports, proxy statements and other information with
the Securities and Exchange Commission (the "SEC") relating to its business,
financial statements and other matters. Such reports, proxy statements and
other information may be inspected and copied at the public reference facilities
maintained by the SEC at Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the regional offices of the SEC located at 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661 and at Seven World Trade Center,
13th Floor, New York, New York 10048. Copies of such material can also be
obtained from the SEC at prescribed rates from the Public Reference Section of
the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549.
The Company has filed a Registration Statement on Form S-3 with the
SEC under the Securities Act with respect to the Common Stock offered hereby.
As permitted by the rules and regulations of the SEC, this Prospectus omits
certain information contained in the Registration Statement. For further
information, reference is made to the Registration Statement, including the
financial schedules and exhibits incorporated therein by reference or filed as a
part thereof. Statements made in this Prospectus as to the contents of any
contract, agreement or other document referred to are not necessarily complete,
and, in each instance, reference is made to the copy of such document filed as
an exhibit to the Registration Statement or otherwise filed with the SEC. Each
such statement shall be deemed qualified in its entirety by such reference.
----------------------
The Company will provide without charge to each person to whom a copy
of this Prospectus is delivered, upon the written or oral request of such
person, a copy of any or all of the documents incorporated herein by reference
(other than exhibits to such documents, unless such exhibits are specifically
incorporated by reference in such documents). Requests for such copies should
be directed to Director, Corporate Communications, XOMA Corporation, 2910
Seventh Street, Berkeley, California 94710, (510) 644-1170.
-3-
INFORMATION INCORPORATED BY REFERENCE
The following documents filed by the Company with the SEC pursuant to the
Exchange Act are hereby incorporated by reference in this Prospectus:
(1) Annual Report on Form 10-K for the fiscal year ended December 31,
1995 as amended by Amendment No. 1 on Form 10-K/A and Amendment No. 2 on
Form 10-K/A (File No. 0-14710);
(2) Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 1996 (File No. 0-14710);
(3) Current Report on Form 8-K dated April 22, 1996 (File No.
0-14710); and
(4) The description of XOMA's Common Stock in the Registration
Statement on Form 8-A dated June 9, 1986 filed on June 11, 1986 under
Section 12 of the Exchange Act, including any amendment or report for the
purpose of updating such description (Registration No. 33-4793).
All documents filed by the Company with the SEC pursuant to Section
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 and to be a
part hereof from the date any such document is filed.
Any statements contained in a document incorporated by reference in
this Prospectus shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained in this Prospectus (or
in any other subsequently filed document which also is incorporated by reference
in this Prospectus) modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed to constitute a part of this
Prospectus except as so modified or superseded.
--------------------
No person has been authorized in connection with the offering made
hereby to give any information or 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 any other person. This
Prospectus does not constitute an offer to sell or solicitation of any offer to
buy any of the securities offered hereby in any jurisdiction in which it is
unlawful to make such 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 date
subsequent to the date hereof.
-4-
RISK FACTORS
In addition to the other information included or incorporated by
reference in this Prospectus, the following factors should be considered
carefully in evaluating an investment in the shares of Common Stock offered by
this Prospectus.
No Assurance of Regulatory Approvals or Additional Product Development
XOMA's products are subject to rigorous preclinical and clinical
testing requirements and to approval processes by the U.S. Food and Drug
Administration (the "FDA") and similar authorities in other countries. The
Company's products are primarily regulated on a product-by-product basis under
the U.S. Food, Drug and Cosmetic Act and Section 351(a) of the Public Health
Service Act. Most of the Company's human therapeutic products are or will be
classified as biologic products and would be subject to regulation by the FDA
Center for Biologics Evaluation and Research. Approval of a biologic for
commercialization requires licensure of the product and the manufacturing
facilities.
In December 1992, XOMA submitted an investigational new drug
application ("IND") to the FDA to begin Phase I human testing of Neuprex(TM), a
recombinantly-derived fragment of human bactericidal/permeability-increasing
protein ("BPI"). In March 1993, the Company initiated human safety and
pharmacokinetic testing under the IND. In mid-1995, the Company initiated three
clinical efficacy trials testing the Neuprex(TM) products as a treatment for
bacterial endotoxin-related conditions. A fourth trial started in the first
quarter of 1996. No assurance can be given, however, that product approval for
Neuprex(TM) or any other BPI product will be obtained.
In March 1989, XOMA filed a product license application ("PLA") for
approval of E5(R), a monoclonal antibody product, for the treatment of gram-
negative sepsis. XOMA has completed several clinical trials of E5(R), including
two randomized, double-blind, placebo-controlled, multicenter Phase III studies
involving nearly 1,300 patients. In September 1991, an FDA advisory committee
heard E5(R) data presentations but made no recommendations regarding the
safety or efficacy of the product. In June 1992, the FDA informed XOMA that
E5(R) was not approvable without further clinical testing. In June 1993, a
third Phase III clinical trial of the E5(R) product commenced with narrower
entry criteria than the previous trials. The trial is being managed and
co-funded by Pfizer Inc. ("Pfizer"). There can be no assurance that the
continuing
-5-
trial will yield data that will result in licensure of the product in the United
States. In October 1993, Pfizer submitted an application for approval to market
E5(R) for endotoxin reduction to regulatory authorities in Japan. There can
be no assurance that such application will be approved.
During December 1991 and January 1992 the manufacturing facilities for
E5(R) were inspected for licensure by the FDA. XOMA believes that there are no
major manufacturing issues outstanding. Such licenses are currently pending and
will not be finalized unless and until E5(R) has been approved for sale.
Additionally, FDA licensure of XOMA's manufacturing facilities for Neuprex(TM)
will be required prior to any commercial use or sale of Neuprex(TM). No
assurance can be given that approval of the manufacturing facilities for E5(R)
or Neuprex(TM) will be obtained.
The antibodies currently used by XOMA in its E5(R) product are derived
from ascites produced in mice by Charles River Laboratories ("CRL"). If the
Company must obtain ascites from other sources, including its own facilities or
a different facility of CRL, regulatory licensure of such other sources will be
required. There can be no assurance that any such licensure will be obtained
without significant delay, expense or additional clinical testing.
The FDA has substantial discretion in both the product approval
process and manufacturing facility approval process and it is not possible to
predict at what point, or whether, the FDA will be satisfied with the Company's
submissions or whether the FDA will raise questions which may be material and
delay or preclude product approval or manufacturing facility approval. As
additional clinical data are accumulated, they will be submitted to the FDA and
may have a material impact on the FDA product approval process.
The Company has accumulated inventories of raw material and
intermediates for E5(R). Because the achievement, timing and terms of
regulatory licensures and subsequent sales of pharmaceutical products are
uncertain, there
can be no assurance that the inventories of raw materials and intermediates will
be usable. In connection with its October 1992 restructuring, the Company
established a $6.0 million reserve for a portion of its E5(R) inventory and
recorded a $2.5 million charge to earnings for future idle capacity. The
Company increased the reserve to $6.9 million in 1993 and to $11.1 million in
1995 to cover the entire value of the inventory. See "-- History of Losses and
Accumulated Deficit."
-6-
Other potential XOMA products will require significant additional
development, including extensive clinical testing. There can be no assurance
that any of the products under development by the Company will be developed
successfully, obtain the requisite regulatory approval or be successfully
manufactured or marketed.
Need for Additional Funds
XOMA has expended and expects to continue to expend substantial funds
in connection with research and development relating to its products and
production technologies, the scale-up of its production capabilities, extensive
human clinical trials and the protection of its intellectual property. The
Company's cash position and resulting investment income are sufficient to
finance the Company's currently anticipated needs for operating expenses,
working capital, equipment and current research projects through approximately
the end of 1997. The Company continues to evaluate strategic alliances,
potential partnerships and financing arrangements which would further strengthen
its competitive position and provide additional funding. However, no assurance
can be given that operations will generate meaningful funds, that additional
agreements for product development funding or strategic alliances can be
negotiated or that adequate additional financing will be available for the
Company to finance its own development on acceptable terms, if at all. If
adequate funds are not available, the business of the Company will be materially
adversely affected.
History of Losses and Accumulated Deficit
XOMA has experienced significant losses and, as of
March 31, 1996, had an accumulated deficit of approximately $313.5 million.
For the year ended December 31, 1995 and the quarter ended March 31,
1996, XOMA had net losses of approximately $22.5 million, or $0.95 per share,
and $7.0 million, or $0.25 per share, respectively. The Company expects to
incur additional losses in the future. Its ability to achieve a profitable
level of operations is dependent in large part on obtaining regulatory approval
for its products, entering into agreements for product development and
commercialization, and making a transition to a manufacturing and marketing
company. XOMA's ability to fund its ongoing operations is dependent on the
foregoing factors and on its ability to secure additional funds. There can be
no assurance that the Company will ever achieve a profitable level of operations
or that
-7-
cash flow from future operations will be sufficient to meet such obligations.
No Assurance of Effective Marketing
As of the date of this Prospectus, the Company has not entered into
any marketing agreements regarding its Neuprex(TM) product. The Company has
engaged an investment banking firm to assist it in completing one or more
strategic alliances with respect to the Neuprex(TM) product. The Company cannot
predict whether or when any such alliance(s) will be consummated.
The Company has entered into marketing agreements with Pfizer
regarding the E5(R) product, which provide Pfizer with exclusive rights to
E5(R) exchange for funding of certain clinical and development activities.
In January 1994, the territory covered by the agreements was redefined to
include only the countries of Japan and the United States. Pfizer also has a
limited first right to negotiate for future XOMA products, other than BPI-
derived products, if they will be used for the treatment, cure or prevention
of gram-negative sepsis. The agreements can be canceled with appropriate
notice upon reimbursement by Pfizer of certain of XOMA's research and
development expenses. In the third quarter of 1995, XOMA and Pfizer agreed
to modify the funding arrangement of the current E5(R) clinical trial and
the payment terms relating to certain patent litigation
costs (see Notes 1, 3 and 6 to the Company's Financial Statements, which are
incorporated herein by reference). No assurance can be given that Pfizer will
be able to market the Company's products successfully. The Company does not
currently have a marketing and sales organization for any of its products, and
no assurance can be given that XOMA will be able to develop the marketing and
sales organization necessary for the successful commercialization of its
products.
Assuming timely regulatory approval, which cannot be assured, the
successful commercialization of XOMA's products will be dependent to a large
extent upon the marketing capabilities of its pharmaceutical partners. The
Company believes that termination of its relationship with Pfizer could have a
material adverse effect on its future revenues and prospects.
No Assurance of Scale-up of Manufacturing Processes
The Company has never commercially introduced any pharmaceutical
products. In addition, there can be no assurance that the Company's, CRL's or
Pfizer's existing manufacturing facilities will receive regulatory approval in a
timely manner. If one or
-8-
more of the Company's products and the relevant manufacturing facilities were to
receive regulatory approval, no assurance can be given that these existing
manufacturing capabilities would be able to produce sufficient quantities of
such products to meet market demand. Additionally, no assurance can be given
that if additional manufacturing facilities are needed to meet market demand,
such manufacturing facilities will be successfully obtained or that the
requisite regulatory approval for such facilities will be obtained.
No Assurance of Patent Protection/Avoidance of Patent Infringement
Because of the length of time and the expense associated with bringing
new products through development and government approval to the marketplace, the
pharmaceutical industry has traditionally placed considerable importance on
obtaining and maintaining patent and trade secret protection for significant new
technologies, products and processes. The Company and other biotechnology firms
hold and are in the process of applying for a number of patents in the United
States and abroad to protect their products and important processes and also
have obtained or have the right to obtain exclusive licenses to certain patents
and applications filed by others. However, the patent position of biotechnology
companies generally is highly uncertain and no consistent policy regarding the
breadth of allowed claims has emerged from the actions of the U.S. Patent and
Trademark Office (the "Patent Office") with respect to biotechnology patents.
Legal considerations surrounding the validity of biotechnology patents continue
to be in transition, and no assurance can be given that historical legal
standards surrounding questions of validity will continue to be applied or that
current defenses as to issued biotechnology patents will in fact be considered
substantial in the future. Accordingly, no assurance can be given as to the
degree and range of protection any patents will afford against competitors with
similar technologies, that patents will issue, that others will not obtain
patents claiming aspects similar to those covered by the Company's patent
applications or as to the extent to which the Company will be successful in
avoiding any patents granted to others.
During the period from September 1994 to June 1996, the Patent Office
issued ten patents to the Company related to its BPI-based products, including
novel compositions, their manufacturer, formulation, assay and use. In
addition, the Company is the exclusive licensee of three BPI-related patents
owned by NYU. The Company and NYU have also received five more U.S. Notices of
-9-
Allowance, and the Company has more than twenty pending patent applications for
its BPI-based products.
The Company is aware of an agreement between Genentech, Inc.
("Genentech" or the "Selling Stockholder") and Incyte Pharmaceuticals Inc.
("Incyte") pursuant to which Incyte claims to hold worldwide rights to all
Incyte and Genentech technology related to BPI and through which Genentech will
receive a royalty on Incyte's BPI product sales under certain circumstances.
Between 1992 and 1994, the Patent Office issued five patents related to BPI to
Incyte (the "Incyte BPI Patents"). While the Company believes, based on the
opinion of its patent counsel, that it does not infringe any valid claims of any
of the Incyte BPI Patents, no assurance can be given that XOMA has not infringed
or will not infringe any valid claims of any of the Incyte BPI Patents.
If certain patents issued to others are upheld or if certain patent
applications filed by others issue and are upheld, the Company may require
certain licenses from others in order to develop and commercialize certain
potential products incorporating the Company's technology. There can be no
assurance that such licenses, if required, will be available on acceptable
terms.
While the Company pursues patent protection, due to uncertainty as to
the future utility of patent protection for biotechnology products or processes,
the Company also relies upon trade secrets, know-how and continuing
technological advancement to develop and maintain its competitive position. All
Company employees have signed confidentiality agreements under which they have
agreed not to use or disclose any of the Company's proprietary information.
Research and development contracts and relationships between the Company and its
scientific consultants and potential customers provide access to aspects of the
Company's know-how that are protected generally under confidentiality agreements
with the parties involved. There can be no assurance that all confidentiality
agreements will be honored or are enforceable.
No Assurance of Product Efficacy or the Ability To Compete Successfully
The biotechnology and pharmaceutical industries are subject to
continuous and substantial technological change. Competition in the areas of
recombinant DNA-based and monoclonal antibody-based technologies is intense and
expected to increase in the future as a number of established biotechnology
firms and large chemical and pharmaceutical companies diversify into the field.
A number of these large pharmaceutical and chemical
-10-
companies have enhanced their capabilities by entering into arrangements with,
or acquiring, biotechnology companies. Substantially all of these companies
have significantly greater financial resources, larger research and development
and marketing staffs and larger production facilities than those of the Company.
Moreover, certain of these companies have extensive experience in undertaking
preclinical testing and human clinical trials. These factors may enable such
companies to develop products and processes competitive with or superior to
those of the Company. In addition, a significant amount of research in
biotechnology is being carried out in universities and other non-profit research
organizations. These entities are becoming increasingly aware of the commercial
value of their work and may become more aggressive in seeking patent protection
and licensing arrangements. There can be no assurance that developments by
others will not render the Company's products or technologies obsolete or
uncompetitive.
Earlier in the 1990's, a number of corporations including Centocor,
Inc., Synergen, Inc. and Chiron, Inc. discontinued development of products (like
E5(R)) designed to treat gram-negative sepsis. These actions may have a
material adverse effect on the regulatory review of E5(R), and there can be
no assurance that E5(R) will receive regulatory approval in the United States
or that Pfizer will be able to market E5(R) effectively. The Company
believes that research and human testing is being conducted with other
products, some of which are designed to treat a broader population of sepsis
patients, including patients with gram-positive as well as gram-negative
sepsis. E5(R) is intended to treat only patients with severe gram-negative
sepsis. There can be no assurance that products currently unknown to the
Company will not prove to be more effective than or receive regulatory
approval prior to E5(R).
In addition, it is possible that Incyte or some other company is
developing one or more products based on BPI, and there can be no assurance that
such product(s) will not prove to be more effective than Neuprex(TM).
No Assurance of Supply of Monoclonal Antibodies
XOMA obtains the unpurified ascites containing the monoclonal
antibodies used in its E5(R) product from a single supplier, CRL, which has
multiple manufacturing sites. XOMA and CRL entered into a supply agreement in
1989 and renewed the agreement in 1991, committing CRL to supply and the Company
to purchase XOMA's anticipated ascites needs for five years after FDA licensure
of E5(R). Among the requirements for FDA licensure of E5(R)
-11-
is that the CRL manufacturing facilities be licensed by the FDA. If the Company
must obtain ascites from other sources, including its own facilities or a
different facility of the same supplier, regulatory approval of such other
sources will be required. Although the Company believes that it currently has
sufficient quantities of ascites for product launch and the first few years of
sales, any significant future interruption in supply could materially and
adversely affect the Company's business relating to E5(R).
Potential Impact of Healthcare Reform
The successful commercialization of the Company's products will depend
upon, among other things, the Company's marketing arrangements for its products.
The Company's ability to enter into marketing arrangements on acceptable terms
and/or the terms of its existing arrangements could be materially adversely
affected if legislation were to be enacted or regulations adopted which mandates
or otherwise results in the reduction or containment of the cost of phar-
maceutical products to consumers. In addition, if legislation were to be
enacted or regulations adopted which mandates or otherwise results in the
reduction of pharmaceutical product manufacturer's prices, the Company's
business could be materially adversely affected.
Uncertainties in Attracting and Retaining Qualified Personnel
The Company's success in developing marketable products and achieving
a competitive position will depend, in part, on its ability to attract and
retain qualified scientific and management personnel. Competition for such
personnel is intense, and no assurances can be given that the Company will be
able to attract or retain such personnel. The loss of a significant group of
key personnel would adversely affect the Company's product development efforts.
Risk of Product Liability Claims
The testing and marketing of medical products entails an inherent risk
of allegations of product liability. The Company believes it currently has
adequate levels of insurance for its clinical trials. The Company will seek to
obtain additional insurance, if needed, if and when the Company's products are
commercialized; however, there can be no assurance that adequate insurance
coverage will be available or be available at acceptable costs or that a product
liability claim would not materially
-12-
adversely affect the business or financial condition of the Company.
Certain Provisions Relating to Changes in Control
The Stockholder Rights Agreement, dated as of October 27, 1993 (the
"Rights Agreement"), between the Company and First Interstate Bank of
California, as Rights Agent, and the Company's Amended and Restated By-Laws
contain provisions that may have the effect of making more difficult an
acquisition of control of the Company that has not been approved by the
Company's Board of Directors. See "Description of Equity Securities -- Certain
Provisions Relating to Changes in Control of the Company."
Volatility of Stock Price
The market prices for securities of biotechnology companies, including
XOMA, have been highly volatile. See "Price Range of Common Stock and Dividend
Information." Announcements regarding the results of regulatory approval
filings, clinical trials or other testing, technological innovations or new
commercial products by XOMA or its competitors, government regulations,
developments concerning proprietary rights or public concern as to safety of
biotechnology have historically had, and are expected to continue to have, a
significant impact on the market price of XOMA's Common Stock.
THE COMPANY
The Company is a biopharmaceutical company developing products for the
treatment of infectious diseases and major complications due to infections,
traumatic injury and surgery. The Company's current product development
programs include:
- Neuprex(TM), a recombinantly-derived fragment of BPI and
XOMA's lead BPI product, which is currently in efficacy
clinical trials for four different indications.
- I-PREX(TM), a proprietary topical formulation of BPI for
the treatment of ophthalmic disorders, which is undergo-
ing preclinical testing as a treatment for corneal
ulcerations and transplants.
- Mycoprex(TM), a potent fungicidal peptide compound derived
from BPI that is currently in preclinical product
development.
-13-
- E5(R), XOMA's monoclonal antibody product, which is in a
Phase III trial in the United States as a treatment for
gram-negative sepsis and has been submitted for approval
in Japan as a treatment for endotoxemia.
The Company's cash position and resulting investment
income are sufficient to finance the Company's currently antici-
pated needs for operating expenses, working capital, equipment and
current research projects through approximately the end of 1997.
The Company continues to evaluate strategic alliances, potential
partnerships, and financing arrangements which would further
strengthen its competitive position and provide additional fund-
ing. The Company has engaged an investment banking firm to assist
in completing one or more strategic alliances with respect to the
Neuprex(TM) product. The Company cannot predict whether or when any
such alliance(s) will be consummated or whether additional funding
will be available when required.
On May 15, 1996, the Company announced the granting of
an exclusive license to Genentech, including a sublicense to IDEC
Pharmaceuticals Corporation, to intellectual property covering the
therapeutic use of chimeric IgG1 antibodies specific for the CD20
antigen on the surface of human B-cells. The Company received an
initial cash payment of $3 million and will receive royalties on
the sale of products employing the anti-CD20 technology that are
sold in the United States and in other countries where the Company
holds relevant patents.
Certain statements contained herein that are not related
to historical facts may contain "forward looking" information, as
that term is defined in the Private Securities Litigation Reform
Act of 1995. Such statements are based on the Company's current
beliefs as to the outcome and timing of future events, and actual
results may differ materially from those projected or implied in
the forward looking statements. Further, certain forward looking
statements are based upon assumptions of future events which may
not prove to be accurate. The forward looking statements involve
risks and uncertainties including, but not limited to, the risks
and uncertainties referred to under "Risk Factors" and elsewhere
herein and in other of the Company's Securities and Exchange Com-
mission filings.
-14-
PRICE RANGE OF COMMON STOCK AND DIVIDEND INFORMATION
The Company's Common Stock trades on the Nasdaq National
Market under the symbol "XOMA." The following table sets forth
the quarterly range of high and low reported sale prices of the
Company's Common Stock on the Nasdaq National Market for the peri-
ods indicated.
High Low
---- ---
1994:
First Quarter ............... $6 1/4 $3 3/4
Second Quarter .............. 4 1/4 2 1/2
Third Quarter ............... 3 5/8 2 1/4
Fourth Quarter .............. 4 1/8 2 3/16
1995:
First Quarter ............... $3 1/16 $1 1/8
Second Quarter .............. 2 7/8 1 9/32
Third Quarter ............... 4 1/4 1 11/16
Fourth Quarter .............. 4 1/8 1 7/8
1996:
First Quarter ............... 5 3/4 3 3/8
Second Quarter
(through June 27, 1996) ..... 8 1/8 3 7/8
On June 27, 1996 the last reported bid price of the Com-
mon Stock as reported on the Nasdaq National Market was $6.50 per
share. On June 27, 1996, there were approximately 2,700 record
holders of XOMA's Common Stock.
The Company has not paid cash dividends on its Common
Stock. The Company currently intends to retain earnings for use
in the development and expansion of its business and, therefore,
does not anticipate paying cash dividends on its Common Stock in
the foreseeable future.
-15-
SELLING STOCKHOLDER
The following table sets forth certain information
regarding the beneficial ownership of Common Stock by the Selling
Stockholder as of May 31, 1996, and the number of shares of Com-
mon Stock covered by this Prospectus.
Beneficial Ownership Number of Shares
Name and Address of of Common Stock prior of Common Stock
Selling Stockholder to the Offering Registered Hereby
- - -------------------- --------------------- -----------------
Number of Percent
Shares of Class
--------- --------
Genentech, Inc.
460 Point San Bruno Boulevard
South San Francisco, CA 94080 1,500,000(1) 4.5% 1,500,000
(1) Does not include an indeterminate number of shares of Common
Stock issuable upon conversion of the $5 million aggregate
principal amount of the convertible note outstanding under
the Convertible Subordinated Note Agreement dated as of
April 22, 1996, as amended, between the Company and
Genentech (the "Convertible Note") into shares of the Compa-
ny's Convertible Preferred Stock, Series E ("Series E Pre-
ferred Stock"), at the conversion price of $10,000 per
share, and the further conversion of such shares of Series E
Preferred Stock into shares of Common Stock. See "Descrip-
tion of Equity Securities - Series E Preferred Stock." The
Convertible Note and the 1,500,000 shares of Common Stock
being registered hereby were issued to Genentech in April
1996 in a transaction exempt from registration under the
Securities Act pursuant Section 4(2) thereof (the "Private
Placement"). The collaboration agreement to which the Pri-
vate Placement relates is described in the Company's Current
Report on Form 8-K, dated April 22, 1996, filed with the SEC
and incorporated herein by reference and has been filed with
the SEC as an exhibit to the Registration Statement of which
this Prospectus is a part.
-16-
DESCRIPTION OF EQUITY SECURITIES
The authorized capital stock of the Company consists
of 70,000,000 shares of Common Stock, $.0005 par value, of
which 33,432,932 shares were outstanding on June 27, 1996, and
1,500,000 shares of preferred stock, $.05 par value, of which
650,000 have been designated Series A Cumulative Preferred
Stock (the "Series A Preferred Stock"), of which none were out-
standing on such date, 5,000 have been designated Non-Voting
Cumulative Convertible Preferred Stock, Series D (the "Series D
Preferred Stock"), of which 4,100 were outstanding on such
date, and 7,500 have been designated Convertible Preferred
Stock, Series E (the "Series E Preferred Stock"), of which none
were outstanding on such date.
Common Stock
Holders of shares of Common Stock are entitled to one
vote per share on all matters to be voted on by stockholders.
The holders of Common Stock are entitled to receive such divi-
dends, if any, as may be declared from time to time by the Com-
pany's Board of Directors out of funds legally available there-
for. Upon liquidation or dissolution of the Company, the hold-
ers of the Common Stock are entitled to share ratably in the
distribution of assets, subject to the rights of the holders of
the Series D Preferred Stock or any other series of preferred
stock that may then be outstanding. There are no redemption or
sinking fund provisions with respect to the Common Stock. All
of the outstanding shares of Common Stock are validly issued,
fully paid and nonassessable.
Preferred Stock Purchase Rights
On October 27, 1993, the Board of Directors of the
Company declared a dividend distribution of one Preferred Stock
Purchase Right (a "Right") for each outstanding share of Common
Stock. Each Right entitles the holder to purchase from the
Company a unit consisting of one one-hundredth of a share (a
"Unit") of Series A Preferred Stock at a cash exercise price of
$30.00 per Unit, subject to adjustment.
The Rights are attached to all outstanding shares of
Common Stock, including the shares of Common Stock offered
hereby. The Rights will separate from the Common Stock and
will be distributed to holders of Common Stock upon the ear-
liest of (i) ten business days after the first public announce-
ment that a person or group of affiliated or associated persons
-17-
(an "Acquiring Person") has acquired beneficial ownership of
20% or more of the Common Stock then outstanding (the date of
said announcement being referred to as the "Stock Acquisition
Date"), (ii) ten business days following the commencement of a
tender offer or exchange offer that would result in a person or
group of persons becoming an Acquiring Person or (iii) the dec-
laration by the Board of Directors of the Company that any per-
son is an "Adverse Person" (the earliest of such dates, the
"Distribution Date").
The Board of Directors of the Company may generally
declare a person to be an Adverse Person after a declaration
that such person has become the beneficial owner of 10% or more
of the outstanding shares of Common Stock and a determination
that (a) such beneficial ownership by such person is intended
to cause or is reasonably likely to cause the Company to repur-
chase the Common Stock owned by such Person or to cause the
Company to enter into other transactions not in the best
long-term interests of the Company or (b) such beneficial own-
ership is reasonably likely to cause a material adverse impact
on the business or prospects of the Company. The Rights are
not exercisable until the Distribution Date and will expire on
December 31, 2002, unless previously redeemed or exchanged by
the Company.
In the event that a person becomes an Acquiring Per-
son or the Board of Directors determines that a person is an
Adverse Person, each holder of a Right will thereafter have the
right (a "Subscription Right") to receive upon exercise that
number of Units of Series A Preferred Stock having a market
value of two times the exercise price of the Rights. In the
event that, at any time following the Stock Acquisition Date,
(i) the Company consolidates with, or merges with and into, any
person, and the Company is not the surviving corporation;
(ii) any person consolidates with the Company, or merges with
and into the Company and the Company is the continuing or sur-
viving corporation of such merger and, in connection with such
merger, all or part of the shares of Common Stock are changed
into or exchanged for other securities of any other person or
cash or any other property, or (iii) 50% or more of the Compa-
ny's assets are sold or otherwise transferred, each holder of a
Right shall thereafter have the right (a "Merger Right") to
receive, upon exercise, common stock of the acquiring company
having a market value equal to two times the exercise price of
the Rights. Rights that are beneficially owned by an Acquiring
or Adverse Person may, under certain circumstances, become null
and void.
-18-
At any time after a person becomes an Acquiring Per-
son or the Board of Directors of the Company determines that a
person is an Adverse Person, the Board of Directors of the Com-
pany may exchange all or any part of the then outstanding and
exercisable Rights for shares of Common Stock or Units of
Series A Preferred Stock at an exchange ratio of one share of
Common Stock or one Unit of Series A Preferred Stock per Right.
Notwithstanding the foregoing, the Board of Directors of the
Company generally will not be empowered to effect such exchange
at any time after any person becomes the beneficial owner of
50% or more of the Common Stock then outstanding.
The Rights may be redeemed in whole, but not in part,
at a price of $.001 per Right by the Board of Directors of the
Company at any time prior to the date on which a person is
declared to be an Adverse Person, the tenth business day after
the Stock Acquisition Date, the occurrence of an event giving
rise to the Merger Right or the expiration date of the Rights
Agreement.
The Series A Preferred Stock
There are currently no shares of Series A Preferred
Stock outstanding. Pursuant to the Certificate of Designation
relating to the Series A Preferred Stock, subject to the rights
of holders of any shares of any series of preferred stock rank-
ing prior and superior (such as the Series D Preferred Stock),
the holders of Series A Preferred Stock are entitled to
receive, when, as and if declared by the Board of Directors of
the Company out of funds legally available for the purpose,
quarterly dividends payable in cash on the first day of March,
June, September and December in each year (a "Dividend Payment
Date"), commencing on the first Dividend Payment Date after the
first issuance of a share or fraction of a share of Series A
Preferred Stock, in an amount per share equal to the greater of
(a) $1.00 or (b) 100 times the aggregate per share amount of
all cash dividends, plus 100 times the aggregate per share
amount of all non-cash dividends or other distributions, other
than a dividend payable in shares of Common Stock, declared on
the Common Stock since the immediately preceding Dividend Pay-
ment Date, or, with respect to the first Dividend Payment Date,
since the first issuance of Series A Preferred Stock.
In addition to any other voting rights required by
law, holders of Series A Preferred Stock shall have the right
to vote on all matters submitted to a vote of stockholders of
the Company with each share of Series A Preferred Stock
-19-
entitled to 100 votes. Except as otherwise provided by law,
holders of Series A Preferred Stock and holders of Common Stock
shall vote together as one class on all matters submitted to a
vote of stockholders of the Company.
Unless otherwise provided in a Certificate of Desig-
nation relating to a subsequently designated series of pre-
ferred stock of the Company, the Series A Preferred Stock shall
rank junior to any other series of preferred stock as to the
payment of dividends and distribution of assets on liquidation,
dissolution or winding-up and shall rank senior to the Common
Stock. Upon any liquidation, dissolution or winding-up of the
Company, no distributions shall be made to holders of shares of
stock ranking junior to the Series A Preferred Stock unless,
prior thereto, the holders of Series A Preferred Stock shall
have received an amount equal to accrued and unpaid dividends
and distributions, whether or not declared, to the date of such
payment, plus an amount equal to the greater of (1) $100.00 per
share or (2) an aggregate amount per share equal to 100 times
the aggregate amount to be distributed per share to holders of
Common Stock or to the holders of stock ranking on parity with
the Series A Preferred Stock, except distributions made ratably
on the Series A Preferred Stock and all other such parity stock
in proportion to the total amount to which the holders of all
such shares are entitled upon such liquidation, dissolution or
winding-up.
If the Company shall enter into any consolidation,
merger, combination or other transaction in which shares of
Common Stock are exchanged for or changed into cash, other
securities and/or any other property, then any shares of
Series A Preferred Stock outstanding shall at the same time be
similarly exchanged or changed in an amount per share equal to
100 times the aggregate amount of cash, securities and/or other
property, as the case may be, into which or for which each
share of Common Stock is changed or exchanged.
The shares of Series A Preferred Stock shall not be
redeemable.
The Series B Preferred Stock
The 18,775 shares of Senior Convertible Preferred
Stock, Series B, issued by the Company in a private placement
consummated in December 1993 in reliance upon the exemption
contained in Section 4(2) of the Securities Act, have been con-
verted into an aggregate of 3,751,454 shares of Common Stock.
-20-
The Series C Preferred Stock
The 4,799 shares of Convertible Preferred Stock,
Series C, issued by the Company in an offering made to foreign
investors in reliance on Regulation S under the Securities Act
in August 1995, have been converted into an aggregate of
2,728,190 shares of Common Stock.
The Series D Preferred Stock
The 4,100 outstanding shares of Series D Preferred
Stock were issued by the Company to GFL-B in an offering of
Series D Preferred Stock and Common Stock exempt from the reg-
istration requirements of the Securities Act pursuant to Regu-
lation D thereunder in March 1996. Pursuant to the Certificate
of Designations relating to the Series D Preferred Stock, the
holders thereof are entitled to receive, when, as and if
declared by the Board of Directors of the Company, out of funds
legally available therefor, dividends at an annual rate of
$40.00 per share, payable semi-annually in arrears, commencing
June 30, 1996. Dividends are payable, at the option of the
Company, in cash, in Common Stock or any combination of cash
and Common Stock. In addition, the Company may elect not to
declare or make payment of any dividend, in which event the
accrued and unpaid dividends shall be taken into account at the
time of conversion, as described below.
The Series D Preferred Stock ranks senior with
respect to rights on liquidation, winding-up and dissolution of
the Company to all classes of Common Stock. Upon any voluntary
or involuntary liquidation, dissolution or winding-up of the
Company, holders of Series D Preferred Stock will be entitled
to receive $1,000 per share, plus accrued and unpaid dividends,
before any distribution is made on the Common Stock or any pre-
ferred stock of the Company ranking junior as to liquidation
rights to the Series D Preferred Stock, but only after any pay-
ments with respect to liquidation preference of preferred stock
ranking senior as to liquidation rights to the Series D Pre-
ferred Stock are fully met. Except as may be required by law
and except with respect to certain actions which may adversely
affect the holders of Series D Preferred Stock, the holders of
Series D Preferred Stock are not entitled to vote on any matter
submitted to a vote of stockholders of the Company.
The holders of Series D Preferred Stock have the
right to convert shares of Series D Preferred Stock into Common
Stock at a conversion price equal to 80% of the then current
-21-
market price of the Common Stock on or after the 75th day fol-
lowing the first date of original issuance of any shares of
Series D Preferred Stock; provided that in no event shall GFL-B
or GFL Performance be entitled to convert any shares of Series
D Preferred Stock if the issuance of shares of Common Stock
upon a proposed conversion, when the shares to be so issued are
counted together with other shares of Common Stock beneficially
owned by GFL-B, GFL Performance or any associate or affiliate
of or adviser to GFL-B or GFL Performance (collectively, the
"GFL Persons") (other than shares so owned through ownership of
Series D Preferred Stock), would result in a GFL Person benefi-
cially owning more than 4.9% of the outstanding shares of Com-
mon Stock; and provided, further, that in the event that for
any 15 trading days during a 20 consecutive trading day period
the conversion of all the outstanding shares of Series D Pre-
ferred Stock upon surrender thereof would require the issuance
of more than approximately 4.5 million shares of Common Stock
in the aggregate with respect to all conversions of Series D
Preferred Stock, the Company will have the option to either
redeem the Series D Preferred Stock at a redemption price of
$1,250 per share or, with stockholder approval, convert such
Series D Preferred Stock into shares of Common Stock. In addi-
tion, subject to the proviso of the immediately preceding sen-
tence, the Corporation has the right, so long as it is in mate-
rial compliance with its obligations to the holders of the
Series D Preferred Stock, exercisable at any time on or after
January 15, 1998, to require the holders thereof to convert
their shares of Series D Preferred Stock into Common Stock at a
conversion price equal to 80% of the then current market price
of the Common Stock.
Each share of Series D Preferred Stock may be
redeemed at the option of the Company at any time on or after
October 1, 1996 at a redemption price of $1,250 per share.
The Series E Preferred Stock
There are currently no shares of Series E Preferred
Stock outstanding. The 7,500 shares of Series E Preferred
Stock have been designated by the Company for issuance upon
conversion of the convertible subordinated loans to the Company
made and to be made by Genentech in connection with the funding
of the Company's development costs for anti-CD11a through 1998.
Such loans are and will be convertible into Series E Preferred
Stock upon the occurrence of certain events relating to certain
regulatory approvals, payment defaults, prepayments and other
circumstances. Pursuant to the Certificate of Designation
-22-
relating to the Series E Preferred Stock, the holders of shares
of Series E Preferred Stock will not be entitled to receive any
dividends on shares of the Series E Preferred Stock.
The Series E Preferred Stock will rank senior with
respect to rights on liquidation, winding-up and dissolution of
the Company to all classes of Common Stock. Upon any voluntary
or involuntary liquidation, dissolution or winding-up of the
Company, holders of Series E Preferred Stock will be entitled
to receive $10,000 per share of Series E Preferred Stock before
any distribution is made on the Common Stock. The holders of
shares of Series E Preferred Stock will have no voting rights,
except as required under the General Corporation Law of the
State of Delaware.
The holders of Series E Preferred Stock will have the
right to convert shares of Series E Preferred Stock into shares
of Common Stock at a conversion price equal to the current mar-
ket price of the Common Stock (determined as provided below).
The current market price will be determined (a) for shares of
Series E Preferred Stock issued in connection with a conversion
of one or more of the convertible subordinated loans upon cer-
tain regulatory approvals, payment defaults or in certain other
circumstances, as of the first date on which such a conversion
occurs, and (b) for shares of Series E Preferred Stock issued
in connection with certain prepayments of one or more of the
convertible subordinated loans or a conversion thereof in cer-
tain other circumstances, as of the date of the issuance of
such shares of Series E Preferred Stock.
The Series E Preferred Stock will be automatically
converted into Common Stock at its then effective conversion
rate immediately upon the transfer by the initial holder to any
third party which is not an affiliate of such holder.
The Company will have the right, at any time and from
time to time, to redeem any or all shares of Series E Preferred
Stock for cash in an amount equal to the conversion price mul-
tiplied by the number of shares of Common Stock into which each
such share of Series E Preferred Stock would then be
convertible.
Certain Provisions Relating to Changes in Control of the
Company
Certain provisions of the Amended and Restated
By-Laws of the Company (the "By-Laws") and the Rights
-23-
(summarized above) may delay, defer or prevent a change in con-
trol of the Company that a stockholder might consider to be in
his or her best interest, including those applicable to a
change in control of the Company that might result in a premium
over the market price for the shares of Common Stock held by
stockholders.
Special Meeting of Stockholders. The By-Laws provide
that meetings of stockholders of the Company may be called only
by the Chief Executive Officer or the Board of Directors of the
Company. This provision may make it more difficult for stock-
holders to take action opposed by management or the Board of
Directors of the Company.
Advance Notice Requirements for Stockholder Proposals
and Director Nominations. The By-Laws provide that stockhold-
ers seeking to bring business before an annual meeting of
stockholders or to nominate candidates for election as direc-
tors at an annual meeting of stockholders, must provide timely
notice thereof in writing. To be timely, a stockholder's
notice must be received by the Secretary of the Company not
less than sixty nor more than ninety days prior to the first
anniversary of the preceding year's annual meeting, or in the
case of an annual meeting that is called for a date that is
more than thirty days or delayed by more than sixty days from
such anniversary, notice by the stockholder to be timely must
be so received not earlier than the ninetieth day prior to such
annual meeting and not later than the close of business on the
later of (1) the sixtieth day prior to such annual meeting or
(2) the tenth day following the day on which such notice of the
date of the annual meeting was mailed or publicly disclosed.
These provisions may preclude some stockholders from bringing
matters before an annual meeting of stockholders or making nom-
inations for directors at an annual meeting of stockholders.
Preferred Stock Purchase Rights. The provisions of
the Rights and the Series A Preferred Stock may make it more
difficult or more costly for a person or group of persons to
acquire control of the Company in a transaction opposed by the
Board of Directors of the Company. See "-- Preferred Stock
Purchase Rights" and "-- The Series A Preferred Stock."
Transfer Agent and Registrar
First Interstate Bank of California is the transfer
agent and registrar of the Common Stock.
-24-
PLAN OF DISTRIBUTION
Any or all of the Common Stock being registered
hereby may be sold from time to time to purchasers directly by
the Selling Stockholder. Alternatively, the Selling Stock-
holder may from time to time offer the Common Stock through
underwriters, dealers or agents who may receive compensation in
the form of underwriting discounts, concessions or commissions
from the Selling Stockholder and/or the purchasers of Common
Stock for whom they may act as agent. The Selling Stockholder,
and any such underwriters, dealers or agents that participate
in the distribution of Common Stock, may be deemed to be under-
writers, and any profit on the sale of the Common Stock by them
and any discounts, commissions or concessions received by them
may be deemed to be underwriting discounts and commissions
under the Securities Act. At the time a particular offer of
Common Stock is made, to the extent required, a supplement to
this Prospectus will be distributed which will set forth the
terms of the offering, including the name or names of any
underwriters, dealers or agents, the purchase price paid by any
underwriter for Common Stock purchased from the Selling Stock-
holder and any discounts, commissions and other items consti-
tuting compensation from the Selling Stockholder and any dis-
counts, commissions or concessions allowed or reallowed or paid
to dealers, including the proposed selling price to the public.
The Company will receive no proceeds from the sale by the Sell-
ing Stockholder of the Common Stock offered hereby.
In connection with distributions of the Common Stock,
the Selling Stockholder may enter into hedging transactions
with broker-dealers and the broker-dealers may engage in short
sales of the Common Stock in the course of hedging the posi-
tions they assume with the Selling Stockholder. The Selling
Stockholder also may sell the Common Stock short and deliver
the Common Stock to close out such short positions. The Sell-
ing Stockholder also may enter into option or other transac-
tions with broker-dealers that involve the delivery of the Com-
mon Stock to the broker-dealers, which may then resell or
otherwise transfer such Common Stock. The Selling Stockholder
also may loan or pledge the Common Stock to a broker-dealer and
the broker-dealer may sell the Common Stock so loaned or upon a
default may sell or otherwise transfer the pledged Common
Stock.
The shares of Common Stock covered by this Prospectus
are shares of Common Stock purchased by Genentech in the Pri-
vate Placement.
-25-
All Registration Expenses incurred in connection with
the registration of the Common Stock to which this Prospectus
relates, estimated to be approximately $110,000, will be borne
by the Company. As and when the Company is required to update
this Prospectus, it may incur additional expenses in excess of
this estimated amount. "Registration Expenses" means all
expenses incurred by the Company in complying with the regis-
tration rights granted to the Selling Stockholder pursuant to
which the Registration Statement to which this Prospectus
relates has been filed.
The Company has agreed to indemnify the Selling
Stockholder against certain liabilities, including certain lia-
bilities under the Securities Act, or to contribute to payments
which the Selling Stockholder may be required to make in
respect thereof.
LEGAL OPINIONS
The validity of the shares of Common Stock to which
this Prospectus relates has been passed upon for the Company by
Cahill Gordon & Reindel, a partnership including a professional
corporation, located in New York, New York. Opinions regarding
certain legal matters with respect to patents and patent law
have been provided to the Company by Marshall, O'Toole,
Gerstein, Murray & Borun, located in Chicago, Illinois.
EXPERTS
The financial statements of XOMA incorporated by ref-
erence in this Prospectus and elsewhere in the Registration
Statement have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their report with respect
thereto, and are incorporated by reference herein in reliance
upon the authority of said firm as experts in giving said
report.
===================================== ===================================
No dealer, salesman or other per-
son has been authorized to give
any information or to make representa-
tions other than those contained in
this Prospectus, and, if given or 1,500,000 Shares
made, such information or representa-
tions must not be relied upon as having XOMA Corporation
been authorized by the Company or the
Selling Stockholder. Neither the Common Stock
delivery of this Prospectus nor any
sale made hereunder shall, under any
circumstances, create an implication
that the information herein is correct
as of any time subsequent to its date. -------------
This Prospectus does not constitute an
offer or solicitation by anyone in any PROSPECTUS
jurisdiction in which such offer
or solicitation is not authorized or in -------------
which the person making such offer or
solicitation is not qualified to do so
or to anyone to whom it is unlawful to
make such offer or solicitation.
------------------
TABLE OF CONTENTS
Page
Available Information...........
Information Incorporated
by Reference..................
Risk Factors....................
The Company.....................
Price Range of Common Stock
and Dividend Information......
Selling Stockholder.............
Description of Equity
Securities....................
Plan of Distribution............
Legal Opinions..................
Experts.........................
, 1996
===================================== ===================================
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The estimated expenses in connection with this offer-
ing are as follows:
Amount
to be Paid
SEC registration fee ...................... $ 3,378
Nasdaq fee ................................ 17,500
Legal fees and expenses (including
Blue Sky fees and expenses) ............. 75,000
Accounting fees and expenses .............. 3,000
Miscellaneous ............................. 11,122
--------
Total ..................................... $110,000
--------
Item 15. Indemnification of Directors and Officers
The Delaware General Corporation Law provides for
indemnification of directors, officers, employees and agents,
subject to certain limitations (Del. Code, Title 8 Sec. 145).
Article VII of the Company's Bylaws provides that expenses
incurred by an officer or director of the Company in defending
a civil or criminal action, suit or proceeding shall be paid by
the Company in advance of a final disposition of the action,
suit or proceeding upon receipt by the Company of an undertak-
ing by the officer or director that he or she will repay such
expenses if it is ultimately determined that he or she is not
entitled to indemnification under the Delaware General Corpora-
tion Law.
As permitted by Section 102 of the Delaware General
Corporation Law, the Company's Certificate of Incorporation
contains provisions eliminating a director's personal liability
for monetary damages to the Company and its stockholders aris-
ing from a breach of a director's fiduciary duty except for
liability under Section 174 of the Delaware General Corporation
Law or liability for any breach of the director's duty of loy-
alty to the Company or its stockholders, for acts or omissions
not in good faith or which involve intentional misconduct or a
knowing violation of law or for any transaction by which the
director derived an improper personal benefit. The Company has
also entered into indemnification agreements with its directors
II-1
and officers providing for indemnification and advancements of
expenses to the fullest extent permitted under Delaware law.
Item 16. Exhibits and Financial Statement Schedules
(a) Exhibits
Exhibit
Number
-------
4.1 Restated Certificate of Incorporation(1)
4.2 Certificate of Amendment of Restated Certificate
of Incorporation
4.3 Amended and Restated By-Laws(2)
4.4 Stockholder Rights Agreement dated October 27,
1993 by and between the Company and First Inter-
state Bank of California as Rights Agent(3)
4.5 Certificate of Designations of Non-Voting Cumula-
tive Convertible Preferred Stock, Series D(4)
4.6 Certificate of Designation of Convertible Pre-
ferred Stock, Series E(4)
4.7 Amended Certificate of Designation of Convertible
Preferred Stock, Series E
5.1 Opinion of Cahill Gordon & Reindel
10.1 Collaboration Agreement, dated as of April 22,
1996, between XOMA Corporation and Genentech,
Inc. (with certain confidential information
omitted)
10.2 Common Stock and Convertible Note Purchase Agree-
ment, dated as of April 22, 1996, between XOMA
Corporation and Genentech, Inc. (with certain
confidential information omitted)
10.3 Convertible Subordinated Note Agreement, dated
April 22, 1996, between XOMA Corporation and
Genentech (with certain confidential information
omitted)
II-2
10.4 Amendment to Convertible Subordinated Note Agree-
ment, dated June 13, 1996, between XOMA Corpora-
tion and Genentech, Inc.
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Marshall, O'Toole, Gerstein, Murray &
Borun
II-3
23.3 Consent of Cahill Gordon & Reindel (included in
Exhibit 5.1)
24.1 Power of Attorney (included on the signature page
hereto)
____________________
(1) Incorporated by reference to the Company's Registration
Statement on Form S-3 (File No. 33-59379).
(2) Incorporated by reference to the Company's Registration
Statement on Form S-3 (File No. 33-74982).
(3) Incorporated by reference to the Company's Current Report
on Form 8-K dated October 27, 1993.
(4) Incorporated by reference to the Company's Registration
Statement on Form S-3 (File No. 333-2493).
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 regis-
tration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, repre-
sent a fundamental change in the information set forth in
the registration statement;
(iii) 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;
Provided, however, that paragraphs (1)(i) and (1)(ii)
do not apply if the registration statement is on Form S-3 or
Form S-8, and the information required to be included in the
post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13
II-4
or Section 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any lia-
bility under the Securities Act of 1933, each post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered herein, 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.
The undersigned registrant hereby undertakes that,
for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pur-
suant to Section 13(a) or 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 herein, 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 foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Com-
mission 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 regis-
trant 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 direc-
tor, officer or controlling person in connection with the secu-
rities being registered, the registrant will, unless in the
opinion of 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.
The undersigned registrant hereby undertakes to
deliver or cause to be delivered with the prospectus, to each
person to whom the prospectus is sent or given, the latest
annual report to security holders that is incorporated by ref-
erence in the prospectus and furnished pursuant to and meeting
II-5
the requirements of Rule 14a-3 or Rule 14c-3 under the Securi-
ties Exchange Act of 1934; and, where interim financial infor-
mation required to be presented by Article 3 of Regulation S-X
is not set forth in the prospectus, to deliver, or cause to be
delivered to each person to whom the prospectus is sent or
given, the latest quarterly report that is specifically incor-
porated by reference in the prospectus to provide such interim
financial information.
II-6
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, 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 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the
City of Berkeley, State of California, on June 28, 1996.
XOMA CORPORATION
By: /s/John L. Castello
------------------------
John L. Castello
Chairman of the Board,
President and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person
whose signature appears below constitutes and appoints John L.
Castello and Christopher J. Margolin, and each of them, as his
true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) and supple-
ments to this registration statement, and to file the same,
with the Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and
perform each and every act and thing requisite and necessary to
be done in connection therewith, as fully to all intents and
purposes as he might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, or
any of them, or their or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
II-7
Pursuant to the requirements of the Securities Act of
1933, this Registration Statement has been signed below by the
following persons on behalf of the registrant and in the capac-
ities and on the dates indicated.
Signature Title Date
- - --------- ----- ----
/s/John L. Castello Chairman of the Board,
- - ------------------- President and Chief
John L. Castello Executive Officer
(Principal Executive
Officer) June 28, 1996
/s/Patrick J. Scannon Chief Scientific and
- - --------------------- Medical Officer and
Patrick J. Scannon Director June 28, 1996
/s/Peter B. Davis Vice President,
- - --------------------- Finance and Chief
Peter B. Davis Financial Officer
(Principal Financial
and Accounting Officer) June 28, 1996
/s/James G. Andress Director June 28, 1996
- - ----------------------
James G. Andress
/s/William K. Bowes, Jr. Director June 28, 1996
- - ----------------------
William K. Bowes, Jr.
/s/Arthur Kornberg Director June 28, 1996
- - ----------------------
Arthur Kornberg
/s/Steven C. Mendell Director June 28, 1996
- - ----------------------
Steven C. Mendell
/s/W. Denman Van Ness Director June 28, 1996
- - -----------------------
W. Denman Van Ness
/s/Gary Wilcox Director June 28, 1996
- - -----------------------
Gary Wilcox
II-8
EXHIBIT INDEX
Exhibit
Number Page
- - ------- ----
4.1 Restated Certificate of Incorporation(1)
4.2 Certificate of Amendment of Restated
Certificate of Incorporation
4.3 Amended and Restated By-Laws(2)
4.4 Stockholder Rights Agreement dated Octo-
ber 27, 1993 by and between the Company
and First Interstate Bank of California
as Rights Agent(3)
4.5 Certificate of Designations of
Non-Voting Cumulative Convertible Pre-
ferred Stock, Series D (4)
4.6 Certificate of Designation of Convert-
ible Preferred Stock, Series E (4)
4.7 Amended Certificate of Designation of
Convertible Preferred Stock, Series E
5.1 Opinion of Cahill Gordon & Reindel
10.1 Collaboration Agreement, dated as of
April 22, 1996, between XOMA Corporation
and Genentech, Inc. (with certain confi-
dential information omitted)
10.2 Common Stock and Convertible Note Pur-
chase Agreement, dated as of April 22,
1996, between XOMA Corporation and
Genentech, Inc. (with certain confiden-
tial information omitted)
10.3 Convertible Subordinated Note Agreement,
dated April 22, 1996, between XOMA Cor-
poration and Genentech (with certain
confidential information omitted)
10.4 Amendment to Convertible Subordinated
Note Agreement, dated June 13, 1996,
between XOMA Corporation and Genentech,
Inc.
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Marshall, O'Toole, Gerstein,
Murray & Borun
23.3 Consent of Cahill Gordon & Reindel
(included in Exhibit 5.1)
25.1 Power of Attorney (included on signature
page to Registration Statement)
- - -------------------------
(1) Incorporated by reference to the Company's Registration
Statement on Form S-3 (File No. 33-59379).
(2) Incorporated by reference to the Company's Registration
Statement on Form S-3 (File No. 33-74982).
(3) Incorporated by reference to the Company's Current Report
on Form 8-K dated October 27, 1993.
(4) Incorporated by reference to the Company's Registration
Statement on Form S-3 (File No. 333-2493).