0000912057-01-535725.txt : 20011019
0000912057-01-535725.hdr.sgml : 20011019
ACCESSION NUMBER: 0000912057-01-535725
CONFORMED SUBMISSION TYPE: S-3/A
PUBLIC DOCUMENT COUNT: 3
FILED AS OF DATE: 20011017
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: BIO TECHNOLOGY GENERAL CORP
CENTRAL INDEX KEY: 0000722104
STANDARD INDUSTRIAL CLASSIFICATION: MEDICINAL CHEMICALS & BOTANICAL PRODUCTS [2833]
IRS NUMBER: 133033811
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: S-3/A
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-65626
FILM NUMBER: 1760911
BUSINESS ADDRESS:
STREET 1: 70 WOOD AVE S
CITY: ISELIN
STATE: NJ
ZIP: 08830
BUSINESS PHONE: 9086328800
MAIL ADDRESS:
STREET 1: 70 WOOD AVENUE SOUTH
CITY: ISELIN
STATE: NJ
ZIP: 08830
S-3/A
1
a2061304zs-3a.txt
S-3/A
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 17, 2001
REGISTRATION NO. 333-65626
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------------
BIO-TECHNOLOGY GENERAL CORP.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE
(State or Other Jurisdiction of Incorporation
or Organization)
13-3033811
(I.R.S. Employer Identification Number)
---------------------------------------
70 WOOD AVENUE SOUTH
ISELIN, NEW JERSEY 08330
(732) 632-8800
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
-----------------------------------------
ROBERT SHAW, ESQ.
BIO-TECHNOLOGY GENERAL CORP.
70 WOOD AVENUE SOUTH
ISELIN, NEW JERSEY 08330
(732) 632-8800
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
--------------------------------
Copies of all communications, including all communications sent to the
agent for service, should be sent to:
CARL KAPLAN, ESQ.
ROY GOLDMAN, ESQ.
FULBRIGHT & JAWORSKI L.L.P.
666 FIFTH AVENUE
NEW YORK, NEW YORK 10103-3198
--------------------------------
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 plan, 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, as amended, 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. |_|
--------------------------------
This 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.
The information in this prospectus is not complete and may be changed. 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 before the registration statement becomes effective.
This prospectus is not an offer to sell securities and is not soliciting an
offer to buy these securities in any state where the offer or sale is not
permitted.
SUBJECT TO COMPLETION, DATED OCTOBER 17, 2001
BIO-TECHNOLOGY GENERAL CORP.
2,344,657 SHARES OF COMMON STOCK
-------------------------
In connection with our acquisition of Myelos Corporation in March 2001,
we issued 2,344,657 shares of our common stock to the shareholders of Myelos.
This prospectus may be used by former shareholders of Myelos to resell the
shares of our common stock issued to them in the Myelos acquisition.
The selling stockholders (and their donees and pledgees) may offer
their BTG common stock through public or private transactions, on or off the
United States exchanges, at prevailing market prices, or at privately negotiated
prices. We will not receive any of the proceeds from the sale of these shares.
Bio-Technology General Corp.'s common stock trades on the Nasdaq
National Market under the ticker symbol "BTGC." On October 16, 2001, the closing
sale price of the common stock was $7.43.
-------------------------
SEE "RISK FACTORS" BEGINNING ON PAGE 4 FOR A DISCUSSION OF CERTAIN
RISKS AND UNCERTAINTIES THAT YOU SHOULD CONSIDER BEFORE YOU INVEST IN THE SHARES
BEING SOLD WITH THIS PROSPECTUS.
-------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
-------------------------
The date of this Prospectus is October , 2001.
TABLE OF CONTENTS
PAGE
----
Our Company.......................................................................................................3
Risk Factors......................................................................................................4
Special Note Regarding Forward-Looking Statements................................................................13
Recent Developments..............................................................................................13
Use of Proceeds..................................................................................................16
Dividend Policy..................................................................................................16
Selling Stockholders.............................................................................................17
Plan of Distribution.............................................................................................18
Legal Matters....................................................................................................20
Experts..........................................................................................................20
Where You Can Find More Information..............................................................................20
Incorporation of Certain Documents by Reference..................................................................21
------------------------------
We have not authorized any person to make a statement that differs from
what is in this prospectus. If any person does make a statement that differs
from what is in this prospectus, you should not rely on it. This prospectus is
not an offer to sell, nor is it seeking an offer to buy, these securities in any
state in which the offer or sale is not permitted. The information in this
prospectus is complete and accurate as of its date, but this information may
change after that date.
2
OUR COMPANY
THIS SUMMARY PROVIDES AN OVERVIEW OF SELECTED INFORMATION AND DOES NOT
CONTAIN ALL THE INFORMATION YOU SHOULD CONSIDER. YOU SHOULD CAREFULLY READ THE
ENTIRE PROSPECTUS, INCLUDING THE SECTION ENTITLED "RISK FACTORS" AND THE
INFORMATION INCORPORATED BY REFERENCE, BEFORE MAKING AN INVESTMENT DECISION.
We are engaged in the research, development, manufacture and marketing
of biopharmaceutical products. Through a combination of internal research and
development, acquisitions, collaborative relationships and licensing
arrangements, BTG has developed a portfolio of therapeutic products, including
eight products that have received regulatory approval for sale and are currently
being marketed. Additionally, we have four products in registration or clinical
trials and several products in pre-clinical development. We distribute our
products on a worldwide basis primarily through a direct sales force in the
United States and primarily through third-party license and distribution
relationships elsewhere. We pursue the development of both products with broad
markets as well as products with specialized niche markets where we can seek
Orphan Drug designation and potential marketing exclusivity.
Our approved products are:
- OXANDRIN-Registered Trademark- (oxandrolone) for the
treatment of involuntary weight loss due to severe trauma, chronic
infection, extensive surgery or unknown pathophysiology, which is
primarily marketed in the United States and which, to date, has been
primarily used to treat involuntary weight loss in AIDS patients;
- BIO-TROPIN-TM- (human growth hormone), which is currently
being marketed in Japan and Israel and in several countries in Europe,
Latin America and the Far East for the treatment of growth hormone
deficiency in children or Turner syndrome;
- BIOLON-Registered Trademark- (sodium hyaluronate), which is
currently marketed in the United States and in several other countries
in North and Latin America, Europe, Asia, Africa, the Far East and in
Israel for the protection of the corneal endothelium during ophthalmic
surgery procedures such as cataract removal and intraocular lens
implantation;
- DELATESTRYL-Registered Trademark- (injectable testosterone),
which is currently marketed in the United States for hypogonadism and
delayed puberty;
- MIRCETTE-Registered Trademark-, developed by Organon, Inc.
using BTG's patented oral contraceptive dosing regimen, which is
currently being marketed in the United States;
- SILKIS-Registered Trademark-, a vitamin D derivative, which
is currently approved in nine European countries for the topical
treatment of recalcitrant psoriasis and marketed in Germany,
Switzerland, The Netherlands and Brazil;
- BIO-HEP-B-TM-, a third generation recombinant vaccine
against hepatitis B virus, which is currently approved and marketed in
Israel; and
- BIO-HY-TM- (sodium hyaluronate) for osteoarthritis, which is
currently being marketed in the European Union under the name
ARTHREASE-TM-.
BTG's products in registration or advanced stages of clinical testing
and development include recombinant insulin for diabetes; FIBRIMAGE-Registered
Trademark-, a thrombus imaging agent; OXSODROL-TM- (human superoxide dismutase)
for the reduction in the incidence of reactive airways (I.E., asthma) in
premature infants; and PROSAPTIDE-TM-, for the treatment of neuropathic pain
associated with diabetic peripheral neuropathy.
Our research and development focus includes PURICASE-Registered
Trademark- for allopurinol-resistant gout patients; a cancer therapy drug to
treat leukemia; and the development of generic versions of biologics that will
be going off patent.
BTG was founded in 1980 to develop, manufacture and market novel
therapeutic products. BTG's overall administration, business development, human
clinical studies, marketing activities, quality assurance and regulatory affairs
are primarily coordinated at our headquarters in Iselin, New Jersey.
Pre-clinical studies, research and development activities and manufacturing of
our biotechnology-derived products are primarily carried out through
Bio-Technology General (Israel) Ltd. ("BTG-Israel"), our wholly-owned subsidiary
in Rehovot, Israel.
We were incorporated in Delaware in October 1980. Our principal
executive offices are located at 70 Wood Avenue South, Iselin, New Jersey 08830,
and our telephone number is (732) 632-8800.
3
RISK FACTORS
You should carefully consider the following risk factors before you
decide to invest in our shares. You should also consider the other information
in this prospectus and information incorporated by reference in this prospectus.
The risks and uncertainties below are not the only ones facing BTG because we
are also subject to additional risks and uncertainties not presently known to
us. If any of these risks actually occurs, our business, financial condition,
operating results or cash flows could be harmed.
WE ARE DEPENDENT ON OXANDRIN SALES.
Sales of OXANDRIN in 1998, 1999 and 2000 and the first nine months of
2000 and 2001 amounted to approximately $40.5 million, $24.9 million, $32.2
million, $22.3 million and $39.2 million, respectively, representing 59%, 40%,
52%, 50% and 55%, respectively, of our total product sales in those periods.
Sales of OXANDRIN in the first, second and third quarters of 2001 were $16.7
million, $17.9 million and $4.6 million, respectively, compared to $5.0 million,
$6.4 million and $10.9 million in the first, second and third quarters of 2000,
respectively. Quarterly fluctuations in sales of OXANDRIN can have a significant
impact on our quarterly results of operations.
Our sales of OXANDRIN consist of sales to Gentiva Health Services, Inc.
("Gentiva"), our wholesale and retail distributor of OXANDRIN in the United
States, and the Ross Products Division of Abbott Laboratories. The increase in
OXANDRIN sales in each of the first three quarters of 2000 was due to Gentiva's
completion, in May 2000, of its OXANDRIN inventory reduction, which Gentiva
began in April 1999 as a result of a slowing in the rate of increase of OXANDRIN
prescriptions. The increase in OXANDRIN sales during the first half of 2001 was
due to: (i) the commencement, in September 2000, of sales by the Ross Products
Division of Abbott Laboratories for the long-term care market for the treatment
of patients with involuntary weight loss, including stocking activity by
wholesalers in connection with the launch of this product in the long-term care
market; (ii) stocking by certain wholesalers in anticipation of a price
increase; (iii) increased purchases by Gentiva following its completion, in May
2000, of a reduction in the amount of OXANDRIN inventory it carries, which
reduction began in April 1999; and (iv) increased wholesaler sales of OXANDRIN
by Gentiva.
Upon completion of its inventory reduction in May 2000, Gentiva began
to purchase, on a monthly basis, an amount of OXANDRIN equal to the average
end-user (I.E., wholesaler) sales during the preceding three months. However,
because of the significant increase in OXANDRIN purchases by wholesalers in the
first quarter of 2001 in anticipation of a price increase and in connection with
the launch of OXANDRIN into the long-term care market, Gentiva's purchases of
OXANDRIN in the second quarter were higher than the levels of its sales of
OXANDRIN to wholesalers in that period. As a result, Gentiva's inventory of
OXANDRIN increased beyond the desired level. Accordingly, BTG and Gentiva
amended their distribution arrangement effective August 2001 to provide for
reduced purchases of OXANDRIN until Gentiva's inventory was reduced to desired
levels and thereafter to ensure that sales of OXANDRIN by BTG to Gentiva more
accurately reflected end-user demand. As a result, sales of OXANDRIN in the
third quarter of 2001 were $13.3 million lower than in the second quarter of
2001 and $6.3 million lower than in the third quarter of 2000.
Gentiva's reduction in OXANDRIN inventory adversely affected the growth
in BTG's product sales and revenues and BTG's results of operations in 1999 and
2000. Reductions in wholesaler purchases of OXANDRIN from Gentiva in the second
and third quarters of 2001 and significantly reduced purchases of OXANDRIN by
Gentiva in the third quarter of 2001 adversely affected the growth in BTG's
product sales and revenues and BTG's results of operations in the third quarter
of 2001 and will continue to adversely affect fourth quarter product sales,
revenues and results of operations. Because purchases by wholesalers fluctuate
from month to month and quarter to quarter based on their own operating
strategies (including desired levels of inventories, purchases by their
customers and stocking in advance of anticipated price increases), BTG's sales
to Gentiva and Ross will fluctuate from quarter to quarter. There can be no
assurance that Gentiva will not determine to further reduce its OXANDRIN
inventory levels.
Since BTG's launch of OXANDRIN in December 1995 through December 2000,
a significant portion of OXANDRIN sales has been for treatment of patients
suffering from AIDS-related weight loss. However, the rate of growth in the
AIDS-related weight loss market has slowed substantially, and there can be no
assurance that it will continue to grow in the future. Our failure to continue
to increase our sales in the AIDS-related weight loss market or to expand into
other markets could have a material adverse effect on our business. OXANDRIN
sales experienced rapid growth in December 2000 and the first half of 2001 in
large part as a result of the commencement
4
by the Ross Products Division of Abbott Laboratories of the marketing of
OXANDRIN for the treatment of involuntary weight loss in the long-term care
market. However, to date the average prescription written for the long-term
care market involve a lower dose of OXANDRIN than the average prescription
written for other markets. There can be no assurance that demand for OXANDRIN
in this market will continue.
OXANDRIN is facing increasing competition from other products,
including human growth hormone, and there can be no assurance that sales of
OXANDRIN will continue to increase. A substantial number of users of OXANDRIN
are patients with AIDS and as more successful treatments for this disease, such
as protease inhibitors, are developed, the need to use OXANDRIN by these
patients may be reduced. Although BTG is working to expand the use of OXANDRIN
to treat other conditions covered by the product's current United States Food
and Drug Administration ("FDA") approval, such as the treatment of involuntary
weight loss associated with burns, non-healing wounds, chronic obstructive
pulmonary disease and cancer, there can be no assurance that BTG will be
successful in its efforts. Additionally, there are no patents covering the use
of OXANDRIN and there can be no assurance that others will not introduce an
oxandrolone product.
WE ARE DEPENDENT ON THIRD-PARTY SUPPLIERS.
BTG is dependent on third parties for the manufacture of OXANDRIN and
DELATESTRYL and the filling and vialing of its BIO-TROPIN product. Although BTG
is a party to an exclusive supply arrangement with G.D. Searle & Company Limited
("Searle"), covering the supply of OXANDRIN to BTG through 2003, and an OXANDRIN
supply agreement with Gedeon-Richter Ltd. ("GRL"), there can be no assurance
that Searle will continue, or that GRL will be able, to provide BTG with
sufficient supplies of OXANDRIN to satisfy its future needs. Bristol-Myers
Squibb Company ceased manufacturing DELATESTRYL for BTG in July 2001 when it
closed the manufacturing facility where it was producing DELATESTRYL. BTG has an
inventory of DELATESTRYL which it believes will be adequate to satisfy demand
for DELATESTRYL until BTG can establish and obtain FDA approval of a new
manufacturing relationship. However, if we cannot establish and obtain FDA
approval of a new DELATESTRYL manufacturing relationship on a timely basis, or
demand for DELATESTRYL exceeds our expectations, our ability to satisfy demand
for DELATESTRYL will be adversely affected. We cannot assure you that we will be
able to establish and obtain FDA approval of a new DELATESTRYL manufacturing
relationship on a timely basis or at all. In addition, BTG is dependent on Dr.
Madaus GmbH to fill and vial its BIO-TROPIN product.
A shutdown in any of the manufacturing facilities utilized by BTG's
suppliers due to technical, regulatory or other problems, resulting in an
interruption in supply of products, could significantly delay the manufacture of
one or more of our products, which could have an adverse impact on our financial
results. The manufacturing process for pharmaceutical products is highly
regulated, and regulators may shut down manufacturing facilities that they
believe do not comply with regulations. The current FDA Good Manufacturing
Practices are extensive regulations governing the manufacturing process,
stability testing, record-keeping and quality standards. Because the suppliers
of key components and materials must be named in a New Drug Application ("NDA")
filed with the FDA for a product, significant delays can occur if the
qualification of a new supplier is required. In the event of any interruption in
supply from Searle, GRL or Dr. Madaus due to regulatory reasons, processing
problems, capacity constraints or other causes, alternative manufacturing
arrangements may not be available on a timely basis, if at all. Any failure of
Searle, GRL or Dr. Madaus to fulfill its obligations to BTG could have a
material adverse effect on our business, results of operations and financial
condition.
WE ARE DEPENDENT ON THIRD-PARTY LICENSEES.
BTG is dependent on third-party licensees to distribute its products
outside the United States and Israel and to distribute certain of its products
in the United States. These arrangements typically provide our licensees with
certain rights to manufacture and market specified products developed using our
proprietary technology, subject to an obligation to pay royalties to us based on
any future product sales or to purchase product from us, and require the
licensee to conduct required clinical trials and obtain any necessary regulatory
approvals. The success of these arrangements depends on each licensee's own
financial, competitive, marketing and strategic considerations, which include
the relative advantages, including patent and proprietary positions, of
alternate products being marketed or developed by others. Furthermore, the
amounts of any payments to be received by BTG under its license agreements from
sales of product by licensees will be dependent on the extent to which its
licensees devote resources to the development and commercialization of the
products. Although we believe our licensees have an
5
economic motivation to commercialize their products, we have no effective
control over the licensees' commercialization efforts.
BTG's business strategy with respect to its products under development
includes finding larger pharmaceutical companies to collaborate on the research,
development and commercialization of certain products. In trying to attract
corporate partners to collaborate in the research, development and
commercialization process, BTG faces serious competition from other
biopharmaceutical companies and the in-house research and development staffs of
the larger pharmaceutical companies. If BTG is unable to enter into arrangements
with corporate partners, its ability to proceed with the research, development
and commercialization of its products may be severely limited. Furthermore,
larger pharmaceutical companies often explore multiple technologies and products
for the same medical conditions. Therefore, they are likely to enter into
collaborations with BTG's competitors for products addressing the same medical
conditions addressed by BTG's products. Depending on how other product
candidates advance, a corporate partner may slow down or abandon its work on
BTG's product candidates or terminate its collaborative arrangement with BTG in
order to focus on these other prospects.
WE DEPEND UPON PROPRIETARY TECHNOLOGY, WHICH MAY BE DIFFICULT TO PROTECT.
BTG's success will depend, in part, on its ability to obtain patent
protection for its technology (including use of its products), preserve trade
secrets and operate without infringing the proprietary rights of third parties.
The patent positions of pharmaceutical and biopharmaceutical companies are
highly uncertain and involve complex legal and factual questions. Patent
disputes are frequent and costly, can delay or preclude the commercialization of
products and could subject BTG to significant liabilities to third parties. Many
biopharmaceutical companies have employed intellectual property litigation as a
way to gain a competitive advantage.
BTG has developed patentable technology and proprietary know-how and
has acquired from various universities and institutions certain basic
technologies, as to which either patents have been issued or patent applications
are pending. There can be no assurance that patent applications will result in
issued patents, that the claims allowed in such issued patents will be
sufficiently broad to protect our proprietary rights or that patents will not be
challenged, circumvented or invalidated or that rights granted pursuant to such
patents will provide competitive advantages to BTG. Because patent applications
are maintained in secrecy for a period of time after filing, we cannot be
certain that others have not filed patent applications for technology covered by
our pending applications or that we were the first to file patent applications
for such technology. BTG also relies on trade secrets, proprietary know-how and
technological innovation that it seeks to protect with confidentiality
agreements with its employees, consultants and licensees. There can be no
assurance that these agreements will not be breached, that BTG will have
adequate remedies for any breach or that BTG's trade secrets and proprietary
know-how will not otherwise become known or be independently discovered by
competitors.
BTG's commercial success will also depend in part on our not infringing
patents or proprietary rights of third parties. A number of companies and
research and academic institutions have developed technologies, filed patent
applications or received patents on various technologies that relate to our
business, and such entities may file applications for or be issued patents in
the future with respect to technology potentially necessary or useful to BTG.
Some of these technologies, applications or patents may conflict with BTG's
technologies and existing or future patents, if any, or patent applications.
Such conflict could limit the scope of patents that BTG has obtained or may
obtain in the future or result in patent applications failing to issue as
patents. In addition, if third parties obtain patents which cover our
activities, there can be no assurance that BTG would be able to license such
patents on reasonable terms, or at all, or be able to license or develop
alternative technology on a timely basis, or at all. As more patents are issued
to third parties, the risk that BTG's products and activities may give rise to
claims that they infringe the patents of others increases. In addition, the
presence of patents or other proprietary rights belonging to other parties may
lead to the termination of research and development of a particular product.
BTG has in the past been, is currently and may in the future be
involved in litigation and administrative hearings to determine the validity and
scope of its and others' patents and proprietary rights. Such litigation and
administrative proceedings have to date required, and may in the future require,
a significant commitment of our resources. Any such commitment may divert
resources from other areas of BTG's business.
6
THE SUCCESSFUL DEVELOPMENT OF PHARMACEUTICAL PRODUCTS IS HIGHLY UNCERTAIN.
Successful pharmaceutical product development is highly uncertain and
is dependent on numerous factors, many of which are beyond BTG's control.
Products that appear promising in the early phases of development may fail to
reach the market for numerous reasons, including, but not limited to:
- they may be found to be ineffective or to have harmful side effects
in pre-clinical or clinical testing;
- they may fail to receive necessary regulatory approvals;
- they may turn out to be uneconomical because of manufacturing costs
or other factors; or
- they may be precluded from commercialization by the proprietary
rights of others or by competing products for the same indication.
Success in pre-clinical and early clinical trials does not ensure that
large-scale trials will be successful. Data obtained from pre-clinical and
clinical trials are frequently susceptible to varying interpretations that may
delay, limit or prevent regulatory approvals. Many biopharmaceutical companies,
including BTG, have suffered significant setbacks in advanced clinical trials,
even after experiencing promising results in pre-clinical and early human
testing.
BTG is currently seeking to expand its product pipeline through the
acquisition of businesses, products and/or technologies. The acquisitions that
BTG is currently able to pursue in general involve products that are still in
clinical trials and, therefore, face the risks discussed above. To the extent
BTG uses its cash resources, incurs debt and/or issues shares of its common
stock in these acquisitions but the acquired product cannot be commercialized,
BTG's business and prospects could be adversely affected.
The length of time necessary to complete clinical trials and to submit
an application for marketing approval for a final decision by a regulatory
authority varies significantly and is dependent upon a number of factors, many
of which are outside our control, including the rate of patient enrollment.
Patient enrollment is a function of several factors, including the size of the
patient population and the proximity of patients to clinical sites. Delays in
patient enrollment could result in increased costs and delays in completion of
the clinical trials. In addition, pre-clinical and clinical trials must meet
regulatory and institutional requirements.
The principal factors affecting BTG's research and development expenses
include the number of and outcome of clinical trials currently being conducted
by it and/or its collaborators, the number of products in development and later
stage research and future levels of revenue.
WE HAVE LIMITED MANUFACTURING CAPACITY.
The manufacture of BTG's products involves a number of technical steps
and requires meeting stringent quality control specifications imposed by
governmental regulatory bodies and by BTG itself. Further, such products can
only be manufactured in facilities approved by the applicable regulatory
authorities. As a result, BTG may not be able to quickly and efficiently replace
its manufacturing capacity in the event that it is unable to manufacture its
products at its facilities. In the event of a natural disaster, equipment
failure, strike, war or other difficulty, BTG may be unable to manufacture its
products in a manner necessary to fulfill demand. BTG's inability to fulfill
demand may permit its licensees and distributors to terminate their agreements,
seek alternate suppliers or manufacture the products themselves. Additionally,
if BTG does not receive regulatory approval for its new facility, it would
likely be unable to meet the anticipated increased demand for its products,
which would have a material adverse effect on BTG's business, results of
operations and financial condition. Any substantial delay in obtaining
regulatory approval for its manufacturing processes and facilities could also
have a material adverse effect on BTG.
BTG is dependent on third parties to manufacture all or a portion of
certain of its products. See "--We are dependent on third-party suppliers."
WE HAVE LIMITED MARKETING CAPABILITY AND EXPERIENCE.
BTG established a sales and marketing force in the United States during
the second half of 1995 to promote distribution of OXANDRIN and other BTG
products in the United States. With respect to territories outside the United
States, BTG does not yet have an established sales force and relies on third
parties to market its products. There can be no assurance that our marketing
strategy will be successful. BTG's ability to market its products
7
successfully in the future will be dependent on a number of factors, many of
which are not within its control. See "--We are dependent on third-party
licensees."
WE WILL FACE TECHNICAL, OPERATIONAL AND STRATEGIC CHALLENGES THAT MAY PREVENT US
FROM SUCCESSFULLY INTEGRATING BTG AND MYELOS.
Our acquisition of Myelos involves risks related to the integration and
management of acquired technology, operations and personnel. The integration of
BTG and Myelos has been and will continue to be a complex, time-consuming and
expensive process and may disrupt our business if not completed in a timely and
efficient manner. We may not be able to integrate our systems and operate
effectively as a combined organization. We may in the future encounter
substantial difficulties, costs and delays in integrating Myelos, including:
incompatibility of business cultures and operations; difficulty maintaining
uniform standards, controls, procedures and policies; the loss of key employees;
and the diversion of management's attention from ongoing business concerns. In
addition, although a legal and financial analysis of Myelos was performed before
we purchased Myelos, it is possible that the analysis did not uncover every risk
inherent in acquiring the business of another company. Although the shareholders
of Myelos have agreed to indemnify us for the losses arising from some of these
risks, the indemnification does not cover all losses, and may be inadequate to
cover losses that are indemnified. In such event, it is likely we would not
realize the anticipated benefits of the acquisition and our stock price could
decline.
WE ARE SEEKING TO EXPAND THROUGH ACQUISITIONS, WHICH ENTAILS RISK.
BTG is currently seeking to expand its operations and product pipeline
through the acquisition of businesses, products and/or technologies. Expansion
through acquisition involves several risks. In order to consummate an
acquisition, BTG may issue additional equity, which would dilute current
stockholders' percentage ownership and dilute earnings per share, incur
substantial debt and/or assume contingent liabilities. BTG may not be able to
successfully integrate any acquired business, product and/or technology without
a significant expenditure of operating, financial and management resources, if
at all. In addition, acquired businesses may not at the time of acquisition be
profitable, and acquired products may require substantial additional research
and development and clinical trials before they can be commercialized, all of
which could adversely affect BTG's results of operations and financial position.
Potential products acquired at an early stage of development may fail to reach
the market for numerous reasons, including those set forth above under "-The
successful development of pharmaceutical products is highly uncertain." To the
extent we acquire technology that is not fully commercially developed and has no
alternative future use at the time of acquisition, we will be required to
write-off immediately the fair market value of such technology, which will
adversely affect our results of operations. Further, changes in accounting for
acquisitions as a result of the elimination of "pooling-of-interests" accounting
could adversely affect BTG's results of operations in the event of an
acquisition.
WE EXPECT OUR QUARTERLY RESULTS TO FLUCTUATE, WHICH MAY CAUSE VOLATILITY IN OUR
STOCK PRICE.
BTG's revenues and expenses have in the past and may in the immediate
future continue to display significant variations, which variations have in the
past caused and would in the future cause our operating results to vary
significantly from quarter to quarter and year to year. These variations are due
to a variety of factors, including:
- the amount and timing of product sales,
- the timing of the introduction of new products,
- the timing and realization of milestone and other payments from
licensees,
- the timing and amount of expenses relating to research and
development, product development and manufacturing activities,
- the extent and timing of costs of obtaining, enforcing and defending
intellectual property rights, and
- any charges related to acquisitions.
Because many of BTG's expenses are fixed, particularly in the short-term, any
decrease in revenues will adversely affect BTG's earnings until revenues can be
increased or expenses reduced. For example, in 1999 and the first five months of
2000 BTG's revenues and earnings were adversely affected by Gentiva's decision
to reduce the amount
8
of OXANDRIN inventory it carried as a result of a slowing in the rate of
increase of OXANDRIN prescriptions. Because of fluctuations in revenues and
expenses, it is possible BTG's operating results for a particular quarter or
quarters will not meet the expectations of public market analysts and
investors, causing the market price of BTG common stock to decline. We believe
that period-to-period comparisons of our operating results are not a good
indication of our future performance and stockholders should not rely on those
comparisons to predict our future operating or share price performance.
WE MAY BE UNABLE TO OBTAIN ANY ADDITIONAL CAPITAL NEEDED TO OPERATE AND GROW OUR
BUSINESS.
The development and commercialization of products requires a
substantial amount of funds. In addition, we may require cash to acquire
businesses, products and/or technologies. Our cash requirements are currently
satisfied primarily through product sales and contract fees. Historically, cash
requirements were satisfied primarily through (i) product sales, (ii) funding of
projects through collaborative research and development arrangements, (iii)
contract fees, (iv) government of Israel funding of a portion of certain
research and development projects, mainly through the office of its Chief
Scientist, and (v) equity and debt financings. There can be no assurance that
these financing alternatives will be available in the future to satisfy our cash
requirements. We believe that our current cash resources, together with
anticipated product sales, scheduled payments to be made to us under our current
agreements with pharmaceutical partners and third parties and continued funding
from the Chief Scientist at current levels, will be sufficient to fund our
ongoing operations for the foreseeable future. There can, however, be no
assurance that product sales will occur as anticipated, that scheduled payments
will be made by third parties, that current agreements will not be canceled,
that the Chief Scientist will continue to provide funding at current levels,
that we will not use a substantial portion of our cash resources to acquire
businesses, products and/or technologies, or that unanticipated events requiring
the expenditure of funds will not occur.
The satisfaction of our future cash requirements will depend in large
part on the status of commercialization of our products, our ability to enter
into additional research and development and licensing arrangements, and our
ability to obtain additional equity investments, if necessary. There can be no
assurance that BTG will be able to obtain additional funds or, if such funds are
available, that such funding will be on favorable terms. If additional funds are
raised by issuing equity securities of BTG, dilution to existing stockholders
may result. If additional funds are raised through the issuance of debt
securities or borrowings, BTG may incur substantial interest expense and could
become subject to financial and other covenants that could restrict our ability
to operate our business. If adequate funds are not available, BTG may be
required to significantly curtail one or more of its commercialization efforts
or research and development programs or obtain funds through arrangements with
collaborative partners or others on less favorable terms than might otherwise be
available.
WE ARE SUBJECT TO STRINGENT GOVERNMENTAL REGULATION.
BTG is subject to stringent regulation with respect to product safety
and efficacy by numerous governmental authorities in the United States and other
countries. Of particular significance are the requirements covering research and
development, testing, manufacturing, quality control, labeling and promotion of
pharmaceutical products for human use. All of BTG's products, manufacturing
processes and facilities require governmental licensing or approval prior to
commercial use. A pharmaceutical product cannot be marketed in the United States
until it has been approved by the FDA, and then can only be marketed for the
indications and claims approved by the FDA. As a result of these requirements,
the length of time, the level of expenditures and the laboratory and clinical
information required for approval of an NDA are substantial. The approval
process applicable to products of the type being developed by BTG usually takes
five to seven years from the commencement of human clinical trials and typically
requires substantial expenditures. BTG and its licensees may encounter
significant delays or excessive costs in their respective efforts to secure
necessary approvals or licenses. Before obtaining regulatory approval for the
commercial sale of its products, BTG is required to conduct pre-clinical and
clinical trials to demonstrate that the product is safe and efficacious for the
treatment of the target disease. The timing of completion of clinical trials is
dependent upon a number of factors, many of which are outside our control. In
addition, BTG and its partners may encounter delays or rejections based upon
changes in the policies of regulatory authorities.
Future United States or foreign legislative or administrative acts
could also prevent or delay regulatory approval of BTG's or its licensees'
products. Failure to obtain requisite governmental approvals, or failure to
obtain approvals of the scope requested, could delay or preclude BTG or its
licensees from marketing their products, could limit the commercial use of the
products and could also allow competitors time to introduce competing products
9
ahead of product introduction by BTG and thereby have a material adverse effect
on BTG's results of operations, liquidity and financial condition. Even after
regulatory approval is obtained, use of the products could reveal side effects
that, if serious, could result in suspension of existing approvals and delays in
obtaining approvals in other jurisdictions.
Regulation by governmental authorities in the United States and other
countries is a significant factor affecting the timing of the commercialization
of BTG's products and its ongoing research and development activities. The
timing of regulatory approvals is not within our control. To date, the length of
time required to obtain regulatory approval of genetically-engineered products
has been significantly longer than expected, both for BTG and the biotechnology
industry in general. These delays have had and, if they continue, could have a
material adverse effect on our results of operations and financial condition. We
believe that these delays have in the past negatively impacted our ability to
attract funding and that, as a result, the terms of such financings have been
less favorable to us than they might otherwise have been had BTG's product
revenues provided sufficient funds to finance the large costs of taking a
product from discovery through commercialization. As a result, BTG has had to
license the commercialization of many of its products to third parties in
exchange for research funding and royalties on product sales; this will result
in lower revenues than if BTG had commercialized the products on its own.
Failure to comply with applicable regulatory requirements can, among
other things, result in fines, suspension of regulatory approvals, product
recalls, seizure of products, imposition of operating restrictions and criminal
prosecutions. Further, FDA policy or similar policies of regulatory agencies in
other countries may change and additional governmental requirements may be
established that could prevent or delay regulatory approval of our products.
WE ARE SUBJECT TO UNCERTAINTIES REGARDING HEALTHCARE REIMBURSEMENT AND REFORM.
BTG's ability to successfully commercialize human therapeutic products
depends in part on the extent to which reimbursement for the cost of such
products and related treatment will be available from government health
administration authorities, private health coverage insurers and other
organizations. Significant uncertainty exists as to the reimbursement status of
newly approved healthcare products, and there can be no assurance that adequate
third-party coverage will be available for BTG to maintain price levels
sufficient for the realization of an appropriate return on its investment in
product development. Government and other third party payors are increasingly
attempting to contain healthcare costs by limiting both coverage and the level
of reimbursement for new therapeutic products approved for marketing by the FDA
and by refusing, in some cases, to provide any coverage for use of approved
products for disease indications for which the FDA has not granted marketing
approval. If adequate coverage and reimbursement levels are not provided by
government and third-party payors for use of our healthcare products, the market
acceptance of these products would be adversely affected. In addition, in recent
years a number of federal and state healthcare reform proposals have been
introduced to contain healthcare costs. There can be no assurance as to the
ultimate content, timing or effect of any healthcare reform legislation, nor is
it possible at this time to estimate the impact of potential legislation on our
business.
Regulatory approval of prices is also required in most countries
outside the United States. In particular, certain European countries will
condition their approval of a product on the agreement of the seller not to sell
the product for more than a certain price in that country. There can be no
assurance that the establishment of a price in one European country will not
have the practical effect of requiring our marketing partners to sell the
product in other European countries at no higher than such price. Because BTG
generally supplies product to its marketing partners for a specified percentage
of net sales, there can be no assurance that the resulting prices would be
sufficient to generate an acceptable return on our investment in our products or
even cover our manufacturing costs for such product.
WE OPERATE IN A HIGHLY COMPETITIVE MARKET AND OUR COMPETITORS MAY DEVELOP
ALTERNATIVE TECHNOLOGIES AND PRODUCTS.
The pharmaceutical and biotechnology industries are intensely
competitive, and the technological areas in which we work continue to evolve at
a rapid pace. Our future success depends upon maintaining our ability to compete
in the research, development and commercialization of products and technologies
in our areas of focus. Competition from pharmaceutical, chemical and
biotechnology companies, universities and research institutions is intense and
expected to increase. Many of these competitors have substantially greater
research and development capabilities and experience and manufacturing,
marketing, financial and managerial resources than we do.
10
Acquisitions of competing companies by large pharmaceutical companies or other
companies could enhance the financial, marketing and other resources available
to these competitors.
Our competitors may develop products that are superior to those we are
developing. Rapid technological development may result in our products or
processes becoming obsolete before marketing of these products or before we
recover a significant portion of the research, development and commercialization
expenses incurred with respect to those products.
Our products must compete with others to gain market acceptance and
market share. An important factor will be the timing of market introduction of
competitive products. Accordingly, the relative speed with which we and
competing companies can develop products, complete the clinical testing and
approval processes, and supply commercial quantities of the products to the
market will be an important element of market success. Significant competitive
factors include:
- capabilities of our collaborators,
- product efficacy and safety,
- timing and scope of regulatory approval,
- product availability,
- marketing and sale capabilities,
- reimbursement coverage from insurance companies and others,
- the amount of clinical benefit of our product candidates relative to
their cost,
- the method of administering a product,
- price, and
- patent protection.
Our competitors may develop more effective or more affordable products
or achieve earlier product development completion, patent protection, regulatory
approval or product commercialization than we do. Our competitors' achievement
of any of these goals could have a material adverse effect on our business.
These companies also compete with BTG to attract qualified personnel and to
attract third parties for acquisitions, joint ventures or other collaborations.
WE MAY BE UNABLE TO OBTAIN AND RETAIN SKILLED PERSONNEL.
We are dependent upon the efforts of our officers, scientists and other
employees. The loss of certain of these key employees could materially and
adversely affect our business. Our business is dependent upon our ability to
attract and retain qualified research and managerial personnel. There is a great
deal of competition for the limited number of scientists with expertise in the
area of BTG's operations. We do not maintain, and have no current intention of
obtaining, "key man" life insurance on any of our employees. We cannot assure
you that we will be successful in hiring or retaining the personnel we require
for continued growth. Our failure to hire and retain such personnel could
materially adversely affect our business.
OUR BUSINESS MAY BE ADVERSELY AFFECTED BY DEVELOPMENTS IN ISRAEL.
BTG's primary research, development and production activities are at
this time conducted in Israel by its wholly-owned subsidiary BTG-Israel and can
be affected by economic, military and political conditions in that country and
in the Middle East in general. Since the establishment of the State of Israel in
1948, a number of armed conflicts have taken place between Israel and its Arab
neighbors and a state of hostility, which varies in degree and intensity, has
caused security and economic problems in Israel. Any major hostilities involving
Israel could adversely affect our research, development and production
operations, which would harm our business. We cannot assure you that ongoing or
revived hostilities related to Israel will not have a material adverse affect on
us or our business and on our share price. Despite the progress towards peace
between Israel and its Arab neighbors, the future of these peace efforts is
uncertain. In addition, since October 2000, there has been a significant
increase in violence, primarily in the West Bank and Gaza Strip.
11
BTG manages its Israeli operations with the objective of protecting
against any material net financial loss in U.S. dollars from the impact of
Israeli inflation and currency devaluations on its non-U.S. dollar assets and
liabilities. The cost of BTG's operations in Israel, as expressed in dollars, is
influenced by the extent to which any increase in the rate of inflation in
Israel is not offset (or is offset on a lagging basis) by a devaluation of the
Israeli Shekel in relation to the U.S. dollar. The rate of inflation (as
measured by the Israeli consumer price index) was approximately 9% in 1998, 1%
in 1999 and 0.4% in the six months ended June 30, 2000, while the Shekel was
devalued by approximately 18%, less than 1% and approximately 2%, respectively,
in these periods. In 2000 there was no change in the consumer price index and
the Shekel's value in relation to the U.S. dollar increased by approximately 3%.
In the six months ended June 30, 2001, the consumer price index decreased by
approximately 1% and the Shekel's value in relation to the U.S. dollar decreased
by approximately 3%. As a result, for those expenses linked to the Israeli
Shekel, such as salaries and rent, this resulted in corresponding decreases in
these costs in U.S. dollars in 1998 and the six months ended June 30, 2000 and
2001, but an increase in these costs in U.S. dollar terms in 1999 and in 2000.
To the extent that expenses in Shekels exceed BTG's revenues in Shekels (which
to date have consisted primarily of research funding from the Chief Scientist
and product sales in Israel), the devaluations of Israeli currency have been and
will continue to be a benefit to BTG's financial condition. However, should
BTG's revenues in Shekels exceed its expenses in Shekels in any material
respect, the devaluation of the Shekel will adversely affect BTG's financial
condition. Further, to the extent the devaluation of the Shekel with respect to
the U.S. dollar does not substantially offset the increase in the costs of local
goods and services in Israel, BTG's financial results will be adversely affected
as local expenses measured in U.S. dollars will increase.
WE MAY INCUR SUBSTANTIAL PRODUCT LIABILITY.
The testing and marketing of BTG's products entail an inherent risk of
product liability and associated adverse publicity. Pharmaceutical product
liability exposure could be extremely large and pose a material risk. Although
BTG has so far been able to obtain indemnification from pharmaceutical companies
commercializing its products, there can be no assurance that other such
companies will agree in the future to indemnify BTG for other of BTG's products
or that such companies will, if obligated to do so, have adequate resources to
fulfill their indemnity agreements. Further, to the extent BTG elects to test or
market products independently, it will bear the risk of product liability
directly. BTG presently has $15,000,000 of product liability insurance coverage
in place. There can be no assurance that we will be able to maintain existing
insurance or obtain additional insurance on acceptable terms, or at all. It is
possible that a single product liability claim could exceed our insurance
coverage limits, and multiple claims are possible. Any successful product
liability claim made against BTG could substantially reduce or eliminate any
stockholders' equity BTG may have and could have a significant adverse impact on
BTG's business.
OUR STOCK PRICE MAY BE VOLATILE.
The market prices for securities of biopharmaceutical companies,
including BTG, have been volatile, and it is likely that the price of our common
stock will fluctuate in the future. Factors such as announcements of
technological innovations or new commercial products by BTG or its competitors,
announcements by BTG or its competitors of results in pre-clinical testing and
clinical trials, governmental regulation, patent or proprietary rights
developments, public concern as to the safety or other implications of
biotechnology products, changes in earnings estimates and recommendations by
securities analysts, period-to-period fluctuations in financial results and
market conditions in general may have a significant impact on the market price
of our common stock. The stock market has also experienced significant price and
volume fluctuations that are often unrelated to the operating performance of
particular companies. In the past, following periods of volatility in the market
price of the securities of biopharmaceutical companies, securities class action
litigation has often been instituted against these companies. If we face such
litigation in the future, it would result in substantial costs and a diversion
of management's attention and resources, which could adversely affect our
business.
In addition, the market price of our common stock could be adversely
affected by the sale of the shares offered hereby, by future exercises of
outstanding options and the issuance of common stock in acquisitions of
businesses, products and/or technologies. At September 30, 2001 options to
purchase an aggregate of approximately 7,832,000 shares of common stock were
outstanding. A substantial portion of these options have exercise prices below
the current market price of the common stock. Additionally, all of the shares of
common stock issuable upon exercise of these outstanding options have been
registered under the Securities Act of 1933, as amended, and, accordingly, when
issued will be freely tradable without restriction. In addition, BTG may issue
additional stock, warrants and/or options to raise capital or complete
acquisitions in the future. BTG may also issue additional
12
securities in connection with its employee benefit plans. During the terms of
such options and warrants, the holders thereof are given the opportunity to
profit from a rise in the market price of the common stock. The exercise of
such options and warrants may have an adverse effect on the market value of
the common stock. The existence of such options and warrants may adversely
affect the terms on which BTG can obtain additional equity financing. To the
extent the exercise prices of such options and warrants are less than the net
tangible book value of the common stock at the time such options and warrants
are exercised, BTG's stockholders will experience an immediate dilution in
the net tangible book value of their investment. Further, the future sale of
a substantial number of shares of common stock by existing stockholders and
option holders may have an adverse impact on the market price of the common
stock.
EFFECTING A CHANGE OF CONTROL OF BTG COULD BE DIFFICULT, WHICH MAY DISCOURAGE
OFFERS FOR SHARES OF OUR COMMON STOCK.
Our certificate of incorporation and the Delaware General Corporation
Law contain provisions that may delay or prevent an attempt by a third party to
acquire control of us. These provisions include the requirements of Section 203
of the Delaware General Corporation Law. In general, Section 203 prohibits
designated types of business combinations, including mergers, for a period of
three years between us and any third party that owns 15% or more of our common
stock. This provision does not apply if:
- our Board of Directors approves of the transaction before the third
party acquires 15% of our stock,
- the third party acquires at least 85% of our stock at the time its
ownership goes past the 15% level, or
- our Board of Directors and two-thirds of the shares of our common
stock not held by the third party vote in favor of the transaction.
We have also adopted a stockholder rights plan intended to deter
hostile or coercive attempts to acquire us. Under the plan, if any person or
group acquires more than 20% of our common stock without approval of the Board
of Directors under specified circumstances, our other stockholders have the
right to purchase shares of our common stock, or shares of the acquiring
company, at a substantial discount to the public market price. The plan thus
makes an acquisition much more costly to a potential acquirer.
Our certificate of incorporation also authorizes us to issue up to
4,000,000 shares of preferred stock in one or more different series with terms
fixed by the Board of Directors. Stockholder approval is not necessary to issue
preferred stock in this manner. Issuance of these shares of preferred stock
could have the effect of making it more difficult for a person or group to
acquire control of us. No shares of our preferred stock are currently
outstanding. While our Board of Directors has no current intentions or plans to
issue any preferred stock, issuance of these shares could also be used as an
anti-takeover device.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains some "forward-looking statements" as defined
in the Private Securities Litigation Reform Act of 1995 and information relating
to us that are based on the beliefs of our management, as well as assumptions
made by and the information currently available to our management. When used in
this prospectus, the words "estimate," "project," "believe," "anticipate,"
"intend," "expect" and similar expressions are intended to identify
forward-looking statements. These statements reflect our current views with
respect to future events and are subject to risks and uncertainties that could
cause actual results to differ materially from those contemplated in these
forward-looking statements, including those risks discussed in this prospectus.
You are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this prospectus. Except for
special circumstances in which a duty to update arises when prior disclosure
becomes materially misleading in light of subsequent events, we do not intend to
update any of these forward-looking statements to reflect events or
circumstances after the date of this prospectus or to reflect the occurrence of
unanticipated events.
RECENT DEVELOPMENTS
The following tables set forth our unaudited statement of operations
for the three and nine month periods ended September 30, 2000 and 2001 and
balance sheet data as of September 30, 2001 and December 31, 2000:
13
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------------------- ------------------------------------
2000(1) 2001 2001(2) 2000(1) 2001 2001(3)
STATEMENT OF OPERATIONS DATA (Actual) (Actual) (Pro Forma) (Actual) (Actual) (Pro Forma)
-------- -------- ----------- -------- -------- -----------
(In thousands, except per share data)
Revenues:
Product sales $18,206 $15,541 $15,541 $44,795 $ 70,731 $70,731
Contract fees 213 289 289 9,764 865 865
Royalties 778 1,677 1,677 2,158 3,370 3,370
Other 2,259 2,624 2,624 6,344 7,108 7,108
------- ------- ------- ------- -------- -------
Total revenues 21,456 20,131 20,131 63,061 82,074 82,074
------- ------- ------- ------- -------- -------
Expenses:
Research and development 5,436 5,562 5,562 16,468 18,677 18,677
Cost of product sales 2,850 2,710 2,710 7,097 11,668 11,668
General and administrative 3,531 2,062 2,977 10,159 7,980 9,928
Marketing and sales 4,365 3,046 3,046 12,936 12,344 12,344
Other 299 642 642 1,264 1,570 1,570
Write-off of in-process R&D
acquired -- -- -- -- 45,600 --
------- ------- ------- ------- -------- -------
Total expenses 16,481 14,022 14,937 47,924 97,839 54,187
------- ------- ------- ------- -------- -------
Income (loss) before income
taxes 4,975 6,109 5,194 15,137 (15,765) 27,887
Income taxes 555 1,664 1,664 4,036 8,926 8,926
------- ------- ------- ------- -------- -------
Income (loss) before cumulative
effect of change in accounting
principle 4,420 4,445 3,530 11,101 (24,691) 18,961
Cumulative effect of change in
accounting principle -- -- -- (8,178) -- --
------- ------- ------- ------- -------- -------
Net income (loss) $ 4,420 $ 4,445 $ 3,530 $ 2,923 $(24,691) $18,961
======= ======= ======= ======= ======== =======
Earnings per common share:
Basic:
Income (loss) before cumulative
effect of change in accounting
principle $ 0.08 $ 0.08 $ 0.06 $ 0.20 $ (0.43) $ 0.33
Cumulative effect of change in
accounting principle -- -- -- (0.15) -- --
------- ------- ------- ------- -------- -------
Net income (loss) $ 0.08 $ 0.08 $ 0.06 $ 0.05 $ (0.43) $ 0.33
======= ======= ======= ======= ======== =======
Diluted:
Income (loss) before cumulative
effect of change in accounting
principle $ 0.08 $ 0.07 $ 0.06 $ 0.19 $ (0.43) $ 0.33
Cumulative effect of change in
accounting principle -- -- -- (0.14) -- --
------- ------- ------- ------- -------- -------
Net income (loss) $ 0.08 $ 0.07 $ 0.06 $ 0.05 $ (0.43) $ 0.33
======= ======= ======= ======= ======== =======
Weighted average number of
common and common
equivalent shares:
Basic 54,493 58,078 58,078 54,186 56,871 56,871
======= ======= ======= ======= ======== =======
Diluted 56,963 59,411 59,411 57,336 56,871 58,072
======= ======= ======= ======= ======== =======
14
September 30,
BALANCE SHEET DATA December 31, 2001
2000 (Unaudited)
------------ -------------
(In thousands)
Assets:
Cash, cash equivalents and short-term
investments $119,570 $124,648
Other current assets 52,502 41,798
-------- --------
Total current assets 172,072 166,446
-------- --------
Property and equipment, net 27,819 44,484
Other long-term assets 13,334 25,050
-------- --------
Total assets $213,225 $235,980
======== ========
Liabilities and Stockholders' Equity:
Current liabilities $18,728 $26,366
Long-term liabilities and deferred items 35,144 51,227
Stockholder's equity 159,353 158,387
-------- --------
$213,225 $235,980
======== ========
---------------------
(1) BTG adopted the Securities and Exchange Commission's Staff Accounting
Bulletin No. 101 on Revenue Recognition in the fourth quarter of 2000, effective
January 1, 2000, and recorded a cumulative effect of change in accounting
principle related to contract revenues recognized in prior periods. The related
revenue is being recognized over the terms of the agreements.
(2) Excludes the effect of the amortization of negative goodwill resulting from
the Myelos acquisition.
(3) Excludes the effect of the write-off of in-process research and development
acquired and the amortization of negative goodwill resulting from the Myelos
acquisition.
FINANCIAL RESULTS
Beginning in late 2000, following the launch of OXANDRIN into the long
term care sector for the treatment of patients with involuntary weight loss, a
number of significant wholesalers began stocking product. Because of strong
script growth recorded upon the launch into the long-term care market and the
fact that specific market research information about the value of long-term care
scripts was not yet available, it was not initially apparent to us and Gentiva,
our national distributor, that these wholesaler purchases were significantly
greater than what they needed to meet growing end-user demand. We now believe
that while this stocking was undertaken in anticipation of new and accelerated
OXANDRIN sales in that market sector, it also reflects an assumption that an
OXANDRIN price increase would take place in 2001. As a result, Gentiva's
purchases of OXANDRIN in the second quarter were higher than the level of its
sales to wholesalers and Gentiva's inventory of OXANDRIN increased beyond the
desired level. We and Gentiva have addressed this situation by amending our
agreement with the purpose of ensuring that our sales of OXANDRIN to Gentiva
more properly reflect end-user demand on an ongoing basis. The impact of the
wholesaler stocking activity in the first part of 2001 resulted in sales of
OXANDRIN in the three months ended September 30, 2001 of $4.6 million compared
to $10.9 million in the comparable period of 2000. Our fourth quarter sales to
Gentiva will also be affected by the wholesaler stocking earlier in the year.
The launch of OXANDRIN in late 2000 by the Ross Products Division of
Abbott Laboratories into the long-term sector for the treatment of patients with
involuntary weight loss led to a 32% increase in prescriptions in the first
eight months of 2001 compared to the corresponding eight months of 2000. Though
the average value of long-term care scripts has so far been lower than that of
scripts derived elsewhere, underlying demand for OXANDRIN has grown and
information from wholesalers indicates that their sales to end-users in the
first eight
15
months of this year were approximately 40% higher than those of the first
eight months of 2000. However, while monthly prescriptions are at their
historical peak, they remained essentially flat in the months of June through
August 2001, due, at least in part, to sales force changes in the long-term
care sector. The long-term care field force contingent detailing physicians,
nursing homes, assisted living facilities, and geriatric hospitals was
streamlined in the spring of 2001 in an effort to achieve greater efficiency.
We believe this inadvertently resulted in a reduction in the number of
OXANDRIN calls and details being made, which only recently came to our
attention. We understand that corrective measures have been taken to increase
the number of calls and details being made.
Sales of our BIO-TROPIN and BIOLON in the third quarter of 2001 were
$8.1 million and $2.8 million, compared to $6.1 million and $1.2 million,
respectively, in the third quarter of 2000. There were no sales of DELATESTRYL
in the third quarter. Human growth hormone, BIOLON, and DELATESTRYL sales
through the first nine months of 2001 were $19.2 million, $6.9 million, and $5.0
million, respectively, or 21%, 47%, and 174%, respectively, ahead of last year's
levels for the comparable period. These increases reflect, respectively, (a)
increased penetration of the Japanese and European human growth hormone markets,
(b) increased sales of BIOLON in the U.S. following an upgrade in our
manufacturing process (which had negatively impacted 2000 BIOLON sales while
being implemented), and (c) heavy demand by wholesalers for DELATESTRYL at the
beginning of this year when the anticipated return to the market of a competitor
did not materialize, and reduced demand for DELATESTRYL in 2000.
We anticipate product sales for the year of approximately $85 million
and total revenues of approximate $100 million, although fourth quarter earnings
per share is expected to be lower than third quarter earnings per share.
HUMAN GROWTH HORMONE
In September 2001, the United States Court of Appeals for the Federal
Circuit reinstated a Genentech, Inc. patent relating to a method for producing
recombinant human growth hormone ("hGH") and a preliminary injunction against
our product made by a particular process. The Genentech patent was invalidated
on January 18, 2000, following a trial to a jury in the United States District
Court for the Southern District of New York. The Federal Circuit did not decide
the issue of infringement by BTG of the reinstated patent. We have never used
the expression system charged with infringement in the Genentech litigation to
manufacture hGH for U.S. sale. Moreover, we have developed a new expression
system for our hGH that was approved by the FDA in 1999. Genentech has never
contended that this new expression system infringes any of its patents. We plan
to manufacture any hGH intended for the U.S. market using this alternate
expression system.
USE OF PROCEEDS
We will not receive any proceeds from the sale of common stock by the
selling stockholders.
DIVIDEND POLICY
We have never declared or paid any dividends on our stock. We currently
anticipate that we will retain all future earnings to support our growth
strategy. Accordingly, we do not anticipate paying cash dividends on our stock
in the foreseeable future. The payment of any future dividends will be at the
discretion of our board of directors and will depend upon, among other things,
future earnings, operations, capital requirements, our general financial
condition, and general business conditions.
16
SELLING STOCKHOLDERS
The following table sets forth information regarding the number of
shares of our common stock beneficially owned by each of the selling
stockholders as of April 10, 2001. The selling stockholders received their
shares of common stock in connection with our acquisition of Myelos Corporation.
None of the selling stockholders owns more than one percent of our outstanding
common stock. None of the selling stockholders has had a material relationship
with us within the past three years other than as a result of the ownership of
our common stock or as a result of their employment with us as of the date of
the closing of our acquisition of Myelos. No estimate can be given as to the
amount of our common stock that will be beneficially owned by the selling
stockholders after completion of this offering because the selling stockholders
may offer all, some or none of the shares of our common stock beneficially owned
by them. The shares offered by this prospectus may be offered from time to time
by the selling stockholders named below.
NUMBER OF SHARES OF COMMON NUMBER OF SHARES OF COMMON
STOCK BENEFICIALLY OWNED STOCK
SELLING STOCKHOLDER(1) PRIOR TO OFFERING(2) REGISTERED HEREIN(2)
------------------- ----------------- -----------------
Chris Allen 2,095 2,095
Andrew C. Barnes Family Trust 92,476 92,476
David R. Barnes Trust 14,020 14,020
Robert C. Barnes TTEE FBO Robert C.
Barnes U/A/D dated 03/28/80 14,934 14,934
Arthur J. Benvenuto 84 84
Arthur J. Benvenuto, Trustee 13,752 13,752
BIG Partners II 70,175 70,175
Robert A. Bohrer 3,873 3,873
Robert A. Bohrer and Karen B. Bohrer 4,420 4,420
Nigel Anthony Calcutt 2,358 2,358
Wendy Marie Campana 1,106 1,106
Jerry Caulder 193 193
Jerry D. Caulder Family Trust 54,238 54,238
Michael Caulder 2,767 2,767
Centennial Fund IV, L.P. 552,370 552,370
Charlotte P. Clark, Trustee U/D/T dtd
5/9/94 45,197 45,197
Alexander D. Cross Trust 8,371 8,371
Alexander D. Cross, TTEE Alexander D.
Cross Family Trust UA DTD 07/08/91 3,320 3,320
Alan Culwell 193 193
Alan R. Culwell and Cina M. Culwell 6,004 6,004
Sam Darin 117 117
Sam Darin and Kristen Darin 1,131 1,131
Fred Esch 29,248 29,248
Emerald Private Equity Fund L.L.C. 40,585 40,585
Elkan R. Gamzu 553 553
GC Technology Fund, L.P. 201,609 201,609
Great American Ventures, L.L.C. 8,434 8,434
Heazel Family Investments L.P. 6,325 6,325
Masao Hiraiwa and Yoshiko Hiraiwa 1,179 1,179
Byron Hood 11,621 11,621
Houston Medical Sciences Limited 12,729 12,729
Tara Kuehnert 110 110
Tara Kuehnert and James Matthew
Kuehnert 774 774
17
LOR, Inc. 36,895 36,895
Jonathan MacQuitty and Laurie Hunter 11,882 11,882
Elisabeth Malcolm 747 747
Ernest Mario 3,537 3,537
Melanie June Marks 380 380
Kathleen McDaniel 193 193
Kathleen McDaniel and Gary D. McDaniel 3,736 3,736
MGVF III, Ltd. 36,895 36,895
Denise Mitchell 193 193
Montauk Partners, L.P. 179,204 179,204
John F. and Ruth Ann Mullane 1,768 1,768
Susan L. O'Brien 147,694 147,694
Terri L. O'Brien 1,627 1,627
Barbara L. O'Leary 117 117
Barbara L. and Daniel P. O'Leary 1,875 1,875
D. Elliot Parks 17,631 17,631
Sheryl Parks 17,631 17,631
Rees/Source Ventures #11 L.L.C. 11,026 11,026
The Regents of the University of California 14,548 14,548
Marc K. Samet 3,873 3,873
Robert Schuessler 193 193
Robert J. Schuessler and Elizabeth H.
Schuessler as Trustees of the Robert and
Elizabeth Schuessler Family Trust,
Declaration of Trust dated April 4, 1997 21,307 21,307
TBCC Funding Trust II 96 96
The Rahn Group LLC 12,359 12,359
Robert D. Ulrich and June Russell 14,195 14,195
Vanguard IV, L.P. 241,926 241,926
Weathers Myelos, L.P. 11,068 11,068
Weathers Myelos II, L.P. 92,975 92,975
Judi Weissinger 1,117 1,117
Michael T. White and Karen C. White 4,767 4,767
Woodside Fund III SBIC, L.P. 179,099 179,099
Woodside Fund IV, L.P. 36,895 36,895
David Wright 110 110
David E. Wright and Cynthia S. Wright 24,209 24,209
Yellowstone Equity Partners IV 5,349 5,349
Michele Yelmene 1,179 1,179
-----------------
(1) The selling stockholders have sole voting and investment authority with
respect to the shares of BTG common stock owned by them, subject to community
property laws where applicable.
(2) The selling stockholders have placed an aggregate of 55,825 shares of
BTG common stock in escrow to satisfy certain indemnification obligations of
these selling stockholders. Each selling stockholder placed in escrow that
number of shares of BTG common stock representing its pro rata share of the
55,825 shares placed in escrow based on such selling stockholder's pro rata
ownership of shares of Myelos Corporation. To the extent any of the shares held
in escrow are returned to BTG in satisfaction of these indemnification
obligations, the total number of shares beneficially owned by each selling
stockholder would be reduced by their respective pro rata interest in the shares
held in escrow that are returned to BTG.
PLAN OF DISTRIBUTION
We are registering 2,344,657 shares of our common stock on behalf of
the selling stockholders. As used herein, "selling stockholders" includes the
selling stockholders named in the table above and pledgees, donees,
18
transferees or other successors-in-interest selling shares received from a
named selling stockholder as a gift, partnership distribution or other
non-sale-related transfer after the date of this prospectus. The selling
stockholders may sell the shares from time to time and may also decide not to
sell all the shares they are allowed to sell under this prospectus. The selling
stockholders will act independently of us in making decisions with respect to
the timing, manner and size of each sale. The sales may be made on one or more
exchanges or in the over-the-counter market or otherwise, at prices and at
terms then prevailing or at prices related to the then current market prices,
or in negotiated transactions. The selling stockholders may effect such
transactions by selling the shares to or through broker-dealers. The shares may
be sold by one or more of, or a combination of, the following:
- a block trade in which the broker-dealer so engaged will attempt
to sell shares as agent but may position and resell a portion of
the block as principal to facilitate the transaction;
- purchases by a broker-dealer as principal and resale by such
broker-dealer for its account pursuant to this prospectus;
- ordinary brokerage transactions and transactions in which the
broker solicits purchasers; and
- privately negotiated transactions.
To the extent required, this prospectus may be amended or supplemented
from time to time to describe a specific plan of distribution. In effecting
sales, broker-dealers engaged by the selling stockholders may arrange for other
broker-dealers to participate in the resales.
The selling stockholders may either sell shares directly to purchasers,
or sell shares to, or through, broker-dealers. These broker-dealers may act
either as agent of the selling stockholders, or as a principal for the
broker-dealer's own account. Broker-dealers or agents may receive compensation
in the form of commissions, discounts or concessions from selling stockholders.
Broker-dealers or agents may also receive compensation from the purchasers of
shares for whom they act as agents or to whom they sell as principals, or both.
Compensation as to a particular broker-dealer might be in excess of customary
commissions and will be in amounts to be negotiated in connection with
transactions involving shares. The selling stockholders may enter into hedging
transactions with broker-dealers in connection with distributions of shares or
otherwise. In such transactions, broker-dealers may engage in short sales of
shares in the course of hedging the positions they assume with selling
stockholders. The selling stockholders also may sell shares short and redeliver
shares to close out such short positions. The selling stockholders may enter
into option or other transactions with broker-dealers which require the delivery
of shares to the broker-dealer. The broker-dealer may then resell or otherwise
transfer such shares pursuant to this prospectus. The selling stockholders also
may loan or pledge shares to a broker-dealer. The broker-dealer may sell the
shares so loaned, or upon a default the broker-dealer may sell the shares so
pledged, pursuant to this prospectus.
Broker-dealers or agents and any other participating broker-dealers or
the selling stockholders may be deemed to be "underwriters" within the meaning
of Section 2(11) of the Securities Act of 1933 in connection with sales of
shares. Accordingly, any such commission, discount or concession received by
them and any profit on the resale of shares purchased by them may be deemed to
be underwriting discounts or commissions under the Securities Act of 1933.
Because selling stockholders may be deemed to be "underwriters" within the
meaning of Section 2(11) of the Securities Act of 1933, the selling stockholders
will be subject to the prospectus delivery requirements of the Securities Act of
1933. In addition, any shares of a selling stockholder covered by this
prospectus which qualify for sale pursuant to Rule 144 promulgated under the
Securities Act of 1933 may be sold under Rule 144 rather than pursuant to this
prospectus. The selling stockholders have advised us that they have not entered
into any agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of their shares.
The shares may be sold by selling stockholders only through registered
or licensed brokers or dealers if required under applicable state securities
laws. In addition, in certain states the shares may not be sold unless they have
been registered or qualified for sale in the applicable state or an exemption
from the registration or qualification requirement is available and is complied
with.
Under applicable rules and regulations under the Securities Exchange
Act of 1934, any person engaged in the distribution of shares may not
simultaneously engage in market making activities with respect to our common
stock for a period of two business days prior to the commencement of such
distribution. In addition, each selling stockholder will be subject to
applicable provisions of the Securities Exchange Act of 1934 and the associated
rules and regulations under the Securities Exchange Act of 1934, including
Regulation M, which provisions may limit the timing of purchases and sales of
shares of our common stock by the selling stockholders. We will make copies
19
of this prospectus available to the selling stockholders and have informed them
of the need for delivery of copies of this prospectus to purchasers at or prior
to the time of any sale of the shares.
We will file a supplement to this prospectus, if required, pursuant to
Rule 424(b) under the Securities Act of 1933 upon being notified by a selling
stockholder that any material arrangement has been entered into with a
broker-dealer for the sale of shares through a block trade, special offering,
exchange distribution or secondary distribution or a purchase by a broker or
dealer. Such supplement will disclose:
- the name of each such selling stockholder and of the
participating broker-dealer(s);
- the number of shares involved;
- the price at which such shares were sold;
- the commissions paid or discounts or concessions allowed to such
broker-dealer(s), where applicable;
- that such broker-dealer(s) did not conduct any investigation to
verify the information set out or incorporated by reference in
this prospectus; and
- other facts material to the transaction.
In addition, we will file a supplement to this prospectus upon being
notified by a selling stockholder that a donee or pledgee intends to sell more
than 500 shares.
We will bear all costs, expenses and fees in connection with the
registration of the shares. The selling stockholders will bear all commissions
and discounts, if any, attributable to the sales of the shares. The selling
stockholders may agree to indemnify any broker-dealer or agent that participates
in transactions involving sales of the shares against certain liabilities,
including liabilities arising under the Securities Act.
Each selling stockholder that owns more than 6,000 shares of our common
stock has agreed that prior to March 19, 2003 it will not without our consent
sell in any three month period more than the greater of (1) 6,000 shares or (ii)
10% of the shares it received in the transaction. We can waive this restriction
at any time without notice.
LEGAL MATTERS
The validity of the securities offered hereby will be passed upon for
us by Fulbright & Jaworski L.L.P. New York, New York. Mr. Carl Kaplan, a
director of BTG, is a partner in Fulbright & Jaworski L.L.P. Attorneys at
Fulbright & Jaworski L.L.P. own 6,039 shares of our common stock in the
aggregate.
EXPERTS
The financial statements of Bio-Technology General Corp. incorporated
by reference 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 included herein in
reliance upon the authority of said firm as experts in accounting and auditing
in giving said report.
The financial statements of Myelos Corporation incorporated by
reference in this prospectus and elsewhere in the registration statement have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon (which contains an explanatory paragraph describing conditions
that raise substantial doubt about Myelos Corporation's ability to continue as a
going concern as described in Note 1 to the financial statements), and are
incorporated herein by reference in reliance upon such report, given on the
authority of such firm as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the Securities and Exchange Commission. You may read and
copy any reports, statements or other information filed by us at the SEC's
public reference room at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and in New York, New York and Chicago, Illinois. Copies
of such material can be also obtained from the Public Reference Section of the
SEC at 450 Fifth Street, N.W., Washington, D.C. 20549, and its public reference
rooms in New York, New York and Chicago, Illinois, at prescribed rates. Please
call the SEC at 1-800-SEC-0330 for further information on the public reference
rooms. Copies of such information may also be inspected at the reading room of
20
the library of the National Association of Securities Dealers, Inc., 1735 K
Street, N.W., Washington, D.C. 20006. Our filings with the SEC are also
available to the public from commercial document retrieval services and at the
SEC's web site at "http://www.sec.gov."
We filed a registration statement on Form S-3 with the SEC to register
the shares of BTG common stock to be sold by the selling stockholders. This
prospectus is a part of the registration statement. As allowed by SEC rules,
this prospectus does not contain all the information you can find in BTG's
registration statement or the exhibits to the registration statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and information that we file later
with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings we
will make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 until the selling stockholders sell all their
shares of BTG stock offered by this prospectus:
(i) our annual report on Form 10-K for the fiscal year ended
December 31, 2000, as amended;
(ii) our quarterly report on Form 10-Q for the quarters ended
March 31, 2001 and June 30, 2001;
(iii) our current reports on Form 8-K, filed on March 1, 2001 and
March 30, 2001, as amended;
(iv) the description of our common stock contained in our
registration statement on Form 8-A, dated July 25, 1983, as amended by
Amendment No. 1 to Form 8-A dated September 29, 1983, and Amendment No.
2 to Form 8-A, dated October 1, 1986; and
(v) the description of our preferred stock purchase rights
contained in our registration statement on Form 8-A, filed on October
9, 1998.
We will furnish without charge to you, upon written or oral request, a
copy of any or all of the documents described above, except for exhibits to such
documents, unless such exhibits are specifically incorporated by reference into
such documents. Requests should be addressed to: Bio-Technology General Corp.,
70 Wood Avenue South, Iselin, N.J. 08830, (732) 632-8800, Attention: Robert
Shaw, Esq., Senior Vice President-General Counsel.
You should rely only on the information incorporated by reference or
provided in this prospectus or any supplement. We have not authorized anyone
else to provide you with different information. The selling stockholders will
not make an offer of these shares in any state where the offer is not permitted.
You should not assume that information in this prospectus or any supplement is
accurate as of any date other than the date on the front of these documents.
21
PART II
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, payable by us in connection with the
sale of the common stock being registered. All amounts are estimates except the
Securities and Exchange Commission registration fee.
SEC registration fee ...............................$ 6,336.44
Legal fees and expenses ............................$15,000.00
Accounting fees and expenses........................$12,000.00
Miscellaneous expenses .............................$ 6,663.56
----------
Total: $40,000.00
==========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law (the "DGCL")
empowers a Delaware corporation to indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of such corporation) by reason of the
fact that such person is or was a director, officer, employee or agent of such
corporation, or is or was serving at the request of such corporation as a
director, officer, employee or agent of another corporation or enterprise. A
corporation may, in advance of the final disposition of any civil, criminal,
administrative or investigative action, suit or proceeding, pay the expenses
(including attorneys' fees) incurred by any officer, director, employee or agent
in defending such action, provided that the director or officer undertakes to
repay such amount if it shall ultimately be determined that he is not entitled
to be indemnified by the corporation. A corporation may indemnify such person
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding 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.
A Delaware corporation may indemnify officers and directors in an
action by or in the right of the corporation to procure a judgment in its favor
under the same conditions, except that no indemnification is permitted without
judicial approval if the officer or director is adjudged to be liable to the
corporation. Where an officer or director is successful on the merits or
otherwise in the defense of any action referred to above, the corporation must
indemnify him against the expenses (including attorneys fees) which he actually
and reasonably incurred in connection therewith. The indemnification provided is
not deemed to be exclusive of any other rights to which an officer or director
may be entitled under any corporation's by-law, agreement, vote or otherwise.
In accordance with Section 145 of the DGCL, Article VI of BTG's By-laws
provides that BTG shall indemnify each person who is or was a director, officer,
employee or agent of BTG or is or was serving at the request of BTG as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses, judgments, fines and
amounts paid in settlement actually and reasonably incurred by such person in
connection with such action suit or proceeding; PROVIDED, HOWEVER, that he or
she acted in good faith and in a manner he or she reasonably believed to be in
or not opposed to the best interests of BTG and with respect to any criminal
action or proceeding, had no reasonable cause to believe his or her conduct was
unlawful. The indemnification provided by BTG's By-laws is not exclusive of any
other rights to which any of those seeking indemnification or advancement of
expenses may be entitled under any agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his or her official
capacity and as to action in another capacity while holding such office, and
shall continue as to a person who has ceased to be a director, officer, employee
or agent and shall inure to the benefit of the heirs, executors and
administrators of such person. Expenses (including attorneys' fees) incurred by
an officer or director in defending a civil, criminal, administrative or
investigative action, suit or proceeding shall be paid by BTG in advance of the
final disposition upon receipt of an undertaking by or on behalf of the
indemnified person to repay such amount if it shall ultimately be determined
that he or she is not entitled to be indemnified by BTG.
In addition, BTG has entered into indemnification agreements with each
of its directors and officers.
II-1
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits
2.1 Agreement and Plan of Reorganization by and among Bio-Technology
General Corp., MYLS Acquisition Corp. and Myelos Corporation, dated as
of February 21, 2001.*
5.1 Opinion of Fulbright &Jaworski L.L.P.**
23.1 Consent of Fulbright & Jaworski L.L.P. (included in Exhibit 5.1).**
23.2 Consent of Arthur Andersen LLP. +
23.3 Consent of Ernst & Young LLP, independent auditors. +
24.1 Power of Attorney (included on signature page).**
------------------
* Incorporated by reference to our report on Form 8-K, filed on March 30, 2001.
** Previously filed.
+ Filed herewith.
(b) Financial Statement Schedules.
None.
ITEM 17. UNDERTAKINGS
(a) 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; and
(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.
(b) 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 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.
(c) 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 Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
a claim for indemnification against such liabilities (other than the payment
by the Registrant of expenses incurred or paid by a director, officer, or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer, or controlling
person of the Registrant in connection with the securities being registered,
the Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-2
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Iselin and State of New Jersey on the 17th day
of October, 2001.
BIO-TECHNOLOGY GENERAL CORP.
By: /s/ Sim Fass
--------------------------------
Sim Fass
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
-------------------------------
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
NAME TITLE DATE
---- ----- ----
Chairman of the Board, Chief October 17, 2001
/s/ Sim Fass Executive Officer and Director
------------------------------ (Principal Executive Officer)
Sim Fass
/s/ Herbert Conrad* Director October 17, 2001
------------------------------
Herbert Conrad
/s/ Carl Kaplan* Director October 17, 2001
------------------------------
Carl Kaplan
/s/ Allan Rosenfield* Director October 17, 2001
------------------------------
Allan Rosenfield
/s/ David Tendler* Director October 17, 2001
------------------------------
David Tendler
/s/ Virgil Thompson* Director October 17, 2001
------------------------------
Virgil Thompson
/s/ Dan Tolkowsky* Director October 17, 2001
------------------------------
Dan Tolkowsky
/s/ Faye Wattleton* Director October 17, 2001
------------------------------
Faye Wattleton
II-3
/s/ Herbert Weissbach* Director October 17, 2001
------------------------------
Herbert Weissbach
/s/ John Bond Senior Vice President-Finance October 17, 2001
------------------------------ (Principal Financial and
John Bond Accounting Officer)
* By /s/Robert Shaw
------------------------------
Robert Shaw
(As Attorney-in-Fact for each
of the Persons indicated)
II-4
EXHIBIT INDEX
EXHIBIT
NUMBER EXHIBIT
------ -------
2.1 Agreement and Plan of Reorganization by and among Bio-Technology General
Corp., MYLS Acquisition Corp. and Myelos Corporation, dated as of
February 21, 2001.*
5.1 Opinion of Fulbright & Jaworski L.L.P.**
23.1 Consent of Fulbright & Jaworski L.L.P. (included in Exhibit 5.1).**
23.2 Consent of Arthur Andersen LLP.+
23.3 Consent of Ernst & Young LLP, independent auditors+
24.1 Power of Attorney (included on signature page).**
-------------------------
* Incorporated by reference on our report on Form 8-K, filed on March 30,2001.
** Previously filed.
+ Filed herewith.
EX-23.2
3
a2061304zex-23_2.txt
EXHIBIT 23.2
Exhibit 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement on Form S-3, of our report dated
February 21, 2001 (except with respect to the matters discussed in Note 12, as
to which the date is March 19, 2001) included in Bio-Technology General Corp.'s
Form 10-K for the year ended December 31, 2000 and to all references to our Firm
included in this registration statement.
ARTHUR ANDERSEN LLP
October 11, 2001
New York, New York
EX-23.3
4
a2061304zex-23_3.txt
EXHIBIT 23.3
Exhibit 23.3
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in Amendment
No. 1 to the Registration Statement (Form S-3) and related Prospectus of
Bio-Technology General Corp. for the registration of 2,344,657 shares of its
common stock and to the incorporation by reference therein of our report dated
January 15, 2001, with respect to the financial statements of Myelos Corporation
included in the Current Report on Form 8-K/A of Bio-Technology General Corp.,
filed with the Securities and Exchange Commission on June 4, 2001.
ERNST & YOUNG LLP
San Diego, California
October 11, 2001