-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TA8y0df1Eo2kRlR3JXDHmF1vy5Jkl/QWP62LYmgSfxLyqDl95CwfWq/L0UehMBoc w5Swz7FgjxJshtuSKhkjYQ== 0001047469-99-024262.txt : 19990616 0001047469-99-024262.hdr.sgml : 19990616 ACCESSION NUMBER: 0001047469-99-024262 CONFORMED SUBMISSION TYPE: S-3/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19990615 FILER: COMPANY DATA: COMPANY CONFORMED NAME: REPLIGEN CORP CENTRAL INDEX KEY: 0000730272 STANDARD INDUSTRIAL CLASSIFICATION: BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836] IRS NUMBER: 042729386 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: S-3/A SEC ACT: SEC FILE NUMBER: 333-76005 FILM NUMBER: 99646801 BUSINESS ADDRESS: STREET 1: 117 FOURTH AVE CITY: NEEDHAM STATE: MA ZIP: 02194 BUSINESS PHONE: 7814499560 MAIL ADDRESS: STREET 1: 117 FOURTH AVE CITY: NEEDHAM STATE: MA ZIP: 02194 S-3/A 1 FORM S-3/A AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 15, 1999 REGISTRATION NO. 333-76005 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ---------------------------------------- AMENDMENT NO. 2 TO FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ---------------------------------------- REPLIGEN CORPORATION (Exact name of Registrant as specified in its charter) -----------------------------
DELAWARE 2836 04-2729386 (State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer of incorporation or organization) Classification Code Number) Identification Number)
117 FOURTH AVENUE NEEDHAM, MA 02494 (781) 449-9560 (Address, including zip code, and telephone number, including area code, of Registrant's principal executive offices) ---------------------------------------- WALTER C. HERLIHY PRESIDENT AND CHIEF EXECUTIVE OFFICER REPLIGEN CORPORATION 117 FOURTH AVENUE NEEDHAM, MA 02494 (781) 449-9560 (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: LAWRENCE S. WITTENBERG, ESQ. Testa, Hurwitz & Thibeault, LLP High Street Tower 125 High Street Boston, Massachusetts 02110 (617) 248-7000 APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after this Registration Statement becomes effective. If the only securities being registered on this form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. / / If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. /X/ If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / / 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. / / - -------------------------- REPLIGEN HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL REPLIGEN 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 SECTION 8(A), MAY DETERMINE. The information in this prospectus is not complete and may be changed. We may not sell these securitieis until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell securities, and it is not soliciting offers to buy these securities in any state where the offer or sale is not permitted. SUBJECT TO COMPLETION, DATED JUNE 15, 1999 REPLIGEN CORPORATION 262,500 SHARES COMMON STOCK These shares are being offered for sale by the Autism Research Institute. Repligen's common stock is traded on the Nasdaq National Market under the symbol "RGEN." The last reported sales price of the common stock on the Nasdaq National Market on June 10, 1999 was $3.0625 per share. --------------------------- INVESTING IN THE COMMON STOCK INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING ON PAGE 3. --------------------------- NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED 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 June __, 1999. YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION DIFFERENT FROM THAT CONTAINED IN THIS PROSPECTUS. AUTISM RESEARCH INSTITUTE IS OFFERING TO SELL, AND SEEKING OFFERS TO BUY, SHARES OF COMMON STOCK ONLY IN JURISDICTIONS WHERE OFFERS AND SALES ARE PERMITTED. THE INFORMATION CONTAINED IN THIS PROSPECTUS IS ACCURATE ONLY AS OF THE DATE OF THIS PROSPECTUS, REGARDLESS OF THE TIME OF DELIVERY OF THIS PROSPECTUS OR OF ANY SALE OF THE COMMON STOCK. ------------------------ TABLE OF CONTENTS
Page ---- The Company............................................................... 2 Risk Factors.............................................................. 3 Legal Proceedings......................................................... 6 Selected Consolidated Financial Data...................................... 7 Management's Discussion and Analysis of Financial Condition and Results of Operations............................ 8 Use of Proceeds...........................................................12 Selling Stockholder.......................................................12 Plan of Distribution......................................................13 Legal Matters.............................................................14 Experts...................................................................14 Where You Can Find More Information.......................................15
------------------------ -1- THE COMPANY We develop new drugs for neurological disease, organ transplantation and cancer. To expand our drug development program, on March 9, 1999, we acquired the exclusive rights to patent applications for the use of secretin in the treatment of autism from Autism Research Foundation, a not-for-profit organization, and Victoria A. Beck, both holders of rights to such patent applications. Autism is a developmental disorder characterized by poor communication skills, negative behavior, irregular sleep patterns and diminished ability to learn. Secretin is a hormone produced in the small intestine which regulates the function of the pancreas as part of the process of digestion. A form of secretin derived from pigs is approved by the FDA for use in diagnosing problems with pancreatic function. Recent anecdotal reports indicate that secretin may have beneficial effects in autism, including improvements in sleep, digestive function, speech and social behavior. Following media reports of the potential benefits of secretin, more than 2,000 autistic children have been treated with the pig-derived hormone. We intend to manufacture a human, synthetic form of secretin and evaluate it in FDA approved clinical trials in order to confirm the benefits of secretin in treating autism and to determine the optimal dosing schedule. There are currently no drugs approved by the FDA for the treatment of autism. We are also developing a product named "CTLA4-Ig," which has been shown to suppress unwanted immune responses in animal models of organ transplants and autoimmune diseases, such as lupus or multiple sclerosis, in which the immune system mistakenly attacks the body. Our product candidate is a derivative of a natural protein whose role is to turn-off an immune response. In animal models of organ transplantation and autoimmune diseases, CTLA-Ig has been shown to block the rejection of a transplanted organ or the effects of the autoimmune disease. Initial clinical testing of CTLA4-Ig has been carried out in patients receiving a bone marrow transplant, which is a potential cure for several diseases of the immune system, including leukemia, myeloma, lymphoma and sickle cell anemia. Despite the clinical success of bone marrow transplants, a significant number of patients experience a severe and potentially life-threatening complication known as Graft Versus Host Disease, in which the newly transplanted immune system attacks the host (i.e., the patient). In December 1998, investigators from the Dana-Farber Cancer Institute, a research hospital in Boston, reported that treatment of bone marrow from a family member who was taking CTLA4-Ig substantially reduced Graph Versus Host Disease in twelve transplant patients. We intend to further evaluate CTLA4-Ig in bone marrow transplants for leukemia. In July 1998, we filed a complaint to assert our ownership rights of United States patents issued to Bristol-Myers Squibb Corporation relating to the use of and manufacture of CTLA4-Ig. We believe that one of our licensees is a co-inventor of these patents and we are seeking to obtain co-inventor rights of these patents. We have also filed our own patents related to compositions of matter and methods of use of CTLA4-Ig. In preclinical studies, we are evaluating low molecular weight compounds which block new blood vessel growth by inhibiting the action of a key growth factor which stimulates the growth of new blood vessels. Drugs which block the growth of new blood vessels may arrest the growth of solid tumors and stop the progression of eye diseases characterized by uncontrolled blood vessel growth. This program is based on our patented, high throughput screening assays and proprietary libraries of compounds. Our program to block new blood vessel growth is supported, in part, by a grant from the National Cancer Institute. -2- We develop, manufacture and market products for the production of therapeutic antibodies. We currently market a line of products for the purification of antibodies based on a naturally occurring protein, Protein A, which can specifically bind to antibodies. In December 1998, we entered into a ten year agreement to supply recombinant Protein A to Amersham Pharmacia Biotech, a leading supplier to the biopharmaceutical market. Repligen's executive offices are located at 117 Fourth Avenue, Needham, Massachusetts 02494, and Repligen's telephone number is (781) 449-9560. RISK FACTORS YOU SHOULD CAREFULLY CONSIDER THE RISKS DESCRIBED BELOW BEFORE MAKING AN INVESTMENT DECISION. ADDITIONAL RISKS AND UNCERTAINTIES THAT WE ARE UNAWARE OF OR THAT WE CURRENTLY DEEM IMMATERIAL ALSO MAY BECOME IMPORTANT FACTORS THAT AFFECT REPLIGEN. IF ANY OF THE FOLLOWING RISKS OCCUR, OUR BUSINESS, FINANCIAL CONDITION OR RESULTS OF OPERATIONS COULD BE MATERIALLY HARMED. IN THAT CASE THE TRADING PRICE OF OUR COMMON STOCK COULD DECLINE, AND YOU MAY LOSE ALL OR PART OF YOUR INVESTMENT. THIS PROSPECTUS ALSO CONTAINS FORWARD LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES. OUR ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED IN THESE FORWARD LOOKING STATEMENTS AS A RESULT OF CERTAIN FACTORS, INCLUDING THE RISKS FACED BY US DESCRIBED BELOW AND ELSEWHERE IN THIS PROSPECTUS. IF WE DO NOT OBTAIN ADDITIONAL CAPITAL, WE WILL BE UNABLE TO DEVELOP OR DISCOVER NEW DRUGS. We need additional long-term financing to develop our drug development programs through the clinical trial process as required by the FDA and our bioprocessing products business. We also need additional long-term financing to support future operations and capital expenditures, including capital for additional personnel and facilities. If we spend more money than currently expected for our drug development programs and our bioprocessing products business, we will need to raise additional capital by selling debt or equity securities, by entering into strategic relationships or through other arrangements. We may be unable to raise any additional amounts on reasonable terms when they are needed due to the volatile nature of the biotechnology marketplace. If we are unable to raise this additional capital, we may have to delay or postpone critical clinical studies or abandon other development programs. BECAUSE OUR OPERATING RESULTS FLUCTUATE FROM QUARTER TO QUARTER, SO DOES OUR STOCK PRICE, WHICH MEANS INVESTORS MAY HAVE TO SELL THEIR STOCK AT A LOSS IF THEY ARE UNABLE TO WAIT FOR A REBOUND. Our quarterly and annual operating revenues and expenses may fluctuate due to a number of factors including: o the timing and size of increased research and development expenses; o expenses associated with clinical development of our products; or o the timing and size of product orders. -3- Our product development activities often focus on unproven technologies and undeveloped markets. As a result, we may experience difficulty in forecasting operating expenditures, and we cannot know when or whether our efforts will result in commercially successful products. The expenses or losses associated with these product development activities could materially adversely affect our operating results. IF WE ARE UNABLE TO CONTINUE TO HIRE AND RETAIN SKILLED TECHNICAL AND SCIENTIFIC PERSONNEL, THEN WE WILL HAVE TROUBLE DEVELOPING PRODUCTS. Our success depends largely upon the continued service of our management and scientific staff and our ability to attract, retain and motivate highly skilled scientific, management and marketing personnel. Potential employees with an expertise in the field of biochemistry, regulatory affairs and/or clinical development of new drug and biopharmaceutical manufacturing are not generally available in the market and are difficult to attract and retain. We also face significant competition for such personnel from other companies, research and academic institutions, government and other organizations who have superior funding and resources to be able to attract such personnel. The loss of key personnel or our inability to hire and retain personnel who have technical and scientific backgrounds could materially adversely affect our product development efforts and our business. WE COMPETE WITH LARGER, BETTER FINANCED AND MORE MATURE PHARMACEUTICAL AND BIOTECHNOLOGY COMPANIES WHO ARE CAPABLE OF DEVELOPING NEW APPROACHES THAT COULD MAKE OUR PRODUCTS AND TECHNOLOGY OBSOLETE. The market for therapeutic and bioprocessing products is intensely competitive, rapidly evolving and subject to rapid technological change. Pharmaceutical and mature biotechnology companies have substantially greater financial, manufacturing, marketing, research and development resources than we have. New approaches to the treatment of our targeted diseases by these competitors may make our products and technologies obsolete or noncompetitive. IF WE ARE UNABLE TO OBTAIN AND MAINTAIN PATENTS FOR OUR PRODUCTS, WE WILL NOT BE ABLE TO SUCCEED COMMERCIALLY. We must obtain patent and trade secret protection for our products and processes in order to protect them from unauthorized use and to produce a financial return consistent with the significant time and expense required to bring our products to market. Our success will depend, in part, on our ability to: o obtain patent protection for our products and manufacturing processes; o preserve our trade secrets; and o operate without infringing the proprietary rights of third parties. There can be no assurance that any patent applications relating to our products will be filed in the future or that any currently pending applications will issue on a timely basis, if ever. -4- Since patent applications in the United States are maintained in secrecy until patents issue and since publication of discoveries in the scientific or patent literature often lag behind actual discoveries, we cannot be certain that we were the first to make the inventions covered by each of our pending patent applications or that we were the first to file patent applications for such inventions. Even if patents are issued, the degree of protection afforded by such patents will depend upon the: o scope of the patent claims; o validity and enforceability of the claims obtained in such patents; and o our willingness and financial ability to enforce and/or defend them. The patent position of biotechnology and pharmaceutical firms is often highly uncertain and usually involves complex legal and scientific questions. Moreover, no consistent policy has emerged in the United States and in many other countries regarding the breadth of claims allowed in biotechnology patents. Patents which may be granted to us in certain foreign countries may be subject to opposition proceedings brought by third parties or result in suits by Repligen which may be costly and result in adverse consequences for Repligen. If our competitors prepare and file patent applications in the United States that claim technology also claimed by us, we may be required to participate in interference proceedings declared by the U.S. Patent and Trademark Office to determine priority of invention, which would result in substantial costs to us. For instance, in July 1998, we filed a complaint to assert our ownership rights of United States patents issued to Bristol-Myers Squibb Corporation relating to the use of and manufacture of CTLA4-Ig. We believe that one of our licensees is a co-inventor of these patents and we are seeking to obtain co-inventor rights of these patents. We may incur substantial costs defending these and other infringement or patent interference proceedings, which proceedings may result in adverse consequences for Repligen. In addition, patents blocking our manufacture, use or sale of our products could be issued to third parties in the United States or foreign countries. The issuance of blocking patents or an adverse outcome in an interference or opposition proceeding, could subject us to significant liabilities to third parties and require us to license disputed rights from third parties on unfavorable terms, if at all, or cease using the technology. WE ARE NOT YEAR 2000 COMPLIANT, AND AS A RESULT, MAY FACE, AND BE LIABLE FOR, DATA CORRUPTION, COMPUTER FAILURE AND DISRUPTION OF OPERATIONS. Many existing computer systems and software products do not properly recognize dates after December 31, 1999. This "Year 2000" problem could result in miscalculations, data corruption, system failures or disruptions of operations. We are subject to potential Year 2000 problems affecting our computers' systems, our internal systems and the systems of our vendors and scientific collaborators, any of which could have a material adverse affect on our business operating results and financial conditions. -5- Based on our assessments to date, we believe that our internal systems are substantially Year 2000 compliant although there can be no assurance that Year 2000 errors or defects will not be discovered in our internal software systems and, if such errors or defects are discovered, there can be no assurance that the costs of making such systems Year 2000 compliant will not be material. Year 2000 errors or defects in the internal systems maintained by our vendors of clinical trial collaborators could require us to incur significant delays in our product development programs and unanticipated expenses to remedy any problems or replace affected vendors. LEGAL PROCEEDINGS On July 17, 1998, Repligen filed a complaint at the United States District Court for the District of Massachusetts in Boston, Massachusetts. The complaint relates to a United States patent issued in 1995 to Bristol-Myers Squibb Corporation claiming a method of treating immune system diseases with CTLA4-Ig. In December 1998, related patents were issued to Bristol-Myers claiming the composition of CTLA4-Ig. Thereafter, the complaint was amended to include the patents claiming the composition of CTLA4-Ig. In the amended complaint, we seek to assert our ownership rights in, and to obtain co-inventor rights of, the Bristol-Myers patents and we also seek unspecified monetary damages. If we are successful in our claims, a licensor of such intellectual property rights Repligen will be named as a co-inventor of the Bristol-Myers patents which will give Repligen and Bristol-Myers shared rights to the patents. There can be no assurances that the litigation will conclude in a result beneficial to Repligen. Repligen's failure to obtain shared ownership rights in the patents may restrict Repligen's ability to commercialize CTLA4-Ig for certain applications. -6- SELECTED CONSOLIDATED FINANCIAL DATA The following selected financial data are derived from, and are qualified in their entirety by reference to, the consolidated financial statements of Repligen as of and for the years ended March 31, 1995, 1996, 1997, 1998 and 1999 which consolidated financial statements have been audited by Arthur Andersen LLP, independent public accountants. The selected financial data set forth below should be read in conjunction with the consolidated financial statements of Repligen and the related notes thereto and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere in this prospectus.
Years Ended March 31, ----------------------------------------------------- 1999 1998 1997 1996 1995 (In thousands, except per share amounts) OPERATING STATEMENT DATA: Revenues Research and development.............. $ 1,268 $ 917 $ 1,180 $ 7,949 $ 10,988 Product............................... 1,010 1,114 1,554 1,874 3,885 Investment and other.................. 312 354 1,068 1,036 2,069 ------- ------ ------- -------- -------- Total Revenue........................ 2,590 2,385 3,802 10,859 16,942 ------- ------ ------- -------- -------- Costs and expenses Research and development.............. 1,847 1,420 1,378 11,980 31,012 Charge for purchased patent rights.... 1,035 -- -- -- -- Selling, general & administrative..... 1,563 1,281 1,940 4,925 4,673 Cost of product sales................. 689 480 537 1,516 1,535 Charge for acquired research & Development.......................... -- -- 549 334 -- Restructuring (credit) charge ........ -- -- (111) 3,567 11,300 Interest.............................. -- -- -- 58 372 ------- ------ ------- -------- -------- Total costs and expenses............. 5,134 3,181 4,293 22,380 48,892 ------- ------ ------- -------- -------- Net loss.................................. $(2,544) $ ( 796) $ ( 491) $(11,521) $(31,950) ------- ------ ------- -------- -------- ------- ------ ------- -------- -------- Net loss per common share................. $( 0.14) $ (0.05) $ (0.03) $ (0.75) $ (2.08) ------- ------ ------- -------- -------- ------- ------ ------- -------- -------- Weighted average common shares outstanding............................... 18,018 16,502 15,678 15,370 15,356 ------- ------ ------- -------- -------- ------- ------ ------- -------- --------
1999 1998 1997 1996 1995 ------------------------------------------------------------- (In thousands) BALANCE SHEET DATA: Cash and investments..................... $ 3,251 $ 4,726 $ 3,538 $ 7,222 $ 15,302 Working capital.......................... 3,860 5,377 3,990 4,154 9,070 Total assets............................. 5,224 6,513 5,621 9,231 31,330 Accumulated deficit...................... (126,864) (124,320) (123,533) (123,042) (111,520) Stockholders' equity..................... 4,592 6,124 4,919 4,809 15,576
-7- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW THE FOLLOWING MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES. WHEN USED IN THIS PROSPECTUS, THE WORDS "INTEND," "ANTICIPATE," "BELIEVE," "ESTIMATE," "PLAN" AND "EXPECT" AND SIMILAR EXPRESSIONS AS THEY RELATE TO US ARE INCLUDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. REPLIGEN'S ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED IN THESE FORWARD-LOOKING STATEMENTS ARE A RESULT OF CERTAIN FACTORS, INCLUDING THOSE SET FORTH UNDER RISK FACTORS" AND ELSEWHERE IN THIS PROSPECTUS. RESULTS OF OPERATIONS FISCAL YEAR ENDED MARCH 31, 1999 COMPARED WITH FISCAL YEAR ENDED MARCH 31, 1998 REVENUES. Total revenues for fiscal 1999 were $2,590,000 as compared to $2,385,000 in fiscal 1998, an increase of $205,000. Research and development revenues for fiscal 1999 totaled $1,268,000, including revenues relating to drug discovery collaboration arrangements with pharmaceutical partners, licensing revenue, and revenue generated from a Phase II Small Business Innovation Research (SBIR) grant from the National Institute of Health. The increase in research and development revenues of $351,000 or 38% from fiscal 1998 levels is primarily attributable to licensing payments relating to intellectual property rights licensed to Neocrin, Inc. Product revenues for fiscal 1999 were $1,010,000 compared to $1,114,000 in fiscal 1998. The decrease in the product sales volume is attributed to a decrease in sales of reagent products partially offset by the increase in sales of Protein A. Investment income for fiscal 1999 was $212,000, a decrease of $13,000 from $225,000 for fiscal 1998. This decrease in investment income was due primarily to the sale of non-investment securities held by Repligen offset by higher average funds available for investment during fiscal 1999. Other revenues for the fiscal 1999 period decreased by approximately $29,000 from the comparable fiscal 1998 period, due in large part, to the one-time sale of equipment and furnishings by Repligen. EXPENSES. During fiscal 1999, total expenses were $5,134,000, significantly higher than fiscal 1998 expenses of $3,181,000. Higher level of expenses in fiscal 1999 was largely due to the $1,035,000 charge associated with Repligen's acquisition of the rights to certain patent applications for the use of secretin in the treatment of autism. Research and development expenses for fiscal 1999, totaled $1,847,000, an increase of $427,000, or 30%, from fiscal 1998 levels due to an increase in both personnel and laboratory expenses associated with the expansion of Repligen's research and development program. Repligen anticipates that research and development expenses will continue to increase significantly as Repligen increases its investment in its drug development programs during fiscal 2000. Cost of product sales for fiscal 1999 totaled $689,000, an increase of $209,000 from the prior fiscal year. Cost of product sales in fiscal 1999 were 68% of product revenues versus 43% of product revenues for fiscal 1998. This increase is largely attributable to a write off of certain -8- obsolete raw materials and work in process resulting from the introduction of a new Protein A product in fiscal 1999. Selling, general and administrative expenses for fiscal 1999 were $1,563,000, an increase from fiscal 1998 of $282,000. This increase is attributable to a noncash charge associated with the issuance of warrants for legal services related to Repligen's complaint filed against Bristol-Myers Squibb. In addition, Repligen incurred increased expenses relating to legal and shareholder services as Repligen sought additional financing. In March 1999, Repligen acquired all rights to certain patent applications covering the use of secretin in the treatment of autism. The rights were acquired pursuant to a patent purchase agreement. In addition, Repligen agreed to make certain milestone payments upon (a) Repligen's filing of a new drug application with the United States Food and Drug Administration for a clinical indication covered by the intellectual property rights transferred by the patent purchase agreement and (b) the approval by the FDA of a product covered by the intellectual property rights transferred to Repligen pursuant to the patent purchase agreement. Finally, Repligen agreed to pay certain royalty payments if Repligen is able to derive sales and/or licensing revenues from the intellectual property rights acquired pursuant to the patent purchase agreement. Under terms of the patent purchase agreement, Repligen may be required to repurchase up to a maximum of 100,000 shares of common stock issued in connection with the patent purchase agreement at a price of $1.59 per share. This obligation to repurchase the common stock expires in June 1999. Approximately $1,035,000 was charged to the accompanying 1999 statement of operations as the cost of the purchased patent rights. FISCAL YEAR ENDED MARCH 31, 1998 COMPARED WITH FISCAL YEAR ENDED MARCH 31, 1997 REVENUES. Total revenues for fiscal 1998 were $2,385,000 as compared to $3,802,000 in fiscal 1997, a decrease of $1,417,000. Research and development revenues for fiscal 1998 totaled $917,000, compared to $1,180,000 in fiscal 1997. The research and development revenues for fiscal year 1998 include revenues relating to drug discovery collaboration arrangements with pharmaceutical partners, licensing revenue, receipt of a milestone payment, and revenue generated from two Phase I Small Business Innovation Research (SBIR) grants from the National Institute of Health. The reduction in research and development revenues of $263,000 or 22% from fiscal 1997 levels is primarily attributable to the termination of its collaborations with Eli Lilly and Company and Repligen Clinical Partners, L.P. Product revenues for fiscal 1998 were $1,114,000 compared to $1,554,000 in fiscal 1997. The decrease of $440,000 in the product sales volume is largely attributed to the timing of large production scale orders of Protein A offset by an increase in sales of reagent products. Investment income decreased by $44,000 from $269,000 for fiscal 1997 to $225,000 for fiscal 1998 and was due primarily to lower average funds available for investment during fiscal 1998. Other revenues for the fiscal 1998 of $129,000 decreased by approximately $660,000 from the comparable fiscal 1997 other revenue of $799,000 and was primarily due to a restructuring of Repligen, pursuant to which Repligen made a one-time sale of equipment and furnishings for $317,000 and the one-time sale of non-investment securities for approximately $300,000 as part of the restructuring. -9- EXPENSES. During fiscal 1998, total expenses of $3,181,000 were significantly lower than fiscal 1997 expenses of $4,293,000, a decrease of $1,112,000 or 26% from fiscal 1997. The higher level of expenses in fiscal 1997 was primarily a result of expenditures associated with Repligen's former facility in Cambridge, Massachusetts. Research and development expenses for fiscal 1998, totaling $1,420,000, compared to $1,378,000 in fiscal 1997, an increase of $42,000, or 3%, from fiscal 1997. Cost of product sales decreased $57,000 from $537,000 in fiscal 1997 to $480,000 in fiscal 1998. Cost of product sales in fiscal 1998 were 43% of product revenues versus 35% of product revenues for fiscal 1997. The decrease in the cost of product sales is the result of a change in the product mix between fiscal years and the result of the realization of inventory in fiscal 1997 that had been reserved for in fiscal 1996. Selling, general and administrative expenses for fiscal 1998 were $1,281,000, compared to $1,949,000 in fiscal 1997, a decrease from fiscal 1997 of $659,000. This decrease is a result of Repligen's restructuring efforts that took place during fiscal 1997 and 1996. As a result of Repligen's relocation to smaller office and laboratory space, Repligen realized savings in rent and related facility costs. In addition, this decrease in expenses is a result of the reduction of administrative personnel and related expenses that took place during fiscal 1997. In the year ended March 31, 1997, Repligen acquired, in exchange for Repligen's common stock, all of the outstanding shares of ProsCure, Inc., a subsidiary of Glycan Pharmaceuticals, Inc. ProsCure has licensed the rights to certain drug discovery technologies and lead compounds for application to the field of cancer from Glycan, a wholly owned subsidiary of Repligen. Since the technology acquired will require further development by Repligen, this acquisition was accounted for as a purchase, with the excess of the purchase price and acquisition costs over the fair value of the assets acquired of approximately $549,000, charged to operations. LIQUIDITY AND CAPITAL RESOURCES Repligen's total cash, cash equivalents and marketable securities decreased to $3,251,000 at March 31, 1999 from $4,726,000 at March 31, 1998. This decrease is primarily attributable to the operating loss incurred in the year ended March 31, 1999 of approximately $1,509,000. In addition, this decrease is attributable to an increase in accounts receivable and prepaid expenses of $242,000, partially offset by an increase of accounts payable and accrued expenses of $228,000. Working capital decreased by $1,517,000 to $3,860,000 at March 31, 1999 from $5,377,000 at March 31, 1998 due to cash outlays to fund operating losses, the purchase of equipment, furniture and fixtures and leasehold improvements, and an increase in accounts receivable outstanding at the end of fiscal year 1998 offset by an increase accounts payable and accrued expenses. Capital expenditures for fiscal 1999 and 1998 were $252,000 and $114,000, respectively. The capital expenditures in both fiscal 1999 and fiscal 1998 reflect leasehold improvements and the purchase of research and development and manufacturing equipment. Repligen entered into agreements with a number of collaborative partners and licenses. Under the terms of these agreements, Repligen may be eligible to receive research support, additional milestones or royalty revenue if these collaborations continue to clinical evaluation -10- and commercialization. Repligen can not be assured to the continuation of these collaborations or any future payments. Repligen has funded operations primarily with cash derived from the sales of its equity securities, revenue derived from research and development contracts, product sales and investment income. In April and May 1999, the certain accredited investors entered into binding common stock purchase agreements to purchase from Repligen an aggregate of 3,600,000 shares of common stock of Repligen for an aggregate purchase price of $9,000,000 in a private placement transaction. The closing of the private placement for financing is subject to Repligen filing a registration statement covering the resale of the shares and causing such registration statement to become effective immediately after the closing. While Repligen anticipates that the cost of operations will increase in fiscal 2000 as it continues to expand its investment in proprietary product development, Repligen believes that the private placement financing (upon closing) yielding an aggregate (after closing) of $9,000,000 in gross proceeds to Repligen (before related transactional expenses) will provide sufficient funding to satisfy its working capital and capital expenditure requirements for the next twenty-four months. Should Repligen need to secure additional financing to meet its future liquidity requirements, there can be no assurances that Repligen will be able to secure such financing, or that such financing, if available, will be on terms favorable to Repligen. YEAR 2000 Repligen has undertaken an initial review of its information technology computer systems and it believes that the Year 2000 problem does not pose significant operational problems to its information technology systems. The majority of Repligen's software and computer equipment has been purchased within the last five years from third-party vendors who have already provided upgrades intended to bring their products into Year 2000 compliance. Repligen has begun to address the small number of internal systems that are not yet Year 2000 compliant, and expects full compliance by the end of 1999. Repligen currently believes that the costs of addressing these issues should not exceed $50,000 and will not have a material adverse impact on Repligen's financial position. Repligen has recently begun interviewing various third parties, including vendors and suppliers of Repligen, to determine their exposure to Year 2000 issues, their anticipated risks and responses to those risks. To date, the third parties that have been contacted have indicated that their hardware or software is or will be Year 2000 compliant in a time frame that meets Repligen's requirements. Even with the vendor compliance however, Repligen intends to continue to assess its exposure to Year 2000 noncompliance on the part of any of its material vendors. There can be no assurance that the vendor's systems will be Year 2000 compliant in a time frame satisfactory to Repligen. Repligen does not have a contingency plan in the event Year 2000 compliance cannot be achieved in a timely manner. A contingency plan will be developed immediately upon completion of Repligen's Year 2000 compliance assessment. -11- USE OF PROCEEDS Repligen will not receive any of the proceeds from the sale of the shares of its common stock by the Autism Research Institute hereunder. See "Selling Stockholder" and "Plan of Distribution". The principal purpose of this offering is to effect an orderly disposition of the shares of common stock of Repligen being offered and sold from time to time by the Autism Research Institute. SELLING STOCKHOLDER The following table lists Autism Research Institute as the selling stockholder, the number of shares of common stock of Repligen beneficially owned by Autism Research Institute as of May 14, 1999 and before this offering, and the maximum number of shares of common stock of Repligen that the Autism Research Institute may offer and sell pursuant to this prospectus. Autism Research Institute may offer shares of common stock of Repligen from time to time. Since Autism Research Institute may sell all, some or none of its shares of common stock of Repligen, no estimate can be made of the aggregate number or percentage of shares of common stock of Repligen that Autism Research Institute will own upon completion of the offering to which this prospectus relates.
Number of Shares Beneficially Owned Before Percentage of Offering and Shares Owned Offered Pursuant to This Before Selling Stockholder Prospectus Offering ------------------- ---------- -------- Autism Research Institute 262,500 1.4%
The Autism Research Institute acquired its shares of common stock of Repligen in connection with Repligen's purchase of intellectual property rights held by Autism Research Institute and Victoria A. Beck. The Autism Research Institute is a not-for-profit organization incorporated in the State of California. Victoria A. Beck was a co-owner of the patent applications purchased by Repligen. The patent purchase agreement to sell the intellectual property rights held by Autism Research Institute and Victoria A. Beck to Repligen is included in the current report of Repligen filed on Form 8-K on March 24, 1999. See "Where You Can Find More Information". Except for the sale by Autism Research Institute of intellectual property rights to Repligen in March, 1999, Autism Research Institute has not had any material relationship with Repligen. In the patent purchase agreement, Autism Research Institute has represented to Repligen that Autism Research Institute acquired the shares of common stock of Repligen as principal for its own account for investment purposes only and not with a view to, or for sale in connection with, any sale, assignment, transfer or other distribution of the shares of common stock of Repligen which would violate the Securities Act of 1933 or any other federal or state securities laws. In recognition of the fact, however, that the Autism Research Institute may want to be able to sell the shares of common stock of Repligen when Autism Research Institute considers it appropriate, we agreed, in the patent purchase agreement, to file this registration statement with the Securities and Exchange Commission to allow Autism Research Institute to publicly sell its shares of Repligen common stock. In the patent purchase agreement, we also agreed to keep the -12- registration statement effective until the earliest of (a) March 9, 2000, and (b) the time that Autism Research Institute has sold all of its shares of common stock of Repligen; provided that in the event that, prior to such time, Repligen fails to remain current or comply with its filing obligations with the SEC under the Securities Exchange Act of 1934 or Rule 144 of the Securities Act, we have agreed to maintain the effectiveness of this Registration Statement until March 9, 2001. PLAN OF DISTRIBUTION The shares of common stock of Repligen covered by this prospectus may be sold by the Autism Research Institute from time to time for its own account. The Autism Research Institute acquired all of its shares of common stock of Repligen pursuant to the patent purchase agreement. In the patent purchase agreement, Repligen is responsible for the expenses incurred in connection with the registration of the shares of common stock of Repligen, except that the Autism Research Institute will pay or assume brokerage commissions and similar charges, the legal fees and expenses of counsel for the Autism Research Institute and any stock transfer taxes or other expenses incurred in connection with the sale of the shares of common stock of Repligen. Repligen will not receive any of the proceeds from this offering. The distribution of the shares of common stock of Repligen by the Autism Research Institute is not subject to any underwriting agreement. In the patent purchase agreement, Repligen has agreed to attempt to find a buyer by June 7, 1999 for at least 100,000 of the shares of common stock of Repligen held by the Autism Research Institute at a price per share equal to or greater than $1.59. Repligen is not and will not receive any commissions or remuneration of any kind in connection with the sale of the shares of common stock of Repligen being offered and sold by the Autism Research Institute. In the patent purchase agreement, Repligen has further agreed that, if the Autism Research Institute has not been able to sell at least 100,000 shares of common stock of Repligen at a price of at least $1.59 per share, the Autism Research Institute shall be entitled to cause Repligen to purchase the number of shares of common stock of Repligen equal to the difference between 100,000 and the number of shares of common stock of Repligen which the Autism Research Institute has been able to sell at a price per share equal to at least $1.59. The Autism Research Institute's right to cause Repligen to repurchase the Autism Research Institute's shares of common stock of Repligen terminates forever on June 17, 1999. In addition to the Autism Research Institute's right to cause Repligen to repurchase the Autism Research Institute's shares of common stock of Repligen pursuant to the patent purchase agreement, as described in the paragraph immediately above, the shares of common stock of Repligen offered by the Autism Research Institute may be sold from time to time in transactions on the Nasdaq National Market, in negotiated transactions, through the writing of options on the shares of common stock of Repligen, or a combination of such methods of sale, at fixed prices that may be changed, at market prices prevailing at the time of sale, at prices relating to such prevailing market prices or at negotiated prices. In addition, the Autism Research Institute may sell its shares of common stock of Repligen covered by this prospectus through customary brokerage channels, either through broker-dealers acting as agents or brokers, or through broker-dealers acting as principals, who may then resell the shares of common stock of Repligen, or at private sale or otherwise, at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at negotiated prices. The Autism Research Institute may effect such transactions by selling shares of common stock of Repligen to or through broker-dealers, and such broker-dealers may receive compensation in the form of discounts, concessions, -13- commissions, or fees from the Autism Research Institute and/or purchasers of the shares of common stock of Repligen for whom such broker-dealers may act as agent or to whom they sell as principal, or both (which compensation to a particular broker-dealer might be in excess of customary commissions). Any broker-dealers that participate with the Autism Research Institute in the distribution of shares of common stock of Repligen may be deemed to be underwriters and any commissions received by them and any profit on the resale of shares of common stock of Repligen placed by them might be deemed to be underwriting discounts and commissions within the meaning of the Securities Act, in connection with such sales. Any shares covered by the prospectus that qualify for sale pursuant to Rule 144 under the Securities Act may be sold under Rule 144 rather than pursuant to this prospectus. Since the Autism Research Institute is not restricted as to the price or prices at which it may sell its shares of common stock of Repligen, sales of such shares of common stock of Repligen at less than the market prices may depress the market price of the common stock of Repligen. EquiServe, 150 Royall Street, Canton, MA 02021, is the transfer agent for the shares of common stock of Repligen. LEGAL MATTERS The validity of the shares of common stock of Repligen offered hereby will be passed upon by Testa, Hurwitz & Thibeault, LLP, Boston, Massachusetts. EXPERTS The financial statements included in and 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 reports with respect thereto, and are included herein in reliance upon the authority of said firm as experts in auditing and accounting and auditing. -14- WHERE YOU CAN FIND MORE INFORMATION Repligen files annual, quarterly and special reports, proxy statements and other information with the SEC. You may read and copy any document we file with the SEC at the SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on operation of the public reference room. Our SEC filings are also available to the public from the SEC's website at "http://www.sec.gov." Our website is located at "http://www.repligen.com." Information contained on our website is not part of this prospectus. The SEC allows Repligen 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. Repligen incorporates 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 Exchange Act (File No. 000-14656): 1. Annual report on Form 10-K for the year ended March 31, 1998; 2. Repligen's proxy statement, filed on July 20, 1998, for the 1998 annual meeting of shareholders; 3. Quarterly reports on Form 10-Q for the quarters ended June 30, 1998, September 30, 1998 and December 31, 1998; 4. Repligen's current report on Form 8-K filed March 24, 1999, as amended by a Form 8-K/A filed June 15, 1999 and current report filed May 17, 1999; and 5. The "Description of Registrant's Securities to be Registered" contained in Repligen's registration statement filed on Form 8-A, dated May 28, 1986. You may request a copy of these filings, at no cost, by writing or telephoning our Chief Financial Officer at the following address: Repligen Corporation 117 Fourth Avenue Needham, MA 02494 (781) 449-9560 This prospectus is part of a registration statement we filed with the SEC. You should rely only on the information or representations provided in this prospectus. We have authorized no one to provide you with different information. We are not making an offer of these securities in any state where the offer is not permitted. You should not assume that the information in this prospectus is accurate as of any date other than the date on the front of the document. -15- INDEX TO FINANCIAL STATEMENTS
Page ---- Report of Independent Public Accountants F-2 Balance Sheets as of March 31, 1999 and 1998 F-3 Statements of Operations for the Years Ended March 31, 1999, 1998 and 1997 F-4 Statements of Stockholders' Equity for the Years Ended March 31, 1999, 1998 and 1997 F-5 Statements of Cash Flows for the Years Ended March 31, 1999, 1998 and 1997 F-6 Notes to Financial Statements F-7
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To Repligen Corporation: We have audited the accompanying balance sheets of Repligen Corporation (a Delaware corporation) as of March 31, 1999 and 1998, and the related statements of operations, stockholders' equity and cash flows for each of the three years in the period ended March 31, 1999. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Repligen Corporation as of March 31, 1999 and 1998, and the results of its operations and its cash flows for each of the three years in the period ended March 31, 1999, in conformity with generally accepted accounting principles. ARTHUR ANDERSEN LLP Boston, Massachusetts May 14, 1999 REPLIGEN CORPORATION BALANCE SHEETS
AS OF MARCH 31, ------------------------------------- ASSETS 1999 1998 ----------- ------------ Current assets: Cash and cash equivalents $ 3,250,751 $ 4,725,544 Accounts receivable, less reserves of $25,000 429,720 212,857 Inventories 630,329 670,818 Prepaid expenses and other current assets 181,617 156,228 ------------ ------------ Total current assets 4,492,417 5,765,447 Property, plant and equipment, at cost: Equipment 944,644 770,512 Leasehold improvements 460,319 442,528 Furniture and fixtures 101,376 40,563 ------------ ------------ 1,506,339 1,253,603 Less -- accumulated depreciation and amortization 862,934 594,719 ------------ ------------ 643,405 658,884 Other assets, net 88,472 88,472 ------------ ------------ $5,224,294 $ 6,512,803 ------------ ------------ ------------ ------------ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 268,708 $ 100,719 Accrued expenses and other 313,926 254,312 Unearned income 49,969 33,332 ------------ ------------ Total current liabilities 632,603 388,363 Commitments and contingencies (Note 6) Stockholders' equity: Preferred stock, $.01 par value -- authorized -- 5,000,000 shares -- issued and outstanding -- none -- -- Common stock, $.01 par value -- authorized -- 30,000,000 shares --issued and outstanding -- 18,264,285 shares and 18,001,785 shares at March 31, 1999 and 1998, respectively 182,642 180,017 Additional paid-in capital 131,272,607 130,264,048 Accumulated deficit (126,863,558) (124,319,625) ------------ ------------ Total stockholders' equity 4,591,691 6,124,440 ------------ ------------ $ 5,224,294 $ 6,512,803 ------------ ------------ ------------ ------------
The accompanying notes are an integral part of these financial statements. F-3 REPLIGEN CORPORATION STATEMENTS OF OPERATIONS
YEARS ENDED MARCH 31, ----------------------------------------------------- 1999 1998 1997 --------- ---------- ---------- Revenues: Research and development $ 1,268,036 $ 916,726 $1,179,980 Product 1,009,655 1,114,452 1,553,598 Investment income 212,157 224,913 268,645 Other 99,711 128,885 799,319 --------- --------- --------- 2,589,559 2,384,976 3,801,542 --------- --------- --------- Costs and expenses: Research and development 1,847,210 1,419,825 1,378,391 Charge for purchased patent rights (Note 7) 1,034,914 -- -- Selling, general and administrative 1,562,750 1,281,090 1,939,881 Cost of product sales 688,618 480,089 536,685 Charge for purchased research & development -- -- 548,978 Restructuring credit -- -- (111,000) --------- --------- --------- 5,133,492 3,181,004 4,292,935 --------- --------- --------- Net loss $(2,543,933) $ (796,028) $ (491,393) --------- --------- --------- --------- --------- --------- Basic and diluted net loss per share $ (0.14) $ (0.05) $ (0.03) --------- --------- --------- --------- --------- --------- Basic and diluted weighted average shares outstanding 18,017,650 16,501,785 15,677,998 --------- --------- --------- --------- --------- ---------
The accompanying notes are an integral part of these financial statements. F-4 REPLIGEN CORPORATION STATEMENT OF STOCKHOLDERS' EQUITY
Common Stock Total Number of $.01 Additional Deferred Accumulated Stockholders' Common Shares Par Value Paid-in Capital Compensation Deficit Equity Balance, March 31, 1996 15,602,542 $156,025 $127,694,145 $ -- $(123,041,651) $ 4,808,519 Net loss -- -- -- -- (491,393) (491,393) Issuance of common stock in connection with the acquisition of ProsCure, Inc. 405,669 4,057 544,921 -- -- 548,978 Compensation relating to issuance of stock options -- -- 79,364 (26,447) -- 52,917 ---------- ------- ----------- --------- ----------- --------- Balance, March 31, 1997 16,008,211 160,082 128,318,430 (26,447) (123,533,044) 4,919,021 Net loss -- -- -- -- (796,028) (796,028) Retirement of common stock issued in connection with the acquisition of (6,426) (65) (9,382) -- 9,447 -- ProsCure, Inc. Issuance of common stock and warrants, net of issusance costs 2,000,000 20,000 1,955,000 -- -- 1,975,000 Compensation relating to issuance of stock options -- -- -- 26,447 -- 26,447 ---------- ------- ----------- --------- ----------- --------- Balance, March 31, 1998 18,001,785 180,017 130,264,048 -- (124,319,625) 6,124,440 Issuance of common stock and warrants 262,500 2,625 1,008,559 -- -- 1,011,184 Net loss -- -- -- -- (2,543,933) (2,543,933) ---------- ------- ----------- --------- ----------- --------- Balance, March 31, 1999 18,264,285 $182,642 131,272,607 $ -- $(126,863,558) $ 4,591,691 ---------- ------- ----------- --------- ----------- --------- ---------- ------- ----------- --------- ----------- ---------
The accompanying notes are an integral part of these financial statements. F-5 REPLIGEN CORPORATION STATEMENTS OF CASH FLOWS
YEARS ENDED MARCH 31, --------------------------------------- 1999 1998 1997 ---- ---- ---- Cash flows from operating activities: Net loss $(2,543,933) $( 796,028) $ ( 491,393) Adjustments to reconcile net loss to net cash used in operating activities -- Depreciation and amortization 268,217 245,607 172,167 Issuance of stock options and warrants for services 126,270 26,447 52,917 Non cash portion of purchased patent rights charge 884,914 -- -- Non cash in-process research and development charge -- -- 548,978 Restructuring credit, noncash portion -- -- (111,000) Changes in assets and liabilities Accounts receivable (216,863) 322,072 (113,675) Amounts due from affiliates -- -- 42,284 Inventories 40,488 (218,577) 248,983 Prepaid expenses and other current assets (25,389) 9,493 22,834 Accounts payable 167,989 (67,550) (377,860) Accrued expenses and other 59,614 (145,676) (3,209,893) Unearned income 16,637 (99,981) (21,685) ----------- ---------- --------- Net cash used in operating activities (1,222,056) (724,193) (3,237,344) ----------- ---------- --------- Cash flows from investing activities: Sales of marketable securities -- 72,353 205,762 Purchases of property, plant and equipment, net (252,737) (114,021) (429,070) Decrease (increase) in restricted cash -- 50,087 (50,087) Decrease in other assets -- 437 32,480 ----------- ---------- --------- Net cash (used in) provided by investing activities (252,737) 8,856 (240,915) ----------- ---------- --------- Cash flows from financing activities: Proceeds from issuance of common stock and warrants, net of issuance costs -- 1,975,000 -- ----------- ---------- --------- Net cash provided by financing activities -- 1,975,000 -- ----------- ---------- --------- Net (decrease) increase in cash and cash equivalents (1,474,793) 1,259,663 (3,478,259) Cash and cash equivalents, beginning of year 4,725,544 3,465,881 6,944,140 ----------- ---------- --------- Cash and cash equivalents, end of year $ 3,250,751 $ 4,725,544 $3,465,881 ----------- ---------- --------- ----------- ---------- ---------
The accompanying notes are an integral part of these financial statements. F-6 REPLIGEN CORPORATION NOTES TO FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Repligen Corporation ("Repligen" or the "Company") is engaged in the development of new drugs for the treatment of cancer, organ transplant and neurological diseases. The Company's products are designed to offer patients improved treatment options based on the modulation of newly discovered disease mechanisms. The Company also manufactures a set of patented products based on Protein A, which are used by the pharmaceutical industry to produce antibodies for therapeutic use. In addition, the Company has licensed certain intellectual property pertaining to its former programs on biological products. The accompanying financial statements reflect the application of certain accounting policies described in this note and elsewhere in the accompanying notes to the financial statements. USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. PRINCIPLES OF CONSOLIDATION The financial statements for the years ended March 31, 1998 and 1997 include the accounts of the Company and its wholly owned subsidiaries, ProsCure, Inc. and Glycan Pharmaceuticals, Inc . All material intercompany accounts and transactions were eliminated in consolidation. These subsidiaries were dissolved during the year ended March 31, 1999. REVENUE RECOGNITION Research and development revenue derived from collaborative arrangements is recognized as earned under cost plus fixed-fee contracts, or on a straight-line basis over the development contract, which approximates when work is performed and costs are incurred. In addition, under certain contracts, the Company recognizes research and development revenues as milestones are achieved. Unearned income represents amounts received prior to recognition of revenue. Research and development expenses in the accompanying statements of operations include funded and unfunded expenses. The Company recognizes revenue related to product sales upon shipment of the product. Revenues recognized from the one-time sale of equipment and non investment securities are also included as other revenue during the years ended March 31, 1998 and 1997. CASH AND CASH EQUIVALENTS The Company considers highly liquid investments purchased with original maturities at the date of acquisition of three months or less to be cash equivalents. Cash equivalents consist of the following at March 31, 1999 and 1998. F-7
Year Ended March 31, ------------------------------------ 1999 1998 ---- ---- U.S. Government and Agency securities......... $ 1,197,624 $ 498,200 Commercial paper.............................. 1,136,119 3,708,580 Money markets................................. 802,755 292,624 Cash.......................................... 114,253 226,140 ----------- ---------- Total cash and cash equivalents............ $ 3,250,751 $ 4,725,544 ----------- ---------- ----------- ----------
INVENTORIES Inventories are stated at the lower of cost (first-in, first-out) or market. Work-in-process and finished goods inventories consist of material, labor, outside processing costs and manufacturing overhead. Inventories at March 31, 1999 and 1998 consist of the following:
Year Ended March 31, ------------------------------------ 1999 1998 ---- ---- Raw materials and work-in-process............................ $412,480 $388,727 Finished goods............................................... 217,849 282,091 ------- ------- Total..................................................... $630,329 $670,818 ------- ------- ------- -------
DEPRECIATION AND AMORTIZATION The Company provides for depreciation and amortization by charges to operations in amounts estimated to allocate the cost of fixed assets over their estimated useful lives, on a straight-line basis, as follows:
DESCRIPTION USEFUL LIFE ----------- ----------- Equipment 5 years Leasehold improvements Shorter of term of the lease or estimated useful life Furniture and fixtures 5-7 years
EARNINGS PER SHARE The Company has adopted Statement of Financial Accounting Standards (SFAS) No.128, EARNINGS PER SHARE. SFAS No. 128 establishes standards for computing and presenting earnings per share and applies to entities with publicly held common stock or potential common stock. Basic net loss per share represents net loss divided by the weighted average number of common shares outstanding during the period. The dilutive effect of potential common shares, consisting of outstanding stock options and warrants, is determined using the treasury stock method in accordance with SFAS No. 128. Diluted weighted average shares outstanding for 1999, 1998 and 1997 exclude the potential common shares from warrants and stock options because to do so would have been antidilutive for the years presented. The potential common shares prior to application of the treasury stock method at March 31, 1999, 1998 and 1997 were 4,496,341, 3,572,741 and 2,787,089 shares, respectively. FAIR VALUE OF FINANCIAL INSTRUMENTS In accordance with SFAS No. 107, DISCLOSURE ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS, the carrying amounts of the Company's cash and cash equivalents, accounts receivable and accounts payable approximate fair value due to the short-term nature of these instruments. F-8 CONCENTRATIONS OF CREDIT RISK Financial instruments that subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. The Company's cash equivalents are invested in financial instruments with high credit ratings. Concentration of credit risk with respect to accounts receivable is limited to customers to whom the Company makes significant sales. The Company does not believe significant risk exists at March 31, 1999. To control credit risk, the Company performs regular credit evaluations of its customers' financial condition and maintains allowances for potential credit losses. Revenues from significant customers as a percentage of the Company's total revenues were as follows:
Year Ended March 31, 1999 1998 1997 ---- ---- ---- Customer A 15% -- -- Customer B 12% -- 1% Customer C 11% 1% -- Customer D 3% 23% 6%
SEGMENT REPORTING The Company has adopted SFAS No. 131, DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED Information, in the fiscal year ended March 31, 1999. SFAS No. 131 establishes standards for reporting information regarding operating segments in annual financial statements and requires selected information for those segments to be presented in interim financial reports issued to stockholders. SFAS No. 131 also establishes standards for related disclosures about products and services and geographic areas. Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision making group, in making decisions now to allocate resources and assess performance. To date, the Company has viewed its operations and manages its business as principally one operating segment. As a result, the financial information disclosed herein, represents all of the material financial information related to the Company's principal operating segment. The following table represents the Company's revenue by country:
Year Ended March 31, ------------------------------------------------------ 1999 1998 1997 ---- ---- ---- US 70% 76% 77% Germany 11% 7% 1% United Kingdom 8% 10% 11% Other 11% 7% 11%
NEW ACCOUNTING STANDARDS In June 1997, the Financial Accounting Standards Board (FASB) issued SFAS No. 130, REPORTING COMPREHENSIVE INCOME. SFAS No. 130 requires disclosure of all components of comprehensive income on an annual and interim basis. Comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from nonowner sources. SFAS No. 130 is effective for fiscal years beginning after December 15, 1997. The Company adopted SFAS No. 130 effective April 1, 1998. The Company's comprehensive loss for the years ended March 31, 1999, 1998 and 1997 was equal to its net loss for the same periods. American Institute of Certified Public Accountants (AICPA) Statement of Position (SOP) 98-05, REPORTING ON THE COSTS OF START-UP ACTIVITIES, was issued in April 1998. SOP 98-05 requires that all nongovernmental entities expense the costs of start-up activities, including F-9 organizational costs, as those costs are incurred. The Company has recorded and will continue to record start-up costs as expense when incurred. In June 1998, the FASB issued SFAS No. 133, ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES. SFAS No. 133 establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts (collectively referred to as derivatives) and for hedging activities. It requires that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. SFAS No. 133 is effective for all fiscal quarters of fiscal years beginning after June 15, 2000. This new standard is not anticipated to have a significant impact on the Company's financial statements based on its current structure and operations. 2. ACCRUED EXPENSES Accrued expenses consisted of the following:
Year Ended March 31, ------------------------------------ 1999 1998 ---- ---- Payroll and payroll-related costs............................ $ 112,758 $ 60,371 Professional and consulting fees............................. 65,050 113,000 Other accrued expenses....................................... 136,118 80,941 --------- --------- Total..................................................... $ 313,926 $ 254,312 --------- --------- --------- ---------
3. INCOME TAXES The Company accounts for income taxes under SFAS No. 109, ACCOUNTING FOR INCOME TAXES. At March 31, 1999, the Company had net operating loss carryforwards for income tax purposes of approximately $98,600,000. The Company also had available tax credit carryforwards of approximately $4,690,000 at March 31, 1999 to reduce future federal income taxes, if any. Net operating loss carryforwards and available tax credits are subject to review and possible adjustment by the Internal Revenue Service and may be limited in the event of certain changes in the ownership interest of significant stockholders. The net operating loss carryforwards and tax credit carryforwards are approximately as follows:
Net Operating Expiration Date Loss Tax Credit Carryforwards Carryforwards ---------------------------------------------- 2000 $ 1,001,000 $ 104,000 2001 1,334,000 109,000 2002 2,500,000 73,000 2003 4,807,000 346,000 2004 6,642,000 408,000 2005-2013 82,316,000 3,650,000 ---------- ---------- Total $ 98,600,000 $ 4,690,000 ---------- ---------- ---------- ----------
The deferred tax asset consists of the following:
Year Ended March 31, ----------------------------------- 1999 1998 ----- ---- Temporary differences......................... $ 3,800,000 $ 3,900,000 Operating loss carryforwards................. 39,400,000 36,500,000 Tax credit carryforwards...................... 4,690,000 4,840,000 ------------ ------------ 47,890,000 45,240,000 Valuation allowance............................ (47,890,000) (45,240,000) ------------ ------------ $ -- $ -- ------------ ------------ ------------ ------------
F-10 A full valuation allowance has been provided, as it is uncertain if the Company will realize the deferred tax asset. 4. COMMON STOCK In March 1999, the Company entered into an agreement for legal services relating to a complaint filed against Bristol-Myers Squibb. Under the terms of the agreement, the Company is required to pay $50,000 in annual fees and if successful in the litigation, a portion of any financial recovery will be paid and warrants to purchase 100,000 shares of common stock will be issued. In addition, the Company issued a fully vested warrant to purchase 100,000 shares of common stock at an exercise price of $1.63 per share. The Company valued these warrants at fair value and recorded legal expense of $126,270 relating to this issuance. In March 1999, the Company acquired all rights to certain patent applications relating to the use of secretin in the treatment of autism. The rights were acquired pursuant to a Patent Purchase Agreement (the "Purchase Agreement") whereby, the Company paid $150,000 in cash, issued a warrant to purchase 350,000 shares of common stock of the Company with an exercise price of $1.59 per share, and issued 262,500 shares of common stock of the Company (See Note 7). The Company valued the shares and warrants issued at fair market value. In December 1997, the Company completed a $2.0 million private placement of its securities. The Company received net proceeds of $1.975 million for the issuance of 2,000,000 shares of common stock and warrants to purchase an aggregate of 750,000 shares of common stock at a price of $1.50 per share. In connection with the initial capitalization of the Repligen Clinical Partners, L.P. (the Partnership), the Company issued warrants to purchase common stock of Repligen to the limited partners of the Partnership (the Original Warrants). In June 1994, Repligen completed an exchange pursuant to which a majority of the holders of Original Warrants exchanged their Original Warrants for new warrants (the Exchange Warrants). Subsequently, in March 1995, Repligen offered to modify the majority of the remaining Original Warrants and the Exchange Warrants. Each holder of an outstanding warrant who was not in default under its obligations to the Partnership was free to accept or reject such modifications. As of March 31, 1999, 620 of the 711.5 nondefaulted limited partnership units had accepted the modifications. Accordingly, as of that date, there were issued and outstanding modified Original Warrants to purchase 163,850 shares of the Company's common stock at $9.00 per share, Exchange Warrants to purchase 189,950 shares of the Company's common stock at $9.00 per share and modified Exchange Warrants to purchase 1,653,250 shares of the Company's common stock at $2.50 and $3.50 per share. These warrants expire between 2000 and 2001. At March 31, 1999, common stock reserved for issuance was as follows:
Reserved for Shares - ------------------------------------------------------------------------------------------------------------------- Incentive and nonqualified stock option plans 3,353,277 Warrants granted in connection with the Repligen Clinical Partners, L.P. offering 2,007,050 Warrants granted in connection with the private placement with BVF and affiliates 750,000 Warrants granted in connection with the Patent Purchase Agreement 350,000 Warrants granted for payment of services 100,000 ----------- 6,560,327 ----------- -----------
F-11 5. STOCK OPTION PLANS The Company has three stock option plans. The plans authorize the grant of either incentive stock options or nonqualified stock options. Incentive stock options are granted to employees at the fair market value at the date of grant. Nonqualified stock options are granted to employees or nonemployees. The options generally vest over four or five years and expire no more than 10 years from the date of grant. As of March 31, 1999, the Company had 2,063,986 shares of common stock available for grant. A summary of stock option activity under all plans is as follows:
Years Ended March 31, --------------------------------------------------------------------------------------------- 1999 1998 1997 ------------------------------- -------------------------------- ------------------------------ Weighted Weighted Weighted Average Average Average No. of Price No. of Price No. of Price Shares Per Share Shares Per Share Shares Per Share ------ --------- ------ --------- ------ --------- Outstanding at beginning of period 740,291 $2.05 704,639 $ 2.20 953,046 $ 3.16 Granted 568,500 1.38 117,500 1.41 180,500 .93 Exercised -- -- -- -- -- -- Forfeited (19,500) 1.18 (81,848) 2.45 (428,907) 3.66 --------- ----- ------- ------ ------- ------ Outstanding at end of period 1,289,291 $ 1.78 740,291 $ 2.05 704,639 $ 2.20 --------- ----- ------- ------ ------- ------ Exercisable at end of period 529,691 $ 2.33 461,713 $ 2.43 367,236 $ 5.33 --------- ----- ------- ------ ------- ------ --------- ----- ------- ------ ------- ------
Options Outstanding Options Exercisable ----------------------------------------------- -------------------------------- Weighted Weighted Weighted Average Average Average Remaining Exercse Exercise Range of Number Contractual Price Number Price Per Exercise Price Outstanding Life Per Share Outstanding Share -------------- ----------- ---- --------- ----------- ----- $ .05-$ .50 ..... 89,541 7.05 $ .45 89,541 $ .45 $ .88-$ 1.00 ..... 30,000 7.88 .94 30,000 .94 $ 1.03-$ 1.50 ..... 919,000 8.41 1.36 193,400 1.30 $ 1.53-$ 1.63 ..... 47,000 8.42 1.59 13,000 1.63 $ 2.75-$ 2.75 ..... 158,750 5.36 2.77 158,750 2.77 $ 3.13-$ 3.13 ..... 10,000 5.55 3.13 10,000 3.13 $ 6.56-$12.45 ..... 45,000 3.26 10.10 45,000 10.10 --------- ---- ------ ------- ----- 1,289,291 7.74 $ 1.78 529,691 $ 2.33 --------- ---- ------ ------- -----
The Company accounts for its stock-based compensation under SFAS No. 123 ACCOUNTING FOR STOCK BASED COMPENSATION. The Company has adopted the disclosure-only alternative for employee grants and, accordingly, will continue to account for stock based compensation for employees under APB Opinion No. 25. The Company has computed the pro forma disclosures required under SFAS No. 123 for all stock options granted to employees in 1999, 1998 and 1997 using the Black-Scholes option pricing model prescribed by SFAS No. 123. The assumptions used and the weighted average information for the years ended March 31, 1999, 1998 and 1997 are as follows: F-12
Year ended March 31, 1999 1998 1997 ---- ---- ---- Risk-free interest rates 5.12% 6.76% 6.44% Expected dividend yield -- -- -- Expected lives 10 years 10 years 10 years Expected volatility 93% 56% 106% Weighted-average grant date fair value of options granted during the period $1.12 $1.41 $.87 Weighted-average remaining contractual life of options outstanding 7.7 years 8.4 years 8.9 years
If compensation expense for the Company's stock option plan had been determined consistent with SFAS No. 123 pro forma net loss and net loss per share would have been as follows:
Year Ended March 31, 1999 1998 1997 ---- ---- ---- Net loss- As reported...................................... ($2,543,933) ($796,028) ($491,393) Pro forma........................................ ($2,768,827) ($908,353) ($573,077) Basic and diluted net loss per share- As reported...................................... $ (.14) $ (.05) ($.03) Pro forma........................................ $ (.15) $ (.06) ($.04)
6. COMMITMENTS The Company leases their facilities. Obligations under noncancellable operating leases as of March 31, 1999 are approximately as follows:
Year Ending March 31, 2000.............................. 281,000 2001.............................. 158,000 2002.............................. 74,000 -------- Total minimum lease payments $513,000 -------- --------
Rent expense charged to operations under operating leases was approximately $281,000, $281,000, and $717,000 for the years ended March 31, 1999, 1998 and 1997, respectively. 7. PURCHASED PATENT RIGHTS In March 1999, the Company acquired all rights to certain patent applications relating to the use of secretin in the treatment of autism. The rights were acquired pursuant to a Patent Purchase Agreement. In addition, the Company has agreed to make minimum annual royalty payments of $500,000 and certain milestone payments upon (a) the Company's filing of a new drug application with the United States Food and Drug Administration ("FDA") for a clinical indication covered by the intellectual property rights transferred by the Purchase Agreement and (b) upon the approval by the FDA of a product covered by the intellectual property rights transferred to the Company pursuant to the Purchase Agreement. These milestone payments, in the aggregate sum of $700,000, will be largely credited against certain royalty payments in the event the Company is able to derive sales and/or license revenues from the intellectual property rights acquired pursuant to the Purchase Agreement. Under terms of this agreement, the Company may be required to repurchase up to a maximum of 100,000 shares of common stock issued in connection with the Purchase Agreement at a price of $1.59 per share. This obligation to repurchase the common stock expires in June 1999. F-13 In order for the Company to commercialize secretin as a treatment for autism, the Company will need to expend a substantial amount in research and development, preclinical testing and clinical trials, regulatory clearances and manufacturing, distribution and marketing arrangements. The outcome of which is uncertain. The cost and time to complete the development of the technology is significant and difficult to estimate given the uncertainties of research and development and regulatory process. Accordingly, the net realizable value of the patent rights acquired is uncertain. Approximately $1,035,000 was charged to the accompanying 1999 statement of operations as the cost of the purchased patent rights. 8. PURCHASED RESEARCH & DEVELOPMENT During fiscal 1997, the Company issued 405,669 shares of its common stock for all of the outstanding stock of ProsCure, Inc. ("ProsCure"). The acquisition was accounted for as a purchase, with the excess of the purchase price and acquisition costs over the fair value of the assets acquired of approximately $549,000 charged to operations as the cost of acquired research and development in process. The Company acquired assets having a fair value of approximately $170,000, consisting primarily of cash and receivables. Results of operations for ProsCure are included in the financial statements of the Company, since March 14, 1996, as ProsCure is a subsidiary of Glycan Pharmaceuticals, Inc. Unaudited pro forma information with respect to ProsCure's pre-acquisition operating results has not been presented as it is not material to the fiscal 1997 operating results. 9. RELATED PARTIES In February 1992, Repligen Clinical Partners, L.P. (the "Partnership") completed a private placement of 900 limited partnership units, with net proceeds of approximately $40,300,000 in cash and notes receivable, to be received by the Partnership over a three-year period. In connection with the formation of the Partnership, the Company granted to the Partnership an exclusive license to all technology and know-how related to the manufacture, use and sale of recombinant platelet factor-4 ("rPF4") in the United States, Canada and Europe. A wholly owned subsidiary of the Company is the General Partner of the Partnership. The Company has received research and development funding from the Partnership pursuant to a Product Development Agreement, whereby the Company performed research and development work and charged the Partnership for actual costs incurred plus a 10% management fee. The Company recognized $12,000 and $190,000 of such funding as revenue in fiscal 1998 and 1997, respectively. Other revenues for the years ended March 31, 1997 included $25,000 representing the 10% management fee under the Product Development Agreement. Profits and losses are allocated 1% to the General Partner and 99% to the Limited Partners. Although the Company was allocated a loss of approximately $1,000 and $2,400 for the year ended March 31, 1998 and 1997, respectively, the Company had previously written down all of its original investment. In April 1996, the Company terminated its arrangements with the Partnership regarding the development and marketing of the rPF4 program. Under the terms of the various agreements between the parties, the rights to the rPF4 technologies remain with the Partnership. 10. SUBSEQUENT EVENTS (UNAUDITED) In April and May 1999, certain private investors agreed to invest approximately $9.0 million in the Company through a private placement of 3,600,000 shares of its common stock. As a condition of closing, the Company agreed to file a registration statement with the Securities and Exchange Commission covering the resale of the shares issued in connection with this private placement. The financing is expected to close by June 30, 1999. Repligen expects to receive net proceeds of approximately $8.8 million after deducting the estimated expenses of the transaction. F-14 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. The following table sets forth an estimate (other than with respect to the Registration Fee and the Nasdaq National Market additional listing fee expense) of the expenses expected to be incurred in connection with the issuance and distribution of the securities being registered, other than underwriting discounts and commissions: Registration Fee -- Securities and Exchange Commission...............$ 235 Nasdaq National Market additional listing fee........................$ 5,250 Blue Sky Fees and Expenses...........................................$ 1,000 Accounting Fees and Expenses.........................................$ 1,000 Legal Fees and Expenses..............................................$10,000 Miscellaneous........................................................$ 5,000 ------- TOTAL.......................................................$22,485 ------- -------
Repligen will bear all expenses shown above. ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. The Delaware General Corporation Law, Article Seventh of Repligen's Restated Certificate of Incorporation, as amended, and Article V of Repligen's By-laws provide for indemnification of Repligen's directors and officers for liabilities and expenses that they may incur in such capacities. In general, directors and officers are indemnified with respect to actions taken in good faith in a manner reasonably believed to be in, or not opposed to, the best interests of Repligen, and with respect to any criminal action or proceeding, actions that the indemnitee had no reasonable cause to believe were unlawful. Repligen maintains directors and officers liability insurance for the benefit of its directors and certain of its officers. ITEM 16. EXHIBITS. The following exhibits, required by Item 601 of Regulation S-K, are filed as a part of this Registration Statement. Exhibit numbers, where applicable, in the left column correspond to those of Item 601 of Regulation S-K.
EXHIBIT NO. ITEM AND REFERENCE - ----------- ------------------ 2.1 -- * Patent Purchase Agreement by and among Repligen Corporation, Victoria A. Beck and Autism Research Institute, dated as of March 9, 1999 (with certain confidential information deleted). (Incorporated by reference to Exhibit 2.1 of the Company's Current Report on Form 8-K/A filed June 15, 1999)
II-1 2.2 -- Common Stock Purchase Warrant issued by Repligen Corporation, dated as of March 9, 1999. (Incorporated by reference to Exhibit 2.2 of the Company's Current Report on Form 8-K/A filed June 15, 1999) 2.3 -- Collateral Assignment of Patents by and among Repligen Corporation, Victoria A. Beck and Autism Research Institute, dated as of March 9, 1999. (Incorporated by reference to Exhibit 2.3 of the Company's Current Report on Form 8-K filed March 24, 1999) 5 -- ** Legal Opinion of Testa, Hurwitz & Thibeault, LLP 3.1 -- Consent of Arthur Andersen (filed herewith) 23.2 -- ** Consent of Testa, Hurwitz & Thibeault, LLP (included in Exhibit 5) 24 -- ** Power of Attorney
* Confidential treatment requested as to certain portions of this exhibit, which portions are omitted and filed separately with the Securities and Exchange Commission. ** Previously filed. ITEM 17. UNDERTAKINGS. The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represents a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered ) and any deviation from the low or high and of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. (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 II-2 relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial BONA FIDE offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. 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 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial BONA FIDE offering thereof. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to provisions described in Item 14 above, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue. II-3 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Amendment No. 2 to Registration Statement on Form S-3 to be signed on its behalf by the undersigned, thereunto duly authorized in the Town of Needham, Commonwealth of Massachusetts on June 15, 1999. Repligen Corporation By: /s/ Walter C. Herlihy ----------------------------- Walter C. Herlihy President and Chief Executive Officer POWER OF ATTORNEY Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 2 to Registration Statement on Form S-3 has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. NAME CAPACITY DATE /s/ Walter C. Herlihy President and Chief Executive June 15, 1999 - -------------------------- Officer, Chief Financial Officer Walter C. Herlihy and Director (principal executive, financial and accounting officer) /s/ Alexander Rich, M.D.* Co-Chairman of the June 15, 1999 - -------------------------- Board of Directors Alexander Rich, M.D. /s/ Paul Schimmel, Ph.D.* Co-Chairman of the June 15, 1999 - -------------------------- Board of Directors Paul Schimmel, Ph.D. /s/ Robert J. Hennessey* Director June 15, 1999 - -------------------------- Robert J. Hennessey /S/ G. William Miller* Director June 15, 1999 - -------------------------- G. William Miller *By: /s/ Walter C. Herlihy ---------------------- Walter C. Herlihy Attorney-in-Fact II-4 INDEX TO EXHIBITS
EXHIBIT NO. ITEM AND REFERENCE - ----------- ------------------ 2.1 -- * Patent Purchase Agreement by and among Repligen Corporation, Victoria A. Beck and Autism Research Institute, dated as of March 9, 1999 (with certain confidential information deleted). (Incorporated by reference to Exhibit 2.1 of the Company's Current Report on Form 8-K/A filed June 15, 1999) 2.2 -- Common Stock Purchase Warrant issued by Repligen Corporation, dated as of March 9, 1999. (Incorporated by reference to Exhibit 2.2 of the Company's Current Report on Form 8-K/A filed June 15, 1999) 2.3 -- Collateral Assignment of Patents by and among Repligen Corporation, Victoria A. Beck and Autism Research Institute, dated as of March 9, 1999. (Incorporated by reference to Exhibit 2.3 of the Company's Current Report on Form 8-K filed March 24, 1999) 5 -- ** Legal Opinion of Testa, Hurwitz & Thibeault, LLP 23.1 -- Consent of Arthur Andersen (filed herewith) 23.2 -- ** Consent Testa, Hurwitz & Thibeault, LLP (included in Exhibit 5) 24 -- ** Power of Attorney
* Confidential treatment requested as to certain portions of this exhibit, which portions are omitted and filed separately with the Securities and Exchange Commission. ** Previously filed. II-5 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 8, 1999 REGISTRATION NO. 333-76005 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ---------------------------------------- AMENDMENT NO. 2 TO FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ---------------------------------------- REPLIGEN CORPORATION (Exact name of Registrant as specified in its charter) -----------------------------
DELAWARE 2836 04-2729386 (State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer of incorporation or organization) Classification Code Number) Identification Number)
117 FOURTH AVENUE NEEDHAM, MA 02494 (781) 449-9560 (Address, including zip code, and telephone number, including area code, of Registrant's principal executive offices) ---------------------------------------- WALTER C. HERLIHY PRESIDENT AND CHIEF EXECUTIVE OFFICER REPLIGEN CORPORATION 117 FOURTH AVENUE NEEDHAM, MA 02494 (781) 449-9560 (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: LAWRENCE S. WITTENBERG, ESQ. Testa, Hurwitz & Thibeault, LLP High Street Tower 125 High Street Boston, Massachusetts 02110 (617) 248-7000 APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after this Registration Statement becomes effective. If the only securities being registered on this form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. / / If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. / / 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. / / - -------------------------- REPLIGEN HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL REPLIGEN 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 SECTION 8(A), MAY DETERMINE. The information in this prospectus is not complete and may be changed. We may not sell these securitieis until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell securities, and it is not soliciting offers to buy these securities in any state where the offer or sale is not permitted. SUBJECT TO COMPLETION, DATED JUNE 8, 1999 REPLIGEN CORPORATION 262,500 SHARES COMMON STOCK These shares are being offered for sale by the Autism Research Institute. Repligen's common stock is traded on the Nasdaq National Market under the symbol "RGEN." The last reported sales price of the common stock on the Nasdaq National Market on June 7, 1999 was $3.0313 per share. --------------------------- INVESTING IN THE COMMON STOCK INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING ON PAGE 3. --------------------------- NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED 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 June __, 1999. YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION DIFFERENT FROM THAT CONTAINED IN THIS PROSPECTUS. AUTISM RESEARCH INSTITUTE IS OFFERING TO SELL, AND SEEKING OFFERS TO BUY, SHARES OF COMMON STOCK ONLY IN JURISDICTIONS WHERE OFFERS AND SALES ARE PERMITTED. THE INFORMATION CONTAINED IN THIS PROSPECTUS IS ACCURATE ONLY AS OF THE DATE OF THIS PROSPECTUS, REGARDLESS OF THE TIME OF DELIVERY OF THIS PROSPECTUS OR OF ANY SALE OF THE COMMON STOCK. ------------------------ TABLE OF CONTENTS
Page ---- The Company............................................................... 2 Risk Factors.............................................................. 3 Legal Proceedings......................................................... 6 Selected Consolidated Financial Data...................................... 7 Management's Discussion and Analysis of Financial Condition and Results of Operations............................ 8 Use of Proceeds...........................................................12 Selling Stockholder.......................................................12 Plan of Distribution......................................................13 Legal Matters.............................................................14 Experts...................................................................14 Where You Can Find More Information.......................................15
------------------------ -1- THE COMPANY We develop new drugs for neurological disease, organ transplantation and cancer. To expand our drug development program, on March 9, 1999, we acquired the exclusive rights to patent applications for the use of secretin in the treatment of autism from Autism Research Foundation, a not-for-profit organization, and Victoria A. Beck, both holders of rights to such patent applications. Autism is a developmental disorder characterized by poor communication skills, negative behavior, irregular sleep patterns and diminished ability to learn. Secretin is a hormone produced in the small intestine which regulates the function of the pancreas as part of the process of digestion. A form of secretin derived from pigs is approved by the FDA for use in diagnosing problems with pancreatic function. Recent anecdotal reports indicate that secretin may have beneficial effects in autism, including improvements in sleep, digestive function, speech and social behavior. Following media reports of the potential benefits of secretin, more than 2,000 autistic children have been treated with the pig-derived hormone. We intend to manufacture a human, synthetic form of secretin and evaluate it in FDA approved clinical trials in order to confirm the benefits of secretin in treating autism and to determine the optimal dosing schedule. There are currently no drugs approved by the FDA for the treatment of autism. We are also developing a product named "CTLA4-Ig," which has been shown to suppress unwanted immune responses in animal models of organ transplants and autoimmune diseases, such as lupus or multiple sclerosis, in which the immune system mistakenly attacks the body. Our product candidate is a derivative of a natural protein whose role is to turn-off an immune response. In animal models of organ transplantation and autoimmune diseases, CTLA-Ig has been shown to block the rejection of a transplanted organ or the effects of the autoimmune disease. Initial clinical testing of CTLA4-Ig has been carried out in patients receiving a bone marrow transplant, which is a potential cure for several diseases of the immune system, including leukemia, myeloma, lymphoma and sickle cell anemia. Despite the clinical success of bone marrow transplants, a significant number of patients experience a severe and potentially life-threatening complication known as Graft Versus Host Disease, in which the newly transplanted immune system attacks the host (i.e., the patient). In December 1998, investigators from the Dana-Farber Cancer Institute, a research hospital in Boston, reported that treatment of bone marrow from a family member who was taking CTLA4-Ig substantially reduced Graph Versus Host Disease in twelve transplant patients. We intend to further evaluate CTLA4-Ig in bone marrow transplants for leukemia. In July 1998, we filed a complaint to assert our ownership rights of United States patents issued to Bristol-Myers Squibb Corporation relating to the use of and manufacture of CTLA4-Ig. We believe that one of our licensees is a co-inventor of these patents and we are seeking to obtain co-inventor rights of these patents. We have also filed our own patents related to compositions of matter and methods of use of CTLA4-Ig. In preclinical studies, we are evaluating low molecular weight compounds which block new blood vessel growth by inhibiting the action of a key growth factor which stimulates the growth of new blood vessels. Drugs which block the growth of new blood vessels may arrest the growth of solid tumors and stop the progression of eye diseases characterized by uncontrolled blood vessel growth. This program is based on our patented, high throughput screening assays and proprietary libraries of compounds. Our program to block new blood vessel growth is supported, in part, by a grant from the National Cancer Institute. -2- We develop, manufacture and market products for the production of therapeutic antibodies. We currently market a line of products for the purification of antibodies based on a naturally occurring protein, Protein A, which can specifically bind to antibodies. In December 1998, we entered into a ten year agreement to supply recombinant Protein A to Amersham Pharmacia Biotech, a leading supplier to the biopharmaceutical market. Repligen's executive offices are located at 117 Fourth Avenue, Needham, Massachusetts 02494, and Repligen's telephone number is (781) 449-9560. RISK FACTORS YOU SHOULD CAREFULLY CONSIDER THE RISKS DESCRIBED BELOW BEFORE MAKING AN INVESTMENT DECISION. ADDITIONAL RISKS AND UNCERTAINTIES THAT WE ARE UNAWARE OF OR THAT WE CURRENTLY DEEM IMMATERIAL ALSO MAY BECOME IMPORTANT FACTORS THAT AFFECT REPLIGEN. IF ANY OF THE FOLLOWING RISKS OCCUR, OUR BUSINESS, FINANCIAL CONDITION OR RESULTS OF OPERATIONS COULD BE MATERIALLY HARMED. IN THAT CASE THE TRADING PRICE OF OUR COMMON STOCK COULD DECLINE, AND YOU MAY LOSE ALL OR PART OF YOUR INVESTMENT. THIS PROSPECTUS ALSO CONTAINS FORWARD LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES. OUR ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED IN THESE FORWARD LOOKING STATEMENTS AS A RESULT OF CERTAIN FACTORS, INCLUDING THE RISKS FACED BY US DESCRIBED BELOW AND ELSEWHERE IN THIS PROSPECTUS. IF WE DO NOT OBTAIN ADDITIONAL CAPITAL, WE WILL BE UNABLE TO DEVELOP OR DISCOVER NEW DRUGS. We need additional long-term financing to develop our drug development programs through the clinical trial process as required by the FDA and our bioprocessing products business. We also need additional long-term financing to support future operations and capital expenditures, including capital for additional personnel and facilities. If we spend more money than currently expected for our drug development programs and our bioprocessing products business, we will need to raise additional capital by selling debt or equity securities, by entering into strategic relationships or through other arrangements. We may be unable to raise any additional amounts on reasonable terms when they are needed due to the volatile nature of the biotechnology marketplace. If we are unable to raise this additional capital, we may have to delay or postpone critical clinical studies or abandon other development programs. BECAUSE OUR OPERATING RESULTS FLUCTUATE FROM QUARTER TO QUARTER, SO DOES OUR STOCK PRICE, WHICH MEANS INVESTORS MAY HAVE TO SELL THEIR STOCK AT A LOSS IF THEY ARE UNABLE TO WAIT FOR A REBOUND. Our quarterly and annual operating revenues and expenses may fluctuate due to a number of factors including: o the timing and size of increased research and development expenses; o expenses associated with clinical development of our products; or o the timing and size of product orders. -3- Our product development activities often focus on unproven technologies and undeveloped markets. As a result, we may experience difficulty in forecasting operating expenditures, and we cannot know when or whether our efforts will result in commercially successful products. The expenses or losses associated with these product development activities could materially adversely affect our operating results. IF WE ARE UNABLE TO CONTINUE TO HIRE AND RETAIN SKILLED TECHNICAL AND SCIENTIFIC PERSONNEL, THEN WE WILL HAVE TROUBLE DEVELOPING PRODUCTS. Our success depends largely upon the continued service of our management and scientific staff and our ability to attract, retain and motivate highly skilled scientific, management and marketing personnel. Potential employees with an expertise in the field of biochemistry, regulatory affairs and/or clinical development of new drug and biopharmaceutical manufacturing are not generally available in the market and are difficult to attract and retain. We also face significant competition for such personnel from other companies, research and academic institutions, government and other organizations who have superior funding and resources to be able to attract such personnel. The loss of key personnel or our inability to hire and retain personnel who have technical and scientific backgrounds could materially adversely affect our product development efforts and our business. WE COMPETE WITH LARGER, BETTER FINANCED AND MORE MATURE PHARMACEUTICAL AND BIOTECHNOLOGY COMPANIES WHO ARE CAPABLE OF DEVELOPING NEW APPROACHES THAT COULD MAKE OUR PRODUCTS AND TECHNOLOGY OBSOLETE. The market for therapeutic and bioprocessing products is intensely competitive, rapidly evolving and subject to rapid technological change. Pharmaceutical and mature biotechnology companies have substantially greater financial, manufacturing, marketing, research and development resources than we have. New approaches to the treatment of our targeted diseases by these competitors may make our products and technologies obsolete or noncompetitive. IF WE ARE UNABLE TO OBTAIN AND MAINTAIN PATENTS FOR OUR PRODUCTS, WE WILL NOT BE ABLE TO SUCCEED COMMERCIALLY. We must obtain patent and trade secret protection for our products and processes in order to protect them from unauthorized use and to produce a financial return consistent with the significant time and expense required to bring our products to market. Our success will depend, in part, on our ability to: o obtain patent protection for our products and manufacturing processes; o preserve our trade secrets; and o operate without infringing the proprietary rights of third parties. There can be no assurance that any patent applications relating to our products will be filed in the future or that any currently pending applications will issue on a timely basis, if ever. Since patent applications in the United States are maintained in secrecy until patents issue and since publication of discoveries in the scientific or patent literature often lag behind actual discoveries, we cannot be certain that we were the first to make the inventions covered by each of our pending patent applications or that we were the first to file patent applications for such -4- inventions. Even if patents are issued, the degree of protection afforded by such patents will depend upon the: o scope of the patent claims; o validity and enforceability of the claims obtained in such patents; and o our willingness and financial ability to enforce and/or defend them. The patent position of biotechnology and pharmaceutical firms is often highly uncertain and usually involves complex legal and scientific questions. Moreover, no consistent policy has emerged in the United States and in many other countries regarding the breadth of claims allowed in biotechnology patents. Patents which may be granted to us in certain foreign countries may be subject to opposition proceedings brought by third parties or result in suits by Repligen which may be costly and result in adverse consequences for Repligen. If our competitors prepare and file patent applications in the United States that claim technology also claimed by us, we may be required to participate in interference proceedings declared by the U.S. Patent and Trademark Office to determine priority of invention, which would result in substantial costs to us. For instance, in July 1998, we filed a complaint to assert our ownership rights of United States patents issued to Bristol-Myers Squibb Corporation relating to the use of and manufacture of CTLA4-Ig. We believe that one of our licensees is a co-inventor of these patents and we are seeking to obtain co-inventor rights of these patents. We may incur substantial costs defending these and other infringement or patent interference proceedings, which proceedings may result in adverse consequences for Repligen. In addition, patents blocking our manufacture, use or sale of our products could be issued to third parties in the United States or foreign countries. The issuance of blocking patents or an adverse outcome in an interference or opposition proceeding, could subject us to significant liabilities to third parties and require us to license disputed rights from third parties on unfavorable terms, if at all, or cease using the technology. WE ARE NOT YEAR 2000 COMPLIANT, AND AS A RESULT, MAY FACE, AND BE LIABLE FOR, DATA CORRUPTION, COMPUTER FAILURE AND DISRUPTION OF OPERATIONS. Many existing computer systems and software products do not properly recognize dates after December 31, 1999. This "Year 2000" problem could result in miscalculations, data corruption, system failures or disruptions of operations. We are subject to potential Year 2000 problems affecting our computers' systems, our internal systems and the systems of our vendors and scientific collaborators, any of which could have a material adverse affect on our business operating results and financial conditions. -5- Based on our assessments to date, we believe that our internal systems are substantially Year 2000 compliant although there can be no assurance that Year 2000 errors or defects will not be discovered in our internal software systems and, if such errors or defects are discovered, there can be no assurance that the costs of making such systems Year 2000 compliant will not be material. Year 2000 errors or defects in the internal systems maintained by our vendors of clinical trial collaborators could require us to incur significant delays in our product development programs and unanticipated expenses to remedy any problems or replace affected vendors. LEGAL PROCEEDINGS On July 17, 1998, Repligen filed a complaint at the United States District Court for the District of Massachusetts in Boston, Massachusetts. The complaint relates to a United States patent issued in 1995 to Bristol-Myers Squibb Corporation claiming a method of treating immune system diseases with CTLA4-Ig. In December 1998, related patents were issued to Bristol-Myers claiming the composition of CTLA4-Ig. Thereafter, the complaint was amended to include the patents claiming the composition of CTLA4-Ig. In the amended complaint, we seek to assert our ownership rights in, and to obtain co-inventor rights of, the Bristol-Myers patents and we also seek unspecified monetary damages. If we are successful in our claims, a licensor of such intellectual property rights Repligen will be named as a co-inventor of the Bristol-Myers patents which will give Repligen and Bristol-Myers shared rights to the patents. There can be no assurances that the litigation will conclude in a result beneficial to Repligen. Repligen's failure to obtain shared ownership rights in the patents may restrict Repligen's ability to commercialize CTLA4-Ig for certain applications. -6- SELECTED CONSOLIDATED FINANCIAL DATA The following selected financial data are derived from, and are qualified in their entirety by reference to, the consolidated financial statements of Repligen as of and for the years ended March 31, 1995, 1996, 1997, 1998 and 1999 which consolidated financial statements have been audited by Arthur Andersen LLP, independent public accountants. The selected financial data set forth below should be read in conjunction with the consolidated financial statements of Repligen and the related notes thereto and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere in this prospectus.
Years Ended March 31, ----------------------------------------------------- 1999 1998 1997 1996 1995 (In thousands, except per share amounts) OPERATING STATEMENT DATA: Revenues Research and development.............. $ 1,268 $ 917 $ 1,180 $ 7,949 $ 10,988 Product............................... 1,010 1,114 1,554 1,874 3,885 Investment and other.................. 312 354 1,068 1,036 2,069 ------- ------ ------- -------- -------- Total Revenue........................ 2,590 2,385 3,802 10,859 16,942 ------- ------ ------- -------- -------- Costs and expenses Research and development.............. 1,847 1,420 1,378 11,980 31,012 Charge for purchased patent rights.... 1,035 -- -- -- -- Selling, general & administrative..... 1,563 1,281 1,940 4,925 4,673 Cost of product sales................. 689 480 537 1,516 1,535 Charge for acquired research & Development.......................... -- -- 549 334 -- Restructuring (credit) charge ........ -- -- (111) 3,567 11,300 Interest.............................. -- -- -- 58 372 ------- ------ ------- -------- -------- Total costs and expenses............. 5,134 3,181 4,293 22,380 48,892 ------- ------ ------- -------- -------- Net loss.................................. $(2,544) $ ( 796) $ ( 491) $(11,521) $(31,950) ------- ------ ------- -------- -------- ------- ------ ------- -------- -------- Net loss per common share................. $( 0.14) $ (0.05) $ (0.03) $ (0.75) $ (2.08) ------- ------ ------- -------- -------- ------- ------ ------- -------- -------- Weighted average common shares outstanding............................... 18,018 16,502 15,678 15,370 15,356 ------- ------ ------- -------- -------- ------- ------ ------- -------- --------
1999 1998 1997 1996 1995 ------------------------------------------------------------- (In thousands) BALANCE SHEET DATA: Cash and investments..................... $ 3,251 $ 4,726 $ 3,538 $ 7,222 $ 15,302 Working capital.......................... 3,860 5,377 3,990 4,154 9,070 Total assets............................. 5,224 6,513 5,621 9,231 31,330 Accumulated deficit...................... (126,864) (124,320) (123,533) (123,042) (111,520) Stockholders' equity..................... 4,592 6,124 4,919 4,809 15,576
-7- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW THE FOLLOWING MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES. WHEN USED IN THIS PROSPECTUS, THE WORDS "INTEND," "ANTICIPATE," "BELIEVE," "ESTIMATE," "PLAN" AND "EXPECT" AND SIMILAR EXPRESSIONS AS THEY RELATE TO US ARE INCLUDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. REPLIGEN'S ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED IN THESE FORWARD-LOOKING STATEMENTS ARE A RESULT OF CERTAIN FACTORS, INCLUDING THOSE SET FORTH UNDER RISK FACTORS" AND ELSEWHERE IN THIS PROSPECTUS. RESULTS OF OPERATIONS FISCAL YEAR ENDED MARCH 31, 1999 COMPARED WITH FISCAL YEAR ENDED MARCH 31, 1998 REVENUES. Total revenues for fiscal 1999 were $2,590,000 as compared to $2,385,000 in fiscal 1998, an increase of $205,000. Research and development revenues for fiscal 1999 totaled $1,268,000, including revenues relating to drug discovery collaboration arrangements with pharmaceutical partners, licensing revenue, and revenue generated from a Phase II Small Business Innovation Research (SBIR) grant from the National Institute of Health. The increase in research and development revenues of $351,000 or 38% from fiscal 1998 levels is primarily attributable to licensing payments relating to intellectual property rights licensed to Neocrin, Inc. Product revenues for fiscal 1999 were $1,010,000 compared to $1,114,000 in fiscal 1998. The decrease in the product sales volume is attributed to a decrease in sales of reagent products partially offset by the increase in sales of Protein A. Investment income for fiscal 1999 was $212,000, a decrease of $13,000 from $225,000 for fiscal 1998. This decrease in investment income was due primarily to the sale of non-investment securities held by Repligen offset by higher average funds available for investment during fiscal 1999. Other revenues for the fiscal 1999 period decreased by approximately $29,000 from the comparable fiscal 1998 period, due in large part, to the one-time sale of equipment and furnishings by Repligen. EXPENSES. During fiscal 1999, total expenses were $5,134,000, significantly higher than fiscal 1998 expenses of $3,181,000. Higher level of expenses in fiscal 1999 was largely due to the $1,035,000 charge associated with Repligen's acquisition of the rights to certain patent applications for the use of secretin in the treatment of autism. Research and development expenses for fiscal 1999, totaled $1,847,000, an increase of $427,000, or 30%, from fiscal 1998 levels due to an increase in both personnel and laboratory expenses associated with the expansion of Repligen's research and development program. Repligen anticipates that research and development expenses will continue to increase significantly as Repligen increases its investment in its drug development programs during fiscal 2000. Cost of product sales for fiscal 1999 totaled $689,000, an increase of $209,000 from the prior fiscal year. Cost of product sales in fiscal 1999 were 68% of product revenues versus 43% of product revenues for fiscal 1998. This increase is largely attributable to a write off of certain -8- obsolete raw materials and work in process resulting from the introduction of a new Protein A product in fiscal 1999. Selling, general and administrative expenses for fiscal 1999 were $1,563,000, an increase from fiscal 1998 of $282,000. This increase is attributable to a noncash charge associated with the issuance of warrants for legal services related to Repligen's complaint filed against Bristol-Myers Squibb. In addition, Repligen incurred increased expenses relating to legal and shareholder services as Repligen sought additional financing. In March 1999, Repligen acquired all rights to certain patent applications covering the use of secretin in the treatment of autism. The rights were acquired pursuant to a patent purchase agreement. In addition, Repligen agreed to make certain milestone payments upon (a) Repligen's filing of a new drug application with the United States Food and Drug Administration for a clinical indication covered by the intellectual property rights transferred by the patent purchase agreement and (b) the approval by the FDA of a product covered by the intellectual property rights transferred to Repligen pursuant to the patent purchase agreement. Finally, Repligen agreed to pay certain royalty payments if Repligen is able to derive sales and/or licensing revenues from the intellectual property rights acquired pursuant to the patent purchase agreement. Under terms of the patent purchase agreement, Repligen may be required to repurchase up to a maximum of 100,000 shares of common stock issued in connection with the patent purchase agreement at a price of $1.59 per share. This obligation to repurchase the common stock expires in June 1999. Approximately $1,035,000 was charged to the accompanying 1999 statement of operations as the cost of the purchased patent rights. FISCAL YEAR ENDED MARCH 31, 1998 COMPARED WITH FISCAL YEAR ENDED MARCH 31, 1997 REVENUES. Total revenues for fiscal 1998 were $2,385,000 as compared to $3,802,000 in fiscal 1997, a decrease of $1,417,000. Research and development revenues for fiscal 1998 totaled $917,000, compared to $1,180,000 in fiscal 1997. The research and development revenues for fiscal year 1998 include revenues relating to drug discovery collaboration arrangements with pharmaceutical partners, licensing revenue, receipt of a milestone payment, and revenue generated from two Phase I Small Business Innovation Research (SBIR) grants from the National Institute of Health. The reduction in research and development revenues of $263,000 or 22% from fiscal 1997 levels is primarily attributable to the termination of its collaborations with Eli Lilly and Company and Repligen Clinical Partners, L.P. Product revenues for fiscal 1998 were $1,114,000 compared to $1,554,000 in fiscal 1997. The decrease of $440,000 in the product sales volume is largely attributed to the timing of large production scale orders of Protein A offset by an increase in sales of reagent products. Investment income decreased by $44,000 from $269,000 for fiscal 1997 to $225,000 for fiscal 1998 and was due primarily to lower average funds available for investment during fiscal 1998. Other revenues for the fiscal 1998 of $129,000 decreased by approximately $660,000 from the comparable fiscal 1997 other revenue of $799,000 and was primarily due to a restructuring of Repligen, pursuant to which Repligen made a one-time sale of equipment and furnishings for $317,000 and the one-time sale of non-investment securities for approximately $300,000 as part of the restructuring. -9- EXPENSES. During fiscal 1998, total expenses of $3,181,000 were significantly lower than fiscal 1997 expenses of $4,293,000, a decrease of $1,112,000 or 26% from fiscal 1997. The higher level of expenses in fiscal 1997 was primarily a result of expenditures associated with Repligen's former facility in Cambridge, Massachusetts. Research and development expenses for fiscal 1998, totaling $1,420,000, compared to $1,378,000 in fiscal 1997, an increase of $42,000, or 3%, from fiscal 1997. Cost of product sales decreased $57,000 from $537,000 in fiscal 1997 to $480,000 in fiscal 1998. Cost of product sales in fiscal 1998 were 43% of product revenues versus 35% of product revenues for fiscal 1997. The decrease in the cost of product sales is the result of a change in the product mix between fiscal years and the result of the realization of inventory in fiscal 1997 that had been reserved for in fiscal 1996. Selling, general and administrative expenses for fiscal 1998 were $1,281,000, compared to $1,949,000 in fiscal 1997, a decrease from fiscal 1997 of $659,000. This decrease is a result of Repligen's restructuring efforts that took place during fiscal 1997 and 1996. As a result of Repligen's relocation to smaller office and laboratory space, Repligen realized savings in rent and related facility costs. In addition, this decrease in expenses is a result of the reduction of administrative personnel and related expenses that took place during fiscal 1997. In the year ended March 31, 1997, Repligen acquired, in exchange for Repligen's common stock, all of the outstanding shares of ProsCure, Inc., a subsidiary of Glycan Pharmaceuticals, Inc. ProsCure has licensed the rights to certain drug discovery technologies and lead compounds for application to the field of cancer from Glycan, a wholly owned subsidiary of Repligen. Since the technology acquired will require further development by Repligen, this acquisition was accounted for as a purchase, with the excess of the purchase price and acquisition costs over the fair value of the assets acquired of approximately $549,000, charged to operations. LIQUIDITY AND CAPITAL RESOURCES Repligen's total cash, cash equivalents and marketable securities decreased to $3,251,000 at March 31, 1999 from $4,726,000 at March 31, 1998. This decrease is primarily attributable to the operating loss incurred in the year ended March 31, 1999 of approximately $1,509,000. In addition, this decrease is attributable to an increase in accounts receivable and prepaid expenses of $242,000, partially offset by an increase of accounts payable and accrued expenses of $228,000. Working capital decreased by $1,517,000 to $3,860,000 at March 31, 1999 from $5,377,000 at March 31, 1998 due to cash outlays to fund operating losses, the purchase of equipment, furniture and fixtures and leasehold improvements, and an increase in accounts receivable outstanding at the end of fiscal year 1998 offset by an increase accounts payable and accrued expenses. Capital expenditures for fiscal 1999 and 1998 were $252,000 and $114,000, respectively. The capital expenditures in both fiscal 1999 and fiscal 1998 reflect leasehold improvements and the purchase of research and development and manufacturing equipment. Repligen entered into agreements with a number of collaborative partners and licenses. Under the terms of these agreements, Repligen may be eligible to receive research support, additional milestones or royalty revenue if these collaborations continue to clinical evaluation -10- and commercialization. Repligen can not be assured to the continuation of these collaborations or any future payments. Repligen has funded operations primarily with cash derived from the sales of its equity securities, revenue derived from research and development contracts, product sales and investment income. In April and May 1999, the certain accredited investors entered into binding common stock purchase agreements to purchase from Repligen an aggregate of 3,600,000 shares of common stock of Repligen for an aggregate purchase price of $9,000,000 in a private placement transaction. The closing of the private placement for financing is subject to Repligen filing a registration statement covering the resale of the shares and causing such registration statement to become effective immediately after the closing. While Repligen anticipates that the cost of operations will increase in fiscal 2000 as it continues to expand its investment in proprietary product development, Repligen believes that the private placement financing (upon closing) yielding an aggregate of $9,000,000 in gross proceeds to Repligen (before related transactional expenses) will provide sufficient funding to satisfy its working capital and capital expenditure requirements for the next twenty-four months. Should Repligen need to secure additional financing to meet its future liquidity requirements, there can be no assurances that Repligen will be able to secure such financing, or that such financing, if available, will be on terms favorable to Repligen. YEAR 2000 Repligen has undertaken an initial review of its information technology computer systems and it believes that the Year 2000 problem does not pose significant operational problems to its information technology systems. The majority of Repligen's software and computer equipment has been purchased within the last five years from third-party vendors who have already provided upgrades intended to bring their products into Year 2000 compliance. Repligen has begun to address the small number of internal systems that are not yet Year 2000 compliant, and expects full compliance by the end of 1999. Repligen currently believes that the costs of addressing these issues should not exceed $50,000 and will not have a material adverse impact on Repligen's financial position. Repligen has recently begun interviewing various third parties, including vendors and suppliers of Repligen, to determine their exposure to Year 2000 issues, their anticipated risks and responses to those risks. To date, the third parties that have been contacted have indicated that their hardware or software is or will be Year 2000 compliant in a time frame that meets Repligen's requirements. Even with the vendor compliance however, Repligen intends to continue to assess its exposure to Year 2000 noncompliance on the part of any of its material vendors. There can be no assurance that the vendor's systems will be Year 2000 compliant in a time frame satisfactory to Repligen. Repligen does not have a contingency plan in the event Year 2000 compliance cannot be achieved in a timely manner. A contingency plan will be developed immediately upon completion of Repligen's Year 2000 compliance assessment. USE OF PROCEEDS -11- Repligen will not receive any of the proceeds from the sale of the shares of its common stock by the Autism Research Institute hereunder. See "Selling Stockholder" and "Plan of Distribution". The principal purpose of this offering is to effect an orderly disposition of the shares of common stock of Repligen being offered and sold from time to time by the Autism Research Institute. SELLING STOCKHOLDER The following table lists Autism Research Institute as the selling stockholder, the number of shares of common stock of Repligen beneficially owned by Autism Research Institute as of May 14, 1999 and before this offering, and the maximum number of shares of common stock of Repligen that the Autism Research Institute may offer and sell pursuant to this prospectus. Autism Research Institute may offer shares of common stock of Repligen from time to time. Since Autism Research Institute may sell all, some or none of its shares of common stock of Repligen, no estimate can be made of the aggregate number or percentage of shares of common stock of Repligen that Autism Research Institute will own upon completion of the offering to which this prospectus relates.
Number of Shares Beneficially Owned Before Percentage of Offering and Shares Owned Offered Pursuant to This Before Selling Stockholder Prospectus Offering ------------------- ---------- -------- Autism Research Institute 262,500 1.4%
The Autism Research Institute acquired its shares of common stock of Repligen in connection with Repligen's purchase of intellectual property rights held by Autism Research Institute and Victoria A. Beck. The Autism Research Institute is a not-for-profit organization incorporated in the State of California. Victoria A. Beck was a co-owner of the patent applications purchased by Repligen. The patent purchase agreement to sell the intellectual property rights held by Autism Research Institute and Victoria A. Beck to Repligen is included in the current report of Repligen filed on Form 8-K on March 24, 1999. See "Where You Can Find More Information". Except for the sale by Autism Research Institute of intellectual property rights to Repligen in March, 1999, Autism Research Institute has not had any material relationship with Repligen. In the patent purchase agreement, Autism Research Institute has represented to Repligen that Autism Research Institute acquired the shares of common stock of Repligen as principal for its own account for investment purposes only and not with a view to, or for sale in connection with, any sale, assignment, transfer or other distribution of the shares of common stock of Repligen which would violate the Securities Act of 1933 or any other federal or state securities laws. In recognition of the fact, however, that the Autism Research Institute may want to be able to sell the shares of common stock of Repligen when Autism Research Institute considers it appropriate, we agreed, in the patent purchase agreement, to file this registration statement with the Securities and Exchange Commission to allow Autism Research Institute to publicly sell its shares of Repligen common stock. In the patent purchase agreement, we also agreed to keep the -12- registration statement effective until the earliest of (a) March 9, 2000, and (b) the time that Autism Research Institute has sold all of its shares of common stock of Repligen; provided that in the event that, prior to such time, Repligen fails to remain current or comply with its filing obligations with the SEC under the Securities Exchange Act of 1934 or Rule 144 of the Securities Act, we have agreed to maintain the effectiveness of this Registration Statement until March 9, 2001. PLAN OF DISTRIBUTION The shares of common stock of Repligen covered by this prospectus may be sold by the Autism Research Institute from time to time for its own account. The Autism Research Institute acquired all of its shares of common stock of Repligen pursuant to the patent purchase agreement. In the patent purchase agreement, Repligen is responsible for the expenses incurred in connection with the registration of the shares of common stock of Repligen, except that the Autism Research Institute will pay or assume brokerage commissions and similar charges, the legal fees and expenses of counsel for the Autism Research Institute and any stock transfer taxes or other expenses incurred in connection with the sale of the shares of common stock of Repligen. Repligen will not receive any of the proceeds from this offering. The distribution of the shares of common stock of Repligen by the Autism Research Institute is not subject to any underwriting agreement. In the patent purchase agreement, Repligen has agreed to attempt to find a buyer by June 7, 1999 for at least 100,000 of the shares of common stock of Repligen held by the Autism Research Institute at a price per share equal to or greater than $1.59. Repligen is not and will not receive any commissions or remuneration of any kind in connection with the sale of the shares of common stock of Repligen being offered and sold by the Autism Research Institute. In the patent purchase agreement, Repligen has further agreed that, if the Autism Research Institute has not been able to sell at least 100,000 shares of common stock of Repligen at a price of at least $1.59 per share, the Autism Research Institute shall be entitled to cause Repligen to purchase the number of shares of common stock of Repligen equal to the difference between 100,000 and the number of shares of common stock of Repligen which the Autism Research Institute has been able to sell at a price per share equal to at least $1.59. The Autism Research Institute's right to cause Repligen to repurchase the Autism Research Institute's shares of common stock of Repligen terminates forever on June 17, 1999. In addition to the Autism Research Institute's right to cause Repligen to repurchase the Autism Research Institute's shares of common stock of Repligen pursuant to the patent purchase agreement, as described in the paragraph immediately above, the shares of common stock of Repligen offered by the Autism Research Institute may be sold from time to time in transactions on the Nasdaq National Market, in negotiated transactions, through the writing of options on the shares of common stock of Repligen, or a combination of such methods of sale, at fixed prices that may be changed, at market prices prevailing at the time of sale, at prices relating to such prevailing market prices or at negotiated prices. In addition, the Autism Research Institute may sell its shares of common stock of Repligen covered by this prospectus through customary brokerage channels, either through broker-dealers acting as agents or brokers, or through broker-dealers acting as principals, who may then resell the shares of common stock of Repligen, or at private sale or otherwise, at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at negotiated prices. The Autism Research Institute may effect such transactions by selling shares of common stock of Repligen to or through broker-dealers, and such broker-dealers may receive compensation in the form of discounts, concessions, -13- commissions, or fees from the Autism Research Institute and/or purchasers of the shares of common stock of Repligen for whom such broker-dealers may act as agent or to whom they sell as principal, or both (which compensation to a particular broker-dealer might be in excess of customary commissions). Any broker-dealers that participate with the Autism Research Institute in the distribution of shares of common stock of Repligen may be deemed to be underwriters and any commissions received by them and any profit on the resale of shares of common stock of Repligen placed by them might be deemed to be underwriting discounts and commissions within the meaning of the Securities Act, in connection with such sales. Any shares covered by the prospectus that qualify for sale pursuant to Rule 144 under the Securities Act may be sold under Rule 144 rather than pursuant to this prospectus. Since the Autism Research Institute is not restricted as to the price or prices at which it may sell its shares of common stock of Repligen, sales of such shares of common stock of Repligen at less than the market prices may depress the market price of the common stock of Repligen. EquiServe, 150 Royall Street, Canton, MA 02021, is the transfer agent for the shares of common stock of Repligen. LEGAL MATTERS The validity of the shares of common stock of Repligen offered hereby will be passed upon by Testa, Hurwitz & Thibeault, LLP, Boston, Massachusetts. EXPERTS The financial statements included in and 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 reports with respect thereto, and are included herein in reliance upon the authority of said firm as experts in auditing and accounting and auditing. -14- WHERE YOU CAN FIND MORE INFORMATION Repligen files annual, quarterly and special reports, proxy statements and other information with the SEC. You may read and copy any document we file with the SEC at the SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on operation of the public reference room. Our SEC filings are also available to the public from the SEC's website at "http://www.sec.gov." Our website is located at "http://www.repligen.com." Information contained on our website is not part of this prospectus. The SEC allows Repligen 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. Repligen incorporates 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 Exchange Act (File No. 000-14656): 1. Annual report on Form 10-K for the year ended March 31, 1998; 2. Repligen's proxy statement, filed on July 20, 1998, for the 1998 annual meeting of shareholders; 3. Quarterly reports on Form 10-Q for the quarters ended June 30, 1998, September 30, 1998 and December 31, 1998; 4. Repligen's current reports on Form 8-K filed March 24, 1999 and May 17, 1999; and 5. The "Description of Registrant's Securities to be Registered" contained in Repligen's registration statement filed on Form 8-A, dated May 28, 1986. You may request a copy of these filings, at no cost, by writing or telephoning our Chief Financial Officer at the following address: Repligen Corporation 117 Fourth Avenue Needham, MA 02494 (781) 449-9560 This prospectus is part of a registration statement we filed with the SEC. You should rely only on the information or representations provided in this prospectus. We have authorized no one to provide you with different information. We are not making an offer of these securities in any state where the offer is not permitted. You should not assume that the information in this prospectus is accurate as of any date other than the date on the front of the document. -15- PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. The following table sets forth an estimate (other than with respect to the Registration Fee and the Nasdaq National Market additional listing fee expense) of the expenses expected to be incurred in connection with the issuance and distribution of the securities being registered, other than underwriting discounts and commissions: Registration Fee -- Securities and Exchange Commission...............$ 235 Nasdaq National Market additional listing fee........................$ 5,250 Blue Sky Fees and Expenses...........................................$ 1,000 Accounting Fees and Expenses.........................................$ 1,000 Legal Fees and Expenses..............................................$10,000 Miscellaneous........................................................$ 5,000 ------- TOTAL.......................................................$22,485 ------- -------
Repligen will bear all expenses shown above. ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. The Delaware General Corporation Law, Article Seventh of Repligen's Restated Certificate of Incorporation, as amended, and Article V of Repligen's By-laws provide for indemnification of Repligen's directors and officers for liabilities and expenses that they may incur in such capacities. In general, directors and officers are indemnified with respect to actions taken in good faith in a manner reasonably believed to be in, or not opposed to, the best interests of Repligen, and with respect to any criminal action or proceeding, actions that the indemnitee had no reasonable cause to believe were unlawful. Repligen maintains directors and officers liability insurance for the benefit of its directors and certain of its officers. ITEM 16. EXHIBITS. The following exhibits, required by Item 601 of Regulation S-K, are filed as a part of this Registration Statement. Exhibit numbers, where applicable, in the left column correspond to those of Item 601 of Regulation S-K.
EXHIBIT NO. ITEM AND REFERENCE - ----------- ------------------ 2.1 -- * Patent Purchase Agreement by and among Repligen Corporation, Victoria A. Beck and Autism Research Institute, dated as of March 9, 1999 (with certain confidential information deleted). (Incorporated by reference to Exhibit 2.1 of the Company's Current Report on Form 8-K filed March 24, 1999)
II-1 2.2 -- Common Stock Purchase Warrant issued by Repligen Corporation, dated as of March 9, 1999. (Incorporated by reference to Exhibit 2.2 of the Company's Current Report on Form 8-K filed March 24, 1999) 2.3 -- Collateral Assignment of Patents by and among Repligen Corporation, Victoria A. Beck and Autism Research Institute, dated as of March 9, 1999. (Incorporated by reference to Exhibit 2.3 of the Company's Current Report on Form 8-K filed March 24, 1999) 5 -- ** Legal Opinion of Testa, Hurwitz & Thibeault, LLP 3.1 -- Consent of Arthur Andersen (filed herewith) 23.2 -- ** Consent of Testa, Hurwitz & Thibeault, LLP (included in Exhibit 5) 24 -- ** Power of Attorney
* Confidential treatment requested as to certain portions of this exhibit, which portions are omitted and filed separately with the Securities and Exchange Commission. ** Previously filed. ITEM 17. UNDERTAKINGS. The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represents a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered ) and any deviation from the low or high and of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. (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 II-2 relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial BONA FIDE offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. 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 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial BONA FIDE offering thereof. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to provisions described in Item 14 above, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue. II-3 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Amendment No. 2 to Registration Statement on Form S-3 to be signed on its behalf by the undersigned, thereunto duly authorized in the Town of Needham, Commonwealth of Massachusetts on June 8, 1999. Repligen Corporation By: /s/ Walter C. Herlihy ----------------------------- Walter C. Herlihy President and Chief Executive Officer POWER OF ATTORNEY Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 2 to Registration Statement on Form S-3 has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. NAME CAPACITY DATE /s/ Walter C. Herlihy President and Chief Executive June 8, 1999 - -------------------------- Officer, Chief Financial Officer Walter C. Herlihy and Director (principal executive, financial and accounting officer) /s/ Alexander Rich, M.D.* Co-Chairman of the June 8, 1999 - -------------------------- Board of Directors Alexander Rich, M.D. /s/ Paul Schimmel, Ph.D.* Co-Chairman of the June 8, 1999 - -------------------------- Board of Directors Paul Schimmel, Ph.D. /s/ Robert J. Hennessey* Director June 8, 1999 - -------------------------- Robert J. Hennessey /S/ G. WILLIAM MILLER* Director June 8, 1999 - -------------------------- G. William Miller *By: /s/ Walter C. Herlihy ---------------------- Walter C. Herlihy Attorney-in-Fact II-4 INDEX TO EXHIBITS
EXHIBIT NO. ITEM AND REFERENCE - ----------- ------------------ 2.1 -- * Patent Purchase Agreement by and among Repligen Corporation, Victoria A. Beck and Autism Research Institute, dated as of March 9, 1999 (with certain confidential information deleted). (Incorporated by reference to Exhibit 2.1 of the Company's Current Report on Form 8-K filed March 24, 1999) 2.2 -- Common Stock Purchase Warrant issued by Repligen Corporation, dated as of March 9, 1999. (Incorporated by reference to Exhibit 2.2 of the Company's Current Report on Form 8-K filed March 24, 1999) 2.3 -- Collateral Assignment of Patents by and among Repligen Corporation, Victoria A. Beck and Autism Research Institute, dated as of March 9, 1999. (Incorporated by reference to Exhibit 2.3 of the Company's Current Report on Form 8-K filed March 24, 1999) 5 -- ** Legal Opinion of Testa, Hurwitz & Thibeault, LLP 23.1 -- Consent of Arthur Andersen (filed herewith) 23.2 -- ** Consent Testa, Hurwitz & Thibeault, LLP (included in Exhibit 5) 24 -- ** Power of Attorney
* Confidential treatment requested as to certain portions of this exhibit, which portions are omitted and filed separately with the Securities and Exchange Commission. ** Previously filed. II-5 EX-23.1 2 EXHIBIT 23.1 Arthur Andersen LLP Exhibit 23.1 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the use of our reports included in this registration statement and to the incorporation by reference in this registration statement of our report dated May 12, 1998 included in Repligen Corporation's Form 10-K for the year ended March 31, 1998 and to all references to our Firm included in this Registration Statement. /S/ ARTHUR ANDERSEN LLP ----------------------- ARTHUR ANDERSEN LLP Boston, Massachusetts June 15, 1999 EX-27 3 EXHIBIT 27
5 This schedule contains financial information extracted from the financial statements for Repligen Corporation and is qualified in its entirety by reference to such financial statements. 1,000 12-MOS MAR-31-1999 MAR-31-1999 3,251 0 455 25 630 4,492 1,506 863 5,224 633 0 0 0 183 4,409 5,224 1,010 2,590 689 5,133 0 0 0 0 0 0 0 0 0 (2,544) (.14) (.14)
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